Read Order: M. Gopalakrishnan & Ors. vs. Pasumpon Muthuramalingam & Anr.
Pankaj Bajpai
New Delhi, March 21, 2022: While considering a case wherein an Order was passed only at the instance of the complainant and without notice to the accused, the Supreme Court has opined that ordinarily, before passing any such order for expeditious proceedings in a particular case (which might appear to be rather of innocuous nature), it would be appropriate for the higher Court to appreciate that any such order for one case, without cogent and extremely compelling reasons, might upset the calendar and schedule of the subordinate Court and also might result in assigning an unwarranted priority to that particular case over and above other cases pending in that Court.
A Division Bench of Justice Dinesh Maheshwari and Justice Vikram Nath observed that such petitions, even when moved before the higher Court, need to be examined from all angles, as progression of such other cases might suffer for no reason and none of the faults of the litigants involved therein.
The observation came pursuant to a petition, challenging an order dated April 20, 2021, whereby the Madurai Bench of High Court of Madras has issued directions that the Trial Court shall expedite the proceedings in S.C. No. 627 of 2017 and conclude the trial within six months.
It was urged that though the order appears to be an innocuous one but, was passed at the instance of the complainant and without notice to the accused.
The accused sought to question the said order contending that he was not made a party in the petition filed before the High Court by the complainant and was never heard by the High Court and various petitions filed against the order declining discharge were pending in the High Court.
After considering the submissions, the Apex Court found that that the petition was filed by the complainant without even joining the accused persons as parties and the High Court had passed the order while being not informed of the other relevant facts, including pendency of the revision petitions in the same High Court, as filed by the accused persons.
Having said so, the Apex Court refrains from entertaining this petition lest there be other complications in the trial or in the pending matters but, it goes without saying that the said petitions, if pending in the High Court also deserve to be taken up for consideration expeditiously.
Accordingly, the Top Court dismissed the petition.
Read Order: The Managing Director, Ajmer Vidhyut Vitran Nigam Ltd., Ajmer & Anr. vs. Chiggan Lal & Ors.
Pankaj Bajpai
New Delhi, March 21, 2022: While considering a case of employees seeking regular pay scale by contending that they should be brought at par with those employees who had been fixed at the regular pay scale, the Supreme Court has opined that the date of regularization and grant of pay scale is a prerogative of the employer/screening committee and no parity can be claimed in the matter of regularization in different years.
A Division Bench of Justice S. Abdul Nazeer and Justice Krishna Murari therefore observed that the High Court was not justified in directing payment of arrears to the respondent employees and in fixing the grant of regular pay-scale w.e.f April 1, 1983.
Going by the background of the case, Chiggan Lal (respondents) were engaged by the Managing Director, Ajmer Vidhyut Vitran Nigam (appellant) as unskilled labour on daily wages on different dates. Later, the appellant passed an office Order in view of the financial condition, by which the strength of the employees, inclusive of casual labour, was frozen to the number of employees. It was also decided that until further orders, no addition was to be made to the strength of the employees as it stood in 1980. The respondents were declared work charged employees between the period January 6, 1981 to March 16, 1981. According to the respondents, they have completed two years of service after March 31, 1982.
In 1987, the appellant issued Office Order in respect of employees who had completed two years of continuous service as on March 31, 1982, who could not be considered earlier. In 1988, the appellant issued an Office Order by which the earlier Screening Committee was authorized to screen the work charged/casual-monthly or daily rated workmen, who have completed two years of service as on March 31, 1983, or thereafter to adjudge suitability for regularization and grant of regular pay-scale. The respondents vide Office Order were regularized and allowed regular pay scale with effect from April 1, 1989 as per the recommendation of the Screening Committee.
The respondents thereafter approached the High Court of Judicature for Rajasthan against the Order passed by the appellant, seeking regular pay scale with effect from April 1, 1983 instead of April 1, 1989 by contending that they should be brought at par with those employees who had been fixed at the regular pay scale. The High Court allowed such petition.
After considering the submissions, the Top Court noted that the date from which regularization is to be granted is a matter to be decided by the employer keeping in view a number of factors like the nature of the work, number of posts lying vacant, the financial condition of the employer, the additional financial burden caused, the suitability of the workmen for the job, the manner and reason for which the initial appointments were made etc.
The said decision will depend upon the facts of each year and no parity can be claimed based on regularization made in respect of the earlier years, added the Court.
The Apex Court found that this Court in Jodhpur Vidyut Vitran Nigam Ltd. V. Nanu Ram and Others , (2006) 12 SCC 494, has held that the employer is required to examine the question as to how many workmen could be regularized keeping in mind, the budget provisions, availability of the posts, the number of muster roll workers engaged in construction work without their being existence of any vacant sanctioned posts and the manner in which these muster roll workers were initially recruited i.e. whether with or without the approval of the management, thereafter examining the above, the employer has to recommend their absorption in regular service on the basis of eligibility as determined by the Screening Committee.
In case of Jodhpur Vidyut Vitran Nigam (Supra), it was further held that mere completion of two years is not the only criterion and that the State is not under an obligation to constitute Screening Committee at the end of each year, added the Court.
Accordingly, the Apex Court allowed the appeal.
Monika Rahar
Chandigarh, March 21, 2022: While dismissing certain appeals by the Excise and Taxation Commissioner, Haryana against the orders of Haryana Tax Tribunal, Chandigarh, the Punjab and Haryana High Court has held that dealers of petrol pumps engaged in purchase and sale of petroleum products are entitled to Input Tax Credit on evaporation loss of the petroleum products.
The first Respondent was the dealer running a petrol pump and engaged in the purchase and sale of petroleum products. For the assessment year 2010-11 (AY), the assessment was finalized by the Excise and Taxation Officer-cum-Assessing Authority, Bhiwani on December 23, 2013 allowing the claim of ITC. Revisional Authority revised the assessment vide order dated August 19, 2016. ITC for evaporation losses was reversed. The Haryana Tax Tribunal, Chandigarh accepted the contention of the dealer and allowed the appeal on July 3, 2017. It was held that the Assessing Authority rightly allowed the claim of ITC on evaporation. The review application filed by the State was dismissed by the Tribunal on 4th May 2018.
Before the Bench of Justice Ajay Tewari, Avneesh Jhingan and Justice Pankaj Jain, the Excise and Taxation Commissioner, Haryana filed these appeals against the orders of the Tribunal. The tribunal accepted the appeals and held that dealers were entitled to Input Tax Credit (ITC) on evaporation loss of Petrol and High-Speed Diesel (HSD).
The issue canvassed in appeals is based on the decision of Division Bench of this Court in All Haryana Petroleum Dealers Association, Bhiwani Versus The State of Haryana and others, 2014(42) R.C.R. (Civil) 811.
The Additional Advocate General, Haryana appearing for the State/Appellant argued that disposal of evaporated Petrol and HSD was otherwise than by way of sale hence the dealer was not entitled to ITC as per Entry 5 of Schedule E of the Haryana Value Added Tax Act, 2003. It was contended that the issue was covered in favour of the appellant by the decision of Division Bench of Punjab and Haryana Court in All Haryana Petroleum Dealers Association’s Case (Supra).
On the other hand, the Advocate appearing for the dealers defended the order of the Tribunal. He contended that Entry 5 of Schedule E does not deal with petroleum products. It was argued that the reversal of ITC for evaporated petrol and HSD was not the issue before the High Court in All Haryana Petroleum Dealers Association’s Case (Supra). He raised an argument that considering the nature of the goods involved, it could not be held that goods were disposed of otherwise than by way of sale.
