Read Order: Bhupinder Singh v. District And Sessions Judge, Sangrur And Another
LE Correspondent
Chandigarh, August 11, 2021: Dismissing the appeal of a terminated employee serving in the district court in Punjab’s Sangrur, the Punjab and Haryana High Court has held that the District and Sessions Judge is fully competent to discharge the employee during probation period, if his work and conduct is found to be deficient.
The case pertains to the appellant who was appointed as peon in the office of the District and Sessions Judge, Sangrur by appointment letter dated 5.8.2019. As per the appointment letter, he was on probation for a period of two years and if his work and conduct is not found satisfactory then his services shall be terminated without any notice.
The appellant was found absent from the duties repeatedly, for which his explanation was called but the same was found unsatisfactory. Thereafter, a discreet inquiry was ordered to be conducted on which it was found that the peon was facing three criminal cases regarding which he never disclosed to his employer.
He was asked to furnish his explanation regarding the same. He did not deny the fact regarding registration of the criminal cases. This being the position, as the peon was under probation, the District and Sessions Judge did not deem it fit to initiate disciplinary inquiry against him and rather terminated the peon’s services by impugned order dated 3.6.2020.
The terminated peon filed a writ petition in the High court to challenge the said order of termination of his services. The Single Judge heard him at length and finally dismissed his petition.
Thereafter, he filed an appeal before the division bench and that too stands dismissed in the present petition by the bench of Justice Rajan Gupta and Justice Karamjit Singh.
The main thrust of the contentions raised by the counsel for the terminated employee was that since the termination order passed by the District and
Sessions Judge is stigmatic, therefore the same stands vitiated due to non-holding of the departmental inquiry.
The bench, however, observed that undisputedly, the appellant was found absent from duty on several occasions. He was granted an opportunity to explain his position. However, the explanation given by the appellant was found to be not satisfactory by the competent authority.
The record shows that three criminal cases were registered against him and in one such case he was arrested on 6.11.2019 by the police of Police Station Joga and was released on bail on 15.11.2019. The appellant gave no intimation or information regarding the same to his department.
According to the bench, the competent authority while passing the impugned order simply gave the brief detail of the aforesaid facts, which were concealed by the appellant from the department.
“This being the position, the learned Single Judge rightly observed that whatever the stigma was attached to the character of the appellant (petitioner therein) on account of these criminal cases, already stood attached somewhere else because of the fact that the petitioner is facing these cases and he also remained in jail on account of the same,” the Division Bench said.
“The learned Single Judge further observed that the impugned order passed by the competent authority does not attach any additional quantum of stigma to the antecedents of the appellant (petitioner therein). Needless to say that had the competent authority not mentioned these facts in the impugned order then it would have been termed as a non-speaking order and would have vitiated for this reason alone, observed the bench.
Concluding the matter, the bench stated, “The impugned order does not disqualify the appellant from future employment as per his eligibility and suitability. It is simpliciter an order of termination of the services of the petitioner. In a sense, it is order of the discharge of the appellant from the service. The District and Sessions Judge was fully competent to discharge the employee during probation period, if his work and conduct was found deficient. Even as per the appointment letter (Annexure P-2), the appointment of the appellant was purely on temporary basis and liable to be terminated at any time without assigning any reasons.”
Read Judgement: Davesh Nagalya (d) & Ors v. Pradeep Kumar (d) Thr. Lrs. And Ors
LE Staff
New Delhi, August 11, 2021: The Supreme Court has ruled that after the death of both partners and in the absence of any clause permitting continuation of the partnership by the legal heirs, the non-residential tenanted premises is deemed to be vacant in law as the tenant is deemed to have ceased to occupy the building.
While reiterating that partnership stands dissolved by death of a partner in terms of Section 42(c) of the Partnership Act, 1932 a Division Bench of Justice Hemant Gupta and Justice A.S. Bopanna observed that the tenant is deemed to cease to occupy the premises in question and consequently, the tenanted property has fallen vacant as well.
The case pertains to an application, filed by Pradeep Kumar (successor-in-interest of tenant Tika Ram) before the Court of Rent Control and Eviction Officer, Dehradun, the District Magistrate, averring inclusion of Subhash Chand in the proposed business of sale of milk, which was opposed by the landlord.
It was argued by the landlord that Subhash Chand was a sub-tenant and hence Pradeep Kumar had put such person in possession of the shop who was not a member of their family and thus the property would be deemed to be vacant u/s 12(2) of the Act.
However, the District Magistrate permitted Subhash Chand to be inducted as a partner. Thereafter, remaining unsuccessful before the District Judge as well as the High Court, the appellant filed an application for review before the High Court on the ground that pursuant to the death of the tenant, Pradeep Kumar i.e., one of the partners of the firm, the partnership does not survive in view of Section 42(c) of the Partnership Act.
The counsel for the appellant argued that in terms of Section 42(c), the partnership stands dissolved by law and there is no clause in the partnership deed which permits the legal heirs of the deceased partners to continue with the partnership firm.
The review application was also dismissed which came to be challenged in the present appeal contending that the High Court had failed to take into consideration death of one of the partners leading to deemed vacation of the premises.
After considering all facts and averments, the Apex Court found that the order of permitting Subhash Chand as partner with Pradeep Kumar has come to an end by efflux of time and operation of law.
