Read Order: Rajcomp Info Services Ltd v. Union of India and Ors
Chahat Varma
New Delhi, June 28, 2023: The Rajasthan High Court has directed the tax authorities to decide GST Refund application of Rajcomp Info Services Ltd. (petitioner) within 60 Days.
The petitioner had approached the High court with a grievance regarding the prolonged delay in the processing of their GST refund application. The application was initially submitted on 10.08.2019, but despite repeated efforts to seek updates from the Central and State GST authorities, the petitioner was informed that the refund application remained pending with the Central Jurisdiction Officer.
“At this stage, we are inclined to dispose of the petition with a direction to the respondent No.2 to ensure that the application claiming refund filed by the petitioner before an Officer subordinate to him is decided within the outer limit of 60 days,” held the court.
Read Order: Probo Media Technologies Private Limited V. Union of India and Others
Chahat Varma
Chandigarh, June 28, 2023: The High Court of Punjab and Haryana has ruled in favour of Probo Media Technologies Private Limited (petitioner), a company engaged in facilitating skill games, stating that no coercive steps would be taken for the recovery of the amount demanded as per the show cause notice issued on 19.05.2023 and the court ordered the defreezing of 50% of the attached amount, allowing the petitioner to resume its day-to-day working.
The court's decision came in light of a previous order passed in the case of Witzeal Technologies Pvt. Ltd. vs. Union of India and Ors. [LQ/PunjHC/2021/14850], dated 20.09.2021, where the State counsel had assured that an empowered Group of Ministers were investigating the taxation issue related to skill games and they would take necessary steps when the clarification comes.
The crux of the matter revolved around the question of whether skill games facilitated by the petitioner should be treated as games of chance subject to a 28% tax on the entire bet value. The petitioner's counsel highlighted the lack of clarification from the Group of Ministers on this matter. Additionally, it was mentioned that the petitioner had already paid GST at a rate of 18% on platform fees.
In view of the assurance given by the State counsel in the order dated 29.09.2021 that no coercive steps would be taken against the petitioner, the court gave relief to the petitioner and decided to adjourn the matter to 17.08.2023.
Read Order: Inter Continental Hotels Group [Asia Pacific] PTE Ltd v. The Dy. C.I.T. Intt. Taxation Circle
Chahat Varma
New Delhi, June 28, 2023: The Delhi bench of the Income Tax Appellate Tribunal has held that the amount received by InterContinental Hotels Group (Asia Pacific) Pvt. Ltd. (IHGAP) from InterContinental Hotels Group (India) Private Limited (IHG India) for the provision of Management Support Services cannot be considered as Fees for Technical Services (FTS) under Article 12(4)(b) of the India-Singapore Double Taxation Avoidance Agreement (DTAA).
Brief issue involved was that, IHGAP (assessee), a Singapore-based company and part of the InterContinental Hotels Group, franchised and licensed hotels under various brands in the Asia Pacific region. IHGAP received management support costs from its Indian group company, IHG India, for services such as operational support, accounting, legal support, and information technology. IHGAP claimed these amounts as exempt in its income tax return, stating that they did not qualify as FTS under the DTAA. However, the Assessing Officer (AO) disagreed and added the management services costs to the assessee's income, treating them as FTS.
The coram of N.K. Billaiya (Accountant) and Challa Nagendra Prasad (Judicial) observed that the Co-ordinate bench had clearly stated that the services rendered by the assessee did not provide any technical knowledge, skill, or know-how to InterContinental Hotels Group India Pvt. Ltd, the recipient of the services.
Further, the bench noted that Co-ordinate bench had also ruled that the amount received by the assessee cannot be considered as FTS under Article 12(4)(b) of India-Singapore DTAA.
Accordingly, the bench held that since no distinguishing facts were presented, they would follow the decisions of the Co-ordinate benches and directed the AO to delete the addition.
The bench further directed the AO to grant credit of TDS to the assessee in accordance with the provisions of Section 199 of the Income Tax Act read with Rule 37BA (2) of the Income Tax Rules.
Read Order: Haryana Rifle Association v. CIT(E) Chandigarh
Chahat Varma
New Delhi, June 28, 2023: The Delhi bench of the Income Tax Appellate Tribunal has ruled in favour of Haryana Rifle Association (assessee), directing the Commissioner of Income Tax (Exemptions) [CIT(E)] to grant registration to the assessee under Section 12AA and Section 80G of the Income Tax Act. The Tribunal concluded that the association was not operating with a profit motive.
The assessee had filed the present appeals against the orders of the CIT(E), Chandigarh, which had rejected their application for registration under Section 12AA and Section 80G of the Income Tax Act. The CIT(E) had argued that the sale of ammunition and charging fees for matches or tournaments conducted by the assessee did not have a charitable aspect and were considered commercial activities.
