Read Order: Mohammad Asif v. Union of India and Others
Monika Rahar
Chandigarh, April 7, 2022: While adjudicating upon a habeas corpus writ filed by a Pakistani national who was awaiting his deportation after overstaying in judicial custody for 02 years and 09 months against a sentence of one year passed by the Trial Court, the Punjab and Haryana High Court has reprimanded the Director (Foreigners), Ministry of Home Affairs and the Under Secretary (Foreigners), Ministry of Home Affairs for taking this matter “casually” and furnishing no response to the recommendation letters sent by the Additional Superintendent, Central Jail, Amritsar, for the petitioner’s deportation.
The Bench of Justice Arvind Singh Sangwan directed the two aforesaid officers to file affidavits by the next hearing, failing which they were directed to appear in person before the Court to explain the delay shown by them in this matter.
In this case at hand, a writ in the nature of habeas corpus was filed seeking the release of the petitioner, a Pakistani national who was awarded rigorous imprisonment for one year by the Trial Court in respect of an FIR registered against the petitioner under Sections 3/34/20 of Indian Passport Act, 1920 read with Section 14 of Foreigner Act, 1946.
The petitioner’s counsel submitted that the petitioner already underwent the sentence of rigorous imprisonment for one year awarded by the Trial Court and even subsequent to that, he underwent total imprisonment for about two years and nine months.
The reply of the Additional Superintendent, Central Jail, Amritsar, was filed in the Court by way of an affidavit stating that the case of the petitioner was recommended for seeking permission regarding his deportation. Due to non-action on the said recommendation, again a reminder was sent through Additional Chief Secretary (Home), Department of Home Affairs and Justice (Passport Branch), Govt. of Punjab for taking further necessary action. It was further stated that another request letter was sent to the Director (Foreigners) and to the Under Secretary (Foreigners) MHA regarding the decision taken on the deportation of Pakistani National i.e. petitioner Mohammad Asif, however, to date, no action was communicated.
In this view, the Court took note of the fact that the petitioner, even if a foreign national, was overstaying in judicial custody for a period of more than 02 years and 09 months while making a remark that the aforesaid two officers of the Ministry of Home Affairs, New Delhi were “taking this matter casually”.
Accordingly, both the officers were directed to file affidavits before the next date of hearing, and in case of non-compliance with this direction, the Court directed the two officers to appear in person before the Court on the next hearing itself, to explain the delay in taking the decision on recommendation sent by the Superintendent, Central Jail, Amritsar.
The matter was listed for further hearing on April 19, 2022.
Read Order: SHAIKH TASLIM SHAIKH HAKIM Vs. THE STATE OF MAHARASHTRA AND ANOTHER
Mansimran Kaur
Mumbai, April 7, 2022: The Aurganbad Bench of the Bombay High has upheld the decision of the Family Court granting divorce to a couple on the basis of mutual consent in accordance with the Muslim Personal Law (Shariat ) Act,1937 and directed that the FIR, filed against the applicant-husband under Sections 498A, 323, 504, and 506 of the Indian Penal Code, be quashed.
The Division Bench of Justice V.K. Jadhav and Justice Sandipkumar C.More said, “It thus appears that the learned Judge of the Family Court has rightly applied the provisions of Muslim Personal Law (Shariat) Application Act, 1937 to the parties before us and accordingly declared the status of marriage as no more in existence by mutual consent.”
Brief facts of the case were that the applicant-husband and the second respondent-wife got separated on the basis of mutual consent and on account of the same they approached the Family Court, Parbhani. The Family Court allowed the petition and declared them to be no more as husband and wife in accordance with the Section 2 of Muslim Personal Law Act, 1937 read with Section 7 (1) (b) Explanation (b) of the Family Court Act, 1984. The order was passed on March 9, 2022. It was also stated that the applicant- husband should pay Rs 5 lakh to the respondent-wife as maintenance.
By way of affidavit, the Counsel for the second respondent vividly stated that the wife was no more interested in furthering the criminal proceedings arising out the the offences alleged in the FIR filed against the applicant. The Counsel also cited the judgment of the Apex Court in Mst. Zoban Khatoon v. Mohd. Ibrahim wherein it was held that ‘mubarat’ is the form of an extra- judicial divorce by mutual consent and the same is acknowledged under the Islamic law and the provision of the Dissolution of Marriage Act shall not intervene with the same.
The applicant-husband sought quashing of FIR and also consequential charge-sheet pending before the Judicial Magistrate, First Class, Parbhani, on the ground that the parties had arrived at an amicable settlement.
The Court went through the allegations made in the FIR and the police papers. The Court was of the view that the parties decided to get separated on the basis of mutual consent in furtherance of which the petition was filed under Section 2 of the Muslim Personal Law (Shariat Act), 1937 read with Section 7 (1) (b) of the Fmaily Courts Act ,1984 for declaration of their status.
The Division Bench stated that the issues pertaining to the marriage, property, dissolution of marriage, maintenance, dowr, trusts and trusts of properties, gifts, etc are decided by the Muslim Personal Law (Shariat) Act, 1937. The Court also considered Section 7 of the Family Courts Act, 1984 which states that suit for declaration of validity of marriage or as to the matrimonial status of any person can also fall within the jurisdiction of the Family Courts.
Further reference was made to Mst. Zohra Khatoon’s Case (Supra) wherein the the Apex Court had stated certain ways of dissolving the marriage under the Muslim Persoanal law. It was mentioned therein that the first way is by reciting of the word “talaq” three times called as “Talaq hasan”, second is “Talaq ahsan” wherein the husband unilaterally gives divorce by single pronouncement and third procedure for obtaining divorce consists of an agreement between the parties wherein the wife relinquishes her entire or part dower on account of seeking divorce. This is called “khula” or “mubarat”. Another mode mentioned in this judgment is to institute a suit for dissolution of marriage under Section 2 of the Family Court Act, 1939, which also amounts to divorce obtained by the wife.