After perusing the relevant provisions of law, the Court opined that it was admitted position that considering the nature of petrol and HSD, the Ministry of Petroleum allowed evaporation losses to the extent of 0.6% in case of motor spirit and 0.2% in the case of HSD. Further, the Court added that it was dealing with the cases where handling or evaporation losses were within the prescribed limits.
Further, the Court stated that as per provisions of the Act, the tax paid to the State by the oil companies on the goods sold, would be ITC available to the purchasing dealers and there would be no ITC for tax paid on the goods specified in Schedule E when used or disposed of in the circumstances mentioned against those goods.
Also, the Bench added that the circumstances mentioned in Schedule E against petroleum products and natural gas are that when used as fuel or exported out of the State. Importantly, the Court opined that Entry 5 of Schedule E is not dealing with the items mentioned at Entries 1 and 2.
“In other words, circumstances mentioned against Entry 5 are not applicable to petroleum products and natural gas”, held the Court.
On the argument of the counsel appearing for the dealers that considering the nature of goods, evaporation is not the disposal of goods otherwise than by way of sale, the Court decided not to dwell on it in view of the clear provision of the statute.
Dismissing the appeals filed by the State, the Court answered the question in favour of the dealer i.e. assessee shall be entitled to ITC on evaporation of the petroleum products.
Monika Rahar
Chandigarh, March 21, 2022: While dismissing certain appeals by the Excise and Taxation Commissioner, Haryana against the orders of Haryana Tax Tribunal, Chandigarh, the Punjab and Haryana High Court has held that dealers of petrol pumps engaged in purchase and sale of petroleum products are entitled to Input Tax Credit on evaporation loss of the petroleum products.
The first Respondent was the dealer running a petrol pump and engaged in the purchase and sale of petroleum products. For the assessment year 2010-11 (AY), the assessment was finalized by the Excise and Taxation Officer-cum-Assessing Authority, Bhiwani on December 23, 2013 allowing the claim of ITC. Revisional Authority revised the assessment vide order dated August 19, 2016. ITC for evaporation losses was reversed. The Haryana Tax Tribunal, Chandigarh accepted the contention of the dealer and allowed the appeal on July 3, 2017. It was held that the Assessing Authority rightly allowed the claim of ITC on evaporation. The review application filed by the State was dismissed by the Tribunal on 4th May 2018.
Before the Bench of Justice Ajay Tewari, Avneesh Jhingan and Justice Pankaj Jain, the Excise and Taxation Commissioner, Haryana filed these appeals against the orders of the Tribunal. The tribunal accepted the appeals and held that dealers were entitled to Input Tax Credit (ITC) on evaporation loss of Petrol and High-Speed Diesel (HSD).
The issue canvassed in appeals is based on the decision of Division Bench of this Court in All Haryana Petroleum Dealers Association, Bhiwani Versus The State of Haryana and others, 2014(42) R.C.R. (Civil) 811.
The Additional Advocate General, Haryana appearing for the State/Appellant argued that disposal of evaporated Petrol and HSD was otherwise than by way of sale hence the dealer was not entitled to ITC as per Entry 5 of Schedule E of the Haryana Value Added Tax Act, 2003. It was contended that the issue was covered in favour of the appellant by the decision of Division Bench of Punjab and Haryana Court in All Haryana Petroleum Dealers Association’s Case (Supra).
On the other hand, the Advocate appearing for the dealers defended the order of the Tribunal. He contended that Entry 5 of Schedule E does not deal with petroleum products. It was argued that the reversal of ITC for evaporated petrol and HSD was not the issue before the High Court in All Haryana Petroleum Dealers Association’s Case (Supra). He raised an argument that considering the nature of the goods involved, it could not be held that goods were disposed of otherwise than by way of sale.
After perusing the relevant provisions of law, the Court opined that it was admitted position that considering the nature of petrol and HSD, the Ministry of Petroleum allowed evaporation losses to the extent of 0.6% in case of motor spirit and 0.2% in the case of HSD. Further, the Court added that it was dealing with the cases where handling or evaporation losses were within the prescribed limits.
Further, the Court stated that as per provisions of the Act, the tax paid to the State by the oil companies on the goods sold, would be ITC available to the purchasing dealers and there would be no ITC for tax paid on the goods specified in Schedule E when used or disposed of in the circumstances mentioned against those goods.
Also, the Bench added that the circumstances mentioned in Schedule E against petroleum products and natural gas are that when used as fuel or exported out of the State. Importantly, the Court opined that Entry 5 of Schedule E is not dealing with the items mentioned at Entries 1 and 2.
“In other words, circumstances mentioned against Entry 5 are not applicable to petroleum products and natural gas”, held the Court.
On the argument of the counsel appearing for the dealers that considering the nature of goods, evaporation is not the disposal of goods otherwise than by way of sale, the Court decided not to dwell on it in view of the clear provision of the statute.
Dismissing the appeals filed by the State, the Court answered the question in favour of the dealer i.e. assessee shall be entitled to ITC on evaporation of the petroleum products.
Read Order: Smt. Kamla & Another v. Jasbir & Another
Monika Rahar
Chandigarh, March 21, 2022: While dealing with a regular second appeal, the Punjab and Haryana High Court has held that a co-sharer can claim injunction against another co-sharer if he is in exclusive possession.
The Bench of Justice Alka Sarin also held that the remedy of the other co-sharer not in possession will not be ousting him forcibly but would rather be to go in for partition and to claim mesne profits
The plaintiff-appellants approached the Court in the second appeal against the decisions by both the lower Courts whereby their suit for a permanent injunction was dismissed.
The facts of the case are such that Jage Ram was the owner in possession of a residential plot, who after his death was inherited by the first plaintiff-appellant and her brother Leelu Ram in equal shares being the Class-1 legal heirs of the deceased. Leelu Ram died in 2014 leaving behind the second defendant-respondent who inherited his half share in the suit property. In 2015, the second defendant-respondent sold her share in the suit property in favour of the first defendant-respondent vide a registered sale deed.
In 2015 the plaintiff-appellants filed the present suit for a permanent injunction against the defendant-respondents for restraining them from dispossessing the plaintiff-appellants from the suit property. By a judgment and decree, the Trial Court dismissed the suit but also directed the plaintiff-appellants and the defendant-respondents to maintain joint possession of the suit property, being co-sharers to the extent of 1/2 share each, till it is partitioned by metes and bounds.
The plaintiff-appellants filed an appeal against the decision by the Trial Court. However, by a judgement and decree the Lower Appellate Court dismissed the appeal. Hence, this regular second appeal by the plaintiff-appellants.
The counsel for the plaintiff-appellants contended that the judgments passed by the Courts below were illegal and erroneous in as much as the suit property was not yet partitioned, still, the second defendant-respondent sold her share in the suit property to the first defendant though, the plaintiff-appellants were having a preferential right in the suit property.
She further contended that the second defendant-respondent sold a specific portion of the suit property which was illegal as she being a co-sharer had no right to sell any specific portion. The counsel further submitted that the first defendant-respondent could not take possession of the suit property without getting the same partitioned through the competent court and that the possession of the plaintiff-appellants deserved to be protected. Reliance was placed upon the decision by the Division Bench of this Court in Bachan Singh vs. Swaran Singh , 2001(1) ILR Punjab 340.
At the outset, the Court opined that a co-sharer can claim injunction against another co-sharer if he is in exclusive possession. The Court further opined that the remedy of the other co-sharer not in possession is not ousting him forcibly but his remedy is to go in for partitijon and to claim mesne profits.
