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Character Merchandising: The Concept And Its Growth

June 21, 2022 0Comments 118Views

By Kumar Shashwat

June 22, 2022

Character merchandising can be defined as the revision or secondary utilization, by the creator of an imaginary character or by a real human being or by one or several sanctioned third parties, of the indispensable personality characteristics (such as the name, image or appearance) of a character in relation to a range of goods and/or services with an outlook to creating in potential consumers a yearning to get hold of those goods and to use those services because of the customers’ attraction with that character. It should already be highlighted that the person or legal entity which will systematize the merchandising activity (the merchandiser) will infrequently be the creator of the fictional character or the real person concerned. The various property or personality rights vesting in the character will be the subject matter of contracts (such as transfer or license agreements or product or service endorsement agreements), enabling one or more than a few involved third parties to be regarded as authorized users of the character.

Registration of Character Trade Marks

The primary function of marks that are symbols in its real sense is to indicate the origin of the goods so that the consumers can distinguish who is responsible for the goods that are placed in public. On the one hand, the creator of the fictional characters is not themselves engaged in such merchandising activities. Still, they may want to procure the trademark rights for their characters in order to regulate and license their use for commercial or merchandising purposes. On the other hand, sportspersons, actors, and pop stars use their characters most rewardingly.

However, in English Law, the Trade Marks Act 1938 prohibits the use of the trademark for trafficking, dealing mainly in a commodity in the right and not primarily to indicate or identify merchandise in which the owner of the trademark is interested; do not contain such restrictions with respect to the registration of trademarks.

In Tarzan,[1] the candidates who were solely qualified to produce movies, records, and commercialization concerning the renowned anecdotal character Tarzan were denied enlisting the word Tarzan in relation to movies, attractive tape recordings, amusement toys and merchandise. The Court of Appeal held that since the word Tarzan was outstanding and was a piece of the dialect, it neglected to meet all requirements for enrolment as a developed or invented word. It was additionally held that the word had an immediate reference to the character and nature of the items since a film managing the endeavours of Tarzan would be portrayed as a “Tarzan” film, and the candidates’ different items were merchandise connected with Tarzan. Hence, the trademark was not considered to be fit for recognizing the candidates’ merchandise. Tarzan couldn’t be enlisted as a trademark because of the way that it spoke of the character and subsequently did not appear to show the origin of the items.

The idea that fame acts as the central impediment to getting the registration of a trademark was further explained in the Elvis Presley case[2]. The candidates, who were the legitimately perceived successors of any promoting exercises carried for the famous personality Elvis Presley, were denied enlisting of the words ” Elvis” and “Elvis Presley”, and the mark “Elvis A. Presley” regarding toiletries. The Court said that every one of the products for which enrollment was looked for was legitimately viewed as memorabilia since they were promoted principally because of their connection with the name and picture of Elvis Presley. It was in this manner held that the imprints were not unmistakable; buyers obtained stock identifying with Elvis Presley, not because they considered that Elvis Presley Enterprises showcased it, but since it conveyed the name or picture of Elvis Presley. The Court’s view was that the general population is occupied with acquiring the merchandise identified with a most loved name as a famous person and is not concerned whether licensees of such a big name create such items. Finally, the Court held that when a character is well known, it is exceptionally far-fetched that the check will mean the inception of the item.

Also, in the Diana case,[3] the executrices of the Estate of Diana, Princess of Wales connected to enlist as a trademark the words “Diana, Princess of Wales” for a wide variety of products and ventures. However, the application was rejected since it was held that the words Diana, Princess of Wales needed peculiarity. It was held that while most individual names might be considered to symbolize the inception of the merchandise, this is not the situation where an acclaimed name is worried; in such cases, it is conceivable that the name will serve to mean the topic of the items, rather than its beginning. It was further held that a normal customer would not expect that all memorabilia bearing the Princess’ name were marketed under the control of one undertaking in charge of their quality.

Legal Perspective

“Copyrights

Exactly when an anecdotal character is introduced in academic work, as a creative work, or an abstract work, it is spoken to by the gauges of copyright law. Usually, the makers of the works hold copyright over these characters. When these characters are a part of a film or the producer has copyrights over the character. Note that the copyright may not come to exist in any fictional character appearing in a copyrighted work without any other person’s information. For such a character to be freely secured under the degree of copyright certification, the character must be managed independently of the story, cartoon or movie that it belongs to. In this instance, Star India v. Leo Burnett, the above was noted:

“The fictional characters are generally drawings in which copyright subsists, e.g., cartoon, and celebrities are living beings who are otherwise very famous in any particular field, e.g., film stars, sportsmen. It is necessary for character merchandising that the characters to be merchandised must have gained some public recognition, that is, achieved a form of independent life and public recognition for itself independently of the original product or independently of the milieu/area in which it appears. Only then can such character be moved into the area of character merchandising. This presumes that the character has independently acquired such reputation as to be a commodity in its own right independently of the goods or services to which it is attached or the field/area in which it originally appears. It is only when this is established on evidence as a fact, that the claimant may be able to claim a right to prevent anyone else from using such a character for other purposes.”

