Read Judgment: VAISHAK INTERNATIONAL LIMITED vs S.V DIKSHIT
Pankaj Bajpai
Bengaluru, October 26, 2021: The Karnataka High Court has observed that in the proceedings such as misfeasance, mere negligence on behalf of the Directors may not be sufficient, but something more needs to be established to reflect dishonesty on the part of the Directors.
The background of the case was that the Directors (respondents) had committed lapses in the course of conduct of affairs of the company. It was asserted that the total misfeasance claim amounted to Rs. 4,98,454 alongwith interest @ 18% p.a.
The respondents however denied the averments while contending that as regards to the claim of mismanagement with respect to the assets amounting to Rs. 1,62,470 as shown in the Balance Sheet, it was pointed out that the assets were not in good condition and the local creditors who had dues had taken over these items which was even prior to the filing of Company Petition.
It was submitted by the respondents that the economic distress of the Company was attributable to the business loss, as Gherkins crop had failed and many of the agriculturists who had received the money as advance from the Company failed to keep up their commitment.
After considering the averments and the objections, the Bench of Justice S. Sunil Dutt Yadav, noted that in the proceedings such as misfeasance, mere negligence on behalf of the Directors may not be sufficient, but something more needs to be established to reflect dishonesty on the part of the Directors.
The High Court further noticed that the nature of proceedings are such that it has a flavour of penal proceedings and any order passed would reflect as an indictment of the Directors which requires to be established by cogent evidence placed by the Official Liquidator.
It is also to be noticed that the assertions in the application pointing out the discrepancies would by itself not be sufficient unless the same are established through evidence, added the Court.
In the present case, there has been explanation by the respondents with respect to each of the item of query and the explanation that there has been business loss resulting in the eventual closure of the Company as made out by the respondents which has led the present state-of-affairs, has been placed as an explanation by way of evidence, added Justice Yadav.
After perusal of the entire material on record, Justice Yadav found that there was no dishonest intention as such by the Directors and the respondents had put forth their explanation as regards each of the discrepancies pointed out by the Official Liquidator.
The explanation, if taken note of, would be sufficient to establish the defence and a positive direction to the respondents to make good the deficiencies as alleged and as asserted by the Official Liquidator is not called for, concluded the High Court.
Read Judgment: Ramawatar vs. State of Madhya Pradesh
Pankaj Bajpai
New Delhi, October 26, 2021: Relying on a recent decision in the case of Ramgopal & Anr vs. The State of Madhya Pradesh, the Supreme Court has reiterated that the powers of this Court under Article 142 of the Indian Constitution can be invoked under SC/ST Act, 1989, to quash a criminal proceeding on the basis of a voluntary compromise between the complainant/victim and the accused.
While quashing the criminal proceedings with the sole objective of doing complete justice between the parties, the Larger Bench of Chief Justice N.V. Ramana, Justice Surya Kant and Justice Hima Kohli observed that when considering a prayer for quashing on the basis of a compromise/settlement, if the Court is satisfied that the underlying objective of the SC/ST Act would not be contravened or diminished even if the felony in question goes unpunished, the mere fact that the offence is covered under a ‘special statute’ would not refrain this Court or the High Court, from exercising their respective powers under Article 142 of the Constitution or Section 482 of CrPC.
Going by the background of the case, a civil dispute over the ownership and possessory rights of a piece of land between Ramawatar (appellant) and his neighbour Prembai (complainant) took an ugly turn when the Appellant allegedly not only threw a brick on the complainant but also made filthy and slur remarks on her caste, which prompted the complainant to lodge FIR u/s 3(1)(x) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities Act), 1989 (SC/ST Act) r/w/s 34 of IPC.
The appellant and his co-accused were subsequently tried, which led to the appellant’s conviction u/s 3(1)(x) of the SC/ST Act and consequential sentence of six months rigorous imprisonment and fine of Rs. 1000.
The appellant challenged his conviction and sentence before the High Court of Madhya Pradesh, Jabalpur Bench, and the High Court held that there was sufficient material to establish that the complainant being a member of the Scheduled Caste community was humiliated by the appellant.
Thus, concurring with the findings of the Trial Court, the High Court maintained the order of conviction and sentence passed against the appellant. Aggrieved, the appellant had approached this Court.
The Larger Bench referred to a recent decision of this Court in the case of Ramgopal & Anr.(Supra), wherein it was clarified that the jurisdiction of a Court u/s 320 Cr.P.C cannot be construed as a proscription against the invocation of inherent powers vested in this Court under Article 142 of the Constitution nor on the powers of the High Court u/s 482 Cr.P.C.
The Court in Ramgopal case further postulated that criminal proceedings involving non-heinous offences or offences which are predominantly of a private nature, could be set aside at any stage of the proceedings, including at the appellate level, added the Bench.
The Apex Court observed that the very purpose behind Section 3(1)(x) of the SC/ST is to deter caste based insults and intimidations when they are used with the intention of demeaning a victim on account of he/she belonging to the Scheduled Caste/Scheduled Tribe community.
“In the present case, the record manifests that there was an undeniable preexisting civil dispute between the parties. The case of the Appellant, from the very beginning, has been that the alleged abuses were uttered solely on account of frustration and anger over the pending dispute. Thus, the genesis of the deprecated incident was the aforestated civil/property dispute”, noted the Court.
The Top Court further observed that the offence in question, for which the Appellant had been convicted, did not appear to exhibit his mental depravity and the aim of the SC/ST Act is to protect members of the downtrodden classes from atrocious acts of the upper strata of the society.
“It appears to us that although the Appellant may not belong to the same caste as the Complainant, he too belongs to the relatively weaker/backward section of the society and is certainly not in any better economic or social position when compared to the victim. Despite the rampant prevalence of segregation in Indian villages whereby members of the Scheduled Caste and Scheduled Tribe community are forced to restrict their quarters only to certain areas, it is seen that in the present case, the Appellant and the Complainant lived in adjoining houses”, added the Court.
Therefore, noting that the Complainant has, on her own free will, without any compulsion, entered into a compromise and wishes to drop the present criminal proceedings against the accused, the Apex Court concluded that in order to avoid the revival of healed wounds, it will be prudent to effectuate the present settlement.
Read Judgment: State of Madhya Pradesh vs. Mahendra Alias Golu
Pankaj Bajpai
New Delhi, October 26, 2021: The Supreme Court has ruled that that sexual intercourse with a woman below sixteen years, with or without her consent, amounted to ‘Rape’ and mere penetration was sufficient to prove such offence.