On the factual aspects of the case, the Court opined that in the present case the plaintiff-appellants were not in possession of the suit property. Further, the Court observed that Rajesh son of Ramphal while appearing as the first Prosecution Witness admitted in his cross-examination that his maternal uncle Leelu Ram and his wife Kavita (the second defendant-respondent) were permanently residing in village Sidipur and were using the suit property themselves. He also admitted that his mother (the first plaintiff-appellant) never remained in possession of the suit property at the spot. Another prosecution witness also admitted in his cross-examination that the first plaintiff-appellant was residing with her in-laws since the time of her marriage and that the rooms in the suit property were constructed by Leelu Ram.
“These candid admissions make it amply clear that the plaintiff- appellants were not in possession of the suit property and thus cannot pray for grant of an injunction to protect their possession”, adjudged the Court.
Further, the Court opined that the counsel for the plaintiff-appellants was unable to point out any act by the defendant-respondents which were detrimental to their interest as co-sharers. Justice Sarin added that she was also unable to point out any act by the defendant-respondents by which the value or utility of the suit property was diminished.
“Thus, the plaintiff-appellants have failed to make out a case for grant of an injunction in their favour. Though the Trial Court dismissed the suit of the plaintiff-appellants, it safe-guarded their share by directing the parties “to maintain joint possession of suit land, being co-sharers to the extent of 1/2 share each, till it is partitioned by metes and bounds”, said the Bench while dismissing the petition.
Read Order: Smt. Ritu @ Ridhima & Anr. v. Sandeep Singh Sangwan
Monika Rahar
Chandigarh, March 21, 2022: While dealing with a petition filed by a wife, who was aggrieved by the initiation of perjury proceedings against her for non-disclosing her source of income in her maintenance proceedings, the Punjab and Haryana High Court has held that a petition under Section 125 Cr.PC is filed by a person who is unable to maintain herself or her children on account of lack of sufficient means, thus, it becomes the foremost duty of the party claiming maintenance to disclose to the Court her actual financial status so as to enable the Court to come to a conclusion as to the quantum of maintenance to be paid if any.
Also, the Bench of Justice Jasjit Singh Bedi opined, “The practice of making false assertions in court ought to be discouraged because the dignity and sanctity of the court is undermined by such conduct of a party to a lis.”
The present revision petition was filed against the order of the Additional Principal Judge (Family Court), Ambala whereby it was ordered that it would be expedient in the interest of justice that an inquiry should be made against the petitioner (first respondent before the Family Court) into an offence under Section 191 IPC punishable under Section 193 and a separate complaint in this regard was ordered to be sent by the court to the court of CMJ, Ambala.
In 2017, the petitioner-wife moved a complaint against the respondent-husband and his family members under Sections 498, 406, 506 and 312 IPC. The petitioner also filed an application under Section 125 Cr.PC along with an application for interim maintenance and in both applications she stated that she had no source of income or property and was unable.
Before the Trial Court, the wife, during her deposition, maintained the same stand of having no income but she was confronted with the record relating to her job and she admitted that she was working as an Assistant Professor at Chitkara University, Rajpura on a monthly salary of Rs. 28,000/- per month. She joined the university on July 3, 2017, whereas she moved an application under Section 125 Cr.P.C. on July 26, 2017, where she denied having any source of income to support herself and her family.
Due to this non-disclosure, the respondent-husband contended that she deliberately and intentionally gave wrong information to the court in order to grab the maintenance and harass him. He stated that it was the foremost duty of the parties, to tell the truth, so that the Court could reach a conclusion as to whether the amount claimed as maintenance by the wife was to be paid or not. Thus, the husband sought an inquiry as also the initiation of proceedings against her under Section 340 Cr.P.C.
The Family Court concluded that the wife was legally bound to tell the truth but she made a false statement in the proceedings under Section 125 Cr.P.C. and thus, the Court came to the conclusion that it was expedient in the interest of justice that an inquiry should be made under Section 191 IPC.
Also, since there were no allegations against the minor daughter, the application qua her was also dismissed. However, the court found while partially allowing the application of the husband that it was expedient in the interest of justice that an inquiry should be made against the wife for having committed an offence under Sections 191 IPC punishable under Section 193 IPC. It was this finding which was assailed by the petitioner-wife.
The petitioner’s counsel contended that she did not act deliberately or with an intention to commit perjury. The Counsel further referred to a number of judgments, wherein the Court held that it was not every case where it would be expedient to conduct proceedings under Section 340 Cr.PC and it was only in those cases where it was in the interest of justice to do so that such an inquiry can be ordered.
Addressing the argument governing Section 360 Cr.P.C., the Court held that the proceedings under section 340 Cr.PC is undoubtedly initiated at the instance of one party but it is a matter of administration of justice and, therefore, ultimately it is between the parties and the court. Though, quite rightly, the effect of such proceedings may actually befall on either of the parties, added the Court.
Further, on the need for disclosure of the source of income, the Court opined that a petition under Section 125 Cr.PC is filed by a person who is unable to maintain herself or her children on account of lack of sufficient means. Thus, the Court asserted that it becomes the foremost duty of the party claiming maintenance to disclose to the Court her actual financial status so as to enable the Court to come to a conclusion as to the quantum of maintenance to be paid if any.
On the factual aspect, the Court opined that during the entire litigation including when the petitioner’s application for interim maintenance was decided, she did not disclose information about her job and her earnings and in fact deliberately and intentionally to grab maintenance, submitted wrong information to the Court that she was unemployed.
The petitioner submitted that she gave all her documents to her counsel before joining the university, and by the time the petition was filed she joined the university and thus she could not disclose this fact. This explanation was found to be false, by the Court. The Court also stated that assuming that the said fact was missing in her petition under Section 125 Cr.PC, the Court could have been informed during the course of proceedings that there had been a change of circumstances regarding her obtaining employment.
“However, as has already been mentioned above, no such information was furnished and only the cross-examination revealed her job and consequent salary. Thus it can safely be said that the possibility of her conviction was high and her actions were certainly deliberate and conscious to obtain maintenance”, added the Bench.
Thus keeping in view the aforementioned facts and circumstances, the petition was dismissed by the Court.
Read Judgment: Vikas Kumar vs. State of NCT of Delhi
Pankaj Bajpai
New Delhi, March 21, 2022: Considering the large commercial quantity of contraband recovered from the premises which was under the possession of the Applicant, as well as the gravity of the allegations levelled against him, the Delhi High Court has held that before exercising its discretion for granting bail to the accused, the Court must record the reasonable grounds discernible from the facts and circumstances that the Applicant is not prima facie guilty of offences that the accused is charged with.
Since the crime is an act against the society, the legislature has contemplated that the Public Prosecutor must be given an opportunity to oppose a Bail Application under the Act, the Single Judge Chandra Dhari Singh observed that u/s 37(b)(ii) of the NDPS Act, the Court is not required to be merely satisfied about the dual conditions i.e., prima facie opinion of the innocence of the accused and that the accused will not commit a similar offence while on bail, but the court must have “reasonable grounds‟ for such satisfaction.
The observation came pursuant to an application u/s 439 of CrPC for seeking regular bail in FIR registered u/s 15, 61 and 85 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) at Police Station Wazirabad, Delhi.
Going by the background of the case, Ct. Robin Malik along with Ct. Kamaljit and Ct. Naushad was on patrolling duty in Wazirabad, where they saw two persons carrying one blackish-grey plastic bag. The two individuals upon sighting the police party tried to escape but were intercepted by the police officials and asked to show the contents of the plastic katta. The katta was in a sealed condition which upon being torn was found to contain poppy husk. The accused were informed of their rights, and the recovered katta was found to weigh 25 kgs, samples were drawn, and the two accused from whose possession intermediate quantity of poppy husk was recovered were arrested.
