Read Order: KUSHA DURUKA v. THE STATE OF ODISHA [SC- CRIMINAL APPEAL NO. 303 OF 2024]
Tulip Kanth
New Delhi, January 22, 2024: The Supreme Court has issued suggestions and directions to streamline the proceedings and avoid anomalies with reference to the bail applications being filed in the cases pending trial and for suspension of sentence.
The Division Bench of Justice Vikram Nath and Justice Rajesh Bindal referred to the Top Court’s judgments in K.D. Sharma Vs. Steel Authority of India Limited and others; Dalip Singh v. State of Uttar Pradesh and others; Moti Lal Songara Vs. Prem Prakash @ Pappu and another wherein it was held that one of the two cherished basic values by Indian society for centuries is "satya" (truth) and the same had been put under the carpet by the petitioner. Reference was also made to Saumya Chaurasia v. Directorate of Enforcement where the litigant tried to misrepresent by concealing material facts.
Noting that there has been changes in the value system post-independence, the Bench said, “Now it is well settled that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final. Suppression of material facts from the court of law, is actually playing fraud with the court. The maxim supressio veri, expression faisi, i.e. suppression of the truth is equivalent to the expression of falsehood, gets attracted. It’s nothing but degradation of moral values in the society, may be because of our education system.”
In the present matter for grant of bail pending trial,the appellant claimed that he was in custody since 03.02.2022 in connection with crime registered under Section 20(b)(ii)(C) of the Narcotic Drugs and Psychotropic Substances Act, 1985. The allegation in the FIR was that the appellant and the co-accused Gangesh Kumar Thakur @ Gangesh Thakur were in exclusive and conscious possession of 23.8 kg Ganja and were transporting the same. The appellant and his co-accused filed an application for release on bail pending trial before the Sessions Judge but the same was rejected.
When the accused approached the High Court with their bail pleas, the Court allowed the bail application filed by the co-accused but the appellant’s plea was rejected. The appellant then filed SLP before the Apex Court. The appellant’s Counsel brought it to the Court’s notice that that during the pendency of the present matter, the High Court vide order dated 11.10.2023 had granted bail to him. However, the Top Court on 06.12.2023, noted that the High Court’s order didn’t mention the fact that it was the second bail application filed by the appellant nor pendency of the SLP before the Top Court, in which notice had already been issued. The matter was listed again on December 13, 2023.
A report had been received by the Top Court wherein the comments of Judge B of the High Court were annexed with the original file of second bail application of appellant. It was mentioned therein that at the time of hearing of the second bail application, the court was not apprised of the factum of pendency of the SLP before this Court, in which notice had already been issued on 22.09.2023.
A perusal of the paper book in second bail application showed that there was a report annexed by the Registry in the matter which mentioned about the earlier two bail applications filed in the FIR in- question. The first bail application filed by the appellant was disposed of on 06.03.2023. Bail application filed by the co-accused Gangesh Kumar Thakur was disposed of on 17.01.2023. The next one was the second bail application filed by the appellant.
Though Standing Order directed the Registry to annex all the orders passed in the earlier bail applications by different accused in the same FIR, however, the order passed by the High Court in the case of the appellant, rejecting his earlier bail application, did not form part of the bail application before the High Court. Only the order dated 17.01.2023 passed in the bail application, filed by the co-accused Gangesh Kumar Thakur was annexed.
Moreover, in the list of dates and events as well as in the body of the bail application, the appellant did not mention regarding disposal of his earlier bail application by the High Court and also filing of the SLP in this Court. During the pendency of the matter before the Top Court a fresh bail application was filed not only before the Trial Court but even before the High Court. The High Court even granted bail to the appellant. In the bail application filed before the High Court, it was not mentioned that the same was second bail application filed by the appellant.
The Bench noticed that in the order dated 17.01.2023 vide which bail application, of the co-accused Gangesh Kumar Thakur was allowed by the High Court, the State Counsel did not point out the factum of pendency of another bail application filed by the co-accused arising out of the same FIR at that stage.
Thus, the Bench held that in order to avoid any confusion in future it would be appropriate to mandatorily mention in the applications filed for grant of bail:
- Details and copies of orders passed in the earlier bail applications filed by the petitioner which have been already decided.
- Details of any bail applications filed by the petitioner, which is pending either in any court, below the court in question or the higher court, and if none is pending, a clear statement to that effect has to be made.
- The registry of the court should also annex a report generated from the system about decided or pending bail application(s) in the crime case in question. The same system needs to be followed even in the case of private complaints as all cases filed in the trial courts are assigned specific numbers (CNR No.), even if no FIR number is there.
- It should be the duty of the Investigating Officer/any officer assisting the State Counsel in court to apprise him of the order(s), if any, passed by the court with reference to different bail applications or other proceedings in the same crime case. And the counsel appearing for the parties have to conduct themselves truly like officers of the Court.
The Top Court also noted that it had already directed vide order passed in Pradhani Jani v. The State of Odisha that all bail applications filed by the different accused in the same FIR should be listed before the same Judge except in cases where the Judge has superannuated or has been transferred or otherwise incapacitated to hear the matter. “The system needs to be followed meticulously to avoid any discrepancies in the orders”, the Bench added.
The Bench didn’t take an extreme step to cancel the petitioner’s bail. However, dismissing the appeal as infructuous, the Top Court burdened the appellant with a token cost of Rs 10,000.
Read Order: The State of Assam and others v. Binod Kumar and others[SC-CIVIL APPEAL NO. 1933 OF 2023]
Tulip Kanth
New Delhi, January 19, 2024: The Supreme Court has upheld the decision of the Gauhati High Court invalidating Rule 63(iii) of the Assam Police Manual on the ground that it was in direct conflict with Section 14(2) of the Assam Police Act, 2007.The Top Court has clarified that the Deputy Commissioner should notbe theReporting Authority to initiate Annual Confidential Reports or Performance Appraisal Reports of IPS Officers working as District Superintendents of Police (SPs) in the State of Assam.
The main issue in this case was as to who should be the Reporting Authority to initiate Annual Confidential Reports (ACRs)/Annual Performance Appraisal Reports (APARs) of Indian Police Service (IPS) Officers working as District Superintendents of Police (SPs) in the State of Assam.
The question to be answered was Rule 63(iii) of the Assam Police Manual which prescribes that such assessment should be initiated by the Deputy Commissioner concerned, as the Reporting Authority, is lawful. The specific ground successfully urged before the High Court by the respondents herein, viz., IPS Officers working as SPs in the State of Assam, was that this Rule is violative of Section 14(2) of the Assam Police Act, 2007.
It was the case of the appellants that a government servant has no right, much less a legal right, to insist that his/her ACR/APAR ought to be initiated by a particular Reporting Authority. It was argued that there is no inconsistency in Rule 63(iii) when compared with the scheme of the Act of 2007 and the All India Services (Confidential Rolls) Rules, 1970/2007 Rules. Referring to All India Services (Performance Appraisal Report) Rules, 2007and the 1987 amendment of Rule 2(e) of the 1970 Rules, the appellants contended that it is not necessary that a Reporting Authority should be the immediate superior of the member of the service whose ACR/APAR is being prepared and it is sufficient if the authority supervises his/her performance.
The respondents, on the other hand, pointed out that Section 14(2) of the Act of 2007 makes it clear that the Deputy Commissioner cannot interfere with the internal organization or discipline within the police force in the district and can only inform the SP if the conduct and/or qualification of a police officer affects the general administration of the district. They contended that the archaic Rule 63(iii) of the Manual is not compatible with the scheme obtaining under the Act of 2007 and the 2007 Rules and that the Gauhati High Court was well justified in holding to that effect and invalidating it.
The Division Bench of Justice Aniruddha Bose & Justice Sanjay Kumar made it clear that IPS Officers, being members of an All India Service, would be amenable to the 2007 Rules. Section 65 of the Act of 2007 states that police personnel in the State of Assam shall be governed by the existing Discipline and Appeal Rules and other Service Conduct Rules in force, as applicable to the Indian Police Service, State Police Service and others serving in the State Police Establishment.