Considering these factors, the High Court affirmed the decision of the Family Court to declare the status of marriage as no more in existence by mutual consent.
On the issue of quashing of the FIR, the Bench referred to the judgment of the Supreme Court in Gian Singh vs. State of Punjab and others wherein it was observed that inherent power given to the High Court for quashing the criminal proceedings is distinct from the power granted to the criminal courts for compounding of offences under Section 320. It was also held therein that the High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and wrongdoer and whether to secure the ends of justice, it is appropriate that criminal case is put to an end.
Thus keeping in view the above stated observations, the Court held that the Family Court had rightly approched the provisions of the Muslim Personal Law (Shariat) Act, 1937 and allowed the criminal application considering that the parties had arrived at amicable settlement voluntarily.
Read Order: Duo Jou Vireimi v. State Of Haryana
Monika Rahar
Chandigarh, April 7, 2022: While dealing with an NDPS Act matter, the High Court of Punjab and Haryana has held that the report of the Chemical Examiner/FSL is to be included in the report under Section 173 Cr.P.C. and without which it will be termed as an incomplete charge sheet, depriving the Magistrate of relevant material to take cognizance.
The High Court further held that if the report of the Chemical Examiner/FSL is not submitted within the requisite period of 180 days, it would essentially result in a default benefit to the accused unless an application is moved by the Investigating Agency apprising the Court of the status of investigation with a prayer for extension of time to the satisfaction of the Court.
The Bench of Justice Sant Parkash was dealing with two petitions first of which was a revision preferred under Section 401 of the Code of Criminal Procedure, 1973 for setting aside the order of the Additional Sessions Judge, Panipat whereby application filed by him for grant of bail in view of Section 167(2) Cr.P.C. was dismissed in an FIR registered under Section 21 of the Narcotic Drugs and Psychotropic Substances Act, 1985 whereas, the second petition was filed by the petitioner under Section 439 Cr.P.C. for grant of regular bail pending trial in the aforesaid case.
The petitioner (a foreigner) was apprehended by the Police for carrying heroin in a packet of corn flakes. The heroine (on being weighed without a polythene bag) was found to be 425 grams. Hence the present FIR was registered and after completion of the investigation, the report under Section 173 Cr.P.C. was presented before the trial Court against the petitioner without receiving the chemical examiner report/FSL.
Since the Police did not file the FSL report along with the report under Section 173(2) of the Cr.P.C. despite the expiry of 180 days, the petitioner/accused filed application for grant of bail on the ground that since the FSL report was not submitted in the Court and thus in view of incomplete FIR, the petitioner sought grant of default bail under Section 167(2) of the Cr.P.C.
This application was dismissed, hence the present revision was filed.
The petitioner’s counsel argued that complete challan was not presented despite the expiry of the statutory period of 180 days from the date of arrest of the petitioner as such the petitioner was entitled to be released on default bail as per the provision of Section 167(2) Cr.P.C. it was further argued that the petitioner could not be denied default bail on the ground of merits of the case not warranting the same. The right of the petitioner to grant default bail was not even defeated by the filing of the FSL report subsequently, argued the counsel while adding that the impugned order suffered from material illegality and it could be challenged by filing the revision petition.
At the very outset, the Court made reference to the case of Ranjit Singh @ Rana Vs. State of Punjab, CRR No.2087 of 2014 [P&H HC] wherein it was held that the final order passed under Section 167(2) of the Cr.P.C. read with Section 36-A(4) of the NDPS Act can be challenged only by way of revision and not by filing a petition under Section 439 of the Cr.P.C. or under Section 482 of the Cr.P.C. and the petitioner has accordingly filed present revision petition under Section 401 read with Section 167(2) of the Cr.P.C.
On the factual aspects of the Case, the Court noted that the petitioner was apprehended on suspicion on February 18, 2019, and 425 grams of heroin falling in the category of commercial quantity was allegedly recovered from the conscious possession of the petitioner attracting provisions of Section 36-A(4) of the NDPS Act which extends the period for the detention of the accused up to one hundred and eighty days and further extends the said period up to one year on the report of the Public Prosecutor indicating the progress of the investigation and the specific reasons for the detention of the accused beyond the said period of one hundred and eighty days, were applicable to the present case.
Further, the Court observed that Charge-sheet was filed by the Police within the prescribed timelimit but the said report was filed without accompanying the FSL Report and the same was not filed despite the expiry of 180 days from the date of arrest of the petitioner. Thus, the Court opined that on expiry of the period of 180 days indefeasible right to grant default bail was accrued to the petitioner.
On the filing of charge sheet without a chemical examiner report, the Court referred to Ravinder @ Binder Versus State of Haryana 2015 Vol. IV, RCR (Criminal) 441 [P&H HC], wherein it was observed that a report under Section 173 (2) submitted within 90 days but without attaching a chemical examiner report, is an incomplete charge sheet and the Court is not competent to take cognizance of the offence on the incomplete charge sheet and held that the accused has indefeasible right to be released on bail as per the provision of Section 167 (2) Cr.P.C.
The Lower Court dismissed the petitioner’s application, on the ground that the FSL report is a corroborative piece of evidence and as such, it cannot be said that the investigation has not been completed. Negating this reasoning, the High Court opined that report of the Chemical Examiner/FSL is to be included in the report under Section 173 Cr.P.C. and without which it will be termed as an incomplete challan, depriving the Magistrate of relevant material to take cognizance and if it is not submitted within the requisite period of 180 days, it would essentially result in a default benefit to the accused unless an application is moved by the Investigating Agency apprising the Court of the status of investigation with a prayer for extension of time to the satisfaction of the Court.
