In the Supreme Court of India
Criminal Appeal No. 71 of 2012
Petitioner
Rupali Devi
Respondent
State of Uttar Pradesh
Date of Judgement
09 April 2019
Bench
Hon’ble Justices Ranjan Gogoi, L.Nageswara Rao, Sanjay Kishan Kaul

THE FACTS

The brief facts of the case are:

Marriage of petitioner and respondent: December, 1997

 The petitioner who had her parental house in Deoria, Uttar Pradesh was married to respondent no.2 in December, 1997 who used to live in Mau along with his family members. Sufficient cash and dowry articles were given at the time of marriage, but the accused persons were not satisfied and started maltreating and harassing the petitioner in her sasural on account of demand of Rs. 2 lacs in cash and a Car. She informed her father about the same. Her father came to Mau and tried to pacify the accused persons, who remained adamant on their demand.

Petitioner gave birth to a child: 12 May, 1998

On 12.5.1998, the petitioner gave birth to a son, who is presently 7 years of age. Even after birth of a son, the harassment of the petitioner continued. When she again became pregnant, the accused persons admitted her at Ladies Clinic of Dr. Saxena at Mau and forcibly got her aborted. 

Petitioner thrown out of Matrimonial home (Mau): July 2002

In July, 2002, the petitioner was turned out of her matrimonial home and the accused persons kept the male child with them. Her father took her to Deoria and continuously tried to pacify the accused persons.

Petitioner went back to her matrimonial house: 14 April 2005

On 14.4.2005, at about 4:00 p.m., the accused persons accompanied by some responsible persons of Mau came to the house of the petitioner at Deoria for compromise and expressed their willingness to take the petitioner with them. After initial reluctance, the petitioner again went to her sasural, but after reaching there, she found that one stranger woman was also living with the family of the accused and on inquiry, it was revealed that she was the second wife of petitioner’s husband. When the petitioner protested, the accused persons beat her and confined her in a room and made her to sign some blank papers.

Petitioner again turned out of Matrimonial house:27 May 2005

After signing divorce paper, the petitioner thereafter, she was turned out of their house on 27.5.2005. The petitioner came to Deoria and disclosed all the facts to her father.

Petitioner lodged an F.I.R at Police Station Kotwali, Deoria: 17 September 2005

On 17.09.2005 Petitioner lodged an F.I.R at Police Station Kotwali, Deoria against respondent for offences under Sections 498A, 494, 313, 504, I.P.C.

ISSUES RAISED

Rupali Devi Vs. State of Rajasthan has acted as a milestone to understand whether a woman forced to leave her matrimonial home on account of acts and conduct that constitute cruelty can initiate and access the legal process within the jurisdiction of the courts where she is forced to take shelter with the parents or other family members. 

STATUES DISSCUSSED

Section 177 (CrPc), Section 178 (CrPc), Section 179 (CrPc), 498A (IPC)

ARGUMENT ADVANCED 

ARGUMENT FROM PETITIONER SIDE (Rupali Devi):

In the aforesaid case, submission was advanced on behalf of the Learned counsel for the petitioner that part of the cause of action arose in District Deoria. The petitioner further submitted that mental cruelty is a continuing offence. According to the facts of the case the respondent along with his family members used to maltreat and harass the petitioner in her sasural on account of demand of Rs. 2 lacs in cash and a Car. Therefore, above case is of cruelty and thus falls under the provision of 498A of the Indian Penal Code.

According to sec 178 (b) that the offence of harassment is committed partly in Deoria and partly in Mau. Even though the acts of physical cruelty was committed in the matrimonial house and there may not be any overt act of physical cruelty in the parent home, but there is  no doubt that the mental trauma and the psychological distress caused by the acts of the husband including verbal exchanges, if any, that had compelled the wife to leave the matrimonial home and take shelter with her parents would continue to persist at the parental home. Therefore, the Court at Deoria (parental home) has the jurisdiction to entertain the complaint and to try the respondent.

ARGUMENT FROM RESPONDENT SIDE (State of Uttar Pradesh)

 Learned counsel for the respondent submitted that from the perusal of the F.I.R. itself, there were no allegations made on behalf of the aggrieved wife that any overt act of cruelty or harassment had been caused to her at the parental home after she had left the matrimonial home. It appears that the whole story of harassment and mental cruelty etc. on account of demand of dowry is alleged to have taken place at Mau where the family members of the husband of the petitioner reside and no part of cause of action took place at Deoria and, therefore, Chief Judicial Magistrate, Deoria had no jurisdiction to try the case. It is clear from the offences were tried by that court within whose local jurisdiction the offence was committed.

JUDGEMENT

The Hon’ble Supreme Court held that, Section 178 creates an exception to the “ordinary rule” engrafted in Section 177 by permitting the courts in another local area where the offence is partly committed to take cognizance. Also, if the offence committed in one local area continues in another local area, the courts in the latter place would be competent to take cognizance of the matter. Under Section 179, if by reason of the consequences emanating from a criminal act an offence is occasioned in another jurisdiction, the court in that jurisdiction would also be competent to take cognizance. Thus, if an offence is committed partly in one place and partly in another; or if the offence is a continuing offence or where the consequences of a criminal act result in an offence being committed at another place, the exception to the “ordinary rule” would be attracted and the courts within whose jurisdiction the criminal act is committed will cease to have exclusive jurisdiction to try the offence.

The Supreme Court permitted the appeal and set aside the acquittal ordered by the High Court. It convicted the respondent for the offence punishable Under Section 498A of the Indian Penal Code and held that the courts at the place where the wife takes shelter after leaving or driven away from the matrimonial home on account of acts of cruelty committed by the husband or his relatives also have jurisdiction to entertain a complaint alleging commission of offences Under Section 498A of the Indian Penal Code.  

CRITICAL ANALYSIS

The Supreme court should be applauded to lay down categorically; that women can file criminal matters pertaining to cruelty from the place where they have taken shelter after leaving or being driven out of their matrimonial home. The Supreme Court held that Section 498A of the Indian Penal Code (IPC) encompasses both mental as well as the physical well-being of the wife. Even if a wife leaves her matrimonial house and returns to her parental house, there are still adverse effects on her mental health in the parental home though account of the acts committed by the husband in the matrimonial home which amount to commission of cruelty within the meaning of Section 498A.

 This decision of Supreme Court was necessary to combat the increasing cases of cruelty and domestic violence on the wife which leads to commission of suicides or grave injury to the wife. This judgement by the Hon’ble court will protect the helpless women who are regularly abused and tortured by their respective husbands and husband’s family members.

Finally, the researcher concludes by basing on present study that: the decision should be recognised as of great legal significance as it has helped to remove the ambiguity which in a way will stop the accused to get the benefit of doubt caused due to problem of jurisdiction in such type of heinous offences.

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Pragya Champawat is a student at the law school at the Narsee Monjee Institute of Management Studies, Mumbai. 

The Covid-19 pandemic which cast its grim shadow over the world around the turn of last year has impacted almost every sphere of human life, perhaps the most alarming of which is the manner in which it has laid waste to the global economy throughout the first and much of the second quarters of 2020. The various world leaders and their governments have had to switch gears from trying to propel growth a few months ago to now trying to rescue their economies and catalyze a recovery. Unconfirmed reports suggest that the first case of COVID-19 in India was reported on January 30, 2020. India currently has the largest number of cases in Asia, with the number of confirmed cases reaching over 200,000 as of June 3, 2020 (1).

The Indian government along with the Indian central bank, the Reserve bank of India (‘RBI’), has announced several reliefs, in part under the banner of ‘Atma-Nirbhar Bharat’ (‘Self Reliant India’), to first stabilize and then revive the Indian economy and the Indian banking sector. Key reliefs include (A) payment moratorium by Indian banks and financial institutions for term loans and working capital facilities, (B) extension of mandatory timelines for resolution of stressed assets and reliefs under asset classification norms, (C) moratorium against insolvency applications (for payment defaults), (D) liquidity support for non-banking financial institutions and housing finance companies, and (E) liquidity support for micro, small & medium enterprises. For the purpose of this Article, we will be analysing the above regulatory measures under (A) to (C).  

In order to address the stress in financial conditions caused by COVID-19, as part of their Statement on Development and Regulatory Policies declared on March 27, 2020, the RBI announced that Indian banks and financial institutions were being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020 (2)(3). Similarly, in respect of working capital facilities sanctioned in the form of cash credit/overdraft, lending institutions have been permitted to allow a deferment of three months on payment of interest in respect of all such facilities outstanding as on March 1, 2020. 

In view of the extension of lockdown and continuing disruption on account of COVID-19, Indian banks and financial institutions have been permitted to further extend the above moratorium by an additional period of three months (from June 1, 2020 to August 31, 2020) in terms of the COVID Regulatory Package declared by the RBI on May 23, 2020. 

It has been clarified that during the moratorium period, interest and principal payments may be suspended by Indian banks. However, unpaid interest is to continue to accrue during this period and will be capitalized. 

The Ministry of Finance has also clarified that borrowers (corporate and individuals) have the ability to request for availing the moratorium (4). 

The parameter for grant of such moratorium was not prescribed purposely, it was intended that banks and financial institutions should allow such moratorium liberally. Reports in May, 2020, suggested that 32 million borrower accounts have availed the loan moratorium scheme (5).  

With a view to containing any ripple effect of the moratorium, the Ministry of Finance, RBI along with the securities market regulator (SEBI), have also provided ancillary reliefs including – (a) no penal charges for non-payment (for those borrowers which have availed the moratorium), (b) relief that rescheduling of payments on account of the moratorium will not qualify as a default for the purposes of supervisory reporting and reporting to credit information companies by the lenders, thus ensuring that the borrower’s credit history is not adversely impacted, (c) reliefs from asset classification downgrade due to non-payment and higher provisioning by banks (due to a delay), etc.

By way of reliefs under the extent asset classification norms, the RBI has allowed the following relaxations –

(a) For those borrower accounts classified as ‘standard’ as on February 29, 2020, even if overdue, the moratorium period, wherever granted in respect of term loans, shall be excluded by the lending institutions from the number of days past-due for the purpose of asset classification under the IRAC norms;

(b) For those working capital facilities sanctioned in the form of cash credit/overdraft (“CC/OD”), where the accumulated interest has been converted into funded interest term loan facilities, such change in terms will not be treated as concessions granted due to financial difficulty of the borrower and will not result in asset classification downgrade;

(c) For the above accounts which are in default but standard and covered under (a) and/or (b) above, the RBI has prescribed additional provisioning of not less than 10% – but to be spread over two quarters.

Additionally, the mandatory timelines for resolution of stressed assets prescribed by the RBI have been extended – the COVID affected period between March 1, 2020 to August 31, 2020. And the RBI has granted reliefs from additional provisioning due to such delays (6).  

With the above measures, the regulator has sought to alleviate the lingering impact of Covid19 pandemic on the businesses and financial institutions in India, consistent with the globally coordinated actions, while also safeguarding the stability of banks (and public depositors interests by extension). 

There were certain grey-areas in interpretation of the aforesaid reliefs. While some High Courts in India have interpreted these reliefs in spirit, largely applying a principle of ‘minimal prejudice to all’ (often surpassing the letter of the regulations), some courts have applied a technical interpretation, leading to a dichotomy. 

As we mentioned above, the RBI guidelines have permitted Indian banks and financial institutions to allow a moratorium on term loan and working capital payments by certain borrowers. This relief is intended to be discretionary. Indian banks and financial institutions are expected to put in place board approved policies for grant of such reliefs, basis which a borrower may or may not qualify for such reliefs (for instance a borrower with the ability to repay and who is not facing any financial stress in the COVID-19 pandemic should not avail this moratorium). However, in a public interest litigation before the Supreme Court of India, the Court directed the RBI to ensure implementation of the above reliefs in letter and spirit by Indian banks and financial institutions (7). This has lead to questions in the market as to whether the judiciary considers that this moratorium should be available for all and whether such an observation is in excess of the interpretative powers of the judiciary.