“In terms of Section 42(c) of the Partnership Act, partnership stands dissolved by death of a partner. The High Court has not taken note of such fact in the review petition and failed to take into consideration the subsequent events which were germane to the controversy. Subhash Chand, the other partner also died during the pendency of appeal,” observed the Bench.
Therefore, with the death of both partners and not having any clause permitting continuation of the partnership by the legal heirs, the non-residential tenanted premises is deemed to be vacant in law as the tenant is deemed to have ceased to occupy the building, added Justice Gupta.
The Top Court thus set aside the order passed by the High Court in Review Application and directed the appellants to take recourse to remedy as may be available to them and may proceed in accordance with law and the provisions of the Act.
Read Order: Hardeep Singh v. State Of Punjab
LE Correspondent
Chandigarh, August 11, 2021: The Punjab and Haryana High Court has denied bail to an accused in a drugs trafficking case after it was found that he is still facing prosecution in four more cases.
This was the second petition for grant of bail, pending trial, in a criminal case arising from an FIR dated 30.11.2018, registered under Section 22 of the Narcotic Drugs and Psychotropic Substance (NDPS) Act, 1985, at Police Station Lehra, District Sangrur, Punjab.
As per the prosecution, the petitioner was found in conscious possession of banned narcotic substances — 125 vials (100 ml each) of Wincirex containing intoxicating syrup and 700 intoxicating tablets of Carisoma.
The first petition of the accused was dismissed on 14.11.2019 after the counsel for the State submitted that the petitioner was involved in two more cases under the NDPS Act and two under the Excise Act and one with regard to theft.
In the present petition, the counsel representing the petitioner contended that the petitioner stands acquitted in one case under the NDPS Act. He, hence, contended that petitioner who has suffered incarceration for approximately 2 years and 7 months should be granted bail, the HC noted.
“The learned counsel for the petitioner admits that the petitioner is still facing prosecution in as many as 5 cases including this one. Hence, no ground to grant concession of bail is made out,” sated the bench of Justice Anil Ksheterpal.
Read Judgment: Shrikrushna vs. State of Maharashtra
Pankaj Bajpai
New Delhi, August 11, 2021: The Nagpur Bench of the Bombay High Court has ruled that the very act of throwing a chit on a woman which professes love for her and contains poetic verses, albeit extremely purely written, is sufficient to outrage her modesty.
The High Court, however, modified the sentence of imprisonment imposed for offences punishable u/s 354 and 509 of the Indian Penal Code (IPC) to the period already undergone by the applicant, saying the applicant deserved a chance to reform and further incarceration was not likely to be of any avail
A Single Bench of Justice Rohit B. Deo enhanced the amount of fine to Rs. 50,000/- for offence punishable u/s 354 IPC and Rs. 40,000/- for offence punishable u/s 509 IPC. In addition to the amount of Rs. 35,000/- which is to be paid to the victim/informant by virtue of the trial Magistrate’s order, Justice Deo also ordered to impose additional fine of Rs. 50,000/- to be paid to the informant/victim.
“The modesty of a woman is her most precious jewel and there cannot be a straitjacket formula to ascertain whether modesty is outraged,” stated the Bench.
It also said, “the very act of throwing a chit on her person which professes love for her and which contains poetic verses, albeit extremely, purely written is sufficient to outrage the modesty of a woman”.
These observations came pursuant to a complaint lodged by 45-year-old Mrs. ‘S’ in Akola Police Station alleging obscene gestures and throwing of chit professing love, by the owner of a neighboring grocery shop, which resulted in culmination of the investigation leading to submission of a final report, wherein the applicant abjured guilt.
In defence, it was pleaded that a false complaint was lodged since Mrs. ‘S’ purchased grocery on credit and she was not inclined to pay the applicant-accused the amount due.
On the basis of contents of the chit and the other materials on record, the Magistrate and the Appellate Court held the accused guilty of offences punishable u/s 354, 506 and 509 of the IPC.
Justice Deo, however, refused to undertake a microscopic examination of the evidence on record and found that there was no material, except a bald general statement that some threat was issued, to bring home the charge u/s 506 of the IPC.
The Bench noted that the sine qua non ingredient of Section 506 is criminal intimidation as defined in Section 503 of the IPC.
A bare perusal of Section 503 would reveal that the threat must be with intent to cause injury either to person, reputation or property and the intent must be to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, added the Bench.
The High Court therefore held that the conviction recorded u/s 506 of the IPC was unsustainable, by observing that as per the evidence, the applicant threatened Mrs. “S” that the contents of the chit should not be disclosed. The nature of the threat, the words used, whether the words used were such as would cause alarm and whether the complainant/informant as a fact was alarmed, are aspects within the realm of speculation.
Insofar as charge u/s 354 and 509 of the IPC was concerned, taking into cumulative effect of the evidence on record, particularly, the version of Mrs. “S”, it was suggestive that the view concurrently taken was a plausible view, added the Court.
However, the High Court in its agreement with the conviction recorded u/s 354 and 509 of IPC, observed that the evidence of Mrs. “S” that the applicant used to flirt, make gestures like pouting of lips, on occasions used to hit her with small pebbles, is confidence inspiring.
Lastly, the High Court expressed that while the applicant did outrage the modesty of Mrs. “S” by throwing on her person a chit professing his love and by certain acts and gestures like pouting of lips and throwing small pebbles, the applicant deserved a chance to reform and further incarceration was not likely to be of any avail.
