Case Excerpts-
1. Albert Morris V. J.B. Simons Supreme Court Of India | 23-02-2017
Judgment:
In this case, Respondent herein (the plaintiff) was granted time to pay the balance Court Fee and for ex-parte evidence. Thereafter, the case was adjourned by 10 days for payment of balance Court Fee. The Court observed that this is a suit for recovery of money and in our view, the Court should have put the parties at least to terms and then disposed of the matter on merits expeditiously.
https://www.legitquest.com/case/albert-morris-v-jb-simons/A39C4
2. Union Of India & Another V. Machinery Sale Corporation Supreme Court Of India | 10-01-2003
Judgment:
In the said case, the respondent herein filed a suit for recovery of money under Order XXXVII of the Code of Civil Procedure, 1908.
The plaintiff-respondent were permitted to convert the summary suit in a regular suit, subject to payment of Court fee and other formalities, if required under law.
https://www.legitquest.com/case/union-of-india–another-v-machinery-sale-corporation/21DD
3. India Electric Works Ltd. V. James Mantosh & Anr Supreme Court Of India | 15-09-1970
Judgment:
In this case, the admitted and proved facts are that the claim made in the present suit was included in the previous money suit No. 28 of 1948 and a decree had been passed by the trial Court in favour of the plaintiffs for the entire claim including the claim for future damages. The plaintiffs were only required to pay additional court fee as provided by the Indian Court Fees Act for the claim relating to future damages and the plaintiffs had in fact paid the required amount of additional Court fee. The benefit of Section 14 (1), therefore, was rightly allowed by the High Court for future damages.
https://www.legitquest.com/case/india-electric-works-ltd-v-james-mantosh–anr/3FA8
4. United Bank Of India V. Naresh Kumar Supreme Court Of India | 18-09-1996
Judgment:
In the said case, the Court observed that the full amount of court fee had been paid by the appellant-Bank; documentary as well as oral evidence had been led on behalf of the appellant.
https://www.legitquest.com/case/united-bank-of-india-v-naresh-kumar/248CA
5. Chiranji Lal (D) By Lrs. V. Hari Das (D) By Lrs Supreme Court Of India | 13-05-2005
Judgment:
In this case, the Supreme Court observed that In Yeshwant Deorao Deshmukh v. Walchand Ramchand Kothari it was said that the payment of court fee on the amount found due was entirely in the power of the decree holder and there was nothing to prevent him from paying it then and there; it was a decree capable of execution from the very date it was passed.
https://www.legitquest.com/case/chiranji-lal-d-by-lrs-v-hari-das-d-by-lrs/270AE
1. M/s Rashmi Hospitality Services Private Limited (GST AAR Karnataka)
20-09-2019
In this case the issue involved was whether the subsidy received from the state government would form part of consideration under section 2(31) of the CGST Act.
Herein, the applicant had entered into agreements with Deputy Commissioners of the districts to provide hotel/ restaurant services for the Indira Canteen through tender. He had been providing the restaurant services by serving the food to beneficiaries and collecting a specified amount from beneficiaries,which was notified.At the end of the month, the applicant was submitting a consolidated bill by showing the amount collected from beneficiaries and subsidy available from the Government.
While referring to clause (31) of section 2 of the Central Goods and Services Tax Act, the Authority of Advance Ruling, Karnataka, observed that the amount of subsidy given by the Central Government or a State Government is not a part of the consideration as per the section 2(31) of the CGST Act.
It was also observed that as per provisions of the 2(31) of SGST/CGST consideration received in the form of subsidy given by the State Government or Central Government for the supply of service of food and drinks to the end-user is excluded from the definition of consideration and hence would not form the part of the consideration and in consequence does not form the part of the turnover.
But the amount collected for the supply from the beneficiaries, which is inclusive of tax, would form the consideration on which the turnover is to be calculated after deducting the proportionate tax as the collected consideration is inclusive of tax.
Hence,it was held that the subsidy amount received from the Government of Karnataka for the supply of service of food to the ultimate beneficiaries (consumers) in Indira Canteens by the applicant is excluded from the definition of consideration and would not form the part of the turnover on which tax is liable. The consideration collected from the beneficiaries is liable to tax after deducting the tax fraction as the price collected is inclusive of tax.
https://gst.kar.nic.in/Documents/General/AAR61RashmiHospitality.pdf
2. M/s Megha Agrotech Private Limited (GST AAR Karnataka)
23-03-2020
Two main issues involved in this case were–
1. Whether under section 15(2)(e) of CGST Act, for calculating “value if taxable supply”, the subsidy amount granted to the farmer by Horticulture / Agriculture / Sericulture Department of Government of Karnataka under PMKSY scheme or any other Central / State Government approved schemes but disbursed to the supplier to be treated as “subsidy” in the hands of the supplier and to be excluded while ascertaining the “transaction value”?
2. Whether the question of inclusion or exclusion of subsidy amount in the value of taxable supply would arise under Section 15(2) of the CGST Act, when such subsidy is not impacting the transaction value, which is price actually paid or payable for the supply of goods by the customer i.e., farmers and when the subsidy is disbursed by Horticulture / Agriculture / Sericulture Department to the supplier on behalf of recipient of the supply (farmers)?
The Authority of Advance Ruling, Karnataka, observed herein that –
Coming to the issue of subsidy, it is very clear that the value of supply shall include the subsidies directly linked to the price, excluding subsidies provided by the Government. The financial assistance provided by the Government is–to–the farmer to enable him to afford the facility and Government is not making payment to, the applicant vendor nor the amount receivable by the farmer has any bearing on the price of the supply.
If the subsidies provided by the Government is directly linked to the price, then the same would be excluded from the value of taxable supply.
In the instant case, the amount receivable or received from the Government is received by the farmer and this amount may be received by him directly in option 1 or by the Bank in case of option 2 or by the applicant in option 3. The farmer has a choice of either opting option 1 or option 2 or option 3 and choice of any one of the option has no impact on the price of the supply of goods and /or services.
Further, the liability of the farmer with the applicant for the supply received by him will get extinguished only when the applicant receives the consideration and it is immaterial from whom he actually receives the amount and the amount received in only credited against the liability of the farmer with him.
Hence the method of receipt of payment has no bearing on the price of the supply and also the receipt of payment by the applicant from the Bank or the Government Department (on the authorization of the farmer concerned) is on the account of the farmer only. Hence the price is independent of the assistance amount and hence would not be covered under clause (e) of sub-section (2) of section 15 of the CGST Act.
The Authority held that the amount of assistance received by the farmer or on account of the farmer from the Government Department has no bearing on the price and hence on the value of supply made by the applicant to the farmer and is not covered under section 15(2)(e) of the CGST Act, 2017.There is no question of excluding the amount of assistance or subsidy received from the transaction value or value of taxable supply.
3. Commissioner of Income-Tax, West Bengal-II, Kolkata v. Rasoi Limited
High Court Of Judicature At Calcutta | 19-05-2011
One of the questions involved in this case was whether the Income Tax Appellate Tribunal was justified in law in allowing the Appeal of the assessee by holding that the assistance received by the assessee from the Government of West Bengal amounting to Rs.5,34,18,887/- is of the nature of capital receipt and hence non-taxable.
The Court while referring to various judgments like Saheney Steel and Press Works Ltd and CIT Vs. Ponni Sugars and Chemicals Ltd., reported in (2008) 306 ITR 392 (SC), opined that it is the object for which the subsidy/assistance is given which determines the nature of the incentive subsidy. The form of the mechanism through which the subsidy is given is irrelevant.
In this case, the object of the subsidy is for expansion of their capacities, modernization, and improving their marketing capabilities and thus, those are for the assistance on capital account. Similarly, merely because the amount of subsidy was equivalent to 90% of the sales tax paid by the beneficiary does not imply that the same was in the form of refund of sale tax paid.
As pointed out by the Supreme Court in the case of Senairam Doongarmall Vs. Commissioner of Income-tax, Assam, reported in AIR 1961 SC 1579, it is the quality of the payment that is decisive of the character of the payment and not the method of the payment or its measure, and makes it fall within capital or revenue.
Thus, in this case,the amount paid as subsidy was really capital in nature.
While answering the question in the affirmative and against the Revenue, the Court observed that in the case of CIT-1, Ludhiana Vs. Adarsh Kumar Goel, reported in (2006) 156 Taxman 257 (Punjab), a Division Bench of the Punjab and Haryana High Court was dealing with a case of subsidy granted in the form of sale tax exemption and thus, the Division Bench held that in the absence of any document or policy of the State Government to show the kind of subsidy it had granted it should be treated as a revenue receipt. In this case, having regard to the objects and reasons behind the grant of the subsidy the Court found that it is a case of capital receipt and thus, the said decision does not help the Revenue in any way.