In light of the above proposition of law, the Court opined that the case record clearly deciphered that the police/prosecution failed to submit the Chemical Examiner/Forensic Science Laboratory Report within the statutory period of 180 days from the date of arrest of the petitioner and the Public Prosecutor failed to seek an extension from the Court before the expiry of 180 days.
On the provisions of default bail, the Court opined that Section 167(2) Cr.P.C. creates an indefeasible right in an accused person, on account of the ‘default’ by the investigating agency in the completion of the investigation within the maximum period prescribed or extended, as the case may be, to seek an order for his release on bail. Thus, an indefeasible right to be enlarged on bail accrues in favour of the accused, if the police fail to complete the investigation and put up a challan against him in accordance with law under Section 173 Cr.P.C., held the Court.
From the above-said observations, the Court concluded that the impugned order suffered from material illegality and was thus liable to be set aside and the petitioner was entitled to grant of default bail under Section 167 (2) of the Cr.P.C. on the ground of filing an incomplete charge-sheet report under Section 173(2) of the Cr.P.C. by the police on account of not filing the Chemical Examiner/Forensic Science Laboratory Report within the period of 180 days from the date of arrest of the petitioner.
Accordingly, the petitioner was ordered to be released on default bail.
Read Judgment: Union of India & Ors v. Shri C.R. Madhava Murthy & Anr
Tulip Kanth
New Delhi, April 7, 2022: Resolving the issue of salary anomalies under the Assured Career Progression Scheme, the Apex Court has upheld the decision of the Karnataka High Court directing stepping up of pay of Superintendents of Central Excise and Customs(original writ petitioners) on promotion as they were drawing a less pay than their juniors.
The Division Bench of Justice M.R.Shah and Justice B.V.Nagarathna said, “Therefore, it was a case of removal of anomaly by stepping up pay of seniors on promotion drawing less pay than their juniors.”
The factual background of this case was such that respondents-original writ petitioners were appointed as Lower Division Clerk. Thereafter, they were promoted to the post of Upper Division Clerk. Other two respondents-Shri C.K. Satish and Shri B.S. Srikanth were appointed as Inspectors and when Union of India introduced Assured Career Progression Scheme, these two respondents were granted upgradation under the ACP Scheme.
The original writ petitioners were promoted to the post of Superintendent of Central Excise and Customs but the employees, junior to the original writ petitioners were granted upgradation under the ACP Scheme. However, the persons who were placed lower in the upgradation list than the original writ petitioners, on account of upgradation granted to them under the ACP Scheme, started drawing higher pay. Therefore, the original writ petitioners submitted a representation to the Department and Central Administrative Tribunal for stepping up and to remove the anomaly and to fix their salaries at par with their juniors.
After the Tribunal rejected their claims, the Karnataka High Court allowed their writ petitions and directed the appellants herein to step up the pay of the respondents-writ petitioners, keeping in view the pay scale which had been granted to the juniors from the date they had started drawing lesser pay than their juniors.
This Appeal was filed by the Union of India and the concerned authority on being dissatisfied with the impugned common judgment passed by the Karnataka High Court by which the High Court had allowed the said writ petitions.
Speaking for the Bench, Justice Shah made it clear that it couldn’t be said that the original writ petitioners were as such claiming the stepping up of the pay under the ACP Scheme. Their grievance was with respect to the anomaly in the pay scale and their grievance was that while granting upgradation under the ACP Scheme, their juniors were getting higher salaries than what they receive. Therefore, it was a case of removal of anomaly by stepping up the pay of seniors on promotion drawing less pay than their juniors.
The Court referred to an order issued by the Government of India on removal of anomaly by stepping up of pay which was rightly considered by the High Court. This order aimed at removing the anomaly of a Government servant promoted or appointed to a higher post on or after April 1, 1961, drawing a lower rate of pay in that post than another Government servant junior to him in the lower grade and promoted or appointed subsequently to another identical post. It was mentioned therein that in such cases the pay of the senior officer in the higher post should be stepped up to a figure equal to the pay as fixed for the junior officer in that higher post. This order declared that the stepping up had to be done with effect from the date of promotion or appointment of the junior officer.
Affirming the view adopted by the Karnataka High Court, the Top Court asserted that it was a case where a junior was drawing more pay on account of upgradation under the ACP Scheme and there was an anomaly and therefore, the pay of a senior was required to be stepped up.
Keeping these factors into consideration, Justice Shah remarked that the High Court had rightly directed the appellants herein to step up the pay of the original writ petitioners keeping in view of pay scale which had been granted to the juniors from the date they had started drawing lesser pay than their juniors.
Concurring with the view taken by the High Court, the Apex Court dismissed the present appeals.
Read Judgment: SUKH DUTT RATRA & ANR v. STATE OF HIMACHAL PRADESH & ORS
Tulip Kanth
New Delhi, April 7, 2022: Exercising its extraordinary jurisdiction under Articles 136 and 142 of the Constitution, the Supreme Court has directed the State to treat the subject lands as deemed acquisition and appropriately disburse compensation to the appellants-land owners.
Referring to the judgment of this Court in Vidya Devi v. State of Himachal Pradesh, the Division Bench of Justice S.Ravindra Bhat and Justice Pamidighantam Sri Narasimha reiterated that the forcible dispossession of a person of their private property without following due process of law, was violative of both their human and constitutional rights under Article 300-A of the Constitution.
The factual background of this case was such that the appellants-Sukh Dutt Ratra and Bhagat Ram claimed to be owners of land situated in District Sirmaour, Himachal Pradesh (subject land). The Respondent-State utilised the subject land and adjoining lands for the construction of the ‘Narag Fagla Road’ in 1972-73, but allegedly no land acquisition proceedings were initiated, nor compensation was given to the appellants or owners of the adjoining land.
