Read Judgment: Union Of India & Ors. V. Manju Arora & Anr
Pankaj Bajpai
New Delhi, January 4, 2022: The Supreme Court has opined that if a regular promotion is offered but the same is refused by the employee before becoming entitled to a financial up-gradation, she/he shall not be entitled to financial up-gradation only because she has suffered stagnation.
This is because, it is not a case of lack of promotional opportunities but an employee opting to forfeit offered promotion, for her own personal reasons, added the Court.
A Division Bench of Justice R. Subhash Reddy and Justice Hrishikesh Roy observed that an employee who has opted to remain in the existing grade, by refusing offer of promotion, forfeits the rights to ACP benefits and such employee, on account of refusal, can be considered for regular promotion only after necessary debarment period is over.
Going by the background of the case, Manju Arora & Anr (Respondents) were claiming the benefit of Assured Career Progression Scheme (ACP Scheme) for the Central Government civilian employees under the Office Memo dated August 9, 1999 issued by the Ministry of Personnel, Public Grievances and Pensions, Government of India. The ACP Scheme provided for financial up-gradation to the next higher grade of pay for those employees who could not get promotion after 12 years of service.
The Respondents Suman Lata Bhatia and Manju Arora who were appointed as Senior Translator (Hindi), were offered promotion to the higher post of Translation Officer on a regular basis. But due to personal reasons, they refused the offered promotions. Later on, the benefits under the ACP Scheme given to the respondents were withdrawn after finding that those were wrongly granted.
The withdrawal order disentitled financial up-gradation under the ACP Scheme to those who had refused vacancies based promotion. Accordingly, the respondent was reverted back to her earlier pay scale. The withdrawal of ACP benefit for the two respondents and one other was challenged before the Central Administrative Tribunal, Principal Bench (CAT).
The CAT opined that on refusal to accept regular promotion, the employee cannot be considered to be stagnating as she has opted to remain in the existing grade of her own volition. Consequently, the decision of the employer to withdraw the ACP benefits to the three applicants were found to be in order by declaring that they are not entitled to the benefits of upgraded pay scale, in terms of the ACP Scheme.
However, the proposed recovery of the differential pay on account of cancellation of the pay up-gradation was interdicted with the observation that the upgraded pay scale was allowed without any misrepresentation from their side.
The decision of the Tribunal declaring disentitlement of the Original Applicants to the ACP benefits were challenged before the High Court, wherein it was concluded that the employees were rightly given the benefit of first up-gradation, which could not have been withdrawn. Consequently, the High Court directed for restoration of the up-gradation under the ACP Scheme, to the concerned employees.
After considering the submissions, the Apex Court found that the benefit of the financial up-gradation under the ACP Scheme shall be available only if regular promotion during the prescribed intervals, 12 years and 24 years, could not be availed by an employee.
Reading of the ACP Scheme shows that financial up-gradation would accrue to an employee only if no regular promotions have been received by her/him at the prescribed intervals of 12 and 24 years respectively, added the Court.
Speaking for the Bench, Justice Roy observed that in the entire service career, an employee is entitled to financial up-gradation if the concerned employee had to suffer stagnation in the same post without benefit of any regular promotion and, the O.M. dated August 9, 1999 was introduced as a “safety net” to deal with the problems of genuine stagnation and hardship faced by the employees due to lack of adequate promotional avenues.
“As can be seen from the records, Manju Arora and Suman Lata Bhatia were offered promotion to higher grade on multiple occasions, but they refused the same and chose to continue in the existing pay scale. The purport of the O.M. dated 9.8.1999 was subsequently clarified by the O.M. dated 18.7.2001 where it was specifically provided that an employee who had been offered regular vacancy based promotion before grant of ACP benefit and the regular promotion was refused, she/he become ineligible to the grant of the ACP benefits”, noted the Bench.
Consequently, the Top Court declared that the employees who had refused the offer of regular promotion would be disentitled to the financial up-gradation benefits envisaged under the O.M. dated August 9, 1999.
Read Order: Surjit Singh and another v. State of Punjab and another
Monika Rahar
Chandigarh, January 4, 2022: Invoking its inherent power under Section 482 of the Cr.P.C., the Punjab and Haryana High Court has quashed an FIR on the ground of a compromise which was entered into between the parties.
The Court while doing so reiterated that a High Court has power under Section 482 to allow the compounding of non-compoundable offence and to quash the prosecution where it is required for preventing abuse of the process of law or for securing the ends of justice.
The concerned petition was filed under Section 482 Cr.P.C. for quashing of an FIR registered under Sections 420, 406, 506 of IPC and Section 13 of Punjab Travel Profession (Regulation) Act, 2014 at Police Station Bhaini Mian Khan, District Gurdaspur, Punjab
The Single-Judge bench of Justice Vikas Bahl was informed in its previous hearing that all the parties concerned were party to the compromise. Thus, the Court, by virtue of its earlier order, directed the parties to appear before the Illaqa Magistrate/ trial Court for recording their statements qua Compromise, and the lower court was directed to submit a report addressing questions like how many persons were arrayed as accused; whether they were proclaimed offender; whether the compromise was voluntary, etc. In pursuance of this Order, a report was submitted which found the compromise to be genuine, voluntary and valid.
The counsel for the petitioners submitted that no other FIR was lodged against the petitioners and that they were not declared proclaimed offenders in the present case. The State Counsel also confirmed this information. It was also submitted that the compromise would bring peace and amity between the parties and was thus in the interest of all the parties.