Case Excerpts:
1.Standard Chartered Bank v. State Of Maharashtra And Ors. Etc
Supreme Court of India | 06-04-2016
Thus, considering the totality of assertions made in the complaint and also taking note of the averments put forth relating to the respondent Nos. 2 and 3 herein that they are whole-time Director and Executive Director and they were in charge of day to day affairs of the Company, we are of the considered opinion that the High Court has fallen into grave error by coming to the conclusion that there are no specific averments in the complaint for issuance of summons against the said accused persons.
https://www.legitquest.com/case/standard-chartered-bank-v-state-of-maharashtra-and-ors-etc/9A879
2. Garnet Speciality Paper Ltd. v. State of Gujarat
High Court of Gujarat At Ahmedabad | 08-01-2019
A conspectus of the aforenoted observations of the Apex Court is that if the cheque is singed by the Director or an officer of the Company who has signed the cheque on behalf of the Company would give rise to the responsibility of liability under section 141 of the Act.
https://www.legitquest.com/case/garnet-speciality-paper-ltd-v-state-of-gujarat/1905FB
3. S.M.S. Pharmaceuticals Ltd v. Neeta Bhalla
Supreme Court of India | 20-09-2005
The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.
https://www.legitquest.com/case/sms-pharmaceuticals-ltd-v-neeta-bhalla/4069
4. K.K. Ahuja v. V.K. Vora & Another
Supreme Court of India | 06-07-2009
The position under section 141 of the Act can be summarised thus:
(i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing to the word `Director makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company.
(ii) In the case of a director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141.
https://www.legitquest.com/case/kk-ahuja-v-vk-vora–another/471D9
5. Bilakchand Gyanchand Company v. A. Chinnaswamy
Supreme Court of India | 12-03-1999
It is evident that proceedings were initiated by the appellant against A. Chinnaswamy who happened to be the managing director of Shakti Spinners Ltd. The cheques in question which were dishonoured were signed by him. The process was issued by the Judicial Magistrate in his name. We see no infirmity in the notice issued under section 138 addressed to A. Chinnaswamy, who was a signatory of the said cheques.
https://www.legitquest.com/case/bilakchand-gyanchand-company-v-a-chinnaswamy/26178
6. Anil Hada v. Indian Acrylic Ltd
Supreme Court of India | 26-11-1999
We, therefore, hold that even if the prosecution proceedings against the company were not taken or could not be continued, it is no bar for proceeding against the other persons falling within the purview of sub-sections (1) and (2) of Section 141 of the Act…Hence we are not impressed by the contention that Section 139 of the Act would afford support to the plea that prosecution of the company is sine qua non for persecuting its directors under section 141 of the Act.
https://www.legitquest.com/case/anil-hada-v-indian-acrylic-ltd/34A
7. S.M. Omar & Others v. Zackaria Thomas
High Court of Judicature At Madras | 01-02-2011
The complaint was filed against the second party with a description Managing Director, Jewel Base Target Private Limited. In my considered view, when the drawer has been addressed with or without any description of his position and when the intention of the holder of the cheque was to make a demand for the payment of the dishonored cheque from such drawer, the provision under section 138 (b) of the Act is satisfied. Sec.138(b) contemplates issuance of notice to the drawer demanding payment and the notice and its content is important then the address. When a person has issued the cheque towards the legally enforceable debt of a company, merely describing the drawer of the cheque by his position as Chairman and Managing Director of the Company, will not invalidate the notice.
https://www.legitquest.com/case/sm-omar–others-v-zackaria-thomas/51723
8. Rajneesh Aggarwal v. Amit J. Bhalla
Supreme Court of India | 04-01-2001
The cheques had been issued by M/s Bhalla Techtran Industries Limited, through its Director Shri Amit Bhalla. The appellant had issued notice to said Shri Amit J. Bhalla, Director of M/s Bhalla Techtran Industries Limited. Notwithstanding the service of the notice, the amount in question was not paid. The object of issuing notice indicating the factum of dishonour of the cheques is to give an opportunity to the drawer to make payment within 15 days, so that it will not be necessary for the payee to proceed against in any criminal action, even though the bank dishonoured the cheques.
It is Amit Bhalla, who had signed the cheques as the Director of M/s Bhalla Techtran Industries Ltd. When the notice was issued to said Shri Amit Bhalla, Director of M/s Bhalla Techtran Industries Ltd., it was incumbent upon Shri Bhalla to see that the payments are made within the stipulated period of 15 days. It is not disputed that Shri Bhalla has not signed the cheques, nor is it disputed that Shri Bhalla was not the Director of the company. Bearing in mind the object of issuance of such notice, it must be held that the notices cannot be construed in a narrow technical way without examining the substance of the matter.
But by no stretch of imagination, a criminal proceeding could be quashed on account of deposit of money in the Court or that an order of quashing of criminal proceeding, which is otherwise unsustainable in law, could be sustained because of the deposit of money in this Court. In this view of the matter, the so-called deposit of money by the respondent in this Court is of no consequence…In the aforesaid premises, we set aside the impugned orders of the High court and allow these appeals and direct that the criminal proceedings would be continued.
https://www.legitquest.com/case/rajneesh-aggarwal-v-amit-j-bhalla/150C
****
Facts: The Respondent (owner of immovable property) entered into a Joint Development Agreement (hereinafter referred to as JDA) and Agreement to sell with the Developer. However, due to non-performance of the JDA and Agreement to sell, Respondent terminated the agreements. As a consequence, the Developer has invoked the arbitration clause of the agreement, challenging the unilateral termination by the Respondent and are seeking specific performance of the JDA & agreement of sale.
Observations:
I. THE SPECIFIC RELIEF (AMENDMENT) ACT, 2018:
Transition from Discretionary Remedy to Statutory Remedy
As per the Erstwhile Act, courts had discretion in granting the remedy of specific relief., i.e., Courts were not bound to grant specific relief merely because it was lawful to do so. However, as per the new Amendment, specific relief has now been made a general rule. Section 101 states that specific performance of a contract shall be enforced by the court subject to the limited grounds of refusal defined in the statute. Specific relief has now been made a statutory remedy.
Substituted Performance of Contract
As per section 202 of the Amendment Act, it is now stated that where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
In Mukesh Singh And Ors. vs Saurabh Chaudhary And Another, the Allahabad High court, while delivering the judgment, has made the following observation:
The scheme of the Act as amended by the Amendment Act 2018 (No.18 of 2018) that the wider discretion of courts to grant specific performance and to make specific performance of contract a General Rule than exception subject to certain limited ground has been done away. The discretionary jurisdiction to decree specific performance as provided in the old Section 20 of the Act has been omitted. After amendment, the jurisdiction of the Court is not discretionary to decree specific performance.
The Court in the said case further observed:
Once it has been established that the registered agreement to sell was lawfully executed by the defendants-appellants in favour of the plaintiff-respondents for sale of the disputed property and that the plaintiff-respondents were always ready and willing to perform their part of the contract, there is no escape from decreeing the suit of specific performance filed by the plaintiffs-respondents.
II. DEFICIENCY OF SERVICE:
⇒ Section 2(o) of the Consumer Protection Act, 1986 defines ‘service’ as ‘service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.
In Lucknow Development Authority vs M.K. Gupta, the Supreme Court has held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat, and the same is for a consideration, it is a “service” as defined by Section 2 (o) of the Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly amounts to deficiency of service.
III. UNFAIR TRADE PRACTICE
⇒ Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words : “‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.
In Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, the Supreme Court has held that a term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The Court in this case went ahead to observe that the incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. In this case, the Court held that the terms of the Apartment Buyer’s Agreement were wholly one-sided and unfair to the Respondent – Flat Purchaser. The Appellant – Builder could not seek to bind the Respondent with such one-sided contractual terms. The Court in this case held that the Respondent – Flat Purchaser has made out a clear case of deficiency of service on the part of the Appellant – Builder. The Respondent – Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. The Respondent
– Purchaser was legally entitled to seek refund of the money deposited by him along with appropriate compensation.
The Law Commission of India in its 199th Report, addressed the issue of ‘Unfair (Procedural & Substantive) Terms in Contract’. The Law Commission inter-alia recommended that a legislation be enacted to counter such unfair terms in contracts. In the draft legislation provided in the Report, it was stated that :
“A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.”