“Therefore, merely because they are deployed/deputed to work in the State of Assam, IPS Officers cannot be denied the benefit of the 2007 Rules which would be applicable across the board to their ilk serving all over the country. It would, therefore, be incorrect to castigate such IPS Officers as insisting upon a Reporting Authority of their choice”, the Bench noted.
As per the Bench, the definition of Reporting Authority in the 1970 Rules, post 1987, and in the 2007 Rules, did away with the mandate of having the immediate superior of the officer reported upon undertaking that exercise but it still requires the Reporting Authority to be someone who supervises the performance of the said officer. Ordinarily, such supervision would be by an officer from within the same department, who is higher in rank than the officer reported upon. The Bench stated that such discussion clearly implied that both authorities must belong to the same service or department. In effect, Rule 63(iii) of the Manual did not fit in with the scheme obtaining under the 1970 Rules and the 2007 Rules, the Bench further added.
Referring to the Manual& specifically Rule 25, the Top Court opined that a SP is required to work under the general control and direction of a Deputy Commissioner and obey his/her instructions but that does not place the SP under the hierarchical supremacy of that Deputy Commissioner.
It was the opinion of the Bench that the Deputy Commissioner should not be the Reporting Authority of the SP of that district. The reason being that when liberty has been given to the SP to disagree with the Deputy Commissioner on any point relating to police administration and seek resolution of such difference of opinion through the Commissioner and, thereafter, the Inspector General of Police, it would be a parody to subject the performance assessment of such a SP to the same Deputy Commissioner with whom he/she had disagreed.
Placing reliance upon Circular No. 11059/4/89-AIS.III, dated 28.12.1990, issued by the Government of India, the Bench clarified that the Reporting Authority must necessarily be in a higher grade of pay than the officer who is being reported upon.
The appellants had argued that the Deputy Commissioner is the most suitable person to assess the performance of the SP, as he works under his control and direction, but the Bench was not impressed with the same. Form I in Appendix II to the 2007 Rules pertains to performance appraisal of all IPS Officers upto the level of Inspector General of Police, which would include SPs. Referring to Clause 6 in Rule 3, the Bench opined that Law and Order is only one of the twenty named domains, which would come within the purview of the Deputy Commissioner and the remaining nineteen would not be within his/her purview and supervision. Seized of only one of the twenty domains, the Deputy Commissioner would not even be competent to assess the overall performance of the SP, the Bench noticed.
“On the above analysis and given the fact that the 1970 Rules/2007 Rules define reporting, reviewing and accepting authorities to mean that they must all be from the same service or department, intervention by the Deputy Commissioner during the exercise of performance assessment of SPs of the districts in the State of Assam, by virtue of Rule 63(iii) of the Manual, cannot be countenanced, being in direct conflict therewith, and would tantamount to permitting the Deputy Commissioner to interfere with the internal organization of the police force, which would be contrary to the mandate of Section 14(2) of the Act of 2007”, the Bench held while dismissing the appeal.
Read Order:Ramalingam &Ors v. N. Viswanathan (SC-CRIMINAL APPEAL NO. 212 OF 2024)
Tulip Kanth
New Delhi, January 19, 2024: The Supreme Court has allowed the appeal of the accused-appellants in a murder case with the observation that the Madras High Court had wrongly set aside the order of discharge when the doctor had disclosed in the post-mortem report that the death of the deceased was a natural one.
The admitted facts of the case were that the respondent’s father Nanjundan had lodged a First Information Report alleging the commission of offences under Sections 341, 323 and 302 of the Indian Penal Code against the appellants. In the complaint, based on which the FIR was registered, it was alleged that the first appellant had filed a suit against the respondent, praying for carrying out the measurement of the property claimed by the appellants and removing encroachment.
On the date of the incident, the appellants and one Gopal assembled in front of the respondent’s house, along with village munsif and a surveyor. They informed the respondents father that Gopal had purchased the said property from the first appellant, and they wanted to measure the property. The respondent’s mother (deceased) tried to prevent them from entering to carry out a survey. The allegation was that at that time, the first appellant exhorted the second appellant to kill the deceased. Thereupon, the second appellant picked up a stick lying at the site and assaulted her on the chest. After that, the third and first appellant kicked the deceased on her chest and stomach. The respondent’s mother was declared dead in the hospital where she was taken.
After completing the investigation, the investigating officer submitted a final report recording that the death of the deceased was due to natural cause and due to prior enmity, the respondent falsely implicated the appellants. The final report was accordingly, filed but instead of filing a protest petition, the respondent’s father filed a complaint under Section 200 of CrPC containing the same averments made in his complaint based on which the FIR was registered. The Judicial Magistrate recorded evidence of witnesses & a doctor who deposed that the death was natural.
The appellants invoked Section 227 of CrPC for discharge, which was allowed by an order dated January 9, 2009.The husband of the deceased Siddammal, challenged this order by filing a revision application. The High Court, by the impugned judgment and order, had allowed the same and remanded the case to the Additional District and Sessions Judge for holding trial.
It was the case of the appellants that the post-mortem certificate recorded that there were no ante-mortem injuries anywhere on the body of the deceased and there was no final opinion regarding the cause of death.
The High Court had opined that the Additional District and Sessions Judge had conducted a mini-trial. However, the Top Court observed that that a mini-trial was not conducted and the Court had considered the case within four corners of its limited jurisdiction under Section 227 of the CrPC.
Clarifying that post-mortem certificate recorded that there were no ante-mortem injuries present on the body of the deceased, the Division Bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan took note of the evidence ofDr. R. Vallinayagam reiterating that in the post-mortem examination, he did not notice any external injuries on the body of the deceased.
Thus, the Bench noted that the expert witness examined by the respondent, who admittedly carried out a post-mortem on the body of the deceased, had categorically stated that the death of the deceased was natural. This wascoupled with the fact that there were no external injuries found on the body of the deceased.
The Bench considered the version of the respondent’s father who was examined as PW-1 stating that one of the appellants hit the deceased with a stick on her chest, and the other appellant repeatedly kicked her on her chest. In the post-mortem, no injury was found on the chest or any other part of the body of the deceased.
“Therefore, taking the evidence of the respondent’s father and other witnesses as it is, there was no material to proceed against the appellants in the private complaint filed by the respondent’s father. We may also note here that even according to the case of the respondent’s father, there was a dispute between him and the appellants over the property, and the incident occurred when, as per the order of the Civil Court, an attempt was made to survey the property through a government surveyor”, the Bench noticed.
According to the Bench,the High Court, even after referring to the post-mortem certificate, had completely ignored the doctor’s evidence. Hence, the Bench set aside the impugned judgment while restoring the Judgment in Sessions Case.
Read Order: ALAGAMMAL AND ORS v. GANESAN AND ANR(In CIVIL APPEAL No. 8185 OF 2009-SC)
Tulip Kanth
New Delhi, January 19, 2024: The Supreme Court has allowed an appeal challenging a Madras High Court order upholding the suit for specific performance after considering the fact that payments were being made at great intervals by the respondents, no willingness was shown by them to pay the remaining amount or give notice to the appellants to execute the Sale Deed.
The facts of the case indicated that the appellants no.1, 2 and 3 entered into a registered Agreement of Sale with the respondents in the year1990 to sell the suit property for a consideration of Rs 21,000, against which Rs 3000 had been received in advance. Further, six months’ time was fixed for completion of the transaction. The appellants in the meantime, had executed a Sale Deed with regard to the property in question with appellant no.7 for a consideration of Rs 22,000.
Thereafter, the respondents sent a Notice to the appellants calling upon them to execute the Agreement. This led to the respondents filing an Original Suit before the District Court against the appellants for specific performance of the Agreement, damages and for recovery of money with interest. The suit stood dismissed by the Principal District Munsif Judge, Dindigul. An appeal filed by the respondents was allowed by the First Appellate Court, and the same had been upheld by the High Court by the Impugned Judgment.
It was the case of the appellants that as per the Agreement, the balance consideration amount of Rs 18,000was to be paid within six months which was admittedly not done. The fingerprint expert had found the thumb-impression of appellant no.1 as not matching the admitted actual sample thumb-impression of the appellant and, thus, the very basis of holding that time was not the essence of the agreement was washed away. It was submitted that the Agreement stipulated that if there was default on the part of the respondents, the advance paid would be forfeited, and the entitlement to obtain the Sale Deed and get possession free from all encumbrances would also end.