The expression ‘penetration’ denotes ingress of male organ into the female parts, however slight it may be, added the Court.
A Division Bench of Justice Surya Kant and Justice Hima Kohli observed that in order to find an accused guilty of an attempt with intent to commit rape, court has to be satisfied that the accused, when he laid hold of the prosecutrix, not only desired to gratify his passions upon her person, but that he intended to do so at all events, and notwithstanding any resistance on her part.
Indecent assaults are often magnified into attempts at rape and in order to come to a conclusion that the conduct of the accused was indicative of a determination to gratify his passion at all events, and in spite of all resistance, materials must exist, added the Bench.
The observation came pursuant to appeal filed by State of Madhya Pradesh (appellant) against the judgment passed by the High Court of Madhya Pradesh (Jabalpur Bench) whereby the conviction of Mahendra (respondent) u/s 376(2)(f) r/w/s 511 of IPC had been set aside and instead he had been held guilty u/s 354 of IPC and consequently his sentence was reduced from 5 years to 2 years rigorous imprisonment.
The background of the case was that an FIR came to be registered by the parents of two minor victims (aged 8 & 9 years),who were molested by the respondent and he attempted to rape them. The FIR was registered after a delay of 15 days as the victims were not prompt in disclosing the incident to their parents.
The Trial Court convicted the respondent for the offence u/s 376(2)(f) r/w/s 511 of IPC though acquitted him u/s 3(2)(v) of the Scheduled Caste and Scheduled Tribes (Prevention of Atrocities) Act, 1989. The respondent was sentenced to undergo rigorous imprisonment of 5 years and fine of Rs.5000.
On appeal, the Principal Bench of Madhya Pradesh High Court modified the judgment of the Trial Court and set aside the conviction u/s 376(2)(f) r/w/s 511 IPC and convicted the respondent u/s 354 of IPC and sentenced him to undergo 2 years of rigorous imprisonment and fine of Rs. 5000.
After considering the evidence and arguments, the Top Court observed that there is a visible distinction between ‘preparation’ and ‘attempt’ to commit an offence and it all depends on the statutory edict coupled with the nature of evidence produced in a case.
“The stage of ‘preparation’ consists of deliberation, devising or arranging the means or measures, which would be necessary for the commission of the offence. Whereas, an ‘attempt’ to commit the offence, starts immediately after the completion of preparation. ‘Attempt’ is the execution of mens rea after preparation. ‘Attempt’ starts where ‘preparation’ comes to an end, though it falls short of actual commission of the crime”, added the Court.
The Apex Court opined that the act of the respondent of luring the minor girls, taking them inside the room, closing the doors and taking the victims to a room with the motive of carnal knowledge, was the end of ‘preparation’ to commit the offence.
His following action of stripping the prosecutrices and himself, and rubbing his genitals against those of the victims was indeed an endeavour to commit sexual intercourse, added the Court.
The Apex Court noted that the acts of the respondent were deliberately done with manifest intention to commit the offence aimed and were reasonably proximate to the consummation of the offence.
Since the acts of the respondent exceeded the stage beyond preparation and preceded the actual penetration, the Trial Court rightly held him guilty of attempting to commit rape as punishable within the ambit and scope of Section 511 read with Section 375 of IPC as it stood in force at the time of occurrence, concluded the Top Court.
Read Order: Daljit Singh Pandher v. State Of Punjab & Ors
LE Staff
Chandigarh, October 25, 2021: The Punjab and Haryana High Court has opined that if the person is seeking to travel that too outside India, during the pendency of a criminal case against him, the Court shall have to be even more circumspect while granting any such permission.
The Bench of Justice Manjari Nehru Kaul dismissed the petition which challenged the order dated September 6,2021 by which petitioner’s application seeking permission to go to Canada for one year was dismissed by the Trial Court.
The petitioner’s counsel mainly contended that due to the pendency of a criminal case under Sections 498-A and 406 of the IPC, registered at Police Station Payal District Ludhiana, the petitioner had not only been unable to join his job at Canada but also had been unable to meet his family since December, 2018.
While placing reliance upon the judgment of this Court in Arun Kapoor vs. State of Haryana, and Anjal Kumar @ Angel Kumar vs. State of Punjab and another, the counsel submitted that it is a cardinal principal that every person is deemed to be innocent till proven guilty and thus, his fundamental right to travel abroad cannot be curtailed merely because of the pendency of a criminal case against him.
The Bench observed that a perusal of the impugned Order revealed that though the petitioner had been seeking permission to go to Canada for joining back his work, however, he had not placed on record any supporting document to show that he was actually employed in Canada.
The Bench also went on to add that the Trial Court rightly observed while dismissing his application that his absence for one year would result in the delay of the trial since evidence had not yet commenced.
While mentioning that the right of a person to travel admittedly cannot be curtailed, the Court clarified that if the person is seeking to travel that too outside India, during the pendency of a criminal case against him, the Court shall have to be even more circumspect while granting any such permission.
Thus, the Bench found it apposite to observe that since the petitioner is a Canadian citizen, his assertion that he should be permitted to travel abroad was devoid of any merit as India too is a foreign country for him and there could be a likelihood that in case the petitioner is permitted to travel to Canada he may abscond.
Taking these circumstances into consideration, the Court was not inclined to invoke its inherent jurisdiction under Section 482 of the Cr.PC, and the present petition stood dismissed.
Read Order: Anil Kumar v. State of Haryana and others
Tulip Kanth
Chandigarh, October 25, 2021: The Punjab and Haryana High Court has recently directed that identity of the petitioner/s and their residential address should be verified prior to filing of any matter by mentioning the Aadhar Card number or Passport number etc., which are considered to be the authentic documents to establish the identity of an individual, alongwith contact number and address should be clearly mentioned in the petition and verified by the counsel before filing of the petition.
The Division Bench of Justice Ravi Shanker Jha and Justice Arun Palli passed these directions in a petition which was filed by the counsel without verifying or making sure about the identity of the petitioner or his true antecedents.
In this petition, noticing certain peculiar facts regarding the identity of the petitioner-Anil Kumar son of Dharam Pal and non-existence of the petitioner-Bajinder Singh son of Raje Ram in the previous petition, this Court by an order dated March 12,2021 required the counsel for the petitioner to produce the petitioners.
Later, the counsel informed that previous petition in question was filed on the instructions of one Sukhvir Singh Lather, who disclosed that one Bajinder Singh, son of Raje Ram, resident of village Kosali, District Jhajjar wanted to file a public interest litigation.
