Read Judgment: Sandoz Private Limited vs. Union of India & Others
Pankaj Bajpai
New Delhi, January 7, 2022: The Supreme Court has ruled that if the DTA supplier as well as EOU had utilized its CENVAT credit for importing goods in question, the refund would be in the form of reversal of commensurate amount of CENVAT credit to the account of the concerned entity.
However, if TED has been paid in cash by the EOU, the EOU may get refund of that amount from Authority implementing the applicable FTP in cash with simple interest at the rate of 6% per annum for the delayed refund of duty on condition that it would not pass on that benefit to the DTA supplier owing to such refund/rebate, added the Court.
A Larger Bench of Justice A.M. Khanwilkar, Justice Dinesh Maheshwari and Justice Krishna Murari observed that the fact that the concerned entity had unsuccessfully applied for refund to the Authorities under the 1944 Act and the rules made thereunder, that would not denude it of its entitlement to get refund of TED under the FTP, as may be applicable being mutually exclusive remedies.
Going by the background of the case, a policy circular bearing No.16 (RE-2012/2009-14) dated March 15, 2013 came to be issued by the Director General of Foreign Trade (DGFT) to clarify that no refund of Terminal Excise Duty (TED) should be provided by the Office of DGFT/Development Commissioners, as supplies made by DTA Unit to EOU are ab initio exempted from payment of excise duty. The Development Commissioner eventually rejected the refund claim.
The Bombay High Court negatived the challenge to the stated policy circular as well as the order passed by the Development Commissioner. The High Court also noted that although in the past the regional authority had accepted refund request of EOUs, that cannot bestow any right much less vested right in EOUs so as to issue mandamus to the statutory authorities concerned to act contrary to the provisions of Foreign Trade Policy (FTP). In substance, the Bombay High Court observed that the circular was only to restate and clarify that the regional authority of DGFT was not competent to entertain the refund application.
In next appeal, the Union of India assailed the judgment, whereby the Division Bench of the Delhi High Court held that the view taken by DGFT that Sandoz (Respondent) could avail of the refund under the provisions of the 1944 Act (CEA, 1944) and the Rules framed thereunder, was untenable in law. High Court noted that since the supply of excisable goods was prior to March 15, 2013, the question of invoking circular against the respondent-Company did not arise. Instead, the High Court held that the refund application ought to have been processed by the DGFT in terms of para 8.3(c) of the FTP, as it stood prior to March 15, 2013.
In the next appeal, the Union of India challenged the judgment, whereby the High Court noted that the respondent Company had supplied computer systems to EOU on payment of TED from June 2009 till October 2009, which in terms of the FTP, in particular para 8.2(b), was deemed export, entitling the respondent-Company to claim refund of TED from the regional authority of DGFT in terms of para 8.3(c) of the FTP.
After considering the submissions, the Top Court noted that since the entitlement of exemption and refund of TED flows from the provisions of 1992 Act and FTP framed thereunder by the Central Government, which is an independent dispensation than the one provided in the 1944 Act and the rules framed thereunder, with the avowed purpose of promoting export and earning foreign exchange, it is the obligation of Authority responsible to implement the subject FTP, to deal with refund claim of the concerned entities.
For, it is not a case of refund under the 1944 Act or 2002 Rules or 2004 Rules as such, but under the applicable FTP, and EOU entities, who had procured and imported specified goods from DTA supplier, are entitled to do so without payment of duty having been ab initio exempted from such liability under para 6.11(c)(ii) of the FTP, being deemed exports, added the Court.
Speaking for the Bench, Justice Khanwilkar noted that it would not be a case of entitlement of EOU, but only a benefit passed on to EOU for having paid such amount to the DTA supplier, which was otherwise ab initio exempted in terms of para 6.11(c)(ii) of the FTP coupled with the obligation to import the same without payment of duty under para 6.2(b).
As regards DTA supplier of goods to EOU, it is entitled to receive the refund of TED in terms of para 8.3(c) read with paras 8.4.2 and 8.5 of the applicable FTP subject to complying necessary formalities and stipulations provided therein, being a case of deemed exports, added the Bench.
The Larger Bench found that even, in the case of DTA supplier of goods to EOU, if TED has been paid by utilizing CENVAT credit, the refund would be in the form of reversal of commensurate amount in its CENVAT credit account.
And if the amount towards TED has been paid in cash by the DTA supplier to the Authorities under the 1944 Act, the refund of TED amount would be made by the Authority implementing the applicable FTP in cash with simple interest at the rate of 6% per annum for the delay in refund of TED, added the Bench.
Hence, the appeals filed by the assessee (EOU) against the decision of the Bombay High Court partly succeed; and the appeals filed by the Department against the decision of the Delhi High Court and Karnataka High Court are also partly allowed.
Read Judgment: Shri Kshetrimayum Maheshkumar Singh & Another vs. Manipur University & Others
Pankaj Bajpai
New Delhi, January 7, 2022: The Supreme Court has opined that in order to determine the percentage of reservation for OBC candidates, the percentage of seats to be reserved for SC and ST candidates must be determined within the four corners of the second proviso inserted in Section 3 of the Central Educational Institutions (Reservation in Admission) Act, 2006 (Reservation Act – Parent Act).
A Division Bench of Justice L. Nageswara Rao and Justice Hima Kohli therefore observed that Manipur University (first Respondent) was right in reverting back to the position obtaining immediately before the commencement of the Central Educational Institutions (Reservation in Admission) Act, 2006 (Reservation Act), by reserving seats in respect of ST, SC and OBC candidates, pegged at 31%, 2% and 17% respectively which was in consonance with the Manipur State Reservation Policy.
The observation came pursuant to an appeal challenging the judgment, whereby the High Court of Manipur (Imphal Bench) held that after the amendment of the Reservation Act, in the year 2012, on introduction of the Central Educational Institutions (Reservation in Admission) Amendment Act, 2012 (Amendment Act), first Respondent was required to follow the reservation norms of 2% for the candidates belonging to Scheduled Caste [SC], 31% for the Scheduled Tribes [ST] and 17% for the Other Backward Classes [OBC] for purposes of admission in the University.
After considering the Amendment Bill and Reports, the Apex Court noted that Reports and recommendations made by the Parliamentary Committees/Commissions that precede enactment of a Statute can be used as external aids to interpret the meaning of ambiguous words in a statutory provision wherever considered necessary.