On the contrary, the respondent submitted that the appellants even after accepting Rs425 over and above the amount indicated in the Agreement and even after getting a decree for declaration and possession of the suit property in her favour did not execute the Sale Deed. Further, it was submitted that it is the obligation of the seller to hand over possession at the time of sale, as was stipulated in the Agreement.
The moot question, before the Division Bench of Justice Vikram Nath & Justice Justice Ahsanuddin Amanullah, was whether the Agreement dated 22.11.1990 disclosed a fixed time-frame for making payment in full by the respondents that is, in terms of the recitals in the agreement for sale executed by the appellant no.1 in favour of the respondents.
It was observed by the Bench that within six months there existed the onus of paying the entire balance amount of Rs 18,000 by the respondent no.1 to the appellant no.1. It was not the case of the respondents that they had even offered to pay the remaining/balance amount before the expiry of the six-month period. Thus, payment of Rs 3,000 only out of Rs 21,000having been made, or at best Rs 7,000/- out of Rs21,000/-, which is the amount indicated in the Legal Notice sent by the respondents to the appellants, the obvious import would be that the respondents had not complied with their obligation under the Agreement within the six-month period.
Moreover, there was no explanation, as to why, an excess amount of Rs 425 as claimed, was paid by respondent no.1 to the appellant no.1, when the respondents specific stand was that due to the appellants not being in possession of the property so as to hand over possession to the respondents, delay was occasioned. The submission that no adverse effect could be saddled on the respondents as decree for declaration and recovery of possession was obtained by appellant no.1 in her favour only on 27.04.1996 was not acceptable for the reason that there was no averment that pursuant to such decree, she had also obtained possession through execution. Thus, the decree dated 27.04.1996 also remained only a decree on paper without actual possession to appellant no.1, the Bench held.
Reliance was also placed upon the judgment of the Top Court in K.S. Vidyanadam v Vairavan [LQ/SC/1997/221].
The Bench concluded the matter by observing that later payments by the respondents to the appellants were being done at great intervals and there was no willingness shown by them to pay the remaining amount or getting the Sale Deed ascribed on necessary stamp paper and giving notice to the appellants to execute the Sale Deed. This fact alongwith the conduct of parties, especially the appellants, made it clear that time would not remain the essence of the contract.
Hence, allowing the appeal, the Bench restored the judgment/order of the Trial Court.
Read Order: Sanjay Kundu v. Registrar General, High Court of Himachal Pradesh & Ors [SLP (CRIMINAL) No. 550-551 2024-SC]
Tulip Kanth
New Delhi, January 19, 2024: In a case where the complainant alleged that the petitioner, IPS officer Sanjay Kundu, in his official capacity, intervened in a civil dispute and attempted to used his office to intimidate the complainant, the Supreme Court has set aside the Officer’s transfer order. However, the Top Court confirmed the Himachal Pradesh High Court’s decision to grant adequate protection to the complainant and his family.
The proceedings, in this matter, before the High Court of Himachal Pradesh were initiated on an email from one Nishant Kumar Sharma, addressed to the Chief Justice of the High Court through the Registrar General. The complainant alleged in his email, that he was facing threats emanating from two persons - X, a former IPS officer and Y, a practicing advocate.
According to his email, the complainant and his family conducted a hotel in Palampur. A relative of Y had invested in the company of the complainant. He alleges that Y had been pressurizing him and his father through X to sell their shares in their company. The email detailed criminal complaints filed by him in Gurugram after an alleged attack on him, and subsequent instances of intimidation to compel him to withdraw them. No FIR was registered in respect of this complaint and a later complaint filed by the complainant in relation to an incident that transpired in Mcleodganj.
On November 9, 2023, the High Court suo motu registered a Criminal Writ Petition pursuant to the email. The State of Himachal Pradesh, Superintendent of Police, Kangra and Superintendent of Police, Shimla were arrayed as respondents. Thereafter, an FIR was registered by the Mcleodganj Police Station for offences punishable under Sections 341, 504 and 506 read with Section 34 of the Indian Penal Code (IPC). The High Court observed that the petitioner, who is a public servant, had overstepped his authority by intervening in what was clearly a private civil dispute. The High Court observed that the petitioner had admitted in his recall application to having placed the hotel run by the complainant under surveillance for alleged drug running activities in September 2023.
The SLP before the Top Court stemmed from the rejection of the petitioner’s recall application. The High Court has dismissed it and directed the State Government to consider within a week, forming a Special Investigation Team (SIT) consisting of IG level officers to coordinate the investigation in all the FIRs and to advise the government on providing effective security to the complainant and his family. Through the impugned Order in question, the earlier order of the High Court directing that the petitioner should be shifted out of the post of DGP, Himachal Pradesh stood revived.
At the outset, the 3-Judge Bench of Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala & Justice Manoj Misra noted that the allegations which were levelled by the complainant were that the petitioner, in his official capacity, intervened in a civil dispute and attempted to used his office to intimidate the complainant. The allegations were apparently serious.
The High Court thus directed that the petitioner be moved to other posts to ensure a fair investigation. Noticing that in doing so, the High court assumed disciplinary jurisdiction over the petitioner, the Bench said, “ This was clearly impermissible. As a serving police officer, the petitioner is subject to the disciplinary control which is wielded over him in terms of the rules governing service. The High Court has improperly assumed those powers to itself without considering the chain of administrative control in the hierarchy of the service. The State Government shifted the petitioner as Principal Secretary (Ayush) in compliance with the directions of the High Court,”
According to the Bench, the consequence of shifting out of an IPS officer has serious consequences. The order was passed without an opportunity to the petitioner to contest the allegations against him or to place his response before the Court. There was thus a manifest miscarriage of procedural justice, it added.
The Bench further observed that the correct course of action for the High Court would have been to recall its ex parte order and to commence the proceedings afresh so as to furnish both the petitioner and the complainant and other affected parties including the SP, Kangra, an opportunity to place their perspectives before it. Instead, the High Court, while deciding the recall application, heavily relied on the earlier status reports.
It was observed that the impugned order suffers from a patent error of jurisdiction. The order was passed without compliance with the principles of justice, especially, the principle of audi alteram partem. The order dated 26 December 2023 had serious consequences, and it was passed without hearing the petitioner who stood to be affected by it. “A post-decisional hearing of the kind conducted by the High Court lacks fresh and dispassionate application of mind to the merits of the recall application, and is for that very reason, likely to cause disquiet”, it said.
However, the Top Court did not interfere with the Order directing the State Government to consider constituting an SIT so that an objective and fair investigation could take place and also directing the State Government to consider granting adequate protection to the complainant and his family.
The direction of the High Court directing the shifting out of the petitioner from the post of DGP was set aside. The Bench ordered that the petitioner would exercise no control whatsoever in respect of the investigation which is to be carried out by the Special Investigation Team.
“The State Government is directed to provide adequate security to the complainant and to the members of his family and to continue to do so based on its evaluation of the threat perception. We clarify that since the investigation is to be carried out by the SIT, we are not expressing any opinion on the merits of the allegations which shall be duly investigated in accordance with law”, the Top Court held while disposing of the SLP.
Read Order: RANBIR SINGH v. STATE (DEL HC- BAIL APPLN. 113/2024)
LE Correspondent
New Delhi, January 19, 2024: The Delhi High Court has refused to grant default bail to a man booked under the NDPS Act case where recovery of 50kg of opium was made but chargesheet was filed without an FSL Report.
The Single-Judge Bench of Justice Swarana Kanta Sharma was considering an application filed under Section 167(2) read with Sections 439 and 482 of the Code of Criminal Procedure, 1973 for grant of default bail in a case registered under Sections 18/25/29 of Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act).
The factual background which led to filing of the appeal was that a secret information was received by the Special Cell that in next 4-5 days, two people from Imphal, Manipur would be carrying drugs from Manipur for supplying them in areas of Delhi NCR and Punjab. On 17.02.2023, the Special Cell had received information that two residents of Imphal i.e. Ranbir Singh (applicant herein)and Loyangamba, who are involved in business of heroin, will come through loop road from MB road towards Sarita Vihar, Delhi in white coloured Maruti Brezza Car.Thereafter, a raiding team reached at the spot. The applicant Ranbir Singh i.e. the driver of the car had then got down from the car and stood on the footpath carrying a bag.