The Tribunal took into consideration the main objects of the assessee, which included organizing, promoting, and encouraging rifle shooting and conducting sports tournaments at various levels. It observed that the financial statements of the association showed that it had purchased ammunition for Rs.1,551,816 and sold it at a subsidized amount of Rs.215,400, resulting in a significant loss. However, this loss was offset by receiving sports promotion funds from the Haryana Government. The association also organized several tournaments at the state and national levels, for which it received match fees. These fees were then utilized for the advancement of the association's objectives.
Based on these observations, the Tribunal held that the assessee's activities were not driven by a profit motive.
Read Order: DRB Infrastructure Pvt. Ltd v. State of West Bengal and Ors.
Chahat Varma
New Delhi, June 28, 2023: The High Court of Calcutta, in an interim order, has instructed the respondent to release the trailers belonging to DRB Infrastructure Pvt. Ltd. (petitioner), which were loaded with machinery and equipment. However, this release was subject to the petitioner furnishing a Bank Guarantee that covers the penalty imposed by the respondent through their order dated 15.02.2023.
Brief facts of the case were that the petitioner, a construction company, was awarded a sub-contract for earth excavation, embankment/subgrade work, and drain work on an expressway project in Jammu. To carry out the work, the petitioner transported its own machinery from Arunachal Pradesh to Jammu using two trailers through a third-party consignment. However, on 26.12.2022, respondent intercepted the trailers. Subsequently, the respondent imposed a penalty on the petitioner for violating the provisions of the West Bengal Goods and Services Tax Act/Central Goods and Services Tax Act and Rules. The petitioner filed the present writ application seeking the release of the trailers.
The petitioner argued that the seizure of the machinery by respondent has resulted in a significant hindrance to the petitioner's work. As a result, the petitioner is unable to carry out the work that was awarded to them in Jammu and Kashmir. Therefore, the petitioner requested the release of the seized machinery so that the petitioner can proceed with the completion and execution of the awarded work.
Since the petitioner had further challenged the order issued by the respondent on 15.02.2023, the Court held that the writ petition cannot be disposed of without the exchange of affidavits. Therefore, the respondents were instructed to file an affidavit-in-opposition within three weeks, and the petitioner was granted a two-week period to file a reply to the said affidavit, if necessary.
Read Order: Baba Baidyanath Trading Company and Ors v. Commissioner of Customs (Port), Kolkata
Chahat Varma
New Delhi, June 28, 2023: In a recent ruling, the Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has determined that the goods imported by Big Bull Traders Pvt Ltd (appellant 1) and Baba Baidyanath (appellant 2) cannot be combined for classification purposes. The Tribunal concluded that the imported goods were not in a Completely Knocked Down (CKD) condition, leading to the decision that they should not be classified under CTH 87038040. Instead, the goods were deemed appropriately classifiable under CTH 87089900. Furthermore, the Tribunal also held that the penalty imposed was not applicable as the notice was not issued under Section 28(4) of the Customs Act, thereby negating the penalties under Section 114A and Section 114AA.
Brief background of the case was that the appellant 1 was a manufacturer of Tricycle. They were authorized to manufacture Tricycles operated by battery under Motor Vehicle Rules. The appellant 2 was a Trading Company dealing in parts of Tricycle. The appellant 1 imported some parts of the Tricycle and procured some parts from appellant 2, which were imported by him separately. The allegation of the department was that both the parts imported by appellant 1 and appellant 2 together would constitute a fully assembled Tricycle. Show Cause Notice was issued to the appellants 1 and 2 proposing to club both the imports together and to assess the goods as fully finished Tricycles, instead of parts of tricycles, as claimed by the appellants. The said notice was adjudicated by the Commissioner of Customs (Port) vide Order-in-Original, wherein the adjudicating authority classified the goods imported as Tricycles under the CTH 8703840, imposing differential duty, redemption fine, interest, and penalties. The penalties were jointly and severally imposed on both the appellants.
The bench comprising of P.K. Choudhary (Judicial) and K. Anpazhakan (Technical) noted that that the order by the adjudicating authority did not present any evidence to prove that the goods imported by the appellants, when combined, possessed the essential characteristics of an e-rickshaw. Thus, the bench held that the goods imported by the appellants, if assembled, would not fulfill the basic function of propulsion required for classification under CTH 8703.
The bench further observed that the goods imported by the appellants, when combined, were not in a complete and fully functional state. The imported components required further manufacturing processes to become a fully finished Tricycle falling under CTH 8703. The bench determined that since the appellants had not imported the complete kit necessary for a fully finished Tricycle, the imported spare parts could not be classified under CTH 8703.