Addressing the legal position on the exercise of inherent power in a case where a compromise is entered into between the parties, the High Court referred to the Full Bench judgment of Punjab and Haryana High Court in the case of Kulwinder Singh and others v State of Punjab, wherein it was held that High Court has power under Section 482 Cr.P.C. to allow the compounding of non-compoundable offence and quash the prosecution where the High Court is of the opinion that the same is required to prevent the abuse of the process of law or otherwise to secure the ends of justice. This power of quashing is not confined to matrimonial disputes alone.
The judgment of the Supreme Court in the case of Gian Singh Vs. State of Punjab and another was also referred to wherein it was observed that for securing the ends of justice or for preventing abuse of process of Court, inherent power can be used by the Court to quash criminal proceedings in which a compromise has been effected.
The Court found the settlement in the present case to be amicable and in the interest of all the parties and thus to secure the ends of justice, the criminal proceedings were ordered to be quashed.
Read Order: Bijender Singh v. State Of Haryana and Others
Monika Rahar
Chandigarh, January 4, 2022: While dismissing the petition for issuance of a Writ in the nature of Mandamus directing the Municipal Council/Corporation, Bhiwani (M.C.), to utilize an open space available in their colony for their common good, the Punjab and Haryana High Court has held that open spaces are part of the Town Development plan for meeting future contingencies and the residents of the locality do not become custodians of such public property.
The Division Bench of Justice Tejinder Singh Dhindsa and Justice Vinod S. Bhardwaj said, “Article 51- A only imposes a duty upon the citizens to safeguard public property. The petitioner cannot be permitted to confer upon itself a right or dominion over the public property under the pretext of discharging the fundamental duty to safeguard the public property.”
The petitioner’s colony allegedly had an open space that was meant for the benefit of the people of the colony. Later the M.C. gave the land to the Public Health Department for constructing a sewer disposal plant, however, this project was shut down and eventually the Department ended up constructing a one-room set on the land without obtaining a sanctioned plan from the Municipal Committee. The petitioner also alleged that the land in question did not stand in the name of Public Health Department and was misused by the said Department by allotting the said one room set to its Baildar.
A writ petition was filed by the petitioners which resulted in the issuance of directions to the respondent to decide upon the petitioner’s representation. After another round of litigation, the Department surrendered possession of the said constructed room to the Municipality and pursuant to this the possession of the said room was taken over by the petitioner and other colony members for common use.
The petitioner argued that the municipal body should be directed to permit such use of the property by the Colony members, however when asked to furnish documents including the area layout to see if the approved layout would permit the property to be used as per the petitioner’s proposal, the petitioner’s counsel refused to refer to any such plan.
After having considered the rival claims, the Court said that the area earmarked as open spaces are for future contingencies and planning and hence, cannot be put to any other use without proper approval even though such use may seem to be advancing the public interest in other ways.
The Town Planning Schemes often provide for all facilities and amenities such as libraries, Parks etc. but such usage is prescribed taking into consideration various norms of urban planning,added the Bench.
The Bench also opined that title in the property is vested in the Government which is elected by the people and remains the sole custodian of public property.
“A space ‘kept open’ does not mean ‘surplus’, and may well be a part of future planning for expansion of the infrastructure. Any such change of user cannot be directed by the Writ Court in its exercise of powers of judicial review especially when such layout is not a subject matter of challenge before the Court and the petitioner fails to establish how such layout/planning is bad and liable to be set aside”, observed the Court.
Lastly, while acknowledging the possible financial implication of directing any such use of the
property in question, the Court held that the petitioner or the Court cannot determine the use of land left as open spaces in the Town Planning Scheme and that unauthorized possession of such public land or property cannot be taken.
Read Judgment: State Of Andhra Pradesh & Ors. V. S. Pitchi Reddy & Ors
Pankaj Bajpai
New Delhi, January 4, 2022: The Supreme Court has opined that when fresh assessment orders were passed consequent upon the remand of the case by the First Appellate Authority pending the revisional proceedings against the order of remand, then fresh assessment orders could not have been set aside merely on that ground.
A Division Bench of Justice M.R. Shah and Justice B.V. Nagarathna observed that the High Court ought not to have directly entertained the writ challenging the fresh assessment orders, and the respective dealers – assessees ought to have availed the alternative remedy of appeals before the FAA which were availed earlier when the earlier assessment orders were passed.
The observation came pursuant to appeals challenging certain orders whereby the High Court had quashed the respective assessment orders passed by the AO – Commercial Tax Officer, Brodipet Circle, Guntur, the State of Andhra Pradesh.
The background of the case was that, the AO assessed the tax in respect of S. Pitchi Reddy & Ors (Respondents – Registered dealers) who were holding VAT Registration. The First Appellate Authority (FAA) remanded the case to the AO, and thereafter the Commissioner of Commercial Taxes exercised suo-moto revisional powers against the order of FAA remanding the matter to the AO. Pending the revisional proceedings, the AO issued show cause notices for making fresh assessment orders consequent to the remand of the cases by the FAA.
In the meanwhile, the AO passed fresh assessment orders consequent upon the remand. However, instead of preferring appeal before the FAA against the fresh assessment orders, the dealer’s straight way filed petitions before the High Court, which was allowed and fresh assessment was quashed, solely on the ground that pending suo-moto revisional proceedings, the AO ought not to have proceeded further with the fresh assessment.
After considering the arguments, the Apex Court noted that if the fresh assessment orders would have gone against the State, in that case the State would have been the aggrieved party and the State could have raised the objection that pending suo-moto revisional proceedings against the order of remand, the AO ought not to have proceeded further with the fresh assessments.
