Read Order: BENNET, COLEMAN & COMPANY LIMITED versus E! ENTERTAINMENT TELEVISION LLC.
Tulip Kanth
New Delhi, June 1, 2023: The Delhi High Court has granted relief to E! Entertainment Television LLC by vacating an ad-interim injunction order passed in favour of Times Group restraining the American pay television channel from starting any channel/ programme in India by the mark “NOW” or any other mark deceptively similar to the mark “NOW”.
“From the facts as noted it is evident that though the plaintiff has number of registrations with suffix and prefix “NOW”, it is a common word and is used by number of other entities”, Justice Mukta Gupta asserted.
The plaintiff- Times Group had prayed for an order restraining the Defendant from adopting and using the mark “NOW”, “E NOW” and “E NEWS NOW” or any other mark or name which is identical or deceptively similar to plaintiff’s channel name/ registered mark or mark’s logo style.
The plaintiff also prayed for restraining the Defendant from using the plaintiff’s domain name/ website timesnow.tc, moviesnow.co.in, romedynow.com, economictimes.indiatimes.com/et-now, etc. or any other domain name similar in fashion for any internet site or social media site, account or handle of the plaintiff or to create any third party interest in the domain name currently in use by the defendant and for direction to defendant to maintain accounts of profit illegally earned by them.
Summons in the suit were issued and interim injunction was also granted in favour of the plaintiff restraining the respondent from starting any channel/ programme in India by the mark “NOW” or any other mark deceptively similar to the mark “NOW”.
The defendant thereafter sought vacation of this injunction order dated May 14, 2019.By another interim application, the defendant also prayed for rejection of the plaint filed by the plaintiff with exemplary costs, or in alternative, the return of plaint for presentation before a court of competent jurisdiction.
It was claimed by the plaintiff that the trademarks “TIME”, “TIMES” and “NOW” are the property of the plaintiff company only, and its subsidiaries and affiliates have been allowed to use the same. The plaintiff has been using the series of mark “TIMES” and “NOW” in various combinations, in respect of television channels for more than a decade. It was contended on behalf of the plaintiff that the present suit is limited to class 38 and 41 of the trademark registrations which pertain to “television broadcasting services” and “television based entertainment services” respectively.
It was also submitted that the defendant had not filed any trademark application for ‘E! Now’ or ‘E! News Now’ in India till date and hence, no right could be claimed by the defendant.
The Defendant had put forth a case stating that the earliest registration of the mark “NOW” by the plaintiff was of July 31, 2008 which was subsequent to the date of use of “E! News Now” by the defendant, and hence, the “NOW” label and marks had been wrongly registered.
Noting the fact that the plaintiff was not the proprietor of the standalone trademark “NOW” nor prior user of the said mark in Class-38 and the stand-alone registration of the plaintiff in Class-41 was of September 18, 2014 on the proposed to be used basis and had not been used till date, the Bench said, “Thus, the registration of “NOW” simplicitor in Class-41 cannot be used to seek an injunction against the defendant‟s mark “E! Now” and “E! New Now” and the defendant’s first use of “E News Now” was since September 30, 2007.”
It was also clarified by the Bench that whether a mark is a common to trade or not is a question of fact. Similarly, a mark may be a trademark in some jurisdiction and publici juris in others, but a mark which may be common to trade at one time may become distinctive over a period of time, or vice versa.
The Bench made it clear that though the plaintiff has number of registrations with suffix and prefix “NOW”, it is a common word and is used by number of other entities. Further the plaintiff’s own stand is that the mark “NOW” is common to trade as stated by the plaintiff in response to the examination report for ROMEDY NOW under No.2589055 in Class-9, and the counter statement in relation to opposition filed against the mark “NOW” under No.1716885 in Class-9.
The plaintiff had also given a disclaimer on “NOW” in registration for LOVCOM in Class-9, LOVCOM NOW in Class-16 and ROMEDY NOW in Class-38. Thus, the plaintiff cannot be permitted to claim that the word ‘NOW’ used by it as a prefix or suffix has acquired a distinction. Therefore, the defendant who is a prior user of mark ‘E’ or E! with ‘NOW’ and ‘E NEWS NOW’ cannot be injuncted.
It was also observed that the Plaintiff in his plaint had claimed that it has principal office in Delhi which fact to the knowledge of the plaintiff was incorrect and was sought to be amended by way of an application under Order VI Rule 17 CPC. Further the plaintiff on the one hand claimed that the defendant had no transborder reputation affecting the plaintiff’s reputation, thus, denying the existence of the defendant as a prior user, however, on the other hand claimed defendant’s transborder reputation to claim injunction from the Court.
