Read Order: WE, THE PEOPLE OF INDIA v. UNION OF INDIA & ORS [DEL HC- W.P.(CRL) 1203/2024]
Tulip Kanth
New Delhi, May 21, 2024: In view of the fact that the petitioner, a law student, acknowledged his mistake and tendered his unconditional apology, the Delhi High Court has waived cost of Rs 75,000 which was imposed on him while dismissing his petition seeking extraordinary interim bail for Delhi Chief Minister Arvind Kejriwal.
The Division Bench of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora was considering the application filed under Section 151 Code of Civil Procedure (CPC), 1908 on behalf of the Petitioner seeking waiver of costs of Rs 75,000 imposed on him by this Court vide final order/ judgement dated April 22, 2024.
The petitioner’s counsel stated that the Petitioner is tendering his unconditional apology for his actions before this Court.It was further stated that after reading the final order, the Petitioner had understood the judicial system of the country as well as the laws of the land and had also learnt his lesson.
The counsel submitted that the Applicant-Petitioner is a student and is not earning anything at present and is fully dependent upon his parents.It was stated that the Applicant-Petitioner belongs to the lower middle class and is not in financial position to bear the above noted costs.
“This Court had imposed cost on the Petitioner as the contentions advanced in the writ petition were contrary to facts and the legal submissions therein were untenable in law. This Court was of the view that a certain course correction was required. Today, the Petitioner has acknowledged his mistake and tendered his unconditional apology. Keeping in view the aforesaid, the cost of Rs.75,000/- imposed on the Petitioner is waived”, the Bench held.
However, the Bench made it clear that in the event the Petitioner and/or its deponent were to file any fresh proceedings in any Court, a copy of the judgment dated April 22, 2024 as well as a copy of this order shall be annexed.
Read Order: KARNAIL SINGH v. STATE OF HARYANA & ORS [SC- REVIEW PETITION (CIVIL) NO.526 OF 2023]
Tulip Kanth
New Delhi, May 21, 2024: The Supreme Court has recalled its 2022 verdict whereby it was held that the vesting in the Panchayat is complete on mere assignment under Section 18(c) of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948. Noting that such a view was totally contrary to the findings recorded in the Constitution Bench judgment in Bhagat Ram & others vs. State of Punjab & others [LQ/SC/1966/300], the Top Court opined that a judgment of the Constitution Bench would be binding on the Benches of a lesser strength.
The State of Haryana, by way of a Government Gazette Notification dated February 11, 1992 inserted sub-clause (6) to Section 2(g) of the Haryana Village Common Lands (Regulation) Act, 1961 along with an explanation to the said sub-clause which received the assent of the President on January 14, 1992.Being aggrieved by the said amendment, the present review petitioner along with similarly situated landowners, holding land in villages, who contribute a share of their holdings to form a common pool of land called shamilat deh, meant exclusively for the common purposes of the village inhabitants filed a batch of Writ Petitions before the High Court. The Full Bench allowed the batch of Writ Petitions.
The State of Haryana challenged this decision wherein this Court held that certain essentials of Article 31-A of the Constitution of India were overlooked and remanded the matter back to the High Court for re-consideration of the issues in light of Article 31A of the Constitution of India. Accordingly, the Full Bench partly allowed the petition and held that the sub-section (6) of Section 2(g) of the Punjab Village Common Lands (Regulation) Act, 1961 and the explanation appended thereto, is only an elucidation of the existing provisions of the said Act read with provisions contained in the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948.
The State of Haryana filed a Civil Appeal which came to be allowed by judgment under review and the Writ Petition of the Original Writ Petitioners was consequently dismissed.Seeking review, the present Review Petition was filed before the Top Court.
On the scope of review, the Division Bench of Justice B.R. Gavai & Justice Sandeep Mehta opined that the review would be permissible only if there is a mistake or error apparent on the face of the record or any other sufficient reason is made out. The review of the judgment would be permissible only if a material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice. Such an error should be an error apparent on the face of the record and should not be an error which has to be fished out and searched.
The Bench noted that the Constitution Bench judgment in Bhagat Ram in unequivocal terms held that the machanged under Section 24 of the said Act. It further held that, the rights of thConstitutione holders are not modified or extinguished till persons have changed possession and entered into the possession of the holdings allotted to them under the scheme. In the said case, the specific contention raised by the State that the requirements as contemplated under Sections 23, 24 and 21(2) of the Consolidation Act were already complete and as such, the acquisition had already taken place before the Constitution (Seventeenth Amendment) Act, 1964, was specifically rejected.
In the light of these findings of the Constitution Bench, the Bench held that the finding of this Court in the JUR that the vesting in the Panchayat is complete on mere assignment under Section 18(c) of the Consolidation Act was totally contrary to the findings recorded in paragraph 5 of the Constitution Bench judgment in Bhagat Ram. As per the Bench, ignoring the law laid down by the Constitution Bench of this Court in Bhagat Ram and taking a view totally contrary to the same itself would amount to a material error, manifest on the face of the order. The review could have been allowed on this short ground alone.
Moreover, the non-consideration of the reasoning given by the Full Bench of the High Court in Jai Singh & others vs. State of Haryana (Jai Singh II) which findings were given by relying on the judgment of the Constitution Bench of this Court in Bhagat Ram, and not showing as to how the findings therein were erroneous in law, also amounted to an error, apparent on the face of the record.
Coming to the facet of stare decisis, the Bench stated that the non-consideration of the reasoning given by the Full Bench of the High Court in Jai Singh II, that on account of more than 100 decisions rendered by various Benches of the High Court, the doctrine of stare decisis is applicable, was also an error apparent on the face of the record.
Thus, observing that the JUR needs to be JUR needs to be recalled, the Bench allowed the Review Petition and also restored the appeal to file. The appeal is now directed to be listed for hearing peremptorily on August 7, 2024 at Serial No.1.
Read Order:PRITI AGARWALLA AND OTHERS v. THE STATE OF GNCT OF DELHI AND OTHERS [SC- CRIMINAL APPEAL NO (S). 348 OF 2021]
Tulip Kanth
New Delhi, May 21, 2024: The Supreme Court has held that the Metropolitan Magistrate did not commit an illegality in receiving the Action Taken Report from the jurisdictional police station while considering a case u/s 4 of the Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, 1989, as it is impermissible to take up the merits of negligence of duty by a public servant without recommendation of the administrative enquiry.
The Olympic Riding and Equestrian Academy, Eastern Jaunapur, New Delhi (OREA), is a training facility for enthusiastic equestrian athletes. Appellant Nos. 2, 3, 6 and Respondent No. 2 were the trainee athletes in OREA. The complaint in this case was filed in the year 2018 by Appellant No. 4 against the administrator of OREA. The said complaint was not made under any specific section of the Indian Penal Code, 1860.
The administrator, however, moved an application for anticipatory bail which stood dismissed. Appellant No. 1 and her husband filed yet another complaint against the administrator of OREA, on the alleged ill- treatment meted out to their son/Appellant No. 2 by the administrator. Another complaint alleging sexual harassment, cheating and cruelty towards animals was filed against the administrator by Appellant Nos. 3, 4 and 6. A WhatsApp group Alliance was created by Appellant No. 6, which included Appellant Nos. 2 and 3 and another trainee athlete at OREA. The administrator was informed about the conspiracy being hatched by the members of the Alliance WhatsApp group to kill the administrator and attack Respondent No. 2 by pouring acid on Respondent No. 2.
The administrator filed a complaint for protection and also to prevent any plan being executed either on the administrator or Respondent No. 2 by a few members of the WhatsApp group, Alliance. Respondent No. 2 filed a complaint against the Appellants herein under the SC/ST Act of 1989, which was the genesis for the present Criminal Appeal. The Respondent filed a Criminal Miscellaneous Application under sections 4(2) and 4(3) of the Act of 1989 before the Special Court on the basis of an application alleging that public servants neglected the duties and functions assigned to them by the Act of 1989. The Metropolitan Magistrate refused to take any action and the respondent approached the Delhi High Court and the Court directed the prosecution of SHO of P.S. Fatehpur Beri. The appeal before the Top Court was filed at the instance of Respondent Nos. 2 to 4.
It was observed by the Top Court that the Metropolitan Magistrate did not commit an illegality or irregularity seeking preliminary inquiry or receiving the Action Taken Report from the jurisdictional police station.