However, in the present case the fresh assessments had gone against the respective dealers, and therefore, as such the respective dealers were required to prefer the appeals before the First Appellate Authority against the fresh assessment orders, added the Court.
Hence, the Top Court concluded that orders passed by the High Court setting aside the fresh assessment orders in the writ petitions under Article 226 of the Constitution of India were unsustainable.
Read Judgment: Kerala State Beverages Manufacturing & Marketing Corporation Ltd. V. The Assistant Commissioner of Income Tax Circle 1(1)
Pankaj Bajpai
New Delhi, January 4, 2022: The Supreme Court has ruled that a surcharge on sales tax or turnover tax, being exclusive levies on State Government undertakings, does not qualify as fee or charge as per Section 40(a)(iib) of the Income Tax Act, for purposes of disallowance.
A Division Bench of Justice R. Subhash Reddy and Justice Hrishikesh Roy observed that a surcharge on a tax is nothing more than an enhancement of the tax, and as per settled law, a legislation is to be interpreted in a manner which serves and promotes the objective and intention behind the legislation.
Going by the background of the case, Kerala State Beverages Manufacturing & Marketing Corporation (Assessee-Appellant), which is engaged in wholesale and retail trade of beverages, was subject to assessment proceedings and order came to be passed u/s 143(3) of the Act. Thereafter the jurisdictional Principal Commissioner of Income Tax (PCIT) exercised power of revision u/s 263 on grounds that the original assessment order was erroneous and prejudicial to interests of the Revenue. The PCIT held that the AO failed to disallow debits from the assessee’s Profit & Loss Account with respect to the amount of surcharge on sales tax and turnover tax paid to the State Government, which ought to have been disallowed u/s 40(a)(iib) of the Act.
The assessee filed an appeal before the ITAT, but the same came to be dismissed. The assessee then filed a Miscellaneous Petition claiming that the Tribunal had failed to consider the issue agitated against the disallowance of the surcharge on Sales Tax. The order of the ITAT was recalled and fresh orders were passed. The assessee approached the High Court to assail the validity of these orders but was not successful. Hence the present appeal.
After considering the submissions, the Apex Court noted that the appellant was holding FL9 and FL1 licences to deal in wholesale and retail of Indian Made Foreign Liquor (IMFL) and Foreign Made Foreign Liquor (FMFL) granted by the Excise Department.
“The FL1 licence was for sale of foreign liquor in sealed bottles, without privilege of consumption within the premises. The gallonage fee is payable as per Section 18A of the Kerala Abkari Act and Rule 15A of the Foreign Liquor Rules. The appellant was the only licence holder for the relevant years so far as FL9 licence to deal in wholesale, and so far as FL1 licences are concerned, it was also granted to one other State owned Undertaking, i.e., Kerala State Cooperatives Consumers’ Federation Ltd”, observed the Court.
Speaking for the Bench, Justice Reddy noted that if the amended provision u/s 40(a)(iib) is to be read in the manner, as interpreted by the High Court, it will literally defeat the very purpose and intention behind the amendment.
The aspect of exclusivity u/s 40(a)(iib) is not to be considered with a narrow interpretation, which will defeat the very intention of Legislature, only on the ground that there is yet another player, viz., Kerala State Cooperatives Consumers’ Federation Ltd. which is also granted licence under FL1, added the Bench.
Justice Reddy went on to observe that the aspect of ‘exclusivity’ u/s 40(a)(iib) has to be viewed from the nature of undertaking on which levy is imposed and not on the number of undertakings on which the levy is imposed.
If this aspect of exclusivity is viewed from the nature of undertaking, in this particular case, both KSBC and Kerala State Cooperatives Consumers’ Federation Ltd. are undertakings of the State of Kerala, therefore, levy is an exclusive levy on the State Government Undertakings, added the Bench.
The Apex Court highlighted that a reading of preamble and Section 3(1) of the Kerala Surcharge on Taxes Act, 1957, makes it abundantly clear that the surcharge on sales tax levied by the said Act is nothing but an increase of the basic sales tax levied under Section 5(1) of the Kerala General Sales Tax Act, 1963, as such the surcharge is nothing but a sales tax.
When the basic sales tax paid by KSBC under Section 5(1)(b) of the KGST Act, deduction was allowed, there was no reason not to allow deduction of surcharge on sales tax, added the Court.
“A clear distinction between ‘fee’ and ‘tax’ is carefully maintained throughout the scheme u/s 40(a) of the Act itself. Wherever the Parliament intended to cover the tax it specifically mentioned as a tax. Section 40(a)(i) and 40(a)(ia) specifically relate to tax related items. Section 40(a)(ic) refers to a sum paid on account of fringe benefit tax. At the same time, Section 40(a)(iib) refers to royalty, licence fee, service fee, privilege fee or any other fee or charge. If these words are considered to include a tax or surcharge like sales tax, the distinction so carefully spelt out in Section 40 between a tax and a fee will be obliterated and rendered meaningless. It is settled principle of interpretation that where the same Statute, uses different terms and expressions, then it is clear that Legislature is referring to distinct and different things”, observed the Division Bench.
Thus, the Top Court held that the gallonage fee, licence fee and shop rental (kist) with respect to FL9 and FL1 licences granted to the appellant will squarely fall within the purview of Section 40(a)(iib) of the Income tax Act.
Read Order: Together We Fight Society vs. Apple Inc & Apple Distribution International Limited
Pankaj Bajpai
New Delhi, January 4, 2022: The Competition Commission of India has opined that the mandatory use of Apple’s IAP for paid apps & in-app purchases restrict the choice available to the app developers to select a payment processing system of their choice especially considering when it charges a commission of up to 30% for app purchases and in-app purchases.