It was also observed that the applicant had already undergone 45 days of incarceration and considering the date of the incident or commission of offence, as the provisions of law stood then, there was no minimum sentence provided for offence punishable under Section 354 of the IPC. It is only by the 2013 amendment that minimum sentence is provided.
Hence, the Division Bench modified the sentence of imprisonment imposed for offences punishable u/s 354 and 509 of the IPC to the period already undergone.
Read Order: MAMTA GUPTA v. RESIDENTS WELFARE ASSOCIATION & ORS
LE Correspondent
New Delhi, August 11, 2021 : The Supreme Court has stayed the Punjab and Haryana High Court’s direction to hold a survey whereby properties/buildings were to be identified from the office of the Estate Officer wherein shares to the extent of 50 %, 30 % or 20 % were sold or transferred to a person outside the family of the original owner/shareholder.
The High Court had passed these directions in its order dated July 27, 2021 pursuant to a petition contending that there had been illegal sale of independent floors in Chandigarh in violation of the UT’s rules.
The petition in question was filed by different Resident Welfare Associations seeking issuance of directions to restrain the official respondents from permitting residential plots in the Union Territory of Chandigarh, which are single dwelling units, to be constructed or utilised as apartments.
The petitioners projected that such activity is not permitted and is rather expressly barred under the existing rules, regulations and by-laws of the UT Administration.
However, few city residents filed a Special Leave Petition in the Supreme Court against the said HC order.
In its order, the SC stated, “We are informed by the learned Senior Counsel appearing for the petitioner that the writ petition is listed for hearing before the High Court on 11.08.2021. The pendency of this Special Leave Petition shall not deter the High Court from continuing with the hearing of the writ petition. However, the direction issued by the High Court for conducting a physical survey of properties/buildings to be identified by the Estate Officer where there has been transfer of shares is stayed.”
What was the HC order?
Read Order: Residents Welfare Association and Anr v. Union Territory of Chandigarh and Ors
This petition was filed seeking issuance of directions to restrain the official respondents from permitting residential plots in the Union Territory of Chandigarh which are single dwelling units to be constructed or utilised as apartments.
The stand taken by the petitioners pertained to the fact that there was a huge outcry against the provision for having apartments, on the ground that such activity would completely alter and finish the character of the City and the existing infrastructure in terms of sewerage, water, electricity, parking, traffic etc. was wholly insufficient to take on the extra load. Under such a situation the Apartment Rules of 2001 were repealed vide notification dated 01.10.2007.
It was submitted also that a large number of single dwelling units are being surreptitiously converted into apartments. The precise contention raised was that residential plots being self-contained independent units cannot be further subdivided into separate units, and sale of independent units even floor wise is not liable to be permitted.
On the contrary, in the joint written statement filed on behalf of the respondents it was averred that submission of building plans or revised building plans are to be considered and passed as a single unit and not floor wise. Still further in a subsequent affidavit of the Assistant Estate Officer, Chandigarh it had been deposed that no sale of defined portion/plot of building is permissible, nor any such sale has been recognised by the Chandigarh Administration except those registered during 2001 to 2007 when the Chandigarh Apartment Rules, 2001 were in vogue.
The HC had passed the directions after the submission was made that in the year 2001, the Chandigarh Administration notified Rules called the Chandigarh Apartment Rules, 2001 whereby even single residential units wherever they existed in the city of Chandigarh could be subdivided into apartments.
While ordering the survey, the HC had asked the UT estate department to carry out a physical inspection of such identified buildings/dwelling units to find out as to whether the sale of share(s) actually translated into the buyer occupying an independent floor in the otherwise composite dwelling unit or to find out as to whether independent floors are in the process of being constructed commensurate to the share(s) that has been purchased in such dwelling unit.
The Division Bench of Justice Tejinder Singh Dhindsa and Justice Vivek Puri had clarified that it would be open for the official respondents to seek the cooperation/assistance of the concerned police authorities/law enforcement agencies to facilitate the carrying out of the physical inspection of the premises in question. It was further directed that this entire exercise be carried out under the supervision of the Chief Architect, UT Chandigarh.
The HC bench held that this was to ensure that such exercise does not become overly time consuming and the object was only towards a fact finding exercise with the view that it ought to be a sample exercise. The same was confined from the date of filing of the instant petition till 31.12.2019. Still further the exercise was to confine only with regard to residential buildings.
Read Order: Ravi Singh v. State of Punjab
Vivek Gupta
Chandigarh, August 10, 2021 : Granting bail to a 16-year-old in a rape case, the Punjab and Haryana High Court has observed that from a bare reading of the provisions of Section 12 of the Juvenile Justice Act, it appears that the intention of the legislature is to grant bail to the juvenile irrespective of the nature or gravity of the offence alleged to have been committed by him.
“The bail can be declined only in such cases where reasonable grounds are there for believing that the release is likely to bring the juvenile into association of any known criminal or expose him to moral, physical or psychological danger, or that his release would defeat the ends of justice,” added the bench of Justice Jaishree Thakur.
The bench cited similar legal precedents in Manoj Singh vs State of Rajasthan 2004, Lal Chand vs State of Rajasthan, Prakash v. State of Rajasthan and Udaibhan Singh alias Bablu Singh vs. State of Rajasthan 2005(4) Crimes 649.
The Petitioner was arrested in 2020 following an FIR registered under Sections 376, 376AB of the Indian Penal Code (IPC) and Section 6 of the Protection of Children from Sexual Offences Act, 2012 (POCSO Act) at Police Station Moonak, District Sangrur, Punjab.