Identity rights

The producer of a film won’t have full rights to exploit the characters that can’t be disengaged from the performer portraying the same. In such a case, the character benefits of the performing craftsman apply despite the producer’s copyrights. This, from time to time, offers a climb to a battle between the two sorts of rights. For example, there has been a conflict between a performing artist assuming the part of a well-known character Gutthi in an Indian TV show and a TV station, which is additionally the maker of the arrangement. Because of this conflict, the performing artist moved out of the show and went ahead to begin his new show on an alternate TV slot. The principal TV slot issued an open proclamation that the character Gutthi had been made for the first show. Thus, it has copyright over the same. The on-screen character issued another announcement declaring his identity rights and saying that it is he who has accomplished acknowledgement as and is constantly related to Gutthi. Inferable from this conflict of rights, none of the parties could utilize the character Gutthi in their separate shows amid the season of the conflict. Identity rights unmistakably apply in instances of superstar marketing. Copyright is relevant just to the degree there are photos of superstars, and they are to be popularized; the picture takers have rights over the photographic works.

Trademarks

Since the vital character components of fanciful and authentic people are utilized as a part of the connection to business articles, trademark law standards likewise come into light in instances of character promotion. For example, in India, a trademark is known as any gadget, heading, plan, mark, word, name, signature, and so on which is fit for a graphical representation and which ought to be equipped for recognizing merchandise and/or administrations of one gathering from those of the other. This broad clarification makes it conceivable to have any anecdotal or real individual’s crucial identity elements as trademarks. For example, the name of a character and his picture, signature, character outlines, voice, catchphrases he utilized, and so forth could be ensured under trademark law.

When it comes to craftsmanship, one needs to consider the most unmistakable identity properties that are celebrated and deserving of trademark security. Character promoting is the initial step for treating acclaimed anecdotal characters or genuine identities as exchange signs. Famous people additionally authorize their identity and name rights under the laws of passing off. For example, in a noteworthy case concerning the identity and trademark privileges of the well-known pop singer “Daler Mehndi”, the pop star and his partner, the offended party, could effectively uphold trademark rights over the name “Daler Mehndi” against the respondents who earned tremendous financial gains by the offering of toys in light of his identity. Even though the name of Daler Mehndi or his fundamental identity components were not enrolled as trademarks, custom-based law gives exclusive privileges to the pop star in his name and identity. The productive instance of passing off could be brought for the execution of customary law marketing rights by the proprietors of such characters in case crucial parts of their characters’ personalities are used without their endorsement. Getting statutory trademark security is also profitable in bringing actual blue instances of trademark infringement against manhandling. The proprietors of universally acclaimed characters like Batman, Harry Potter and so forth have likewise procured statutory rights by enlisting the characters’ names as trademarks in India. On the Indian side, the proprietors of the fictional character Munnabhai (that showed up in the motion picture titled “Munnabhai MBBS” and its continuation “Lage Raho Munnabhai”) have additionally enlisted such character name as a trademark.

[1] Tarzan Trade Mark [1970] FSR 245, CA.

[2] Elvis Presley Trade Mark [1997] RPC 543.

[3] Diana Princess of Wales Trade Mark [2001] ETMR 25. See also the similar view of Isaac,B., ‘Merchandising or Fundraising? Trade Marks and the Diana, Princess of Wales Memorial Fund’ (1998) 20 European Intellectual Property Review 441.

Books:

1. Ahuja V K, Law Relating to Intellectual Property Rights (English), Lexis Nexis, 2nd Edition, 2013.

2. Wadehra B L, Law Relating to Intellectual Property (English), Universal Law Publication, 5th Edition, 2012.

3. Ananth Padmanabhan, Intellectual Property Rights HB (English), Lexis Nexis- New Delhi, 1st Edition (Hardcover), 2012.

Articles:

1. John Perry Barlow, The Economy of Ideas, Wired, Mar. 1994

2. Emem Uduak Udobong, Copyright infringement in the search engine, December 2005.

Kumar Shashwat is Founding Partner at Kumar & Singh Associates.

Columns

Disciplinary Proceedings: Dilemma and Dogmas

June 2, 2022 0Comments 822Views

By Deo Prakash Singh

June 2, 2022

Disciplinary proceedings are the documented rules that define the relationship and control between a master and a servant. The power of the master to exercise control over the servant is to maintain and sustain the working environment at the workplace to achieve the dedicated goal and objectives. It signifies the obligation of the servant to obey and act in accordance with the code of conduct formulated by the master.

Disciplinary action is imposed by the employer on an employee against an act of misconduct by ordering punishment. The proceedings are perhaps the most vast and litigated branches in India and are full of dilemmas and dogmas. Service matters have the maximum number of commentaries, statutes, rules and regulations. The author here tries to discuss disciplinary proceedings — how they are conducted in public service tribunals, the procedure through which cases filed, and how they are conducted.

The general conception that a government job, in contrast to a private job, is a safe and secure job that ensures uninterrupted pay, perks and other service benefits is a misnomer. The statement may be true to a considerable extent because of the play and importance of natural justice in conducting disciplinary proceedings in public service. But the master in this case is that the mighty state has the capacity to diminish the future prospects of a government delinquent employee. Not only this, in public service the government delinquent employee has no way except to knock the doors of the court which is a time-taking and expensive exercise that sometimes even remains undecided. During the pendency of the litigation the employee may be deprived of service benefits and promotions. It is very difficult to decide between the two — whether justice delayed is justice denied or justice hurried is justice buried. The principle of natural justice sometimes derails from its impregnated objective.

Natural Justice and Disciplinary Proceedings

The principles of natural justice, generally, are taken care of while conducting disciplinary proceedings.

Article 311 of the Constitution of India guarantees the protection of rights of civil servants against arbitrary dismissal, removal and reduction in rank. This protection is not available where the employee has been convicted of a criminal charge or the competent authority is satisfied that compliance with the rules of natural justice is not reasonably practicable or the President or the Governor is satisfied that holding of an enquiry is not expedient in the interest of the security of the state. This is one of the express exceptions referred to in Article 310 and not subject to any control by any other provision of the Constitution. This provision in the Constitution aims at providing security of tenure to a government servant. This shield is a security to the extent of providing certain safeguards which have been made conditions precedent for dismissal or removal or reduction in rank of a government servant.