Notices were issued to Sukhvir Singh Lather and upon being served, he furnished an affidavit and affirmed that he was working on contractual basis in the office of Chief Engineer, BWS, Irrigation & W.R. Department, Haryana, Panchkula and several persons who had issues with the department would seek his legal advice for filing petitions. He would also refer them to the advocates. Likewise one Bajinder Singh,son of Raje Ram, had approached him and he had referred him to the counsel, who was appearing for the petitioner-Anil Kumar, even in the present petition. Thus, he had nothing more to do in the matter.
Being dissatisfied with the affidavit, dated September 13,2021, filed by Sukhvir Singh Lather and the matter being extremely sensitive, the Court had clearly expressed to the counsel appearing for him and shared the options the Court was left with to get to the root of the matter.
The Division Bench opined that from a bare perusal of the subsequent affidavit, it was apparent that Sukhvir Singh Lather never met any person by the name Bajinder Singh. Obviously, there was no occasion to introduce any such person to Mr. Jasminder Singh Thind, counsel for the petitioner either. He had admitted that there was no such person as Bajinder Singh who was stated to have filed the previous petition in question.
He had also stated in his affidavit that in fact he himself posed as Bajinder Singh and got the previous petition filed by signing all the documents as Bajinder Singh. And this fact was neither known to Mr. Jasminder Singh Thind, nor to Mr. Balsher Singh, who were the counsel even in the earlier writ petition. He admitted that he had made a grave mistake and for which he tendered an unconditional apology.
According to the Division Bench it was apparent that the earlier petition was filed by one Bajinder Singh who never existed and orders were obtained from this Court in the name of a fictitious person. Concededly, the said petition was filed by Sukhvir Singh Lather posing himself to be Bajinder Singh.
However, none of the parties or Sukhvir Singh Lather had made any allegation against the present petitioner-Anil Kumar. But evidently he was negligent, for he signed the second petition, which was verbatim the same as the first, as if he was the petitioner even in the first petition and not Bajinder Singh. Undoubtedly, the petition was filed by the counsel without verifying or making sure about the identity of the petitioner or his true antecedents,noted the Bench.
However, as the counsel appearing for Sukhvir Singh Lather had tendered an unconditional apology on his behalf and stated that this act was committed in a state of overzealousness without deriving any personal benefit or gain, the unconditional apology tendered by him was accepted and the Bench warned him to be careful in future.
Read Judgment: Jayan & Anr. vs. State of Kerala
Pankaj Bajpai
New Delhi, October 25, 2021: While acquitting the appellants of the offences of allegedly transporting huge quantity of spirit without license, on ground of doubtful prosecution case, the Supreme Court has stated that that Test Identification Parade is a part of investigation and it is not substantive evidence.
The question of holding T.I Parade arises when the accused is not known to the witness earlier and the identification by a witness of the accused in the Court who has for the first time seen the accused in the incident of offence is a weak piece of evidence especially when there is a large time gap between the date of the incident and the date of recording of his evidence, added the Court.
A Division Bench of Justice Ajay Rastogi and Justice Abhay S. Oka observed that T.I Parade may make the identification of the accused by the witness before the Court trustworthy.
However, the absence of T.I Parade may not be ipso facto sufficient to discard the testimony of a witness who has identified the accused in the Court, added the Bench.
The observation came pursuant to appeals challenging conviction for the offences punishable u/s 55(a) of Kerala Abkari Act.
The background of the case was that the accused (Jayan & Anr) was alleged to have transported total quantity of 6090 litres of spirit in 174 plastic cans, without any licence. Further, the allegation of the prosecution was that the truck bearing registration number KLB-7589 was fitted with fake number plates bearing registration number KLY-730 and at the time of the commission of the offence, the truck was being driven by the second accused and that the third and fourth accused persons were accompanying the second accused in the truck.
The Kattakkada Police Station, on being alerted about the incident, proceeded to search the truck. When they located the truck and stopped the same, the accused No.2 who was in the driver’s seat in the truck and the third and fourth accused persons who were present in the truck ran away. The police however, apprehended the second accused who allegedly disclosed to them that spirit was loaded in the truck in plastic cans.
The police could not trace the accused No.3 and therefore, a charge sheet was filed against the first, second and fourth accused. On examining 13 prosecution witnesses, the Additional Sessions Judge (ASJ) convicted the first, second and fourth accused persons for the offence punishable u/s 55(a) of the Abkari Act and sentenced them to undergo rigorous imprisonment for a period of three years and to pay a fine of Rupees one lakh each. The appeal challenging the same came to be dismissed by the Single Judge of the Kerala High Court.
After considering the submissions, the Apex Court found that one Sajan Mathai and Chandran who were the alleged prior owners of the truck were not examined by the prosecution and surprisingly, no investigation was made about the correct registration number of the truck.
The Court also found that the prosecution came to the conclusion about the correct registration number of the truck only on the basis of a photocopy of R.C book allegedly found in the seized truck.
However, as admitted by the prosecution witness, the investigation officer, the said photocopy of the R.C book was not produced by the prosecution, noted the Court.
“A very shocking aspect of the case is that the prosecution did not even produce the record of the RTO in respect of the registration of the truck. Though the chassis and engine number of the truck were recorded in the mahazar, no investigation was carried out to ascertain the correct registration number of the offending truck. Thus, the identity of the truck itself becomes doubtful. The most relevant evidence of the record of RTO showing the name of the registered owner was withheld by the prosecution”, observed the Top Court.
The Top Court found it difficult to believe that the prosecution witness who did not know the second and fourth accused prior to the incident could identify them in the Court after lapse of 11 years, and the same was the case with all the official witnesses.
Therefore, observing that the prosecution had chosen not to produce evidence regarding the correct registration number of the truck and the name of the registered owner thereof, the Apex Court allowed the appeal by concluding that the entire prosecution case has become doubtful.
Read Judgment: Union of India & Anr vs. Ms. A. Shainamol, IAS & Anr
Pankaj Bajpai
New Delhi, October 25, 2021: The Supreme Court has ruled that an SC/ST or OBC candidate, selected against unreserved vacancy as a general merit candidate, cannot make a grievance in respect of allocation of cadre but has a right to seek service as a reserved category candidate if that improves the selection of service.
A Division Bench of Justice Hemant Gupta and Justice V. Ramasubramanian therefore, by relying on the decision of this Court in Union of India and Ors. vs. Rajiv Yadav, IAS and Ors. , reiterated that the allocation of cadre is not a matter of right and a selected candidate has a right to be considered for appointment to the IAS but he has no such right to be allocated to a cadre of his choice or to his home state.