Later, the Juvenile Justice Board, Sangrur declined his bail plea and the same was affirmed by the Additional Sessions Judge, Ludhiana.
The petitioner in his petition in the High Court prayed for setting aside the impugned orders passed by both these Courts.
The petitioner mainly argued that the bail application of the petitioner had been dismissed by both lower Courts only on the ground that the victim is aged five years and since the petitioner and the victim belong to the same village, his release would defeat the ends of justice.
The Petitioner contended that a perusal of the order passed by the Additional Sessions Judge, Sangrur would reflect that there was no evidence on record to establish that there was likelihood of the juvenile coming in association with any known criminal or his release on bail would expose him to moral, physical or psychological danger.
It was also submitted that the petitioner has been in the observation home since November 9, 2020 and he is ready to abide by all the terms and conditions that may be imposed by the High Court while considering his petition for grant of bail.
Deciding the matter, the HC Bench stated that the only ground on which the bail of the juvenile is rejected by both the Courts is that he and the victim belong to the same village added with the fact that the victim was aged 5 years at the time of alleged incident.
“The term ‘ends of justice’ is not defined in the Juvenile Justice Act and therefore, has to be interpreted keeping in view the statement and object of the statute and the legislative intent behind it. There is no doubt that the Juvenile Justice Act is a beneficial legislation and it is a settled position of law that gravity or seriousness of the offence would not be a ground to decline concession of bail to the juvenile. Learned counsel for the respondent-State has also not pointed out any material available on record to show that there are reasonable grounds for believing that the petitioner is likely to come into the association of any known criminal if released on bail, or his release will expose him to moral, physical or psychological danger or as to how his release would defeat the ends of justice,” observed the Bench.
Thus, the High Court was of the view that no purpose would be served in keeping the Petitioner in custody. The impugned orders were held to be not sustainable in the eyes of law and as such, were set aside.
Read Judgement: Parubai vs. State of Maharashtra
Pankaj Bajpai
New Delhi, August 11, 2021: The Supreme Court has ruled that the moral wrong of not coming to the aid of a fellow human being in distress cannot be a circumstance to hold a person guilty of a crime which is as serious as murder, unless the other circumstances in the chain point to the accused so as to lead to an irresistible conclusion of being guilty.
The Apex Court made the observations while acquitting, on benefit of doubt, the appellant who was accused of setting fire to the house where she lived as second wife, leading to the death of her husband’s first wife and their two children.
A Division Bench of Justice A.S Bopanna and Justice Hemant Gupta observed that second marriage, the desire for domestic dominance and the execution of document for maintenance a day before registration of the marriage, cannot be held as a strong motive for an alleged crime where the appellant would destroy her own house.
The Bench noted that the High Court held the appellant guilty of pouring kerosene around the deceased and her children and setting them on fire since the appellant had not received any injuries in the fire, and had failed to explain the reason for the eruption of fire in view of such obligation to explain under section 106 of the Evidence Act. The Bench held the High Court’s reasoning as not sustainable in the present circumstance.
Details of the Case
The house where the appellant being the second wife and her family were residing was engulfed in flames. Although the appellant came out of the house unscathed, the first wife (Mandabai) and her children died due to burn injuries. Noticing that no injuries were sustained by the appellant, her father-in-law lodged a complaint and also implicated her.
When the matter went before the Sessions Court, it was observed that the appellant was sleeping in the same room as the deceased was sleeping and that the appellant did not suffer any injuries. These were held as the circumstances to rule out the possibility of accidental fire.
The Sessions Court opined that adverse inference can be drawn that the appellant set fire to the house. The fact that she was the second wife and the husband of the appellant had executed an agreement transferring his land in favour of deceased Mandabai (first wife) was held as the motive to commit the offence, more particularly since she wanted to “establish her dominance in the house”.
The matter then went before the High Court which discarded the extra-judicial confession by the father-in-law, opining that the father-in-law who was the informant could not have happily accepted the appellant as the second wife of his son when he had already got married to the first wife, now deceased.
However, the High Court concluded that the appellant was guilty of committing the offence since she had not sustained the slightest injury due to the fire which means that she left the house well in advance to the spreading of fire.
What the Supreme Court said
After considering the arguments and the observations made by High Court and Sessions Court, the Apex Court found that the conclusion reached by the High Court was on the assumption made only due to the fact that the appellant had not suffered injuries in the fire accident.
“It is no doubt true that the incident which occurred in this case, if caused by any person with an intention to cause death, is certainly gruesome as it resulted in the death of three persons of which two were small children and is unpardonable. However, in a case where the appellant was proceeded against mainly based on the extrajudicial confession said to have been made to her father-in-law and the said evidence has been disbelieved by the High Court as not being trustworthy, the issue would be as to whether the chain of circumstances to convict the appellant is complete,” opined Justice Bopanna.
“It takes a person lot of courage or be overdriven with compassion to get back into the house to save somebody else and not doing so may be considered as morally wrong for not coming to the aid of fellow human being in distress, but it cannot be a circumstance to hold a person guilty of a crime which is as serious as murder unless the other circumstances in the chain point to the accused so as to lead to an irresistible conclusion of being guilty,” the Bench observed.
The Apex Court also said that though the High Court had employed the phrase ‘beyond reasonable doubt’ in its concluding paragraph, however the reasoning preceding the same are only “conjectures and surmises”.