Later, the State was directed to initiate land acquisition proceedings and a notification under Section 4 of the Land Acquisition Act, 1894 was issued and award was passed fixing compensation at Rs 30,000 per bigha.When proceedings under Section 18 for enhancement of compensation were initiated by ten neighboring landowners, it was held that the reference petitioners were entitled to enhanced compensation. In 2009, the High Court dismissed the appeal against this order by those claimants, who were seeking statutory interest from the date of taking possession (rather than date of initiation of acquisition proceedings).
Similarly situated land owners, filed writ proceedings before the High Court and the Court granted relief to some but declined the plea of others.This led the appellants to file a writ petition before the High Court in 2011, seeking compensation for the subject land or initiation of acquisition proceedings under the Act. This writ petition was disposed of, with liberty to file a civil suit in accordance with law. Aggrieved, the appellants approached this court through these appeals.
At the outset, the Bench noticed,”While the right to property is no longer a fundamental right [Constitution (Forty Fourth Amendment) Act, 1978], it is pertinent to note that at the time of dispossession of the subject land, this right was still included in Part III of the Constitution. The right against deprivation of property unless in accordance with procedure established by law, continues to be a constitutional right under Article 300-A.”
Stating that the initiation of acquisition proceedings initially in the 1990s occurred only at the behest of the High Court, the Division Bench expressed that State’s actions, or lack thereof, had in fact compounded the injustice meted out to the appellants and compelled them to approach this court, albeit belatedly.
The Division Bench was of the opinion that the State’s lackadaisical conduct was discernible from this action of initiating acquisition proceedings selectively, only in respect to the lands of those writ petitioners who had approached the court in earlier proceedings, and not other land owners.In this manner, at every stage, the State sought to shirk its responsibility of acquiring land required for public use in the manner prescribed by law.
Talking about the clandestine approach of the State, the Bench explained further that the State in an arbitrary manner actively tried to limit disbursal of compensation as required by law, only to those for which it was specifically prodded by the courts, rather than to all those who are entitled. This arbitrary action, was violative of the appellants’ prevailing Article 31 right (at the time of cause of action), undoubtedly warranted consideration, and intervention by the High Court, under its Article 226 jurisdiction.
The Top Court clarified that the State was unable to produce any evidence indicating that the land of the appellants had been taken over or acquired in the manner known to law, or that they had ever paid any compensation.
The Bench was also not not moved by the State’s contention that since the property was not adjoining to that of the appellants, it disentitled them from claiming benefit on the ground of parity. To this, the Court stated that despite it not being adjoining (which is admitted in the rejoinder affidavit filed by the appellants), it was clear that the subject land was acquired for the same reason – construction of the Narag Fagla Road, in 1972-73, and much like the claimants before the reference court, these appellants too were illegally dispossessed without following due process of law. In the absence of written consent to voluntarily give up their land, the appellants were entitled to compensation in terms of law, added the Bench.
The Bench also held that the approach taken in Vidya Devi’s Case(Supra) wherein the Apex Court rejected the contention of ‘oral’ consent to be baseless and outlined the responsibility of the State, was squarely applicable to the nearly identical facts in the present case.
Hence, directing the State to appropriately disburse compensation to the appellants, the Top Court also ordered the respondent-State to pay legal costs and expenses of Rs 50,000 to the appellant considering the disregard for the appellants’ fundamental rights which caused them to approach this court and receive remedy decades after the act of dispossession.
Read Order: Gaurav Arora v. State of Haryana
Monika Rahar
New Delhi, April 6, 2022: While dealing with two bail pleas by two petitioners (Gaurav Arora and Neeraj) arrayed as accused in a road accident-cum-murder case, the Punjab and Haryana High Court has held that humans are different and have unpredictable behaviour, as an outcome of their varied environments and innate tendencies.
The above-stated remark of the Bench of Justice Anoop Chitkara was made in response to the submission made by the Counsel for one of the petitioners who argued that the petitioner’s wife was expecting during the time of the occurrence and that the petitioner himself had a well-to-do educational background and a job, thus eliminating the possibility of his having any motive for causing the said accident.
Negating this plea, Justice Chitkara asserted in this respect,
“The fact that the wife of Gaurav was expecting and likely to deliver in those days… there was no reason for him to indulge in such a heinous offence; given his education and his position in a corporate job, cannot be considered as a sure-shot response of every father expecting a baby; as it is highly subjective and would vary largely from person to person, some love war and crime, others make efforts to impart education, medicare, raising standards of living and peace.”
The petitioners, incarcerated upon their arrest in the FIR registered under Sections 302, 307, 34, 120-B IPC came up before the High Court under Section 439 of the Code of Criminal Procedure, 1973 (CrPC) for seeking bail.
As per the prosecution’s case, on the intervening night of September 10, 2020, two persons, namely Robin (deceased) and Arvind (eye-witness) received injuries in a roadside accident. They were admitted to a hospital where doctors while declaring them unfit for making statements, found that the injuries were caused by blunt weapons. Due to deteriorating conditions, Robin was shifted to another hospital where the statement of his father (Satish Kumar) was recorded under section 154 CrPC.
In his statement, Satish Kumar stated that after dinner, he along with his son (Robin) and Arvind (his son’s friend), went for a walk. He stated that Robin and Arvind were walking ahead of him and at 11.15 P.M., a car came from behind at high speed, in a rash and negligent manner, and hit both the boys and fled after hitting them. He added that due to darkness, he could not note down the vehicle’s details. However, with the help of passersby, the injured victims were shifted to a hospital. Based on this statement, the said FIR was registered.
When Arvind was declared fit for making his statement, his statement was recorded under Section 161 Cr.P.C. The crux of this statement is that the accident was caused by the three accused persons (Gaurav Pilani (A-2), Raj Kumar Bathla (A-1), and Neeraj (A-3)) for the purpose of killing him owing to a long-standing animosity between them (Arvind and the accused persons). He also mentioned that he noted the car number and recognised the three accused sitting in the car after he was run over by it.