After some time, the accused/applicant started running towards the car. Immediately thereafter, the raiding team got hold of the applicant and the co-accused Loyangamba. The raiding team conducted search of the car and 10kg of opium each was recovered from the bags being carried by the accused persons and 30kg of opium was recovered from the car. Accordingly, the FIR was registered, accused persons were arrested, and were sent to police remand.
It was the case of the applicant that the chargesheet in this case was filed without an FSL Report and therefore, the chargesheet in such a case would be considered as 'incomplete'. This would enable the applicant to avail the benefit of default bail. It was also submitted that the Apex Court in several recent decisions, including in Mohd Arbaz & Ors. v. State of NCT of Delhi had granted bail to accused persons in cases where FSL report was not filed alongwith main chargesheet within a period of 180 days.
On the contrary, the State Counsel submitted that the present case pertained to recovery of 50kgs of opium, which is a commercial quantity, from the possession of accused persons who are allegedly involved in inter-state trade of narcotic drugs. It was argued that in the case of Mohd Arbaz (supra), the Apex Court has only opted to examine the legal issue in detail and for the time being, interim relief has been granted to the petitioners. It was also stated that till the issue in question i.e. whether a charge-sheet filed without FSL report is complete or incomplete for the purpose of default bail is decided by the Apex Court, the prevailing law will cover the present case and the petitioner will not be entitled to grant of default bail, in view of decisions to this effect passed by several Benches of this Court.
The Bench observed that in Arif Khan v. State (NCT of Delhi) while dismissing the petition, the Top Court opined that non-filing of FSL report alongwith the chargesheet does not fall within the ambit of Section 173(2) of Cr.P.C. so as to consider it as “incomplete chargesheet” and accordingly, no right of default bail is accrued in favour of the accused.
It was further noticed by the Bench that though in case of Mohd Arbaz (supra), as well as in other subsequent cases filed assailing the orders of refusal of grant default bail, the accused persons had been enlarged on bail by the Apex Court, the said relief however has been granted to the accused persons on the ground of pendency of larger issue i.e. whether chargesheet filed without an FSL report is incomplete chargesheet, before the Apex Court in batch of petitions.
“However, neither the decisions challenged before the Hon'ble Apex Court have been stayed, nor any general directions have been given to the Courts to release the accused persons on default bail if the chargesheet is filed without an FSL report”, the Bench said.
Thus, dismissing the application, the Bench held that there was no ground for grant of default bail to the present accused/applicant.
Read Order: PREETI ANAND v. STATE (NCT OF DELHI) [BAIL APPLN. 4364/2023-DEL HC]
LE Correspondent
New Delhi, January 19, 2024: In a case of conspiracy and bank fraud where the appellant along with other accused persons took loans from Punjab National Bank by misusing complainant’s firm name and his PAN & Aadhar credentials, the Delhi High Court has rejected the bail plea of the woman.
The Single-Judge Bench of Justice Navin Chawla was considering an application filed under Section 438 of the Code of Criminal Procedure Code, 1973 seeking anticipatory bail in a case registered under Sections 420/468/471/120B/467 of the Indian Penal Code, 1860.
It was the case of the prosecution that the complainant, Mr. Surender Mohan, filed a complaint stating that he had received letters from the Punjab National Bank, Kalkaji Branch (PNB) with regard to an alleged term loan account in the name of one M/s. Harpreet Impex, which was stated to be a partnership firm of which he was alleged to be one of the partners. He denied having any connection with the said firm or having availed or taken any such loan.
On inquiry, it was found that his Aadhaar Card and Pan Card had been misused by the applicant for claiming that he was a partner in the said firm and a Partnership Deed allegedly bearing complainant’s signatures was produced before the bank. The Partnership Deed bore a photograph of a different person. It was further alleged that the term loan got sanctioned by mortgaging a flat which, stood in the name of the daughter of the complainant, who had been residing in London. It was further alleged that the said property had already been sold by him, as a Power of Attorney of his daughter, to a third party.
The complainant had earlier entered into negotiation with one Mr. Ravi Gehlot and his wife Mrs. Kiran Gehlot, who were also the accused in the present FIR. The complainant alleged that he had handed over the property papers of the said property along with a copy of his Aadhaar Card, copy of the Passport, and the Pan Card of his daughter, to Ravi Gehlot as he had represented that he would require a loan for purchasing the said property. The complainant alleged that misusing the said papers, the above loan transaction was entered into by the accused in connivance with each other.
The applicant contended that the allegations against her were all based on documentary evidence. All such documents had already been retrieved by the prosecution and, therefore, there was no need for a custodial interrogation of the applicant. The Court was also made aware of the fact that pursuant to the interim bail, the applicant had duly joined the investigation and she had also undertaken to join the investigation as and when called.
The applicant further submitted that she is a woman having roots in the society and is not a flight risk. She also has to take care of two children and, therefore, it would be in the interest of justice that she be granted an anticipatory bail.
On the contrary, the State Counsel submitted that the applicant could be termed as a habitual offender inasmuch as the earlier FIR was also lodged on similar allegations against the applicant. The applicant was also the beneficiary of the ill-gotten money. Further, investigation had revealed that the alleged Partnership Deed showed the applicant herein as one of the partners of M/s Harpreet Impex. It was alleged to have been further revealed that the applicant along with her husband, a co-accused, had applied for the alleged loan on the basis of allegedly forged and fabricated documents.
The Bench noticed that the allegations made against the applicant were rather severe. It had been alleged that she actively connived along with the co-accused in projecting herself to be a partner along with the complainant/informant to obtain an overdraft facility from the bank. In the said transaction, the property belonging to the daughter of the complainant was mortgaged illegally without any authority.
The High Court took note of the fact that the complainant/informant had stated that the said property, in fact, stood sold to a third party prior to the date of the transaction. “This would involve multiple victims facing consequences for the acts of the conspiracy that has been alleged against the applicant. The entire extent of this conspiracy and the manner of its execution are yet to be unearthed fully by the prosecution”, it remarked.
The Bench also opined that though the applicant had submitted that the amount that was received by the applicant from the partnership firm and from the co-accused, stood transferred to her husband, but it couldn’t be denied that she did first receive this money. What was her exact role in the same can only be unearthed by further investigation, the Bench added.
It was also noticed that she earlier tried to evade investigation and Non-Bailable Warrants had to be issued for seeking her production. The prosecution had alleged that there was another FIR with similar allegations against the applicant. Though, the applicant stated that the dispute giving rise to the said FIR had been settled with the complainant/informant therein but the Bench opined that would give rise to a suspicion that similar modus operandi had been used by the applicant in more than one case. The same would again require custodial interrogation of the applicant, the Bench added.
Dismissing the application, the Bench said, “Only being a woman cannot grant additional protection or rights to the accused.”
Read Order: SURAJ v. STATE (NCT OF DELHI) (CRL.A. 1073/2023-DEL HC)
LE Correspondent
New Delhi, January 18, 2024:Considering the fact that the appellant-accused held a grudge against the complainant over the relations with his ex-girlfriend and the injuries were inflicted upon the complainant with avowed object or knowledge to cause death by causing several injuries with stones, the Delhi High Court has upheld the conviction u/s 308 IPC.
The facts of the case suggested that on 22.08.2021, injured Arjun (PW- 2) received a call from appellant Suraj to meet him. When Arjun reached at the spot along with his friend/neighbour Sunny (PW-1/complainant), he was confronted by appellant on the issue of Arjun having proximity with his ex-girlfriend namely Monika. Arjun was further assaulted by appellant who was joined by two- three other associates including Robin.
As Sunny raised alarm, appellant along with other co-accused fled from the spot. Arjun was removed to Dr.BSA Hospital, from wherein he was referred to Safdarjung Hospital. The information regarding the incident was reported to the police telephonically on the next day by sister of the injured (Neha/PW-5). The Appellant and the Co-accused Robin were arrested and charges were framed against them for the offences punishable under Section 308/34 IPC.