The observation came pursuant to an appeal challenging an order passed by the Kerala High Court (Ernakulam Bench), whereby the Union of India (Appellant) was directed to allocate the A. Shainamol (Respondent) to the Kerala cadre of the All-India Service.
The background of the case was that A. Shainamol, a successful IAS candidate, who was allotted Himachal Pradesh cadre, had filed an application u/s 19 of the Administrative Tribunals Act, 1985 before the Central Administrative Tribunal (CAT), which directed the Union Government to allot and accommodate the applicant against the outsider OBC vacancy in the Maharashtra cadre by virtue of her merit over the candidate already identified and allotted the Maharashtra cadre.
Challenging the same, the other candidate and Union of India approached the Kerala High Court, which declared that the Respondent would be eligible to be allotted to the Kerala cadre.
After considering the arguments, the Top Court observed that allotment of cadre is an incidence of service, and the applicant as a candidate for the All-India Service with eyes wide open has opted to serve anywhere in the country.
Once an applicant gets selected to service, the scramble for the home cadre starts, added the Court.
Speaking for the Bench, Justice Gupta noted that the procedure for allocation of cadre is a mechanical process and admits no exception except in terms of Rule 7(4) of the Indian Administrative Service (Recruitment) Rules, 1954, which is to be read as proviso to Rule 7(3).
Therefore, opining that the State has no discretion of allocation of a cadre at its whims and fancies, the Apex Court concluded that the Tribunal (CAT) or the High Court should have refrained from interfering with the allocation of cadre on the argument of alleged violation of the allocation circular.
“In terms of Rule 6 of the Central Administrative Tribunal (Procedure) Rules, 1987, an application before the Central Administrative Tribunal is required to be filed where the applicant is posted for the time being or the cause of action wholly or in part has arisen. The applicant in her Original Application has not laid any foundation as to how the Ernakulam Bench of the Central Administrative Tribunal will have the jurisdiction to entertain an Original Application filed by her. It appears that the applicant had chosen the Ernakulam Bench for the reason that she was permanent resident of Kerala State. The applicant was not posted in the State of Kerala on the date of filing of the application”, observed the Apex Court.
Therefore, observing that the applicant had not explained how the cause of action either wholly or partly had arisen within the jurisdiction of the Tribunal at Kerala, the Apex Court set aside the orders passed by the High Court and the Tribunal.
Read Judgment: V Nagarajan vs. Sks Ispat and Power Ltd & Ors
Pankaj Bajpai
New Delhi, October 25, 2021: The Supreme Court has opined that an application for certified copy of order should be made before expiry of limitation period in order to claim exclusion under Limitation Act, 1963.
Hence, V Nagarajan (appellant) having failed to apply for a certified copy, had rendered such appeal filed before the National Company Law Appellate Tribunal (NCLAT) as clearly barred by limitation, added the Court.
A Larger Bench of Justice Dr. D.Y. Chandrachud, Justice Vikram Nath & Justice B.V. Nagarathna therefore observed that a sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation.
It is not open to a person aggrieved by an order under the Insolvency and Bankruptcy Code 2016 (IBC) to await the receipt of a free certified copy u/s 420(3) of the Companies Act 2013 r/w Rule 50 of the NCLT Rules and prevent limitation from running, added the Bench.
The background of the case was that the Cethar Ltd. (Corporate Debtor), engaged in engineering & project consultancy, was undergoing liquidation, and the appellant was appointed as its interim resolution professional and resolution professional.
After an unsuccessful attempt at resolution, the appellant was appointed as its liquidator on April 25, 2018 and it instituted proceedings u/s 43 and 45 of the IBC to avoid preferential and undervalued transactions of the Corporate Debtor in favour of first to fourth respondents with respect to a contract dated March 15, 2011. No relief was however sought against the tenth Respondent(SKS Power Generation Chhattisgarh Ltd-subsidiary of first respondent-SKS Ispat and Power Ltd).
The appellant claimed to have subsequently discovered that SKS Ispat and Power Ltd (first respondent) and its subsidiary-SKS Power Generation Chhattisgarh Ltd (tenth Respondent) had colluded with the promoters of the Corporate Debtor and defrauded the latter of over INR 400 crores by entering into a fraudulent settlement of INR 4.58 crores.
The appellant also alleged that these transactions formed a part of the ongoing investigation by the Central Bureau of Investigations and the Enforcement Directorate. The tenth respondent allegedly at the behest of first respondent, sought to invoke certain bank guarantees issued by the Corporate Debtor for its failure to perform its engineering services.
The appellant then filed a Miscellaneous Application to resist the invocation of this performance guarantee until the liquidation proceedings were concluded. The NCLAT however held that the appeal filed u/s 61(1) was barred by limitation, by noting that the statutory time limit of thirty days had expired and an application for condonation of delay had not been filed.
On appeal, the NCLAT observed that the appellant had not provided any evidence to prove that a certified or free copy had not been issued to him.
After considering the submissions, the Top Court observed that owing to the special nature of the IBC, the aggrieved party is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order it seeks to assail, in consonance with the requirements of Rule 22(2) of the NCLAT Rules.
Section 12(2) of the Limitation Act allows for an exclusion of the time requisite for obtaining a copy of the decree or order appealed against, added the Court.
The Larger Bench made it clear that the litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause.
Rule 22(2) of the NCLAT Rules mandates the certified copy being annexed to an appeal, which continues to bind litigants under the IBC, added the Bench.
The Larger Bench went on to opine that while the tribunals, and even this Court, may choose to exempt parties from compliance with this procedural requirement in the interest of substantial justice, as re-iterated in Rule 14 of the NCLAT Rules, the discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance.
The Apex Court found that the appellant was present before the NCLT on December 31, 2019 when interim relief was denied and the miscellaneous application was dismissed, however, appellant had demonstrated no effort on his part to secure a certified copy of the said order and had relied on the date of the uploading of the order on the website.
“The period of limitation for filing an appeal u/s 61(1) against the order of the NCLT dated 31 December 2019, expired on 30 January 2020 in view of the thirty-day period prescribed u/s 61(2). Any scope for a condonation of delay expired on 14 February 2020, in view of the outer limit of fifteen days prescribed under the proviso to Section 61(2)”, observed the Court.