Further, considering that the App Store is the only source of downloading apps in the iOS and its condition requiring use of application store’s payment system for paid apps & in-app purchases, it appears that Apple controls the significant volume of payments processed in the market, added the CCI.
A Coram of Mr. Ashok Kumar Gupta (Chairperson), Ms. Sangeeta Verma (Member) and Mr. Bhagwant Singh Bishnoi (Member) therefore observed that leveraging by Apple of its dominant position in App Store market to enter/protect its market for in-app purchase payment processing market, is violation of Section 4(2)(e) of the Competition Act, 2002.
The observation came pursuant to an Information originally filed u/s 19(1)(a) of the Competition Act, by Together We Fight Society (Informant), a non-government organization, against Apple Inc. (first Opposite Party) and Apple India Private Limited (AIPL), alleging contravention of various provisions of Section 4 of the Act.
Going by the background of the case, Apple Inc. is engaged in designing, marketing and selling smartphones (including the iPhone), personal computers (including iMacs), tablets (including the iPad), wearables and accessories. Further, Apple is stated to own and operate the Apple’s App Store to distribute applications and ADI is the Apple entity which is responsible for Apple’s proprietary App Store.
The Informant had alleged that Apple uses a barrage of anti-competitive restraints and abuse of dominant practices in markets for distribution of applications (apps) to users of smart mobile phones and tablets, and processing of consumers’ payments for digital content used within iOS mobile apps. The Informant had averred that Apple imposes unreasonable and unlawful restraints on app developers from reaching users of its mobile devices unless they go through the ‘App Store’ which is stated to be controlled by Apple. Further, Apple also requires app developers who wish to sell digital in-app content to their consumers to use a single payment processing option offered by Apple, which carries a 30% commission. As per the Informant, this amounts to abuse of its dominant position on the part of Apple in violation of Section 4 of the Act.
After considering the submissions, the Coram noted that the app developers, in order to maximize their reach to the maximum set of consumers, would not like to confine their offerings exclusively to one of the ecosystems as it would imply losing a sizable portion of the potential consumers’ revenue who are available on the other platform.
The essentiality of the iOS ecosystem from the app developers’ perspective cannot be overlooked and at the same time, for the consumers too, certain popular apps are a must have irrespective of the ecosystem and hence app developers’ have to service them, added the Coram.
The CCI noted that recognizing the cross side network effects, app developers have to develop and innovate for each of the ecosystem to be able to maximize their revenue and provide a wider consumer choice.
The Commission was of the prima facie view that Apple holds a monopoly position in the relevant market for app stores for iOS in India, and the dependence of the app developers appear to result in acceptance of Apple’s mandatory and non-negotiable rules inter alia relating to distribution of apps through App Store, by the latter.
The Coram found that Apple makes it mandatory to use Apple’s proprietary in-app purchase system (IAP) for distribution of paid digital content and it charges app developers commission of up to 30% on subscriptions bought through the mandatory IAP, and further, Apple prohibits app developers from informing app users about the ability to purchase on the web.
Thus, Apple prohibits app developers to include a button/link in their apps which take/steer the user to third party payment processing solution other than Apple’s IAP, added the Coram.
“While the App Store policies of Apple allows users to consume content such as music, e-books, etc purchased elsewhere also in the app, its rules restrict the ability of app developers to inform users about other purchasing options through a notification in the app itself, which might be cheaper, which would result in higher price for the users of such apps”, observed the Commission.
Thus, the Commission concluded that Apple has violated the provisions of Section 4(2)(a), 4(2)(b), 4(2)(c), 4(2)(d) and 4(2)(e) of the Act, and hence directed the Director General (DG) to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act.
The CCI however made it clear that nothing stated in this order shall tantamount to a final expression of opinion on the merits of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the present observations.
Read Judgment: K.muthuirul vs. The Inspector of Police
Pankaj Bajpai
Chennai, January 3, 2022: The Madras High Court (Madurai Bench) has opined that the accused can exercise his right to apply the default bail on the whole day, on which, the indefeasible right to apply the statutory bail accrues to him.
Since K.muthuirul (Petitioner) has availed of his indefeasible right to bail on October 18, 2021 and offered to abide by the terms and conditions to be imposed, the subsequent filing of the charge sheet does not disentitle the petitioner from claiming the default bail, added the Court.
The Single Judge Murali Shankar observed that Section 10 of the General Clauses Act cannot be invoked by the investigating agency for laying the final report, after the expiry of the prescribed period.
The observation came pursuant to a petition challenging the order of the Principal Sessions Judge for EC and NDPS Act cases, Madurai, dismissing the petition filed u/s 167(2) of Code of Civil Procedure, seeking statutory bail.
Going by the background of the case, Inspector of Police (Respondent) had registered a case against petitioner for allegedly possessing of 22 kgs of Ganga, u/s 8(c) r/w 20(b) (ii) (c) of NDPS Act. Accordingly, the petitioner was arrested and was remanded to judicial custody. Thus, the petitioner filed a petition u/s 167(2) CrPC, seeking default bail alleging that the respondent police failed to file the charge sheet within a period of 180 days envisaged u/s 36(A) of NDPS Act. The Trial Court however dismissed the petition.
After considering the submissions, Justice Shankar noted that the accused is entitled to file his application for default bail only after the expiry of 60 days or 90 days or 180 days as the case may be and that his right to avail the statutory bail accures only on the next day as the case may be, but the investigating agency has to file the charge sheet before the expiry of 60 days, 90 days or 180 days as the case may be, if they require the detention of the accused beyond the prescribed period of 60 or 90 or 180 days.