In the case of Indiabulls Housing Finance Limited vs. HDFC Bank Limited, Indiabulls Housing Finance Limited (‘IHFL’) had availed a term loan of Rs. 540 crores from HDFC Bank. It appears that IHFL sought to avail the moratorium, but this request was rejected on the grounds that its cash flows were unaffected and so it did not qualify for the moratorium. IHFL’s counsel argued that RBI’s circular granting a moratorium to all borrowers was mandatory – which relief was being denied to the petition, which was refuted by the counsel for HDFC. The submissions by the counsel for HDFC were backed by the counsel for the RBI, who reiterated that the reliefs re moratorium are discretionary. While appreciating the submissions by the respondent counsel (for HDFC and RBI), the Delhi High Court only granted interim relief, allowing HDFC to appropriate certain cash deposited with it for a particular EMI tranche, without rejecting the submissions by the borrower in the interests of justice. 

A similar approach of granting such relief which causes  “minimal prejudice to all” was adopted by the Bombay High Court in the case of Transcon Skycity Private Limited v ICICI Bank. In this case, the plaintiff defaulted on its repayment obligations in January 2020. It argued that the asset classification reliefs by the RBI stipulated that the period from march 1, 2020 should not be included in the 90-day period leading to an accounts classification as ‘non-performing’, and the clock stopped for this countdown from March 1, 2020. While refusing to provide a sweeping judgement, in the facts of this case only, the Bombay High Court allowed this argument with the above objective of “minimal prejudice to all” . 

The above decision came days after the decision of the same court in Idea Toll & Infrastructure vs ICICI Home Finance, where the Bombay High Court interpreted the circulars of the RBI strictly, but nevertheless the reliefs granted were aimed at protecting the interests of the bank whilst minimizing the prejudice to the borrower (emphasizing that the order was passed in consideration of the various RBI circulars and also the fact that the income of the borrower was seriously depleted). 

The issue of continuing interest accrual during the moratorium period is also being challenged by before the Supreme Court in Gajendra Sharma Vs Union Of India & Anr (8). The petitioner has urged the court to declare ultra vires that part of the RBI’s notification that allows the charging of interest since it, “creates hardship in the present scenario of complete national lockdown”. The matter is set to be heard two weeks hence and is yet to be conclusively adjudicated upon.

Recently on June 5, 2020, the Union Cabinet and the President of India have also approved the (Indian) Insolvency & Bankruptcy (Amendment) ordinance, 2020, further to the relief package declared in May, 2020. Under this Ordinance, a 6 month moratorium has been declared from March 25, 2020 (which is further extendable by 6 months, depending on the COVID situation) (Suspension period), for any insolvency applications against any borrower for any default after March 25, 2020. The Ordinance has peculiarly also provided that no insolvency application can ever be preferred for such defaults during this Suspension Period. There are several practical and interpretational concerns with this last proviso (which are the subject matter of significant introspection and discussions in the market).

Lastly, the moratorium is only for the instalments which were due from 1st March 2020 up to the period of moratorium conferred by the lender (so, 31st August, in case of a 6 month moratorium). The same does not affect payment obligations that have already fallen due before 1st March. Hence, if there was a default, and there were remedies available to the lender as on 1st March already, the same will not be affected. However, for using the powers under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002  (which is one of the most effective security enforcement and recovery mechanisms prevalent in India), the loan facility would be required to be characterized as non-performing. The intervening asset classification holiday would have the effect of deferring the NPA categorization thus posing a spoke in the already diminished remedies available to lenders. 

It is clear that India’s march toward becoming a trillion dollar economy has been rudely interrupted. Whether the relief efforts will bear fruit and drive economic growth back to pre-pandemic levels is a question that will only be answered in time. What is certain is that the Indian regulators will continue to ‘try and try till they succeed’.

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Suharsh Sinha is Partner at AZB & Partners. Saloni Thakkar and Arzan Zarolia are Associates at AZB & Partners. 

This article was published in Financial Regulation International Volume 23 Issue 5, June 2020. © Informa UK Ltd. For more information visit www.financialregulationintl.com

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(1) https://economictimes.indiatimes.com/news/politics-and-nation/india-records-over-9800-covid-cases-in-a-day-tally-reaches-226770/videoshow/76209174.cms.

(2) The RBI has clarified that repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by three months.

(3) Deferred instalments under the moratorium include the following payments falling due from March 1, 2020 to May 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments; (iv) credit card dues. It is likely these will continue for the extended period of the EMI moratorium.

(4) Frequently Asked Question by the Ministry of Finance (dated April 1, 2020).

(5) https://www.freepressjournal.in/india/finance-minister-nirmala-sitharaman-says-over-32-crore-people-availed-rbis-3-month-moratorium 

(6) As per the RBI’s June 7, 2019 circular, any default in payments has to be recognized within thirty days and such accounts are to be classified as special mention accounts and resolved expeditiously. Once a borrower is reported to be in default by any of the addressee lenders mentioned in the circular, they shall undertake a prima facie review of the borrower account within thirty days from such default (known as the Review Period). During this Review Period of thirty days, lenders may decide on the resolution strategy, including the nature of the Resolution Plan, the approach for implementation of the resolution plan, etc. The lenders may also choose to initiate legal proceedings for insolvency or recovery. 

(7) Kamal Kumar Kalia Vs. Union of India & Anr.  (Writ Petition (C) 10955/2020)

(8) Writ Petition (C) 11127/2020

When various social media platforms were developed the intent was for people to keep in touch. This intent made people around the world to en masse subscribe to such platforms such as Facebook, Twitter, Instagram etc. Over a period of time, the humour on these social media platforms disappeared and was immediately replaced with deeply hateful and aggressive messages and name calling, without, in the least, knowing the person. To make matters worse, these persons who post these patently hateful messages are proud to call themselves “trolls” and are self-proclaimed moral policemen. They feel that everyone’s opinion should conform with their standards failing which snap judgments are made, abuses are hurled by the dozen and aggressive messages are posted without demur. This deeply psychologically deviant behavior, especially on social media, cannot be normalized or brushed aside, as being the new normal. This delinquent behavior, to shoot from the shadows, has to stop and a mechanism ought to be brought about to do so. 

What is cyber bullying and trolling?

Internet trolling is a subset of cyber bullying or cyber harassment. Thus, it would be useful to understand what is cyber bullying. Cyber bullying is the use of the internet and other electronic forms of technology to post embarrassing photos, aggressive and patently abusive messages, emails, or to make threats. 

A ‘troll’ can be defined as someone who makes deliberately offensive or provocative online posts, usually with the intention of eliciting reactions from others. Internet trolling is a behavior wherein the troll intends to inflame, upset, or otherwise damage civil discourse. This is done through vile invective/diatribe, insults and other verbal havoc with a view to disrupt online or public communication.

Forms of Trolling:

Trolling can take several forms but are mostly aggressive, abusive, hurtful, humiliating rumours or comments or posts about an individual online or triggering religious, racial, ethnic or political hate online by posting hate comments or videos.

Troll Aims:

The aim of each troll is simple. Attention. An internet troll seeks attention or seeks to push a particular agenda. They essentially seek to shift attention from the author’s content or conversations and try and get as much mileage unto themselves, by posting inflammatory comments. The more attention they get, in the form of comments directed at them, the happier the troll is. 

Some illustrations:

Some notable illustrations and examples is the trolling/ cyberbullying of Ms. Monica Lewinski, the backlash that a celebrity faced after incorrectly answering a general knowledge question in a television show, the backlash some celebrities faced on their views on nepotism in the film industry and quite frankly the vile comments that every single person faces on social media, especially on Twitter, not just restricted to political issues. 

Deep psychological issues of the troller: 

Various studies have shown and found trolling was positively correlated with psychopathy, sadism and Machiavellianism. Infact, sadism proved to be the most important factor for predicting trolling behaviors. Studies have also shown that trollers, who resort to multiple and repeated abuses, also face issues relating to depression, low self esteem and anxiety, all of which stem from a lack of attention all their lives (1).  

Impact of trolling on the trolled: 

While these online activities may seem harmless to the perpetrator, they have far-reaching repercussions on the mind of the victim. This is because the nature of content published on online platforms or in their associated text messaging portals is denigrating, to state the least. 

This invariably leads to excruciating symptoms that negatively affect the victim’s mental health and can lead to bouts of depression, anxiety, suicidal tendencies, low self-esteem, anger and frustration.

Measures adopted internationally:

United Kingdom:

The United Kingdom has sought to essentially curb trolling by the use of various legislations (2). One of the important legislations, in this regard, is the Malicious Communications Act, which states that any person who sends a letter, electronic communication or article of any description to a person that conveys a message that is indecent or highly offensive, a threat or false information or causes distress or anxiety to the recipient or to any other person, then the sender is guilty of an offence. On the basis of this statute as also other statutes, multiple criminal reports and consequent convictions have been registered in the United Kingdom, albeit for a short term of imprisonment. 

Other countries:

Stringent legislations have also been adopted by Japan, United States and many European nations making cyber bullying as also trolling, where abusive posts a punishable offense by law.

Indian Law and the problems:

In order to address this issue, the Legislature showed considerable foresight while promulgating the Information Technology Act, 2000, though the form and the manner in which the provisions were couched left much to be desired. The Legislature thus added provisions essentially criminalizing acts of persons sending obscene messages, sexually explicit messages, messages that invade privacy or messages that are offensive in nature (3). These measures were adopted to prevent offences such as trolling, cyber stalking, cyber bullying, spamming etc. 

Unfortunately, Section 66A of the Information Technology Act, 2000, which was the offence relating to messages which were offensive in nature, was struck down as being unconstitutional being in derogation to the guarantees of freedom of speech and expression envisaged under Article 19(1) (a) of the Constitution of India (4). The relevant portion of the judgment is reproduced hereunder:

“98. We have already held that Section 66A creates an offence which is vague and overbroad, and, therefore, unconstitutional under Article 19(1)(a) and not saved by Article 19(2). We have also held that the wider range of circulation over the internet cannot restrict the content of the right under Article 19(1)(a) nor can it justify its denial.”

The Hon’ble Supreme Court, in the submission of the author, could have read down the provision, ensuring safeguards, rather than holding the entire provision to be unconstitutional. Be that as it may, as the law stands now, refuge cannot be sought under Section 66A of the Information Technology Act. The consequence of this judgment is that a free run is given to trolls to post grossly abusive and offensive material on the internet. Surely, the freedom of speech and expression cannot and does not permit a person to virtually spit on someone’s face or absolutely sully someone’s reputation and get away with it. This has only given ammunition to mischief mongers and trolling has unfortunately become a norm and not an aberration anymore.

If therefore these miscreants are to be brought to book, they would have to fall within the purview of Section 354A of the Indian Penal Code which provides for an offence in respect of sexual harassment, Section 354C of the Indian Penal Code which provides for the offence of voyeurism and/or Section 354 D of the Indian Penal Code  which provides for the offence of being the subject matter of or subjected to sexually explicit content. It is necessary to mention that these provisions under the Indian Penal Code safeguard the rights of women only, who are subjected to any of the above offences. 

However, if any of the above ingredients are absent i.e. if the message is not sexual/sexually explicit in nature or voyeuristic and the message from a troll is purely abusive or ridicules or humiliates or has the propensity to do so, the only recourse to law would be to, at the most, file a complaint/suit for defamation or criminal intimidation. This is also a dead end for the person who has been trolled. Police officials are already under tremendous pressure to investigate and conclude offences and therefore they are already reluctant when it comes to lodging a police complaint for more heinous offences. This, therefore, is not an efficacious remedy at all. 

That apart, assuming that one is a public figure or a person with a lot of followers on platforms such as Twitter or Instagram, (which does not by itself give anyone the right to abuse) one cannot possibly file a defamatory action or a police complaint against each and every troll posting down right derogatory remarks. Surely a simpler and more effective method has to be found so as to not be subject to ridicule, humiliation or abuse. Ignoring the abuse does not stave off a future assault on social media. Similarly, dealing with such abuse head on only antagonizes the troller. 