As per the Division Bench of Justice M.M. Sundresh & Justice S.V.N Bhatti, the impugned judgment expanded the discussion and recorded a few findings, which were not needed at all. Therefore, the order of the Magistrate calling upon a report in the circumstances set out above was held to be legal.
Referring to the SC/ST Act, it was opined that the cumulative effect of the structured application to a given situation is that the intentional insult or abuse coupled with the humiliation is made in any place within public view. The allegation, in the instant case, prima facie appeared to be an omnibus and ambiguous allegation. The specific allegation in the complaint on Appellant No. 2 was that Appellant No. 2 called Respondent No. 2 chuda, chamar, chakka and faggot. The allegation did not refer to the place nor the public view before whom it was made.
On this issue of what constitutes a public place, the Bench held that an important test for any place within public view is within the view of persons other than the complainant. In this case, the allegations read together or individually did not satisfy the requirement of having been made in public view.
Referring to sub-sections (1), (2) and (3) of section 4, the Bench noted that the commission or omission by a public servant has penal consequences and the willful neglect is recommended by an administrative enquiry and the cognizance can be taken thereafter. As per the Bench, the Magistrate would have the accusation of a party and view of the Department while deciding to take cognizance of the offence or not.
The Bench was of the view that the Metropolitan Magistrate at the relevant point of time was justified in ordering a preliminary inquiry on the application dated 09.05.2018 and receiving the Action Taken Report from the jurisdictional police station. Further, the accusations in the complaints did not satisfy as having been made in any place within public view. Therefore, in a case such as the present, directing registration of FIR and further steps was unsustainable.
Moreover, taking up the merits of the negligence of duty by the public servant would be without the recommendation of the administrative enquiry and is impermissible. The Metropolitan Magistrate, keeping in perspective the binding precedents under section 156(3) of the CrPC, applied his discretion to the circumstances of the case and concluded that no offence was made out in the application and complaint under section 4 of the Act of 1989.
Hence, setting aside the impugned judgment, the Bench allowed the Criminal Appeal.
Read Order: AJWAR v. WASEEM AND ANOTHER [SC- CRIMINAL APPEAL NO. 2639 of 2024]
Tulip Kanth
New Delhi, May 21, 2024: While observing that all the accused-respondents had remained in custody for less than three years for a serious offence of double murder, the Supreme Court has quashed the bail orders passed in their favour by the Allahabad High Court.
The incident in question had taken place on May 19, 2020 in the evening when the appellant-complainant, his two sons, Abdul Khaliq and Abdul Majid with some other persons were sitting in the baithak of his house for breaking the fast (Roza Iftar) and preparing to offer prayers. The accused persons (10 in number, namely, Nazim, Abubakar, Waseem, Aslam, Gayyur, Nadeem, Hamid, Akram, Qadir and Danish) arrived at the spot and indiscriminately fired at the appellant and his two sons. Both the sons of the appellant died on the spot and his nephew, Asjad was seriously injured. The appellant-complainant had alleged that there was previous enmity between the parties due to which the accused persons had attacked him and his sons.
Pertinently, Niyaz Ahmed, father of Waseem (accused No. 7) was not named in the FIR. His role in the incident came up during the course of the investigation conducted by the police and based thereon, his name was added as a co-accused. On completion of the investigation, a chargesheet was submitted under Section 173 Cr.P.C. against eight accused including Abubakar (accused No. 1), Niyaz Ahmad, Aslam (accused No.2) and Nazim (accused No. 8).
The appeals before the Top Court were filed against four different orders of the Single Judges of the Allahabad High Court on applications moved by Waseem (accused No. 7), Nazim (accused No. 8), Aslam (accused No. 2) and Abubakar (accused No.1) in the case registered under Sections 147, 148, 149, 302, 307, 352 and 504 read with Section 34 of Indian Penal Code, 1860 (IPC). The applications filed by them were allowed by different Benches of the High Court. Aggrieved by the said orders, the appellant-Complainant approached the Top Court.
At the outset, The Division Bench of Justice Hima Kohli and Justice Ahsanuddin Amanullah took note of the fact that this was the third time that the appellant-complainant had approached the Top Court for relief. Referring to the post-mortem report, the Bench observed that the deceased, Abdul Khaliq had received one firearm injury in his head and the cause of his death was cranio- cerebral damage as a result of ante-mortem firearm injury which was sufficient to cause death in ordinary course of nature. The post mortem report of the deceased, Abdul Majid showed that he had sustained one firearm entry wound in the abdomen and one exit wound corresponding to each other and the cause of his death was shock and hemorrhage as a result of ante-mortem firearm injury. The injury report of the injured, Asjad (nephew of the appellant-complaint) showed that he had sustained a lacerated wound on the skull and bruises and abrasion on other parts of his body. It was also noticed that so far the deposition of four eye-witnesses had been recorded (PW 1, 2, 3 and 4) and all of them had attributed a role to the accused respondents.
The Bench also set out certain parameters for granting bail. It observed that while considering as to whether bail ought to be granted in a matter involving a serious criminal offence, the Court must consider relevant factors like the nature of the accusations made against the accused, the manner in which the crime is alleged to have been committed, the gravity of the offence, the role attributed to the accused, the criminal antecedents of the accused, the probability of tampering of the witnesses and repeating the offence, if the accused are released on bail, the likelihood of the accused being unavailable in the event bail is granted, the possibility of obstructing the proceedings and evading the courts of justice and the overall desirability of releasing the accused on bail.
“It is equally well settled that bail once granted, ought not to be cancelled in a mechanical manner. However, an unreasoned or perverse order of bail is always open to interference by the superior Court”, it held.
The Bench also explained that if there are serious allegations against the accused, even if he has not misused the bail granted to him, such an order can be cancelled by the same Court that has granted the bail. Bail can also be revoked by a superior Court if it transpires that the courts below have ignored the relevant material available on record or not looked into the gravity of the offence or the impact on the society resulting in such an order.
The Bench further added that the considerations that weigh with the appellate Court for setting aside the bail order on an application being moved by the aggrieved party include any supervening circumstances that may have occurred after granting relief to the accused, the conduct of the accused while on bail, any attempt on the part of the accused to procrastinate, resulting in delaying the trial, any instance of threats being extended to the witnesses while on bail, any attempt on the part of the accused to tamper with the evidence in any manner.The Bench also made it clear that this list is only illustrative and not exhaustive. However, the court must be cautious that at the stage of granting bail, only a prima facie case needs to be examined and detailed reasons relating to the merits of the case that may cause prejudice to the accused, ought to be avoided. The bail order should reveal the factors that have been considered by the Court for granting relief to the accused. Reference was also made to the judgments in Puran v. Ram Bilas and Another [LQ/SC/2001/1208] ; Narendra K. Amin (Dr.) v. State of Gujarat and Another [LQ/SC/2008/991].
Coming to the facts of the case, the Bench opined that the High Court had completely lost sight of the principles that conventionally govern a Courts discretion at the time of deciding whether bail ought to be granted or not. The High Court has ignored the fact that the appellant-complainant had stuck to his version as recorded in the FIR and that even after entering the witness-box, the appellant-complainant and three eyewitnesses had specified the roles of the accused- respondents in the entire incident.
The High Court also overlooked the fact that the respondents have previous criminal history details whereof have been furnished by the Counsel for the State of UP. The accused Nazim was granted bail in 2017 and while on bail, he was alleged to have committed a double murder of the two sons of the appellant-complainant. Moreover, while on bail, there had been allegations that three of the accused- respondents herein had threatened one of the key eye-witnesses, Abdullah (PW-2) in open Court, thrashed him and threatened to kill him in the Court premises. The attempt to delay the trial on the part of the respondents has also surfaced from the records.
Most importantly, the High Court had overlooked the period of custody of the respondents-accused for such a grave offence alleged to have been committed by them. All the accused-respondents had remained in custody for less than three years for such a serious offence of a double murder for which they have been charged.
All these factors when examined collectively, left no manner of doubt that the respondents did not deserve the concession of bail. Thus, the Top Court quashed all the four impugned orders and directed the respondents to surrender within two weeks.
Read Order: Dani Wooltex Corporation & Ors v. Sheil Properties Pvt. Ltd. & Anr [SC- CIVIL APPEAL NO. 6462 OF 2024]
LE Correspondent
New Delhi, May 21, 2024: The Supreme Court has explained that mere absence in proceedings or failure to participate does not, per se, amount to abandonment and the Arbitral Tribunal can take recourse to Section 25 of the Arbitration and Conciliation Act, 1996 in order to continue with or terminate the proceedings if the parties remain absent.