IV. BREACH OF AGREEMENT/CONTRACT
In M/S. Fortune Infrastructure (now known as M/S. Hicon Infrastructure) & Anr. Vs. Trevor D’lima & Ors., the Supreme Court has made the following observations:
If the seller wants to limit their liability for breach of contract under the aforesaid rule, they have to portray that they have performed their obligation in a prudent manner. It may be noted that the onus is on the seller to show his best efforts and bona fides in discharging the obligation. It may be noted that even in the absence of fraud, mere unwillingness to carry out the duty could constitute bad faith sufficient for the purchaser to claim damages.
The Supreme Court further held that a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation.
Conclusion:
Thus, it can be observed that as per the Specific Relief (Amendment) Act, 2018, specific performance of a contract shall be enforced by the court subject to the limited grounds of refusal defined in the statute. Further, if there is a breach of contract, the aggrieved has the option of substituted performance and has the option to recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
It has been clearly held by the Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan that the Flat Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder. In this case, Supreme Court upheld the order passed by the National Commission, wherein National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent – Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent – Flat Purchaser could not be compelled to take possession at such a belated stage.
In Sai Priya Construction Company V. K. Anantha Kumari Satya Raju there was an agreement between the builder and the owners to develop the land of the owners bearing Plot Nos. 5 and 6, situated Chikoti Gardens, Hyderabad. Later, the owners cancelled the agreement and the builder was informed of the same by way of a notice on 27-7-2002. Aggrieved thereby, the builder invoked the arbitration clause incorporated under the agreement and nominated an arbitrator. The owners also nominated an arbitrator of their choice.
In both the above cited cases, it is observed that the aggrieved parties terminated the agreement unilaterally.
***
Facts:
In the said case the petitioner seeks his release on bail in case FIR No. 250/2004 under Section 376 IPC. The petitioner faces accusation of subjecting his 13-year-old daughter to sexual abuse and rape.
It is argued that contrary to her statement to the police on the basis of which FIR was registered, in her subsequent statement under Section 164 Cr.P.C. before the Metropolitan Magistrate concerned she simply complained of not being provided with proper food by the petitioner with no allegation of alleged sexual assault and rape as reflected in her previous statement to the police.
Observation:
The court observed that before reporting the matter to the police on 28th July, 2004, the prosecutrix had earlier narrated the ordeal faced by her at the hands of the petitioner to her class teacher and relatives. Of course, in her subsequent statement under Section 164 Cr.P.C, the prosecutrix omits to reiterate her allegation of sexual abuse and rape by the petitioner, her statement initially made to the police preceded by narration of traumatic experience to her class teacher and others cannot be lost sight of.
Decision:
It was held that tampering with evidence by the petitioner on his enlargement on bail being not unlikely, request for bail is difficult to accede to. Plea for bail is, accordingly, declined and the petition is dismissed.
https://www.legitquest.com/case/anand-kumar-v-state-nct-of-delhi/21371
Facts:
In the instant case, prosecutrix sent a letter to SHO, Mahendra Park Police Station denying the allegations levelled by her in her earlier complaint. She moved an application before the learned Metropolitan Magistrate on 28.09.2015 to record her 164 Cr.P.C. statement. In her 161 Cr.P.C. statement recorded before the police, she reiterated that a false FIR was lodged by her to settle the dispute about her salary with the petitioner. Learned senior counsel urged that since the prosecutrix has retracted her earlier statement, there is no likelihood of conviction and continuance of the criminal proceedings against the petitioner would be an abuse of process.
Observations:
The High Court noted that the supplementary statement and the application moved before the SHO cannot be taken into consideration to throw away the earlier complaint of prosecutrix. The Court further added that it was to be ascertained during trial as to how and in what circumstances, the prosecutrix denied her earlier version or whether it was due to some threats or pressure, and it would be unsafe to quash the FIR/chargesheet on the basis of the prosecutrix’s retraction from her statement.
Decision:
Court held that settled position is that the power under Section 482 Cr.P.C. to quash the criminal proceedings must be exercised sparingly with circumspection. It should not be exercised to stifle a legitimate prosecution. The petition was accordingly dismissed.
https://www.legitquest.com/case/dilip-kumar-gupta-v-state-nct-of-delhi–another/A2C6B
Facts:
In the said case when the statement of the victim was recorded under section 164 of the Cr.P.C., she completely denied the story of gang rape and she had nowhere stated the name of the petitioner in her statement recorded under Section 164 of the Cr.P.C.. Rather, she stated that she had gone to see a temple along with co-accused Nanhaka and while they were standing near a tree, the local people caught them and pressurized the victim to lodge false case.
Decision:
The Court noted that considering the aforesaid statement of victim as well as submissions of the parties, let the petitioner be released on bail on furnishing bail bonds of Rs. 10,000/- with two sureties of the like amount each to the satisfaction of learned Special Judge.
https://www.legitquest.com/case/rakesh-kumar-v-the-state-of-bihar/1E5424
4. State (Govt. of NCT of Delhi) vs. Shyam Sunder — District Court
Facts:
In the said case, the prosecutrix alleged that for some days, the accused had been beating and molesting her. On 14.06.2008, at about 2.00 am, accused committed sexual intercourse with her forcibly and left the house early in the morning. On her statement, a case was registered vide FIR No. 305/08 at the police station Mehrauli. On 26.06.2008, she gave her statement under section 164 CrPC before the Magistrate stating therein that she had given a false statement to the police. The accused had only abused and beat her. She denied that the accused had raped her. On the basis of the statement, a cancellation report was filed. After getting notice, the prosecutrix filed her objections and thereafter, the case was directed to be further investigated. During investigation, the statement of the prosecutrix was again recorded, wherein she alleged that she was raped by the accused.
Observation:
It was observed that the accused has been able to raise suspicion on the veracity of this witness as in her statement which was recorded u/s 164 CrPC she has categorically stated that the accused did not commit rape but when he refused to marry, she again made complaint after a few months making similar allegations reiterating the incident in FIR No. : 305/08 U/s.: 376, her subsequent statement recorded u/s 164 CrPC.
The court observed that the conviction in such cases can be made on the sole testimony of the prosecutrix and the version of the victim in rape commands great respect and acceptability but if there are some circumstances which cast doubts in the mind of the court of the veracity of the victim’s evidence then it is not safe to rely on the sole testimony of the victim of rape.
It was held in case of Rajoo Vs. State of MP [AIR 2009 SC 858] : “It cannot be lost sight of that rape causes the greatest distress and humiliation to the victim but at the same time a false allegation of rape can cause equal distress, humiliation and damage to the accused as well. The accused must also be protected against the possibility of false implication, particularly where a large number of accused are involved. It must, further, be borne in mind that the broad principle is that an injured witness was present at the time when the incident happened and that ordinarily such a witness would not tell a lie as to the actual assailants, but there is no presumption or any basis for assuming that the statement of such a witness is always correct or without any embellishment or exaggeration”
It was held in the case of Dev Kumar Juneja Vs. The State (Delhi Administration) 1996 4 AD (Delhi) 527 that law on the question of variance between different statements of a witness at different stages is that small variations or omissions will not justify a finding that the witness is a liar and his testimony be discarded. However, vital omissions merit consideration and if on points it appears to the court that witness has tried to improve the case, such a witness will have to be discarded. The cases of Surajamal Vs. State, AIR 1979 SC 1408, Matadin and ors. Vs. State of UP, AIR 1979 SC 1234 and Namdeo Daulate etc. Vs. State of Maharashra, AIR 1977 SC 381 were also relied upon.
In the case of Narender Kumar Vs. State of NCT Of Delhi AIR 2012 SC 2281, it was observed:
The courts while trying an accused on the charge of rape, must deal with the case with utmost sensitivity, examining the broader probabilities of a case and not get swayed by minor contradictions or insignificant discrepancies in the evidence of witnesses which are not of a substantial character. However, even in a case of rape, the onus is always on the prosecution to prove affirmatively each ingredient of the offence it seeks to establish and such onus never shifts.
Decision:
The court held that the present case is not free from suspicion and it would be highly unsafe to base the conviction of the accused on the basis of the evidence and material available on record. The court therefore acquitted the accused of the offence punishable under section 376 IPC.
5. https://www.tribuneindia.com/news/chandigarh/%E2%80%98rape-victim%E2%80%99-retracts-statement-11058
As reported, the girl retracted the charges while she was recording the statement under Section 164 of the CrPC in front of the magistrate. The victim told the magistrate that the rape never happened, denying her initial statement. This happened a day after the initial complaint was filed. Despite the denial of the rape charge by the 20-year-old victim, the police will continue with its inquiry.