It is established that the principle of natural justice mainly comprises of following two rules:

(I) no person is to be condemned without hearing

(II) no person shall be a judge of his own cause

These two are the basic features. It means that fairness in conducting the proceedings shall be the essence of practice and the delinquent employee should be treated fairly which may culminate into punishment. The fairness principle requires a tribunal to proceed and hear the aggrieved employee on the points of law and procedure of fairness to protect the rights ensconced in the law book.

Elements of Disciplinary Proceedings

The proceedings are conducted under the domestic jurisdiction of the employer. To hold an enquiry into the misconduct of the employee is the most important feature and a precondition to the imposition of any punishment on a public servant. It is a universal principle and procedure because of the fact that almost all government servants and employees of statutory corporations or government companies are governed by rules which generally provide for a detailed procedure to be followed before imposing any punishment.

A departmental proceeding is a quasi-judicial proceeding and hence the enquiry officer’s performance a quasi-judicial function. The articles of charges levelled against the delinquent employee must be found to have been proved. The enquiry officer is duty-bound to arrive at a finding upon taking into consideration the materials brought on record by the parties. The proceeding has to be conducted against any person in a strict adherence to the statutory provisions and the principles of natural justice. The charges would be specific, definite and distinct setting out the details of the incident which forms the basis of the charges. No enquiry can be sustained on vague charges. The enquiry has to be conducted fairly, objectively but not subjectively. The findings should not be unreasonable and perverse nor the same should be based on conjectures and surmises. The court is very a specific on proof and suspicion. Every act or omission on the part of the delinquent employee cannot be a misconduct. The authority must record reasons for arriving at the findings of fact in the context of the statute defining the misconduct. Evidence adduced should not be perfunctory. Even if the delinquent employee does not take the defence or raise any protest, that does not absolve the inquiring authority from being vitiated for the reason particularly in respect of an order involving adverse or penal consequences.

Central Civil Services (Classification, Control and Appeal) Rules, 1965 under Rule 11 enumerated major and minor penalties and the procedure to conduct the disciplinary proceedings. It has also provided, under many decisions of the Government of India, the difference and definition of major and minor penalties in which major penalty shall be in case of grave and serious charges.

Administrative Tribunals

The Law provides for the establishment of Administrative Tribunal for the Union and the states specifying the jurisdiction and powers of such tribunals, procedure to be followed by the tribunals and excludes the jurisdiction of all courts except the Supreme Court.

The law also provides that the president in case of Union and the Governor in case of a state may make rules and regulations of services and posts in connection with the affairs of the state to such services.

Here it is important to include that only government servants throughout a state can file their respective cases in the tribunal to get their grievances redressed. It means that the tribunals are vested with the authority to hear the grievances of the employees of the state/Union only whereas further the employees working with private companies or organisations which are not owned by the state can only file their cases under industrial disputes in labour courts and industrial tribunals.

Preliminary Enquiry

Normally the disciplinary authority appoints a preliminary enquiry officer to look into the alleged charges against the government servant and if the preliminary enquiry officer is prima facie guilty of the alleged misconduct, he may prepare a charge-sheet of the same and produce it before the disciplinary authority. The proceeding may not be known to the delinquent employee. The disciplinary authority on the basis of the charge-sheet submitted by the preliminary enquiry officer proceed to initiate departmental enquiry and it may start afresh and may not be from the point where the preliminary enquiry officer left. It is an established rule that the preliminary enquiry officer cannot be appointed as enquiry officer in the full-fledged enquiry as he may be prejudiced to the delinquent employee because he had already framed a charge-sheet against him in the preliminary enquiry.

Procedure To Conduct Enquiry In Case Of Major Penalty

The appointing authority/ disciplinary authority has to issue in order to initiate the disciplinary proceedings against the government servant. Sometimes the Governor of the state has to do the same as he is being the appointing authority of the specified government servants. The disciplinary authority may himself enquire into the charges or appoint an officer subordinate to the enquiry officer to enquire into the charges. The charge-sheet shall be approved by the disciplinary authority. The charges should be precise and clear to facilitate the government servant of the facts and circumstances against him. The documentary evidences and the names of witnesses proposed should prove the same along with oral evidence.

The delinquent government servant shall be required to submit a written statement of his defence in person within a specified time period mentioned in the book of rules preferably within 15 days from the date of issue/receipt of the order. The government servant shall have to state that whether he desires to cross examine any witness mentioned in the charge-sheet or whether he desires to produce some new or extra evidence. He shall also be informed that in case a written submission is not filed within the specified date it will be presumed that he has none to furnish and the enquiry officer shall proceed to complete the enquiry ex parte.

It has also been decided by a court judgement that after the charge-sheet is given to the employee, an oral enquiry is must and notice should be given to the employee intimating him about the date, time and place of enquiry. It has also been laid down in this case that if an opportunity to the employee to produce witnesses or to rebut the evidence against him is not given then the whole enquiry is liable to be quashed ab initio and the punishment on the basis of such enquiry report shall not be sustainable.

It is settled law that the documents relied in support of the charges have to be proved in departmental enquiry by the enquiry officer in the presence of the delinquent employee. The government servant is also at liberty to ask for documents in case they are mentioned in the charge-sheet. But is the same have not been annexed with the charge-sheet, then opportunity of inspection has to provided.