The appellant approached the Delhi High Court challenging the judgment whereby the appellant had been convicted under Section 308 IPC.
It was the appellant’s case that the findings of the Trial Court were based on surmises and conjectures since PW-1 Sunny (complainant) who is alleged to have been present at the spot did not support the case of the prosecution and was declared hostile.It was also urged that PW-4 Subhash, father of injured did not support the prosecution version and resiled from his statement under Section 161 Cr.P.C. qua role of co-accused Robin.The conviction of the appellant on the basis of testimony of solitary witness (injured) was stated to be bad in law.
The single-judge Bench of Justice Anoop Kumar Mendiratta was of the view that the Sessions Judge rightly inferred that from 06.47 PM on 23.08.2021 after receiving the information till preparation of rukka on the same day, the IO had spent 4-5 hours in the initial investigation of the case, collecting the MLCs and, consequently, the FIR could be registered only on 24.08.2021 at 12.21 AM. It was also noticed that day of occurrence was during peak of Covid pandemic, due to which there was possibility of no police personnel being on duty in the Hospital at the time of admission as revealed from MLC.
“As such, the delay in registration of FIR appears to have been satisfactorily explained by the prosecution and there does not appear to be any circumstances whereby the FIR may be considered to have been lodged as an afterthought and deliberations. The veracity cannot be doubted merely on account to delay in registration of FIR, in the facts and circumstances of the case”, the Bench held.
The High Court explained that the oral evidence may be either (1) wholly reliable (2) wholly unreliable (3) neither wholly reliable nor wholly unreliable. It is well settled that accused can be convicted even on the sole testimony of a witness if it is wholly reliable. However, where the witness does not partly support the case of the prosecution qua the role of the co-accused or any other fact and is cross-examined on behalf of the prosecution, the same does not result in automatic rejection of his evidence, the Bench opined.
Referring toSection 154 of the Indian Evidence Act, 1872which provides that the Court may, in its discretion, permit the person who calls a witness to put any question to him which might be put in cross-examination by the adverse partyand sub-section 2 does not disentitle the person so permitted to rely on any part of the evidence of such witness.
“The evidence of a witness who has been cross-examined by the party relying upon it can be taken into account and conviction can be based, if it finds corroboration, and the credit of the witness has not been shaken, when taken as a whole. However, if the complete testimony of a witness is impugned and the witness squarely stands discredited, as a matter of prudence, the evidence should be discarded in toto”, the Bench observed while relying upon Sat Paul v. Delhi Admn., [LQ/SC/1975/379] .
The Bench observed that the testimony of PW-1 to the extent that he had accompanied PW-2 Arjun to the spot wherein the appellant was already present, could not be dented. Also, the fact that PW-1 fled from the spot since the appellant was in possession of a knife and as three-four associates of appellant followed, could be taken note of.
During cross-examination except on the point of presence and participation of co-accused Robin, testimony of PW-2 remained consistent. No material contradictions were brought in the short cross-examination on behalf of the appellant. It was opined by the High Court that merely because carrying of knife by the appellant was not mentioned by PW-2 in his statement, it couldn’t be a ground to disbelieve the testimony of PW-2.
“Minor alterations are bound to be there in a natural testimony on account of lapse of time and may have been missed to be disclosed at the time of recording of statement under Section 161 Cr.P.C. Non-seizure of stones or weapon of offence cannot be detrimental to the prosecution case as the injured was assaulted after covering his head with blanket”, the Bench held while adding that the non-seizure of the clothes of PW-2 by the investigating agency seemed inconsequential since the nature of injuries remained undisputed on record as proved in the MLC.
Further stating that the prosecution version cannot be doubted merely on the ground that no independent witness from public was joined in the investigation, the Bench opined, “It needs to be kept in perspective that minor discrepancies, infirmities and deficiencies unless they impact the root of the case and render the testimony unworthy of belief, cannot be given much credence as they may occur on account of errors of memory due to lapse of time.”
It was also observed that the testimony of PW-2 Arjun on the point of assault by the appellant could not be dented and there was no reason to falsely implicate the appellant. The motive of assault by appellant was apparently over relationship of PW-2 with Monika. The intention, knowledge and motive were writ large on the face of record and the assault was premeditated, since the victim was telephonically called at the place of occurrence and thereafter mercilessly assaulted.
Referring to Vadivelu Thevar v. The State of Madras, [LQ/SC/1957/42], the Bench said, “It is well settled that conviction can be based on solitary testimony of a credible witness though uncorroborated. The Courts should not insist on corroboration except in the cases where the nature of the testimony of the single witness itself requires as a rule of prudence that corroboration should be insisted upon like in case of a witness of an accomplice or of an analogous character.”
The Bench noticed that the assault was premeditated and there was clear evidence on record that accused/appellant held a grudge against the complainant over the relations with his ex-girlfriend Monika. After a failed attempt to cause harm with the stab blow, the injuries were inflicted with avowed object or knowledge to cause death by causing several injuries on the parietal region, which is a vital part of the body with stones. The offence fell within the ambit of Section 308 IPC.
The convict in the present case was also involved in other offences. Thus, considering the grievous nature of offence, the Bench dismissed the appeal and held that the Trial Court had appropriately sentenced the appellant with rigorous imprisonment for three years and payment of fine of Rs10,000.
Read Order: SHADAKSHARI v. STATE OF KARNATAKA & ANR[CRIMINAL APPEAL NO. 256 OF 2024-SC]
Tulip Kanth
New Delhi, January 18, 2024:In a case where a village accountant was accused of fabricating official documents by misusing his official position as a public servant, the Supreme Court has held that the Karnataka High Court was not justified in quashing the complaint as well as the chargesheet in its entirety.
The factual background of the case which led to the filing of the appeal was that the appellant as the complainant lodged a first information report alleging that respondent No.2 and another were irregularly creating documents of property in the name of dead person despite knowing the fact that those were fake documents, such as, death certificate, family tree of the original successor of land of the appellant etc. for illegal gain. The said FIR was registered under Sections 409, 419, 420, 423, 465, 466, 467, 468, 471 and 473 of the Indian Penal Code, 1860 (IPC) read with Section 149 and Section 34 thereof.
The respondent No.2, working as Village Accountant in the district of Hassan, Karnataka State, filed a petition under Section 482 of the Code of Criminal Procedure, 1973 (Cr.PC) for quashing of the said FIR before the High Court of Karnataka. The High Court in its order noted that the specific case of the appellant was that land situated at Chattanahalli Village belonged to the appellant and his family members. The same was given to accused No.1 for the purpose of cultivation. Accused No.1 in collusion with revenue officials including accused No.2 (respondent No.2) created lot of fake documents in favour of respondent No.1. The three accused persons were charged under Sections 471, 468, 467, 465, 420, 409, 466 and 423 read with Section 34 of IPC.
The appellants had approached the Top Court challenging Karnataka High Court’s order quashing the complaint, chargesheetand the Judicial Magistrate’s order. It was their case that no sanction to prosecute was required qua respondent No. 2 as making of a fake document couldn’t be said to be carried out by respondent No. 2 in the discharge of his official duty. Reference was made to Shambhoo Nath Misra Vs State of U.P., [LQ/SC/1997/481].
The issue before the Division Bench of Justice Abhay S. Oka & Justice Ujjal Bhuyan was sanction was required to prosecute respondent No. 2 who faced accusation amongst others of creating fake documents by misusing his official position as a Village Accountant, thus a public servant.
At the outset, placing reliance upon State of Orissa Vs. Ganesh Chandra Jew, [LQ/SC/2004/426], the Bench opined that the object of sanction for prosecution is to protect a public servant discharging official duties and functions from undue harassment by initiation of frivolous criminal proceedings.Referring to more settle ratios and judgments, the Bench said, “Thus, this court has been consistent in holding that Section 197 Cr.PC does not extend its protective cover to every act or omission of a public servant while in service. It is restricted to only those acts or omissions which are done by public servants in the discharge of official duties."