6. http://archive.indianexpress.com/news/-rape-victim–in-trouble-for-turning-hostile/504712/
As reported, a city court has started a criminal trial against an alleged rape victim for turning hostile before a sessions court — five years after she had complained of rape. The woman initially told a magistrate that the accused had raped her in February 2002, when she was a minor. Her statement was recorded under Section 164 of the CrPC. Later, when she took the witness box during trial, she turned hostile and denied rape. She also said she had made her previous statement to the magistrate under pressure from a police officer. Despite attempts by the prosecution, the woman refused to stand by her original complaint. Additional Sessions Judge Narinder Kumar absolved the accused Vijay Kumar of rape charges on May 16, 2007. While acquitting Kumar, the judge noted that the complainant had done a volte-face from her earlier statement given to a magistrate, thereby abusing the process of the court. The sessions court then turned complainant and sent a formal request to the Additional Chief Metropolitan Magistrate (ACMM), Rohini, to register a case against the woman under Section 193 (punishment for false evidence).
1. Kent Ro Systems Ltd v. Amit Kotak
High Court of Delhi 18-01-2017
This is a case dealing with Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011
While referring to the Information Technology Act, 2000, it has been observed that for a case to be made out under Section 79(3), making the provision of Section 79(1) exempting an intermediary from liability to be inapplicable, the plaintiffs have to plead and prove conspiracy or abetment or aiding or inducing within the meaning of Section 79(3) of the IT Act. The words ‘conspired’, ‘abetted’, ‘aiding’ and ‘inducing’ are legal terms meaning whereof has been settled for long. They require pleading and proof of common intention. That is not the case pleaded by the plaintiffs.
https://www.legitquest.com/case/kent-ro-systems-ltd-v-amit-kotak/B3254
2. ‘X’ v. UNION OF INDIA AND ORS
High Court Of Delhi 20-04-2021
This is a case dealing with Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011.
Excerpts-
“82. Upon a composite reading of section 79(2) and (3), the conditionalities and obligations subject to which an intermediary enjoys exemption from liability under the IT Act, may be summarized as under :
(a) The exemption applies only if the function of the intermediary is limited to providing access to a communication system over which information is transmitted, temporarily stored or hosted;
(b) The exemption applies only if the intermediary does not initiate the transmission nor selects the receiver of the transmission nor selects or modifies the information contained in the transmission;
(c) The exemption applies only if the intermediary observes due diligence while discharging its duties under the IT Act and observes all other guidelines prescribed by the Central Government in relation to its duties;
(d) The exemption is not available if the intermediary has conspired, abetted or induced the commission of an unlawful act;
(e) Most importantly, the exemption is not available if the intermediary fails to expeditiously remove or disable access to material upon receiving actual knowledge or being notified by the appropriate government or its agencies that any information/data/communication link residing in or connected to a computer resource controlled by that intermediary is being used to commit an unlawful act.”
Clearly therefore, if the intermediary fails to fulfil the conditionalities and obligations cast upon it, both in the positive and in the negative, as set-out above, such intermediary is liable to forfeit the exemption from liability available to it under section 79(1) of the IT Act.
It cannot be ignored that the law and judicial opinion in India as also in several other jurisdictions mandates intermediaries to remove and disable, access to offending content once they receive ‘actual knowledge’ by way of a court order or upon being notified by the appropriate government or its agency, failing which the intermediary is liable to lose the exemption from liability available to it under section 79(1) of the IT Act.
https://www.legitquest.com/case/x2018xx2019-v-union-of-india-and-ors/1E5EB9
3. Super Cassetes Industries Ltd v. Myspace Inc. & Another
High Court Of Delhi 29-07-2011
Keeping in consideration, Section 81 of the IT Act, 2000, it has been observed here that-“the combined effect of reading Section 81 and the proviso is that the provisions of IT act may override other laws for the time being in force but cannot restrict the rights of the owner under the Copyright Act and the Patent Act. In other words, the rights of the owners under the Copyright Act, 1957 and/ or Patent Act, 1970 shall remain unfettered by any of the provisions of IT Act.
Accordingly, Section 79 cannot restrict the rights of the copyright owner by saving the liability of the defendants of the infringing acts caused under the provisions of Section 51 (a) (ii) of the Act by operation of proviso to Section 81 of the Act.”
It has also been opined that – “conjoint reading of Section 79 and Section 81 makes it amply clear that the proviso to Section 81 prevents any provisions of IT Act to act as restriction on exercising of the rights by the copyright owner.”
Excerpt –
“The defendants, their agents, representatives, servants, their officers or any person on their behalf are restrained from modifying the works (more specifically the works of the plaintiff), by adding advertisements to the said works of the plaintiff adding logos and/ or sponsorships to the works, or earning profit otherwise in any manner in relation to the said works consequent upon uploading to their website/webspace of www.myspace.com or in.myspace.com without making endeavours to enquire the ownership of the plaintiff (as at that stage of modification, the defendants have all means to enquire about the same) and thereby making them available to the public either by displaying (or playing or exhibition) of on the website or allowing the downloading from their website or otherwise of the said works in the modified form which will lead to permitting the place for profit within the meaning of Section 51 (a) (ii) of the Act and causes infringement of copyright of the plaintiff.”
It has also been stated that there is no corresponding law which is in pari materia to that of Digital Millennium Copyright Act (“DMCA”). The said Act specifically addresses the issues relating internet related wrongs, however existing law of Copyright Act, 1957 does not provide any such safe harbor provisions and rather the later enactment of IT Act, 2000 and its new amendment in 2009 speaks otherwise which I have already examined Section 81 of IT Act (as amended in 2009), proviso to which excludes the operation of the IT law in cases of copyright infringement.”
https://www.legitquest.com/case/super-cassetes-industries-ltd-v-myspace-inc–another/58184
4. CHRISTIAN LOUBOUTIN SAS v. NAKUL BAJAJ & ORS
High Court Of Delhi 02-11-2018
Excerpt –
“The trademark owner loses its huge customer base especially in the case of luxury products. If the products turn out to be counterfeit or not up to the mark, then it is the trademark owner’s brand equity which is diluted. The seller himself does not suffer. Such immunity is beyond what is contemplated to intermediaries under Section 79 of the IT Act. While Section 79 of the IT Act is to protect genuine intermediaries, it cannot be abused by extending such protection to those persons who are not intermediaries and are active participants in the unlawful act. Moreover, if the sellers themselves are located on foreign shores and the trade mark owner cannot exercise any remedy against the said seller who is selling counterfeits on the e-commerce platform, then the trade mark owner cannot be left remediless.
While the so-called safe harbour provisions for intermediaries are meant for promoting genuine businesses which are inactive intermediaries, and not to harass intermediaries in any way, the obligation to observe due diligence, coupled with the intermediary guidelines which provides specifically that such due diligence also requires that the information which is hosted does not violate IP rights, shows that e-commerce platforms which actively conspire, abet or aide, or induce commission of unlawful acts on their website cannot go scot free.”
https://www.legitquest.com/case/christian-louboutin-sas-v-nakul-bajaj–ors/1098C3
5. Shreya Singhal v. Union of India
Supreme Court Of India 24-03-2015
Section 79 is valid subject to Section 79(3)(b) being read down to mean that an intermediary upon receiving actual knowledge from a court order or on being notified by the appropriate government or its agency that unlawful acts relatable to Article 19(2) are going to be committed then fails to expeditiously remove or disable access to such material.
https://www.legitquest.com/case/shreya-singhal-v-union-of-india/90624
6. SASIKALA PUSHPA v. FACEBOOK INDIA & ORS
High Court Of Delhi 02-06-2020
Excerpt –
“It thus follows that merely because any information on the internet is offensive or causes announce, inconvenience, danger etc. to a person does not entitle that person to call upon the intermediary to remove that information/content or to disable access thereto and the intermediary is not liable to do so. It further follows that such a person is required to either approach the designated governmental agency or the Court for issuance of such a direction to the intermediary and the Court will issue such a direction only if the person concerns makes out a case of the information being actionable in law and not merely because the information may be an irritant without being actionable in law.”
https://www.legitquest.com/case/sasikala-pushpa-v-facebook-india–ors/1ADA07
7. TITAN COMPANY LIMITED Versus ROHIT KUMAR JAIN AND ORS.
High Court of Delhi 29-07-2019
In the year 2019, a Civil Lawsuit was filed by Titan against Snapdeal and some of its sellers. Herein, Titan had sued the defendants, for permanent injunction restraining counterfeiting of the products of the plaintiff under the marks “TITAN” and “FASTTRACK”.