While the Intermediary guidelines only make the web platform publish a privacy policy and inform the users that they ought not to publish “grossly harmful, harassing, blasphemous defamatory, obscene, pornographic, paedophilic, libellous, invasive of another’s privacy, hateful, or racially, ethnically objectionable, disparaging, relating or encouraging money laundering or gambling, or otherwise unlawful in any manner whatever”, these privacy policies seldom deter a troll. Therefore, irrespective of the privacy policy, the troll publishes derogatory and offensive material, at his/her whim and fancy. Similarly, if action is to be taken, the person who has been trolled has to lodge a complaint with the platform. Once again, action is rarely taken by the platform and if at all it is taken, it is taken extremely belatedly, by which time the damage is already done. 

The Simple Solution:

Instead, all web platforms ought to be directed to compulsorily incorporate a specific icon/tool which allows the user/ person being trolled to block a particular troll or report a troll. Upon the troll being reported, not only should the comment be deleted with immediate effect, the troll should be pre-empted from publishing any further messages on the user’s platform or in response to the user’s comment, unless an express consent to do so is given by the person already trolled. Similarly, if multiple users have reported the troll, the media platform should automatically deactivate the account of the troll rather than allow him to cause and wreak havoc. 

Besides this, once multiple accounts are deactivated, each web platform, especially social media platforms, should be made to liaise with the cyber cell or the police station of local jurisdiction, within a stipulated period of time, to hand over a list of persons who have been reported by multiple persons who have been trolled. Accordingly, penal action ought to be taken against each of these trolls. Using the deterrence theory, one would possibly seek a sharp decline of such abusive language on the internet. Additionally, this data/ statistics so collected ought to be published on each website for users to understand the gravity of the issue. 

Since a void is created in the Information Technology Act, 2000, by way of the Supreme Court judgment, the Legislature ought to introduce a tempered down version of Section 66A of the Information Technology Act, 2000 by balancing the right to freedom of speech and expression and ensuring adequate safeguards. While I agree that it is difficult, if not impossible, to define trolling (as it is very subjective in nature), however, measures have to be taken by the Legislature to curb such delinquent tendencies, without hindering the freedom of speech and expression to stand the test of judicial review, if it comes to that. 

In short, someone needs to stop these vile comments and rein in the trolls.  

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Aaditya Vijaykumar is a lawyer practicing in the Delhi High Court. His practice areas include arbitration, litigation relating to contractual disputes, consumer disputes, gaming laws, anti-trust issues, litigation before the Debt Recovery Tribunal, NCLT, litigation for and on behalf of the government and PSUs, as well as litigation relating to property disputes and election laws.

__________

 (1) Differentiating cyber bullies and Internet trolls by personality characteristics and self-esteem by Kathryn C. Seigfried-Spellar, Purdue University, JDFSL V11N3;

(2) The Protection from Harassment Act, The Malicious Communications Act 1988, the Communications Act 2003, Obscene Publications Act 1959, Computer Misuse Act 1990;

(3) Please see Section 66A, Section 66E, Section 67, Section 67A, Section 67 B and Section 67 C of the Information and Technology Act, 2000

(4) Shreya Singhal v. Union of India, W.P. (C) 167/ 2012. This writ petition W.P. (C) 167/2012 was accompanied by writ petitions bearing no. 21/2013, 23/2013, 97/2013, 199/2013, 217/2013, 222/2013, 225/2013, 758/2014 and 196/2014, which were taken up together with W.P. (C) 167/2012 and disposed off by the Supreme Court vide order dated 24^th March, 2015.

Women are equal to men. There is virtually nothing which a man can do and women cannot. The said notion had been statutorily accepted in our country. The power equation in a marital relationship is dynamic in nature and there is no denying the fact that the socially constructed stereotypes and so-called physical/biological incapacity of women which earlier used to be a legal ground of discrimination no longer exist. 

The way of bestowing equality, which was taken away by certain practices, was to restore them by interpreting the law in a manner so as to be in consonance with Article 14 of the Constitution of India. 

The consequences of the same are here to be seen; women actually leading in all three organs of the State i.e. as legislators, as judges at the lowest to highest levels in hierarchy of Courts and in the executive like holding the post of chief secretary. It’s not so difficult to realise that the changes brought in yesteryears are bearing fruit.

Pt. Jawaharlal Nehru and  Dr Bhimrao Ambedkar introduced the Hindu Marriage Act (and a few other minor acts to protect women’s rights) with the vision to protect women from many bad practices which were prevalent in society at that time.  Even in the face of opposition from many sections of society and without caring about the political consequences of the move in the next elections,  the duo fought for the cause and that’s how we got the Hindu Code under which a woman can ask for divorce from her husband and claim maintenance, thereby getting empowered. 

Similarly after the Apex Court judgment declaring ‘triple talaq’ as unconstitutional, the current government took a huge step to change the life of the Muslim women by recognising that the practice of ‘triple talaq’ in the Muslim community is nothing but foul play by the men from that community under the guise of religious practice and the same doesn’t find mention in Quran, and enacted a statute and made it an offence. 

When gender equality is achieved in the said manner, it means equating the status of women to that of men. 

Contrast the aforesaid ways of restoring the status of women with the manner in which women centric laws are made, interpreted and applied. The idea of such laws like for dowry, rape, sexual harassment comprising stalking etc. being stringent was to recognise the menace attached with these evils and to see that the culprits are punished. The essence of these laws is to discourage men who resort to such dastardly acts and make women safe in society. These laws protect women but at the same time, they are not tools in their hands to be used against men. Law is not a tool to be used, it’s tool to achieve justice. 

On a similar footing are maintenance laws and their interpretation and application. There too the practice has been towards granting maintenance to women on the ground that they being dependent on the husband (who is a man) and that husbands have a duty to maintain them. A few judgments even go to the extent of holding that even a working woman is liable to be maintained by the husband. 

If one goes to the family courts of India today, one would find that among the abovementioned laws what is mostly agitated and argued is maintenance only. Furthermore, most of all that is adjudicated upon are maintenance applications. 

The objectivity has been lost. Law has been applied in such a manner to instil in men that women are actually dependent on them for all times to come. 

Section 125 CrPC Requires Broader Interpretation? 

Section 125 CrPC enable a wife to approach  the court for claiming maintenance from her husband in case of failure to pay the same. The said section further states that a ‘divorced wife’ is ‘wife’ within the meaning of section 125 CrPC. Thus, even after marriage ceases to exist, women would have to be maintained by her ex-husband till the time she remarries. 

Section 125 CrPC is meant to achieve a social purpose. The object is to prevent vagrancy and destitution. It is for this reason that even a daughter, like a son, is liable to maintain her parents. The law thus comes to the rescue of the destitute and prevents vagrancy. Once the intention of law is to prevent vagrancy and in the present era of equality, there is no rationale as to why Section 125 CrPC doesn’t give right to a husband to claim maintenance. In present times, it is not unreasonable to find instances where the husband is not working due to some disability, loss of employment etc. and the wife is working and earning money.  For example, if in these times of lay offs, a husband loses his job and his wife is fortunate enough to hold on to her job, then wife may very well refuse to maintain her husband there being no obligation on women to maintain their husbands. In a court of law the husband would never have a defence of sitting idle and not working.  

Why Gender Neutral Law?

The State has addressed the problem of inequality by passing laws w.r.t maintenance of wife. The law further casts an obligation on the father of a women to maintain her till the time she gets married. However, inequality against a woman starts from their own parent’s house right from childhood. If the pressure of studies and consequent taking up of any work/job is not put on the woman by her own parents, then the parents of such women are guilty of spoiling and curtailing the future and growth of women. The parents of the female child since her childhood are concerned about her marriage and try to program her in that manner alone. The idea is to inculcate in her that the real home of a female is her in-laws home and that husband is the one who has to take care of her. In the said quest only, the evil practice of dowry started. There are only social reasons that compel the parents of a girl to succumb to give dowry to getting their daughter married.  The very fact that for marriage, dowry is given even by mortgaging everything shows that the mindset must change at the parent’s home. If the girl is only there at her parents’ home till she attains the statutory age of marriage, then solutions to the problem of women can’t be found at her husband’s home. It is therefore high time that each girl child is made to study and work by their parents in the same way as a male child is. If any parent fails to comply with these minimum standards then liability must be imposed on those erring parents as well. Charity begins at home, so does equality.  

Thus, it is necessary that section 125 CrPC must be gender neutral as the problems of women start at their parents’ house and get even bigger at their husbands’ homes. In probably most cases, whether a woman is employed or not is due to her and parents’ commission or omission and the same is then carried forward as she depends on her husband’s and in-laws preferences on the same. If at the time of crises in the family, a woman is liable to be maintained by her husband, then if situation demands a husband should also be given the said right.  

The judgments that go on to say that even a working woman is liable to be maintained by the husband actually lends credence to the fact that law on one hand treats and aspires a women to be equal to men, and then completely surrenders her to  her husband.  The said judgments fail to take into account that the very idea that after marriage the woman belongs to her husband has already been rejected in Joseph Shine case (AIR 2018 SC 4898) where SC while declaring section 497 IPC (adultery) as unconstitutional held that women, unlike chattels, are not the property of man. Therefore, over dependency of the wife on husband for maintenance and to make out a living actually runs counter to the notion that women are not property of men. Dependency itself stems from the mindset of treating a wife as property. 

Complete absence of any liability on wife to maintain her husband and this tumultuous equality and complete silence on these aspects by women’s groups shows the mendacious nature of women’s activism for gaining equality. It is submitted that women and men are equal, i.e. wherever there is inequality of the treatment meted out to them the law would come to their rescue. However, the same would not and cannot mean that to achieve equality or to bypass men laws would be applied in such a manner so as to pull down men. In other words, if A scores 90 marks and B scores 80 marks, then proper way is to ask B to work harder and reach at or beyond 90 marks and not by asking A to score 10 marks less. 

Equality thus achieved would be in consonance with the Constitutional morality. 

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Advocates Ishan Jain and Yash Prakash are Partners at Suvigya Legal.

The primary aim of journalism is to provide the people with news, views, comments and information on matters that are of public importance in a manner that is fair, unbiased and accurate. The influence of media extends to a large variety of people and helps in shaping their views and thoughts and thus, it becomes even more important to include proper information and not lose sight of the privileges, duties and obligations of mediapersons. It can be aptly said that the media of a country determines the perception and the outlook of its citizens and thus the role of the people associated with this noble profession, i.e. reporters, editors, camera persons and news anchors is of utmost importance and should have special privileges.

However, in order to enjoy the privileges granted to the media, they have to adhere to certain norms in collecting and distributing the information, which include ensuring that the news is authentic and from reliable sources, usage of language that is socially acceptable and the news must be fair and well thought out keeping in mind the cascading effect it tends to have on the society as well as individuals concerned.

The Press Council of India has time and again sought to promote the standards of the media by coming up with and modifying various codes of conduct. They are various norms that journalists must abide by in order to avoid potential conflicts. Some of these include-

These are just a few instances, however, there exist a lot more conditions set by the Press Council of India which is a self-regulated body that operates under the Press Council Act, 1978 and it is essential that the Press and journalists follow the rules set by them. 

Freedom of Press

Article 19(1)(a) of the Constitution defines the scope of the right to freedom of speech and expression as a fundamental right. However, there is no provision that expressly provides for the freedom of press but it is implied within the ambit of freedom of speech and expression granted in Article 19(1)(a) of the Constitution. This freedom includes within its ambit the right to express one’s opinions freely by speaking, writing, printing pictures or in any other manner. The freedom of media is extremely important as it lays the basis for democratic polity and is also considered to be a vital pillar for a free society. It is also an important instrument for bringing about social and political changes. However, this does not give an unabridged right to the press to speak without responsibility and there are indeed certain restrictions that must be considered. It was held by the Hon’ble Supreme Court in Indian Express Newspapers v. Union of India (1986 AIR 515) that the role of the press is extremely significant in the democratic machinery. It is the duty of the courts to uphold the freedom of press and invalidate all laws and administrative actions that interfere with that freedom. There are three essential aspects of freedom of press which are- freedom of access to all sources of information, freedom of publication and freedom of circulation. 