Per contra if the charged government employee admits the charges, the enquiry officer shall submit his report to the disciplinary authority without further proceedings in enquiry but where the charged government servant denies the charges, the enquiry officer shall proceed with the enquiry to call on the witnesses as per the rules framed under the law in the presence of the government employee who shall be given the opportunity to cross examine such witnesses. After recording the aforesaid evidence, the enquiry officer records oral evidence if the charged government servant desired so in his written defence submission. The enquiry officer may ask what he pleases at any time from any witness or from the person charged with a view to discover the truth or to obtain proof. The disciplinary authority may appoint a presenting officer to present the facts of charges from the government side whereas the charged government servant too can take help of a retired government employee or legal practitioner if the enquiry officer gives his consent for it.

When the enquiry is complete, the enquiry officer shall submit its enquiry report to the disciplinary authority along with all records. The report shall consist of sufficient record of brief facts, the evidence and statement of findings on each charge with reasons thereof but the enquiry officer shall not make any recommendation about the penalty. The enquiry officer shall have to submit his final report within six months from the date of issuance of the order by the disciplinary authority and he is bound to adhere to the time-limit. In any case the total time-limit to complete a disciplinary proceeding should not exceed 18 months from the date of initiation of the proceedings, i.e., from the date of issuance of the framing of charges letter.

If there is vigilance angle, the advice of CVC shall be sought and the time limit for the advice shall be maximum 30 days. For the second advice from the CVC, the same time-limit of 30 days shall be available. Similarly the time limit for concurrence from the UPSC shall be 30 days.

Stage of Tribunal

The cause of action arises due to the impugned punishment order by the disciplinary authority against the delinquent employee and here the role of lawyers come into play to represent the petitioner/the applicant under section 19 of the Administrative Tribunal Act, 1985. Before bringing a case of disciplinary proceeding to the tribunal, the aggrieved employee against whom an adverse order has been passed has to make representation to the appellate authority against the order. It is only after the representations remain unanswered by the authorities or if the delinquent employee has not been satisfied then he can bring his case to the tribunal. The government servant challenges an adverse order as bad order in the tribunal.

The aggrieved employee says in his submissions in the court that the proceeding conducted against him were unjust, unwarranted, malicious and/or arbitrary and the charges levelled against him are unjustified and against the principles of natural justice. The petitioner prays to quash the impugned order as if it had never been passed so that he may be entitled to all consequential service benefits to which he is entitled.

The petitioner may pray for interim relief but the interim relief sought should be different from the final relief. It is prayed in the court that if the impugned order is left to stand it will do irreparable loss to the petitioner.

Conclusion

Disciplinary action cannot be based on breach of statutory rules or administrative actions which do not supplement rules or are inconsistent with them. Before initiating any disciplinary proceeding the master must be prima facie satisfied that the employee has committed some misconduct. The misconduct must be committed during the tenure of the service. An allegation of misconduct against an officer in relation to his quasi-judicial functions cannot be made merely on the basis that he made a mistake of judgement while passing the order. This is because the administrative adjudication also requires to perform their functions without fear or favour which may be defeated by the constant threat of disciplinary proceedings.

Disciplinary proceedings cannot be initiated only on the basis of suspicion. There must be a reasonable basis. Those disciplinary proceedings shall be quashed if the exercise of power was not bona fide, e.g. anonymous complaints, biased preliminary enquiry and disregard to the directions of the Chief Justice by the full court. Similarly, if an employee is allowed to retire on attaining the age of superannuation even after initiation of disciplinary proceedings, major management cannot be imposed on him thereafter except under rare circumstances since retirement results in severance of relationship of master and servant.

Deo Prakash Singh an Advocate practicing at the Patna High Court.

Columns

RERA: Good News for the Third-Party Purchasers of Ex-Developer

May 31, 2022 0Comments 142Views

By Pallavi Ghaisas

May 31, 2022

A.Pre-RERA

Prior to commencement of Real Estate (Regulation and Development) Act, 2016, (“RERA”), in landmark judgment in Vaidehi Akash Housing Pvt.Ltd. Vs. New D.N. Nagar Co-op.Housing Society Union Ltd. & Ors. [2015(3)ABR270] (“Vaidehi’s Judgement”), decided on 1^st December 2014 by Hon’ble Justice S C Gupte of Hon’ble Bombay High Court, inter alia, decided the rights of third party purchasers (“Allottees”) under Maharashtra Ownership Flats Act, 1963 (“MOFA”) vis-à-vis society after termination of development agreement with Developer (“Ex-Developer”). It was observed that the development agreement executed by the Ex-Developer with the society was on principal to principal basis and as per agreement executed by the Allottees with Ex-Developer, the rights of Allottees thereunder were subject to Ex-Developer’s rights and not higher than those. It was held that (i) society was not a co-promoter U/s. 2 (c) of MOFA and was merely in the position of owner vis-à-vis third party purchasers and (ii) the purchasers did not have any enforceable right, under MOFA, against the Society or the New Developer appointed by society, after termination of development agreement with Ex-Developer.

B. RERA- Regime

In the matter of Peter Almeida and Tangerine Almeida vs. M/s. Shubh Enterprises and others [Compliant No. CC006000000055575], filed by complainants therein being allottees, facts are similar to the said Vaidehi matter, the essence being the society terminates the development agreement with Developer (Ex-Developer) and appoints a New Developer for construction on land held by society. The allottees who paid monies to the Ex-Developer for securing flats under allotment letter executed with Ex-Developer sought direction from Regulatory Authority, against the society and the New Developer, for (i) executing agreement for sale and (ii) allotting flat in newly constructed building.