The Division Bench of Justice Abhay S. Oka & Justice Pankaj Mithal was considering the issue about the legality and validity of the order of termination of the arbitral proceedings under clause (c) of sub-section (2) of Section 32 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) passed by the Arbitral Tribunal.
The first appellant, Dani Wooltex Corporation, is a partnership firm that owned certain land in Mumbai. The first respondent, Sheil Properties (Sheil), a private limited company, was engaged in real estate development. The second respondent, Marico Industries (Marico), is also a limited company in the consumer goods business. A part of the first appellant's property was permitted to be developed by Sheil under the Development Agreement and a Memorandum of Understanding (MOU) was executed by and between the first appellant and Marico, by which the first appellant agreed to sell another portion of its property to Marico. Under the MOU, Marico was given the benefit of a certain quantity of FSI/TDR. Marico issued a public notice inviting objections, to which Sheil submitted an objection and stated that any transaction between the first appellant and Marico would be subject to the Agreement.
The dispute between the first appellant and Sheil led Sheil to institute a suit for the specific performance of the MOU as modified by the alleged consent terms. The first appellant and Marico were parties to the said suit. Marico also filed a suit against the first appellant, and Sheil was also made a party defendant to the suit. The arbitral proceeding based on Maricos claim was heard earlier, culminating in an award.
Due to the COVID-19 pandemic, the set meeting was held a little later when the Arbitral Tribunal directed the first appellant to file a formal application for dismissal of the claim of Sheil and permitted Sheil to file a reply. Accordingly, the first appellant filed an application invoking the Arbitral Tribunals power under clause (c) of sub-section (2) of Section 32 of the Arbitration Act. The contention raised by the first appellant in the said application was that Sheils conduct of not taking any steps for eight years showed that the said company abandoned the arbitral proceedings. The Arbitral Tribunal passed an order terminating the arbitral proceedings in the exercise of power under Section 32(2)(c) of the Arbitration Act.
Sheil filed an application before the Bombay High Court to challenge the legality and validity of the order of the Arbitral Tribunal by taking recourse to Section 14(2) of the Arbitration Act. By the impugned judgment and order, the Single Judge set aside the order of termination of the proceedings. The appellants disputed this judgment.
Referring to Sections 14 & 15, the Bench held that an Arbitrator always has the option to withdraw for any reason. Therefore, he can withdraw because of the parties' non-cooperation in the proceedings. But in such a case, his mandate will be terminated, not the arbitral proceedings.
Placing reliance upon Sections 25 & 32, the Bench clarified that if a party fails to appear for a hearing after filing a claim, the Arbitrator cannot say that continuing the arbitral proceedings has become unnecessary. Abandonment by the claimant of his claim may be grounds for saying that the arbitral proceedings have become unnecessary. However, the abandonment must be established. Abandonment can be either express or implied. Abandonment cannot be readily inferred.
“Mere absence in proceedings or failure to participate does not, per se, amount to abandonment. Only if the established conduct of a claimant is such that it leads only to one conclusion that the claimant has given up, his/her claim can an inference of abandonment be drawn. Merely because a claimant, after filing his statement of claim, does not move the Arbitral Tribunal to fix a date for the hearing, it cannot be said that the claimant has abandoned his claim. The reason is that the Arbitral Tribunal has a duty to fix a date for a hearing. If the parties remain absent, the Arbitral Tribunal can take recourse to Section 25”, it added.
The Bench also stated, “The failure of the claimant to request the Arbitral Tribunal to fix a date for hearing, per se, is no ground to conclude that the proceedings have become unnecessary.”
Coming to the facts of the case, the Bench observed that there was no abandonment either express or implied. The failure to challenge the award on Marico’s claim would not amount to abandonment of the claim filed by Sheil in January 2012. In the claim submitted by Sheil, a prayer was made in the alternative for passing an award in terms of money against the first appellant.
“Therefore, we hold that there was absolutely no material on record to conclude that Sheil had abandoned its claim or, at least, the claim against the first appellant”, the Bench said while also noting that till the award was passed in Marico’s claim, Sheil’s representative was always present at all hearings till the passing of the award. After the award, the Arbitrator never convened a meeting to deal with Sheil’s claim. Hence, the finding of the Arbitrator that there was abandonment of the claim by the first appellant was held to be not based on any documentary or oral evidence on record. As per the Bench, the Arbitrator committed illegality as such a finding could never have been rendered on the material before the Arbitral Tribunal.
Thus, the Bench concurred with the view of the Single Judge and dismissed the appeal. Noting that the sole Arbitrator had withdrawn from the proceedings, the Bench held that the parties would take necessary steps to get the substituted Arbitrator appointed in accordance with law.
Read Order: SMT. SHYAMO DEVI AND OTHERS v. STATE OF U.P. THROUGH SECRETARY AND OTHERS [ SC- CIVIL APPEAL NO. 5539 OF 2012]
LE Correspondent
New Delhi, May 21, 2024: While upholding the land allotments made under the Uttar Pradesh Zamindari Abolition and Land Reforms Act (UPZALR Act) in the year 1994, the Supreme Court has made it very clear that the Collector has the power to initiate suo moto action for cancellation of allotment under sub-section (6) of Section 122-C in case of fraud. The Top Court reaffirmed that the suo moto power should be exercised within a reasonable period of time.
The factual scenario of this case was such that in the year 1969-70, the khasra plot in Rampur Kedhar Village, UP was designated as a Panchayat Ghar but later it was declared unsuitable in 1993. On the request of the village Pradhan a portion of the said plot was re-assigned for residential use by the Assistant Collector and subsequently different plots of land in said survey number came to be allotted to different individuals including the writ petitioners under Section 122-C(i)(d) of Uttar Pradesh Zamindari Abolition and Land Reforms Act (UPZALR Act).
After 13 years, the Secretary/Lekhpal of Bhumi Prabandhank Samiti, Rampur forwarded a report to the jurisdictional Tehsildar opining thereunder that plot No.185 had been originally designated as Panchayat Ghar and classified under Section 132 of UPZALR Act and accordingly recorded in the revenue records, which had been unlawfully allotted for residential use. The Tehsildar in turn forwarded a proposal to the District Magistrate for cancellation of the allotment which resulted in show cause notices being issued to the writ petitioners and the same was duly replied by them by filing objections.
An application came to be filed by the petitioners to decide the issue of the limitation as preliminary issue, since the proceedings had been initiated after 13 years from the date of allotment contending inter alia that within a period of 3 years the proceedings ought to have been initiated. The Additional Collector opined that there is no limitation fixed under the Act and proceeded to reject the application filed.
The appeal before the Top Court was filed challenging the order of the Allahabad High Court whereunder the writ petition filed by the appellants (writ petitioners) challenging the order passed in Revision came to be dismissed. Consequently the order passed by the Additional Collector holding that proceedings for cancellation of the patta could be started at any time came to be upheld.
The State Counsel submitted that the revenue was empowered under the UPZALR Act to cancel the illegal and fraudulent allotment of land made in favour of the writ petitioners and as such suit had been instituted for cancellation of allotment for which no limitation has been specified under Section 122-C(6) of UPZALR Act and particularly when the land in question had been reserved as Panchayat Ghar it would be governed under Section 132 of the UPZALR Act.
The Division Bench of Justice C.T. Ravikumar & Justice Aravind Kumar noted that the writ petitioners who are rustic and illiterate villagers had submitted applications for allotment of land for purposes of house construction in the village. After the allotment was made, the writ petitioners and other allottees put up construction by putting up residential accommodation and had been residing therein with their family members. However, after a period of 13 years, the Lekhpal submitted a report for cancellation of such allotment.
On the issue of limitation, the Bench referred to the judgment in State of Punjab Vs. Bhatinda Milk Producer Union Limited [LQ/SC/2007/1247] wherein it has been held that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. “In the teeth of the expression any time not being found in sub-section (6) of Section 122-C, it would not detain us for too long to set aside the impugned orders”, the Bench said.