Speaking for the Bench, Justice Kohli recognizing the fact that the composition of the population in the North Eastern States ought to be given precedence, observed that the Standing Committee stated in its Report that while the extent of reservation of seats for SCs/STs may be definite, OBC reservation may differ from State to State.
It was with the idea of re-conciliating 50% cap on reservation for SCs/STs and 27% for the OBC quota, that the Amendment Bill was introduced primarily to remove the existing ambiguities and to overcome the difficulties that were being faced by the CEIs established in the Sixth Schedule States, to accommodate the aspirations of a large tribal population in that region, added the Bench.
Justice Kohli refused to accept the submission of the appellants that the amendments brought about in the Reservation Act by legislating the Amendment Act were only directed towards tribal States covered by the Sixth Schedule to the Constitution and cannot be made applicable to the State of Manipur, even though the definition of the expression “Specified north eastern region” introduced by virtue of the amended Section 2(ia) encompasses the State of Manipur.
On the date immediately preceding the date of commencement of the Reservation Act, the first Respondent – University had been reserving 2% seats for SC and 31% for ST candidates for purposes of admission, found the Bench.
The Apex Court therefore concluded that the High Court Single Judge was perfectly right in making the observation that the formulae for fixing the percentage of reservation for the SC and ST candidates and for determining the percentage of seats to be reserved for OBC candidates under the second proviso of Section 3, ought to be gathered from the same source.
The Top Court therefore endorsed the view taken by the High Court Single Judge that after amendment of the Reservation Act, the University had to follow the reservation norms of 2% for SC candidates, 31% for ST candidates and 17% for OBC candidates which is in consonance with the second proviso to Section 3 of the Reservation Act inserted by virtue of the Amendment Act.
Read Order: Lovepreet Singh v. Haryana Public Service Commission and Another
Monika Rahar
Chandigarh, January 7, 2022: While dealing with an appeal by a candidate against not being marked for two correct answers given against deleted questions, the Punjab and Haryana High Court has held that in an objective MCQ exam where the candidate has to merely mark a correct response, a question which has no single, unique or ‘most appropriate answer’ (i.e. suspect question) becomes incapable of being asked. A suspect question, thus, needs to be deleted so that no student gets advantage, or is denied advantage, because of evaluation of such questions.
The Bench of Justices Ravi Shanker Jha and Justice Arun Palli also said ,“Similarly, the examining authority, guided by the experts in the subject, is well equipped and, thus, rightly authorized to decide the answer-key and in that process delete the suspect questions. Further, whether a question is framed aptly or is vague, ambiguous or has multiple correct answers and, therefore, required to be deleted is the exclusive domain of the subject experts. Thus, ordinarily this Court in exercise of power of judicial review would not interfere with the opinion of the experts unless shown to be conclusively erroneous or flawed.”
In this case, the appellant appeared for a competitive exam conducted by the Haryana Public Service Commission (Commission). Before the formal declaration of result, the Commission uploaded the standard question booklet along with the proposed answer key. The appellant filed objections to six questions from the answer key. Thereafter, the Commission declared the result and the appellant failed to qualify for an interview. The grievance of the appellant was that the result was declared based upon the incorrect answer key and without considering his objections.
Thus, he approached the High Court with a Writ Petition. The Commission refuted the appellant’s claim and stated that it declared the result based on the report of experts to whom these objections were sent. This petition was dismissed by the Single Judge bench.
Then, another petition was filed by the petitioner praying for the quashing of the Expert Committee’s report which recommended deletion of Q. Nos. 25 & 62 (General Ability Paper) and for restoration of those questions because the appellant answered these questions correctly. However, the Single Judge dismissed this petition on the ground that the selection process had already withstood the judicial scrutiny in the previous round of litigation and therefore, the second petition was hit by res judicata. Hence this intra Court appeal was filed.
The appellant’s counsel submitted that even though the Expert Committee found Q. Nos. 25 & 62 (General Ability Paper) to be ambiguous but since the appellant answered them correctly, he was entitled to be awarded marks for those two questions. Further,as the appellant competed against one of the six posts reserved for BC-A Category and as one post was still vacant, so he could be appointed against the said post.
At the outset, the Court noted that after receiving the Commission’s response wherein it stated that the appellant’s objections were sent to an Expert Committee and based on its report the result was announced, the petitioner accepted this response and prayed for doing a round off of his marks from 39.9% to 40% in General Ability Test owing to the fact that two question from those which were deleted were marked correctly by the petitioner.
Refraining from making any further observations on the merit of the case, the Court observed that its scope was limited to determining if pursuant to the recommendations of the Expert Committee which found the concerned questions to be ambiguous/confusing, those questions could be deleted and, if the Commission was competent to cause such deletion.
In this respect, reference was made to the judgment of the Supreme Court in Kanpur University v. Samir Gupta, wherein it was held that ‘Multiple Choice Objective-type test’ care must be taken to see that questions having an ambiguous import are not set in the papers because these exams have limited scope of marking ‘yes’ or ‘no’. It leaves no scope for reasoning or argument. If a defect in the answer key or questions is pointed out, a prompt and timely decision must be to declare that the suspect question will be excluded from the paper and no marks assigned to it.
Since the authenticity or correctness of the Expert Committee’s report was not even remotely questioned by appellant’s counsel, thus the Court dissuaded from interfering with the impugned decision of the Single Judge and dismissed the appeal.
Read Judgment: Union of India vs. Alapan Bandyopadhyay
Pankaj Bajpai
New Delhi, January 7, 2022: The Supreme Court has opined that the power of judicial review of an order transferring an Original Application pending before a Bench of the Central Administrative Tribunal (CAT) to another Bench u/s 25 of the Administrative Tribunals Act, 1985, can be judicially reviewed only by a Division Bench of the High Court within whose territorial jurisdiction the Bench passing the same, falls.
A Division Bench of Justice A.M. Khanwilkar and Justice C.T. Ravikumar therefore observed that the High Court at Calcutta has usurped jurisdiction to entertain the petition challenging the order passed by the CAT, New Delhi, even after taking note of the fact that the Principal Bench of the Tribunal does not lie within its territorial jurisdiction.