However, recently the Media or Press has seen a lot of controversies come its way and has been charged with various lawsuits for speaking about important issues. The media is not always at fault and has Freedom of Press as granted under Section 19(1)(a) of the Constitution. Thus, there are certain defences available to journalists, news anchors and news channels. The integrity and the security of the Press and Media are pivotal for any democracy and cannot be compromised with.

Legal Defences available to Journalists, News Anchors & News Channels:  

Thus, it can be seen that while there are certain restrictions on the Press, there is also freedom to exercise their right to freedom and expression. It is advisable that they exercise it in the right manner while following the guidelines laid down by the Press Council of India. 

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Anant Sharma is Advocate & Managing Partner at K & S Legal L.L.P and Co-Founder & Convenor at My Lawyers Advice.

The co-author of this article, Ankita Sethi, is a fourth year law student at Symbiosis Law School, Pune.

The era of liberalization, globalization & privatization has changed the scenario of commercial litigation throughout the country. Arbitration has become the preferred mode of dispute resolution, especially amongst the business community. The Indian Evidence Act, 1872  which is of cardinal importance in both criminal and civil trials plays an important role in commercial litigation as well. The Indian Evidence Act comes into play in all stages of the arbitration process. The Claimant leads oral & documentary evidence to prove his claims before the tribunal, while the Respondent does the same to deny the factum of these claims as well bring forth his own counter-claims. Cross-examination of witnesses are done by both sides to fortify one’s claims and deny the factum of others’ claims. The Evidence Act plays a significant role in proceedings under the anti-trust law as well.

Estoppel, which is a principle of Evidence, also comes into play. As an estoppel and like waiver it can be both used as a shield and a sword, it can  be used to wriggle out of liability, as well as fasten liability. The rule of “best evidence”contained in Section 114(g) of The Indian Evidence Act is also applicable in arbitration proceedings. It can manifest itself in “non-examination of crucial witness, non-examination of witness on material points and withholding of document which can prove or disprove claims”.The rule of best evidence also finds resonance in Section 92 of The Indian Evidence Act which prohibits evidence of oral terms, when the terms of an agreement, grant or disposition of property, or any matter required by law to be reduced to a documentary form. This short article will attempt to understand through various case laws the manner in which principles of evidence law interact with the arbitration act and the Competition Act, 2002, and the effect which it has finally on the lis between the parties.

I. The meaning of Estoppel – Section 115 of The Indian Evidence Act, 1872 explains the concept of estoppel as follows -“when one person by acts or omission, or by declaration, has made another person believe something to be true and persuaded that person to act on it, then under no circumstances can he or his representative deny the truth in suit or proceedings”. The principle of estoppel can simply be put as “one cannot approbate & reprobate at the same time”.

II. The Best Evidence Rule –  The rule of best evidence finds recognition in Section 114(g) of The Indian Evidence Act, 1872 which is as follows – “That evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it”. This rule essentially means that the evidence which will be the most effective in proving claims or successfully denying them must be put forth by the party making assertions or denying them, and failure to do so will lead to an adverse inference being drawn against such party. The Best Evidence rule also finds recognition in the principles of cross-examination, which is said to be the “strongest weapon in the armoury of a lawyer”.If a witness is not examined on a crucial “point in issue” or if a crucial witness is not examined at all, adverse inference is likely to be drawn against such party, who fails to do these tasks.

III. The approach of the National Courts in dealing with the tryst of Indian Evidence Act & Arbitration & Conciliation Act:

We shall analyse the decisions of the National Courts in the following case laws –

A. MMTC Ltd vs Anglo American Mettalurgical Society (FAO(OS) 532/2015) – Appellant had entered into a long-term agreement with the Respondent. As per the terms of the agreement the Appellant had agreed to purchase a quantity of freshly mined & cooked coal from the Respondent over three delivery periods. Disputes arose between the Petitioner & Respondent over the delivery of the third consignment. The Appellant wrote to the Respondent saying that the consignment of coal was ready, and the Respondent should nominate two stems (ships)for lifting the supply of coal. The Respondent via e-mail sought time to do the same. The Appellant sent numerous e-mails to the Respondent, however Respondent refused to confirm the availability of the stem, due to which the Appellant was unable to effectuate the supply of coal. The Respondent considered this a breach of the agreement, and brought forth a claim for damages against the Appellant for breach of contract before an Arbitral Tribunal. The Arbitral Tribunal made award in favour of Respondents, holding Appellants to be guilty of breach of contract. Appellant unsuccessfully contested the Award in a petition under Section 34 of The Arbitration & Conciliation Act, 1996. Appeal was made to the Division Bench under Section 37 of The Arbitration & Conciliation Act, 1996. It was contended on behalf of the Appellants that the Ld. Single Judge and the Arbitral Tribunal had erred in relying on the oral testimony of an official of Respondent, when an express written document (in this case the agreement between the parties) was present. Reliance was placed on Section 92 of The Indian Evidence Act, 1872 which prohibits and excludes oral evidence, which has been reduced in writing.  In the facts of the present case, it was thus contended that when the agreement expressly stipulated that “there will be no delivery of coal, unless and until a suitable stem is first nominated for the delivery of such coal”.It was thus contended before the Hon’ble Court that placing reliance on such oral testimony in presence of a written agreement of the same, is wholly contrary to the provisions of The Indian Evidence Act, 1872. The Court proceeded to reverse the decision of the Single Bench primarily due to this contravention of The Indian Evidence Act, 1872, and other supporting factors. This decision highlights the importance of principles of evidence in Arbitration proceedings, and tells us that a contravention of evidence Law will be considered “an breach of the fundamental policy of Indian Law”as per Section 34 of The Arbitration & Conciliation Act, and award can be set aside for such breach.

B. In Re XYZ Association of Man Made Fibre Industry [CCI(Case No. 62 of 2016]: In the present case, the Informant filed information under Section 19 of The Competition Act, 2002 alleging contravention of Section 4 of The Competition Act, 2002. It was alleged that the Opposite Party was imposing discriminatory prices of VSF (Velcro Synthetic Fibre) from customers situated in similar positions, it was charging higher prices to customers in the domestic market, compared to their foreign counterparts. The Commission was of the opinion that this “prima facie, constituted a contravention of The Competition Act, 2002”and ordered an investigation by the Director General. The Director General embarked on an extensive investigation over a sustained period of time, it took the statements of many officials of leading retail brands such as BIBA etc, many spinners and other people who were in any way connected with the textile industry. The DG returned a finding that the actions of the OP in “imposing discriminatory tariff to similarly situated customers was an violation of Section 4 of The Competition Act, 2002”.The main crux of arguments of OP before the Appellate Tribunal that VSF was an easily substitutable material, and therefore it was not difficult for the local manufacturers to use any other material for its substitute. The Commission then referred to the cross-examination of Mr. Anantkumar Reddy (Vice President, Fabrics, BIBA) who stated emphatically before the DG  that “VSF due to its distinct features is not capable of replacement by any other material”,this statement of the Mr. Reddy had not been cross-examined by the OP in any manner, whatsoever, and due to his  testimony being unchallenged, it is taken to be true. Thus the OP was found guilty of violating Section 4 of The Competition Act, 2002. 

C. Jackie Kakubhai Shroff vs Ratnam Sudesh Iyer(ARBITRATION  PETITION NO. 167 OF 2015)– The Petitioner & Respondent were shareholders in a company called “Atlas Aquafin Pvt Ltd”In the year 2002, Respondents were looking at an exit opportunity from the company. Respondent asked Petitioner to sign a document giving authorization from them for permission to sell such shares. Petitioner at that time refused to do so. On 4.4.2010Petitioner received a notice from Clifford Chance with an attachment of placement instruction, the placement instruction allegedly bore the signature of the Petitioner. The Petitioner made a complaint to the Economic Offenses Wing of the Mumbai Police against Respondent complaining about forgery. Respondent approached the Petitioners for settlement of disputes. On 3^rd January 2011 a settlement deed was drawn up & executed amongst the parties. The settlement deed envisaged payment of 3 million USD for withdrawal of police complaint against the Respondent, and for giving authorization to them to sell their shares. The said settlement deed contained an arbitration clause. The Petitioner performed their obligations satisfactorily, withdrawing the police complaint as well as giving the Respondents permission to sell their shares. The Petitioner’s wife, who was not connected with the Petitioner’s case in any way sent an email to certain mutual business associates, where she proceeded to call the Respondent a “forger”.The settlement deed had a clause wherein “it was prohibited to criticize the subject-matter of the settlement, in any manner whatsoever”. This email was constituted as a breach of settlement, and reference to arbitration was sought for damages. The sole arbitrator returned a finding that Petitioner had breached the settlement deed, he awarded the Respondent damages and held that the Petitioner was not entitled to the sum of 3.5 million USD as they had committed breach of settlement. Petitioner challenged the award under Section 34 of The Arbitration & Conciliation Act, 1996. It was argued by the Petitioners that there was no breach of the settlement deed as Petitioner’s wife was not authorized by the Petitioner to deal with the case in any manner, whatsoever , hence the statement made by her does not result in breach. It was further argued by the Petitioner that he had complied with all the obligations under the settlement deed, it was further argued that even if the settlement deed was purported to have been breached, the arbitrator awarding the sum of 2.5 million USD as liquidated damages for alleged breach cannot be countenanced as per law. The Respondent has argued that the mandate of Court in proceedings under Section 34 of The Arbitration & Conciliation Act, 1996 is limited, and findings of fact by the arbitrator should not be interfered with, when the sole arbitrator has given detailed reasons in support of decision. The Hon’ble Court opined that there is nothing on record to show that the Petitioner’s wife was his authorized representative. It has neither been proved in any manner whatsoever whether Petitioner’s wife made those insinuations against the Respondent with the authorization of the Petitioner. Petitioner in his reply to the “statement of claim”has denied that his wife was his authorized representative, or was authorized to take any decisions on his behalf. Respondent failed to cross-examine the Petitioner’s wife on this aspect, and failed to lead any evidence on the issue, whether Petitioner’s wife was his authorized agent or not. In the absence of cross-examination, primarily on this basis annulled the award in favour of the Respondent. The best- evidence also comes into picture in this case because the Respondent’s claim was mainly based on the proposition that “Petitioner’s wife was his authorized agent” who had breached the deed. The Respondent should have lead evidence to prove his contention, his failure to do so brings Section 114(g) of The Indian Evidence Act, 1872 into the picture, resulting in an adverse inference being drawn against him, and negating his claim. 

 Conclusion: The above illustrated case-laws show us the interaction between the principles of Evidence Law & commercial matters. It is a misconception indeed to believe that the skills of cross-examination and leading evidence are only needed for criminal & civil trials. They are very much “sine que non”in commercial disputes as well. Evidence Law is of such cardinal importance in arbitration matters, that incorrect application or failure to appreciate the principles of Evidence Law will often lead to the arbitral award being set aside as it is considered a “fundamental policy of Indian Law” within the contours of Section 34 of The Arbitration & Conciliation Act, 1996.

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Advait is an associate in the litigation team of Kesar Dass B & Associates. He deals with arbitration, civil suits and matters pertaining to the Insolvency and Bankruptcy Code, 2016.

An arbitration agreement is defined under Section 7 of the Arbitration & Conciliation Act, 1996 [“Act”] as an agreement by the parties thereto to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. Sub-section (3) of the said provision mandates that in order to be valid, an arbitration agreement must be in writing. Sub-section (4) provides the eventualities in which an arbitration agreement may be considered a ‘written agreement’. By way of example, an arbitration agreement may also come into existence through the exchange of correspondence, including through electronic means, if such correspondence provides the record of the agreement.