The Bench was of the view that on the basis of presumed irregularities, the Tehsildar had jumped to the conclusion that allotment was irregular, against law and approval of allotment was on the basis of forged signature of Sub- District Magistrate. However, the basis of such a conclusion, namely the signature of the Sub-District Magistrate having been forged, was not specified. Moreover, no allegation of whatsoever nature had been attributed to the allottees of having forged the signatures. In this background, the Bench opined that the principles enunciated by this Court in Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K. Suresh Reddy [LQ/SC/2003/797] would be squarely applicable to the facts on hand and as such the order impugned herein couldn’t be sustained.
Further, placing reliance upon Additional Commssioner, Revenue and Others v. Akhalaq Hussain and Another [LQ/SC/2020/318], the Bench said, “We also make it clear that though the power of the Collector is available to initiate suo moto action for cancellation of allotment under sub-section (6) of Section 122-C in case of fraud and such foundational facts would disclose the same, it would suffice to initiate the proceedings as fraud vitiates all proceedings as held in Akhalaq Hussains case referred to supra.”
Another factor which swayed in the Court’s mind to quash the impugned order was the fact that pursuant to the allotment made in 1994 the allottees who are poor rustic villagers had constructed their houses and the allotment was made based on the approval granted by the then Sub-District Magistrate and they had been residing in the residential buildings so constructed by them for the last several years. “...to unsettle the same would result in heaping injustice to those poor hapless persons and particularly when the subject land has been utilized for allotment to the poor and houseless persons”, it held.
Thus, allowing the appeal, the Bench set aside the impugned order as well as the order passed by Additional Collector- respondent No.3 herein and the order of the Additional Commissioner, (Administration) Moradabad Division.
Read Order: Solapur Municipal Corporation v. Shankarrao Govindrao Patil and others Etc [SC- CIVIL APPEAL NOs. 9127-9132 OF 2018]
LE Correspondent
New Delhi, May 21, 2024: Noting the fact that the rights of several workmen are at stake and the issue pertaining to the employment status of workers in the service of Majarewadi Gram Panchayat would turn upon the conclusions that are to be drawn from new documents that have come on record, the Supreme Court has remanded the matter back to the Bombay High Court.
The issue for consideration in these appeals was regarding the status of the respondents herein, viz., the petitioners in the four writ petitions before the High Court, who were engaged in the service of Majarewadi Gram Panchayat, which was merged with Solapur Municipal Corporation (Corporation) along with ten other gram panchayats.
On 25.03.2003, the respondents herein, along with others, were regularized in the service of the Corporation with effect from 01.02.2003. Their claim before the High Court, however, was that they should be treated as having been absorbed in the service of the Corporation from 05.05.1992 itself, in view of the provisions of Section 493(5)(c) of the Bombay Provincial Municipal Corporations Act, 1949. On the other hand, the Corporation contended that they were continued on daily wage basis till 01.02.2003 and, therefore, their employment from 05.05.1992 could not be treated as regular service.
The main issue before the Division Bench of Justice A.S. Bopanna & Justice Sanjay Kumar was regarding the employment status of the respondents herein in the service of Majarewadi Gram Panchayat. The respondents claimed to be the regular employees of the said gram panchayat as on the appointed date, i.e., 05.05.1992. If so, they would be entitled to claim the benefit of Section 493 of the Maharashtra Municipal Corporations Act, 1949 ( Bombay Provincial Municipal Corporations Act, 1949). Section 493 states that the transitory provisions in Appendix IV shall apply to the constitution of the Corporation and other matters specified therein. Clause 5(c) states that all officers and servants in the employ of the said municipality or local authority immediately before the appointed day shall be officers and servants employed by the Corporation under the Act and shall, until other provision is made in accordance with the provisions of the Act, receive salaries and allowances and be subject to the conditions of service to which they were entitled to on such date. The first proviso thereto states that the service rendered by such officers and servants before the appointed day shall be deemed to be service rendered in the service of the Corporation.
The Bench took note of the admitted fact that no material was produced by the respondents before the High Court to establish that they were regular employees of Majarewadi Gram Panchayat before the appointed date. However, a photocopy of Majarewadi Gram Panchayats Resolution No. 83(8) dated 20.03.1992, in Marathi along with an English translation, had been produced. It was stated therein that all the employees working with Majarewadi Gram Panchayat till the end of 31.03.1992 were permanently appointed on regular salary, together with dearness allowance and other allowances. The names of such employees, their designations and their salaries were set out thereafter.
Apart from this document, original orders of appointment in Marathi issued by Majarewadi Gram Panchayat, along with English translations, to some of the respondents had also been produced. The orders of appointment were all dated 20.03.1992. These documents appeared to be genuine, on the face of it, and were duly authenticated by the officials concerned.
The Corporation, on the other hand, would refer to Resolution No.83(9) passed by Majarewadi Gram Panchayat on 20.03.1992, whereby several appointments of seasonal nature were made on a temporary basis. By Resolution No. 83(8), all the employees working with the gram panchayat till 31.03.1992 were permanently appointed whereas Resolution No. 83(9) specifically stated that the 48 temporary appointments made thereunder were to come into effect only on 01.04.1992. Therefore, those 48 appointees were not entitled to claim the benefit of Resolution No. 83(8).
Reference was also made to the Draft Notification reflecting the details of the proposed merger of the gram panchayats with the Corporation, issued by the Government of Maharashtra long before the happening of the events in Majarewadi Gram Panchayat in March, 1992, and it was contended that the entire exercise of the gram panchayat, even if true, was not a bonafide one and that no benefit could be extended to the respondents on the strength thereof.
Considering such aspects, the Bench opined that the the High Court had no occasion to consider it, as the documents in question were produced before the Top Court for the very first time.
“Though, ordinarily, we would not allow documentary evidence to be produced belatedly at the last stage, we are also mindful of the fact that the rights of several workmen are at stake and the issue for consideration would invariably turn upon the conclusions that are to be drawn from these new documents….Such an exercise would be more appropriate before the High Court rather than this Court. Further documentary evidence may have to be led, perhaps, in relation to these new documents and that is not a task that we would normally undertake in exercise of jurisdiction under Article 136 of the Constitution”, the Bench held.
Thus, the Bench observed that the matter would have to be reconsidered by the High Court of Maharashtra at Bombay in the light of and on the strength of the new documents. Allowing the appeals, the Bench restored the writ petitions to the file of the High Court.
The Top Court also held that both parties may be permitted to bring on record such documentary evidence as is deemed fit and necessary by the High Court, for proper reconsideration of the case. The entire matter is now left open for adjudication afresh by the High Court. Given the antiquity of this matter, the Bench has requested the High Court to give it due priority and dispose it of as expeditiously as possible.
Read Order: NATIONAL INVESTIGATION AGENCY NEW DELHI v. OWAIS AMIN @ CHERRY & ORS [SC- CRIMINAL APPEAL NO. 2668 OF 2024]
Tulip Kanth
New Delhi, May 20, 2024: The Supreme Court has clarified that the Code of Criminal Procedure (CrPC, 1973) shall be pressed into service from 31.10.2019 onwards in the Union Territory of Jammu & Kashmir. The Top Court partly allowed the appeal of the National Investigation Agency (NIA) in a case where the respondents attempted to ram into a convoy of the CRPF and opined that on the day when the investigation was completed, the Code of Criminal Procedure SVT., 1989 was in force within J&K.
October 31, 2019 is the day on which the Jammu and Kashmir Reorganisation Act came into effect.
Brief facts of the matter at hand are that a case was registered against the respondents under Sections 307, 120-B, 121, 121-A and 124-A of Jammu and Kashmir State Ranbir Penal Code SVT., 1989 (RPC, 1989), Sections 4 and 5 of the Explosive Substances Act, 1908, and Sections 15, 16, 18 and 20 of the UAPA, 1967 by the jurisdictional police.
The said case was re-registered by the appellant subsequent to the order passed by the Ministry of Home Affairs (MHA), Government of India. A complaint was conveyed by the District Magistrate, Ramban by way of a communication to the NIA Court in tune with Sections 196 and 196-A of the Code of Criminal Procedure SVT., 1989. Pursuant to the said complaint, investigation was duly completed by the appellant and the respondents were charge-sheeted for the offences under Sections 306, 309, 307, 411, 120-B, 121, 121-A and 122 of RPC, 1989, Sections 16, 18, 20, 23, 38 and 39 of UAPA, 1967, Sections 3 and 4 of Explosive Substances Act, 1908 and Section 4 of the Jammu & Kashmir Public Property (Prevention of Damage) Act, 1985, for making an attempt to ambush and ram the convoy of Central Reserve Police Force (CRPF) personnel by a Santro car laden with explosives. Before their attempt could succeed, a blast occurred resulting in the respondents fleeing from the place of occurrence.