The Maharashtra Real Estate Regulatory Authority, Mumbai (“Regulatory Authority”) by its order dated 5^thNovember 2019 directed that registered agreement for sale to be executed with complainants therein (being allottees of Ex-Developer) in accordance with the allotment letter issued by Ex-Developer. The ratio of the Vaidehi’s Judgement was not applied by the Regulatory Authority inter alia for the reason that it was before commencement of RERA and it held that after transfer of development rights in favour of the New Developer, the commitment of Ex-Developer will have to be honoured by the New Developer and society.

By common judgement dated 6^th May 2022 in the appeals filed therein, the Maharashtra Real Estate Appellate Tribunal dealt with the question of- “Whether Allottees are entitled to reliefs as claimed in the complaint against the Society and New Developer” while answering the same in negative, it was inter alia reasoned as follows:

i. Since Society is not a party to contract / agreement for sale executed between Allottees and the Ex-Developer, the society cannot be held liable to any obligations that are required to be performed by Ex-Developer towards Allottees;

ii. Society has no privity of contract with the Allottees and the transaction is purely and only between the Allottees and the Ex-Developer as per settled position of law;

iii. Project registered by the New Developer does not involve the circumstances where there is a transfer in its favour as contemplated under Section 15 of RERA

iv. Neither the society nor New Developer appointed by it are under obligation to recognise claims of allottees as prayed for in the complaint therein;

v. In the absence of privity of contract, the Society and New Developer cannot be held liable to Allottees and consequently Allottees are not entitled to reliefs as claimed against the Society and New Developer;

vi. Under these circumstances, since New Developer has already taken over the project, no flat can be made available to Allottees in the project;

vii. The alternative claim of Allottees for refund, if at all, can be considered only against the Ex-Developer who has received the amount of earnest money from Allottees.

The complaint was remanded to the Regulatory Authority for considering and deciding the claim of allottees afresh to the extent of refund of the amount against Ex-Developer after hearing the concerned Parties.

Impact of RERA Judgement on Third-Party Purchasers

There are many projects halted or abandoned by Developers almost everywhere. The Society in such cases usually terminates the Development Agreement and appoints a New Developer. In such circumstances the allottees who have paid monies to Ex-Developer will now have an option to enforce their rights against Ex-Developer, before RERA authorities, for refund of amount paid by them.

Pallavi Ghaisas is a Lawyer specialising in the field of Real Estate. She works at Federal & Company, a Mumbai-based law firm.

Columns

Bombay High Court Lays Down Guidelines For Abandoned Vessels Under Arrest

May 23, 2022 0Comments 141Views

By Vikrant Shetty

May 23, 2022

On the last day of Hon’ble Mr. Justice S.J. Kathawalla’s tenure as judge of the Hon’ble Bombay High Court, the Division Bench comprising of him and the Hon’ble Mr. Justice Milind N. Jadhav, provided a huge relief to crew members who remain on abandoned vessels that are under arrest, by providing guidelines that would have to be followed by the owner, arresting party, Sheriff of Mumbai and the concerned P&I Club. In the matter of The Swedish Club vs V8 Pool Inc &Ors. and Pradeep &Ors. Vs. M.T. GP ASPHALT the Hon’ble Court considered the following questions:

Whether crew wages accrued on board a vessel after her arrest by the Admiralty Court would rank as “Sheriff’s expenses”?
Whethera party who has approached theAdmiralty Court for leave to pay the crew their wages can stand in the shoes of the crew members and claim such amounts from the sale proceeds of the vessels as Sheriff’s expenses and / or in priority as a maritime lien?

Brief Background of Facts:

The subject Vessel M.T. GP ASPHALT I was arrested on 22^nd December, 2020, by V8 Pool Inc.

Swedish Club was the Protection and Indemnity Club (“P&I Club”) with which the vessel was entered.On 22^nd December, 2020, after receipt of emails from the crew informing that the vessel supplies were running low, FTI Consulting, the company undertaking restructuring of the owner of the Defendant vessel, arranged for enough supplies to last a month.

On 7^th January, 2021, the Crew addressed an email to the Swedish Club informing them that the salaries for the month of November and December 2020 were overdue and that arrangements would have to be made for food and water. The Swedish Club, on 21^st January, 2021 filed an Interim Application,seeking leave of the Ld. Single Judge to make certain payments in respect of maintenance of the vessel and well-being of the crew and that the same be treated as “Sheriff’s Expenses”, which would allow the amounts to be reimbursed as a first charge from the eventual sale of proceeds from the Vessel. The Ld. Single Judge disallowed the application and held that the Swedish Club was obligated under the Maritime Labour Convention (“MLC”) to make the payment of the wages and was not a Volunteer. The Ld. Judge held that if the Swedish Club makes payment for the expenses post arrest (including wages), it will not be treated as Sheriff’s expenses. The Swedish Club would have to file a suit, for the recovery of the same.

Both the Swedish Club and the Crew Members appealed from the respective orders which were allowed by the Hon’ble Bombay High Court[1].

Guidelineslaid down:

For the benefit of the crew the Hon’ble Court found it necessary to frame some guidelines to be followed in the case of abandoned vessels that are under arrest. However, the Hon’ble Court clarified that these are only guidelines, and the Admiralty Court is at its liberty to use its discretion in any given case.