The bench also observed that the goods imported by the appellants together did not contain all the essential components required to form a CKD kit as per Notification no. 50/2017. The necessary components such as the controller, differential, battery, gearbox or transmission mechanism, engine, speed meter, electrical lining, wiper mechanism, mechanical hubs, braking system, rear shocker, meter board, headlight, batteries, tires, and tubes were not included in the imported parts. As a result, the condition specified in the notification for levying duty at the rate of 30% was not satisfied.
The bench, thus, ruled that the imposition of penalties and confiscation of goods in this case were erroneous and not legally justified.
Read Order: M/s. Aqua Excel v. The Assistant Commissioner (ST)(FAC)
Chahat Varma
New Delhi, June 28, 2023: The High Court of Madras has dismissed the writ petitions filed by M/s. Aqua Excel (petitioner), challenging the orders passed under the Tamil Nadu Value Added Tax Act, 2006, and has permitted the petitioner to approach the appellate authority by way of statutory appeal, even though the filing of appeals were delayed beyond condonable period.
In the matter at hand, the filing of appeals had been delayed by 26 days. As a result, the petitioner had approached the High Court, seeking permission to file the appeals despite the delay. Additional Government Pleader for the respondents, did not express any serious objection to the request.
Thus, the court granted liberty to the petitioner to approach the appellate authority within two weeks from the date of the judgment.
The court ruled that the appeals will be accepted by the receiving Registry without taking into account the delay, as long as they are filed within the specified period. However, the court emphasized that all other statutory requirements, including the pre-deposit, must be complied with.
Read More: N. Varalakshmi v. V.R. Shivananda Murthy
Simran Singh
New Delhi, June 27, 2023: The Karnataka High Court has allowed the case of the plaintiff who had filed a suit for relief seeking declarationthat she was the absolute owner and in lawful possession and enjoyment of the suit schedule property and to declare that the preliminary decree passed by the Top Court dated 14.07.2017 and the order and draft final decree drawn by the Civil Judge, Bengaluru, dated 06.02.2019 was not binding on the plaintiff or affecting the suit schedule property.
The Single Judge Bench of Justice H.P. Sandeshheld that the impugned order passed by the Trial Court was liable to be set aside since the order suffered from its legality and correctness.
The vendors were parties who had given an undertaking that even though they sold the property after the decree, Section 52 of Transfer of Property Act,1882 was attracted and reiterated the decision of the Supreme Court in the case of GuruswamyNadar v P. Lakshmi Anmal, which had held that it was a public policy that once a suit had been filed pertaining to any subject-matter of the property, in order to put an end to such kind of litigation, the principle of lis pendens had been evolved so that the litigation may finally terminate without intervention of a third party otherwise no litigation would come to an end. Therefore, in order to discourage that same subject-matter of property, being subjected to subsequent sale to a third person, this kind of transaction was to be checked.
The Bench held that the principles laid down in the judgment were held to be aptly applicable to the case on hand since there was an undertaking by the vendor of the plaintiff and also there was a decree prior to the execution of the Sale Deed, the Sale Deed was executed when the appeal was pending before this Court and the same could not create any right in favour of the plaintiff. Hence, there was no cause of action to file a suit as well as the litigation would never come to an end if proceeded to take up the suit, which was hit by Section 52 of the Transfer of Property Act.
In the matter at hand, the revision petition challenged the rejection order with costs of INR 1000/- passed by the Trial Court which was filed under Order VII Rule 11(d) read with Section 151 of Code of Civil Procedure, 1908 (CPC). The defendant had claimed that he had filed a suit partition against the defendant’s vendors wherein they had undertaken not to alienate the same as per the undertaking given to the Trial Court. The said suit was partly decreed on 31.07.2007 and against which, she had preferred an appeal which was allowed granting 1/4th share to her in the suit schedule property. The Court had appointed a Court Commissioner to divide the same after hearing the objections from all the parties. Accordingly, northern side of the suit schedule property measuring 425 sq.ft. had fallen as her share and she had taken the possession of the same through the Court by filing Execution Petition on 26.04.2019 where she became the judgment debtor 3 in the said case.
After taking possession of the same, defendant 2 had also taken southern portion of the suit schedule property from the plaintiff and on the same day, she had entered into rental agreement with her for the said portion, a tenancy month starting from 01.05.2019 and accordingly, he had paid the advance amount of Rs.3 Lakhs and the balance payable was Rs.2 Lakhs out of Rs.5 lakhs and monthly rent payable was Rs.30,000/- and accordingly, he had been paying the monthly rent in cash.
Since he had accepted her as his landlord and entered into the rental agreement, it was not open for him to deny her title. That apart, whatever alleged transaction had taken place between him and his vendors, the pending proceedings was subject to the result of the suit. Hence, it was averred that the Sale Deed had no validity in the eye of law and he was not entitled to get any relief in the suit. The plaintiff could not re-agitate his right. He had purchased the property during the pendency of Regular First Appeal, and there existed a decree passed by the Trial Court, thus, contended that the case was barred by law.