In the course of investigation, the two accused apprehended with the poppy husk, in custody, made disclosure naming the accused-applicant as the source of the contraband and divulged details of the godown situated at Village Jagatpur, Delhi where the poppy straw was stored by the supplier. In pursuance thereto one raiding team including the SHO, reached at the disclosed address, where 975.5 Kilograms of Poppy straw was seized filled into 39 plastic gunny bags of 25kgs each, samples were drawn and sent to FSL. After investigation of the case, Final Report was submitted.
As per the statement of Chander Deep, Jyoti being the wife of Vikas had befriended his wife, and were living in the same locality for the past two years. Jyoti had asked his wife to stay in the premises in question on rent as her husband was in the masala business and needed some place to set up a grinding machine. Due to past acquaintance, he agreed, and the premises were let out. During the course of investigation, the accused Vikas Kumar, was declared proclaimed offender and subsequently, the applicant surrendered and was arrested. After investigation, supplementary charge sheet u/s 15/29 of the NDPS Act & Section 174A of the IPC was filed. Accordingly, the applicant preferred the bail application.
After considering the submissions, Justice Singh found that in view of the gravity of the consequences of drug trafficking, the offences under the NDPS have been made cognizable and non-bailable.
Section 37 of NDPS does not allow granting bail for offences punishable u/s 19 or Section 24 or Section 27A and for offences involving commercial quantity unless the twin conditions prescribed under the Section have been met, which include hearing the Public Prosecutor; and satisfaction of the Court based on reasonable grounds that the accused is not guilty of the offence and that he is likely to not commit an offence of a similar nature, added the Single Judge.
Justice Singh noted that the Court also needs to be satisfied before grant of bail about the scheme of Section 439 of CrPC and thus, it is evident that section 37 limits the discretion of the court in matters of bail by placing certain additional factors over and above, what has been prescribed under the Code.
The offences prescribed under NDPS are not only a menace to a particular individual but to the entire society especially, the youth of the country and such offences have a cascading effect and are in vogue these days, thus destroying the capabilities and lives of a big chunk of the population and trend has been growing over the years added the Single Judge.
Therefore, the High Court observed that in order to prevent the devastating impact on the people of the nation, Parliament in its wisdom deemed it fit to introduce stringent conditions for grant of bail under the NDPS Act and the Court has to stay mindful of the legislative intent and mandate of the Act while granting bail in such matters.
It was noted that mere absence of a written rent agreement was not enough to discharge the allegations against the applicant rather the factum of the possession of the said premises was sufficient to implicate the applicant in the instant case. This was a property from where, on inputs by the co-accused, a substantially large amount of contraband was received.
As far as the question of parity while granting bail with respect to other co-accused is concerned,the Bench was of the opinion that the two cannot be treated equally for the reason that there was a big difference in the quantum of the recovery made in their cases respectively – the contraband recovered from the premises shown to be in possession of the accused was commercial in nature and hence the rigours of Section 37 of the NDPS Act were attracted in his case.
Moreover, the Applicant was stated not to be cooperating with the investigation previously and given the fact that the public witnesses were yet to be examined in the case, the probability of the applicant trying to influence the witnesses could not be ruled out.
There was also, nothing on record before this Court to arrive even at a prima facie satisfaction that the applicant had not committed the said offence, nor was there any cogent reason to presume that the applicant was not likely to commit similar offence if released on bail.
Thus, on the basis of the aforementioned grounds, the Court dismissed the bail application.
Read Judgment: Shyam Sel & Power Limited & Another V. Shyam Steel Industries Limited
Pankaj Bajpai
New Delhi, March 17, 2022: Noticing that the High Court had failed to take into consideration the three tests of prima facie case, balance of convenience and irreparable injury while deciding an application for ad-interim injunction on restraining the appellants from using in any way the mark ‘SHYAM’ or with a label or device containing the mark ‘SHYAM’ till the disposal of the trademark infringement suit, the Supreme Court has imposed cost of Rs 5 lakh on Shyam Steel Industries.
The Court held that an appellate court, after the findings of the trial court are recorded, has an advantage of appreciating the view taken by the trial judge and examining the correctness or otherwise thereof within the limited area available. If the appellate court itself decides the matters required to be decided by the trial court, there would be no necessity to have the hierarchy of courts, added the Court.
A Division Bench of Justice B.R Gavai and Justice L. Nageswara Rao therefore observed that an order for postponement of the issue with regard to grant of ad-interim injunction by the Single Judge cannot be construed to be a ‘judgment’ within the meaning of Clause 15 of Letters Patent and as such, the appeal to the Division Bench of the High Court was not tenable, when there was no adjudication with regard to the rights of the respondent to get an ad-interim injunction during the pendency of the suit.
Going by the background of the case, Shyam Steel Industries (respondent) filed a suit against Shyam Sel & Power (appellants) for infringement of trade mark and passing off. It is the case of the respondent that it has trade mark registration in respect of the word ‘SHYAM’ and diverse label marks wherein the word ‘SHYAM’ features prominently. Both the respondent and the appellants manufacture and sell, inter alia, Thermo Mechanically treated bars (TMT bars). It is the case of the respondent that in the year 2015, it came to know that the appellants were using the mark ‘SHYAM’ in their products. The respondent therefore, through its advocate, objected to such use. The appellants agreed to phase out the products that they had manufactured with the mark ‘SHYAM’ and not to use the said mark ‘SHYAM’ on their products in future. Later, the appellants had applied for registration of the mark ‘SHYAM INFRA’, on which the respondent had filed its objection.
Since the appellants did not file their counterstatement, the application lapsed and was treated as abandoned. Later, towards the end of 2018, the appellants started to use the word ‘SHYAM METALICS’ on the packaging of their TMT bars. According to respondent, though the appellants had used the word ‘SHYAM’ on their invoices and stationeries, they had not used the said word ‘SHYAM’ on their wrappers in which their TMT bars were packed, which was done only to take advantage of the growing and expanding business of the respondent.
Accordingly, the respondent filed a civil suit claiming infringement of their registered trade mark ‘SHYAM’ and its variants and also for passing off by the appellants. The Single Judge made a prima facie observation that he was of the view that ‘SHYAM’ being a part of the business name of the appellants, no injunction should be passed to restrain the appellants from using the said word ‘SHYAM’ on their packaging. On appeal, the Division Bench granted an injunction restraining the appellants from, in any way, manufacturing, selling or advertising their goods with the mark ‘SHYAM’ or with a label or device containing the mark ‘SHYAM’ till the disposal of the suit.
After considering the submissions, the Top Court noted that to come within the ambit of ‘judgment’, such an order must affect vital and valuable rights of the parties, which works serious injustice to the party concerned.
Each and every order passed by the Court during the course of the trial, though may cause some inconvenience to one of the parties or, to some extent, some prejudice to one of the parties, cannot be treated as a ‘judgment’, added the Court.
Speaking for the Bench, Justice Gavai found that what the Single Judge has done by the said order, was to grant two weeks’ time to the appellants to file affidavit-in-opposition and postpone the issue of grant of ad-interim injunction by three weeks.