Judicial pronouncements on the scope of an arbitration agreement have by and large crystallised the  factors to be borne in mind while drafting such an agreement.

This article attempts to summarise some of the important factors which emerge from an analysis of some important judicial pronouncements on the topic.

Scope of the Arbitration Agreement: ‘all or certain disputes’

First and foremost, it is important to delineate the scope of the intended arbitration agreement/clause. The words ‘all or certain disputes’, used in the provision itself, demonstrate that the parties may exercise their choice of specifying the categories of probable disputes arising out of a contractual relationship which shall be referred to arbitration. In the alternative, the parties are also free to incorporate an all-encompassing arbitration clause in their contract.

The ‘scope’ of the arbitration agreement is based on the answer to the question as to which disputes are covered under the arbitration clause in a given arbitration agreement. To put it simply, to see whether a dispute between parties can be referred to arbitration, one has to look into the arbitration clause binding the parties and ascertain whether the said clause covers such disputes which the parties wish to get adjudicated.

 In Mahanagar Telephone Nigam Ltd. vs. Canara Bank and Ors. reported as AIR 2019 SC 4449, the Supreme Court has held that arbitration agreements are to be construed according to the general principles of construction of statutes, statutory instruments, and other contractual documents. The intention of the parties must be inferred from the terms of the contract, conduct of the parties, and correspondence exchanged, to ascertain the existence of a binding contract between the parties. If the documents on record show that the parties were ad idem, and had actually reached an agreement upon all material terms, then it would be construed to be a binding contract. The meaning of a contract must be gathered by adopting a common sense approach, and must not be allowed to be thwarted by a pedantic and legalistic interpretation. The Court opined that an arbitration agreement is a commercial document and it must be interpreted so as to give effect to the intention of the parties, rather than to invalidate it on technicalities.

Thus being the case, it is advisable to draft an arbitration clause in clear and unambiguous words so as to avoid confusion and also in a way that the clear intent of the parties is reflected on a bare perusal of it.

Appointment of Arbitrator

The parties are free to determine the procedure for appointment of an arbitrator, and the number of arbitrators intended to be appointed. Section 10 of the Act however mandates that the arbitrators shall not be even in number. In the event that the parties do not provide for the number of arbitrators, the arbitration is to be conducted by a sole arbitrator.

Due care, however, must be taken of the fact that the arbitrator proposed to be appointed is not ineligible under the Seventh Schedule of the Act. The Seventh Schedule (read with Section 12(5) of the Act)  sets out certain circumstances under which the arbitrator is rendered ineligible for appointment. This is contemplated in a situation where the arbitrator either has a relationship (of the kinds mentioned in the Schedule) with the parties to the dispute, or with the dispute itself, or in the situation where the arbitrator has a direct or indirect interest in the dispute.

Typically, some contracts are seen to have an upper level employee of one of the contracting parties as the arbitrator. With the insertion of the Seventh Schedule in the Act [By the Arbitration (Amendment) Act, 2016 w.e.f. 23.10.2015], such an appointment is impermissible. Interpreting this Schedule, the Supreme Court has held that while appointing an arbitrator it should be kept in mind that a party who is interested in the outcome of such arbitral dispute cannot have discretion to appoint a sole arbitrator.( Perkins Eastman Architects DPC and Another HSCC (India) Ltd. reported as AIR 2020 SC 59)

The Supreme Court has, however, clarified that a challenge under Section 12 of the Act cannot be made out regarding appointment of arbitrator who is a retired employee of one of the parties in Central Organisation for railway electrification vs. ECI-SPIC-SMO-MCML  reported as 2020 (1) SCALE 134

The amendments made to the Act vide the Arbitration (Amendment) Act, 2019 provide for mandatory qualifications of an arbitrator by way of insertion of the Eighth Schedule in the Act. In addition to providing for certain professional qualifications, the said Eighth Schedule also provides certain ‘General Norms applicable to arbitrators’. These amendments have, however, not been brought into force till date(Vide Notification No. 3154(E) issued by the Ministry of Law and Justice on 30.8.2019, only Sections 1, 4-9, 11-13 and 15 of the Arbitration (Amendment) Act, 2019 have been brought into force.)

Place of Arbitration

An arbitration clause should clearly specify the seat of the arbitration. The ‘seat’ determines the court which will have the exclusive jurisdiction to adjudicate any proceedings arising out of arbitration proceedings. An arbitration clause is not governed by the rules of determination of jurisdiction based on the place where the cause of action has arisen. As held by the Supreme Court in Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited & Ors reported as AIR 2017 SC 2105, under the law of arbitration, unlike under the Code  of Civil Procedure,1908, a reference to the ‘seat’ is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue in the classical sense may not have jurisdiction.

Unambiguous expression of intention to refer disputes to arbitration

An arbitration agreement must reflect the unambiguous intention of the parties to refer the disputes inter se to arbitration. Absent such intent, the vague reference to ‘settlement of disputes’ by a person/ authority or body will not amount to an agreement to refer disputes to arbitration.

The arbitration clause in Karnataka Power Transmission Corporation Limited & Ors. v. Deepak Cables (India) Ltd. reported as AIR 2014 SC 2134 provided for reference of ‘any dispute or difference of any kind whatsoever arising out of the contract’ to the Engineer in charge, who was to give ‘his decision’ within 30 days after being requested by either party to do so. Such a widely worded clause was held not to amount to an unambiguous arbitration agreement. The Supreme Court held:

“On a studied scrutiny of this postulate, it is graphically clear that it does not provide any procedure which would remotely indicate that the concerned engineer is required to act judicially as an adjudicator by following the principles of natural justice or to consider the submissions of both the parties. That apart, the decision of the engineer is only binding until the completion of the works. It only casts a burden on the contractor who is required to proceed with the works with due diligence. Besides the aforesaid, during the settlement of disputes and the court proceedings, both the parties are obliged to carry out the necessary obligation under the contract. The said clause, as we understand, has been engrafted to avoid delay and stoppage of work and for the purpose of smooth carrying on of the works. It is interesting to note that the burden is on the contractor to carry out the works with due diligence after getting the decision from the engineer until the completion of the works. Thus, the emphasis is on the performance of the contract. The language employed in the clause does not spell out the intention of the parties to get the disputes adjudicated through arbitration. It does not really provide for resolution of disputes.”

The Court arrived at this finding after an exhaustive and instructive discussion on the law on Section 7 of the Act.

In Mahanagar Telephone Nigam Ltd. vs. Canara Bank and Ors.(supra) the Court found that the intention to resolve the disputes through arbitration was manifest from the statement by the parties made before a Court in a writ petition between the parties. It was held that the agreement between the parties as recorded in a judicial order was final and conclusive of the agreement entered into between the parties. Further, it was found that the filing of the statement of claim and defence filed before the arbitrator would also constitute evidence of existence of an arbitration agreement, which was not denied by the other party, under Section 7(4)(c) of the Act.

Asymmetric arbitration clause

In Shri Chand Construction and Apartments Private Limited v. Tata Capital Housing Finance Ltd.( CS(OS) 179/2019) the Hon’ble Delhi High Court opined that an arbitration agreement, providing for claims of one of the parties arising in respect of a defined legal relationship to be adjudicated by arbitration, while excluding the claims of the other party arising in respect of the same legal relationship from the scope of arbitration would be contrary to the public policy prohibiting splitting up of claims and causes of action as enshrined in the provisions of the CPC and would result in multiplicity of proceedings, with claims of one of the parties to a legal relationship being decided by one forum and the claims of the other party to the same legal relationship being decided by another forum and possibility of conflicting findings.

This means, that in a case where the contract has been entered into between the parties at place ‘A’, for supply of goods from place ‘B’ to place ‘C’, the parties may name place ‘Z’, which may have no connection whatsoever to the performance of the contract, as an exclusive seat of the arbitration proposed between the parties.

The ‘venue’ of arbitration is merely a place of convenience where the proceedings may be conducted and it does not confer jurisdiction on courts under whose territorial jurisdiction the said venue is. The Supreme Court has clarified in BGS SGS SOMA JV vs. NHPC Ltd. reported as 2019 (17) SCALE 369  that the venue of an arbitration proceeding can change and it would not result in change in jurisdiction.

To mitigate protracted litigation, it is imperative that parties should, in unambiguous words state their intent to designate a seat and also may state their desirable place and venue where the said arbitration proceedings can be conducted.

Arbitration clause in an unstamped & unregistered document

It is important to be mindful of the requirement of registration (under the Registration Act, 1908) or of stamp duty payment (under the Indian Stamp Act 1899 or the relevant statute) qua the agreement being entered into between two contracting parties, if such an agreement is to contain an arbitration clause. The legal position in this regard has been laid down in Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engineering Ltd reported as AIR 2019 SC 2053  by the Supreme Court. While entering into the contract containing an arbitration clause, the parties must ensure that the stamp duty due on the agreement has been duly paid. This is because the Supreme Court has held that in case of an unstamped agreement, or an agreement which is not duly stamped, the arbitration clause cannot be enforced until the instrument is duly stamped. Therefore, a party approaching the Court under Section 11 of the Act for appointment of an arbitrator on the basis of an unstamped instrument or an instrument not duly stamped will have to wait for the appointment until the instrument is impounded by the Court and stamp duty is duly paid there on.

On the other hand, however, if a compulsorily registerable agreement is as a matter of fact not so registered, the arbitration agreement contained therein may yet be acted upon.

Doctrine of Separability: The doctrine states that an arbitration clause is separate from the underlying contract in which it appears. However, the existence of the contract is necessary for the terms of arbitration clause. This can be seen from the position laid down by the Apex Court in the case abovementioned.

Incorporation of an Arbitration Clause by reference to another contract

Section 7(5) is a specific provision which provides for incorporation of an arbitration clause by reference to another contract, albeit upon satisfaction of certain specific conditions. Situations where the parties are in engaged in regular contractual dealings with each other and therefore have entered into several contracts with each other; or classic cases of Government contracts where the terms of one contract may refer to another; or cases where the parties choose to refer to an institutional mechanism for arbitration, without specifying the procedure to be followed for initiation of the arbitration separately in the contract; are not uncommon in commercial transactions. In one such case in Duro Felguera S.A. v. Gangavaram Port Limited reported as AIR 2017 SC 5070 the parties split their contract into 5 separate ‘packages’, each of which separate package contained an arbitration clause. Additionally, one party executed a corporate guarantee in favour of the other which contained a separate arbitration clause. The 5 agreements were then followed by an MoU, and it was argued that the MoU subsumed all the agreements and the arbitration clause in the MoU must thus prevail. The Supreme Court rejected this argument and in the course of its judgment referred to M.R. Engineers and Contractors Pvt. Ltd. v. Som Dutt Builders Ltd reported as 2009 (9) SCALE 298. which laid down the following essentials for the incorporation of an arbitration clause by reference:

In conclusion, while there may not exist a mandatory form of an arbitration agreement and while procedures and appointment may have been left to the discretion of the parties to the contract, due care must be taken that the arbitration clause is worded in clear, unambiguous terms where the intent of the parties to refer the disputes (either specific, or all) to arbitration must be evident.

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Akshay & Ankita are Associates in the Disputes Resolution team of Innovatus Law, a New Delhi based multi-disciplinary law firm specializing in dispute resolution and general corporate practice. Akshay can be reached at akshay@innovatuslaw.in. Ankita can be reached at ankita@innovatuslaw.in

Five Focus Points while conducting legal due diligence before any transaction:

The due diligence exercise commences with sharing of vital information and documents of the target business with the prospective investor / buyer / acquirer. It is common for such documents to include confidential and proprietary information. Since a due diligence exercise generally precedes the decision to enter or withdraw from the deal, the likelihood of leaking of secrets cannot be completely ruled out in case the transaction is not successfully closed. Therefore, it is must for the business owners to have a comprehensive NDA executed with the prospective investor before sharing the information in order to preclude them and their agents from disclosing the information.