Going by the background of the case, Alapan Bandyopadhyay (Respondent), who was the then Chief Secretary of the State of West Bengal, filed an application before the Kolkata Bench of the Central Administrative Tribunal (CAT) challenging the disciplinary proceedings initiated against him alleging failure to attend a review meeting chaired by the Prime Minister of India for assessing the loss of life, damage to property and infrastructure caused by the cyclonic storm ‘YAAS’. He was charged thereunder for failure to maintain absolute integrity and devotion to duty and for exhibiting conduct unbecoming of a public servant.
Pending consideration of the application, the Union of India (Appellant) moved a Transfer Petition u/s 25 of the Administrative Tribunals Act, before the Principal Bench of the Tribunal at New Delhi seeking its transfer from the Kolkata Bench to the Principal Bench. That petition was allowed by the Chairman of the Tribunal. The High Court however, set aside the order passed by CAT Principal Bench (New Delhi) transferring the application filed by the respondent.
After considering the provisions and the submissions, the Apex Court noted that as per Section 25 of the Act, a party to any Application before any Bench of the CAT is statutorily entitled to make a separate application before the Chairman of the CAT for such a transfer.
Upon transfer of an Original Application pending before a particular Bench of the Tribunal, lying within the territorial jurisdiction and power of judicial superintendence of any particular High Court other than High Court of Delhi at Delhi, to the Principal Bench at New Delhi lying within the territorial jurisdiction of High Court of Delhi, the question of maintainability may arise in case of a challenge against the order of transfer, added the Court.
The Top Court elaborated that yet another High Court may emerge in the picture if the Chairman, sitting at the Principal Bench transferred the O.A. not to the file of the Principal Bench, but to another Bench lying within the territorial jurisdiction of yet another High Court.
However, the Chairman of the Tribunal can also pass an order of transfer of an Original Application while sitting at any other Bench than the Principal Bench, and this possibility cannot be ruled out in view of the provisions u/s 5(4)(a) of the Act, added the Court.
Speaking for the Bench, Justice Ravikumar observed that once the High Court found the order impugned as one passed by the Principal Bench, then it should have confined its consideration firstly, to decide its own territorial jurisdiction for exercising the power of judicial review over the order passed by the Principal Bench in the correct perspective, without reference to the bundle of facts constituting the cause of action for filing application before the Kolkata Bench of the Tribunal founded on the cause of action referred to in Rule 6(2) of the Central Administrative Tribunal (Procedure) Rules, 1987, that decides the place of filing of an O.A.
Hence, the Apex Court set aside the final order passed by the High Court at Calcutta to be held as one passed without jurisdiction, and hence, ab initio void.
Read Order: Vijay Kumar v. State of Punjab
Monika Rahar
Chandigarh, January 7, 2022: While dealing with a petition under Section 438 of the Cr.P.C., the Punjab and Haryana High Court has denied the grant of anticipatory bail to an accused under the NDPS Act on the ground that the contraband substance was recovered from the petitioner’s house.
The Bench of Justice Archana Puri stated, “Even though, the petitioner has been nominated, as accused at the behest of Vikram Singh, fellow accused, but however, fact remains that recovery of incriminating article has been effected from the house of the present petitioner in the presence of independent witness”
In this case, an FIR was lodged against the petitioner under Section 15 of the NDPS Act. As per the prosecution story, after the investigating agencies received secret information about the involvement of the petitioner and his co-accused Vikram Singh in smuggling of poppy husk in Rajasthan and its sale in Punjab, Vikram Singh, who was already in custody in another FIR, was investigated and during this investigation, he suffered disclosure statement, thereby stating to have smuggled 30 kgs of poppy husk along with the petitioner. He also confessed to hiding the contraband substance in the house of the petitioner with the petitioner’s knowledge. In pursuance of this confession, 30 kgs. of poppy husk was recovered from the spot so disclosed.
The petitioner’s counsel argued that the petitioner was nominated as accused, only on the basis of the disclosure statement made by his co-accused and that even the recovery of 30 kgs. of poppy husk was falsely shown to be from the petitioner’s house.
On the other hand, the State Counsel cited the availability of secret information against the petitioner and the discovery of narcotic substances on account of the disclosure statement of the petitioner’s co-accused, as grounds for opposing the petitioner’s pre-arrest bail plea.
The Court noted that the disclosure statement specifically stated that both the accused persons collectively purchased the contraband and that the recovery was effected from the disclosed spot in the presence of even the DSP and independent witnesses.
Thus, the accused was denied pre-arrest bail.
Read Order: Suresh Chand v. Ajit Singh Dahiya and Others
Monika Rahar
Chandigarh, January 7, 2022: While considering a quash petition, the Punjab and Haryana High Court has recently held that the Court of the first instance while awarding multiple sentences of imprisonment in a trial, must specify, in clear terms, as to whether the said sentences would run concurrently or consecutively and in case, they were to run consecutively, the order (sequence) in which the same would run.
In this case, the petitioner along with two other persons was tried in an FIR under Sections 302/307/34 of IPC and Section 25 of Arms Act of 1959. The Additional Sessions Judge, Chandigarh convicted and sentenced the petitioner alone for life imprisonment under Section 302 of the IPC and term sentences of five years each was given to two under Section 25 of Arms Act. This order did not specify as to whether the sentences were to run concurrently or consecutively. But, on the same day, the same Judge issued a conviction warrant wherein it was specifically mentioned that all the substantive sentences would run concurrently.
Suddenly, after more than 13 years, an application under Section 353 r/w Section 362 of Cr.P.C. was made by the first respondent alleging that the conviction warrant was forged and that the petitioner should be convicted according to the sentence order. The Additional Sessions Judge, Chandigarh, while allowing this application, ordered the sentences awarded to the petitioner to run consecutively. The judge also held that the conviction warrant sent to the Jail Authorities could not be taken into consideration. Hence, the petitioner approached the High Court under Section 482 Cr.P.C. with a prayer to quash the order allowing the above- mentioned application.
At the outset, the Bench of Justice Vikas Bahl recorded its finding on the scope of an application under Sections 353 r/w section 362 of the Cr.P.C. and observed that a party is not entitled under these sections to go back to the Trial Court to seek directions of nature that were sought in the present case. Further, it noted that neither of the said sections envisaged the setting aside of a conviction warrant or issuance of a direction to the authorities to comply with any order.