“No doubt, that the learned Single Judge has at one place observed that prima facie, he was of the view that ‘SHYAM’ being a part of the business name of the appellants defendants, no injunction should be passed to restrain the appellants defendants from using the said word ‘SHYAM’ on their packaging, but in the same order, he has clarified that all the observations he has made in the said order were prima facie for the purpose of passing an order at the adinterim stage and the same would have no relevance at the time of considering and deciding the said application after exchange of affidavits”, added the Bench.
Justice Gavai therefore highlighted that the Single Judge had postponed the issue with regard to consideration of the prayer of the respondent for grant of ad-interim injunction by a period of mere three weeks and that too only in order to afford an opportunity to the appellants to file their affidavit-in-opposition.
Therefore, while observing that unwarranted proceedings at the behest of the parties who can afford to bear the expenses of such litigations, must be discouraged, the Apex Court allowed the appeal and directed the respondent to pay a token cost of Rs.5 lakh to the Supreme Court Middle Income Group Legal Aid Society (MIG).
The Single Judge is to decide the application filed by the respondent under Order XXXIX Rules 1 and 2 CPC as expeditiously as possible, requested the Top Court.
Read Judgment: Nahar Singh vs. State of Uttar Pradesh & Anr.
Pankaj Bajpai
New Delhi, March 17, 2022: While considering the power of a Magistrate taking cognizance of an offence on the basis of a police report in terms of Section 190 (1)(b) of CrPC to issue summons to any person not arraigned as an accused in the police report, the Supreme Court opined that, for summoning persons upon taking cognizance of an offence, the Magistrate has to examine the materials available before him for coming to the conclusion that apart from those sent up by the police some other persons are involved in the offence.
A Division Bench of Justice Aniruddha Bose and Justice Vineet Saran observed that materials to be examined by the Magistrate need not remain confined to the police report, charge sheet or FIR, but, statement made u/s 164 of CrPC could also be considered for such purpose.
Going by the background of the case, the Chief Judicial Magistrate (CJM), Bulandshahr, Uttar Pradesh had taken cognizance of offences u/s 363, 366 and 376 of IPC on the basis of a police report, which had named two individuals as accused-Yogesh and Rupa. The police report was made on the basis of an FIR made by the mother of a lady victim (prosecutrix), wherein she stated that in 2012 her daughter was enticed away by said Yogesh and his two or three associates. The Investigating Officer recovered the prosecutrix and recorded her statement u/s 161 of CrPC wherein she stated that Yogesh had committed rape upon her. The victim was, thereafter, produced before the Additional Chief Judicial Magistrate and her statement u/s 164 of CrPC was recorded wherein she disclosed the names of the accused Rupa, Yogesh as also Nahar Singh (appellant), as the persons who had committed rape upon her.
The CJM found that there was no ground to summon the appellant for trial. Against this order, the de facto complainant invoked the revisional jurisdiction of the Sessions Judge, which set aside the order passed by the CJM and remanded the matter to the Court of the CJM. It was also observed in the order of the Revisional Court that the Magistrate should pass a lawful order to summon the accused, Nahar Singh in the matter. Thereafter, the CJM heard the matter on remand and the appellant was directed to be summoned for trial.
The appellant thereafter approached the Allahabad High Court urging that exercise of jurisdiction by the CJM u/s 190 (1)(b) of CrPC was impermissible in the subject case. The appellant’s case was that as he had not been named as accused in the charge-sheet, he could only be summoned in exercise of jurisdiction u/s 319 of CrPC. The High Court held that it was the duty of the Magistrate to find out with respect to the complicity of any person apart from those who were charge-sheeted by sifting the corroborative evidence on record. In case the Magistrate came to the conclusion that there was clinching evidence supporting the allegations made against persons who have not been charge-sheeted, it was his duty to proceed against such persons as well by summoning them.
After considering the submissions, the Top Court observed that jurisdiction to issue summons can be exercised even in respect of a person whose name may not feature at all in the police report, whether as accused or in column (2) thereof if the Magistrate is satisfied that there are materials on record which would reveal prima facie his involvement in the offence.
None of the authorities limit or restrict the power or jurisdiction of the Magistrate or Court of Session in summoning an accused upon taking cognizance, whose name may not feature in the F.I.R. or police report, added the Court.
Speaking for the Bench, Justice Bose found that in the present case, the name of the accused had transpired from the statement made by the victim u/s 164 of CrPC.
In the case of Dharam Pal and Others vs. State of Haryana and Another, (2014) 3 SCC 306, it has been laid down in clear terms that in the event the Magistrate disagrees with the police report, he may act on the basis of a protest petition that may be filed and commit the case to the Court of Session, and this power of the Magistrate is not exercisable only in respect of persons whose names appear in column (2) of the charge-sheet, apart from those who are arraigned as accused in the police report.
Justice Bose further noted that in the subject-proceeding, the Magistrate acted on the basis of an independent application filed by the de facto complainant.
“If there are materials before the Magistrate showing complicity of persons other than those arraigned as accused or named in column 2 of the police report in commission of an offence, the Magistrate at that stage could summon such persons as well upon taking cognizance of the offence”, added the Bench.
Accordingly, the Apex Court allowed the appeal.
Read Judgment: Minor vs. Union of India & Ors.
Pankaj Bajpai
Ernakulam, March 17, 2022: Finding that the parents of the minor child (petitioner) had divorced by mutual consent and her custody was given to the mother, and that none of the parties could bring any legal prohibition in incorporating the name of a non-citizen as the legal guardian in the passport of a minor child, the Kerala High Court (Ernakulam Bench) has opined that the minor is entitled to be issued with an Indian passport with the name of her mother endorsed not only as a mother but even as the legal guardian in the passport to be issued.
The Single Judge Bechu Kurian Thomas therefore observed that merely because one parent acquired the citizenship of another country or if one parent is not a citizen of India, will not by itself, disentitle a child born in India and whose other parent is an Indian citizen to be issued with an Indian passport.
The observation came pursuant to a petition by a minor girl who has approached this Court seeking a direction for issuing a passport to her without insisting on the consent from her biological father.
Going by the background of the case, the parents of the petitioner dissolved their marriage by mutual consent through a compromise decree from the Family Court, Ernakulam. Despite the mother of the petitioner being an American citizen, she was appointed as the legal guardian, with visitorial rights given to the father, subject to the mutual convenience of parties. After the dissolution of marriage, petitioner’s mother remarried and she intends to take the petitioner abroad to live along with her. For the said purpose, when an application for obtaining a passport was submitted, the passport issuing authority – second respondent, insisted on the consent from petitioner’s biological father and refused to accept the application, without the said consent.
According to the petitioner, her parents had been living apart since 2011, and in such circumstances, compelling the petitioner to produce the consent of the biological father is not legally required.
After considering the submissions, Justice Thomas noted that legally, the passport issuing authority cannot insist on consent from both parents for issuing a passport to a minor child.
Though in earlier times, there was ambiguity and confusion regarding the procedure to be adopted when consent of both parents could not be obtained while issuing a passport to a minor, by virtue of several precedents, which were subsequently incorporated as guidelines in the Passport Manual, it has been provided that, if an affidavit is filed in the form of Annexure-C of Schedule III of the Passport Rules, 1980, the passport issuing authority can issue a passport to a minor child, without insisting upon the consent of both parents, observed the Single Judge.
Therefore, Justice Thomas said that even if one of the parents of a minor child refused to give consent, the passport issuing authority is entitled to issue a passport to a minor, provided Annexure-C is submitted.
“In the instant case, since the biological father himself has no objection in issuing a passport to the petitioner, the option to submit Annexure-C, – when the consent of one of the parents is not obtained, or Annexure-D, – when the consent of both parents is obtained, is available to the petitioner. Thus, if the petitioner submits the relevant form as per the Passport Rules, 1980, the respondents are bound to process the application for issuance of a passport to the petitioner”, added the Single Judge.