Cross checking of the regulatory approvals and licenses is a significant part of legal due diligence. This would not only involve the validity check of the approvals / licenses but the lawyers are also expected to analyze whether or not the business operations are in conformity with the terms of such approvals and licenses. In certain cases, some specific approvals and licenses are also instrumental in deciding the fate of the deal. Therefore, these checks are extensively conducted in order to identify such ‘deal breakers’ and ‘deal changers’. The parties also rely on the outcome of these checks to ascertain the risks that may follow after the deal and to safeguard themselves from such risks and liabilities. It is therefore necessary for the business owners to obtain appropriate licenses and comply with all applicable laws so as to not lose the bargaining edge because of the legal complexities.

Contracts are an integral part of any business organisation. During a legal due diligence, they assist in identifying different stakeholders of the business and also helps to determine the scope and extent of their rights / obligations vis-a-vis the promoters and the company. It is must to thoroughly scrutinize all material contracts like co-founders’ agreement, shareholders agreement, lease and license, IP transfer agreements, vendor contracts, service level agreements etc. The detailed inspection of the clauses of these contracts backed by a thorough legal research helps in detecting the restrictions which may prove to be fatal for the transactions. Such restrictive clauses vary from contract to contract for example limitation of liabilities, restriction on transfer of shares, term, exclusive or non-exclusive, non-compete, jurisdiction etc.  

Pending litigation or unfavourable decrees bring a considerable amount of uncertainty for any prospective investor / buyer / acquirer to even make a deserving offer. The business owners should ensure that they are not extensively involved in litigation and disputes. On the other hand, for the other party, it is immensely important to closely examine the documents of such disputes and court proceedings in order to determine the extent of risks involved and liabilities which may be imposed post transaction. Non-compliance of applicable laws in certain cases may also attract heavy penalties. In this regard, regulatory and / or quasi judicial proceedings must also be closely monitored while conducting a legal due diligence.   

Value and ownership of the assets are two predominant considerations for negotiating the numbers in any transaction. Proper inspection of the documents to check the chain of ownership and validity of title is indispensable while conducting legal due diligence. The aim is to foresee potential risks, liabilities, charges, encumbrances and other restrictions that may be attached to such assets. In today’s evolving and tech based business environment, the ownership status of the Intellectual Property is also crucial for the prospective investor. Therefore, ownership over the Intellectual Property and the confidentiality with respect to the knowhow of the business must also be reviewed during the legal due diligence. 

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Ayush Beotra is an Associate Partner at Innovatus Law, a New Delhi based multi-disciplinary law firm specializing in dispute resolution and general corporate practice. Ayush regularly advises businesses on various legal issues of general corporate commercial law. Ayush can be reached at ayush@innovatuslaw.in.

Money laundering is a menace not only to the economy but also to the integrity and sovereignty of a nation. To combat with tenacity and obviate the foe, the Indian Parliament enacted the ‘Prevention of Money Laundering Act, 2002’ [henceforth ‘the Act’]. One of the essential features of ‘the Act’, which sets it apart from the general scheme of the Criminal Procedure Code, 1973 and the Indian Penal Code, 1860 is the provision of presumption and the burden of proof. As per Section 24 of ‘the Act’ when a person is accused of having committed the offence of money laundering under Section 3, the burden to prove that the alleged ‘proceeds of crime’ are untainted property shall be on the accused. In a general criminal law the burden is on the prosecution to prove the felony, however, not so under this “Act”

Under Section 24 of ‘the Act’  in any proceeding relating to the proceeds of crime, a presumption is raised by the Authority or the Court against any person indicted with the offence of money laundering that the money/property in question is ‘tainted’, unless the contrary is proved by the felon. Even in the case of Records, and Properties, which are found in the possession or control of any person in the course of a survey or search under this Act, it shall be presumed that such record or property belongs to such person.

Therefore, it is unequivocally clear that, it is the person indicted with an offence under Section 3 of ‘the Act’, whose property is attached and proceeded against for Confiscation, who has to discharge the onus of proof by disclosing the sources of his Income, Earnings or Assets, out of which or means whereby he has acquired the property attached. It is “he” who has to discharge the burden that the property does not constitute proceeds of crime and is legit.

Further it is necessary to mention that where a transaction of acquisition of property is part of inter-connected transactions, the onus of establishing that the property acquired is not connected to the activity of Money-Laundering is on the person in ownership, control or possession of the property, even though not accused under Section 3 offence under ’the Act’, provided one or more of the interconnected transactions is/are proved to be involved in Money-Laundering.

The “discharge of burden” under section 24 of ‘the Act’ has persistently been convoluted contention before the Court and the Authority, particularly at what stage “onus” shifts on the accused during the proceeding as there are various stages of proceeding under ‘the Act’. So, let’s examine the issue:

The Section 24 of ‘the Act’ has undergone paradigm shift under the prevention of the Money Laundering (Amendment) Bill 2012 whereby the amendment in the parent “Act of 2002” was carried out and the “accused” word in original parent section 24 was substituted with word “charged”. The position of Section 24 of the “Act”( Burden of Proof) pre and post amendment of 2013 has been like this:

(Prior to 2013 amendment): “Burden of proof” When a person is “accused” of having committed the offence under section 3, the burden of proving that proceeds of crime are untainted property shall be on the accused.”

(Post 2013 amendment):“Burden of proof” In any proceeding relating to proceeds of crime under this Act, (a) in the case of a person “charged” with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering.

On scrutiny of the original section 24 in Parent Act of 2002 suggests that when person is “accused” of having committed the offence of money laundering the burden of proving the proceeds of crime are untainted property shall be on the accused. It appeared to be a drastic provision as simply by an accusation that a person had committed an offence of money laundering the burden shifts on the accused whereas he may not even be charged at that time. Thereafter, ‘the Prevention of Money Laundering (Amendment) Bill 2012’  was introduced in the Parliament and Section 24 of the parent Act was amended, whereby, the word “accused” in parent Act was replaced with word “charged”.

It is appropriate to mention here that the Hon’ble Finance minister, while answering the Question in Rajay Sabha about the Amendment of Section 24 of ‘the Act’ under ‘the Prevention of Money Laundering (Amendment) Bill 2012’ clarified that the word “accused” is onerous and unfair provision in the parent Act of 2002 in view of the above mentioned reasons hence, it is substituted with word “charge”. Now as per the amended provision a person is “charged” with an offence of money laundering under the “the Act” means when the Court frames a charge against him in accordance with Section 211 of CrPC and only at that stage the burden shifts on the accused. The word “charge” appears first time in the CrPC under section 211 and by borrowing the language of section 211 CrPC the word “accused” is substituted with word “charge” in ‘the Act’. Therefore, it is noticeable that the burden of proof shifts on accused once charge of offence is framed, which means ‘at the stage of trial’ and not ‘at the stage of enquiry’. 

The Hon’ble high court of Delhi, in the case Upender Rai vs Enforcement Directorate reported as (2019) 262 DLT 382 held that in case a person is charged with the offence of money laundering, the Authority or the Court shall presume that such proceeds of crime are involved in money laundering unless the contrary is proved. The stage of raising the presumption or for the accused to rebut the said presumption would be during the course of trial. Even if assuming that at the stage of bail the Court is to consider that the accused is prima facie required to rebut the presumption, the same would not have to be beyond reasonable doubt but on the basis of broad probabilities.

Now, the significant question arises that what is position of “burden of proof” at the stage of attachment of proceeds of crime under ‘the Act’. The legislators have predicted two parallel proceedings under the Act; One with regard to the attachment of the properties derived and obtained from the proceeds of crime and its confiscation and; Second, action contemplated is prosecution and punishment for commission of offence covered under section 3 of the Act. In the case of Radha Mohan Lakhotia Vs Enforcement Directorate reported as (2010) 5 BOM CR 625 the Hon’ble High Court of Bombay held that by virtue of Section 24 of the Act, the burden of proving that the property possessed by the accused was not proceeds of crime and is untainted would be on the accused and he is bound to discharge the burden of proof at the stage of attachment proceeding as well with support of the Income, Earnings, Assets.  

Further in the case of B. Rama Raju Vs. Union of India reported as [2011]164CompCas149(AP) it was held by Hon’ble Andhra Pradesh High Court that Section 24 of the Act shifts the burden of proving that the proceeds of crime are untainted property onto person(s) accused of having committed the offence under section 3. In response to the notice issued under section 8(1) and qua the legislative prescription in section 24 of the Act the person accused of having committed the offence under section 3 must show with supporting evidence and material that the person has requisite means by way of income, earning or assets, out of which or by means of which the person has acquired the property alleged to be proceeds of crime. Only on such showing would the accused be able to rebut the statutorily enjoined presumption that the alleged proceeds of crime are untainted property. 

Moreover, it was argued that Section 24 of Act offends the Article 14 of the Constitution on the ground that burden of proving that proceeds of crime are untainted property is applicable only to the prosecution and trial of a person indicted of committing an offence under Section 3 of the Prevention of Money Laundering Act 2002 and do not operates to the attachment and confiscation under Chapter III of the “Act”. However, the Hon’ble High Court upheld the provision in Section 24 valid by observing that in the cases of money laundering the various strategies are involved by the accused and the proceeds of crime undergo various transactions and are layered into the economic system in order to show that money is untainted. Therefore, it is right to cast the burden of proof on the accused. The burden of proof under Section 24 applies to trial proceedings and continues to attachment and confiscation proceedings. 

In case of Sarosh Munir Khan Vs Enforcement directorate (534 /Mumbai /2013) the Hon’ble High court of Bombay held that an order confirming the attachment and/or the provisional attachment can be passed only on the Adjudicating Authority being satisfied, on considering the material on record including the material or evidence furnished in response to the notice issued under section 8(1), the reply furnished in response thereto, and taking all and other relevant material in to consideration, to record a finding that the property or so much of it, is involved in money laundering.

In case of Rohit Tandon Vs Enforcement Directorate reported as AIR 2017 SC 5309 , The Hon’ble Supreme court held that the decisions in the cases of Subrata Chattoraj vs Union of India 2014(6) SCALE 593, Y. S. Jagan Mohan Reddy vs CBI AIR 2013 SC 1933, Union of India Vs Hassan Ali Khan, 2011 (11) SCALE 302 is that economic offences having deep-rooted conspiracies and involved huge loss of the public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of Proof that the monies were not proceeds of crime and were not, therefore, tainted shifts on the accused person under section 24 of the Act.

Therefore, under the general law the burden of proof lies on the person/agency making any claim or asserting any fact under the Indian Evidence Act 1872, whereas, the ‘Prevention Of Money Laundering Act 2002’ is a Special Law enacted by the Parliament with the exceptional provision of presumption and reverse burden of proof in the prosecution as well as the attachment proceedings under the Act.  

Nitesh Rana, Advocate, is Special Prosecutor and Counsel for the Enforcement Directorate.

1. Introduction and Background of the Request:

1.1. An extradition request was made by the Government of India(GOI) to the Government of United Kingdom in respect of Mr. Vijay Mallya on 9^th February, 2017 and as India is not a designated Category 2 territory under Section 84 (7) of the Extradition Act 2003 (the “2003 Act”), the GOI had to show a prima facie case against Sh. Vijay Mallya pursuant to Section 84 (1) of the 2003 Act. Accordingly, the proceedings took place before the Senior District Judge Arbuthnot (“the SDJ”), sitting at Westminster Magistrates’ Court.