“Once the Additional Sessions Judge finally disposed of the matter, the appeal and the SLP against which had already been adjudicated, the moving of the present application, after a period of 13 years after the passing of the order of sentence, before the Additional Sessions Judge, Chandigarh, was not maintainable, moreso under section 353 r/w 362 of Cr.P.C. The Additional Sessions Judge had become functus officio, and thus could not have entertained the said application”, said the Bench.
The Court further observed that the Additional Sessions Judge, while issuing the warrant under Section 425 of Cr.P.C., was performing his judicial functions and the same could not be stated to be a ministerial act. Thus, the conviction warrant issued by the Judge under his signatures on the same date when the order of sentence was passed, specifically directing all the substantive sentences to run concurrently, was a judicial act.
The Court while stating that the order of sentence and the conviction warrant were to be read and understood together, observed that in the absence of any specific direction to the effect that the term sentence was to precede life imprisonment, it became clear by itself that the term sentences were intended by the trial court to run concurrently with the life sentence.
The Court also stated that the impugned Order did not consider the fact that the respondent’s application came after more than 13 years, when the petitioner’s case for release was at the final stage, and thus, the same was held by the Court to be against the legitimate expectation that the petitioner had for all these years with respect to his release.
The first respondent’s counsel argued that in collateral proceedings (under Section 482) words cannot be read into a judgment, more so when the appeal and further appeal against the impugned judgment were dismissed. Refuting this plea the Court said, after reflecting on the plight of the petitioner stated, “The prayer in the present petition under Section 482 of Cr.P.C. is for setting aside the order dated 07.10.2021 (order allowing first respondent’s application) and the prayer is not for reading any words into the order of sentence or for reviewing the same. Since, in the impugned order, Additional Sessions Judge, Chandigarh had considered the import of the order of sentence… without considering the relevant law on the point and without considering the fact that the application was not maintainable, thus, it is within the ambit of this Court to set aside the said order and protect the legal rights of the petitioner.”
The petition, for quashing of the impugned order, was allowed and the first respondent’s application was set aside.
Read Judgment: Malappa @ Malingaraya vs. State Of Karnataka
Pankaj Bajpai
Bengaluru, January 6, 2022: While noticing that the child born to the victim is no more and thus there is no impingement on the paternity of the child, the Karnataka High Court (Kalaburagi Bench) has opined that in deserving cases, the Court can direct for DNA test and there is no prohibition for ordering DNA test and the same is subject to each facts and circumstances of the case.
The Bench of Justice H.P Sandesh observed that the Magistrate had secured the accused and examined him (in camera) and explained the consequences and thereafter he gave the consent and the Magistrate directed the CMO and also the Investigating Officer to follow the procedure as laid down u/s 53, 53A and 164A of CrPC.
Only in compliance of the same and on the consent of the accused, which has been recorded in the order sheet, the Magistrate ordered to draw the blood sample, added the Single Judge.
The present petition had been filed seeking a writ of certiorari to quash the order subjecting Malappa (Petitioner) for DNA test and also seeking to quash the DNA report which was obtained to prove rape charges, urging that the very order dated 4th and 5th January,2017 and the DNA report and final opinion dated March 30, 2017, are against the principle of natural justice and violative of Article 20(3) of the Constitution of India.
It was contended that the petitioner never consented to undergo DNA profiling and for that purpose to give his blood sample. The petitioner filed objections to the requisition for drawing the sample for the purpose of DNA by the Investigating Officer. Thereafter, one more requisition was filed for drawing the blood sample from the petitioner and the Magistrate without following the procedure contemplated u/s 164 of the Cr.P.C., also resulted in violation of Article 20(3) of the Constitution of India, ordered to draw the blood sample.
After considering the submissions, the High Court found that that prior to amending Section 53 of Cr.P.C. and explanation and Section 53A, there was no specific provision for conducting DNA test and it was a practice and having felt the difficulties of the Investigating Officer in unearthing the truth, the parliament felt that it is necessary to bring an amendment and hence amendment was brought in 2005 by Act 25/2005 substituting the explanation which came to effect from June 23, 2006 in respect of Sections 53A and 54 of Cr.P.C. i.e., examination by registered medical practitioner.
In the explanation it is made clear regarding examination that it shall include the examination of blood, blood stains, semen, swabs in case of sexual offences, sputum and sweat, hair samples and finger nail clippings by use of modern and scientific techniques including DNA profiling and such other tests which the registered medical practitioner thinks necessary in a particular case, added the Court.
Justice Sandesh stated that the very contention of the petitioner that subjecting him for drawing of blood sample in order to test the paternity of the child amounts to violation of Article 20(3) of the Constitution of India and amounts to self-incrimination, cannot be accepted.
“It is the specific case of the victim that when she was on coolie work along with the accused, he subjected her for sexual act against her wish and also he promised to marry her and caused the life threat not to reveal the same. When she became pregnant, the parents have noticed the body development and on enquiry only, she revealed the same and the accused retorted that what evidence they are having to say that on account of his act, she became pregnant”, noted the Single Judge.
The High Court therefore dismissed the petition, concluding that the Magistrate has applied the judicious mind and having considered Sections 53 and 53A of CrPC and in compliance of Section 164A of CrPC, while ordering for DNA test.
Read Order: Dr. Surinder Mohan v. Bharat Kumar
Monika Rahar
Chandigarh, January 6, 2022: In an appeal where the plaintiff recorded evidence before the trial court thereby,going beyond the order passed in revision petition which allowed such recording of evidence in the first place, the Punjab and Haryana High Court has opined that the plaintiff himself being guilty of playing fraud with the Court, he cannot certainly take plea of estoppel on the part of defendant and defendant having waived of any right.
The Bench of Justice H.S.Madaan referred to the judgment of the Apex Court in M/s Sonell Clocks and Gifts Ltd. Versus New India Assurance Co. Ltd., wherein it was observed that waiver is intentional relinquishment of right; it must involve conscious abandonment of existing legal right, advantage, benefit, claim or privilege, which except for such waiver, party could have enjoyed; it is agreement not to assert right; to invoke principle of waiver, person who is said to have waived must be fully informed as to his rights and with full knowledge about same, he intentionally abandons them. There must be specific plea of waiver, much less of abandonment of right by opposite party.
In this case, a civil suit filed by the plaintiff (appellant) against his brother (respondent) was decreed to be closed by the Trial Court after the plaintiff failed to conclude his evidence despite being given several opportunities. Against this, the plaintiff filed a revision petition wherein the High Court gave him an opportunity to examine an expert witness. However, going beyond High Court’s order the plaintiff submitted before the Trial Court, the expert witness’s affidavit along with his own.