Relying upon A. Srinivasulu Vs. State Rep. by the Inspector of Police, the Respondent argued that a public servant cannot be prosecuted without obtaining sanction under Section 197 of Cr.PC. The Bench opined that in this judgment, four of the accused persons were officials of Bharat Heavy Electricals Limited, a public sector undertaking and thus were public servants. It was noted therein that accused No.1 could not be prosecuted for committing the offence of criminal conspiracy when sanction for prosecuting accused Nos.3 and 4 with whom criminal conspiracy was alleged, was declined.
As per the Bench, the facts of the present case were clearly distinguishable from the facts of A. Srinivasulu (supra). Moreover, the Bench held that the question whether respondent No.2 was involved in fabricating official documents by misusing his official position as a public servant was a matter of trial.
“Certainly, a view can be taken that manufacturing of such documents or fabrication of records cannot be a part of the official duty of a public servant. If that be the position, the High Court was not justified in quashing the complaint as well as the chargesheet in its entirety, more so when there are two other accused persons besides respondent No.2”, the Top Court further opined.
It was also noticed by the Bench that Respondent No.2 had unsuccessfully challenged the complaint in an earlier proceeding under Section 482 Cr.PC. Though liberty was granted by the High Court to respondent No.2 to challenge any adverse report if filed subsequent to the lodging of the complaint, instead of confining the challenge to the chargesheet, respondent No.2 also assailed the complaint as well which he could not have done, the Bench added.
Thus, the Top Court held that the High Court had erred in quashing the complaint as well as the chargesheet in its entirety. Consequently, the Bench set aside the order of the High Court.
Read Order: KUNAL KASHYAP v. STATE OF NCT OF DELHI (In CRL.M.C. 375/2024-DEL HC)
LE Correspondent
New Delhi, January 18, 2024: The Delhi High Court has clarified that the procedure adopted by the Sessions Court to list the matter for order on sentence without deciding the application under Section 105 of the Mental Healthcare Act, 2017 contravenes the mandate of Section 105 and cannot be accepted.
Genesis of the present petition was an FIR registered under Sections 279/337 IPC against the Petitioner for commission of offences punishable under Sections 279/337/304A IPC. The Petitioner was convicted and an order on sentence was passed by the Metropolitan Magistrate. Petitioner filed an appeal but the same was dismissed by the Sessions Court. On the same day, the two applications filed by the Petitioner under Section 4 of Probation of Offenders Act, 1958 and under Section 105 of Mental Healthcare Act, 2017 were taken on record and the case was adjourned
This impugned order was assailed before the High Court on two-fold grounds by the Petitioner. It was submitted that the Petitioner had been suffering from schizophrenia, depression, psychosis, paranoia and hallucinations, for which he had been under treatment since 2015 till date. The illnesses had rendered him incapable of even carrying out his daily activities without the assistance of his sister, who is his guardian and looking after him since 2015. As per the mandate of Section 105 of the said Act, case of the Petitioner ought to have been referred by the Court for further scrutiny to the concerned Board for its opinion, which procedure was not followed.
Referring to Section 4 of the 1958 Act, it was urged that this provision vests the Court with power to release persons on probation for offences not punishable with death or imprisonment for life. In the present case, since the Petitioner had been convicted for offences punishable under Sections 279/337/304A IPC, none of which are punishable with death or life imprisonment and the maximum sentence that could be imposed was imprisonment for two years.
Referring to Ravinder Kumar Dhariwal and Another v. Union of India and Others, the Bench opined that the purpose of enacting the 2017 Act was to ensure healthcare, treatment and rehabilitation of persons with mental illness as well as to protect and promote their rights and as observed by the Supreme Court in the aforementioned judgment, this Act provides for a rights-based framework with a transformative potential.
The Bench further held that the Section 105 creates a statutory right in favour of a person, who claims to be suffering from mental illness, as defined under Section 2(1)(s) of the 2017 Act, to seek reference of his case to the Board for its opinion during any judicial process and casts a consequential obligation on the Competent Court to make a reference and seek an opinion from the Board when such a claim is made before it.
“This is a clear mandate of Section 105 of the 2017 Act and is open to no exception or discretion by the Court. The inexorable conclusion therefore is that if a claim of mental illness is made before the Court, whether orally or by an application, with some supporting material that the person is suffering from mental illness, an onerous responsibility is cast on the Competent Court to follow the procedure laid down in Section 105 of the 2017 Act”, it said.
“From the order-sheets, it is therefore clear that while the learned Court proceeded to hear arguments on the application under Section 105 of the 2017 Act but did not decide the same, which is contrary to the express provision and spirit of Section 105 of the 2017 Act. The procedure adopted by the learned Sessions Court to list the matter for order on sentence without deciding the application under Section 105 of the 2017 Act contravenes the mandate of Section 105 and cannot be accepted”, the Bench noted.
The High Court also opined that the argument of the State that the application will be decided on 18.01.2024 contemporaneously with the order on sentence was wholly flawed. Section 105 of the 2017 Act envisages reference of the claim of mental illness to a Board, which would then assess the alleged mental illness, after examining the case of the person itself or by a Committee of Experts and submit its opinion to the Court. This opinion would undoubtedly be a relevant factor for deciding the quantum of sentence including for deciding an application under Section 4 of the 1958 Act, in a given case. “Therefore, as rightly argued on behalf of the Petitioner, decision on the application under Section 105 of the 2017 Act will impact the order on sentence and the application was thus required to be adjudicated prior to listing the case for order on sentence”, the Bench further noted.
As far as application under Section 4 of the 1958 Act was concerned, while it was the argument of the State that the said provision is inapplicable to a case where the offence is under Section 304A IPC, the Petitioner urged that this couldnot be treated as a thumb rule in every case. However, since the Court was not called upon to decide the application on merits and the only relief pressed by the counsel for the Petitioner was to direct the Sessions Court to decide the application before pronouncing the order on sentence, the Bench refused to enter into the merits of the application. As per the Bench, it is the domain and jurisdiction of the Sessions Court to decide the application, both on maintainability and merits.
“This Court nonetheless does find merit in the contention of the Petitioner that the application cannot be left undecided and will require to be adjudicated, post the decision on the application under Section 105 of the 2017 Act”, the Bench held while directing the Sessions Court to decide the application filed by the Petitioner under Section 105 of the 2017 Act and pass an order thereon. It was also directed by the Bench that the Court shall proceed to decide the application under Section 4 read with Section 11 of the 1958 Act and pronounce the order on sentence. The impugned order was thus set aside to the extent it directed listing the matter on 18.01.2024 for order on sentence.
Read Orders: JEEVAN KUMAR v. DY. DIRECTOR DIRECTORATE OF ENFORCEMENT (CRL.M.C.5229/2013-DEL HC)
and
DR. JEEVAN KUMAR v. PRABHAKANT (CRL.REV.P. 504/2012 & CRL.M.A. 16239/2012- DEL HC)
Tulip Kanth
New Delhi, January 18, 2024: Considering the fact that one of the co-accused, a doctor by profession, was acquitted in a case whereby he was accused of making money from his involvement in an illegal racket of kidney transplantation, the Delhi High Court has quashed the Enforcement Case Information Report in the PMLA case.
The issue before the Single-Judge Bench of Justice Sudhir Kumar Jain was if in case an accused is acquitted/discharged in a predicate offence, in that eventuality, whether the prosecution initiated by the respondent/ED can be allowed to be continued or is liable to be quashed.
The factual background of the case was that an FIR was registered under section 420 of the Indian Penal Code, 1860 and sections 18/19 of the Transplantation of Human Organs Act, 1994 at P.S. Palam Vihar, Gurgaon. The investigation of the abovementioned FIR was entrusted to CBI and consequently, a case was registered under sections 326/342/417/465/473/ 307/506/120B IPC and sections 18/19/20 of TOHO Act. After conclusion of investigation, the final report was filed and the trial was conducted.
It was primarily alleged that Dr. Jeevan Kumar, along with others, was involved in illegal racket of kidney transplantation and committed various offences including the offence punishable under section 307 IPC and the offences punishable under sections 18/19/20 of TOHO Act which are scheduled offences under PMLA. It was also alleged that illegal kidney transplantation was the only occupation of Dr. Jeevan Kumar and his entire earnings were from this source only.