2. Major defence of Sh. Vijay Mallya before the UK Courts

2.1. One of the major defence of Sh. Vijay Mallya before the UK Courts was that the material relied upon against him includes statements under Section 161 Cr.P.C., which are inadmissible in nature. The major ground was that

(i) the UK-India treaty never envisaged statements u/s 161 CrPC but statements u/s 164 Cr.P.C., which are made in front of the magistrate;

(ii) there are lengthy passages in a number of the statements which are word to word identical, and

(iii) in many cases, the witnesses were giving evidence after the event, reporting on matters by reference to documents before them (or available to them) which are not produced, or annexed to the statement.

2.2. However, the SDJ held that the statement under Section 161 Cr.P.C. were admissible in evidence, as the witness accepts the written statement, which is clear from the use of the words “RO&AC” (Read Over and admitted to be correct) written by the Investigating Officer at the bottom of the statements. The SDJ had also relied upon Section 84(2), (3) and (4), which provides that statements made to an investigating officer would be admissible at trial. The relevant portion of the judgment of SDJ is as under:

51. I have had no evidence from the officers as to how the section 161 statements were taken. I bear in mind this is a fraud case. The evidence is repetitive with many witnesses producing similar information. The officers investigating these matters often receive statements from witnesses who produce the same documents from their bank records. There is no evidence that I have heard which undermines the bona fides of the investigating officers.

52. I do not know the processes the officers go through to produce a statement which they read over to the witness. It would be wrong to speculate but it may involve a number of preliminary interviews before the witness statement is finalised. I have no doubt that what happens then is that the information taken from the witness which is put into statement form is then read over to the witness. If the witness accepts the truth and accuracy of the statement, the officer signs the statement and writes “RO and AC”, read over and affirmed as correct.

2.3. The matter was then Appealed before the UK High Court, wherein the following was observed:

37. S.161 of the Indian Criminal Procedure Code (‘the Code’) establishes the approach in India to witness statements in criminal cases. Witnesses are bound to appear at trial, to be sworn, and then to give oral evidence and be cross-examined. S.161 statements are prepared by police (or prosecutors) as an indication of the evidence a witness will give, but they are not admissible as evidence at trial in India. They may be used as the basis of cross-examination if the evidence given proves inconsistent with the statement. The process of creation is standardised. Once the statement is prepared by the relevant officer, it is read to, and approved by, the witness. The approval is attested by the officer, typically using the acronym “RO&AC”, standing for “Read Over and Affirmed to be Correct”. The statements are accepted to be hearsay evidence, as the SDJ remarked in paragraph 49 of her judgment.

3. Admissibility of statements recorded under Section 161 of the Cr.P.C. as held by UK Courts, i.e., both Westminster Magistrates’ Court & UK High Court:

3.1.  It is the considered opinion of the author that the UK law viz. admissibility of statement given to an Investigating Officer is not applicable either to India or to an Indian subject and thus, the document (statements under Section 161 Cr.P.C.) considered by the UK Court was not a statement recorded under Section 84(2), and (4) of the Extradition Act 2003 but under Section 161 Cr.P.C., which statements are per-se inadmissible.

3.2. A statement, which is per-se inadmissible, cannot change its colour to an admissible document, merely by change of sight or by location of its use.

3.3. The observation of the UK Courts that the statement under Section 161 Cr.P.C. is admissible is directly contrary to the settled principles of law laid down by the Hon’ble Supreme Court of India and various High Courts of India, apart from being statutorily inadmissible, as is clear from the following submissions.

3.4. Section 161 of Cr.P.C. deals with the examination, by the Police during the investigation of the matter, of witnesses, who are supposed to be acquainted with the facts and circumstances of the case. The said Section reads as under:

161. Examination of witnesses by police.

(1) Any police officer making an investigation under this Chapter, or any police officer not below such rank as the State Government may, by general or special order, prescribe in this behalf, acting on the requisition of such officer, may examine orally any person supposed to be acquainted with the facts and circumstances of the case.

(2) Such person shall be bound to answer truly all questions relating to such case put to him by such officer, other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.

(3) The police officer may reduce into writing any statement made to him in the course of an examination under this section; and if he does so, he shall make a separate and true record of the statement of each such person whose statement he records.

3.5. However, the said statements recorded by the Police under Section 161 Cr.P.C. are per se inadmissible in nature and, thus, have no evidentiary value. The same is also clear from Section 162 Cr.P.C., which provides that the statement of a witness under Section 161 Cr.P.C. can be used only for the purposes to contradict such witness in the manner provided by Section 145 of the Indian Evidence Act, 1872 (1 of 1872 ). Section 162 Cr.P.C. reads as under:

162. Statements to police not to be signed: Use of statements in evidence.

(1) No statement made by any person to a police officer in the course of an investigation under this Chapter, shall, if reduced to writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose, save as hereinafter provided, at any inquiry or trial in respect of any offence under investigation at the time when such statement was made:

Provided that when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing as aforesaid, any part of his statement, if duly proved, may be used by the accused, and with the permission of the Court, by the prosecution, to contradict such witness in the manner provided by section 145 of the Indian Evidence Act, 1872 (1 of 1872 ); and when any part of such statement is so used, any part thereof may also be used in the re-examination of such witness, but for the purpose only of explaining any matter referred to in his cross- examination.

3.6. Meaning thereby that the statement under Section 161 Cr.P.C. can be used by a party, if the witness, while deposing on oath before the Court, gives an inconsistent version from the one given in the statement under Section 161 Cr.P.C.

3.7. It is for this reason that the legislature in its wisdom has limited the scope and applicability of the statements under Section 161 CrPC only for the purpose of confrontation, as clearly provided in Section 162 CrPC.

3.8. The Hon’ble Courts through various judicial pronouncements has time and again held that the statements under Section 161 Cr.P.C. are inadmissible in nature. Few of the said decisions are as under:

(a) The Hon’ble Supreme Court of India in Rajendra Singh Vs. State of U.P and Ors. reported as 2007 (3) ACR 2696 (SC) wherein the Hon’ble Supreme Court criticized the reliance placed by the High Court on the statement under Section 161 CrPC as the same is wholly inadmissible. Relevant portion of which is as under:-

“6. The High Court has basically relied upon the statements of six witnesses which had been recorded by the investigating officer under Section 161 Cr.P.C. to record a positive finding that the respondent could not have been present at the scene of commission of the crime as he was present in a meeting of Nagar Nigam at Allahabad. A statement under Section 161 Cr.P.C. is not a substantive piece of evidence. In view of the proviso to sub-section (1) of section 162 Cr.P.C., the statement can be used only for the limited purpose of contradicting the maker thereof in the manner laid down in the said proviso. Therefore, the High Court committed a manifest error of law in relying upon wholly inadmissible evidence in recording a finding that Kapil Dev Singh could not have been present at the scene of commission of the crime.

10. Having considered the submissions made by learned Counsel for the parties, we are of the opinion that the statements of the witnesses under Section 161 Cr.P.C. being wholly inadmissible in evidence could not at all be taken into consideration. The High Court relied upon wholly inadmissible evidence to set aside the order passed by the learned Sessions Judge.

That apart, no finding on a plea of alibi can be recorded by the High Court for the first time in a petition under Section 482 Cr.P.C. As mentioned above, the burden to prove the plea of alibi lay upon the accused which he could do by leading evidence in the trial and not by filing some affidavits or statements purported to have been recorded under Section 161 Cr.P.C.”

(Emphasis Supplied)

(b) The Hon’ble Supreme Court of India in Ram Swaroop and Ors. vs. State of Rajasthan reported as (2004) 13 SCC 134 held that statement under Section 161 CrPC cannot be used as a evidence, relevant portion of which is as under:-

“23. The whole procedure adopted by the High Court is clearly illegal and cannot be sustained. We have also noticed that the High Court has attached undue importance to the statements made in the course of investigation and recorded under Section 161 of the Code of Criminal Procedure. It is well settled that a statement recorded under Section 161 of the Code of Criminal Procedure cannot be treated as evidence in the criminal trial but may be used for the limited purpose of impeaching the credibility of a witness.”

(Emphasis Supplied)

(c) The Hon’ble Supreme Court of India in Baldev Singh Vs State of Punjab reported as (1990) 4 SCC 692 held that statement recorded under Section 161 of the CrPC shall not be used for any purpose except to contradict a witness in the manner prescribed in the proviso to Section 162(1), relevant portion of which is as under:-

“6. It is seen from the judgment of the High Court that though PW-10 in his chief examination has supported the prosecution version in all its material particulars has given a complete go – by and struck a death kneel to the prosecution in his cross-examination stating that due to darkness he could not identify the culprits. The High Court was inclined to place reliance on his evidence on the ground that this witness in his statement before the police; recorded under Section 161 of the CrPC during the investigation as well in the first information report Exh. P.O., has narrated all the relevant facts and had not whispered in those statements that he could not identify the appellant due to darkness. This reasoning of the High Court in our view is erroneous.

Needless to stress that the statement recorded under Section 161 of the CrPC shall not be used for any purpose except to contradict a witness in the manner prescribed in the proviso to Section 162(1) and that the first information report is not a substantial piece of evidence.

The High Court has misled itself into relying upon these two statements and thereby has fallen into a serious error. It is pertinent to note in this connection that PW -7, an Advocate who is a disinterested witness has testified to the fact that both PWs 9 and 10 met him after the incident, but they did not tell the name of the appellant.”

(Emphasis Supplied)

3.9. Moreover, the statements under Section 161 CrPC are made and written by the concerned investigating officer himself and the concerned witness to whom the said statement is attributed may not even have given the said statement.

3.10. It is pertinent to mention that a statement under Section 161 Cr.P.C. is also not to be signed by the witness concerned, as is clear from Section 162 Cr.P.C. and thus, the statement is a version recorded by the investigating officer. However, to show that the witness has approved the contents of the statement under Section 161 Cr.P.C. as correct, the statement generally contains an acronym “RO&AC”, standing for “Read Over and Admitted to be Correct”.

3.11. The author, with his experience of being a criminal trial lawyer, who has himself cross-examined hundreds of witnesses, states that he has observed that the statements under Section 161 CrPC are recorded by the Officers in terms of their own understanding and their own pre-conceived purposes and that the meaning of the acronym “RO&AC” is not even known to the witnesses.

3.12. In many cases, during the cross-examination by the author, thewitnesses have admitted that they are not even aware about the purported statement which the agency attributed to them, or that the same was not read over to them for their confirmation.

3.13. They have even admitted that they are not even aware of the meaning of the acronym ‘RO & AC’, which is usually written at the end of each statement. Few examples of the same are mentioned below, only for sample (but the name of the witnesses and the context of the evidence not pertaining to the present Article are removed for confidentiality issues):

(I) In 2G Spectrum Case:

(a) Response of Witness A while under cross-examination by the Author:

After my statement was recorded I neither read my statement word by word nor said OK to the IO. I do not know the meaning of “RO & AC”.

(b) Response of Witness B while under cross-examination by the Author:

Q. Do you understand the meaning of RO & AC?

Ans: I do not understand its meaning.

(c) Response of Witness C while under cross-examination by the Author:

I do not understand the meaning of “RO & AC”.

(d) Response of Witness D while under cross-examination by the Author:

I do not know the meaning of “RO & AC”.

(e) Response of Witness E, while under cross-examination by the Ld. Spl. PP for CBI:

Ques: Did the IO record your statement?

Ans: Yes.

At this stage, witness has been shown his statement recorded under Section 161 CrPC and his attention is drawn to portion A to A of statement mark PW xxxxxxx.

Ques: Did you state the facts recorded at portion A to A in the aforesaid statement?

Ans: No.

Ques: I put it to you that you did state the facts before the IO as recorded in portion A to A to the effect that “xxxxxxx xxxxxxx xxxxxxx”?

Ans: That is incorrect.

(f) Response of Witness F, while under cross-examination by the Ld. PP for CBI:

“CBI officials spoke to me but did not record my statement. I have been shown statement recorded in my name under Section 161 Cr.P.C and only a part of it pertains to the matter about which CBI officials spoke to me.”