The said application was resisted by filing objection statement contending that while invoking Order VII Rule 11 of CPC, the Court had to look into the plaint averments which clearly disclosed that it was not barred by any law and also it was a settled law that only plaint averments had to be looked into. When the averments made in the plaint clearly established that the same was not barred by any law and orders were obtained behind the back of the respondent.
It was further averred that defendant did not bring a fact to the notice of this Court or the City Civil Court that the plaintiff was the absolute owner in lawful possession and enjoyment of the suit schedule property. Hence, the judgment and decree was not binding or affecting the plaintiff. It was also contended that the defendant had submitted that the plaintiff had accepted defendant as landlord and the same was denied. There existed no such rental agreement and the same was bogus, concocted and fabricated. Hence, Order VII Rule 11 of CPC could not be dismissed on the threshold and prayed the Court to dismiss the same.
The issue for consideration before the Court was whether the Trial Court had committed an error in not allowing the application filed under Order VII Rule 11(d) read with Section 151 of CPC and whether the said order suffered from its legality and correctness?
The Court stated that it was a settled law that the Court had to look into the contents of the plaint while invoking Order VII Rule 11 of CPC and it could not look into the defense. “Having perused the application invokes Order VII Rule 11(d) read with Section 151 of CPC contending that the plaint may be rejected as barred by law.”
The Bench noted that during the pendency of Regular First Appeal, the plaintiff had purchased the suit schedule property and was granted 1/4th share and consequently FDP wasalsodrawn and the possession was given to the extent of 425 sq.ft in favour of the defendant and thus attracted Section 52 of TPA. “No doubt, on perusal of the affidavit not stated the very proviso under which the suit is barred. But it is contended that the transaction taken place between the plaintiff and his vendor during the pendency of the proceedings and the same is subject to the result of the suit. Hence, the Sale Deed has no validity in the eye of law and he is not entitled to get any relief in the suit. Hence, the suit is barred by law; the same is also resisted by filing an objection.”
Hence, the Court had to take note of the material on record, particularly, the plaint. It noted that in the plaint it was stated that he had purchased the property based on the decree obtained by his vendor and that he had purchased the same for valuable consideration of Rs.10,43,000/-. It was important to note that the portion of the property which he had purchased was also acquired and he had received the compensation and also admitted the transaction between the plaintiff and defendants and claimed that it was only a loan transaction and not rental agreement. He made the payment of Rs.3 Lakhs and on the other hand, it was the contention of the defendant that he had entered into a lease agreement and agreed to pay a rent of Rs.30,000/- per month and also paid the advance amount of Rs.3 Lakhs and the remaining Rs.2 Lakhs to be paid.
Further the Bench noted that the plaint specifically pleaded that defendants falsely claimed that they had right over the portion of the suit schedule property in terms of the judgment and decree and the possession had been delivered in the Execution petition. The appeal was pending before this Court while purchasing and was also allowed and granted 1/4th share in Regular First Appeal. “When such being the case, the very contention of the respondents is that the Court had to look into the only plaint averments and having taken note of the material on record in the very pleading, the plaintiff in paragraph Nos.9 and 10 pleaded with regard to an appeal and also the FDP proceedings.”
The bench sated that it was also the claim that he had purchased the property in the year 2010 and that the very suit of the year had not been mentioned in the plaint and cleverly drafted which only mentions the Regular First Appeal and FDP proceedings. “In paragraph Nos.9 and 10, they have not pleaded the original suit was of the year 1997 and also it is clear that in the year 1998 itself, the vendor of the plaintiff has given an undertaking that he will not alienate the property.”
The Bench stated that the suit was decreed in the year 2007 and an appeal was pending before this Court during which the plaintiff had purchased the property. “The original suit is of the year 1997 and is not pleaded in the plaint and in an ingenious method only pleaded R.F.A. and not stated anything about the decree passed in the suit and purchasing the property when there is a decree and also there is an undertaking and the cause of action is also pleaded with regard to the date of purchase i.e., 20.03.2010 and the preliminary decree passed by this Court vide order dated 14.07.2017 and thereafter on 06.02.2009 when the final decree is drawn and the fact that the vendor is party to the suit, appeal and FDP proceedings is not in dispute.”
The Bench referred to the case of P.V. Guru Raj Reddy v P. Neeradha Reddy , which had categorically held that while dealing with Order VII Rule 11 of CPC, the Court had to look into the averments of the plaint. In the plaint, it was only pleaded with regard to R.F.A. as well as FDP proceedings and the Court was required to see the averments of the plaint. Further the Supreme Court in Sarvinder Singh v Dalip Singh, had discussed with regard to Section 52 of the Transfer of Property Act and categorically held that the alienation obviously would be hit by doctrine of lis pendens by operation of Section 52. Under these circumstances, the respondents could not be considered to be either necessary or proper parties to the suit. Hence, it was held that the plaintiff need not be a necessary party and the same was binding since his venders were parties in all the proceedings.