“The case itself is that the fire had erupted at midnight when the appellant and others were sleeping and she came out shouting. The explanation for the cause of fire by the appellant would have arisen only if there was any other evidence to the effect that the appellant was already awake and was outside even before the fire erupted,” observed the Bench.
The Top Court also noted that it has come in evidence that in the subject house, cooking is also done and material pertaining to the tractor including diesel can was also kept therein. Therefore, the circumstance that the appellant was not injured in the incident cannot be the basis to rely on the presence of kerosene stains as a circumstance that she had set fire by sprinkling kerosene.
Therefore, reiterating that the links in the chain of circumstances is necessary to be established for conviction on the basis of circumstantial evidence, the Top Court set aside the judgment passed by the High Court affirming the conviction and sentence ordered by the Sessions Court.
Read Order: Deputy Director of Income Tax v. Raninder Singh
LE Correspondent
Chandigarh, August 11, 2021: The Punjab and Haryana High Court has directed a trial court in Ludhiana not to proceed further in income tax evasion cases against Punjab Chief Minister Amarinder Singh and his son Raninder Singh.
The High Court took note of the Income Tax department’s submission that the trial court is likely to pass a fresh order in the matter in view of the revisional court’s November 2018 order that had quashed the summons issued to the father-son duo, which is subject matter of challenge regarding the admissibility of the digital information.
Both respondents, though aware of the proceedings before the High Court, have not appeared before the court as notice could not be served on them since 2019 when the High Court took cognisance of the matter.
The HC said if the trial court passes further order, it “would cause grave prejudice since the respondents have not put in appearance herein being unserved but aware of the proceedings before this Court, which would be clear from the order dated 20.07.2021, passed by the CJM, Ludhiana”.
“This court is of the opinion that the CJM should not pass any further orders,” the bench of Justice GS Sandhawalia stated, while posting the matter for further hearing on November 18.
The bench also directed that the Income-Tax department as well as the accused be served notices for the adjourned date.
The Chief Minister and his son are both facing three cases concerning allegations of amassing wealth in foreign countries.
The I-T department has claimed that the chief minister’s son is a direct beneficiary of the assets maintained and controlled through foreign business entities. These include accounts with HSBC Private Bank, Geneva. Raninder is also a trustee of the UK-based Jacaranda Trust. However, the CM and Raninder have denied any association with these entities.
Following the I-T department’s petition, in April 2017 the Ludhiana trial court of Chief Judicial Magistrate Jaapinder Singh had summoned CM Amarinder Singh and Raninder to attend court hearings and face trial in the three cases filed against them for alleged tax evasion and amassing wealth in foreign countries.
However, claiming that they were wrongly summoned, the father-son moved revision petitions in the upper court. In November 2018, the court of Additional Sessions Judge Rajeev K Beri quashed the summon orders passed by the trial court.
In 2019, the Income Tax department moved the High Court against the order issued by the court of ASJ Beri.
During the last hearing, the I-T department had told the HC bench that the trial court is likely to pass the final order on the stay of the proceedings that is now restricted by the bench of Justice Gurmeet Singh Sandhawalia.
“The trial Court is likely to pass a fresh order, keeping in view the observations made on 27.11.2018, which is subject matter of challenge herein regarding the admissibility of the digital information and thus, would cause grave prejudice since the respondents have not put in appearance herein being unserved but aware of the proceedings before this Court, which would be clear from the order dated 20.07.2021, passed by the CJM, Ludhiana,” the HC said.
“Keeping in view the above, this Court is of the opinion that the CJM should not pass any further orders on the complaint which has been remanded to him. Let the respondents (CM and his son), as per the office report, be served by way of dasti process, for the date already fixed in the main case, i.e. 18.11.2021,” stated the bench.
Read Order: SEBI Order in matters of GLOBAL INFRATECH AND FINANCE LTD
LE Staff
New Delhi, August 11, 2021: The Securities and Exchange Board of India (SEBI), in exercise of its powers conferred under section 19 read with sections 11(1), 11(4) & 11B of the SEBI Act. 1992, restrained Noticee Nos. 1 to 10 and 42 to 46 in a case concerning Global Infratech & Finance Ltd from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner for specified periods of time.
Furthermore, if SEBI observed that a company’s scrip was manipulated, it had the power to take action against the entities involved in price manipulation. Thus, if entities were connected to entities involved in price manipulation, SEBI had the power to take action against such entities, observed Madhabi Puri Buch (Whole Time Member).
In the present case, SEBI had taken action against Noticee Nos. 42 to 46, since it was during investigation that they were preferential allottees connected to Global Infratech & Finance Ltd (GIFL) through fund transactions and connected to LTP contributor through GIFL and had sold shares at artificially inflated price.
Hence, SEBI initiated enforcement action against them for alleged violation of Prohibition of Fraudulent & Unfair Trade Practices (PFUTP) Regulations on the basis of their connection with GIFL through fund transactions and thereby with entities involved in price manipulation; their selling of shares during price rise period at artificially inflated/manipulated price.
SEBI stated that as per ICDR (Issue of Capital and Disclosure Requirements) Regulation 2(za), promoter included person/persons: in control of issuer; instrumental in formulation of a plan or programme pursuant to which specified securities were offered to public; named in offer document as promoters.