After the Police recovered the car (registered in the name of the wife of the third accused), the case was converted from a roadside accident to that of murder and attempt to murder.
The counsel for the second accused (Gaurav Pilani) argued that there was no reason for the second accused to cause the accident. He cited the factum of the pregnancy of Gaurav’s wife and his well to do educational background and a corporate job, to further the argument of lack of motive. The Counsel also argued that considering the time of the accident (11:15 PM), it would not have been possible for Arvind to note the car number and identify the persons sitting in the car. Lastly, he argued that the alleged discovery of the number plate of the car was from the joint statement of all the three accused, which is legally inadmissible.
The Counsel for the third accused argued that the petitioner had no motive to commit the offence; the car in question was registered in the name of the wife of Neeraj, with whom he had estranged relations; and call details were insufficient to connect him with the crime. Another argument was that the story was overturned, and a case of accident was converted into a case of murder. There was nothing to show that Arvind was not in reasonable mental condition, and the doctor’s statement, declaring him unfit, was without any application of mind or seeking any opinion. He has further argued Arvind’s statement under Section 161 CrPC was the result of deliberations after watching the CCTV footage.
On the other hand, the State Counsel argued that the crime resulted from a well-planned conspiracy.
The Court at the very outset observed that initially, Satish Kumar stated in his statement (which led to FIR registration) that he was also walking with Robin and Arvind, but at the time of the accident, he was 50 meters behind. However, the Court added that being a father of an injured in serious condition, it would be inappropriate to comment on his mental state of mind at that point in time.
Thus, whether the subsequent supplementary statement of Satish Kumar was tutored or influenced at the end of some person, according to the Court was needed to be appreciated during evidence, and the Court thus refrained itself from deriving any adverse opinion at this stage. Also, on the evidentiary value of the fitness certificates of the victims, the Court held that it was a subject matter of trial and not of bail.
Coming to the material available after the investigation, the Court opined that both the petitioners were allegedly identified by the eye-witness (Arvind); they talked to each other over calls on the date of occurrence; and due to their joint statement, the offending vehicle was recovered.
On the argument of the petitioner’s (Gaurav) counsel stating that his wife was expecting the Court opined that this factor could not be considered as a sure-shot response of every father expecting a baby; as it is highly subjective and would vary largely from person to person, some love war and crime, others make efforts to impart education, medicare, raising standards of living and peace. Justice Chitkara also added that humans are different and have unpredictable behaviour, as an outcome of their varied environments and innate tendencies.
Further, the Court noted that the exclusive evidence against Neeraj was that the Swift car, recovered from his garage, had the tell-tale signs of an accident. Addressing the plea of his counsel to the effect that the car was registered in his wife’s name with whom he severed his relations, the Court remarked,
“Therefore, he is not answerable to explain the car and its condition, as he had estranged relations with his wife. This, in fact, seems an additional reason because he might probably be trying to kill two birds with one stone.”
Also, the Court refused to discredit the version of an injured witness (Arvind) at the bail stage without allowing him to explain his stand during cross-examination.
Thus, without commenting on the case’s merits, in the facts and circumstances peculiar to this case, and for the reasons mentioned above, the Court adjudged that the petitioner failed to make a case for bail at this stage.
Read Order: M.S. SAUMYA Vs. THE STATE OF KERALA
Mansimran Kaur
New Delhi, April 6, 2022: The Kerala High Court has held that an advocate who takes up full time Government employment and thereupon voluntarily suspends from legal practice, cannot have the legal right to practise and cannot be said to be a member of the Bar.
The Bench of Justice Alexander Thomas and Justice Viju Abraham was dealing with an original application which challenged the impugned ruling of the Division Bench of the Kerala Administrative Tribunal pronouncing that the appellant in the present case could not be treated as a “member of the Bar” for seeking appointment as Assistant Public Prosecutor Grade II. The ruling of the Division Bench of the Administrative Tribunal was upheld by the Court.
The brief facts of the case were that the appellant secured her degree of law from the University of Calicut and thereafter she enrolled herself as an Advocate before the Bar Council of Kerala on December 30, 2007 in accordance with the Advocates Act,1961. However, the appellant after a tenure of five years got her legal practice suspended voluntarily before the Bar Council of Kerala on December 10,2012.
The dispute arose when the vacancy for the post of Assistant Public Prosecutor came out and the appellant was not allowed to apply for the same, as one of the eligibility criteria for selection and appointment for the same was that the individual should be the member of the bar. As the appellant had suspended her legal practice voluntarily, therefore she could not be acknowledged as the member of the Bar. However, the appellant contended the same by stating that she fulfilled all the qualifications of the Clause 7 of the notification and the suspension did not mean that she was never the “ member of the Bar”.
The respondent contended strongly to the contentions of the appellant by producing certain provisions of the Advocates Act,1961 and Rules of the BCI. The respondent referred to Sec. 41(3) of the Act which states that, where any Advocate is suspended or removed from practice, the certificate granted to him under Sec. 22, in respect of his enrollment shall be recalled. Additionally Rule 49 of the BCI was cited wherein it is stated that an Advocate gives up his legal practice voluntarily, he/she shall cease to practise as an Advocate.
The Division Bench stated that the applicant was a full time Government servant employed as a Lower Division Typist in the Excise Department of the State Government and the applicant had no case that she has been employed in a public employment solely or predominantly to act and or plead on behalf of a party in courts of law, etc.
Since the applicant had taken up a full time Government employment, as an LD Typist, then consequent to the voluntary suspension of legal practice, she ceased to be having the legal right to practise as an Advocate and consequently she ceased to be an Advocate so long as the voluntary suspension is in force, added the Bench.The High Court was of the view that the order passed by the Administrative Tribunal of Kerala was right in its reasoning.