The Apex Court therefore dismissed the appeal u/s 62 of the IBC and clarified that the lockdown from March 23, 2020 on account of the COVID-19 pandemic and the suo-motu order of this Court has had no impact on the rights of the appellant to institute an appeal in this proceeding and the NCLAT had correctly dismissed the appeal on limitation.
Read Judgment: Jalkal Vibhag Nagar Nigam & Ors. vs. Pradeshiya Industrial And Investment Corporation & Anr.
Pankaj Bajpai
New Delhi, October 25, 2021: The Supreme Court has recently held that the levy which is imposed u/s 52 of the UP Water Supply and Sewerage Act, 1975 is a tax on lands and buildings situated within the area of the Jal Sansthan for the purpose of imposing the tax.
Thus, the levy u/s 52 falls squarely under the ambit of Entry 49 of List II of the Seventh Schedule of the Constitution as it is in the nature of a tax and not a fee, added the Court.
A Larger Bench of Justice Dr. D.Y. Chandrachud, Justice Vikram Nath and Justice B.V. Nagarathna observed that the tax has been labelled as the water tax or a sewerage tax simply because it is imposed by the Jal Sansthan constituted under the Act, 1975.
That does not alter the nature of the levy which in substance is a tax on lands and buildings within the meaning of Entry 49 of List II of the Seventh Schedule of the Constitution, added the Bench.
“A fee may involve an element of compulsion and its proceeds may form a part of the Consolidated Fund. Similarly, the element of a quid pro quo is not necessarily absent in the case of every tax”, clarified the Apex Court.
The observation came pursuant to a petition challenging the judgment passed by Allahabad High Court (Lucknow Bench) whereby it had directed Jalkal Vibhag Nagar Nigam (petitioner) to refund water & sewerage taxes levied and collected under the provisions of the Act, 1975 from the Pradeshiya Industrial And Investment Corporation (first respondent), by relying upon a decision of this Court in Union of India v. State of U.P & Ors.
The background of the case was that a demand towards water tax was raised by the petitioner on the construction of a building at Gomti Nagar, Lucknow in 1986 by the first respondent under the auspices of the U.P. Rajkiya Nirman Nigam Limited.
Challenging the levy of water tax & sewerage tax, the first respondent contended that during the construction of the building, they had not obtained any water from the pipeline laid down by the petitioner within the area nor had they made a request for a fresh water connection.
Accordingly, the first respondent contended that such levy was ultra vires the provisions of Article 265 of the Constitution. Answering in affirmative, the Division Bench of the High Court directed the Petitioner to refund the water and sewerage taxes levied & collected.
After considering the provisions and arguments, the Top Court said that a basic principle of tax jurisprudence is that the levy of a tax cannot be conflated with its measure, and in the context of Section 52, the levy by the Jal Sansthan is “on premises situated within its area” meaning the area within which the Jal Sansthan exercises its jurisdiction and powers.
Stating that the levy is on premises, the Top Court explained that the expression ‘premises’ is defined u/s 2(18) to mean “any land or building”, and hence, read together with the definition of the expression “premises”, the levy is squarely on lands and buildings situated within the area of the Jal Sansthan, added the Court.
The Larger Bench clarified that while imposing the levy u/s 52(1)(a) the legislature has provided that the levy will be on premises situated within the area of the Jal Sansthan, where the area is covered by the water supply services of the Jal Sansthan. This stipulation in clause (a) does not render the levy a fee instead of a tax.
The purpose of the legislation in imposing a tax, which is prescribed as a water tax, is to enable the Jal Sansthan to finance the activities which it undertakes to plan, promote and execute schemes for and operate an efficient system of water supply, noted the Bench.
Opining that the raising of revenue in terms of Section 52(1)(a) is in the nature of a tax, the Larger Bench observed that restrictions which are imposed by Section 55 do not render the tax a fee, nor are they indicative of the tax being charged for the actual use of water.
Speaking for the Bench, Justice chandrachud observed that Section 56 is a clear indicator of the tax being in the nature of a compulsory exaction arising out of the fact that the premises comprise of land and building situated within the area of the Jal Sansthan, so long as the restrictions which are contained in Section 55 are not attracted.
Section 52 and Section 56 also indicate that the intention of the legislature is to collect water tax and sewerage tax from the occupier of the premises, where the premises are connected with water supply or, as the case may be, with a sewer of the Jal Sansthan and, in case where the premises are not so connected, from the owner of the premises, added Justice Chandrachud.
Therefore, the Larger Bench said that so long as a provision for water supply or sewerage is made by the Jal Sansthan in the area covered, the occupier or the owner of the premises is liable to pay the taxes.
Both the water tax as well as the sewerage tax could be consolidated for the purpose of levying, assessing and collecting them u/s 57 of the Uttar Pradesh Water Supply and Sewerage Act 1975 Act, added the Bench.
Hence, the Apex Court rejected the constitutional challenge to the validity of Sections 52 (1)(a), Section 55(b)(1) and Section 56 of the UP Water Supply and Sewerage Act.
Read Judgment: Ram Milan vs. State of U.P & Ors.
Pankaj Bajpai
Prayagraj, October 22, 2021: While dismissing the petition for grant of firearm license, the Allahabad High Court said that there is no bar for the Advocate to apply for firearm license and the application for the same can be considered in accordance with law under the provisions of Arms Act, 1959 r/w Arms Rules, 2016.
The Bench of Justice Saurabh Shyam Shamshery however, observed that a general trend to have a firearm license by an Advocate without any good reason is not appreciable and it is not in the interest of noble profession of Advocate.
The observation came pursuant to an application filed by the Petitioner (claiming to be an Advocate practicing at District Court, Allahabad) for a firearm license for Revolver u/s 13 of the Arms Act, 1959 r/w the Arms Rules, 2016 for his personal & professional safety, which came to be rejected by the licensing authority.
The Firearm license was sought on the ground that there was an attempt to murder on him and some local persons tried to molest his female family members by entering in his house. Accordingly, two FIRs came to be registered u/s 147, 323, 504, 506 IPC and 3(2)(Va) SC/ST Act. However, no charge-sheet was filed in first case, and the trial is pending in second case.
The High Court found that although the Petitioner has claimed himself to be an active Advocate, however, there is no documentary evidence on record and neither the registration of petitioner as an Advocate nor any membership with District Bar Association nor any document to show that he is active in profession, are on record.
“The contention that the accused persons are extending continuous threat to petitioner to enter into compromise in aforesaid criminal cases, is not supported by any evidence or document. Even no complaint has been filed by petitioner in this regard. He has not even approached the concerned authority to take protection under Witness Protection Scheme 2018”, observed the Court.