1. A vessel under arrest / its crew will be considered abandoned if:

a. After the arrest of the vessel, the crew addresses a communication to the owner with a copy to the P&I club, the demise/bareboat charterer (if any), the arresting party and the Sheriff of Mumbai stating that the vessel requires supplies (food/ provisions/ bunkers/ other necessaries)and/ or one or more of the crew’s wages remain unpaid for at least 2 months, with details of when the supplies are expected to run out and of the outstanding wages; and

b. The owner and the demise/bareboat charterer (if any) fails to make the necessary supplies to the vessel and make payment of the said outstanding wages within 10 days or responds stating its inability to maintain the vessel and crew.

2. The arresting party shall bring the crew’s communication to the attention of the Admiralty Court within 4 days of such communication.

a. If the owner of arrested vessel has not entered appearance in the suit, the Admiralty Court shall pass an order calling upon the owner and such demise/bareboat charterer (both) to remain present in court within 3 days. The order shall be communicated to the owner by the arresting party. If the owner remains absent, the Admiralty Court shall record that the vessel and crew have been abandoned.

b. If the owner or demise/bareboat charterer (if any) of the arrested vessel has entered appearance in the suit or appears pursuant to the order above specified, the Admiralty Court shall direct the owner and such demise/bareboat charterer (both) to make the necessary supplies to the vessel and make payment of the said outstanding wages within a further 3 days, failing which the vessel and crew shall be considered abandoned.

3. If the owner or demise/bareboat charterer (if any) of the arrested vessel has entered appearance in the suit or appears pursuant to the order above specified, the Admiralty Court shall direct the owner and such demise/bareboat charterer (both) to make the necessary supplies to the vessel and make payment of the said outstanding wages within a further 3 days, failing which the vessel and crew shall be considered abandoned.

4. If a vessel is so abandoned, and pending the sale of the vessel, any party (including a P&I club which has humanitarian obligations to the crew on board the vessel at the time of abandonment) is desirous of rendering supplies or funding expenses for the safety and/or preservation of such vessel and/or subsistence of the crew and/or payment of wages and/ or repatriation of crew and/ or reducing the crew on board to a skeleton crew and claiming the same as Sheriff’s expenses is required to do either of the following:

a. Approach the office of the Sheriff of Mumbai to urgently file a report to seek directions from the Admiralty Court for such steps to be taken as may be required and for leave of the Admiralty Court to permit that party to put the office of the Sheriff in funds for such steps and for such expenses to be Sheriff’s expenses. The office of the Sheriff shall immediately file a report before the Admiralty Court. All expenses and payments shall be routed through the Sheriff’s office.

b. Approach the Admiralty Court directly with prior notice to the arresting party concerned as well as the office of the Sheriff of Mumbai seeking leave to do any of the above for the safety and/or preservation of the vessel and/or subsistence of the crew and/or payment of wages. In such case all expenses and payments shall be routed through the office of the Sheriff of Mumbai.

c. If such an application is made, the Admiralty Court shall hear the same on an urgent basis and pass necessary orders. Unless there are serious doubts about the expenses, in the interests of the well-being of the abandoned crew members on board the arrested vessel, leave shall generally be granted for such expenses to be Sheriff’s Expenses and recoverable from the sale proceeds on an immediate basis.

d. If such an application is made, the Admiralty Court shall hear the same on an urgent basis and pass necessary orders. Unless there are serious doubts about the expenses, in the interests of the well-being of the abandoned crew members on board the arrested vessel, leave shall generally be granted for such expenses to be Sheriff’s Expenses and recoverable from the sale proceeds on an immediate basis.

5. In case of an emergent situation where the situation on board the vessel is precarious, any party may after giving at least 24 hours’ prior notice in writing to the parties to the suit as well as the office of the Sheriff may render the supplies/ incur expenses for a limited period of time i.e. 7 days. Such party must thereafter at the earliest make an application to the Admiralty Court to declare such payments made as Sheriff’s Expenses and for any further expenses it desires to incur as per the procedure laid out above.

a. Any party seeking reimbursement of such payments made, shall file an application with all relevant documents in support including proof of payments.

b. The Admiralty Court shall refer the claim of such party to the Commissioner for taking accounts or such other officer of the Court to examine and scrutinize the claims. The officer so appointed shall give a hearing to the parties and examine and scrutinize the documentation and shall prepare a Report for the Admiralty Court.

6. In the event, crew on board an arrested vessel have not been paid their wages, all such crew members shall also be entitled to approach the Admiralty Court to treat their wages accrued post arrest as Sheriff’s Expenses. The Admiralty Court shall refer the crew’s claim to the Commissioner for Taking Accounts or such other officer of the Court to examine and scrutinize the crew’s claims. The Commissioner for Taking Accounts or such other officer so appointed shall give a hearing to the parties and shall prepare a Report for the Admiralty Court.

7. There may be situations where the vessel and crew have already been abandoned prior to the arrest. A vessel/ crew will be considered to have already been abandoned before the time of arrest if the crew has addressed a communication to the owner with a copy to the P&I club stating that the vessel requires supplies (food/ provisions/ bunkers/ other necessaries) and/ or one or more of the crew’s wages remain unpaid for at least 2 months, with details of when the supplies are expected to run out and of the outstanding wages and the owner has failed to supply the vessel or make payment of the outstanding wages within ten days thereof or has responded stating its inability to maintain the vessel and crew. If an abandoned vessel is arrested, for all expenses post the arrest, the procedure above said shall be followed.

8. It is expected that the P&I clubs with which such vessels (whether abandoned before or after the arrest) are entered will promptly approach the Admiralty Court for appropriate orders. The same procedure as stated above for reimbursement of payments made above will apply.

9. The Admiralty Court shall, as far as possible, expeditiously pass orders on all applications including for immediate reimbursement of any such payments as above specified first in terms of priority from the sale proceeds of the vessel.