The defendants no.1 and 2 (Rohit Kumar Jain and Dharam Pal) were restrained from selling, marketing or otherwise dealing in the goods bearing the marks “TITAN” and “FASTTRACK” of the plaintiff and the defendant no.3 (Snapdeal Pvt. Ltd.) was directed to forthwith, within 24 hours of service of this order, remove the URLs of which complaint had been lodged by the plaintiff with the defendant no.3 and of which particulars were given in the plaint also and to thereafter also, immediately on receipt of complaint from the plaintiff of other / further URLs selling counterfeit goods of the plaintiff, remove the same.
https://www.legitquest.com/case/titan-company-limited-v-rohit-kumar-jain-and-ors/1E7863
8. SNAPDEAL PRIVATE LIMITED versus M/S FUTURETIMES TECHNOLOGIES PVT. LTD
High Court Of Delhi 17.03.2020
Herein, the case set up by the plaintiff(Snapdeal Pvt. Ltd. ) was that the defendant(M/S Futuretimes Technologies ) was not only infringing its registered trademark “Snapdeal”, but was also indulging in acts, which tend to degrade or tarnish its registered trademarks. It was claimed that the defendant had resorted to false advertisement inasmuch as it sought to inform the world at large that the goods available on its website were cheaper than those which were available on the plaintiff’s website.
It was also put forth that it would be nearly impossible for anyone to peg the price of the goods offered on the website of either the plaintiff or the defendant to a particular amount as the price itself was dynamic. It was also contended that the defendant’s use of the byline “everything cheaper than Snapdeal” in its advertising campaign was false.
The Court opined that if the defendant was allowed to carry on what the plaintiff claimed was a false advertisement campaign, it would degrade its trademarks and reputation. Accordingly, till the next date of hearing, the defendant was restrained from using the byline “everything cheaper than Snapdeal” qua every social media platform or otherwise.
News Excerpts on Meesho-
According to a latest news article, an FIR has been filed against Meesho, on a complaint filed by a customer who said that he was sold a fake Rolex watch and GUCCI t-shirt on the social commerce platform.1
A news piece has also mentioned that in January, there has been a police probe against founders of social commerce platform Meesho – Vidit Aatrey and Sanjeev Barnwal – for retailing fake products on their marketplace.2
A public interest litigation (PIL) has also been filed in the Delhi High Court against Meesho and two other social commerce platforms – GlowRoad and Shop101 – for not displaying names of manufacturers, country of origin and the MRP of products sold on their platforms. The petition claims that the respondent websites such as meesho.com is not displaying details of seller and also seller detail is not available on packing slip/invoice.3
The PIL has been filed against the E-Commerce companies/websites which are involved in the business of online selling of all kind of goods including food items, electronics, electrical, clothing /merchandise, furniture, toys and Sports and Home /Living in India. The PIL is mainly seeking issuance of directions to ensure the display of mandatory declarations on the products offered for sale at e-commerce websites and the Compliance of Legal Metrology Act, 2009 and Consumer Protection Act, 2019.
In the latest Orders, Notice had been issued to the Respondents (Union of India through its Secretary Ministry Of Consumer Affairs Food and Public Distribution and Ors.) and the matter is now listed for further hearing on 08.07.2021.
Conclusion
In the case of ‘X’ v. Union Of India And Ors. it has been discussed that the law and judicial opinion mandates intermediaries to remove and disable access to offending content once they receive ‘actual knowledge’ by way of a court order or upon being notified by the appropriate government or its agency, failing which the intermediary is liable to lose the exemption from liability available to it under section 79(1) of the IT Act.
In Kent Ro Systems Ltd v. Amit Kotak, it has been opined that in making the provision of Section 79(1) exempting an intermediary from liability to be inapplicable, the plaintiffs have to plead and prove conspiracy or abetment or aiding or inducing within the meaning of Section 79(3) of the IT Act.
In the case of Myspace Inc v. Super Cassettes Industries Ltd, it has been concluded that Sections 79 and 81 of the IT Act and Section 51(a)(ii) of the Copyright Act have to be read harmoniously. Accordingly, it is held that proviso to Section 81 does not preclude the affirmative defence of safe harbor for an intermediary in case of copyright actions.Section 51(a)(ii), in the case of internet intermediaries contemplates actual knowledge and not general awareness. Additionally, to impose liability on an intermediary, conditions under Section 79 of the IT Act have to be fulfilled.
It has also been opined in the aforementioned cases that the rights of the owners under the Copyright Act, 1957 and/ or Patent Act, 1970 shall remain unfettered by any of the provisions of IT Act. Section 79 cannot restrict the rights of the copyright owner by saving the liability of the defendants of the infringing acts caused under the provisions of Section 51 (a) (ii) of the Act by operation of proviso to Section 81 of the Act.
****
1 https://entrackr.com/2021/01/after-pil-meesho-and-its-directors-face-fir-for-selling-fake-products/
2 https://www.livemint.com/companies/news/petition-filed-against-flipkart-amazon-others-for-selling-fake-products- 11613665185484.html
3 https://entrackr.com/2021/01/after-pil-meesho-and-its-directors-face-fir-for-selling-fake-products/
Case Laws:
1. Rajiv Phukan & Another v. The State of Assam : Gauhati High Court
What emerges from the discussion is that section 27 of the Evidence Act does not provide for writing the information, which may have been given by an accused. Hence, the information can be verbal and also be proved against the accused, who gives the information. But when the verbal information given by the accused is not deposed to by the Investigating Officer or when the Investigating Officer does not depose as to what exactly the accused had stated before him, section 27 would not apply as there would be, strictly speaking, no proof of disclosure statement.
Section 27, in such a case, becomes inapplicable not because of the fact that no written record has been proved as regards the disclosure statement, but because of the fact that the Court does not know as to what the accused had stated, which led to the discovery of the fact… Where a disclosure statement is made subsequent to the discovery of a fact, the disclosure statement cannot be proved under section 27, for, a disclosure statement, whether it amounts to confession or not, would be relevant only when the statement precedes the discovery of fact.
https://www.legitquest.com/case/rajiv-phukan–another-v-the-state-of-assam/71CBD
2. Mehboob Ali v. State Of Rajasthan : Supreme Court
For application of section 27 of Evidence Act, admissible portion of confessional statement has to be found as to a fact which were the immediate cause of the discovery, only that would be part of legal evidence and not the rest. In a statement if something new is discovered or recovered from the accused which was not in the knowledge of the Police before disclosure statement of the accused is recorded, it is admissible in the evidence.
https://www.legitquest.com/case/mehboob-ali-v-state-of-rajasthan/955C7
3. Indra Dalal v. State of Haryana : Supreme Court
The provision absolutely excludes from evidence against the accused a confession made by him to a police officer. This provision applies even to those confessions which are made to a police officer who may not otherwise be acting as such. If he is a police officer and confession was made in his presence, in whatever capacity, the same becomes inadmissible in evidence. This is the substantive rule of law enshrined under this provision and this strict rule has been reiterated countlessly by this Court as well as the High Courts.
https://www.legitquest.com/case/indra-dalal-v-state-of-haryana/920E8
4. Monu alias Sandeep v. State : Delhi High Court
Learned counsel for the petitioner submits that the petitioner has been falsely implicated. He submits that apart from alleged disclosure and confessional statements of the accused, there is no material to connect the petitioner with the subject offence…
Learned counsel for the petitioner further submits that consequent to the alleged disclosure/confessional statements, there is no recovery of any incriminating evidence/material, as such, the disclosure statements are inadmissible in evidence…
Without commenting on the merits of the case and keeping in view the totality of facts and circumstances, the court was of the view that the petitioner has made out a case for grant of regular bail.
By LE Staff
May 21, 2021
I. State of Maharashtra Vs. Tapas D.Neogy [(1999) 7 SCC 685]
Supreme Court of India | 16-09-1999
In the said case, the Supreme Court has ruled that bank account falls within the meaning of the property mentioned under Section 102 of Cr.P.C., and that, unless the freezing of the bank account is in accordance with section 102 of Cr.P.C., the same cannot be legally sustainable.
The said provisions are extracted herein below in extenso: “Sec.102. Power of Police Officer to seize certain property
1. Any police officer may seize any property which may be alleged or suspected to have been stolen, or which may be found under circumstances which create suspicion of the commission of any offence.
2. Such police officer, if subordinate to the officer in charge of a police station shall forthwith report the seizure to that officer.
3. Every Police Officer acting under sub-sec.(1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the Court, he may give custody thereof to any person on his executing a bond undertaking to produce the
property before the Court as and when required and to give effect to the further orders of the Court as to the disposal of the same.”