In the present case, allegation against Noticee Nos. 13 to 36 was on the basis of the Company’s version that they were promoters as mentioned in shareholding pattern. As per documentary evidence, Noticees did not fall within purview of the above definition. Besides, Noticees submitted they were neither involved in affairs of GIFL nor knew its directors. No documentary evidence was available on record of involvement of these Noticees in managing affairs of GIFL or their awareness of knowing its directors, noted MP Buch.
Hence, as it was difficult to reasonably conclude that Noticee Nos. 13 to 36 were promoters of GIFL, MP Buch in the order recorded that allegation that Noticees were connected to GIFL by virtue of them being its promoters did not stand established.
Moreover, no allegation against Noticee Nos. 13 to 41 of LTP contribution, price manipulation, volume manipulation, circular trades, reversal trades, synchronised trades, etc. could be proved. Hence, Noticee Nos. 13 to 41 could not be said to be involved in alleged fraudulent scheme and violation of PFUTP Regulations 3(a), (b), (c), (d) and 4(1), opined MP Buch.
However, considering connection of Noticee Nos. 1 to 7 between themselves as well as with GIFL, their trading behaviour as sellers was not found genuine. MP Buch found them to have acted under a premeditated scheme where under they placed orders in such a manner so as to raise LTP significantly.
The trading pattern exhibited intent to increase price of scrip every day with significantly low volumes and also appeared to be devoid of any economic rationale. Thus, preponderance of probability led to conclusion that trades were executed by Noticee Nos. 1 to 7 in a manipulative manner for increasing price of scrip of GIFL, noted MP Buch.
Hence, the SEBI in its order concluded that allegation of violation of provisions of PFUTP Regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and 4(2)(e) against Noticees stood established.
Read Judgment: Brajesh Singh vs. Sunil Arora & Ors
Pankaj Bajpai
New Delhi, August 10, 2021: The Supreme Court today issued directions to political parties to publish information regarding the criminal antecedents of candidates on the homepage of their websites, thus making it easier for the voters to get the information.
Significantly, the Apex Court directed the Election Commission of India to create a dedicated mobile application containing information published by election candidates regarding their criminal antecedents, so that at one stroke each voter gets such information on his/her mobile phone.
A Division Bench of Justice Rohinton Fali Nariman and Justice BR Gavai delivered the judgement on contempt petitions filed by Brajesh Singh and Manish Kumar, who alleged that the Court’s earlier directions passed on February 13, 2020, were flouted by political parties during the Bihar Assembly Elections.
It was submitted that while eight parties complied with the Apex Court’s 2020 directions to some extent, two parties namely Communist Party of India and the Nationalist Congress Party have completely flouted these directions during the Bihar elections.
The counsel for CPI (M) and NCP tendered unconditional apologies for the act of the CPI (M) for fielding four candidates with criminal antecedents, whereas the NCP fielding 26 such candidates.
The counsel for Election Commission, senior advocate Harish Salve, favoring action against parties that were found in egregious violation, said that though there would be larger concerns of too many parties being thrown out of the political arena, they may have to be made to understand that this is not optional.
The Amicus Curiae, senior advocate K.V. Viswanathan, also contended that such violation should attract action and that if such deterrent would not be there, parties will simply violate it.
The Top court clarified that the details which are required to be published, shall be published within 48 hours of the selection of the candidate and not prior to two weeks before the first date of filing of nominations.
The Bench also asked the ECI to bring such noncompliance by the political party to the notice of the Supreme Court as being in contempt of the Court’s Orders/directions, which shall in future be viewed very seriously, if any political party fails to submit such compliance report with the ECI.
Expressing discontent over the failure on the part of several political parties to disclose and publicize the criminal antecedents of the candidates they had fielded for the Bihar Assembly elections last year, the Supreme Court called it to be derogatory of the orders passed by it on Feb 13, 2020.
In furtherance of the directions already given by the Constitution Bench in Public Interest Foundation v. Union Of India, the Supreme Court said that voters should be enabled to have an informed choice while exercising their right to vote.
The SC clarified that its earlier direction passed in 2020 was only to provide information to the voter so that his right to have information as to why a particular political party has chosen a candidate having criminal antecedents and as to why a political party has not chosen a candidate without criminal antecedents, is effectively guaranteed.
“There are various factors which a political party takes into consideration while selecting a candidate. As a citizen who possesses requisite qualifications and is not disqualified under any of the provisions of the Constitution or the Act of 1951, has a right to contest an election and a voter has a right to vote a candidate of his choice, a political party would also have the discretion to choose a candidate of its choice,” the Bench observed.
The Court also made it clear that “though a political party would have the freedom of selecting candidates of its choice, though having criminal antecedents, what would be required is to give reasons in support of such selection, and the reasons could be dependent on various factors including qualifications, achievements and other merits”.
Although the Apex Court said that its directions in no way impinge upon the right of a political party to choose a candidate of its own choice, it passed various directions in order to make the right of information of a voter more effective and meaningful.
Those directions are:
1. Political parties are directed to publish information regarding criminal antecedents of candidates on the homepage of their websites, thus making it easier for the voter to get to the information that has to be supplied.
2. The ECI is directed to create a dedicated mobile application containing information published by candidates regarding their criminal antecedents, so that at one stroke, each voter gets such information on his/her mobile phone;
3. The ECI is directed to carry out an extensive awareness campaign to make every voter aware about his right to know and the availability of information regarding criminal antecedents of all contesting candidates. This shall be done across various platforms, including social media, websites, TV ads, prime time debates, pamphlets, etc.