Implication of the Guidelines:

It is yet to be seen whether courts will apply similar principles to those who provide salvage services to arrested vessels. However, the aforesaid guidelines have brought much required clarity with respect to the rights of the crew members of an abandoned vessel under arrest and the steps that can be taken for maintenance of the vessel and its crew, including payment of wages during the period of arrest of such vessel.

The above Article is written by Vikrant Shetty, Partner of DhruveLiladhar& Co. with assistance from Associate Sakina Electricwala.

[1]Order dated 23^rd March 2022, passed in Comm. Appeal No. 108 of 2021 and Comm. Appeal No. 111 of 2021

Columns

On Non-Fungible Tokens (NFTs)

April 23, 2022 0Comments 370Views

By Anand Kumar Rai

April 23, 2022

NFT stands for non-fungible token. An NFT is a digital cryptoasset that represents real-world objects, for example, artwork like music, painting, crafts, videos, game items, etc. They are sold and purchased online, frequently like cryptocurrencies, and they are generally encoded with the same underlying software as many cryptocurrencies.

Cryptocurrencies and physical money are “fungible,” which means they can be exchanged or traded for one another. They’re also equal in value—one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. But, NFTs are different, each NFT has a unique digital signature that makes it impossible for NFTs to be exchanged for each other or equal to one another (hence, non-fungible). For example, two persons A and B having different denominations of notes but having equal value could exchange their money the way we exchange when we need change. But both of them having two different art pieces with different digital signatures cannot exchange the same as both are two different digital tokens having different digital signatures.

Need for NFT:

The next question that arises is – what is the need for NFT?Anyone can view the bulk of images online for free. So why spend millions on something that could easily screenshot or downloaded? The answer is whenever we download or take screenshots, we don’t own the artwork. We don’t have rights over the artwork. NFT allows the buyer to purchase or sellthe ownership of the original item. It contains built-in authentication, which serves as proof of ownership. Collectors value these “digital bragging rights” more than the item itself.So, if we buy an oil painting via NFT, instead of getting an actual oil painting to hang on the wall, we will get a digital file instead.

Regulation and legal position of NFTs in India:

Transactions of NFT is risky business. An NFT’s value is entirely based on what someone else is willing to pay for it. Therefore, demand in the digital market will drive the price rather than the fundamental value of the asset, technical or economic indicators, which typically influence stock pricesover stock exchanges, and at least generally form the basis for investor demand. So, it is not guaranteed that if for example,we buy a piece of artwork for Rs 1000 having a perception that in future we will be able to sell it for a higher price, we will be able to do so, as there is a possibility that we will lose all of our money in case nobody wants to buy that particular artwork.

Since it is a new form of digital trading like cryptocurrency,there is no specific regulation or law that bans the trading ofNFTs in India. Also, there is no explicit definition that classifies NFTs as a type of cryptocurrency or a type of derivative. However, the government is planning to introducea law that will ban private trading of cryptocurrencies which is more focused towards criminalising the possession, issuance, mining, trading and transferring of crypto-assets. India is further planning to build a structure for introducing official digital currency, but it is a long way to go. But, as of now, there is no definition of crypto-assets in Indian legislation, so it’s intricate to decide whether NFTs fit into this category of an asset or not and will be banned along with other cryptocurrencies.

1. NFTs under Securities Contract (Regulation) Act, 1956:

In a parallel opinion, it is suggested that NFTs will be categorised as derivatives under the Securities Contract (Regulation) Act, 1956 (“SCRA“).

Section 2(a)(ac) of SCRA defines derivatives as:

(ac)] “derivative” includes–

(A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;

(B) a contract which derives its value from the prices, or index of prices, of underlying securities]]

[(C) commodity derivatives; and]

[(D) such other instruments as may be declared by the Central Government to be derivatives;]

Section 18A of SCRA defines the condition for a derivative trading to be legal as:

18A. Contracts in derivatives

Notwithstanding anything contained in any other law for the time being in force, contracts in derivative shall be legal and valid if such contracts are

(a) traded on a recognised stock exchange;

(b) settled on the clearinghouse of the recognised [stock exchange; or] in accordance with the rules and bye-laws of such stock exchange.]

[(c) between such parties and on such terms as the Central Government may, by notification in the Official Gazette, specify,]

Looking into both the sections, the relevant information we take out is that contracts in derivatives will be valid and legal only if such contracts are traded on a recognised stock exchange and settled on the clearinghouse of the recognised stock exchange, in accordance with the bye-laws of such stock exchange. But in the case of NFT right now these two conditions are not being fulfilled. So, if NFTtrading is deemed to be a contract in derivative for the purposes of SCRA, then it would make the sale and purchase of NFTs in private illegal.

So, if government include the NFTs in the category of Derivatives without having any alternative platform like a recognized exchange or indexes that regulate NFT’s pricing on that particular exchange, then It will become Illegal.

The government has also prepared a draft to regulate the cryptocurrency and is likely to adopt, the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill’ of 2019 in 2021

The draft defines the cryptocurrency under section 2(1)(a) as:

“Cryptocurrency, by whatever name called, means any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes;”

Under the above mentioned definition, it can be analysed that NFTs could be considered to be of the following value:1. Representation of value, which is exchanged with the inherent value in any business activity, for example, a proprietary code could be sold as an NFT to a business.2. As a store of value, for example, buying any artwork/art pieces.

However, there is an exemption to this under Section 3(3) of the bill, as per Section 3(3) – Nothing in this Act shall apply to the use of Distributed Ledger Technology for creating a network to enable the delivery of any financial or other services or for creating value, without involving any use of cryptocurrency, in any form whatsoever, for making or receiving payment.