The Single Judge said that subjective satisfaction of Licensing Authority cannot be interfered by this Court under the writ jurisdiction in absence of any material, that there was no basis for such satisfaction or the basis of satisfaction is based on surmises and conjectures.
Rule 12 of Arms Rules, 2016 provides certain factors which have to be taken into consideration by the Licensing Authority while granting a firearm license, which includes legitimate and genuine reasons and also that the very nature of his business, profession, job or otherwise has genuine requirement to protect his life and property, added the Single Judge.
“An advocate always appears fearlessly before the Court to protect the rights of his clients. In case there is a threat in the mind of Advocate, the entire basis of nobleness of the profession would fall. If such applications are allowed without any concrete basis, a day will come that every Advocate will carry an arm inside the Court premises”, observed the High Court.
The Court further stated that every Advocate has a weapon of his legal arguments with bullets of judgments passed by High Courts and Supreme Court in support of his submission, which are enough to provide safety to his profession and client and are sufficient to demand justice from the Courts.
Read Order: Naveen Kumar v. The Debts Recovery Tribunal-2, Chandigarh And Others
LE Staff
Chandigarh, October 22,2021: The Punjab and Haryana High Court has directed the District Magistrate, Karnal, to ensure that the possession of the property in question is restored to the auction purchaser and opined that the petitioners candidly having not stated the truth or having suppressed the facts, are not entitled for hearing on merits.
The Division Bench of Justice G.S.Sandhawalia and Justice Sant Parkash observed that the petitioner was taking chances before different Courts and doing forum shopping subject to his convenience. He had approached this Court initially and having not succeeded in the first round of litigation, approached the Tribunal and then the present litigation was initiated. Therefore, in view of the conduct of the petitioner, he did not deserve any hearing on merits.
The present Writ Petition, under Article 226/227 of the Constitution of India, was filed for seeking directions against the respondents not to take physical possession of the shop in question forcibly and illegally from the petitioner. Challenge was also raised to the Order passed by the first respondent, DRT, whereby the prayer for interim relief had been denied in a miscellaneous application.
On an earlier date, the Coordinate Bench had held that the petitioner had approached this Court and the possession had been delivered to the auction purchaser and the writ petition had been rendered infructuous.
The petitioner then approached the DRT on December 29,2020 wherein an impression was given that he was still in physical possession and accordingly, it was ordered that no cause of action, as such, has accrued in favour of the applicant. The SA was accordingly dismissed as premature. Another application was filed later, in which the Tribunal further passed an order that prayer of any kind of interim relief was not allowed. Challenging the same, the petitioner had come to this Court.
This Court had also protected the petitioner and the respondents were restrained to take physical possession of the shop keeping in view that no evaluation report had been taken as contemplated under Rule 8 (5) of the Security Interest (Enforcement) Rules, 2002.
Later, a writ petition was filed by the auction purchaser for restoration of the property by specifically alleging that possession was with him since October 27,2020. The petitioner along with other had broken the locks of the shop and entered in the same. The matter had been reported to the police on the same day and even photographs as such were placed on record. Notice was issued to the petitioner’s counsel for the petitioner to file reply which had not been done.
The Division Bench noted that keeping in view the fact that since there had been concealment of the facts, question of hearing the petitioner on merits did not arise. It is the settled principle that in extraordinary jurisdiction, the writ Court has to keep in mind the conduct of the parties to invoke its extraordinary writ jurisdiction. The petitioners candidly having not stated the truth or having suppressed the facts as noticed above, are not entitled for hearing on merits, said the Bench.
The Division Bench also clarified that the benefit of interim relief as such was taken by not disclosing the correct facts to this Court that on an earlier occasion the writ petition had been dismissed as infructuous on account of the fact that possession had already been delivered to auction purchaser. This fact was suppressed from this Court which had passed the interim order in his favour. After taking the interim order, the petitioner as such had also interfered in the possession of the auction purchaser forcing him to file the petition for restoration of the possession.
The judgment of the Apex Court in the case of M/s Prestige Lights Ltd. Vs. State Bank of India was also referredd to wherein it has been held that if there was suppression of material facts or twisted facts had been placed before the Court, the writ Court may refuse to entertain the petition and dismiss it without entering into the merits of the matter.
Thus, observing that the present case was also one such case where parties whose hands were soiled, could not ask for hearing on merits, the Court allowed the restoration application filed by the auction purchaser-third respondent and ordered that possession be restored to him in view of the fact that he got the sale deed in his favour by paying Rs.18,80,000 and question of petitioner retaining the possession did not arise.
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Right to Disclosure – Importance & Challenges in Criminal Justice System – By Manu Sharma
Personal liberty is the most cherished value of human life which thrives on the anvil of Articles 14 and 21 of the Constitution of India (“the Constitution”). Once a person is named an accused, he faces the spectre of deprivation of his personal liberty and criminal trial. This threat is balanced by Constitutional safeguards which mandate adherence to the rule of law by the investigating agencies as well as the Court. Thus, any procedure which seeks to impinge on personal liberty must also be fair and reasonable. The right to life and personal liberty enshrined under article 21 of the Constitution, expanded in scope post Maneka Gandhi[1], yields the right to a fair trial and fair investigation. Fairness demands disclosure of anything relevant that may be of benefit to an accused. Further, the all-pervading principles of natural justice envisage the right to a fair hearing, which entails the right to a full defence. The right to a fair defence stems from full disclosure. Therefore, the right of an accused to disclosure emanates from this Constitutional philosophy embellished by the principles of natural justice and is codified under the Code of Criminal Procedure, 1973 (“Code”).
Under English jurisprudence, the duty of disclosure is delineated in the Criminal Procedure and Investigations Act, 1996, which provides that the prosecutor must disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused, except if such disclosure undermines public interest.[2] Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.[3] The duty of disclosure under common law contemplates disclosure of anything which might assist the defence[4], even if such material was not to be used as evidence[5]. Under Indian criminal jurisprudence, which has borrowed liberally from common law, the duty of disclosure is embodied in sections 170(2), 173, 207 and 208 of the Code, which entail the forwarding of material to the Court and supply of copies thereof to the accused, subject to statutory exceptions.