The Court went on to refer to the case Mallamma v Mallegowda, which discussed in detail the very provisions of Order VII Rule 11 (a) to (d) read with Section 151 of CPC and had held that the Court had to be vigilant against any camouflage or suppression and was under an obligation to ascertain whether a litigation was utterly vexatious or was an abuse of process of the Court. “The Court should be cautious while considering the material on record. Admittedly, in the case on hand, the suit was decreed and there was an undertaking and during the pendency of R.F.A., the property was purchased.”
The Bench while navigating through the relief of declaration to declare that the preliminary decree obtained was not binding on the plaintiff or affecting the suit schedule property and when the same was purchased during the pendency of the appeal, it could not be contended that the order passed by this Court as well as in FDP stated that it could not be held that it was not binding and in the judgment of the Supreme Court referred supra, held that the alienation obviously would be hit by doctrine of lis pendens by operation of Section 52 as held in Sarvinder Singh’s case (supra). When such being the case, there were no triable issues between the parties. “Admittedly, the vendor of the plaintiff is a party to the earlier suit and R.F.A. and he has suffered the decree. When such being the material on record, the question of once again agitating the issue in respect of the very subject matter of the property, which is a portion of the property, suffered by the vendor of the plaintiff, who is bound by the judgment and decree passed against his vendor and there cannot be new grounds arise to him once again to litigate the same as held by the Apex Court in P.V. Guru Raj Reddy’s case (supra), and no fresh cause of action arises to decide the issue which has already been decided and also the plaint averments exfacie discloses earlier there was a suit and there was a decree and the same was challenged in R.F.A. In R.F.A., this Court granted 1/4th share and final decree was also drawn and his vendor has suffered the decree throughout and on a reading, the suit appears to be barred by law under Section 52 of the Transfer of Property Act and the same cannot be adjudicated in the Court once again.
Read More: Bank Of Baroda v. Baljit Singh
Simran Singh
New Delhi, June 27, 2023: The Supreme Court allowed the challenge preferred by the appellant Bank against the judgement passed by the Punjab and Haryana High Court in a case where the respondent had sought declaration and mandatory injunction vis-a-vis his appointment in the appellant-Bank on compassionate basis. The Supreme Court was of the view that the High Court was not right in answering the questions of law in favour of the respondent and thereby, set aside the judgment of the First Appellate Court and restored the judgment of the Trial Court.
The Division Bench comprising of Justice B.V. Nagarathna and Justice Manoj Misraheld that the High Court ought to have taken into consideration the factual details rather than just referring to the judgments in answering the questions of law.
The Bench considered the issue regarding the consideration of the financial position of the respondent vis-a-vis the eligibility to be considered for appointment on compassionate grounds and perused the relevant clauses of the Scheme and noted the details submitted with regard to the deceased employee and his dependent’s income. The income of the widow of the deceased was Rs.6,845/- per month (basic pay of Rs.4140/- per month) as she was employed in the Health Department of the State Government, and her family pension was Rs.3,478/- per month. Thus, the gross total income of the family per month came to Rs.10,323/- and the net income was Rs.7,618/- per month. After applying the formula to the case of the respondent, the Court found that the monthly income so arrived at was not less than 60% of the total emoluments and thus, the case of the respondent could not be considered on compassionate basis on that score. The total emoluments of the deceased father of the respondent were Rs.3,210/- per month at the time of his death which was lesser than the total net income of the deceased’s family. Thus, the total income of the family was not less than 60% of the total emoluments which the deceased was drawing at the time of his death as per the Scheme under consideration.
The Bench took note of the fact that the respondent, during the course of the argument had clarified that he was eligible to be considered for the post of Peon as he had passed 8th standard during the life time of his father and thus, was eligible to be considered to the said post as on the date on which he made the said application. However, the Court sated that “We do not think that the said argument would be of assistance to the respondent inasmuch as the respondent is not qualified or is eligible to be considered for said post on compassionate basis having regard to the family income of the respondent.”
In the matter at hand, the High Court had set aside the judgement of the First Appellate Court passed in a Civil Appeal and restored the judgment of the Trial Court passed in Original Suit. The respondent’s father who was working in the appellant-Bank and had died in harness on 16.05.1999. As on that date, the appellant-Bank had a Scheme in place for appointment of dependents of the deceased employees on compassionate grounds which was issued on 18.08.1998.
The Bench was of the view that the appointment of a candidate on compassionate basis did not create any vested right and that it was only when a candidate was covered under all clauses of the Scheme applicable at the relevant point of time that he/she could be considered for compassionate appointment.