The defendant also crossed- examined both of them and eventually, the suit was partly decreed in the plaintiff’s favour. Now both the parties preferred separate appeals, in response to which the Additional District Judge set aside Trial Court’s decree on the ground that the plaintiff was only allowed to examine the expert witness and he clearly went beyond that. The plaintiff’s counsel argued that the defendant himself waived his right by cross-examining the witnesses and he should be estopped from raising this point now.
Addressing this contention and showing agreement with the Additional District Judge’s decision, the Bench observed that there was nothing to show that the defendant gave his consent for recording the statement of the plaintiff and thus no question of waiver of right arose.
“The plaintiff himself being guilty of playing fraud with the Court, he cannot certainly take plea of estoppel on the part of defendant and defendant having waived of any right…Therefore, estoppel, as provided under Section 115 of the Evidence Act, does not come into play against the defendant.”, said the bench.
Thus, the judgment of the Additional District Judge remanding the case was held to be perfectly legal and valid.
Read Order: Husan Bano and Another v. State of Punjab and Others
Monika Rahar
Chandigarh, January 6, 2022: While considering a protection plea of a married couple, where the boy was under marriageable age, the Punjab and Haryana High Court has held that every citizen is entitled to the protection of life and liberty under Article 21 of the Constitution of India, however; such liberty is always circumscribed by the provisions of law.
The Bench of Justice Amol Rattan Singh further opined that if any cognizable offence is found to be made out, naturally, the police can take cognizance of such offence and proceed with the matter accordingly, while otherwise ensuring protection of the life of the persons concerned.
This observation was made when the petitioners’ counsel argued that although the second petitioner (claimed to be 19 years of age) was under marriageable age, yet being a Muslim, he was governed by Muslim Personal Law which allowed any person above the age of puberty to get married.
The Court observed that the petitioner’s counsel had not been able to show any provision in the Prohibition of Child Marriage Act, 2006, which carves out a distinction in favour of any community, by which any member of such community can get married at an age below the legally marriageable age as prescribed under the provisions of the said Act.
The petitioner’s counsel also claimed that the first petitioner was 22 years old. He cited the conduct of an ossification test in this regard. However, the State counsel pointed to her school certificate to claim that she was 17 years and about 3-1/2 months on the date of the marriage. On this, the Bench opined that it was a well-settled proposition that an ossification test cannot be taken to be an accurate measure of a persons’ chronological age, with there being a margin of two years (plus or minus) from the age shown in such test.
Therefore, the official respondents were directed to protect the life and liberty of the petitioners as per law, but at the same time, the Bench made absolutely clear that this order would not bar proceedings under the Prohibition of Child Marriage Act, 2006, all offences committed under that Act being cognizable in terms of Section 15 thereof.
Read Order: Abdul Wahid v. State of Haryana
Monika Rahar
Chandigarh, January 6, 2022: While dealing with an appeal pertaining to a dowry death case where the prosecution was not able to prove its case beyond a reasonable doubt, the Punjab and Haryana High Court has held that it is the general rule that in a criminal case the burden of proof is always on the prosecution to bring home the guilt of the accused and Section 106 of Evidence Act is certainly not intended to relieve it of that duty and has referred to the judgment of the Apex Court in Nagendra Sah vs. State of Bihar.
The bench of Justice Ritu Bahri and Justice Karamjit Singh, while pointing towards the prosecution’s failure in establishing a motive for the incidence said, “In a case of circumstantial evidence, motive assumes great significance and importance. Absence of motive would put the Court on its guard and cause it to scrutinise each piece of evidence very closely in order to ensure that suspicion, emotion or conjecture do not take the place of proof.”
In this case, the deceased woman’s father alleged that his daughter was murdered by her husband (accused) by strangulation and being thrown in a water tank on account of his unmet dowry demands. The accused, a CRPF constable posted in Bihar, was married to the deceased for 13 years and he allegedly took a leave from his duty on the pretext of his wife’s illness and murdered her on the intervening night of 26th- 27th October, 2011. The accused was convicted and sentenced under Sections 498-A, 302/102-B of the IPC. Hence, this appeal was filed challenging this conviction.
Before the Trial Court, the case of the prosecution was that the accused mistreated his deceased wife and made repeated dowry demands and that while in custody, he made two disclosure statements confessing his guilt and causing the discovery of a ‘duppatta’ which he used for strangulation. One of the three doctors who conducted the post-mortem was orally examined to state strangulation and drowning as the cause of the death.
Contrary to these submissions, the appellant’s Counsel proved before the High Court that when the deceased accidentally fell in the water tank while fetching water, the appellant was staying in a neighboring village as he got late while coming from duty on leave. He also established that no independent witnesses were examined to prove the factum of harassment and dowry demand and that even the complainant admitted that the appellant purchased a property in his wife’s name and that his daughter was never harassed by him.
In the absence of any eye witness to the incident, the Court said that this was a case of circumstantial evidence and hence, the evidence adduced should have pointed conclusively towards the guilt of the accused person. While noting that four prosecution witnesses turned hostile in this case, the Court observed, “We deem it expedient to mention the legal position with regard to hostile witnesses. The testimony of hostile witness cannot be ipso-facto discarded in toto. It is well settled that portion of the testimony of hostile witness, which inspires confidence can be used. It is also well settled that testimony of hostile witness finding corroboration from other sources can be believed. In this context, reference be made to Pandappa Hanumappa Hanamar vs. State of Karnataka, (1997)10 SCC 197.”
The Court also observed that in the absence of a collective written opinion of the medical board as a whole and the oral testimony of one of the doctors could not be held to be the medical evidence of the fact that the deceased died due to strangulation and drowning. Thus, the Court concluded that the prosecution failed to prove the appellant’s guilt beyond a reasonable doubt.
Further, the Court said that in the absence of examination of a witness to prove the appellant’s stay in the neighbor on the night when the incident occured, doubt/suspicion regarding appellant’s conduct was created but the liability of the appellant could not be fastened just on the ground of suspicion. Law is well settled with regard to the fact that however, strong the suspicion may be, it cannot take the place of proof. Strong suspicion, coincidence, grave doubt cannot take the place of proof, added the Bench.