II. Dr.Shashikant D.Karnik Vs. State of Maharashtra Through Anti Corruption Bureau [(2008) CRILJ 148]
High Court of Bombay | 17-04-2007
In the said case, the Bombay High Court has made the following observation regarding Section 102, Cr.P.C:
“18. So far as requirement under Section 102 (1) is concerned, it is obligatory upon the police to show that the property which they want to attach or attaching is under circumstances which create suspicion of the commission of any offence.”
“19. Second requirement of Section 102 (2) of Cr.P.C. is that the officer seizing the account or attaching the account subordinate to the officer in charge of the police station has to forthwith report the seizure or attachment to his superior i.e. to the officer in charge of the police station.”
“20. Third requirement of Sub Section (3) of Section 102, lays down a mandate that every police officer acting under Sub-section (1) shall forthwith report the seizure or attachment of accounts to the Magistrate having jurisdiction.”
III. S. Vaikundarajan vs State Madras High Court | 28.04.2016
In the said case, the revision petitioners herein entered into an agreement dated 25.11.2008 to purchase the property of the second respondent herein. The agreement pertains to an extent of 20 acres 64 cents and 533 sq.ft. and the
agreed sale price was Rs.8,25,00,000/-. As per the agreement, the sale has to be concluded on or before 31.11.2011. If there is a breach on the part of the owner of the property (R2 herein), the revision petitioners are entitled to refund of the amount along with interest at the rate of 8% p.a. It was agreed by the vendor (R2) that steps would be taken to convert the agricultural lands into a commercial lands and to take necessary steps to get the lands reclassified in Revenue records. As it was not done, the revision petitioners filed a petition in A.R.C.No.2 of 2012 and obtained an award. The second respondent was directed to pay a sum of Rs.8,25,00,000/- with interest @ 6% p.a. The total amount of Rs.8,91,00,880/- was ordered to be paid within two months from the date of receipt of copy of the award. As the second respondent did not pay the amount, the revision petitioners filed E.P.No.50 of 2012 on 11.12.2012, seeking legal remedy against the second respondent. The Executing Court ordered attachment of SB A/c. No.606601508801 of ICICI Bank, Kancheepuram Branch, which was held in the joint names of Shri. A. Jayaraman, brother of Shri. A. Subbiah and Smt. Janaki (second respondent herein) vide order dated 20.09.2013, which was made absolute on 10.10.2013.
During the investigation of this case, the SB Account which stood in the names of Shri A. Jayaraman, brother of Shri Subbiah and Smt. Janaki was frozen on 15.06.2012 vide an order under Section 102 Cr.P.C. and the same was intimated to the Special Judge for CBI Cases, Madurai. During the course of investigation of this case, i.e. in R.C.55(A)/2012, again the account was frozen on 04.01.2013 vide an order under Section 102 Cr.P.C. and the same was intimated to the Court.
Court made the following observations:
It was the case of CBI that the money standing in the Bank Account of the second respondent is the subject matter of an offence and the revision petitioners should not be allowed to enjoy the fruits of the crime. The Court
rejected this contention stating that the revision petitioners are not asking for any money from the pocket of the second respondent and what is asked for is the return of their own money paid by them earlier.
Revision petitioners contended that the mandatory procedure, as contemplated under Section 102 Cr.P.C. while freezing the bank account, has not been followed and therefore, the order freezing the account of the second respondent are illegal. The Court observed that the order freezing the account of R2 is not valid. Under normal circumstances, the order freezing the account could be questioned only by R2. But, the revision petitioners, having acquired interest in the deposited amount, have the right to challenge the freezing order.
At para 21, the court has made the observation that the party, who obtained a decree, on 02.08.2012, cannot be deprived of the fruits of the decree till in the year 2016.
While disposing of the Civil Revision Petition, the court had directed the following:
(i) The petitioner shall furnish Bank Guarantee for a sum of Rs.6,03,00,000/-, which is available in ICICI Bank, Kancheepuram, in Savings Bank A/c. No.606601508801 standing in the name of the second respondent. Such guarantee shall be furnished within a period of two weeks from the date of receipt of a copy of this order.
(ii) On such guarantee being furnished, the amount lying in Garnishee Bank is ordered to be sent for to the Executing Court and the said funds are ordered to be disbursed to the Revision Petitioners herein.
IV. Krishna Bhatt v. State Bank of India
(High Court Of Kerala) | 19-01-1989
In this case, the following impugned order was challenged by the Petitioner:
“… The decree holder Bank obtained a decree for recovery of the amounts misappropriated by the judgment debtor from the decree holder Bank by forging documents and falsifying accounts while he was working in the Bank as a Clerk- cum-Cashier. Under the decree the Bank is entitled to realise a sum of Rs. 1,40,000/- from the judgment debtor. One such misappropriation was made by the judgment debtor (second respondent herein) on 27-5-82 by forging a banker’s cheque for a sum of S.10,858.70P in favour of the 3rd respondent in this petition who is his brother-in-law. The C.B.I. charge sheeted the judgment debtor for offences of criminal breach of trust, forgery and falsification of accounts. The judgment debtor pleaded guilty to the charge and he was convicted by the special court. During the course of investigation, the C.B.I. freezed the account of the 3rd respondent in relation to the sum of Rs. 10,858.70P misappropriated by the judgment debtor. The 3rd respondent is only a namelender for the judgment debtor in respect of this amount. In fact, the 3rd judgment debtor was an abettor of the offence committed by the judgment debtor. 3rd. respondent has no manner of right in this amount misappropriated by the judgment’ debtor from the decree holder…” (emphasis supplied)
The Court observed that the facts clearly show that the petitioner has been helping the judgment debtor to conceal the money, the judgment debtor misappropriated by using forged bank cheque, from the reach of the decree- holder bank. The petitioner therefore is bound to repay the amount credited in his account with the Corporation Bank to the decree-holder Bank.
V. Chandra Mohan Jha V. State Of Meghalaya
High Court of Meghalaya | 13.10.2015
In this case, application had been filed by the Applicant for de-freezing of Bank Account and release of substantial amount of money during the pendency of the case.
On two different dates, the Chief Judicial Magistrate vide orders dated 17.01.2014 and 28.11.2014 had de-frozen and released several Bank Accounts merely on the concession given by the Investigating Officer even after freezing of the Bank Accounts during the course of investigation.
The Court ruled that for enabling the applicant/petitioner to meet the financial obligations of the CMJ Foundation, the CMJ University and also in respect of individual liability and that of family members and to make the CMJ University functional in terms of the judgment of the learned single Judge passed in WP(C)No. 177 of 2014, for the present, an amount of Rs. 15,62,43,477.46 out of the frozen amount of Rs. 30,42,87,709.17 belonging to the CMJ Foundation should be released.
CONCLUSION
From the above arguments, discussions and decisions the following points emerge:
A. The police draws its power to activate the process of freezing bank account from Section 102 of the Code of Criminal Procedure (CrPC). Firstly it is to be seen whether the mandatory requirement of section 102, Cr.P.C has been followed by the police or not in freezing the account of the Judgment Debtor and whether the same is legally sustainable or not.
B. Secondly, ongoing investigation by police/freezing of account is no bar for the civil court to proceed with the execution proceedings and the courts have authority to pass necessary directions with respect to release of funds from frozen amounts/ pass appropriate orders.
By LE Staff
CASE LAWS:
It comprises legal misconduct which is completed if the Arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material document which throw abundant light on the controversy to help a just and fair decision. It is in this sense that the Arbitrator has misconducted the proceedings in this case. The court, therefore, says it has no hesitation in setting aside such an award.
In the result the judgment of the High Court is set aside and that of the Subordinate Judge is restored. The award of the Arbitrator thus stands quashed. The Arbitrator will complete the proceedings after considering all the relevant documents including Ext. P. 11 and Ext. P. 16 after giving opportunity to the parties. The appeal is allowed with costs.
https://www.legitquest.com/ep-poulose-vs-state-of-kerala-and-another
2. HAI v. M/S. BSC-RBM-PATI Joint Venture — Delhi High Court, January 24, 2018
“Perversity”, as a ground for setting aside an arbitral award, has to be examined on the touchstone of the Wednesbury principle of reasonableness.
It would include a case in which:
(a) the findings, in the award, are based on no evidence, or
(b) the Arbitral Tribunal takes into account something irrelevant to the decision arrived at, or
(c) the Arbitral Tribunal ignores vital evidence in arriving at its decision.
https://www.legitquest.com/nhai-vs-ms-bsc-rbm-pati-joint-venture
3. S.K.S. Logistic Ltd., Mumbai v. Oil & Natural Gas Corporation Ltd., Chennai & Others — Madras High Court, September 15, 2016
In Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons (1992 Supp (2) SCC 312), it was held: (SCC p. 317, para 7) “7. … It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law.”