While taking cognizance, the Special Judge, NIA concluded that no cognizance could be taken for the offences charged under Sections 121, 121-A and 122 of the RPC, 1989 as the procedure contemplated under Section 196-B of CrPC, 1989 wasn’t followed. Furthermore, cognizance was also not taken for the offence committed under Section 120-B of RPC, 1989 for the reason that neither was there any authorization, nor was there any empowerment as required under Section 196-A of CrPC, 1989. Resultantly, cognizance was taken for the remaining offences.
Aggrieved by the decision of the Special Judge, NIA, both the appellant and the respondents filed their respective appeals. The Division Bench of the Jammu and Kashmir held that the Special Judge was wrong on two counts, namely, that the complaint made was in accordance with Section 4(1)(e) of CrPC, 1989, and in view of the discretion available under Section 196-B of CrPC, 1989, there was no question of undertaking any mandatory preliminary investigation.
The appellants challenged the judgment rendered by the Division Bench of the Jammu & Kashmir High Court by which the judgment rendered by the Special Judge was confirmed in part, while remitting the issue pertaining to the charges framed under Sections 306 and 411 of the RPC along with Section 39 of the Unlawful Activities (Prevention) Act, 1967 (hereinafter referred to as UAPA, 1967) for taking cognizance afresh.
“There is nothing to infer either from the Act, 2019 or the Order, 2019 that CrPC, 1973 will have a retrospective application. However, the Order, 2019 did take into consideration all the difficulties that might arise by facilitating the continuance thereunder”, the Division Bench of Justice M.M. Surdresh & Justice S.V.N. Bhatti said.
“To make this position clear, the CrPC, 1973 shall be pressed into service from 31.10.2019 onwards, and thus certainly not before the appointed day”, the Top Court held while also adding, “ Thus, any investigation in currency at the time of repealing of any statute, as mentioned in Table 3 of the Fifth Schedule, followed by the introduction of the Act, 2019, shall continue under CrPC, 1989. However, the application of law thereon would be the CrPC, 1973. While so, the CrPC, 1973 cannot be made applicable when the earlier one (i.e. CrPC, 1989) was still in force.”
The Bench was of the opinion that while an investigation could continue after its initiation under the CrPC, 1989, by way of the application of the CrPC, 1973, it couldn’t be stated that even for a case where there was a clear non-compliance of the former, it could be ignored by the application of the latter.
The Top Court explained that Para 2(13) confers sufficient power on the investigating agency to deal with such a situation. “While we are holding that the requirement of an authorization or an empowerment is mandatory for conveying a complaint, it being at the conclusion of investigation, would not preclude the investigating agency from complying with it thereafter. It is an approval from an appropriate authority of the investigation having been completed.”
The Top Court was in complete agreement with the reasoning adopted by the High Court of Calcutta in Nibaran Chandra (supra) as the present was a case where an authority had failed to exercise the said power in granting an authorization.
On the facts of the case, the Bench observed that it was an omission caused by the appellant which needed to be rectified. “It being a curable defect, would not enure to the benefit of the respondents, particularly when they are yet to be charged in the absence of such sanction or empowerment”, the Bench said.
It was reiterated that the complaint was conveyed by the District Magistrate, Ramban to the Special Judge, NIA on 20.09.2019. Further, the investigation was completed with the filing of the chargesheet on 25.09.2019. Whereas, the appointed day for the Act, 2019 was 31.10.2019. Hence, on the day when the investigation stood completed, the CrPC, 1989 was in force within the Union Territory of Jammu & Kashmir.
Thus, the Bench set aside the impugned judgment insofar as it confirmed the judgment of the Special Judge, NIA, in not taking cognizance for the offence punishable under Section 120-B of the RPC, 1989. Accordingly, the Bench gave liberty to the appellant to comply with the mandate of Section 196-A of the CrPC, 1989, by seeking appropriate authorization or empowerment as the case may be. If such a compliance is duly made, then the Trial Court has been asked to undertake the exercise of taking cognizance, and proceed further with the trial in accordance with law.
Read Order: SUNITA DEVI v. THE STATE OF BIHAR & ANR [SC- CRIMINAL APPEAL NO. 3924 OF 2023]
Tulip Kanth
New Delhi, May 20, 2024: While observing that a Judge can never have unrestrictive and unbridled discretion without there being any guidelines in awarding a sentence, the Supreme Court has suggested constitution of an appropriate Committee on sentencing consisting of various experts and stakeholders.
The FIR, in this case, was registered under Section 376AB of the Indian Penal Code, 1860 and Section 4 of the Protection of Children from Sexual Offences Act, 2012 (POCSO Act, 2012) read with Section 3(2)(v) of the Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, 1989 (SC/ST Act, 1989). for the occurrence that took place in 2021. The case of the prosecution in nutshell was that the accused took advantage of a minor girl child and committed the offence of rape.
The accused was arrested and remanded to judicial custody which was further extended by the orders through video conferencing. The charge-sheet filed was taken on record without the FSL report. The prosecutor was directed to ensure the presence of the accused through video conferencing. On the day when arguments were to be heard on framing of charges were to be framed, the counsel appearing for the accused was provided with the documents, without being given any time and without ensuring that these documents were in fact shown to the accused.
Order for summoning of prosecution witness was passed without without taking into consideration the Witness Protection Scheme, 2018 and the statements of the witnesses were recorded in disregard of the provisions of the Rules for Video Conferencing for Courts, 2020.Thereafter, death sentence was imposed by the trial court. The High Court ordered for a de novo trial. Incidentally, the approach adopted by the Trial Court was found fault with.
Assailing the impugned judgment on merit, both the informant and the Trial Judge filed Criminal Appeals. Another Criminal Appeal was filed by the very same Judge who rendered a similar conviction and sentenced the accused to life imprisonment. The disciplinary proceedings initiated were dropped on the administrative side. However, an application was filed by the Judge alleging that certain administrative work had been taken away from him, apparently on the basis of the impugned judgments, and therefore, he should either be restored with the said power or transferred to some other place.
On a perusal of the impugned judgments, the Division Bench of Justice M.M. Sundresh & Justice S.V.N. Bhatti opined that the High Court, while passing both the impugned judgments, had not only called for the records and rendered findings of fact, but also considered them in detail.
“At every stage, the accused was denied due opportunity to defend himself. The appellant judicial officer was obviously acting in utmost haste. Every trial is a journey towards the truth and a Presiding Officer is expected to create a balanced atmosphere in the mind of the prosecution and the defence. It seems to us that the decision was rendered in utmost haste. It would be humanly impossible to deliver the judgment within half an hours time running into 27 pages consisting of 59 paragraphs in the first case and similarly in the other. The lawyer for the defence cannot fight against the court”, the Bench said.
The Top Court was of the view that at every stage, including framing of charges, there was a constant denial of due opportunity and hearing. The accused was not able to consult his lawyer. He was not even served with the copies, though his lawyer received the same before framing of the charges. Moreover, neither the provisions of the Witness Protection Scheme, 2018 had been invoked nor the Rules for Video Conferencing for Courts, 2020 were followed. The accused was merely shown the court's proceedings and the writing was on the wall for him. On facts, even in the other Criminal Appeal the trial had commenced and concluded in a single day. “When the charges are very serious, Courts should be more circumspect in discharging their solemn duty”, it held while also adding, “The appellant judicial officer is fortunate that no action was taken against him. We do not wish to say anything more on this, except by stating that in the absence of any proposed action, there is no question of hearing the appellant.”
On the application filed seeking intervention over the action taken on the administrative side, the Bench granted liberty to the appellant to approach the High Court on the administrative side. Dismissing the appeal, the Bench directed that the trial court shall keep in mind the mandate of POCSO Act, 2012 while recording the evidence of the victim and complete the trial expeditiously in view of Section 35 of the POCSO Act, 2012.
“The Government of India represented by the Secretary for the Ministry of Law and Justice shall file an affidavit on the feasibility of introducing a comprehensive sentencing policy and a report thereon, within a period of six months from today, as indicated above”, the Bench held while also adding that he Registry shall forward a copy of the judgment to the Department of Justice, Ministry of Law and Justice, Government of India.