The High Court found that petitioner having acquired Indian citizenship by birth as per section 3 of the Hindu Marriage Act ,1955 cannot be regarded as a stateless child by reason of her mother being an American citizen, as law abhors such statelessness of children.
Since the petitioner was born in India and her domicile of origin is India and when her biological father continues to be an Indian citizen, the objection raised by the respondents in issuing an Indian Passport, based purely on her mother being an American citizen is, to say the least, odious and legally unsustainable, added the Court.
The High Court therefore directed the Regional Passport Officer to process the application filed by the petitioner as expeditiously as possible.
Read Judgment: State of Punjab & Others V. Dev Brat Sharma
Pankaj Bajpai
New Delhi, March 17, 2022: While hearing a case of rejection of application under Order VII Rule 11 r/w/s 151 of CPC whereby the plaintiff was required to make good deficiency in the Court fees on the amount claimed by him as compensation, the Supreme Court has held that valuation for the purposes of jurisdiction and relief has to be the same in the money suits falling under category 7(i) and it was only in category of suits covered by Clause (iv) of Section 7 of the Court Fees Act, 1870 that there could be two different valuations for the purposes of jurisdiction and for relief sought.
A Division Bench of Justice Vikram Nath and Justice Dinesh Maheshwari found that in the present case, the respondent has not given a separate valuation for relief sought and rightly so, as it had no liberty and right to give different valuation than what was being actually claimed.
Going by the background of the case, Dev Brat Sharma (respondent) retired as DDPO and was the youngest freedom fighter in the Quit India Movement. After retirement, he was practicing as an Advocate. The respondent was duly recognized by the Government of Punjab as a ‘freedom fighter’ but the Director, Lotteries, who was posted as Deputy Commissioner, Jalandhar at the relevant time, denied the said status. Accordingly, the respondent approached the High Court at Chandigarh which allowed his request for issuing the certificate of ‘freedom fighter’.
The respondent had to travel to Chandigarh several times, engage lawyers, pay fees and expenses for the said litigation at an old age, he had suffered great mental tension and torture on account of illegal acts of the officers of State of Punjab. As such, he suffered damages of approximately Rs.20 lakhs, which included Rs.2 lakhs for the litigation expenses, mental tension, harassment and further incidental damages. Accordingly, a legal notice was given u/s 80 CPC calling upon the officers to pay a sum of Rs.20 lakhs as damages suffered by him. When despite notice, the said amount was not paid, a suit was instituted.
The Trial Court disposed of the said application with the direction to the respondent to file the Court-fees on the amount of Rs.20 lakhs as claimed by him and granted about 10 weeks’ time to make good the deficiency. Aggrieved by the said order, the respondent preferred a revision petition u/s 115 CPC before the High Court, which held that as the actual and specified amount of damages was still to be assessed and determined by the Trial Court, as such, the direction of the Trial Court to pay ad valorem Court fees on the amount of Rs.20 lakhs was not sustainable in law. The High Court, accordingly, set aside the order of the Trial Court and rejected the application of the appellant under Order VII Rule 11 CPC with a further direction to the Trial Court to proceed with the suit.
After considering the submissions, the Top Court found that the present was a money suit for compensation/damages and not falling under any of the categories mentioned in clause (iv) of Section 7 of the Act. Therefore, there would be no question at all for the applicability of Section 7(iv) of the Court Fees Act, 1870.
It would be a simple case of applicability of Section 7(i) of the Act and ad valorem Court-fees would have to be paid as per Schedule 1 entry 1, added the Court.
Speaking for the Bench, Justice Nath noted that it is only with respect to the category of suits specified in clause (iv) of Section 7 of the Act that the plaintiff has the liberty of stating in the plaint the amount at which relief is valued and Court-fees would be payable on the said amount.
Liberty given under clause (iv) to the specific suits of six categories is not available to the suits falling under any other clause, be it (i), (ii), (iii) etc, and once the suit in question was a money suit for compensation and damages falling under clause (i) of Section 7 of the Act, ad valorem Court-fees would be payable on the amount claimed, added the Bench.
Justice Vikram Nath therefore concluded that the High Court fell in error in setting aside the order passed by Trial Court whereby it had granted time to the plaintiff-respondent to make good the Court-fees within a particular period failing which the plaint would stand rejected.
Accordingly, the Apex Court allowed the appeal and directed that the plaintiff-respondent shall make payment of such court fees, since the suit itself has been finally dismissed.
Read Judgment: Bihar Industrial Area Development Authority & Ors. V. Rama Kant Singh
Pankaj Bajpai
New Delhi, March 17, 2022: While hearing a case regarding the maintainability of reference and the extension of limitation period by the Arbitral Tribunal, the Supreme Court has opined that the Arbitration Tribunal has the power to condone the delay in making a reference and therefore, it has held that under Article 136 of the Constitution of India, the present case was not a fit one to interfere with the award on the ground that the reference was barred by limitation.
A Division Bench of Justice Abhay S. Oka and Justice Ajay Rastogi observed that the High Court rightly found that the scope for interference with the award of the Arbitration Tribunal in revisional jurisdiction was very narrow and in the absence of any perversity, the High Court could not have given a different interpretation to the clauses in the agreement from the one provided by the Arbitration Tribunal.
Going by the background of the case, the executive engineer of the Bihar Industrial Area Development Authority (first appellant), invited a tender to carry out the drainage work in an industrial area. Rama Kant Singh (respondent) offered a bid which was accepted and accordingly, an agreement was executed in 2007 by and between both the parties. Later, after issuing a notice, the first appellant terminated the agreement and forfeited the security deposit of the respondent.
The Bihar Public Works Contract Disputes Arbitration Tribunal made an award and held that Article 137 of the Limitation Act, 1963 was applicable. Hence, it was held that the reference made to the Arbitration Tribunal raising a dispute about the termination order was not barred by limitation. The Arbitration Tribunal held that the respondent was entitled to a refund of the earnest money and the security deposit. It was held that the respondent was entitled to unpaid dues in the sum of Rs. 27,94,990/-. In addition, the Arbitration Tribunal held that the respondent is entitled to the amounts of Rs.6,22,476/- and Rs.50,000/- deducted towards the penalty by the first appellant.
The matter reached the High Court which also held that Article 137 of the 1963 Act was applicable and, therefore, the dispute raised by the respondent was not barred by the limitation.
After considering the submissions, the Top Court found that in view of Section 8 of the Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008, if any of the provisions of the 2008 Act are in conflict with the Arbitration and Conciliation Act, 1996, the latter shall prevail to the extent of the conflict.
In the present case, as there is no arbitration clause in the agreement between the parties, the provisions of the 1996 Act will have no application, and therefore, the reference to the Arbitration Tribunal will be governed by the 2008 Act, added the Court.
Speaking for the Bench, Justice Oka noted that u/s 9(1) of the 2008 Act, the period of limitation is of one year from the date on which the dispute has arisen, which date in the present case is June 08, 2010, when the first appellant terminated the agreement.
“The High Court recorded a finding that as the representation made by the respondent against the order of termination of the contract was kept pending for an inordinately long time and was not at all decided, the delay was explained by the respondent. The High Court, by recording the said finding in paragraph 10 of the impugned Judgment, held that sufficient cause was made out by the respondent for the delay”, added the Bench.
Justice Oka further found that the Arbitration Tribunal has interpreted various clauses of the agreement between the parties and held that there was no provision therein to forfeit the earnest money as well as the security deposit.