The Court also referred to the case of Deepak Agarwal v. Keshav Kaushik and Ors., wherein the Apex Court held that Rule 49 of the BCI Rules states that an Advocate shall not be a full time salaried employee at any firm, corporation, government etc, as long as he continues to be in the legal profession.
Another case of Patna High Court in Amar Sinha v. Bar Council was also referred to wherein It was observed that if a person, having licensed to practise law under the Advocates Act, abandons his profession or is having no bonafide intend and interest to continue in the profession, then there is no reason to treat him as a member of the profession merely on the strength of his enrollment
The Bench stated,”…person like the applicant, who has initially secured enrollment as an Advocate in the State Bar Council and later has taken up full time Government employment as above, and has thereupon voluntarily suspended from legal practice as above, then such a person cannot be said to have the legal right to practise as an Advocate and hence, as per the provisions of the Act and the Rules supra, such a person cannot be said to be a member of the Bar as understood in Anx. A-1 selection notification and Anx. R-4 (b) special Rules. Such an eligibility condition of being a member of the Bar should be possessed by the candidate concerned not only as on the last date of submission of the application to the Public Service Commission but also thereafter, even as on the date of advice by the PSC and the date of appointment order issued by the appointing authority, etc.”
Making the above observations, the Court dismissed the original application and refused to interfere with the impugned order.
Read Order: Satvir Kumar @ Surinder Kumar v. State Of Punjab
LE Correspondent
New Delhi, April 6, 2022: In view of the law laid by the full bench in Joginder Singh v. State of Punjab wherein it was held that a mere prescription of minimum sentence under Section 61 (1) (c) of the Punjab Excise Act, 1914 is not a bar to the applicability of Section 360 and 361 Cr.P.C. and the same itself is not a reason sufficient for denying the benefit of probation to a person convicted thereunder, the High Court of Punjab and Haryana has granted parole for a period of two years to the petitioner who was convicted for committing offence made punishable under Section 61(1) (a) (b) (c) of the Punjab Excise Act, 1914.
While partly allowing the revision petition, the Bench of Justice Vinod S. Bhardwaj added,
“The petitioner has already undergone an actual custody of 10 months and 09 days and a total sentence of a one year and 14 days, out of the total awarded sentence of 02 years… The petitioner has also availed parole of 545 days and had not involved himself in any other untoward incident or illegal activity.”
In this case, an FIR was registered against the accused/petitioner under Section 61 (1) of the Punjab Excise Act, 1914 for the reason that the petitioner was found to be in possession of 06 bottles and a quarter of illicit liquor (750 ML each) and 15 litres lahan. It was alleged that the petitioner was distilling illicit liquor without any permit or licence.
Accordingly, the investigation was initiated and the recovered lahan, illicit liquor and the utensils deployed for distilling illicit liquor were taken into police possession. Upon conclusion of the investigation, a final report was filed and charges were framed against the petitioner under Section 61(1) (a) (b) (c) of the Punjab Excise Act, 1914.
Upon consideration of the rival submissions advanced by the parties before the Trial Court, a finding of conviction was recorded by the Lower Court and the petitioner was sentenced to undergo rigorous imprisonment. Aggrieved, the petitioner preferred an appeal before the Court of Sessions Judge, Fazilka, however, the same was dismissed. Hence, the instant revision petition was filed against the judgment of conviction and order of sentence.
The petitioner’s counsel restricted his arguments to the quantum of sentence and did not challenge the judgment on merits. He sought the grant of the benefit of probation as the sentence awarded to the petitioner was less than 03 years and the petitioner was a first-time offender. It was the case of the counsel that the case of the petitioner was covered within guidelines prescribed under Section 360 Cr.P.C. Besides, the Counsel added that the petitioner also underwent actual custody of 10 months including the custody as an under-trial and a total sentence of one year including remissions out of the awarded sentence of two years.
The Counsel placed reliance on the case of Joginder Singh (Supra) to substantiate his case. A further reference was made to the judgment in the matter of “Dalbir Singh versus State of Punjab” reported as 2015 (3) R.C.R. (Criminal) 278 where on the sentence of 01 year and in a case of recovery of 50 Kgs. of “Lahan” and 180 Mls. of illicit liquor, the benefit of probation was extended to the accused.
Upon consideration of the facts of the case and the precedents cited, the Court took note of the mitigating circumstance which emerged in this case. One such mitigating factor was that the incident in question occurred in the year 2018 and there was nothing to suggest that the petitioner was involved in any other case thereafter. Further, the Court observed (from the custody certificate filed by the State of Punjab) that the petitioner was not involved in any case prior to the occurrence in question. The Court also noted that even though the petitioner was on bail during the trial, he did not misuse such concession and was not indulged in the commission of any other offence.
Also, the fact that the petitioner was a first-time offender and that he underwent actual custody of 10 months and 09 days and a total sentence of one year and 14 days, out of the total awarded sentence of 02 years, was considered by Justice Bhardwaj.
Further, the Court observed that the petitioner did not involve himself in any other untoward incident or illegal activity while he was out on parole for 545 days. Also, the Court considered the fact that the petitioner was approximately 45 years of age and he had a family to support and look after.
Thus, in view of the above cumulative mitigating circumstances, noticed above, the present revision petition was partly allowed.
The petitioner was ordered to be released on probation for a period of 02 years on the date he would furnish his bonds with regard to maintaining good behaviour to the satisfaction of the Trial Court. During the period of probation, the Court directed the petitioner to not commit any offence and maintain good behaviour. He was also directed to give an undertaking to the trial court that he would undergo the remaining part of his sentence if called upon to do so by a court of competent jurisdiction during the period of probation.
Read Order: AMAN VACHAR Vs. UNION OF INDIA
LE Correspondent
New Delhi, April 6, 2022: The Delhi High Court has allowed an application challenging an Office Memorandum dated July 13, 2021 issued by the Union of India, through the Ministry of External Affairs on the ground that it contained a pre-requisite for the Judges of the Supreme Court and the High Court to obtain political clearance for private visits abroad. The High Court has struck down this mandate.