The Court referred to the case of Balbir Kaur v. Steel Authority of India Ltdand stated that the said judgment could be distinguished from the facts of the instant case as the 1998 Scheme specifically disentitled a candidate for compassionate appointment benefit on the application of the formula for calculation of monthly income if the same was less than 60% of the total emoluments which the deceased was drawing at the time of his death. The object was that it was only when a deceased employee’s family was in penury and without any source of livelihood when the employee died in harness, compassionate appointment could be considered. Since appointment on compassionate basis was an exception to the general rule for appointment by an open invitation, the exception had to be resorted to only when the candidate and his family was in penury so as to provide immediate succor on the death of the employee in harness. Therefore, the case for compassionate appointment had to be considered in accordance with the prevalent Scheme.
The Court referred to the case of State of Himachal Pradesh v. Parkash Chand , wherein it had been categorically held that a direction by a High Court to consider cases for compassionate appointment dehors the terms of the policy was impermissible as it would amount to re-writing the terms of the policy. This aspect had been overlooked by the High Court in the instant case.
Further the bench went on to navigate the case of Indian Bank v. Promilawherein it had been observed that eligibility for compassionate appointment must be as per the applicable scheme and the courts could not substitute a scheme or add or subtract from the terms thereof in exercise of judicial review.
The Bench stated it was not in dispute between the parties that the Scheme dated 18.09.1998 which had been issued by way of a Circular was applicable to the case of the respondent.Under the said Scheme, both the educational qualification as well as qualification vis-a-vis the income of the candidate making an application for compassionate appointment had been prescribed and they were to be considered by the employer.
The Bench noted that the High Court while considering the issue whether the case of the appellant could be considered for compassionate employment vis-a-vis the Scheme which was in vogue at the time when Balbir Singh died or subsequent to that and whether the advancement of family pension could be the ground for non-suiting the case of compassionate employment simply stated that the effective date of consideration of the application for compassionate appointment would be the date on which the respondent’s father died. The High Court had stated that the 1998 Scheme was in force as on the date when the respondent’s father died and, therefore, the said Scheme would be applicable. However, the Court found that while answering the questions of law, the High Court had erred on both counts.
Read more: Prochy N. Mehta v. NoshirTankariwala
Simran Singh
New Delhi, June 27, 2023: The Calcutta High Court dismissed a petition preferred by the Parsi ZoroastrianAssociation, Calcutta which had sought initiation of proceeding under Section 340 of the Criminal Procedure Code, 1973 against the plaintiffs for commission of offence under Section 193 and 209 of the Indian Panel Code, 1860. The Court stated that the materials brought on record wereinsufficient andinadequate to justify the conclusion that it wasexpedient, in the interest of justice, to file a complaint.
The Single-Judge Bench of Justice Krishna Rao stated that the Court had to be satisfied as to the prima facie case for a complaint for the purpose of inquiry into an offence under the provision of Cr.P.C. "The mere fact that a person has made a contradictory statement in a judicial proceeding is not by itself always sufficient to justify a prosecution under Sections 199 and 200 of the Indian Penal Code, but it must be shown that the defendant has intentionally given a false statement at any stage of the judicial proceedings or fabricated false evidence for the purpose of using the same at any stage of the judicial proceedings.”
It was viewed that the Court had to form an opinion that it was expedient, in the interests of justice, to initiate an inquiry into the offences of false evidence and offences against public justice and more specifically referred to in Section 340(1) Cr.P.C., having regard to the overall factual matrix as well as the probable consequences of such a prosecution. “The Court must be satisfied that such an inquiry is required in the interests of justice and appropriate in the facts of the case.”
The Court observed that it had been consistently held by the Court that prosecution for perjury be sanctioned by the Courts only in those cases where perjury appeared to be deliberate and that prosecution ought to be ordered where it would be expedient, in the interest of justice, to punish the delinquent and not merely because there was some inaccuracy in the statement.
In the matter at hand, it was alleged that after the demise of defendant 1, the Parsi Zoroastrian community held an online memorial service for him where both plaintiff 1 and her husband spoke on the said occasion. Another online memorial service was held and the said event was streamed live on youtube wherein it was proved that the plaintiffs were present on the said memorial service through on online mode.
It was submitted that the averments made by the plaintiffs that only after the receipt of the copy of pleadings, the plaintiffs enquired about the death of the defendant 1 was misleading and that the plaintiffs had made false statement on affidavit before this Court thus committing an offence under the provisions of IPC.
The Bench navigated through the provision of Section 340 of CrPC which provided for procedure in cases mentioned in Section 195 CrPC. It further referred to the Supreme Court case of K.T.M.S. Mohd. v. Union of India which had held thatprovisions of Section 340 of CrPC were alluded only for the purpose of showing that necessary care and caution was to be taken before initiating a criminal proceeding for perjury against the deponent of contradictory statements in a judicial proceeding.