The Apex Court therefore partly allowed the appeal and modified the award made in Reference Case only to the extent to which interest at the rate of 10% was allowed on the claims.
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Right to Disclosure – Importance & Challenges in Criminal Justice System – By Manu Sharma
Personal liberty is the most cherished value of human life which thrives on the anvil of Articles 14 and 21 of the Constitution of India (“the Constitution”). Once a person is named an accused, he faces the spectre of deprivation of his personal liberty and criminal trial. This threat is balanced by Constitutional safeguards which mandate adherence to the rule of law by the investigating agencies as well as the Court. Thus, any procedure which seeks to impinge on personal liberty must also be fair and reasonable. The right to life and personal liberty enshrined under article 21 of the Constitution, expanded in scope post Maneka Gandhi[1], yields the right to a fair trial and fair investigation. Fairness demands disclosure of anything relevant that may be of benefit to an accused. Further, the all-pervading principles of natural justice envisage the right to a fair hearing, which entails the right to a full defence. The right to a fair defence stems from full disclosure. Therefore, the right of an accused to disclosure emanates from this Constitutional philosophy embellished by the principles of natural justice and is codified under the Code of Criminal Procedure, 1973 (“Code”).
Under English jurisprudence, the duty of disclosure is delineated in the Criminal Procedure and Investigations Act, 1996, which provides that the prosecutor must disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused, except if such disclosure undermines public interest.[2] Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.[3] The duty of disclosure under common law contemplates disclosure of anything which might assist the defence[4], even if such material was not to be used as evidence[5]. Under Indian criminal jurisprudence, which has borrowed liberally from common law, the duty of disclosure is embodied in sections 170(2), 173, 207 and 208 of the Code, which entail the forwarding of material to the Court and supply of copies thereof to the accused, subject to statutory exceptions.
II. Challenges in Enforcement
The right to disclosure is a salient feature of criminal justice, but its provenance and significance appear to be lost on the Indian criminal justice system. The woes of investigative bias and prosecutorial misconduct threaten to render this right otiose. That is not to say that the right of an accused to disclosure is indefeasible, as certain exceptions are cast in the Code itself, chief among them being public interest immunity under section 173(6). However, it is the mischief of the concept of ‘relied upon’ emerging from section 173(5) of the Code, which is wreaking havoc on the right to disclosure and is the central focus of this article. The rampant misuse of the words “on which the prosecution proposes to rely’ appearing in section 173(5) of the Code, to suppress material favourable to the accused or unfavourable to the prosecution in the garb of ‘un-relied documents’ has clogged criminal courts with avoidable litigation at the very nascent stage of supply of copies of documents under section 207 of the Code. The erosion of the right of an accused to disclosure through such subterfuge is exacerbated by the limited and restrictive validation of this right by criminal Courts. The dominant issues highlighted in the article, which stifle the right to disclosure are; tainted investigation, unscrupulous withholding of material beneficial to the accused by the prosecution, narrow interpretation by Courts of section 207 of the Code, and denial of the right to an accused to bring material on record in the pre-charge stage.
A. Tainted Investigation
Fair investigation is concomitant to the preservation of the right to fair disclosure and fair trial. It envisages collection of all material, irrespective of its inculpatory or exculpatory nature. However, investigation is often vitiated by the tendencies of overzealous investigating officers who detract from the ultimate objective of unearthing truth, with the aim of establishing guilt. Such proclivities result in collecting only incriminating material during investigation or ignoring the material favourable to the accused. This leads to suppression of material and scuttles the right of the accused to disclosure at the very inception. A tainted investigation leads to miscarriage of justice. Fortunately, the Courts are not bereft of power to supervise investigation and ensure that the right of an accused to fair disclosure remains protected. The Magistrate is conferred with wide amplitude of powers under section 156(3) of the Code to monitor investigation, and inheres all such powers which are incidental or implied to ensure proper investigation. This power can be exercised suo moto by the Magistrate at all stages of a criminal proceeding prior to the commencement of trial, so that an innocent person is not wrongly arraigned or a prima facie guilty person is not left out.[6]
B. Suppression of Material
Indian courts commonly witness that the prosecution is partisan while conducting the trial and is invariably driven by the lust for concluding in conviction. Such predisposition impels the prosecution to take advantage by selectively picking up words from the Code and excluding material favouring the accused or negating the prosecution case, with the aid of the concept of ‘relied upon’ within section 173(5) of the Code. However, the power of the prosecution to withhold material is not unbridled as the Constitutional mandate and statutory rights given to an accused place an implied obligation on the prosecution to make fair disclosure.[7] If the prosecution withholds vital evidence from the Court, it is liable to adverse inference flowing from section 114 of the Indian Evidence Act, 1872 (“Evidence Act). The prosecutor is expected to be guided by the Bar Council of India Rules which prescribe that an advocate appearing for the prosecution of a criminal trial shall so conduct the prosecution that it does not lead to conviction of the innocent. The suppression of material capable of establishment of the innocence of the accused shall be scrupulously avoided. [8]
C. Scope of S. 207
The scope of disclosure under section 207 has been the subject of fierce challenge in Indian Courts on account of the prosecution selectively supplying documents under the garb of ‘relied upon’ documents, to the prejudice of the defence of an accused. The earlier judicial trend had been to limit the supply of documents under section 207 of the Code to only those documents which were proposed to be relied upon by the prosecution. This view acquiesced the exclusion of documents which were seized during investigation, but not filed before the Court along with the charge sheet, rendering the right to disclosure a farce. This restrictive sweep fails to reconcile with the objective of a fair trial viz. discovery of truth. The scheme of the code discloses that Courts have been vested with extensive powers inter alia under sections 91, 156(3) and 311 to elicit the truth. Towards the same end, Courts are also empowered under Section 165 of the Evidence Act. Thus, the principle of harmonious construction warrants a more purposive interpretation of section 207 of the code. The Hon’ble Supreme Court expounded on the scope of Section 207 of the Code in the case of Manu Sharma[9] and held that documents submitted to the Magistrate under section 173(5) would deem to include the documents which have to be sent to the magistrate during the course of investigation under section 170(2). A document which has been obtained bona fide and has a bearing on the case of the prosecution should be disclosed to the accused and furnished to him to enable him to prepare a fair defence, particularly when non production or disclosure would affect administration of justice or prejudice the defence of the accused. It is not for the prosecution or the court to comprehend the prejudice that is likely to be caused to the accused. The perception of prejudice is for the accused to develop on reasonable basis.[10] Manu Sharma’s [supra] case has been relied upon in Sasikala [11] wherein it was held that the Court must concede a right to the accused to have access to the documents which were forwarded to the Court but not exhibited by the prosecution as they favoured the accused. These judgments seem more in consonance with the true spirit of fair disclosure and fair trial. However, despite such clear statements of law, courts are grappling with the judicial propensity of deviating from this expansive interpretation and regressing to the concept of relied upon. The same is evident from a recent pronouncement of the Delhi High Court where the ratios laid down in Manu Sharma & Sasikala [supra] were not followed by erroneously distinguishing from those cases.[12] Such “per incuriam” aberrations by High Court not only undermine the supremacy of the Apex Court, but also adversely impact the functioning of the district courts over which they exercise supervisory jurisdiction. Hopefully in future Judges shall be more circumspect and strictly follow the law declared by the Apex Court.