II. Challenges in Enforcement
The right to disclosure is a salient feature of criminal justice, but its provenance and significance appear to be lost on the Indian criminal justice system. The woes of investigative bias and prosecutorial misconduct threaten to render this right otiose. That is not to say that the right of an accused to disclosure is indefeasible, as certain exceptions are cast in the Code itself, chief among them being public interest immunity under section 173(6). However, it is the mischief of the concept of ‘relied upon’ emerging from section 173(5) of the Code, which is wreaking havoc on the right to disclosure and is the central focus of this article. The rampant misuse of the words “on which the prosecution proposes to rely’ appearing in section 173(5) of the Code, to suppress material favourable to the accused or unfavourable to the prosecution in the garb of ‘un-relied documents’ has clogged criminal courts with avoidable litigation at the very nascent stage of supply of copies of documents under section 207 of the Code. The erosion of the right of an accused to disclosure through such subterfuge is exacerbated by the limited and restrictive validation of this right by criminal Courts. The dominant issues highlighted in the article, which stifle the right to disclosure are; tainted investigation, unscrupulous withholding of material beneficial to the accused by the prosecution, narrow interpretation by Courts of section 207 of the Code, and denial of the right to an accused to bring material on record in the pre-charge stage.
A. Tainted Investigation
Fair investigation is concomitant to the preservation of the right to fair disclosure and fair trial. It envisages collection of all material, irrespective of its inculpatory or exculpatory nature. However, investigation is often vitiated by the tendencies of overzealous investigating officers who detract from the ultimate objective of unearthing truth, with the aim of establishing guilt. Such proclivities result in collecting only incriminating material during investigation or ignoring the material favourable to the accused. This leads to suppression of material and scuttles the right of the accused to disclosure at the very inception. A tainted investigation leads to miscarriage of justice. Fortunately, the Courts are not bereft of power to supervise investigation and ensure that the right of an accused to fair disclosure remains protected. The Magistrate is conferred with wide amplitude of powers under section 156(3) of the Code to monitor investigation, and inheres all such powers which are incidental or implied to ensure proper investigation. This power can be exercised suo moto by the Magistrate at all stages of a criminal proceeding prior to the commencement of trial, so that an innocent person is not wrongly arraigned or a prima facie guilty person is not left out.[6]
B. Suppression of Material
Indian courts commonly witness that the prosecution is partisan while conducting the trial and is invariably driven by the lust for concluding in conviction. Such predisposition impels the prosecution to take advantage by selectively picking up words from the Code and excluding material favouring the accused or negating the prosecution case, with the aid of the concept of ‘relied upon’ within section 173(5) of the Code. However, the power of the prosecution to withhold material is not unbridled as the Constitutional mandate and statutory rights given to an accused place an implied obligation on the prosecution to make fair disclosure.[7] If the prosecution withholds vital evidence from the Court, it is liable to adverse inference flowing from section 114 of the Indian Evidence Act, 1872 (“Evidence Act). The prosecutor is expected to be guided by the Bar Council of India Rules which prescribe that an advocate appearing for the prosecution of a criminal trial shall so conduct the prosecution that it does not lead to conviction of the innocent. The suppression of material capable of establishment of the innocence of the accused shall be scrupulously avoided. [8]
C. Scope of S. 207
The scope of disclosure under section 207 has been the subject of fierce challenge in Indian Courts on account of the prosecution selectively supplying documents under the garb of ‘relied upon’ documents, to the prejudice of the defence of an accused. The earlier judicial trend had been to limit the supply of documents under section 207 of the Code to only those documents which were proposed to be relied upon by the prosecution. This view acquiesced the exclusion of documents which were seized during investigation, but not filed before the Court along with the charge sheet, rendering the right to disclosure a farce. This restrictive sweep fails to reconcile with the objective of a fair trial viz. discovery of truth. The scheme of the code discloses that Courts have been vested with extensive powers inter alia under sections 91, 156(3) and 311 to elicit the truth. Towards the same end, Courts are also empowered under Section 165 of the Evidence Act. Thus, the principle of harmonious construction warrants a more purposive interpretation of section 207 of the code. The Hon’ble Supreme Court expounded on the scope of Section 207 of the Code in the case of Manu Sharma[9] and held that documents submitted to the Magistrate under section 173(5) would deem to include the documents which have to be sent to the magistrate during the course of investigation under section 170(2). A document which has been obtained bona fide and has a bearing on the case of the prosecution should be disclosed to the accused and furnished to him to enable him to prepare a fair defence, particularly when non production or disclosure would affect administration of justice or prejudice the defence of the accused. It is not for the prosecution or the court to comprehend the prejudice that is likely to be caused to the accused. The perception of prejudice is for the accused to develop on reasonable basis.[10] Manu Sharma’s [supra] case has been relied upon in Sasikala [11] wherein it was held that the Court must concede a right to the accused to have access to the documents which were forwarded to the Court but not exhibited by the prosecution as they favoured the accused. These judgments seem more in consonance with the true spirit of fair disclosure and fair trial. However, despite such clear statements of law, courts are grappling with the judicial propensity of deviating from this expansive interpretation and regressing to the concept of relied upon. The same is evident from a recent pronouncement of the Delhi High Court where the ratios laid down in Manu Sharma & Sasikala [supra] were not followed by erroneously distinguishing from those cases.[12] Such “per incuriam” aberrations by High Court not only undermine the supremacy of the Apex Court, but also adversely impact the functioning of the district courts over which they exercise supervisory jurisdiction. Hopefully in future Judges shall be more circumspect and strictly follow the law declared by the Apex Court.
D. Pre-Charge Embargo
Another obstacle encountered in the enforcement of the right to disclosure is the earlier judicial approach to stave off production or consideration of any additional documents not filed alongwith the charge sheet at the pre-charge stage, as the right to file such material was available to the accused only upon the commencement of trial after framing of charge.[13] At the pre-charge stage, Court could not direct the prosecution to furnish copies of other documents[14] It was for the accused to do so during trial or at the time of entering his defence. However, the evolution of law has seen that at the stage of framing charge, Courts can rely upon the material which has been withheld by the prosecutor, even if such material is not part of the charge sheet, but is of such sterling quality demolishing the case of the prosecution.[15] Courts are not handicapped to consider relevant material at the stage of framing charge, which is not relied upon by the prosecution. It is no argument that the accused can ask for the documents withheld at the time of entering his defence.[16] The framing of charge is a serious matter in a criminal trial as it ordains an accused to face a long and arduous trial affecting his liberty. Therefore, the Court must have all relevant material before the stage of framing charge to ascertain if grave suspicion is made out or not. Full disclosure at the stage of section 207 of the code, which immediately precedes discharging or charging an accused, enables an accused to seek a discharge, if the documents, including those not relied upon by the prosecution, create an equally possible view in favour of the accused.[17] On the other hand, delaying the reception of documents postpones the vindication of the accused in an unworthy trial and causes injustice by subjecting him to the trauma of trial. There is no gainsaying that justice delayed is justice denied, therefore, such an approach ought not to receive judicial consent. A timely discharge also travels a long way in saving precious time of the judiciary, which is already overburdened by the burgeoning pendency of cases. Thus, delayed or piecemeal disclosure not only prejudices the defence of the accused, but also protracts the trial and occasions travesty of justice.