Further the Bench relied upon the Supreme Court case of State NCT Delhi v Pankaj Chaudhary which had held that “there are two preconditions for initiating proceedings under Section 340 Cr.P.C.
(i) materials produced before the court must make out a prima facie case for a complaint for the purpose of inquiry into an offence referred to in clause (b)(i) of sub-section (1) of Section 195 Cr.P.C., and
(ii) it is expedient in the interests of justice that an inquiry should be made into the alleged offence.”
The Court was of the view that in the process of formation of the said opinion by the Court, the requirement should only be to have a prima facie satisfaction of the offence which appeared to have been committed. “It is open to the Court to hold a preliminary inquiry though it is not mandatory. In case, the Court is otherwise in a position to form such an opinion, that it appears to the Court that an offence as referred to under Section 340 of Cr.P.C has been committed, the Court may dispense with the preliminary inquiry. Even after forming an opinion as to the offence which appears to have been committed also, it is not mandatory that a complaint should be filed as a matter of course.”
The Bench noted that the main contention of the applicants was that the plaintiffs had made a false averment in the affidavit filed by the plaintiffs. It was the contention of the applicants that the plaintiffs had the knowledge about the death of defendant 1 but in the affidavit, the plaintiffs had stated that after only receipt of the copy of pleadings, the plaintiffs had enquired about the death of the defendant 1.
The Bench was thus of the view that it was settled law that mere fact that a person had made contradictory statement in a judicial proceeding was not by itself always sufficient to justify the prosecution under Sections 199 and 200 of IPC but it must be shown that the defendant had intentionally given a false statement in any stage of judicial proceedings or fabricated false evidence for the purpose of using the same at any stage of judicial proceedings. Even after the above position had emerged also, still the Court had to form an opinion that it was expedient in the interest of justice to initiate an inquiry into the offences of false evidence and offences against the public justice as referred in Section 340 (1) of Cr.P.C, having regard to the overall factual matrix as well as the probable consequences of such a prosecution. The Court must be satisfied that such an inquiry is required, in the interest of justice, and appropriate in the facts of the case.
Read more: Mir MajiburRahaman v. Union of India
Simran Singh
New Delhi, June 27, 2023: The Calcutta High Court opined that the Disciplinary Authority as well as the Appellate Authority had rightly imposed punishment upon the petitioner for removal of service of the Central IndustrialSecurityForce (CISF) after he was found to have committed gross misconductby failing to react by using his weapons and fleeing from the spot during an attack by militants, thereby leaving his colleagues and the ONGC staff they were protecting in grave danger.
The respondent authorities have passed the order of removal of the petitioner from service after following due process of law without actuated by malafides, this Court is not inclined to interfere with the impugned orders, the High Court said.
The Court further noted that the question of quantum of punishment in disciplinary matters is primarily for the disciplinary authority, and the jurisdiction of High Courts under Article 226 of the Constitution or of the Administrative Tribunals is limited and is confined to the applicability of one or the other of the well-kwon principles known as “Wednesbury Principles” namely whether the order was contrary to law, or whether relevant factors were not considered, or whether irrelevant factors were considered or whether the decision was one which no reasonable person could have taken.
The Single Judge Bench of Justice Krishna Raoheld that the petitioner was found to have committed gross misconduct as he had failed to react and fire from his automatic service weapon to counter attack the militants and fled away from the spot after throwing away his service SMG carbine with three magazines full of 90 live around of 9 mm ammunition, leaving his colleagues and ONGC staffs into the “mouth of death”.
The Bench was of the view that the respondent authorities had passed the order of removal of the petitioner from service after following due process of law without actuated by malafides, thus was not inclined to interfere with the impugned orders.
In the matter at hand, the petitioner was a Constable in CISFand was promoted to the post of Head Constable, CISF Unit, ONGC, Jorhat. On 24-06-2002, the petitioner was detailed for escorting of field party and the convoy was embraced and attacked by the suspected militants who started firing at random. It was averred that the petitioner had fallen down and gotten chest injury which made him feel giddy thus, he took possession in a bush which was at the distance of 100 m from the site of the militant’s attack and subsequently became unconscious.
By way of a Memo, the Commandant, being the Disciplinary Authority issued a Memorandum along with Article of charges under Rule 36 of CISF Rule, 2001, on the allegation that the petitioner had fled away from the scene of incident leaving his colleagues and ONGC employees when the convoy of the ONGC field party GP-33 was ambushed by the suspected militant group on their way back to base camp near Dhansiri railway crossing. The petitioner left his SMG Carbine 9 mm, 90 live rounds - 9mm with three magazines unattended in the bushes near the place of incident though he was deployed on escort duty. The Disciplinary Authority was not satisfied with the explanation offered by the petitioner and accordingly a regular enquiry was conducted by appointing Enquiry Officer. Thereafter, the Disciplinary Authority had passed final order of punishment of removal from service of the petitioner.