4. The ECI is also directed to create a separate cell which will also monitor the required compliances so that this Court can be apprised promptly of non-compliance by any political party of the directions contained in this Court’s Orders, as fleshed out by the ECI, in instructions, letters and circulars issued in this behalf;
5. If any political party fails to submit such compliance report with the ECI, the ECI shall bring such noncompliance by the political party to the notice of the Supreme Court as being in contempt of the Supreme Court’s Orders/directions, which shall in future be viewed very seriously.
Read Order: Gurnam Singh v. Bant Singh & Ors
LE Correspondent
Chandigarh, August 10, 2021: The Supreme Court has issued notice to the Punjab government after a petitioner challenged an order of the Punjab and Haryana High Court that dismissed his plea in a property case on the ground that registration is necessary for affecting oral exchange of property in the rural areas in Punjab.
In his special leave petition, the counsel for the petitioner relied upon the judgement of the Division Bench of the High Court of Punjab and Haryana reported as Sardara Singh And Anr. vs. Harbhajan Singh And Ors. as well as a Single Bench judgment of the High Court of Punjab and Haryana reported as Paramjit Singh vs. Ratti Ram to contend that oral exchange is permissible in rural areas in the State of Punjab and that registration is not necessary for affecting such oral exchange.
The Apex Court issued notice on the Special Leave Petition as well as on the prayer for interim relief, returnable within six weeks.
During the High Court proceedings, the petitioner contended that the provision of Section 54 of Punjab’s Transfer of Property Act, made applicable by virtue of what is stipulated in Section 118, is not applicable to rural areas The counsel contended that even as per the circular dated 18.9.1989 issued by the Department of Revenue of the Government of Punjab, registration of any exchange of an immovable property, in such areas, is also not compulsory.
Deciding the matter Gurnam Singh And Another v. Bant Singh And Others on March 13, 2020, the bench of Justice Amol Rattan Singh ruled, “As regards the aforesaid contention, I find myself unable to agree with learned counsel, in view of the fact that though he is absolutely correct in saying that Section 118 of the T.P. Act not being applicable to the rural areas of the State of Punjab even today, therefore, compulsory registration of an exchange of immovable property (even of a value of more than Rs. 100/-) would not be compulsory, yet, what obviously cannot be ignored, in the opinion of this court, is that Section 17 of the Registration Act, 1908, does not carve out any exception as regards compulsory registration of a document the subject matter of which is an immovable property of a value of more than Rs 100.”
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Environment and Sustainable Development – A Balanced Approach - Nayan Chand Bihani
The debate between protection of the environment and sustainable development is an age old one and is growing in proportion with every passing day all over the world, in general and specifically with respect to developing countries like India, in particular.
The Stockholm Declaration on the Human Enviornment,1972 categorically stated that man is both the creator and the moulder of his environment, which gives him physical sustenance and affords him the opportunity of intellectual, moral, social and spiritual growth. In the long run and tortuous evolution of the human race on this planet a stage has been reached when through the rapid acceleration of science and technology man has acquired the power to transform his environment in countless ways and on an unprecedented scale. Both aspect of man’s environment, the natural and the man-made, are essential to his wellbeing and to the enjoyment of basic human rights-even the right to life itself. It also states that the protection and improvement of the human environment is a major issue which affects the wellbeing of peoples and economic development throughout the world, it is the urgent desire of the people of the whole world and the duty of all the Governments. The Declaration, in Principle 2, states that the natural resources of the earth, including the air, water, land, flora and fauna and especially representative samples of natural eco-systems, must be safeguarded for the benefit of present and future generations through careful planning or management, as appropriate. It further, in Principle 8, states that economic and social development is essential for ensuing a favourable living and working environment for man and for creating conditions on earth that are necessary for the improvement of the quality of life.
A milestone in this field is the Rio Declaration on Environment and Development, 1992. It, interalia, states that human beings are at the centre of concern for sustainable development and that they are entitled to a healthy and productive life in harmony with nature. It also states that the right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations. It states that in order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it and that to achieve sustainable development and a higher quality of life for their people, States should reduce and eliminate unsustainable patterns of production and consumption and promote appropriate demographic policies. It contemplates that the States shall enact effective environmental legislation. Environmental standards, management objectives and priorities should reflect the environmental and developmental context to which they apply. The Declaration states that in order to protect the environment, the precautionary approach shall be widely applied by the states according to their capabilities and that environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority.
Initially, the trend was to use ‘Polluter Pays’ principle and punish the offending unit. Subsequently, vide judicial decisions, the principle of sustainable development was widely applied so as to balance the two principles.