(g) Response of Witness G, while under cross-examination by the Ld. PP for CBI:

“I had a discussion with the CBI, though, there was no interrogation. No statement of mine was recorded in front of me. I have been shown astatement recorded under Section 161 Cr.P.C and attributed to me and I have seen it for the first time. The same is now Mark PW xxxxxxx.”

(h) Response of Witness H, while under cross-examination by the Ld. PP for CBI:

“ It is wrong to suggest that my statement was recorded. I have gone through statement dated xxxxxxx recorded under Section 161 Cr.P.C and attributed to me. However, this is not mystatement, though, the information recordedtherein is partly true. The statement is now Mark xxxxxxx.”

(i) Response of Witness I, while under cross-examination by the Ld. PP for CBI:

“A discussion took place with me by the CBI. No statement of mine was recorded. I have been shown a statement recorded under Section 161 Cr.P.C and attributed to me and this statementis seen by me for the first time in Court today.The statement is now Mark xxxxxxx. It is wrong to suggest that this statement was given by me to the IO.”

(j) Response of Witness J, while under cross-examination by the Ld. PP for CBI:

“I was questioned by the CBI, but I do not know if my statement was recorded by it or not. I have been shown a statement recorded under Section 161 CrPC and attributed to me. However, this is not the statement given by me to the CBI. The statement is now mark PW xxxxxxx. It is wrong to suggest that this statement was given by me to the CBI.”

(k) Response of Witness K, while under cross-examination by the Ld. PP for CBI:

I have gone through a statement recorded under Section 161 CrPC and attributed to me and it is not my statement. …… It is wrong to suggest that the statement contained in mark xxxxxxx is the statement given by me to the IO.…..

(l) Response of Witness L, while under cross-examination by the Ld. PP for CBI:

“CBI had recorded my statement. I was interrogated by the IO. No statement was readover to me by the IO. I have been shown astatement dated xxxxxxx recorded under Section 161 Cr.P.C and attributed to me. However, thisstatement was not made by me before the IO.The statement is now Mark xxxxxxx. It is wrong to suggest that I made this statement before the IO.”

II. In Coal Scam Cases:

(m) Response of Witness M while under cross-examination by the Author:

“I had stated in my statement U/S 161 Cr. PC to the IO that xxxxxxx xxxxxxx. Confronted with statement U/S 161 Cr. PC dated xxxxxxx Ex. PW xxxxxxx, the aforesaid fact is not mentioned.

(n) Response of Witness N while under cross-examination by the Author:

“I did state in my statement U/s 161 Cr.PC dated xxxxxxx that xxxxxxx xxxxxxx xxxxxxx. Confronted with statement u/s 161 Cr.PC dated xxxxxxx where it is not so mentioned. The statement is Ex. PW xxxxxxx.

(o) Response of Witness O while under cross-examination by the Author:

“I had stated in my statement u/s 161 Cr.PC about xxxxxxx. At this stage witness has been confronted with his statement u/s 161 Cr.PC dated xxxxxxx where there is no mention of xxxxxxxxx. The statement u/s 161 Cr. PC as above is Ex. PW xxxxxxx.”

(p) Response of Witness P while under cross-examination by the associate of the Author:

“I had stated to the IO in my statements U/S 161 Cr. PC that xxxxxxx xxxxxxx xxxxxxx. Witness has been confronted with his two statements U/S 161 Cr. PC Dated 06.07.2015 and 24.08.2015, where it is not mentioned that xxxxxxx xxxxxxx.

I had however stated to the IO in my statements U/S 161 Cr. PC that xxxxxxx xxxxxxx xxxxxxx. Witness has been confronted with his two statements u/s 161 Cr. PC dt. xxxxxxx and xxxxxxx, where no such fact are mentioned.”

(q) Response of Witness Q while under cross-examination by the Author:

“I must have told to the IO that xxxxxxx xxxxxxx. Witness has been confronted with his statement under Section 161 Cr. P.C. dated xxxxxxxx where nothing is mentioned in this regard. The statement is Ex. PW xxxxxxx.

3.14. Taken together, it has been noticed that:

(a) Statements under Section 161 Cr.P.C. are often not read back to the witnesses;

(b) Statements under Section 161 Cr.P.C. are often denied by their supposed makers as inaccurate;

(c) Statements under Section 161 Cr.P.C. often do not reflect what the witness has stated.

3.15. That is why statements under Section 161 Cr.P.C. are neveradmissible as evidence of their contents, but are only admissible as a previous inconsistent statement, and for that limited purpose only. That is to say, statements under Section 161 Cr.P.C. are simply incapable of providing admissible evidence of a prima facie case.

4. Conclusion:

4.1. In view of the same, it is concluded that the view taken by the UK Courts is not in consonance with the law applicable to statements recorded under Section 161 Cr.P.C. and the Courts need to relook at the view taken by it, as the same is far from reality of situation in India, as per the prevalent law.

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Advocate Vijay Aggarwal represented various accused in the 2G scam case and has been representing diamantaires Nirav Modi and Mehul Choksi  in various cases.

In the field of industrial jurisprudence, a declaration can be given by the Court that the termination of a workman is wrong and that such workman continues to be in service. The doctrine that contract of personal service cannot be enforced does not apply in case of Industrial Disputes Act, 1947 (I.D. Act). What happens when such a declaration is given? Does the workman simply join duty and is paid from the date of joining or is the workman also entitled to receive back wages for the period of wrongful termination? The term back wages does not find mention in the I.D. Act. and it is through judicial pronouncement that the concept came to be evolved. 

In the initial years, grant of full back wages was the normal rule. In Hindustan Tin Works v. Employees (1), the Supreme Court held that ordinarily, a workman whose service has been wrongfully terminated would be entitled to full back wages and a divergent view would be a premium on the unwarranted litigative activity of the employer. The idea behind grant of full back wages was to put the workman at the same position as he/she was prior to the illegal termination. If the service was not terminated, the workman would have continued to work and would have earned his/her wages. In Hindustan Tin Works, it was observed that for challenging an illegal termination, a workman has to go through gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an big factor that he may not survive to see the day when relief is granted.If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved. Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages. There are also instances where an employer acts in gross violation of the statutory provisions or principles of natural justice or is guilty of victimising the employee/ workman, in such cases the Court ought to direct payment of full back wages. In Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (2), the Supreme Court opined that the Courts must keep in mind that in matters of illegal/ wrongful termination, an employee suffers on account of wrongdoings of the employer. By not awarding full back wages to the employee in such cases, it would amount to giving a premium to the employer of his wrongdoings. Deepali Gundu Surwase’s case has been recently followed by the Supreme Court in Jayantibhai Raojibhai Patel v. Municipal Council, Narkhed & Ors. Municipal Council, Narkhed & Ors. (3)

Over the years, the law on grant of back wages has undergone a change. There has been a shift from grant of full back wages to partial back wages or no back wages at all. In Novartis India Ltd. v. State of W.B. (4), the Apex Court held that back wages cannot be claimed as a matter of right. In Divisional Controller, Gujarat SRTC v. Kadarbhai J. Suthar (5), it was held that there is no automatic entitlement to full back wages on the finding that termination was not lawful.  In M.P. SEB v. Jarina Bee (6), it was ruled that when an order of dismissal/ termination/ removal is set aside and the employee is reinstated, back wages do not automatically follow unless and until the order expressly directs payment of back wages. In P.V.K. Distillery Ltd. v. Mahendra Ram (7), the Supreme Court observed that even if the workmen have been illegally and unjustifiably terminated, the same does not create a right of reinstatement with full back wages. Court was of the view that with the passage of time, a pragmatic view should be taken and the management should not be compelled to pay for the period for which the workman made no contribution at all. In another case namely U.P. Drugs & Pharmaceuticals Co. Ltd. v. Ramanuj Yadav (8) while dealing with wrongful retrenchment, the Supreme Court refused to interfere with the finding of denial of back wages on the ground of financial position of the management and pending proceedings before Board for Industrial and Financial Reconstruction. The workmen were directed to be reinstated with consequential service benefits but without any back wages. In M.P. v. Arjunlal Rajak (9), the services of the workman were terminated on the ground of closure of the production unit. Since the unit itself was closed, the Supreme Court, instead of granting back wages granted a monetary compensation of Rupees Ten Thousand. 

While considering the grant of back wages, the Court takes into account various factors (10). One of the most important factors being whether the employee/ workman was gainfully employed at another place during the period of his/her termination/ removal. The onus is on the employee to establish that he/she was not gainfully employed during this period. Even the employer has the right to establish with the aid evidence that the employee/ workman concerned was gainfully employed and hence not entitled to back wages. If it is proved that the workman/ employee was gainfully employed, the Court would not grant any back wages. There are also instances where an employee is terminated or dismissed by way of a departmental enquiry on account of misconduct and the Court confirms the misconduct but interferes with punishment for being disproportionate to the misconduct and awards a lesser punishment resulting in reinstatement of the employee. In such cases, reinstatement itself is a consequential benefit arising from imposition of lesser punishment and hence no back wages are awarded in such a case. 

Apart from the above, the Courts in India have also applied the principle of “no work no pay” in some cases while declining to award back wages and limiting the relief to reinstatement only. The principle of “no work no pay” applies in cases where the workman/employee has remained absent without leave or justification. These are cases where the absence is proved but the termination is set aside on account of procedural lapses on the part of the employer in terminating the employee (11). 

There is no straight jacket formula on what should be the quantum of back wages. There is a discretionary element involved and it has to be dealt with on case by case basis depending upon the facts and circumstances. The adjudicatory authority or the Court takes into account various factors such as length of service of the workman, employee, nature of misconduct if any, whether such misconduct has been proved or not, financial condition of the employer and similar other factors. One of the important criteria for awarding back wages is the length of service that an employee/workman has rendered. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman/employee is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which is often quite large, is considered inappropriate. Another consideration is whether there has been any delay on the part of the workman/employee in availing legal remedy. In Executive Engineer, O&M Division, Karnataka Electricity Board v. C. Guddappa (12), the Supreme Court set aside the order of the High Court granting full back wages to the workman on the ground that there was a long delay on the part of the workman in approaching the Labour Court and the said issue was not examined by the Courts below. 

Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or daily wager (13). While in the case of a regular/permanent workman, back wages are awarded, however, in case of a daily wages, compensation is awarded instead of reinstatement and back wages. In BSNL v. Bhurumal (14) followed in State of Uttarakhand v. Raj Kumar (15), Supreme Court held that when it comes to illegal termination of a daily wage worker (violation of Section 25-F I.D. Act), in such cases instead of reinstatement with back wages, the workman should be given monetary compensation. Reason being that a daily wager can neither claim regularization nor has a right to continue as a daily wager.

There is no fixed criteria or basis for awarding back wages. Ultimately, it is the discretion of the Court/Tribunal which is based on various factor such as the situation of the industry i.e. whether it is operating or not, whether the financial position of the management is sound, whether granting of back wages would place an impossible burden on the employer, whether the workman/employee concerned has secured another employment or not, etc. Based on these factors, there is a vestige of discretion left in the Court/Tribunal to make appropriate consequential orders relating to the quantum of back wages.

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Cauveri Birbal is an advocate practising primarily in the areas of labour and service laws. She can be reached at cauveribirbal@gmail.com

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1.(1979) 2 SCC 80

2. (2013) 10 SCC 324

3. 2019 (11) SCALE 277

4. (2009) 3 SCC 124

5. (2007) 10 SCC 561

6. (2003) 6 SCC 141

7. (2009) 5 SCC 705

8. (2003) 8 SCC 334

9. (2006) 2 SCC 711

10. Surendra Kumar Verma v. Central Government Industrial Tribunal-cum-Labour Court (1980) 4 SCC 443

11. United India Insurance Co. Ltd. v. Siraj Uddin Khan, (2019) 7 SCC 564

12. (2002) 10 SCC 577

13. Haryana Roadways v. Rudhan Singh, (2005) 5 SCC 591

14. (2014) 7 SCC 177

15. (2019) 14 SCC 353