The Bench of Justice Rajiv Shakdher and Justice Jasmeet Singh said, “Therefore, insofar as the instant O.M. dated 13.07.2021 requires judges of the Supreme Court and the High Courts to seek political clearance for private foreign visits, it is uncalled for, given the high offices they are holding, especially given the fact that nothing has changed since the 2011 guidelines were issued.”
It was mentioned in the memorandum that the Judges of the Supreme Court and High Court shall seek political clearance before they make their private visits abroad.
The substance of what had been articulated in the application, was that requiring judges of Constitutional Courts i.e., the Supreme Court and the High Courts to seek political clearance for private visits to foreign countries, infringes not only their right of privacy but also, in a sense, degrades and diminishes the high office that they hold.
The petitioner appearing in person also apprised this Court of the 2011 guidelines wherein certain guidelines were issued pertaining to the foreign visits of the Judges of the Supreme Court and High Court. Moreover, this Court in pursuant to the guidelines of 2011 pronounced a judgment whereby the Court had dispensed with the requirement of the judges of the Supreme Court and the High Courts to obtain political clearance for private foreign visits.
The appellant/ petitioner thus was of the view that the same approach should have been followed in the present O.M. challenged. The appellant also highlighted that a Special Leave Petition was filed against the judgment of this Court mentioned above, however the same was disposed of without reforming any part of the judgment delivered by this Court on March 25, 2012.
Referring to the Solicitor General’s contention that the information concerning judges traveling abroad is required even when they proceed on a private visit, so that in case of any emergency they can be extended requisite assistance, the Bench clarified that the information about judges’ travel plans is known the moment a request is made to the Consular, Passport and Visa Division of the Ministry of External Affairs for issuance of a “Visa Support Notes Verbale”.
The Court added that in any case, if an Indian citizen (which includes a judge) is caught in a crisis, Indian embassies/Missions are duty-bound to extend assistance to the extent possible, as and when they receive information of such an occurrence.
Taking into consideration the admitted facts and the referred judgment, the Bench opined, “Accordingly, the OM dated 13.07.2021, to the extent it requires the judges of the Supreme Court and the High Courts to seek political clearance qua private visits abroad, is struck down, in view of the reasons articulated hereinabove and given the fact that this issue has received the attention of this court on an earlier occasion, as noticed hereinabove.”
Read Order: PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) – 2 v. M/S. MAHAGUN REALTORS (P) LTD
LE Correspondent
New Delhi, April 6, 2022: The Supreme Court has held that when a company ceases to exist upon its amalgamation, whether this event invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case.
The Apex Court thereby set aside an order of the High Court that had reaffirmed an order of the Income Tax Appellate Tribunal (ITAT) which had held as unsustainable an assessment order passed by the Assessing Officer (AO) on the ground that the assessee company (respondent in this case) did not exist, as a consequence of amalgamation, on the date of the assessment order.
“Amalgamation, thus, is unlike the winding up of a corporate entity. In the case of amalgamation, the outer shell of the corporate entity is undoubtedly destroyed; it ceases to exist. Yet, in every other sense of the term, the corporate venture continues – enfolded within the new or the existing transferee entity. In other words, the business and the adventure lives on but within a new corporate residence, i.e., the transferee company,” held a Bench of Justices U U Lalit and S Ravindra Bhat.
It is, therefore, essential to look beyond the mere concept of destruction of corporate entity which brings to an end or terminates any assessment proceedings, the Bench said, adding that there are analogies in civil law and procedure where upon amalgamation, the cause of action or the complaint does not per se cease – depending of course, upon the structure and objective of enactment.
“Broadly, the quest of legal systems and courts has been to locate if a successor or representative exists in relation to the particular cause or action, upon whom the assets might have devolved or upon whom the liability in the event it is adjudicated, would fall,” it further said.
The brief facts of the case are that the respondent-assessee company, Mahagun Realtors Private Limited (MRPL), engaged in the development of real estate, amalgamated with Mahagun India Private Limited (MIPL). In terms of the order and provisions of the Companies Act, 1956, the amalgamation was with effect from April 1, 2006.
Discrepancies were noticed in the books of accounts of MRPL in the year 2007 and a search and seizure operation was carried out in the Mahagun group of companies, including MRPL and MIPL, in 2008. The statements of the common directors of these companies, duly recorded under provisions of the Income Tax Act, 1961, comprised admissions about not reflecting the true income of the said entities. In 2009, MAPL was subsequently served with notice by the Revenue Department for filing of Return on Income, followed by Show Cause Notice.
The Assessing Officer (AO), issued the assessment order on August 11, 2011, assessing the income of Rs. 8,62,85,332/- after making several additions of Rs. 6,47,00,972/- under various heads. The assessment order showed the assessee as Mahagun Relators Private Ltd, represented by Mahagun India Private Ltd.
An appeal was preferred to the Commissioner of Income Tax (CIT) by the appellants: M/s Mahagun Realtors (Represented by Mahagun India Pvt Ltd, after amalgamation)
The appeal was partly allowed by the CIT on April 30, 2012. The CIT set aside some amounts brought to tax by the AO. The revenue department appealed against this order before the ITAT; simultaneously, the assessee too filed a cross objection to the ITAT. The revenues appeal was dismissed; the assessees cross objection was allowed only on a single point, i.e., that MRPL was not in existence when the assessment order was made, as it had amalgamated with MIPL.
The revenue department appealed to the High Court. The High Court, relying upon a judgment of the Supreme Court, in Principal Commissioner of Income Tax v. Maruti Suzuki India Limited, dismissed the appeal. The revenue department, therefore, appealed against that judgment.
The appellant in this case urged that the facts of Maruti Suzuki (supra) are distinguishable from the present case, among other contentions.