The Polluter Pays principle talks about the liability of the polluter. With the increase in the industrial development what subsequently also increased is the waste emitted out of these industries and as a result of these wastes not only were the immediate surroundings adversely affected but also the environment at large. There is no specific definition of the Polluter Pays principle, rather it is a practice emphasising on the fact that one who pollutes the environment should be held accountable and responsible for the same with consequential steps to be taken. The principle not just focuses on punishing the polluter but its main criterion is to ensure that the polluted environment returns back to its original state. The reason behind it is to promote ‘Sustainable Development’. Thus it can be summed up that Polluter Pays principle is an essential element of sustainable development. Therefore, whosoever causes pollution to the environment will have to bear the cost of its management. The principle imposes a duty on every person to protect the natural environment from pollution or else he will be responsible for the cost of the damage caused to the environment. The main reason behind imposing a cost is two folds. Firstly, to refrain any person from polluting the environment and secondly, if in the case there is pollution then it is the polluter’s duty to undo the damage. Hence, both of the above ensures that there should be sustainable development. It is pertinent to mention that the Polluter Pays principle is not a new concept. It was first referred to in 1972 in a Council Recommendation on Guiding Principles Concerning the International Economic Aspects of Environmental Policies of the Organisation for Economic Co-operation and Development. The same is also enshrined in Principle 16 of the Rio Declaration, which states that ‘the polluter, in principle, bear the cost of pollution.’ The need of the hour is a demonstrable willingness to adhere to the essence of the principle in order to ensure that there is development, but not at the cost of causing environmental degradation.
The Hon’ble Supreme Court of India in the case of Indian Council for Enviro-legal Action vs Union of India reported in LQ/SC/1996/358, interalia, putthe absolute liability upon the polluter for the harm caused to the environment.
The Hon’ble Supreme Court of India in the case of Vellore Citizens Welfare Forum vs Union of India, reported in LQ/SC/1996/1368, interalia, accepted the Polluter Pays Principle as a part of the Article 21 of the Constitution of India and also emphasised Article 48A and Article 51A(g) of the Constitution of India.
The Hon’ble Supreme Court of India in the case of Amarnath Shrine reported in LQ/SC/2012/1121, has categorically stated the right to live with dignity, safety and in a clean environment.Article 21 of the Constitution of India, guaranteeing the right to life is ever widening and needs to maintain proper balance between socio-economic security and protection of the environment.
The Hon’ble Apex Court in the case of Bombay Dyeing and Manufacturing Co Ltd- vs – Bombay Environmental Action Group reported in LQ/SC/2006/206, interalia, states that the consideration of economic aspects by Courts cannot be one and it depends on the factors of each case. However, strict views ought to be taken in cases of town planning and user of urban land so as to balance the conflicting demands of economic development and a decent urban environment. Ecology is important but other factors are no less important and public interest will be a relevant factor.
The Hon’ble Supreme Court in the case of Dahanu Taluka Environment Protection Group –vs- Bombay Suburban Electricity Supply Company Ltd reported in LQ/SC/1991/157, has held that it is primary for the Government to consider importance of public projects for the betterment of the conditions of living of people on one hand and necessity for preservation of social and ecological balance, avoidance of deforestation and maintenance of purity of atmosphere and water from pollution and the role of the Courts is restricted to examine the whether the Government has taken into account all the relevant aspects and has not ignored any material condition.
The Hon’ble Supreme Court of India in the case of Narmada BachaoAndolan vs Union of India reported in LQ/SC/2000/1509, interalia, reiterated the Polluter Pay Principle.
A milestone case is that of M C Mehta vs Union of India reported in LQ/SC/2004/397, wherein the Hon’ble Supreme Court explained the Precautionary principle and the principle of Sustainable Development. It was, interalia, stated that the development needs have to be met but a balance has to be struck between such needs and the environment. The Hon’ble Supreme Court also reiterated similar views in a series of cases, some of which are stated hereinbelow;
LQ/SC/2007/1421
- M C Mehta vs Union of IndiaLQ/SC/2009/1231
- Tirpur Dyeing Factory Owners Association vs Noyyal River Ayacutdars Protection Association &Ors.LQ/SC/2009/1891
An interesting question came up before the Hon’ble Supreme Court with regard to the setting up of nuclear power plants with regard to the possibility of considerable economic development weighed against risk of feared radiological hazard. The Hon’ble Apex Court in the case of G.Sundarrajan –vs- Union of India reported in LQ/SC/2013/536, interalia, held that the Courts will be justified to look into the aspect as to the opinions of experts and the adequacy of safety measures and will be justified to look into the safety standards being followed by the Nuclear Power Plant.
The Hon’ble Supreme Court, in the case of Lal Bahadur vs State of UP reported in LQ/SC/2017/1384, interalia, emphasised the importance of striking a balance between the two principles.
An important development is the advent of the National Green Tribunal which has the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of any legal right relating to environment) is involved and relates to the Acts specified in Schedule I, namely the Water (Prevention and Control of Pollution) Act, 1974, the Water(Prevention and Control of Pollution) Cess Act, 1977, the Forest Conservation Act, 1980, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991 and the Biological Diversity Act, 2002. The National Green Tribunal, since its inception, has been looking into the aspects of environmental pollution and the mitigation thereof.
It can thus be said that both the environment and development are essential in the modern world for the betterment and living standards of the people. However, rampant and unplanned development at the cost of the environment is not to be entertained and the Courts will keep a close watch into the aspect of sustainable development, interalia, based on the criteria and guidelines, as specified.
Nayan Chand Bihani is a practising advocate at Calcutta High Court. Mr. Bihani pursued his LL.B from the Calcutta University College of Law, Hazra Campus and was enrolled as an Advocate in December,1998. Mr. Bihani deals mainly with Writ petitions, specially in Environmental laws, Election laws, Educational laws, Municipal laws, Service laws and Public Interest Litigations. He also represents several authorities like the West Bengal State Election Commission, the West Bengal Pollution Control Board, the State of West Bengal, several Educational Institutions and Universities and several Municipalities and Municipal Corporations and the Odisha Pollution Control Board. He can be contacted at nayanbihani@gmail.com.
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