III. Duties of the stakeholders in criminal justice system
The foregoing analysis reveals that participation of the investigating agency, the prosecution and the Court is inextricably linked to the enforcement of the right to disclosure. The duties cast on these three stakeholders in the criminal justice system, are critical to the protection of this right. It is incumbent upon the investigating agencies to investigate cases fairly and to place on record all the material irrespective of its implication on the case of prosecution case. Investigation must be carried out with equal alacrity and fairness irrespective of status of accused or complainant.[18] An onerous duty is cast on the prosecution as an independent statutory officer, to conduct the trial with the objective of determination of truth and to ensure that material favourable to the defence is supplied to the accused. Ultimately, it is the overarching duty of the Court to ensure a fair trial towards the administration of justice for all parties. The principles of fair trial require the Court to strike a delicate balance between competing interests in a system of adversarial advocacy. Therefore, the court ought to exercise its power under section 156(3) of the Code to monitor investigation and ensure that all material, including that which enures to the benefit of the accused, is brought on record. Even at the stage of supply of copies of police report and documents under section 207 of the Code, it is the duty of the Court to give effect to the law laid down by the Hon’ble Supreme Court in Manu Sharma (supra) and Sasikala (supra), and ensure that all such material is supplied to the accused irrespective of whether it is “relied upon” by the prosecution or not.
IV. Alternate Remedy
The conundrum of supply of copies under section 207 of the code abounds criminal trials. Fairness is an evolving concept. There is no doubt that disclosure of all material which goes to establish the innocence of an accused is the sine qua non of a fair trial.[19] Effort is evidently underway to expand the concept in alignment with English jurisprudence. In the meanwhile, does the right of an accused to disclosure have another limb to stand on? Section 91 of the Code comes to the rescue of an accused, which confers wide discretionary powers on the Court, independent of section 173 of the Code, to summon the production of things or documents, relevant for the just adjudication of the case. In case the Court is of the opinion that the prosecution has withheld vital, relevant and admissible evidence from the Court, it can legitimately use its power under section 91 of the Code to discover the truth and to do complete justice to the accused.[20]
V. Conclusion
A society’s progress and advancement are judged on many parameters, an important one among them being the manner in which it administers criminal justice. Conversely, the ironic sacrilege of the core virtues of criminal jurisprudence in the temples of justice evinces social decadence. The Indian legislature of the twenty first century has given birth to several draconian statutes which place iron shackles on personal liberty, evoking widespread fear of police abuses and malicious prosecution. These statutes not only entail presumptions which reverse the burden of proof, but also include impediments to the grant of bail. Thus, a very heavy burden to dislodge the prosecution case is imposed on the accused, rendering the right to disclosure of paramount importance. It is the duty of the Court to keep vigil over this Constitutional and statutory right conferred on an accused by repudiating any procedure which prejudices his defence. Notable advancement has been made by the Apex Court in interpreting section 207 of the Code in conformity with the Constitutional mandate, including the right to disclosure. Strict adherence to the afore-noted principles will go a long way in ensuring real and substantial justice. Any departure will not only lead to judicial anarchy, but also further diminish the already dwindling faith of the public in the justice delivery system.
**
Advocate Manu Sharma has been practising at the bar for over sixteen years. He specialises in Criminal Defence. Some of the high profile cases he has represented are – the 2G scam case for former Union minister A Raja; the Religare/Fortis case for Malvinder Singh; Peter Mukerjee in the P Chidambaram/ INX Media case; Devas Multimedia in ISRO corruption act case; Om Prakash Chautala in PMLA case; Aditya Talwar in the aviation scam case; Dilip Ray, former Coal Minister in one of the coal scam cases; Suhaib Illyasi case.
**
Disclaimer: The views or opinions expressed are solely of the author.
[1] Maneka Gandhi and Another v. Union of India, (1978) 1 SCC 248
[2] S. 3 of the Criminal Procedure and Investigations Act, 1996
[3] R v. H and R v. C, 2004 (1) ALL ER 1269
[4] R v. Ward (Judith), (1993) 1 WLR 619 : (1993) 2 ALL ER 577 (CA)
[5] R v. Preston, (1994) 2 AC 130 : (1993) 3 WLR 891 : (1993) 4 ALL ER 638 (HL), R v. Stinchcome,
(1991), 68 C.C.C. (3d) 1 (S.C.C.)
[6] Vinubhai Haribhai Malaviya and Others v. State of Gujarat and Another, 2019 SCC Online SC 1346
[7] Sidhartha Vashishth alias Manu Sharma v. State (NCT of Delhi), (2010) 6 SCC 1
[8] R. 16, part II, Ch. VI of the Bar Council of India Rules
[9] Manu Sharma, (2010) 6 SCC 1
[10] V.K. Sasikala v. State, (2012) 9 SCC 771 : AIR 2013 SC 613
[11] Sasikala, (2012) 9 SCC 771 : AIR 2013 SC 613
[12] Sala Gupta and Another v. Directorate of Enforcement, (2019) 262 DLT 661
[13] State of Orissa v. Debendra Nath Padhi¸(2005) 1 SCC 568
[14] Dharambir v. Central Bureau of Investigation, ILR (2008) 2 Del 842 : (2008) 148 DLT 289
[15] Nitya Dharmananda alias K. Lenin and Another v. Gopal Sheelum Reddy, (2018) 2 SCC 93
[16] Neelesh Jain v. State of Rajasthan, 2006 Cri LJ 2151
[17] Dilwar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra, (2008) 10 SCC 394
[18] Karan Singh v. State of Haryana, (2013) 12 SCC 529
[19] Kanwar Jagat Singh v. Directorate of Enforcement & Anr, (2007) 142 DLT 49
[20] Neelesh, 2006 Cri LJ 2151
Disclaimer: The views or opinions expressed are solely of the author.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Legitquest is a Legal-Tech venture run by a versatile team of tech-savvy attorneys, engineers and designers who aim to make the practice of law simpler for its end users. We have eminent jurist Mr. Ram Jethmalani as our patron