Thus, the learned Arbitrators gave not only inconsistent findings but also ignored vital evidence… For the aforementioned reasons, the learned single Judge has rightly interfered with the Award under Section 34 of the Arbitration and Conciliation Act, 1996, as the award of the learned Arbitrators suffers from patent illegality and contrary to Fundamental policy of Indian law due to perversity.
4. Delhi Metro Rail Corporation Ltd v. Delhi Airport Metro Express Private Ltd — Delhi High Court, January 15, 2019
Most importantly, the Arbitral Tribunal had ignored and did not consider vital evidence of certification for commercial operations accorded by CMRS while deciding the question of civil structure faults and in holding that no effective steps to cure the defects were taken…. Another juristic principle is that the decision/award should not be perverse or irrational, i.e. findings based on no evidence, or the arbitral tribunal takes into account something irrelevant to the decision or ignores the vital evidence in arriving at the decision…The appeal is accordingly partly allowed setting aside the award in the terms indicated above with liberty to the parties to invoke arbitration clause for fresh adjudication on their claims and counter claims…
5. M/S DYNA Technologies Pvt Ltd v. M/S Crompton Greaves Ltd — Supreme Court, December 18, 2019
When there is complete perversity in the reasoning then only it can be challenged under the provisions of Section 34 of the Arbitration Act. The power vested under Section 34 (4) of the Arbitration Act to cure defects can be utilized in cases where the arbitral award does not provide any reasoning or if the award has some gap in the reasoning or otherwise and that can be cured so as to avoid a challenge based on the aforesaid curable defects under Section 34 of the Arbitration Act… Although the Arbitral Tribunal has dealt with the claims separately under different sub-headings, the award is confusing and has jumbled the contentions, facts and reasoning, without appropriate distinction… From a perusal of the award, the inadequate reasoning and basing the award on the approval of the respondent herein cannot be stated to be appropriate considering the complexity of the issue involved herein, and accordingly the award is unintelligible and cannot be sustained.
https://www.legitquest.com/case/ms-dyna-technologies-pvtltd-v-ms-crompton-greaves-ltd/184C7A
CONCLUSION
An analysis of the above mentioned judgements can be summed up as:
• It comprises legal misconduct which is completed if the Arbitrator on the face of the award arrives at a decision by ignoring very material document which throws abundant light on the controversy to help a just and fair decision.
• Perversity, as a ground for setting aside an arbitral award includes a case in which the findings, in the award, are based on no evidence, or the Arbitral Tribunal ignores vital evidence in arriving at its decision.
• It has also been decided in one of the cases that the learned single Judge had rightly interfered with the Award under Section 34 of the Arbitration and Conciliation Act, 1996, as the award of the learned Arbitrators suffered from patent illegality. The learned Arbitrators had given not only inconsistent findings but also ignored vital evidence.
• It has also been held that decision/award should not be perverse or irrational, i.e. findings based on no evidence, or the arbitral tribunal takes into account something irrelevant to the decision or ignores the vital evidence in arriving at the decision.
***
By LE Staff
CASE LAWS:
1. Ram Chander Arjan Dass v. National Textile Corporation Ltd (Punjab And Haryana HC)
It is not disputed that there is no provision in the Act which takes the power of review from the Court acting under the Arbitration Act. In that situation, the power of review is applicable to the Courts when they decide matters under the Arbitration Act. The above view is supported from the observations of the Supreme Court in Sree Meenakshi Mills Ltd. v. Their Workmen : A.I.R. 1958 S.C. 153.
2. The Punjab State Co-Operative Supply and Marketing Federation, Limited v. Panchsheel Rice Traders, Rajpura. District Patiala and Ors (Punjab And Haryana HC)
In M/S Ram Chander Arjan Dass””s case (supra), the question involved was whether the Arbitrator had the power of review or not. It was held by this Court that the provisions of the Code are applicable to the proceedings under the Arbitration Act and there was no provision in the Act which takes the power of review from the court under the Arbitration Act and therefore, the Court was competent to review its orders.
3. Maheshwari Brothers Ltd. vs National Highways Authority Of India (Calcutta HC)
It is thus clear that while dealing with a proceeding under Section 9, the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceeding before it. Most of the time proceedings under Section 9 are invoked before the commencement of an arbitral process. Therefore, the availability of the review powers of a Civil Court to a Section 9 proceeding cannot be ruled out in view of Section 5 of the said Act. Section 9 proceedings before such a Court are undoubtedly proceedings in a Court of a civil jurisdiction. While dealing with such proceedings, such Courts will “have the same powers for making orders as it has for the purpose of and in relation to any proceedings before it”. This is the mandate of Section 9. There is no specific exclusion of review powers of a Civil Court as is there in the case of second appeal (Section 37(2) of the said Act).
4. Maharashtra Explosives Limited v. Sadiq and Company (Bombay HC at Nagpur)
The powers of review can very well be said to be specifically conferred on the court exercising jurisdiction in the proceedings under section 8 of the Arbitration Act. Even if, therefore, there is no independent provision in the Arbitration Act itself regarding the powers of review of the Court in the proceedings under the Arbitration Act, by virtue of section 41 making applicable the entire provisions of the Code of Civil Procedure to all proceedings before the Court under the Arbitration Act, the powers of review as contained in the Civil Procedure Code have to be held as specifically conferred on the Court dealing with the proceedings under the Arbitration Act.
https://www.legitquest.com/case/maharashtra-explosives-limited-v-sadiq-and-company/176716
5. Municipal Corporation of Greater Mumbai and Ors v. Pratibha Industries Ltd. and Ors (Supreme Court)
To similar effect is the judgment in Shivdeo Singh and Ors. v. State of Punjab Ors. (AIR 1963 SC 1909), wherein the Supreme Court has stated as under:
10. … It is sufficient to say that there is nothing in Article 226 of the Constitution to preclude a High Court from exercising the power of review which inheres in every Court of plenary jurisdiction to prevent miscarriage of justice or to correct grave and palpable errors committed by it.
I. Babi D’Souza v. Syndicate Bank [ILR (1986) KAR 900]
High Court of Karnataka | 30.08.1985
Facts:
In this case, the Decree-Holder sued out the execution to recover the money from J. Dr. 2-revision petitioner, by attachment and sale of the occupancy rights conferred on the second J. Dr. by the Land Tribunal. J. Dr-2 resisted the petition contending that the occupancy rights conferred on him cannot be sold at all as per Section 61 of the Land Reforms Act. The Trial Court over-ruled the objections of J Dr. 2-revision petitioner. Hence, the revision.
Observations:
Once the occupancy rights are conferred on the tenant as a result of an enquiry under Section 48A of the Karnataka Land Reforms Act and once a certificate under Section 55 is issued, the land ceases to be vested in the State Government and the tenant becomes the full owner thereof. Once the occupancy rights have been conferred on the tenant, the occupancy rights so conferred would amount to an interest in the property.
The Court observed that on a perusal of Section 61(1) (2) and (3) it becomes crystal clear that a person on whom the occupancy rights were conferred, has got an interest in the land. Section 61(1) does not prohibit sale by an order of the Court in execution proceedings.
The occupancy rights conferred on a person after an enquiry conducted under Section 48A, would amount to an interest held by such a person in the land. There is nothing either in Section 61 or any other provision of the Karnataka Land Reforms Act prohibiting the Civil Court from attaching and selling of such an interest in the execution of a decree.
II. Ratan Lal and Anr v. S.B.B.J. and Ors [ (2004) 1 RLW 306 (RAJ) ]
High Court of Rajasthan | 10.07.2003
Facts:
In the said case, the plaintiff- respondent No. 1 Bank obtained a decree for Rs. 72,079/- on 16th Dec., 1978. The execution petition was filed for recovery of the said amount by sale of the mortgaged property by the decree holder non-petitioner No. 1. In the execution petition, the judgment-debtor submitted an application raising objection that since, the property mortgaged is an agriculture land, therefore, it cannot be put to auction and there is bar against the attachment and sale of the agriculture land.
Observations:
The Executing Court observed that there is no provision in the CPC, which puts bar against attachment and sale of agriculture land. Special provisions for sale of agriculture produce has been given in Order 21 Rules 74 & 75 CPC.
The High Court observed that it is clear from a bare reading of the Sub-clause (c) of the proviso to Section 60 of the Civil Procedure Code that the agriculture land has not been excluded by this provision from the attachment and sale in execution of a decree. Only houses and other buildings of an agriculturist have been saved from the attachment along with land immediately appurtenant to the houses and buildings, which are necessary for their enjoyment, which are belonging to an agriculturist or a labourer or a domestic servant and occupied by him. The legislature specifically has not included the agriculture land, in this provision, to exclude the agriculture land from the provision of attachment and sale of the property in execution of a decree, therefore, this exclusion indicate that the law framers were conscious that an agriculturist may not be made homeless and therefore, specific provision has been made to exclude only home of agriculturist, but has not excluded agriculture land. We cannot insert the words “agriculture land” in the Sub-clause (c) of the proviso to Section 60.