Read Order: IN RE: T.N. GODAVARMAN THIRUMULPAD AND ORS v. UNION OF INDIA & ORS [SC- IA NO(S). 2930 OF 2010, 3963 OF 2017, 160714 OF 2019, 77320 OF 2023 AND 79064 OF 2023]
Tulip Kanth
New Delhi, May 20, 2024: While directing the Central Empowered Committee (CEC) or the relevant Competent Authority to adjudicate upon an application seeking permission to construct a health/eco-resort in Hoshangabad District of Madhya Pradesh, the Supreme Court has opined that the applicant is justified in claiming that its proprietary rights guaranteed under Article 300A of the Constitution cannot be infringed merely on account of the pending writ appeal before the Madhya Pradesh High Court.
The interlocutory applications, before the Top Court, had been preferred by the applicant M/s Shewalkar Developers Limited being aggrieved by the inaction of the respondents in deciding the application filed by the applicant seeking permission to construct a health/eco-resort on the subject land situated in District Hoshangabad, Madhya Pradesh. The total area of these two plots is around 59,265 sq. ft. and 49,675 sq. ft., respectively.
The applicant herein approached the Madhya Pradesh High Court by filing Writ Petition seeking a direction to the respondents to favorably consider the prayer of the applicant. The Division Bench permitted the applicant to approach the Central Empowered Committee(CEC). Consequently, the applicant preferred an application to the CEC seeking permission to construct the health/eco-resort on the land mentioned above asserting that the said chunk of land was not a forest land and had been acquired under valid title deeds and thus, the prayer for permission to construct may be allowed. However, the prayer made by the applicant was not accepted whereupon, the applications under consideration came to be filed before the Top Court.
The State Government had previously taken a stand in its counter that the land in issue falls within the limits of Pachmarhi Wildlife Sanctuary and therefore, by virtue of the directions issued by the CEC vide letter dated July 2, 2004, no commercial activity was permissible thereupon, without the permission of the Top Court.
At the outset, the Division Bench of Justice B.R. Gavai & Justice Sandeep Mehta noted that the original application remained pending for almost 14 years. Irrespective of the fact that the order passed by the District Collector purportedly covers the entire area of the Plot, the sale deed executed in favour of the applicant and the mutation made in its name had never been questioned in any Court of law. Neither the Revenue Department nor the State Government authorities took the trouble of impleading the applicant as party in any of the abovementioned litigations.
“The title acquired by the applicant over the subject plots not having been challenged, attained finality and thus the State cannot claim a right thereupon simply because at some point of time, the plots came to be recorded as Nazul lands in the revenue records. The categoric stand in the compliance affidavit filed by the State(reproduced supra) fortifies the claim of the applicant that these plots are falling under the urban area”, the Bench said.
The Bench further held, “In this background, the applicant is justified in claiming that its proprietary rights guaranteed under Article 300A of the Constitution of India cannot be infringed merely on account of the pending writ appeal before the Madhya Pradesh High Court.”
The Top Court was of the firm view that the permission sought by the applicant for raising construction of health/eco- resort cannot be opposed only on account of pendency of the writ appeal before the Madhya Pradesh High Court. A registered sale deed was executed in the year 1991 by the land owner Dennis Torry in favour of the applicant. The Bench observed that activities, if any, on the Plot Nos. 14/3 and 14/4 purchased by the applicant from Dennis Torry would have to be carried out strictly in accordance with the ESZ notification dated 9th August, 2017, issued by the Ministry of Environment, Forest and Climate Change. Nonetheless, the applicant would be at liberty to satisfy the authorities that the plots in question are beyond the Eco-Sensitive Zone.
Furthermore, since the writ appeal pending before the Madhya Pradesh High Court arose out of the orders passed in relation to the title rights of Dennis Torry, from whom the applicant purchased the plots in question, the activities, if any, undertaken by the applicant on the said plot of land would also remain subject to the outcome of the said writ appeal.
Thus, the Bench directed that the application filed by the applicant for raising construction on the plot shall be decided objectively by the CEC/Competent Authority of the local body keeping in view the location of the land with reference to the notified boundaries of the ESZ.
While deciding the application filed by the applicant, the authorities have been asked to bear in mind the fact that it is the pertinent case presented before this Court that a large number of resorts of Madhya Pradesh Tourism Development Corporation and Special Area Development Authority(SADA) are existing on areas abutting the land owned by the applicant.The Bench also ordered that applications shall be decided within a period of two months from today.
Read Order: TARSEM LAL v. DIRECTORATE OF ENFORCEMENT JALANDHAR ZONAL OFFICE [SC- CRIMINAL APPEAL NO. 2608 OF 2024]
Tulip Kanth
New Delhi, May 20, 2024: The Supreme Court has clarified that the Directorate of Enforcement (ED) will have to apply to the Special Court in order to seek custody of an accused who appears after service of summons. However, when the ED wants to conduct a further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed under Section 44(1)(b) of the PMLA provided the requirements of Section 19 are fulfilled.
The appellants, before the Top Court, were the accused persons in complaints under Section 44 (1) (b) of the Prevention of Money Laundering Act, 2002 (PMLA) who were denied the benefit of anticipatory bail by the impugned orders. The facts of the case suggested that they were not arrested after registration of the Enforcement Case Information Report (ECIR) till the Special Court took cognizance under the PMLA of an offence punishable under Section 4 of the PMLA. The cognizance was taken on the complaints filed under Section 44 (1)(b).
The appellants did not appear before the Special Court after summons were served to them. The Special Court issued warrants for procuring their presence. After the warrants were issued, the appellants applied for anticipatory bail before the Special Court but their applications were rejected. Unsuccessful accused preferred these appeals since the High Court had turned down their prayers. The Top Court, by interim orders, had protected the appellants from arrest.
The appellants had contended that the power to arrest vesting in the officers of the Directorate of Enforcement (ED) under Section 19 of the PMLA cannot be exercised after the Special Court takes cognizance of the offence punishable under Section 4 of the PMLA. If an accused appears pursuant to the summons issued by the Special Court, there is no reason to issue a warrant of arrest against him or to take him into custody. It was also submitted that there is nothing inconsistent between Section 88 of the Code of Criminal Procedure, 1973 (CrPC) and the provisions of the PMLA.
The respondents, on the other hand, contended that once an accused appears before the Special Court, he is deemed to be in its custody. In view of Section 65, read with Section 71 of the PMLA, the provisions of the PMLA will have an overriding effect over the provisions of the CrPC. It was also submitted that in none of these cases, the conditions incorporated under Section 45 (1) of the PMLA had been fulfilled; therefore, the appellants were disentitled to the grant of anticipatory bail.
The Division Bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan was of the view that if a warrant of arrest has been issued and proceedings under Section 82 and/or 83 of the CrPC have been issued against an accused, he cannot be let off by taking a bond under Section 88. Section 88 is indeed discretionary. But this proposition will not apply to a case where an accused in a case under the PMLA is not arrested by the ED till the filing of the complaint. In such cases, as a rule, a summons must be issued while taking cognizance of a complaint. In such a case, the Special Court may direct the accused to furnish bonds in accordance with Section 88 of the CrPC, it added.
It explained that even if a bond is not furnished under Section 88 by an accused and if the accused remains absent after that, the Court can always issue a warrant under Section 70 (1) of the CrPC for procuring the presence of the accused before the Court. In both contingencies, when the Court issues a warrant, it is only for securing the accused's presence before the Court. When the Special Court deals with an application for cancellation of a warrant, the Special Court is not dealing with an application for bail. Hence, Section 45(1) will have no application to such an application.
The Bench was informed across the Bar by the counsel of the appellants that some of the Special Courts under the PMLA are following the practice of taking the accused into custody after they appear pursuant to the summons issued on the complaint. Therefore, the accused are compelled to apply for bail or for anticipatory bail apprehending arrest upon issuance of summons.
“We cannot countenance a situation where, before the filing of the complaint, the accused is not arrested; after the filing of the complaint, after he appears in compliance with the summons, he is taken into custody and forced to apply for bail. Hence, such a practice, if followed by some Special Courts, is completely illegal. Such a practice may offend the right to liberty guaranteed by Article 21 of the Constitution of India”, it said.