The respondent/ED registered the ECIR based on the alleged income derived by Dr. Jeevan Kumar from his criminal activity and the co-accused persons including the petitioner had been alleged to have assisted him in projecting it as untainted property. The trial court acquitted Dr. Jeevan Kumar of all the charges framed against him. The same had not been challenged and therefore, attained finality.
It was the petitioner’s case that in view of the fact that the co-accused Dr. Jeevan Kumar had been acquitted by the trial court, the present complaint filed by the ED was not maintainable. The Counsel prayed that the complaint filed by the respondent/ED be quashed along with consequential proceedings arising therefrom stated to be pending before the concerned court.
On the contrary, the Central Government Standing Counsel appearing for the ED submitted that in view of the fact that one of the co-accused had been acquitted in respect of the predicate offence, the present complaint couldn’t be quashed. Reliance was placed upon the order passed by the Supreme Court in Directorate of Enforcement V Gagan Deep Singh to submit that the issue whether proceedings under PMLA would survive upon acquittal/discharge of the accused in a scheduled offence was still pending before the Supreme Court. It was submitted that the present petition be adjourned sine die till the decision of the Supreme Court on this issue.
The Bench placed reliance upon Vijay Madanlal Choudhary vs. Union Of India (supra) wherein it was held that if the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money- laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.
Considering all the factual and legal aspects, the Bench said, “…the complaint filed by the respondent/ED and the consequential proceedings cannot survive. Considering that the co-accused Dr. Jeevan Kumar has been acquitted by the trial court vide judgment dated 22.03.2013 and that the said judgment has not been challenged till date, there can be no offence of money laundering under section 3 of PMLA against the petitioner.”
Thus, the Bench quashed the ECIR along with all consequential proceedings arising therefrom stated to be pending before the concerned court.
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Right to Disclosure – Importance & Challenges in Criminal Justice System – By Manu Sharma
Personal liberty is the most cherished value of human life which thrives on the anvil of Articles 14 and 21 of the Constitution of India (“the Constitution”). Once a person is named an accused, he faces the spectre of deprivation of his personal liberty and criminal trial. This threat is balanced by Constitutional safeguards which mandate adherence to the rule of law by the investigating agencies as well as the Court. Thus, any procedure which seeks to impinge on personal liberty must also be fair and reasonable. The right to life and personal liberty enshrined under article 21 of the Constitution, expanded in scope post Maneka Gandhi[1], yields the right to a fair trial and fair investigation. Fairness demands disclosure of anything relevant that may be of benefit to an accused. Further, the all-pervading principles of natural justice envisage the right to a fair hearing, which entails the right to a full defence. The right to a fair defence stems from full disclosure. Therefore, the right of an accused to disclosure emanates from this Constitutional philosophy embellished by the principles of natural justice and is codified under the Code of Criminal Procedure, 1973 (“Code”).
Under English jurisprudence, the duty of disclosure is delineated in the Criminal Procedure and Investigations Act, 1996, which provides that the prosecutor must disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused, except if such disclosure undermines public interest.[2] Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.[3] The duty of disclosure under common law contemplates disclosure of anything which might assist the defence[4], even if such material was not to be used as evidence[5]. Under Indian criminal jurisprudence, which has borrowed liberally from common law, the duty of disclosure is embodied in sections 170(2), 173, 207 and 208 of the Code, which entail the forwarding of material to the Court and supply of copies thereof to the accused, subject to statutory exceptions.
II. Challenges in Enforcement
The right to disclosure is a salient feature of criminal justice, but its provenance and significance appear to be lost on the Indian criminal justice system. The woes of investigative bias and prosecutorial misconduct threaten to render this right otiose. That is not to say that the right of an accused to disclosure is indefeasible, as certain exceptions are cast in the Code itself, chief among them being public interest immunity under section 173(6). However, it is the mischief of the concept of ‘relied upon’ emerging from section 173(5) of the Code, which is wreaking havoc on the right to disclosure and is the central focus of this article. The rampant misuse of the words “on which the prosecution proposes to rely’ appearing in section 173(5) of the Code, to suppress material favourable to the accused or unfavourable to the prosecution in the garb of ‘un-relied documents’ has clogged criminal courts with avoidable litigation at the very nascent stage of supply of copies of documents under section 207 of the Code. The erosion of the right of an accused to disclosure through such subterfuge is exacerbated by the limited and restrictive validation of this right by criminal Courts. The dominant issues highlighted in the article, which stifle the right to disclosure are; tainted investigation, unscrupulous withholding of material beneficial to the accused by the prosecution, narrow interpretation by Courts of section 207 of the Code, and denial of the right to an accused to bring material on record in the pre-charge stage.
A. Tainted Investigation
Fair investigation is concomitant to the preservation of the right to fair disclosure and fair trial. It envisages collection of all material, irrespective of its inculpatory or exculpatory nature. However, investigation is often vitiated by the tendencies of overzealous investigating officers who detract from the ultimate objective of unearthing truth, with the aim of establishing guilt. Such proclivities result in collecting only incriminating material during investigation or ignoring the material favourable to the accused. This leads to suppression of material and scuttles the right of the accused to disclosure at the very inception. A tainted investigation leads to miscarriage of justice. Fortunately, the Courts are not bereft of power to supervise investigation and ensure that the right of an accused to fair disclosure remains protected. The Magistrate is conferred with wide amplitude of powers under section 156(3) of the Code to monitor investigation, and inheres all such powers which are incidental or implied to ensure proper investigation. This power can be exercised suo moto by the Magistrate at all stages of a criminal proceeding prior to the commencement of trial, so that an innocent person is not wrongly arraigned or a prima facie guilty person is not left out.[6]
B. Suppression of Material
Indian courts commonly witness that the prosecution is partisan while conducting the trial and is invariably driven by the lust for concluding in conviction. Such predisposition impels the prosecution to take advantage by selectively picking up words from the Code and excluding material favouring the accused or negating the prosecution case, with the aid of the concept of ‘relied upon’ within section 173(5) of the Code. However, the power of the prosecution to withhold material is not unbridled as the Constitutional mandate and statutory rights given to an accused place an implied obligation on the prosecution to make fair disclosure.[7] If the prosecution withholds vital evidence from the Court, it is liable to adverse inference flowing from section 114 of the Indian Evidence Act, 1872 (“Evidence Act). The prosecutor is expected to be guided by the Bar Council of India Rules which prescribe that an advocate appearing for the prosecution of a criminal trial shall so conduct the prosecution that it does not lead to conviction of the innocent. The suppression of material capable of establishment of the innocence of the accused shall be scrupulously avoided. [8]
C. Scope of S. 207
The scope of disclosure under section 207 has been the subject of fierce challenge in Indian Courts on account of the prosecution selectively supplying documents under the garb of ‘relied upon’ documents, to the prejudice of the defence of an accused. The earlier judicial trend had been to limit the supply of documents under section 207 of the Code to only those documents which were proposed to be relied upon by the prosecution. This view acquiesced the exclusion of documents which were seized during investigation, but not filed before the Court along with the charge sheet, rendering the right to disclosure a farce. This restrictive sweep fails to reconcile with the objective of a fair trial viz. discovery of truth. The scheme of the code discloses that Courts have been vested with extensive powers inter alia under sections 91, 156(3) and 311 to elicit the truth. Towards the same end, Courts are also empowered under Section 165 of the Evidence Act. Thus, the principle of harmonious construction warrants a more purposive interpretation of section 207 of the code. The Hon’ble Supreme Court expounded on the scope of Section 207 of the Code in the case of Manu Sharma[9] and held that documents submitted to the Magistrate under section 173(5) would deem to include the documents which have to be sent to the magistrate during the course of investigation under section 170(2). A document which has been obtained bona fide and has a bearing on the case of the prosecution should be disclosed to the accused and furnished to him to enable him to prepare a fair defence, particularly when non production or disclosure would affect administration of justice or prejudice the defence of the accused. It is not for the prosecution or the court to comprehend the prejudice that is likely to be caused to the accused. The perception of prejudice is for the accused to develop on reasonable basis.[10] Manu Sharma’s [supra] case has been relied upon in Sasikala [11] wherein it was held that the Court must concede a right to the accused to have access to the documents which were forwarded to the Court but not exhibited by the prosecution as they favoured the accused. These judgments seem more in consonance with the true spirit of fair disclosure and fair trial. However, despite such clear statements of law, courts are grappling with the judicial propensity of deviating from this expansive interpretation and regressing to the concept of relied upon. The same is evident from a recent pronouncement of the Delhi High Court where the ratios laid down in Manu Sharma & Sasikala [supra] were not followed by erroneously distinguishing from those cases.[12] Such “per incuriam” aberrations by High Court not only undermine the supremacy of the Apex Court, but also adversely impact the functioning of the district courts over which they exercise supervisory jurisdiction. Hopefully in future Judges shall be more circumspect and strictly follow the law declared by the Apex Court.