The Bench note the evidence of Prosecution Witness 1 (PW1), wherein it was sated that on enquiry at the place of incident it was found that the petitioner at the time of incident had fled away from the place of incident along with his arms and ammunition and the CISF personnel had searched the petitioner at the place of incident by calling his name to no avail. It was stated that the petitioner was in the last vehicle along with three other Constables who had informed PW1 that the petitioner had fled away along with his arms and ammunition without giving any protection to the colleagues and the civilian and hide himself at the unknown place due to fear and he had not taken any steps against the militants. The petitioner did not cross-examine P.W.1 and simply put his signature in the said statement as true.
The Court further took note of PW 10 which had stated that all 3 constables came down from the vehicle and took the position but the petitioner had fled away from the place of incident. Upon search of the place of incident, they could not find the arms and ammunition as the petitioner was not able to say in which place he had kept the arms but after long search it was found in the bushes. The petitioner did not deny the statement of PW10
The Court found from the record that 11 CISF personnel including the petitioner were on escort duty and out of 11 personnel in the escort party, 10 personnel had taken their position immediately on getting out their vehicle and retaliated by opening fire at the militants. The petitioner not only failed to react and fire from his automatic service weapon to counter attack the militants but also fled away from the spot after throwing away his service SMG carbine with three magazines full of 90 live around of 9 mm ammunition, leaving his colleagues and ONGC staffs into the mouth of death.
The Bench noted that as regard the opportunity of hearing, it was found from record that all the witnesses were examined in his presence and he had cross-examined many of the witnesses except some. With regard to supply of enquiry report, the petitioner had admitted that he had submitted his representation against the enquiry report and from the record of the disciplinary proceeding, it was found that by letter dated 13-01-2003, the enquiry report was served upon the petitioner and on 24-01-2003, the petitioner had submitted his representation against the enquiry report.
The Court took note of the fact that the petitioner had also suppressed the fact that the petitioner has filed a review against the order of the Appellate Authority and during the pendency of the review application, the petitioner had filed the present writ application. However, during the pendency of the writ application, the Appellate Authority had dismissed the review application but the said fact was not brought before this Court.
The Bench referred to the Constitution Bench case of State of Orissa v.Bidyabhushan Mohapatrawhich had observed that having regard to the gravity of the established misconduct, the punishing authority had the power and jurisdiction to impose punishment and the penalty was not open to review by the High Court under the Article 226 of the Constitution. The three-judge Bench in the case of B.C. Chaturvediv. Union of India had held that judicial review was not an appeal from a decision but a review of the manner in which the decision was made. Power of judicial review was meant to ensure that the individual received fair treatment and not to ensure that the conclusion which the authority reachedwas necessarily correct in the eye of the Court. When an inquiry was conducted on the charges of misconduct by a public servant, the Court or Tribunal would be concerned only to the extent of determining whether the inquiry was held by a competent officer or whether the rules of natural justice and statutory rules were complied with.
The Court reiterated that after considering the ‘Wednesbury Principles’ and the doctrine of proportionality, held that the question of quantum of punishment in disciplinary matters was primarily for the disciplinary authority, and the jurisdiction of High Courts under Article 226 of the Constitution or of the Administrative Tribunals was limited and was confined to the applicability of one or the other of the well-kwon principles known as ‘Wednesbury Principles’ namely whether the order was contrary to law, or whether relevant factors were not considered, or whether irrelevant factors were considered or whether the decision was one which no reasonable person could have taken.
The Bench referred to a three-judge Bench in case of Deputy General Manager (Appellate Authority) v. Ajai Kumar Srivastavawhich had circumscribed the power of judicial review by the ConstitutionalCourts and had observed that “it is thus settled that the power of judicial review, of the constitutional court, is an evaluation of the decision making process and not the merits of the decision itself. It is to ensure fairness in treatment and not to ensure fairness of conclusion. The court/tribunal may interfere in the proceedings held against the delinquent if it is, in any manner, inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the conclusion or finding reached by the disciplinary authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached or where the conclusion upon consideration of the evidence reached by the disciplinary authority are perverse or suffer from patent error on the face of record or based on no evidence at all, a writ of certiorari could be issued…it is thus settled that the power of judicial review, of the constitutional court, is an evaluation of the decision making process and not the merits of the decision itself. It is to ensure fairness in treatment and not to ensure fairness of conclusion. The court/tribunal may interfere in the proceedings held against the delinquent if it is, in any manner, inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the conclusion or finding reached by the disciplinary authority is based on no evidence. If the conclusion or finding be such as no reasonable person would have ever reached or where the conclusion upon consideration of the evidence reached by the disciplinary authority are perverse or suffer from patent error on the face of record or based on no evidence at all, a writ of certiorari could be issued…”
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)
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