Hence, the appeal was allowed.
Read Judgment: Bhadar Ram (d) Thr. Lrs V. Jassa Ram & Ors.
Pankaj Bajpai
New Delhi, January 6, 2022: The Supreme Court has opined that a Scheduled Caste belonging to State of Punjab and being an ordinarily and permanent resident of the State of Punjab cannot claim the benefit of a Scheduled Caste in the State of Rajasthan for purpose of purchase of land belonging to a Scheduled Caste person of State of Rajasthan, which was given to original allottee as Scheduled Caste landless person.
A Division Bench of Justice M.R. Shah and Justice A.S. Bopanna therefore observed that the land transaction in favour of Bhadar Ram (Appellant), in breach of Section 13 of the Rajasthan Colonization Act, 1954 and Section 42 of the Rajasthan Tenancy Act, 1955, is rightly held to be void by the High Court.
Going by the background of the case, the dispute is with respect to the land situated at Ganganagar District, Rajasthan, which was allotted to one Chunilal as Scheduled Caste landless person and father of Jassa Ram (Respondent). As per the case of Respondent, in the year 1972, Chunilal borrowed a sum of Rs.5000/- from one Puran Singh and under the guise of documentation, the said Puran Singh belonging to Jat High Caste fraudulently made Chunilal sign the sale deed in favour of Appellant, who was a resident of Punjab.
Chunilal then filed a suit for ejectment against Puran Singh and Bhadar Ram on the ground that he was the allottee of the land and the sale deed was void and ineffective and the same was in violation of Section 42 of Rajasthan Tenancy Act, and Section 13 of Rajasthan Colonization Act. The said suit came to be decreed by the Trial Court holding that the land was in possession of Puran Singh who was not a Scheduled Caste person and that the sale deed was in violation of Section 13 of the Rajasthan Colonization Act, 1954 as well as in breach of Section 42 of the Rajasthan Tenancy Act, 1955 and therefore, Puran Singh is liable to be evicted.
The matter then reached the Board of Revenue, where the Appellant was granted relief by giving benefit of compounding upon payment of compounding fees u/s 13 of the Rajasthan Colonization Act, 1954. On Writ, the High Court held that the appellant being the resident and Scheduled Caste belonging to the State of Punjab, he could not have taken the benefit of his being Scheduled Caste in the State of Rajasthan.
After considering the submissions, the Apex Court observed that merely because his grandfather and father had purchased the agricultural lands in the State of Rajasthan, the appellant cannot be said to be an ordinarily resident of Rajasthan, when as per bainama mutation record, the address of Appellant was shown as that of Punjab.
As per Section 42 of the Rajasthan Tenancy Act, 1955, there is a restriction on sale, gift or bequest by a member of Scheduled Caste in favour of a person, who is not a member of Scheduled Caste, added the Court.
Therefore, looking at the object and purpose of such a provision, Justice Shah observed that the said provision is to protect a member of the Scheduled Caste belonging to the very State he belongs i.e., in the present case the State of Rajasthan.
Being a Scheduled Caste in the State of Punjab whether the sale transaction in favour of the appellant original defendant could have been saved from the bar u/s 42 of the Rajasthan Tenancy Act, 1955 is now not res integra, added the Bench.
Justice Shah noted that the Board of Revenue granted the benefit of provisions of Section 13A of the Rajasthan Colonization Act, 1954 in favour of the appellant and the Board permitted the appellant to pay compounding fees and regularized the transaction.
However, when the Board of Revenue granted the benefit of compounding u/s 13A(2), an order of ejection of the appellant was already passed against him and Puran Singh, and the possession was already handed over to the respondent from Puran Singh, who was found to be in actual physical possession of the land, added the Bench.
“Section 13(A)(2) of the Rajasthan Colonization Act, 1954 would be applicable only in a case where an order of ejectment has been passed, but a person against whom an order of ejectment has been passed has not actually been ejected from the land transferred. In that view of the matter, no order of compounding in favour of the appellant and /or even Puran Singh could have been passed by the Board of Revenue in exercise of power u/s 13(A)(2) of the Rajasthan Colonization Act, 1954”, observed the Top Court.
Hence, the Apex Court dismissed the appeal concluding that the land transaction in question is hit by Section 13 of the Rajasthan Colonization Act, 1954.
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Right to Disclosure – Importance & Challenges in Criminal Justice System – By Manu Sharma
Personal liberty is the most cherished value of human life which thrives on the anvil of Articles 14 and 21 of the Constitution of India (“the Constitution”). Once a person is named an accused, he faces the spectre of deprivation of his personal liberty and criminal trial. This threat is balanced by Constitutional safeguards which mandate adherence to the rule of law by the investigating agencies as well as the Court. Thus, any procedure which seeks to impinge on personal liberty must also be fair and reasonable. The right to life and personal liberty enshrined under article 21 of the Constitution, expanded in scope post Maneka Gandhi[1], yields the right to a fair trial and fair investigation. Fairness demands disclosure of anything relevant that may be of benefit to an accused. Further, the all-pervading principles of natural justice envisage the right to a fair hearing, which entails the right to a full defence. The right to a fair defence stems from full disclosure. Therefore, the right of an accused to disclosure emanates from this Constitutional philosophy embellished by the principles of natural justice and is codified under the Code of Criminal Procedure, 1973 (“Code”).
Under English jurisprudence, the duty of disclosure is delineated in the Criminal Procedure and Investigations Act, 1996, which provides that the prosecutor must disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused, except if such disclosure undermines public interest.[2] Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.[3] The duty of disclosure under common law contemplates disclosure of anything which might assist the defence[4], even if such material was not to be used as evidence[5]. Under Indian criminal jurisprudence, which has borrowed liberally from common law, the duty of disclosure is embodied in sections 170(2), 173, 207 and 208 of the Code, which entail the forwarding of material to the Court and supply of copies thereof to the accused, subject to statutory exceptions.