D. Pre-Charge Embargo
Another obstacle encountered in the enforcement of the right to disclosure is the earlier judicial approach to stave off production or consideration of any additional documents not filed alongwith the charge sheet at the pre-charge stage, as the right to file such material was available to the accused only upon the commencement of trial after framing of charge.[13] At the pre-charge stage, Court could not direct the prosecution to furnish copies of other documents[14] It was for the accused to do so during trial or at the time of entering his defence. However, the evolution of law has seen that at the stage of framing charge, Courts can rely upon the material which has been withheld by the prosecutor, even if such material is not part of the charge sheet, but is of such sterling quality demolishing the case of the prosecution.[15] Courts are not handicapped to consider relevant material at the stage of framing charge, which is not relied upon by the prosecution. It is no argument that the accused can ask for the documents withheld at the time of entering his defence.[16] The framing of charge is a serious matter in a criminal trial as it ordains an accused to face a long and arduous trial affecting his liberty. Therefore, the Court must have all relevant material before the stage of framing charge to ascertain if grave suspicion is made out or not. Full disclosure at the stage of section 207 of the code, which immediately precedes discharging or charging an accused, enables an accused to seek a discharge, if the documents, including those not relied upon by the prosecution, create an equally possible view in favour of the accused.[17] On the other hand, delaying the reception of documents postpones the vindication of the accused in an unworthy trial and causes injustice by subjecting him to the trauma of trial. There is no gainsaying that justice delayed is justice denied, therefore, such an approach ought not to receive judicial consent. A timely discharge also travels a long way in saving precious time of the judiciary, which is already overburdened by the burgeoning pendency of cases. Thus, delayed or piecemeal disclosure not only prejudices the defence of the accused, but also protracts the trial and occasions travesty of justice.
III. Duties of the stakeholders in criminal justice system
The foregoing analysis reveals that participation of the investigating agency, the prosecution and the Court is inextricably linked to the enforcement of the right to disclosure. The duties cast on these three stakeholders in the criminal justice system, are critical to the protection of this right. It is incumbent upon the investigating agencies to investigate cases fairly and to place on record all the material irrespective of its implication on the case of prosecution case. Investigation must be carried out with equal alacrity and fairness irrespective of status of accused or complainant.[18] An onerous duty is cast on the prosecution as an independent statutory officer, to conduct the trial with the objective of determination of truth and to ensure that material favourable to the defence is supplied to the accused. Ultimately, it is the overarching duty of the Court to ensure a fair trial towards the administration of justice for all parties. The principles of fair trial require the Court to strike a delicate balance between competing interests in a system of adversarial advocacy. Therefore, the court ought to exercise its power under section 156(3) of the Code to monitor investigation and ensure that all material, including that which enures to the benefit of the accused, is brought on record. Even at the stage of supply of copies of police report and documents under section 207 of the Code, it is the duty of the Court to give effect to the law laid down by the Hon’ble Supreme Court in Manu Sharma (supra) and Sasikala (supra), and ensure that all such material is supplied to the accused irrespective of whether it is “relied upon” by the prosecution or not.
IV. Alternate Remedy
The conundrum of supply of copies under section 207 of the code abounds criminal trials. Fairness is an evolving concept. There is no doubt that disclosure of all material which goes to establish the innocence of an accused is the sine qua non of a fair trial.[19] Effort is evidently underway to expand the concept in alignment with English jurisprudence. In the meanwhile, does the right of an accused to disclosure have another limb to stand on? Section 91 of the Code comes to the rescue of an accused, which confers wide discretionary powers on the Court, independent of section 173 of the Code, to summon the production of things or documents, relevant for the just adjudication of the case. In case the Court is of the opinion that the prosecution has withheld vital, relevant and admissible evidence from the Court, it can legitimately use its power under section 91 of the Code to discover the truth and to do complete justice to the accused.[20]
V. Conclusion
A society’s progress and advancement are judged on many parameters, an important one among them being the manner in which it administers criminal justice. Conversely, the ironic sacrilege of the core virtues of criminal jurisprudence in the temples of justice evinces social decadence. The Indian legislature of the twenty first century has given birth to several draconian statutes which place iron shackles on personal liberty, evoking widespread fear of police abuses and malicious prosecution. These statutes not only entail presumptions which reverse the burden of proof, but also include impediments to the grant of bail. Thus, a very heavy burden to dislodge the prosecution case is imposed on the accused, rendering the right to disclosure of paramount importance. It is the duty of the Court to keep vigil over this Constitutional and statutory right conferred on an accused by repudiating any procedure which prejudices his defence. Notable advancement has been made by the Apex Court in interpreting section 207 of the Code in conformity with the Constitutional mandate, including the right to disclosure. Strict adherence to the afore-noted principles will go a long way in ensuring real and substantial justice. Any departure will not only lead to judicial anarchy, but also further diminish the already dwindling faith of the public in the justice delivery system.
**
Advocate Manu Sharma has been practising at the bar for over sixteen years. He specialises in Criminal Defence. Some of the high profile cases he has represented are – the 2G scam case for former Union minister A Raja; the Religare/Fortis case for Malvinder Singh; Peter Mukerjee in the P Chidambaram/ INX Media case; Devas Multimedia in ISRO corruption act case; Om Prakash Chautala in PMLA case; Aditya Talwar in the aviation scam case; Dilip Ray, former Coal Minister in one of the coal scam cases; Suhaib Illyasi case.
**
Disclaimer: The views or opinions expressed are solely of the author.
[1] Maneka Gandhi and Another v. Union of India, (1978) 1 SCC 248
[2] S. 3 of the Criminal Procedure and Investigations Act, 1996
[3] R v. H and R v. C, 2004 (1) ALL ER 1269
[4] R v. Ward (Judith), (1993) 1 WLR 619 : (1993) 2 ALL ER 577 (CA)
[5] R v. Preston, (1994) 2 AC 130 : (1993) 3 WLR 891 : (1993) 4 ALL ER 638 (HL), R v. Stinchcome,
(1991), 68 C.C.C. (3d) 1 (S.C.C.)
[6] Vinubhai Haribhai Malaviya and Others v. State of Gujarat and Another, 2019 SCC Online SC 1346
[7] Sidhartha Vashishth alias Manu Sharma v. State (NCT of Delhi), (2010) 6 SCC 1
[8] R. 16, part II, Ch. VI of the Bar Council of India Rules
[9] Manu Sharma, (2010) 6 SCC 1
[10] V.K. Sasikala v. State, (2012) 9 SCC 771 : AIR 2013 SC 613
[11] Sasikala, (2012) 9 SCC 771 : AIR 2013 SC 613
[12] Sala Gupta and Another v. Directorate of Enforcement, (2019) 262 DLT 661
[13] State of Orissa v. Debendra Nath Padhi¸(2005) 1 SCC 568
[14] Dharambir v. Central Bureau of Investigation, ILR (2008) 2 Del 842 : (2008) 148 DLT 289
[15] Nitya Dharmananda alias K. Lenin and Another v. Gopal Sheelum Reddy, (2018) 2 SCC 93
[16] Neelesh Jain v. State of Rajasthan, 2006 Cri LJ 2151
[17] Dilwar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra, (2008) 10 SCC 394
[18] Karan Singh v. State of Haryana, (2013) 12 SCC 529
[19] Kanwar Jagat Singh v. Directorate of Enforcement & Anr, (2007) 142 DLT 49
[20] Neelesh, 2006 Cri LJ 2151
Disclaimer: The views or opinions expressed are solely of the author.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
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