The only problem here with the above section is that it is unable to explicitly define whether NFTs would fall under the scope of services as laid down under the above exemption or not.

2. NFTs under Sale of Goods Act, 1930:

Unless the government doesn’t come up with an explicit definition and regulations defining NFTs, they can be considered as “goods” under the Sale of Goods Act, 1930.

Section 2(7) of the Act defines the Goods as:

(7 ) “goods” means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;

The definition of goods provided under the sales of goods act doesn’t explicitly exclude NFT from its scope. With appropriate regulation from the side legislature in its very right, can include this term under the provisions of this Act.

3. NFTs under FEMA:

Currently, the marketplaces over which NFT transactions are performed are operated by entities established outside India. As the Foreign Exchange Management Act, 1999 (“FEMA”)governs cross-border economic transactions in India, but there are no explicit regulatory guidelines from RBI for crypto-assets or NFTs. If we consider existing provisions of FEMA, crypto-assets and NFTs could be considered as intangible assets like software and intellectual property under FEMA. However, determining the location of an NFT is an open question, the location where its owner resides or where the asset is physically present?

Since most of the NFT’s buyers and sellers as well as the operators of marketplaces are located outside India, Indian participants in the NFT purchase or selling could be seen as performing cross-border transactions. This will put a questionunder FEMA, that whether in these transactions there is an export or import of an intangible asset. Also, for a transaction to fall under the ambit of FEMA the transaction has to have a corresponding remittance of fiat currency done through authorised banking channels. Therefore NFT transactions are in an ambiguous position under FEMA.

4. NFT under Finance Act, 2020:

The Finance Act, 2020 expanded the ambit equalization levy (“EL”) and ensures its applicability on e-commerce operators at a rate of 2 per cent on the consideration received by such e-commerce operators from ‘e-commerce supply or services’ made. Accordingly, the NFT marketplaces may be subject to EL at a rate of 2% on consideration received by them fromtransactions made, if they are also considered as ‘e-commerce supply or services’ made to a person resident in India, a person using an Indian internet protocol (“IP”) address, or a non-resident in certain specified circumstances

But, applying this provision to the purchase of NFTs would lead to certain complications. 1. The definition of an e-commerce operator under the EL provision is very wide and may extend to any electronic service which may facilitate a buyer and a seller to carry out an NFT transaction, including the blockchain operators and not just the NFT marketplace. 2. At no point during the transaction does the NFT marketplace have access to the sale consideration of the NFT. This non-custodial feature results in a situation of impossibility where the marketplace would have to pay 2% of the entire consideration, even when it does not have access to the consideration amount. 3. It is unclear whether the gas fees, which goes neither to the seller nor the e-commerce operator but directly to blockchain miners, would be considered to be part of the tax base for levy of EL in the hands of the NFT marketplace. 4. It may be impractical or unfeasible for the e-commerce operator to keep track of the IP address or the location or residency of each buyer or seller for determining the applicability of EL.

5.NFT under GST:

Having no explicit definition of NFTs under the Indian legislation makes it difficult to levy GST on NFT transactions. Under the Goods and Services Tax (“GST”) regime, the NFT classification is very important to impose GST, it should be clearly classified into intangible assets and goods, as typically, the tax treatment under GST should generally follow from the nature of the underlying asset. For example, whether a digital art as NFT will be treated as an intangible asset or good for levying income tax and Goods and Services Tax (GST). GST applicability will also depend on whether the NFT platform is located in India or outside of India.

The GST regime also obligates an electronic commerce operator to collect tax at source at a specified rate of the net value taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator (Section 52 of the CGST Act, 2017).In this regard, while the Tax Collected at Source (TCS)obligation under GST may apply to a normal marketplace wherein the consideration for the supply is collected by the marketplace. In the case of an NFT marketplace, the TCS obligation under GST should not apply, as the consideration for the supply is not collected by the NFT marketplace but, directly transferred between the parties through an automated contract.

Way forward:

In India, it is in the developing phase. It is up to the government how they have been regulated, the government has been trying to regulated cryptocurrencies also, similarly,NFTs would also expect to be regulated in a similar fashion. It is yet to see how government will react such instruments. Also, there are no guidelines from RBI for regulating NFTs and their transactions.

As of now NFTs are billed as digital art pieces and there is no particular regulation defining the position of NFTs, so we might have to rely on regular principles of the Indian Contract Act and the Sales of Goods Act, for the sale/purchase of NFTs.

Anand Rai is an associate at Sarvaank Associates. He advises and acts on transactions and corporate commercial work, with a special focus on corporate finance and policy. I

Interviews

Interviews, Trending

Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur

February 3, 2020 0Comments 1866Views

Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.

Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?

A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.

Q: So you have had the feeling that the establishment is trying to interfere in the matters?

A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.

Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?

A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.

Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?

A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.

Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?

A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.

Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?

A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.

Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?

A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.

Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?

A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.

Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?

I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.

Q: What kind of technology would you recommend that courts should have?

A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.

Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?

You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.

Q: Do you think law should permit this to death row convicts?

A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.

Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?

A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.

Q: What about capital punishment as a means of punishment itself?

A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.

Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?

A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.

Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?

A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?

Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?

A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).

Q: You think giving proper training to police to prepare a case will make a difference?

A: Yes, it will make a difference.

Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?

A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.

Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?

A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.

Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?

A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.

Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?

A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.

Q: What will happen if in a democracy these rights are controlled by hook or by crook?

A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.

Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?

A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.

Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?

A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.

Q: Is there any other thing you would like to say?

A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.

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