II. Challenges in Enforcement
The right to disclosure is a salient feature of criminal justice, but its provenance and significance appear to be lost on the Indian criminal justice system. The woes of investigative bias and prosecutorial misconduct threaten to render this right otiose. That is not to say that the right of an accused to disclosure is indefeasible, as certain exceptions are cast in the Code itself, chief among them being public interest immunity under section 173(6). However, it is the mischief of the concept of ‘relied upon’ emerging from section 173(5) of the Code, which is wreaking havoc on the right to disclosure and is the central focus of this article. The rampant misuse of the words “on which the prosecution proposes to rely’ appearing in section 173(5) of the Code, to suppress material favourable to the accused or unfavourable to the prosecution in the garb of ‘un-relied documents’ has clogged criminal courts with avoidable litigation at the very nascent stage of supply of copies of documents under section 207 of the Code. The erosion of the right of an accused to disclosure through such subterfuge is exacerbated by the limited and restrictive validation of this right by criminal Courts. The dominant issues highlighted in the article, which stifle the right to disclosure are; tainted investigation, unscrupulous withholding of material beneficial to the accused by the prosecution, narrow interpretation by Courts of section 207 of the Code, and denial of the right to an accused to bring material on record in the pre-charge stage.
A. Tainted Investigation
Fair investigation is concomitant to the preservation of the right to fair disclosure and fair trial. It envisages collection of all material, irrespective of its inculpatory or exculpatory nature. However, investigation is often vitiated by the tendencies of overzealous investigating officers who detract from the ultimate objective of unearthing truth, with the aim of establishing guilt. Such proclivities result in collecting only incriminating material during investigation or ignoring the material favourable to the accused. This leads to suppression of material and scuttles the right of the accused to disclosure at the very inception. A tainted investigation leads to miscarriage of justice. Fortunately, the Courts are not bereft of power to supervise investigation and ensure that the right of an accused to fair disclosure remains protected. The Magistrate is conferred with wide amplitude of powers under section 156(3) of the Code to monitor investigation, and inheres all such powers which are incidental or implied to ensure proper investigation. This power can be exercised suo moto by the Magistrate at all stages of a criminal proceeding prior to the commencement of trial, so that an innocent person is not wrongly arraigned or a prima facie guilty person is not left out.[6]
B. Suppression of Material
Indian courts commonly witness that the prosecution is partisan while conducting the trial and is invariably driven by the lust for concluding in conviction. Such predisposition impels the prosecution to take advantage by selectively picking up words from the Code and excluding material favouring the accused or negating the prosecution case, with the aid of the concept of ‘relied upon’ within section 173(5) of the Code. However, the power of the prosecution to withhold material is not unbridled as the Constitutional mandate and statutory rights given to an accused place an implied obligation on the prosecution to make fair disclosure.[7] If the prosecution withholds vital evidence from the Court, it is liable to adverse inference flowing from section 114 of the Indian Evidence Act, 1872 (“Evidence Act). The prosecutor is expected to be guided by the Bar Council of India Rules which prescribe that an advocate appearing for the prosecution of a criminal trial shall so conduct the prosecution that it does not lead to conviction of the innocent. The suppression of material capable of establishment of the innocence of the accused shall be scrupulously avoided. [8]
C. Scope of S. 207
The scope of disclosure under section 207 has been the subject of fierce challenge in Indian Courts on account of the prosecution selectively supplying documents under the garb of ‘relied upon’ documents, to the prejudice of the defence of an accused. The earlier judicial trend had been to limit the supply of documents under section 207 of the Code to only those documents which were proposed to be relied upon by the prosecution. This view acquiesced the exclusion of documents which were seized during investigation, but not filed before the Court along with the charge sheet, rendering the right to disclosure a farce. This restrictive sweep fails to reconcile with the objective of a fair trial viz. discovery of truth. The scheme of the code discloses that Courts have been vested with extensive powers inter alia under sections 91, 156(3) and 311 to elicit the truth. Towards the same end, Courts are also empowered under Section 165 of the Evidence Act. Thus, the principle of harmonious construction warrants a more purposive interpretation of section 207 of the code. The Hon’ble Supreme Court expounded on the scope of Section 207 of the Code in the case of Manu Sharma[9] and held that documents submitted to the Magistrate under section 173(5) would deem to include the documents which have to be sent to the magistrate during the course of investigation under section 170(2). A document which has been obtained bona fide and has a bearing on the case of the prosecution should be disclosed to the accused and furnished to him to enable him to prepare a fair defence, particularly when non production or disclosure would affect administration of justice or prejudice the defence of the accused. It is not for the prosecution or the court to comprehend the prejudice that is likely to be caused to the accused. The perception of prejudice is for the accused to develop on reasonable basis.[10] Manu Sharma’s [supra] case has been relied upon in Sasikala [11] wherein it was held that the Court must concede a right to the accused to have access to the documents which were forwarded to the Court but not exhibited by the prosecution as they favoured the accused. These judgments seem more in consonance with the true spirit of fair disclosure and fair trial. However, despite such clear statements of law, courts are grappling with the judicial propensity of deviating from this expansive interpretation and regressing to the concept of relied upon. The same is evident from a recent pronouncement of the Delhi High Court where the ratios laid down in Manu Sharma & Sasikala [supra] were not followed by erroneously distinguishing from those cases.[12] Such “per incuriam” aberrations by High Court not only undermine the supremacy of the Apex Court, but also adversely impact the functioning of the district courts over which they exercise supervisory jurisdiction. Hopefully in future Judges shall be more circumspect and strictly follow the law declared by the Apex Court.
D. Pre-Charge Embargo
Another obstacle encountered in the enforcement of the right to disclosure is the earlier judicial approach to stave off production or consideration of any additional documents not filed alongwith the charge sheet at the pre-charge stage, as the right to file such material was available to the accused only upon the commencement of trial after framing of charge.[13] At the pre-charge stage, Court could not direct the prosecution to furnish copies of other documents[14] It was for the accused to do so during trial or at the time of entering his defence. However, the evolution of law has seen that at the stage of framing charge, Courts can rely upon the material which has been withheld by the prosecutor, even if such material is not part of the charge sheet, but is of such sterling quality demolishing the case of the prosecution.[15] Courts are not handicapped to consider relevant material at the stage of framing charge, which is not relied upon by the prosecution. It is no argument that the accused can ask for the documents withheld at the time of entering his defence.[16] The framing of charge is a serious matter in a criminal trial as it ordains an accused to face a long and arduous trial affecting his liberty. Therefore, the Court must have all relevant material before the stage of framing charge to ascertain if grave suspicion is made out or not. Full disclosure at the stage of section 207 of the code, which immediately precedes discharging or charging an accused, enables an accused to seek a discharge, if the documents, including those not relied upon by the prosecution, create an equally possible view in favour of the accused.[17] On the other hand, delaying the reception of documents postpones the vindication of the accused in an unworthy trial and causes injustice by subjecting him to the trauma of trial. There is no gainsaying that justice delayed is justice denied, therefore, such an approach ought not to receive judicial consent. A timely discharge also travels a long way in saving precious time of the judiciary, which is already overburdened by the burgeoning pendency of cases. Thus, delayed or piecemeal disclosure not only prejudices the defence of the accused, but also protracts the trial and occasions travesty of justice.