D. Pre-Charge Embargo
Another obstacle encountered in the enforcement of the right to disclosure is the earlier judicial approach to stave off production or consideration of any additional documents not filed alongwith the charge sheet at the pre-charge stage, as the right to file such material was available to the accused only upon the commencement of trial after framing of charge.[13] At the pre-charge stage, Court could not direct the prosecution to furnish copies of other documents[14] It was for the accused to do so during trial or at the time of entering his defence. However, the evolution of law has seen that at the stage of framing charge, Courts can rely upon the material which has been withheld by the prosecutor, even if such material is not part of the charge sheet, but is of such sterling quality demolishing the case of the prosecution.[15] Courts are not handicapped to consider relevant material at the stage of framing charge, which is not relied upon by the prosecution. It is no argument that the accused can ask for the documents withheld at the time of entering his defence.[16] The framing of charge is a serious matter in a criminal trial as it ordains an accused to face a long and arduous trial affecting his liberty. Therefore, the Court must have all relevant material before the stage of framing charge to ascertain if grave suspicion is made out or not. Full disclosure at the stage of section 207 of the code, which immediately precedes discharging or charging an accused, enables an accused to seek a discharge, if the documents, including those not relied upon by the prosecution, create an equally possible view in favour of the accused.[17] On the other hand, delaying the reception of documents postpones the vindication of the accused in an unworthy trial and causes injustice by subjecting him to the trauma of trial. There is no gainsaying that justice delayed is justice denied, therefore, such an approach ought not to receive judicial consent. A timely discharge also travels a long way in saving precious time of the judiciary, which is already overburdened by the burgeoning pendency of cases. Thus, delayed or piecemeal disclosure not only prejudices the defence of the accused, but also protracts the trial and occasions travesty of justice.
III. Duties of the stakeholders in criminal justice system
The foregoing analysis reveals that participation of the investigating agency, the prosecution and the Court is inextricably linked to the enforcement of the right to disclosure. The duties cast on these three stakeholders in the criminal justice system, are critical to the protection of this right. It is incumbent upon the investigating agencies to investigate cases fairly and to place on record all the material irrespective of its implication on the case of prosecution case. Investigation must be carried out with equal alacrity and fairness irrespective of status of accused or complainant.[18] An onerous duty is cast on the prosecution as an independent statutory officer, to conduct the trial with the objective of determination of truth and to ensure that material favourable to the defence is supplied to the accused. Ultimately, it is the overarching duty of the Court to ensure a fair trial towards the administration of justice for all parties. The principles of fair trial require the Court to strike a delicate balance between competing interests in a system of adversarial advocacy. Therefore, the court ought to exercise its power under section 156(3) of the Code to monitor investigation and ensure that all material, including that which enures to the benefit of the accused, is brought on record. Even at the stage of supply of copies of police report and documents under section 207 of the Code, it is the duty of the Court to give effect to the law laid down by the Hon’ble Supreme Court in Manu Sharma (supra) and Sasikala (supra), and ensure that all such material is supplied to the accused irrespective of whether it is “relied upon” by the prosecution or not.
IV. Alternate Remedy
The conundrum of supply of copies under section 207 of the code abounds criminal trials. Fairness is an evolving concept. There is no doubt that disclosure of all material which goes to establish the innocence of an accused is the sine qua non of a fair trial.[19] Effort is evidently underway to expand the concept in alignment with English jurisprudence. In the meanwhile, does the right of an accused to disclosure have another limb to stand on? Section 91 of the Code comes to the rescue of an accused, which confers wide discretionary powers on the Court, independent of section 173 of the Code, to summon the production of things or documents, relevant for the just adjudication of the case. In case the Court is of the opinion that the prosecution has withheld vital, relevant and admissible evidence from the Court, it can legitimately use its power under section 91 of the Code to discover the truth and to do complete justice to the accused.[20]
V. Conclusion
A society’s progress and advancement are judged on many parameters, an important one among them being the manner in which it administers criminal justice. Conversely, the ironic sacrilege of the core virtues of criminal jurisprudence in the temples of justice evinces social decadence. The Indian legislature of the twenty first century has given birth to several draconian statutes which place iron shackles on personal liberty, evoking widespread fear of police abuses and malicious prosecution. These statutes not only entail presumptions which reverse the burden of proof, but also include impediments to the grant of bail. Thus, a very heavy burden to dislodge the prosecution case is imposed on the accused, rendering the right to disclosure of paramount importance. It is the duty of the Court to keep vigil over this Constitutional and statutory right conferred on an accused by repudiating any procedure which prejudices his defence. Notable advancement has been made by the Apex Court in interpreting section 207 of the Code in conformity with the Constitutional mandate, including the right to disclosure. Strict adherence to the afore-noted principles will go a long way in ensuring real and substantial justice. Any departure will not only lead to judicial anarchy, but also further diminish the already dwindling faith of the public in the justice delivery system.
**
Advocate Manu Sharma has been practising at the bar for over sixteen years. He specialises in Criminal Defence. Some of the high profile cases he has represented are – the 2G scam case for former Union minister A Raja; the Religare/Fortis case for Malvinder Singh; Peter Mukerjee in the P Chidambaram/ INX Media case; Devas Multimedia in ISRO corruption act case; Om Prakash Chautala in PMLA case; Aditya Talwar in the aviation scam case; Dilip Ray, former Coal Minister in one of the coal scam cases; Suhaib Illyasi case.
**
Disclaimer: The views or opinions expressed are solely of the author.
[1] Maneka Gandhi and Another v. Union of India, (1978) 1 SCC 248
[2] S. 3 of the Criminal Procedure and Investigations Act, 1996
[3] R v. H and R v. C, 2004 (1) ALL ER 1269
[4] R v. Ward (Judith), (1993) 1 WLR 619 : (1993) 2 ALL ER 577 (CA)
[5] R v. Preston, (1994) 2 AC 130 : (1993) 3 WLR 891 : (1993) 4 ALL ER 638 (HL), R v. Stinchcome,
(1991), 68 C.C.C. (3d) 1 (S.C.C.)
[6] Vinubhai Haribhai Malaviya and Others v. State of Gujarat and Another, 2019 SCC Online SC 1346
[7] Sidhartha Vashishth alias Manu Sharma v. State (NCT of Delhi), (2010) 6 SCC 1
[8] R. 16, part II, Ch. VI of the Bar Council of India Rules
[9] Manu Sharma, (2010) 6 SCC 1
[10] V.K. Sasikala v. State, (2012) 9 SCC 771 : AIR 2013 SC 613
[11] Sasikala, (2012) 9 SCC 771 : AIR 2013 SC 613
[12] Sala Gupta and Another v. Directorate of Enforcement, (2019) 262 DLT 661
[13] State of Orissa v. Debendra Nath Padhi¸(2005) 1 SCC 568
[14] Dharambir v. Central Bureau of Investigation, ILR (2008) 2 Del 842 : (2008) 148 DLT 289
[15] Nitya Dharmananda alias K. Lenin and Another v. Gopal Sheelum Reddy, (2018) 2 SCC 93
[16] Neelesh Jain v. State of Rajasthan, 2006 Cri LJ 2151
[17] Dilwar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra, (2008) 10 SCC 394
[18] Karan Singh v. State of Haryana, (2013) 12 SCC 529
[19] Kanwar Jagat Singh v. Directorate of Enforcement & Anr, (2007) 142 DLT 49
[20] Neelesh, 2006 Cri LJ 2151
Disclaimer: The views or opinions expressed are solely of the author.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Legitquest is a Legal-Tech venture run by a versatile team of tech-savvy attorneys, engineers and designers who aim to make the practice of law simpler for its end users. We have eminent jurist Mr. Ram Jethmalani as our patron