If the charge sheet is filed even prior to the filing of the bail petition on the same day, the said filing of the charge sheet will not defeat the right already accrued to the accused, added the Single Judge.
The High Court noted that the Code of Criminal Procedure does not prescribe any particular period for laying the charge sheet and the Section 167(2) of CrPC does not prescribe any period of limitation even by implication.
The investigating agency is certainly entitled to file the charge sheet, even after expiry of 60 or 90 or 180 days, as the case may be, but they will not have any right to seek extension of remand beyond the period prescribed u/s 167(2) CrPC, added the Court.
The High Court therefore set aside the order passed by the Principal Sessions Judge and ordered the petitioner to be released on bail on his executing a bond for a sum of Rs.25,000/- with two sureties each for a like sum to the satisfaction of the Principal Sessions Judge for EC and NDPS Act cases, Madurai.
Read Judgment: Air India Limited vs. Kanwardeep Singh Bamrah & Others
Pankaj Bajpai
New Delhi, January 3, 2022: The Delhi High Court has opined that a decision taken by Kanwardeep Singh Bamrah & Others (Respondent – Pilots) to withdraw their resignation letters because of kicking in travel restrictions on account of Covid-19 pandemic, cannot form the basis of denuding them of their legal right to revisit their decision to resign from Air India Limited (AIL – Appellant Airline).
The power to take disciplinary action against the pilot would subsist, till there is a snapping of the employer-employee relationship, and that delinking of this relationship can happen only, once the resignation tendered is accepted, added the Court.
A Division Bench of Justice Rajiv Shakdher and Justice Talwant Singh observed that the State and its instrumentalities are obliged to act as a model employer, and, therefore, cannot be seen to deprive the pilots of, the right to serve the organization (AIL), at a point in time when finding jobs in the private sector is a difficult proposition.
Thus, before resignations tendered by the pilots were accepted, they had every right in law to withdraw the same as their jural relationship with AIL remained unimpaired till their resignations were accepted, added the Bench.
It was the case of AIL that resignations were tendered by the pilots in the period spanning between July 2019 and February 2020, as certain commercial airlines had expanded their business and were, looking out for trained pilots to handle their aircraft(s). The pilots, according to AIL, were wanting to seize this opportunity, and therefore, had tendered their resignations. However, after March 2020, the situation changed drastically with the Covid-19 pandemic, erupting with venom, across the world including India. This resulted in the shutdown of businesses and cost-cutting measures as also rationalization of salaries across industries, including the airline industry as AIL took similar steps to bring about rationalization in the conduct of its business.
Therefore, the gravamen of AIL’s case was that the pilots, having realized that there were no opportunities left for employment, decided to withdraw their resignations.
The stand of AIL was that once the resignation is submitted, it operates, in praesenti, and therefore, the subsequent acts concerning acceptance of resignation or acceptance of withdrawal of resignation and the U-turn made thereafter in accepting the resignation would not impact the legal position, which is, that the employer-employee relationship snapped insofar as the employee was concerned the moment the resignation was tendered.
After considering the arguments, the High Court noticed that resignation is a voluntary act in contradistinction to termination/removal from service or even retirement/superannuation, which occurs as per the applicable rules as also the delinking which occurs by efflux of time in consonance with the provisions of the contract, obtaining between the employer and employee.
Therefore, since resignation is a voluntary act, the concerned employee can ordinarily determine the date when she/he wishes to part company with the employer, and resignation can, thus, be instantaneous or be configured to take effect, at a future date, added the Court.
The Division Bench noted that although the trigger for snapping the link between the employer and the employee is placed in the hands of the employee, the link will get snapped based on the nature of the office/post held by the employee and/or the contract entered into between the employer and the employee.
Thus, ordinarily, where the offices/posts are held by persons, which have special attributes, then, persons who hold such office(s)/post(s) can unilaterally relinquish their office/post; as against this, most of the other office(s)/post(s) have a bilateral attribute attached to them, added the Bench.
The High Court noted that as per the Service Regulations, an employee can resign only if he has given six months’ notice in writing, in case he falls in the licence/approval category; a period which is reduced to three months with an alternative to paying compensation in lieu of notice, qua employees falling in all other categories.
The Division noted from the Civil Aviation Requirement, dated October 27, 2009 (CAR), that the stipulations qua notice period has been made to prevent last-minute cancellation of flights and harassment to passengers; in a nutshell, to further public weal.
Thus, in line with the provisions contained in the Service Regulations and the Operations Manual, during the notice period, the pilot is obliged to undertake the flight duties assigned to her/him with a corresponding obligation placed on the employer (in this case AIL) not to deprive the pilot of her/his legitimate rights and privileges concerning assignment of duties, added the Bench.
The High Court went on to observe that CAR requires air transport undertaking to issue a NOC to the pilot once the notice period expires, and in case, the air transport undertaking accepts the resignation earlier than the notice period, the notice period is automatically truncated, and the air transport undertaking is, thereafter, obliged to provide a NOC.
Therefore, once the pilot has served the notice period, a right emerges in his favour to exit from the AIL, and seek issuance of a NOC from the AIL, upon completion of all monetary and procedural formalities, added the Court.
The High Court highlighted that although there is an obligation on the part of the pilot to serve a minimum notice period of six months, the employer-employee relationship does not dissolve till such time a decision is taken at AIL’s end as to whether or not the pilot tendering his resignation falls in the excepted categories.