Setting out the required procedure, the Bench said, “If the ED wants custody of the accused who appears after service of summons for conducting further investigation in the same offence, the ED will have to seek custody of the accused by applying to the Special Court. After hearing the accused, the Special Court must pass an order on the application by recording brief reasons. While hearing such an application, the Court may permit custody only if it is satisfied that custodial interrogation at that stage is required, even though the accused was never arrested under Section 19. However, when the ED wants to conduct a further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed under Section 44(1)(b), provided the requirements of Section 19 are fulfilled.”
In this case, the Bench took note of the fact that warrants were issued to the appellants as they did not appear before the Special Court after the service of summons. The appellants could have applied for cancellation of warrants issued against them as the warrants were issued only to secure their presence before the Special Court. Instead of applying for cancellation of warrants, the appellants applied for anticipatory bail. All of them were not arrested till the filing of the complaint and have co-operated in the investigation.
Therefore, the Bench proposed to direct that the warrants issued against the appellants shall stand cancelled subject to the condition of the appellants giving undertakings to the respective Special Courts to regularly and punctually attend the Special Court on all dates fixed unless specifically exempted by the exercise of powers under Section 205 of the CrPC. Allowing the appeals, the Bench also put forth the condition that the appellants will have to furnish bonds to the Special Court in terms of Section 88 of the CrPC.
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.
Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?
A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.
Q: So you have had the feeling that the establishment is trying to interfere in the matters?
A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.
Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?
A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.
Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?
A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.
Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?
A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.
Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?
A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.
Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?
A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.
Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?
A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.
Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?
I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.
Q: What kind of technology would you recommend that courts should have?
A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.
Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?
You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.
Q: Do you think law should permit this to death row convicts?
A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.
Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?
A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.
Q: What about capital punishment as a means of punishment itself?
A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.
Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?
A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.
Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?
A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?
Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?
A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).
Q: You think giving proper training to police to prepare a case will make a difference?
A: Yes, it will make a difference.
Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?
A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.
Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?
A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.
Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?
A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.
Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?
A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.
Q: What will happen if in a democracy these rights are controlled by hook or by crook?
A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.
Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?
A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.
Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?
A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.
Q: Is there any other thing you would like to say?
A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Right to Disclosure – Importance & Challenges in Criminal Justice System – By Manu Sharma
Personal liberty is the most cherished value of human life which thrives on the anvil of Articles 14 and 21 of the Constitution of India (“the Constitution”). Once a person is named an accused, he faces the spectre of deprivation of his personal liberty and criminal trial. This threat is balanced by Constitutional safeguards which mandate adherence to the rule of law by the investigating agencies as well as the Court. Thus, any procedure which seeks to impinge on personal liberty must also be fair and reasonable. The right to life and personal liberty enshrined under article 21 of the Constitution, expanded in scope post Maneka Gandhi[1], yields the right to a fair trial and fair investigation. Fairness demands disclosure of anything relevant that may be of benefit to an accused. Further, the all-pervading principles of natural justice envisage the right to a fair hearing, which entails the right to a full defence. The right to a fair defence stems from full disclosure. Therefore, the right of an accused to disclosure emanates from this Constitutional philosophy embellished by the principles of natural justice and is codified under the Code of Criminal Procedure, 1973 (“Code”).
Under English jurisprudence, the duty of disclosure is delineated in the Criminal Procedure and Investigations Act, 1996, which provides that the prosecutor must disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused, except if such disclosure undermines public interest.[2] Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.[3] The duty of disclosure under common law contemplates disclosure of anything which might assist the defence[4], even if such material was not to be used as evidence[5]. Under Indian criminal jurisprudence, which has borrowed liberally from common law, the duty of disclosure is embodied in sections 170(2), 173, 207 and 208 of the Code, which entail the forwarding of material to the Court and supply of copies thereof to the accused, subject to statutory exceptions.
II. Challenges in Enforcement
The right to disclosure is a salient feature of criminal justice, but its provenance and significance appear to be lost on the Indian criminal justice system. The woes of investigative bias and prosecutorial misconduct threaten to render this right otiose. That is not to say that the right of an accused to disclosure is indefeasible, as certain exceptions are cast in the Code itself, chief among them being public interest immunity under section 173(6). However, it is the mischief of the concept of ‘relied upon’ emerging from section 173(5) of the Code, which is wreaking havoc on the right to disclosure and is the central focus of this article. The rampant misuse of the words “on which the prosecution proposes to rely’ appearing in section 173(5) of the Code, to suppress material favourable to the accused or unfavourable to the prosecution in the garb of ‘un-relied documents’ has clogged criminal courts with avoidable litigation at the very nascent stage of supply of copies of documents under section 207 of the Code. The erosion of the right of an accused to disclosure through such subterfuge is exacerbated by the limited and restrictive validation of this right by criminal Courts. The dominant issues highlighted in the article, which stifle the right to disclosure are; tainted investigation, unscrupulous withholding of material beneficial to the accused by the prosecution, narrow interpretation by Courts of section 207 of the Code, and denial of the right to an accused to bring material on record in the pre-charge stage.
A. Tainted Investigation
Fair investigation is concomitant to the preservation of the right to fair disclosure and fair trial. It envisages collection of all material, irrespective of its inculpatory or exculpatory nature. However, investigation is often vitiated by the tendencies of overzealous investigating officers who detract from the ultimate objective of unearthing truth, with the aim of establishing guilt. Such proclivities result in collecting only incriminating material during investigation or ignoring the material favourable to the accused. This leads to suppression of material and scuttles the right of the accused to disclosure at the very inception. A tainted investigation leads to miscarriage of justice. Fortunately, the Courts are not bereft of power to supervise investigation and ensure that the right of an accused to fair disclosure remains protected. The Magistrate is conferred with wide amplitude of powers under section 156(3) of the Code to monitor investigation, and inheres all such powers which are incidental or implied to ensure proper investigation. This power can be exercised suo moto by the Magistrate at all stages of a criminal proceeding prior to the commencement of trial, so that an innocent person is not wrongly arraigned or a prima facie guilty person is not left out.[6]
B. Suppression of Material
Indian courts commonly witness that the prosecution is partisan while conducting the trial and is invariably driven by the lust for concluding in conviction. Such predisposition impels the prosecution to take advantage by selectively picking up words from the Code and excluding material favouring the accused or negating the prosecution case, with the aid of the concept of ‘relied upon’ within section 173(5) of the Code. However, the power of the prosecution to withhold material is not unbridled as the Constitutional mandate and statutory rights given to an accused place an implied obligation on the prosecution to make fair disclosure.[7] If the prosecution withholds vital evidence from the Court, it is liable to adverse inference flowing from section 114 of the Indian Evidence Act, 1872 (“Evidence Act). The prosecutor is expected to be guided by the Bar Council of India Rules which prescribe that an advocate appearing for the prosecution of a criminal trial shall so conduct the prosecution that it does not lead to conviction of the innocent. The suppression of material capable of establishment of the innocence of the accused shall be scrupulously avoided. [8]
C. Scope of S. 207
The scope of disclosure under section 207 has been the subject of fierce challenge in Indian Courts on account of the prosecution selectively supplying documents under the garb of ‘relied upon’ documents, to the prejudice of the defence of an accused. The earlier judicial trend had been to limit the supply of documents under section 207 of the Code to only those documents which were proposed to be relied upon by the prosecution. This view acquiesced the exclusion of documents which were seized during investigation, but not filed before the Court along with the charge sheet, rendering the right to disclosure a farce. This restrictive sweep fails to reconcile with the objective of a fair trial viz. discovery of truth. The scheme of the code discloses that Courts have been vested with extensive powers inter alia under sections 91, 156(3) and 311 to elicit the truth. Towards the same end, Courts are also empowered under Section 165 of the Evidence Act. Thus, the principle of harmonious construction warrants a more purposive interpretation of section 207 of the code. The Hon’ble Supreme Court expounded on the scope of Section 207 of the Code in the case of Manu Sharma[9] and held that documents submitted to the Magistrate under section 173(5) would deem to include the documents which have to be sent to the magistrate during the course of investigation under section 170(2). A document which has been obtained bona fide and has a bearing on the case of the prosecution should be disclosed to the accused and furnished to him to enable him to prepare a fair defence, particularly when non production or disclosure would affect administration of justice or prejudice the defence of the accused. It is not for the prosecution or the court to comprehend the prejudice that is likely to be caused to the accused. The perception of prejudice is for the accused to develop on reasonable basis.[10] Manu Sharma’s [supra] case has been relied upon in Sasikala [11] wherein it was held that the Court must concede a right to the accused to have access to the documents which were forwarded to the Court but not exhibited by the prosecution as they favoured the accused. These judgments seem more in consonance with the true spirit of fair disclosure and fair trial. However, despite such clear statements of law, courts are grappling with the judicial propensity of deviating from this expansive interpretation and regressing to the concept of relied upon. The same is evident from a recent pronouncement of the Delhi High Court where the ratios laid down in Manu Sharma & Sasikala [supra] were not followed by erroneously distinguishing from those cases.[12] Such “per incuriam” aberrations by High Court not only undermine the supremacy of the Apex Court, but also adversely impact the functioning of the district courts over which they exercise supervisory jurisdiction. Hopefully in future Judges shall be more circumspect and strictly follow the law declared by the Apex Court.