III. Duties of the stakeholders in criminal justice system
The foregoing analysis reveals that participation of the investigating agency, the prosecution and the Court is inextricably linked to the enforcement of the right to disclosure. The duties cast on these three stakeholders in the criminal justice system, are critical to the protection of this right. It is incumbent upon the investigating agencies to investigate cases fairly and to place on record all the material irrespective of its implication on the case of prosecution case. Investigation must be carried out with equal alacrity and fairness irrespective of status of accused or complainant.[18] An onerous duty is cast on the prosecution as an independent statutory officer, to conduct the trial with the objective of determination of truth and to ensure that material favourable to the defence is supplied to the accused. Ultimately, it is the overarching duty of the Court to ensure a fair trial towards the administration of justice for all parties. The principles of fair trial require the Court to strike a delicate balance between competing interests in a system of adversarial advocacy. Therefore, the court ought to exercise its power under section 156(3) of the Code to monitor investigation and ensure that all material, including that which enures to the benefit of the accused, is brought on record. Even at the stage of supply of copies of police report and documents under section 207 of the Code, it is the duty of the Court to give effect to the law laid down by the Hon’ble Supreme Court in Manu Sharma (supra) and Sasikala (supra), and ensure that all such material is supplied to the accused irrespective of whether it is “relied upon” by the prosecution or not.
IV. Alternate Remedy
The conundrum of supply of copies under section 207 of the code abounds criminal trials. Fairness is an evolving concept. There is no doubt that disclosure of all material which goes to establish the innocence of an accused is the sine qua non of a fair trial.[19] Effort is evidently underway to expand the concept in alignment with English jurisprudence. In the meanwhile, does the right of an accused to disclosure have another limb to stand on? Section 91 of the Code comes to the rescue of an accused, which confers wide discretionary powers on the Court, independent of section 173 of the Code, to summon the production of things or documents, relevant for the just adjudication of the case. In case the Court is of the opinion that the prosecution has withheld vital, relevant and admissible evidence from the Court, it can legitimately use its power under section 91 of the Code to discover the truth and to do complete justice to the accused.[20]
V. Conclusion
A society’s progress and advancement are judged on many parameters, an important one among them being the manner in which it administers criminal justice. Conversely, the ironic sacrilege of the core virtues of criminal jurisprudence in the temples of justice evinces social decadence. The Indian legislature of the twenty first century has given birth to several draconian statutes which place iron shackles on personal liberty, evoking widespread fear of police abuses and malicious prosecution. These statutes not only entail presumptions which reverse the burden of proof, but also include impediments to the grant of bail. Thus, a very heavy burden to dislodge the prosecution case is imposed on the accused, rendering the right to disclosure of paramount importance. It is the duty of the Court to keep vigil over this Constitutional and statutory right conferred on an accused by repudiating any procedure which prejudices his defence. Notable advancement has been made by the Apex Court in interpreting section 207 of the Code in conformity with the Constitutional mandate, including the right to disclosure. Strict adherence to the afore-noted principles will go a long way in ensuring real and substantial justice. Any departure will not only lead to judicial anarchy, but also further diminish the already dwindling faith of the public in the justice delivery system.
**
Advocate Manu Sharma has been practising at the bar for over sixteen years. He specialises in Criminal Defence. Some of the high profile cases he has represented are – the 2G scam case for former Union minister A Raja; the Religare/Fortis case for Malvinder Singh; Peter Mukerjee in the P Chidambaram/ INX Media case; Devas Multimedia in ISRO corruption act case; Om Prakash Chautala in PMLA case; Aditya Talwar in the aviation scam case; Dilip Ray, former Coal Minister in one of the coal scam cases; Suhaib Illyasi case.
**
Disclaimer: The views or opinions expressed are solely of the author.
[1] Maneka Gandhi and Another v. Union of India, (1978) 1 SCC 248
[2] S. 3 of the Criminal Procedure and Investigations Act, 1996
[3] R v. H and R v. C, 2004 (1) ALL ER 1269
[4] R v. Ward (Judith), (1993) 1 WLR 619 : (1993) 2 ALL ER 577 (CA)
[5] R v. Preston, (1994) 2 AC 130 : (1993) 3 WLR 891 : (1993) 4 ALL ER 638 (HL), R v. Stinchcome,
(1991), 68 C.C.C. (3d) 1 (S.C.C.)
[6] Vinubhai Haribhai Malaviya and Others v. State of Gujarat and Another, 2019 SCC Online SC 1346
[7] Sidhartha Vashishth alias Manu Sharma v. State (NCT of Delhi), (2010) 6 SCC 1
[8] R. 16, part II, Ch. VI of the Bar Council of India Rules
[9] Manu Sharma, (2010) 6 SCC 1
[10] V.K. Sasikala v. State, (2012) 9 SCC 771 : AIR 2013 SC 613
[11] Sasikala, (2012) 9 SCC 771 : AIR 2013 SC 613
[12] Sala Gupta and Another v. Directorate of Enforcement, (2019) 262 DLT 661
[13] State of Orissa v. Debendra Nath Padhi¸(2005) 1 SCC 568
[14] Dharambir v. Central Bureau of Investigation, ILR (2008) 2 Del 842 : (2008) 148 DLT 289
[15] Nitya Dharmananda alias K. Lenin and Another v. Gopal Sheelum Reddy, (2018) 2 SCC 93
[16] Neelesh Jain v. State of Rajasthan, 2006 Cri LJ 2151
[17] Dilwar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra, (2008) 10 SCC 394
[18] Karan Singh v. State of Haryana, (2013) 12 SCC 529
[19] Kanwar Jagat Singh v. Directorate of Enforcement & Anr, (2007) 142 DLT 49
[20] Neelesh, 2006 Cri LJ 2151
Disclaimer: The views or opinions expressed are solely of the author.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
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