Therefore, the High Court held that the employees would not be reinstated but would be entitled to back wages for the period spanning between the date when their resignations were accepted and the date when they found alternate employment.
Read Judgment: Jindal Stainless (hisar) Ltd. vs. Sourabh Jinal & Ors
Pankaj Bajpai
New Delhi,January 3, 2022: The Delhi High Court has opined that a document which ought to be produced in Court by the defendant under Order VIII Rule 1(3) of CPC, but, is not so produced shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.
The Bench of Justice Suresh Kumar Kait observed that the present suit was at the stage of cross examination of prosecution witness and parties were yet to establish their case with respect to use of trade mark “Jindal” on the basis of issues framed by this Court.
Going by the background of the case, a suit has been filed by Jindal Stainless (Plaintiff) seeking permanent injunction, restraining infringement of trademark “JINDAL”, passing-off, dilution and tarnishment of the trademark; damages; rendition of accounts; delivery up; declaration of ‘well-known’ status etc. In pursuance of the same, Sourabh Jindal (Applicant/1st defendant) filed an application to bring on record certain additional documents contending that such documents sought to be placed on record are in public domain and are necessary for just determination of the case.
On the other hand, such application was vehemently opposed by counsel for plaintiff by urging that the plea of first defendant that the additional documents sought to be placed on record were in his possession cannot be accepted, as defendants might have initiated the process for registration of the trademark much before filing of the written statement, however, did not disclose this fact in the written statement so filed.
The counsel for plaintiff further submitted that the said defendant has not been able to show any reasonable cause for nondisclosure of the documents which are sought to be placed on record.
After considering the submissions, Justice Kait found that vide order dated May 15, 2019, this Court has passed an interim order directing that the defendants shall forthwith stop using the mark ‘JINDAL’ per se in their trading name as well as trade mark but shall be entitled to use ‘SOURABH JINDAL’ as their trade name and trade mark.
“The applications for registration of trademarks under Class 35 and 16 respectively were made on 07.06.2019, whereas written statement was filed thereafter on 25.06.2019. According to applicant/ defendant No.1, the registration of trademark “Sourabh Jindal” with the logo in Class 16 was granted on 31.01.2020 and Class 35 was granted on 18.02.2020. Though for the reasons best known to defendant No.1, the fact of having applied for registration of word mark “Sourabh Jindal” during pendency of this suit, was not mentioned in the written statement”, observed the Single Judge.
However, Justice Kait noted that by virtue of interim order dated May 15, 2019, this Court had permitted the defendants to use the said trade/word mark and no restraint order in respect thereof was passed and after receipt of traded mark registration certificate, first defendant has approached this Court to place the same on record.
So far as with bringing on record partnership agreement dated August 14, 2020, deed of assignment, receipt of payment of demand draft of Rs.10,000 etc. is concerned, the Single Judge found that first defendant has has created a Limited Liability Partnership company in the name of Sourabh Jindal LLP from August 14, 2020, which is run by Mr. Dheeraj Aggarwal and Mr. Praful B. Bhatt besides him and has thereby informed the persons responsible in case of fixation of liability.
Therefore, relying on the decision of the Apex Court in the case of Sugandhi (Dead) by Legal Representatives and Another Vs. P. Rajkumar, wherein it was observed that the court should take a lenient view when an application is made for production of the documents under Rule 1(3) CPC, the High Court allowed the application for admitting documents on record.
Read Order: Sapna and Another v. State of Punjab and Others
Monika Rahar
Chandigarh, January 3, 2022: While dealing with a plea seeking protection, the Punjab and Haryana High Court has held that the mere fact that one of the ‘major or adult’ parties to a live-in relationship has not attained marriageable age, would not be a valid ground to deprive the party concerned of his/ her fundamental right to life and personal liberty as guaranteed under Article 21 of the Indian Constitution.
The Bench of Justice Harnaresh Singh Gill was dealing with a writ petition under Article 226 of the Constitution of India seeking protection to the life and liberty of the petitioners (live-in couple) at the instance of the threats posed by their families.
Both the petitioners were major, however, the second petitioner, though a major, did not attain marriageable age. It was the case of the petitioners that they informed their parents about their relationship; however the same was not approved. Citing danger to their lives, the petitioners submitted that they received threats from their respective families and they were living in a constant state of fear, and were, therefore, running from pillar to posts for the protection of their life and liberty.
In support of his case, the counsel representing the petitioners relied upon the judgment passed by the Supreme Court in the case of Nandakumar and Anr. v. The State of Kerala and others, wherein it was held that even if the boy was not competent to enter into wedlock, they have the right to live together even outside wedlock and it was also mentioned that ‘live-in relationship’ is now recognized by the Legislature itself.
The core issue of law which arose for court’s consideration was whether the right to life and liberty of an adult male, who is a party to a live-in relationship, can be infringed upon by his family members or by the State on the ground that he has not attained marriageable age?
Addressing the issue, the Court elaborated upon the “bounded duty” of the State to protect the constitutionally guaranteed right of life and liberty of every citizen and observed that Article 21 of the Constitution stipulates protection of life and liberty to every citizen and that no person shall be deprived of his life and personal liberty except according to procedure established by law. It is the bounden duty of the State as per the Constitutional obligations cast upon it to protect the life and liberty of every citizen, added the Bench.
Further, the Court answered the main issue by observing that mere fact that the second petitioner is not of marriageable age, would not deprive the petitioners of their fundamental right as envisaged in the Constitution, being citizens of India.
The petition was thus disposed of with a direction to the Police to decide the representation moved by the petitioners, in accordance with the law, and to grant protection to them if any threat to their life and liberty is perceived.