D. Pre-Charge Embargo
Another obstacle encountered in the enforcement of the right to disclosure is the earlier judicial approach to stave off production or consideration of any additional documents not filed alongwith the charge sheet at the pre-charge stage, as the right to file such material was available to the accused only upon the commencement of trial after framing of charge.[13] At the pre-charge stage, Court could not direct the prosecution to furnish copies of other documents[14] It was for the accused to do so during trial or at the time of entering his defence. However, the evolution of law has seen that at the stage of framing charge, Courts can rely upon the material which has been withheld by the prosecutor, even if such material is not part of the charge sheet, but is of such sterling quality demolishing the case of the prosecution.[15] Courts are not handicapped to consider relevant material at the stage of framing charge, which is not relied upon by the prosecution. It is no argument that the accused can ask for the documents withheld at the time of entering his defence.[16] The framing of charge is a serious matter in a criminal trial as it ordains an accused to face a long and arduous trial affecting his liberty. Therefore, the Court must have all relevant material before the stage of framing charge to ascertain if grave suspicion is made out or not. Full disclosure at the stage of section 207 of the code, which immediately precedes discharging or charging an accused, enables an accused to seek a discharge, if the documents, including those not relied upon by the prosecution, create an equally possible view in favour of the accused.[17] On the other hand, delaying the reception of documents postpones the vindication of the accused in an unworthy trial and causes injustice by subjecting him to the trauma of trial. There is no gainsaying that justice delayed is justice denied, therefore, such an approach ought not to receive judicial consent. A timely discharge also travels a long way in saving precious time of the judiciary, which is already overburdened by the burgeoning pendency of cases. Thus, delayed or piecemeal disclosure not only prejudices the defence of the accused, but also protracts the trial and occasions travesty of justice.
III. Duties of the stakeholders in criminal justice system
The foregoing analysis reveals that participation of the investigating agency, the prosecution and the Court is inextricably linked to the enforcement of the right to disclosure. The duties cast on these three stakeholders in the criminal justice system, are critical to the protection of this right. It is incumbent upon the investigating agencies to investigate cases fairly and to place on record all the material irrespective of its implication on the case of prosecution case. Investigation must be carried out with equal alacrity and fairness irrespective of status of accused or complainant.[18] An onerous duty is cast on the prosecution as an independent statutory officer, to conduct the trial with the objective of determination of truth and to ensure that material favourable to the defence is supplied to the accused. Ultimately, it is the overarching duty of the Court to ensure a fair trial towards the administration of justice for all parties. The principles of fair trial require the Court to strike a delicate balance between competing interests in a system of adversarial advocacy. Therefore, the court ought to exercise its power under section 156(3) of the Code to monitor investigation and ensure that all material, including that which enures to the benefit of the accused, is brought on record. Even at the stage of supply of copies of police report and documents under section 207 of the Code, it is the duty of the Court to give effect to the law laid down by the Hon’ble Supreme Court in Manu Sharma (supra) and Sasikala (supra), and ensure that all such material is supplied to the accused irrespective of whether it is “relied upon” by the prosecution or not.
IV. Alternate Remedy
The conundrum of supply of copies under section 207 of the code abounds criminal trials. Fairness is an evolving concept. There is no doubt that disclosure of all material which goes to establish the innocence of an accused is the sine qua non of a fair trial.[19] Effort is evidently underway to expand the concept in alignment with English jurisprudence. In the meanwhile, does the right of an accused to disclosure have another limb to stand on? Section 91 of the Code comes to the rescue of an accused, which confers wide discretionary powers on the Court, independent of section 173 of the Code, to summon the production of things or documents, relevant for the just adjudication of the case. In case the Court is of the opinion that the prosecution has withheld vital, relevant and admissible evidence from the Court, it can legitimately use its power under section 91 of the Code to discover the truth and to do complete justice to the accused.[20]
V. Conclusion
A society’s progress and advancement are judged on many parameters, an important one among them being the manner in which it administers criminal justice. Conversely, the ironic sacrilege of the core virtues of criminal jurisprudence in the temples of justice evinces social decadence. The Indian legislature of the twenty first century has given birth to several draconian statutes which place iron shackles on personal liberty, evoking widespread fear of police abuses and malicious prosecution. These statutes not only entail presumptions which reverse the burden of proof, but also include impediments to the grant of bail. Thus, a very heavy burden to dislodge the prosecution case is imposed on the accused, rendering the right to disclosure of paramount importance. It is the duty of the Court to keep vigil over this Constitutional and statutory right conferred on an accused by repudiating any procedure which prejudices his defence. Notable advancement has been made by the Apex Court in interpreting section 207 of the Code in conformity with the Constitutional mandate, including the right to disclosure. Strict adherence to the afore-noted principles will go a long way in ensuring real and substantial justice. Any departure will not only lead to judicial anarchy, but also further diminish the already dwindling faith of the public in the justice delivery system.
**
Advocate Manu Sharma has been practising at the bar for over sixteen years. He specialises in Criminal Defence. Some of the high profile cases he has represented are – the 2G scam case for former Union minister A Raja; the Religare/Fortis case for Malvinder Singh; Peter Mukerjee in the P Chidambaram/ INX Media case; Devas Multimedia in ISRO corruption act case; Om Prakash Chautala in PMLA case; Aditya Talwar in the aviation scam case; Dilip Ray, former Coal Minister in one of the coal scam cases; Suhaib Illyasi case.
**
Disclaimer: The views or opinions expressed are solely of the author.
[1] Maneka Gandhi and Another v. Union of India, (1978) 1 SCC 248
[2] S. 3 of the Criminal Procedure and Investigations Act, 1996
[3] R v. H and R v. C, 2004 (1) ALL ER 1269
[4] R v. Ward (Judith), (1993) 1 WLR 619 : (1993) 2 ALL ER 577 (CA)
[5] R v. Preston, (1994) 2 AC 130 : (1993) 3 WLR 891 : (1993) 4 ALL ER 638 (HL), R v. Stinchcome,
(1991), 68 C.C.C. (3d) 1 (S.C.C.)
[6] Vinubhai Haribhai Malaviya and Others v. State of Gujarat and Another, 2019 SCC Online SC 1346
[7] Sidhartha Vashishth alias Manu Sharma v. State (NCT of Delhi), (2010) 6 SCC 1
[8] R. 16, part II, Ch. VI of the Bar Council of India Rules
[9] Manu Sharma, (2010) 6 SCC 1
[10] V.K. Sasikala v. State, (2012) 9 SCC 771 : AIR 2013 SC 613
[11] Sasikala, (2012) 9 SCC 771 : AIR 2013 SC 613
[12] Sala Gupta and Another v. Directorate of Enforcement, (2019) 262 DLT 661
[13] State of Orissa v. Debendra Nath Padhi¸(2005) 1 SCC 568
[14] Dharambir v. Central Bureau of Investigation, ILR (2008) 2 Del 842 : (2008) 148 DLT 289
[15] Nitya Dharmananda alias K. Lenin and Another v. Gopal Sheelum Reddy, (2018) 2 SCC 93
[16] Neelesh Jain v. State of Rajasthan, 2006 Cri LJ 2151
[17] Dilwar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra, (2008) 10 SCC 394
[18] Karan Singh v. State of Haryana, (2013) 12 SCC 529
[19] Kanwar Jagat Singh v. Directorate of Enforcement & Anr, (2007) 142 DLT 49
[20] Neelesh, 2006 Cri LJ 2151
Disclaimer: The views or opinions expressed are solely of the author.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Legitquest is a Legal-Tech venture run by a versatile team of tech-savvy attorneys, engineers and designers who aim to make the practice of law simpler for its end users. We have eminent jurist Mr. Ram Jethmalani as our patron