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Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Environment and Sustainable Development – A Balanced Approach - Nayan Chand Bihani
The debate between protection of the environment and sustainable development is an age old one and is growing in proportion with every passing day all over the world, in general and specifically with respect to developing countries like India, in particular.
The Stockholm Declaration on the Human Enviornment,1972 categorically stated that man is both the creator and the moulder of his environment, which gives him physical sustenance and affords him the opportunity of intellectual, moral, social and spiritual growth. In the long run and tortuous evolution of the human race on this planet a stage has been reached when through the rapid acceleration of science and technology man has acquired the power to transform his environment in countless ways and on an unprecedented scale. Both aspect of man’s environment, the natural and the man-made, are essential to his wellbeing and to the enjoyment of basic human rights-even the right to life itself. It also states that the protection and improvement of the human environment is a major issue which affects the wellbeing of peoples and economic development throughout the world, it is the urgent desire of the people of the whole world and the duty of all the Governments. The Declaration, in Principle 2, states that the natural resources of the earth, including the air, water, land, flora and fauna and especially representative samples of natural eco-systems, must be safeguarded for the benefit of present and future generations through careful planning or management, as appropriate. It further, in Principle 8, states that economic and social development is essential for ensuing a favourable living and working environment for man and for creating conditions on earth that are necessary for the improvement of the quality of life.
A milestone in this field is the Rio Declaration on Environment and Development, 1992. It, interalia, states that human beings are at the centre of concern for sustainable development and that they are entitled to a healthy and productive life in harmony with nature. It also states that the right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations. It states that in order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it and that to achieve sustainable development and a higher quality of life for their people, States should reduce and eliminate unsustainable patterns of production and consumption and promote appropriate demographic policies. It contemplates that the States shall enact effective environmental legislation. Environmental standards, management objectives and priorities should reflect the environmental and developmental context to which they apply. The Declaration states that in order to protect the environment, the precautionary approach shall be widely applied by the states according to their capabilities and that environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority.
Initially, the trend was to use ‘Polluter Pays’ principle and punish the offending unit. Subsequently, vide judicial decisions, the principle of sustainable development was widely applied so as to balance the two principles.
The Polluter Pays principle talks about the liability of the polluter. With the increase in the industrial development what subsequently also increased is the waste emitted out of these industries and as a result of these wastes not only were the immediate surroundings adversely affected but also the environment at large. There is no specific definition of the Polluter Pays principle, rather it is a practice emphasising on the fact that one who pollutes the environment should be held accountable and responsible for the same with consequential steps to be taken. The principle not just focuses on punishing the polluter but its main criterion is to ensure that the polluted environment returns back to its original state. The reason behind it is to promote ‘Sustainable Development’. Thus it can be summed up that Polluter Pays principle is an essential element of sustainable development. Therefore, whosoever causes pollution to the environment will have to bear the cost of its management. The principle imposes a duty on every person to protect the natural environment from pollution or else he will be responsible for the cost of the damage caused to the environment. The main reason behind imposing a cost is two folds. Firstly, to refrain any person from polluting the environment and secondly, if in the case there is pollution then it is the polluter’s duty to undo the damage. Hence, both of the above ensures that there should be sustainable development. It is pertinent to mention that the Polluter Pays principle is not a new concept. It was first referred to in 1972 in a Council Recommendation on Guiding Principles Concerning the International Economic Aspects of Environmental Policies of the Organisation for Economic Co-operation and Development. The same is also enshrined in Principle 16 of the Rio Declaration, which states that ‘the polluter, in principle, bear the cost of pollution.’ The need of the hour is a demonstrable willingness to adhere to the essence of the principle in order to ensure that there is development, but not at the cost of causing environmental degradation.
The Hon’ble Supreme Court of India in the case of Indian Council for Enviro-legal Action vs Union of India reported in LQ/SC/1996/358, interalia, putthe absolute liability upon the polluter for the harm caused to the environment.
The Hon’ble Supreme Court of India in the case of Vellore Citizens Welfare Forum vs Union of India, reported in LQ/SC/1996/1368, interalia, accepted the Polluter Pays Principle as a part of the Article 21 of the Constitution of India and also emphasised Article 48A and Article 51A(g) of the Constitution of India.
The Hon’ble Supreme Court of India in the case of Amarnath Shrine reported in LQ/SC/2012/1121, has categorically stated the right to live with dignity, safety and in a clean environment.Article 21 of the Constitution of India, guaranteeing the right to life is ever widening and needs to maintain proper balance between socio-economic security and protection of the environment.
The Hon’ble Apex Court in the case of Bombay Dyeing and Manufacturing Co Ltd- vs – Bombay Environmental Action Group reported in LQ/SC/2006/206, interalia, states that the consideration of economic aspects by Courts cannot be one and it depends on the factors of each case. However, strict views ought to be taken in cases of town planning and user of urban land so as to balance the conflicting demands of economic development and a decent urban environment. Ecology is important but other factors are no less important and public interest will be a relevant factor.
The Hon’ble Supreme Court in the case of Dahanu Taluka Environment Protection Group –vs- Bombay Suburban Electricity Supply Company Ltd reported in LQ/SC/1991/157, has held that it is primary for the Government to consider importance of public projects for the betterment of the conditions of living of people on one hand and necessity for preservation of social and ecological balance, avoidance of deforestation and maintenance of purity of atmosphere and water from pollution and the role of the Courts is restricted to examine the whether the Government has taken into account all the relevant aspects and has not ignored any material condition.
The Hon’ble Supreme Court of India in the case of Narmada BachaoAndolan vs Union of India reported in LQ/SC/2000/1509, interalia, reiterated the Polluter Pay Principle.
A milestone case is that of M C Mehta vs Union of India reported in LQ/SC/2004/397, wherein the Hon’ble Supreme Court explained the Precautionary principle and the principle of Sustainable Development. It was, interalia, stated that the development needs have to be met but a balance has to be struck between such needs and the environment. The Hon’ble Supreme Court also reiterated similar views in a series of cases, some of which are stated hereinbelow;
LQ/SC/2007/1421
- M C Mehta vs Union of IndiaLQ/SC/2009/1231
- Tirpur Dyeing Factory Owners Association vs Noyyal River Ayacutdars Protection Association &Ors.LQ/SC/2009/1891
An interesting question came up before the Hon’ble Supreme Court with regard to the setting up of nuclear power plants with regard to the possibility of considerable economic development weighed against risk of feared radiological hazard. The Hon’ble Apex Court in the case of G.Sundarrajan –vs- Union of India reported in LQ/SC/2013/536, interalia, held that the Courts will be justified to look into the aspect as to the opinions of experts and the adequacy of safety measures and will be justified to look into the safety standards being followed by the Nuclear Power Plant.
The Hon’ble Supreme Court, in the case of Lal Bahadur vs State of UP reported in LQ/SC/2017/1384, interalia, emphasised the importance of striking a balance between the two principles.
An important development is the advent of the National Green Tribunal which has the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of any legal right relating to environment) is involved and relates to the Acts specified in Schedule I, namely the Water (Prevention and Control of Pollution) Act, 1974, the Water(Prevention and Control of Pollution) Cess Act, 1977, the Forest Conservation Act, 1980, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991 and the Biological Diversity Act, 2002. The National Green Tribunal, since its inception, has been looking into the aspects of environmental pollution and the mitigation thereof.
It can thus be said that both the environment and development are essential in the modern world for the betterment and living standards of the people. However, rampant and unplanned development at the cost of the environment is not to be entertained and the Courts will keep a close watch into the aspect of sustainable development, interalia, based on the criteria and guidelines, as specified.
Nayan Chand Bihani is a practising advocate at Calcutta High Court. Mr. Bihani pursued his LL.B from the Calcutta University College of Law, Hazra Campus and was enrolled as an Advocate in December,1998. Mr. Bihani deals mainly with Writ petitions, specially in Environmental laws, Election laws, Educational laws, Municipal laws, Service laws and Public Interest Litigations. He also represents several authorities like the West Bengal State Election Commission, the West Bengal Pollution Control Board, the State of West Bengal, several Educational Institutions and Universities and several Municipalities and Municipal Corporations and the Odisha Pollution Control Board. He can be contacted at nayanbihani@gmail.com.
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