Read Order : Sunil Kumar @ Sunny v. State of Haryana
LE Staff
Chandigarh, January 3, 2022: The Punjab and Haryana High Court has denied bail to an accused in a case of gang rape wherein it was alleged that the accused had drugged, raped and confined a woman into captivity on the pretext of giving her employment in his farmhouse.
The Bench of Justice Gurvinder Singh Gill was approached by the petitioner- accused for grant of bail in an FIR registered against him under Sections 328, 342, 506, 376-D, 370/120-B of Indian Penal Code, 1860 (IPC) and Sections 3, 4, 5, 5-A, 5-B, 5-C, 6, 7 and 9 of Immoral Traffic (Prevention) Act, 1956.
The factual scenario of this case was that the petitioner- accused was an acquaintance of the victim’s husband and he offered the victim a job at his farmhouse. He also allegedly assured that he would also arrange for a job for the victim’s husband who worked as a labourer. The victim was brought to his farmhouse on the pretext of this job offer and was drugged and raped by the petitioner- accused. The accused also snatched her phone to prevent her from contacting her husband.
It was alleged that he used to bring 10-12 persons every day to commit gang rape upon her and she was kept in a locked room. It was also alleged that on July 18,2018, nine persons committed rape out ot of which two were police officials. The victim- complainant managed to escape from the farmhouse and registered the FIR.
The counsel for the petitioner contended that the petitioner was falsely implicated in the case. It was argued that he was not liable for the offences attracted from the IPC in the FIR and that even if the prosecution story was to be believed, he (the accused) would be liable for an offence under the Immoral Traffic (Prevention) Act, 1956 which was punishable for a maximum imprisonment of 2 years whereas the petitioner as on date had already undergone imprisonment for a period of 3 years and 6 months.
The counsel also cited a lack of medical evidence and of physical injury on the body of the victim to be evidence of the innocence of the accused. It was also submitted that the FSL report did not suggest anything in support of the case of the prosecution. And lastly, it was argued that since all other co-accused were ordered to be released on bail, the petitioner should also be granted bail.
On the contrary, the State counsel submitted that the petitioner was the main accused who infact invited his friends and acquaintances for raping the victim and that she had been made a captive.
After having gone through the rival submissions, the Court noted that the prosecutrix in her statement recorded in terms of Section 164 of Cr.P.C. and also in her statement recorded during the proceedings of the trial had stated consistently with regard to the case of the prosecution as regards her rape.
Further, the Court showed its disagreement with the argument of the petitioner’s counsel that the petitioner should at maximum be tried for offences under the Immoral Traffic (Prevention) Act, 1956, and observed that the petitioner was the main accused, and the allegations against him virtually had been substantiated.
Thus, opining that the alleged offence was heinous in nature and without recording any findings on the merit of the case, the Court denied bail to the petitioner- accused.
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Environment and Sustainable Development – A Balanced Approach - Nayan Chand Bihani
The debate between protection of the environment and sustainable development is an age old one and is growing in proportion with every passing day all over the world, in general and specifically with respect to developing countries like India, in particular.
The Stockholm Declaration on the Human Enviornment,1972 categorically stated that man is both the creator and the moulder of his environment, which gives him physical sustenance and affords him the opportunity of intellectual, moral, social and spiritual growth. In the long run and tortuous evolution of the human race on this planet a stage has been reached when through the rapid acceleration of science and technology man has acquired the power to transform his environment in countless ways and on an unprecedented scale. Both aspect of man’s environment, the natural and the man-made, are essential to his wellbeing and to the enjoyment of basic human rights-even the right to life itself. It also states that the protection and improvement of the human environment is a major issue which affects the wellbeing of peoples and economic development throughout the world, it is the urgent desire of the people of the whole world and the duty of all the Governments. The Declaration, in Principle 2, states that the natural resources of the earth, including the air, water, land, flora and fauna and especially representative samples of natural eco-systems, must be safeguarded for the benefit of present and future generations through careful planning or management, as appropriate. It further, in Principle 8, states that economic and social development is essential for ensuing a favourable living and working environment for man and for creating conditions on earth that are necessary for the improvement of the quality of life.
A milestone in this field is the Rio Declaration on Environment and Development, 1992. It, interalia, states that human beings are at the centre of concern for sustainable development and that they are entitled to a healthy and productive life in harmony with nature. It also states that the right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations. It states that in order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it and that to achieve sustainable development and a higher quality of life for their people, States should reduce and eliminate unsustainable patterns of production and consumption and promote appropriate demographic policies. It contemplates that the States shall enact effective environmental legislation. Environmental standards, management objectives and priorities should reflect the environmental and developmental context to which they apply. The Declaration states that in order to protect the environment, the precautionary approach shall be widely applied by the states according to their capabilities and that environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority.
Initially, the trend was to use ‘Polluter Pays’ principle and punish the offending unit. Subsequently, vide judicial decisions, the principle of sustainable development was widely applied so as to balance the two principles.