The respondent’s counsel contended that upon sanction of amalgamation scheme, the amalgamated company stood dissolved without winding up, in terms of section 394 of the Companies Act, 1956. Reliance was placed on the decision of the Supreme Court in Saraswati Industrial Syndicate v. Commissioner of Income Tax Haryana, Himachal Pradesh. It was argued that the amalgamating company (MRPL) cannot be regarded as a person in terms of Section 2(31) of the Act.
The respondent’s counsel urged that the notice under Section 153A by the AO (despite the intimation by Respondent about the amalgamation on May 30, 2008 and the statement of the director at the time of search) issued in the name of MRPL, a non-existing entity, was invalid and initiation of proceedings against non- existent entity was void-ab-initio. It was contended that the respondents case is covered by Maruti Suzuki (supra). The facts of both cases are similar.
The Top Court, while delving into various precedents in similar matter, said: “This court, without elaborate discussion, approved the reasoning in various judgments which held that upon the cessation of the transferor company, assessment of the transferor (or amalgamated company) was impermissible.”
The Bench, however, said, “… this Court notes and holds that whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 (and its equivalent in the 2013 Act), but would depend on the terms of the amalgamation and the facts of each case.”
The Supreme Court also held that the combined effect of Section 394 (2) of the Companies Act, 1956, Section 2 (1A) and various other provisions of the Income Tax Act, is that despite amalgamation, the business, enterprise and undertaking of the transferee or amalgamated company, which ceases to exist, after amalgamation, is treated as a continuing one, and any benefits, by way of carry forward of losses (of the transferor company), depreciation, etc., are allowed to the transferee. Therefore, unlike a winding up, there is no end to the enterprise, with the entity. The enterprise in the case of amalgamation, continues.
The Top Court also held that the facts of the present case are distinct from those of the Maruti Suzuki (supra) and others cited by the respondents.
“In the light of the facts, what is overwhelmingly evident- is that the amalgamation was known to the assessee, even at the stage when the search and seizure operations took place, as well as statements were recorded by the revenue of the directors and managing director of the group. A return was filed, pursuant to notice, which suppressed the fact of amalgamation; on the contrary, the return was of MRPL. Though that entity ceased to be in existence, in law, yet, appeals were filed on its behalf before the CIT, and a cross appeal was filed before ITAT. Even the affidavit before this court is on behalf of the director of MRPL,” the Bench noted.
The Top Court, thus, set aside the High Court order.
“Since the appeal of the revenue against the order of the CIT was not heard on merits, the matter is restored to the file of ITAT, which shall proceed to hear the parties on the merits of the appeal- as well as the cross objections, on issues, other than the nullity of the assessment order, on merits,” the Supreme Court held.
Read Order: HARBHAJAN SINGH v. STATE OF HARYANA & ORS
LE Correspondent
New Delhi, April 6, 2022: The Supreme Court has upheld the maintainability of the Petition challenging the Haryana Sikh Gurdwara (Management) Act, 2014, on the ground that it is violative of the Sikh Gurdwara Act, 1925, State Reorganisation Act, 1956, Punjab Reorganisation Act, 1966 as well as the Inter State Corporation Act, 1957.
The Division Bench comprising Justice Hemant Gupta and Justice V. Ramasubramanian declined the preliminary objections challenging the maintainability of the writ petitions and observed that the writ petitions invoked under Article 32 of the Constitution on account of alleged infringement of the fundamental rights of the petitioners are to be considered on merits.
The two preliminary objections assailing the maintainability of the writ petitions were that the present writ petitions do not infringe the fundamental right of the petitioners and therefore Article 32 cannot be invoked which in turn makes present writ petitions not maintainable before this Court.
The second objection was raised on arraying the State of Punjab and Himachal Pradesh as parties, stating that the same is an invitation to the other States to present their remarks on the legislative compentency of the State of Haryana, which is sheer abuse of process of law.
The counsel for the State of Haryana cited the judgment of the Top Court in Chiranjit Lat Chowdhari v. Union of India and Ors., wherein it was held that Article 32 does not possess the objective of assessing the constitutional validity of the legislative enactments, but is invoked to protect the encroachment of the fundamental rights of the citizens.
Another important judgment of the Apex Court in D.A.V. College v. The State of Punjab and others was discussed wherein the constitutional validity of certain provisions of the Gurunanak University Act 1921 were challenged. The Court in this case decided the question of determination of minority based on religion and language and held that the Hindus of the State of Punjab are minority, however the Act does not infringe any fundamental right of the petitioners and therefore the Court need not to assess the legislative competence of the impugned Act.
The Apex Court analyzed the objections of the respondents in the light of the judgements cited above and was of the view that these judgements did not support the contentions of the respondent wholly.
The Court observed that two prime interpretations that came to surface in D.A.V. Case (Supra). One of the observations was that if the Court is of the view that the petitioner’s fundamental right is infringed and a case is made out on its face value, then invocation of Article 32 can be made. The second interpretation was that even if the petition is entertained irrespective of the fact that there was no encroachment of the fundamental right, the same shall not imply that the Court will have to still deal with the legislative competence of the Act.
Referring to these interpretations, the Bench observed that while the first proposition is valid, the second is not. Thus, it said, “…the entertainment of the writ petition does not mean that this Court has to examine the impugned legislation or legislative competence if the same is not found to be infringing fundamental rights.”
Further on the issue of impleadment of the States of Punjab and Himachal Pradesh,the Court stated that since the other States have been given an opportunity to comment upon the legislative competence of the State of Haryana, the same shall become an inter-state dispute which is dealt under Article 131 of the Indian Constitution. However, the Top Court remarked that at present there is no such scenario, therefore the maintainability objections stood declined.
The Bench concluded the matter by saying, “ Hence, both the writ petitions under Article 32 for the alleged violation of their fundamental rights are required to be considered on merits.”
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
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.
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Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
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