The Polluter Pays principle talks about the liability of the polluter. With the increase in the industrial development what subsequently also increased is the waste emitted out of these industries and as a result of these wastes not only were the immediate surroundings adversely affected but also the environment at large. There is no specific definition of the Polluter Pays principle, rather it is a practice emphasising on the fact that one who pollutes the environment should be held accountable and responsible for the same with consequential steps to be taken. The principle not just focuses on punishing the polluter but its main criterion is to ensure that the polluted environment returns back to its original state. The reason behind it is to promote ‘Sustainable Development’. Thus it can be summed up that Polluter Pays principle is an essential element of sustainable development. Therefore, whosoever causes pollution to the environment will have to bear the cost of its management. The principle imposes a duty on every person to protect the natural environment from pollution or else he will be responsible for the cost of the damage caused to the environment. The main reason behind imposing a cost is two folds. Firstly, to refrain any person from polluting the environment and secondly, if in the case there is pollution then it is the polluter’s duty to undo the damage. Hence, both of the above ensures that there should be sustainable development. It is pertinent to mention that the Polluter Pays principle is not a new concept. It was first referred to in 1972 in a Council Recommendation on Guiding Principles Concerning the International Economic Aspects of Environmental Policies of the Organisation for Economic Co-operation and Development. The same is also enshrined in Principle 16 of the Rio Declaration, which states that ‘the polluter, in principle, bear the cost of pollution.’ The need of the hour is a demonstrable willingness to adhere to the essence of the principle in order to ensure that there is development, but not at the cost of causing environmental degradation.
The Hon’ble Supreme Court of India in the case of Indian Council for Enviro-legal Action vs Union of India reported in LQ/SC/1996/358, interalia, putthe absolute liability upon the polluter for the harm caused to the environment.
The Hon’ble Supreme Court of India in the case of Vellore Citizens Welfare Forum vs Union of India, reported in LQ/SC/1996/1368, interalia, accepted the Polluter Pays Principle as a part of the Article 21 of the Constitution of India and also emphasised Article 48A and Article 51A(g) of the Constitution of India.
The Hon’ble Supreme Court of India in the case of Amarnath Shrine reported in LQ/SC/2012/1121, has categorically stated the right to live with dignity, safety and in a clean environment.Article 21 of the Constitution of India, guaranteeing the right to life is ever widening and needs to maintain proper balance between socio-economic security and protection of the environment.
The Hon’ble Apex Court in the case of Bombay Dyeing and Manufacturing Co Ltd- vs – Bombay Environmental Action Group reported in LQ/SC/2006/206, interalia, states that the consideration of economic aspects by Courts cannot be one and it depends on the factors of each case. However, strict views ought to be taken in cases of town planning and user of urban land so as to balance the conflicting demands of economic development and a decent urban environment. Ecology is important but other factors are no less important and public interest will be a relevant factor.
The Hon’ble Supreme Court in the case of Dahanu Taluka Environment Protection Group –vs- Bombay Suburban Electricity Supply Company Ltd reported in LQ/SC/1991/157, has held that it is primary for the Government to consider importance of public projects for the betterment of the conditions of living of people on one hand and necessity for preservation of social and ecological balance, avoidance of deforestation and maintenance of purity of atmosphere and water from pollution and the role of the Courts is restricted to examine the whether the Government has taken into account all the relevant aspects and has not ignored any material condition.
The Hon’ble Supreme Court of India in the case of Narmada BachaoAndolan vs Union of India reported in LQ/SC/2000/1509, interalia, reiterated the Polluter Pay Principle.
A milestone case is that of M C Mehta vs Union of India reported in LQ/SC/2004/397, wherein the Hon’ble Supreme Court explained the Precautionary principle and the principle of Sustainable Development. It was, interalia, stated that the development needs have to be met but a balance has to be struck between such needs and the environment. The Hon’ble Supreme Court also reiterated similar views in a series of cases, some of which are stated hereinbelow;
LQ/SC/2007/1421
- M C Mehta vs Union of IndiaLQ/SC/2009/1231
- Tirpur Dyeing Factory Owners Association vs Noyyal River Ayacutdars Protection Association &Ors.LQ/SC/2009/1891
An interesting question came up before the Hon’ble Supreme Court with regard to the setting up of nuclear power plants with regard to the possibility of considerable economic development weighed against risk of feared radiological hazard. The Hon’ble Apex Court in the case of G.Sundarrajan –vs- Union of India reported in LQ/SC/2013/536, interalia, held that the Courts will be justified to look into the aspect as to the opinions of experts and the adequacy of safety measures and will be justified to look into the safety standards being followed by the Nuclear Power Plant.
The Hon’ble Supreme Court, in the case of Lal Bahadur vs State of UP reported in LQ/SC/2017/1384, interalia, emphasised the importance of striking a balance between the two principles.
An important development is the advent of the National Green Tribunal which has the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of any legal right relating to environment) is involved and relates to the Acts specified in Schedule I, namely the Water (Prevention and Control of Pollution) Act, 1974, the Water(Prevention and Control of Pollution) Cess Act, 1977, the Forest Conservation Act, 1980, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991 and the Biological Diversity Act, 2002. The National Green Tribunal, since its inception, has been looking into the aspects of environmental pollution and the mitigation thereof.
It can thus be said that both the environment and development are essential in the modern world for the betterment and living standards of the people. However, rampant and unplanned development at the cost of the environment is not to be entertained and the Courts will keep a close watch into the aspect of sustainable development, interalia, based on the criteria and guidelines, as specified.
Nayan Chand Bihani is a practising advocate at Calcutta High Court. Mr. Bihani pursued his LL.B from the Calcutta University College of Law, Hazra Campus and was enrolled as an Advocate in December,1998. Mr. Bihani deals mainly with Writ petitions, specially in Environmental laws, Election laws, Educational laws, Municipal laws, Service laws and Public Interest Litigations. He also represents several authorities like the West Bengal State Election Commission, the West Bengal Pollution Control Board, the State of West Bengal, several Educational Institutions and Universities and several Municipalities and Municipal Corporations and the Odisha Pollution Control Board. He can be contacted at nayanbihani@gmail.com.
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