Further, the order granting ad-interim injunction also noted that the same was granted on the representation that the trademark ‘NOW’ had been registered in various categories in favour of the plaintiffs since 2006 but the plaintiff had registration only in Class 41 which was also on the proposed to be use basis and till now the plaintiff had not used the trademark ‘NOW’ simplicitor in Class 41.
Consequently, the ad-interim injunction was vacated by the Bench. The Court also dismissed the Plaintiff’s application under Order XXXIX Rule 1 & 2 CPC and disposed of the defendant’s application.
Read Order: Sangram Singh v State of NCT of Delhi
Simran Singh
New Delhi, June 1, 2023: The Delhi High Court has set aside the impugned order dated 25-02-2023 cancelling the bail of the petitioner in the FIR registered under Section 336, 387, 506 and 34 Indian Penal Code,1860 (IPC) and 25, 27, 54 and 59, Arms Act, 1959 (Arms Act) on the ground that the accused was involved in another case in FIR registered under Sections 25, 54 and 59 of Arms Act, stating that it was unsustainable in the eyes of law.
In the matter at hand, the petitioner impugned the order dated 25-02-2023 passed by the Additional Session Judge, (ASJ) New Delhi whereby the bail granted to the petitioner was cancelled. The ASJ had previously, vide order dated 22-02-2022 had granted bail to the petitioner accused in case FIR subject to the condition that the accused would not commit any other offence or offence of similar nature. The Sessions Court was of the view that the said condition had been violated by the accused as subsequently another FIR was registered against the accused under sections 25, 54 and 59 of Arms Act and thus the bail was liable to be cancelled.
The petitioner submitted that FIR under Sections 25, 54 and 59 Arms Act, was falsely lodged and the Sessions Court without going into the facts of the case mechanically cancelled the bail. The Additional Public Prosecutor vehemently opposed the petition and submitted that the Sessions Judge correctly cancelled the bail of the accused as the petitioner was a habitual offender. There were 5 other cases pending against the petitioner and that the regular bail application of the petitioner had also been dismissed vide order dated 08-05-2023.
The Bench stated that the jurisdiction regarding cancellation of bail was a very limited jurisdiction. It was settled law that the bail once granted could only be cancelled if there were very cogent and overwhelming supervening circumstances or if the accused had misused his liberty of bail. “The Courts can cancel the bail only if either there exists supervening circumstances or if there is an inherent defect in the order granting bail.”
The Bench noted that in the present case, while granting bail, a condition was imposed vide order dated 22-02-2022 that the petitioner would not commit any offence or offence of similar nature. However, subsequently, another FIR was registered under Section 25, 54 and 59 Arms Act.
The Court considered that simply because an FIR had been lodged, the bail granted to the accused on merits could not have been cancelled. Needless to say that the same would depend upon the facts and circumstances of each case. However the impugned order cancelling the bail was silent on the facts or the gravity of the offence alleged to have been committed by the accused.
The Court thus was of the view that the impugned order dated 25-02-2023 cancelling the bail could not be sustain in the eyes of law and the same was liable to be set aside. Accordingly, the impugned order dated 25-02-2023 was set aside.
Read Order: Abhay Kumar v Superintendent of Police
Simran Singh
New Delhi, June 1, 2023: The Karnataka High Court has set aside for the third time in a row the FIR filed against Abhay Kumar, former MLA from Bagevadi Assembly constituency in Karnataka’s Belagavi district, who is accused of accumulating disproportionate assets.
The Single-Judge Bench of Justice K. Natarajan noted that the Trial Court had directed the police twice before to register FIR and on both occasions the FIRs were quashed by the High Court since no sanction had been obtained from the State Government to prosecute him. Despite such facts, the Trial Court had directed the police to file FIR for the third time to investigate the matter.
In the matter at hand, the accused sought quashing the order dated 21-09-2017 passed by the Additional District and Sessions Judge, Belagavi, Trial Court and consequently quash the FIR, as being illegal and void. The defacto complainant had filed a private complaint before the Trial Court for the offence punishable under Sections 13 (1) (e) read with 13(2) of Prevention of Corruption Act,1988 (PC Act), in turn the Special Judge referred the complaint to the Lokayuktha police for investigation under Section 156 (3) of Criminal Procedure Code,1973 (CrPC).
It was alleged that the accused being a sitting MLA during the parade 2004 to 2008 representing the Bagevadi Assembly constituency in Belagavi district, during which he had amassed wealth more than the known sources of income, thereby the accused being public servant committed the offence under the provisions of PC Act. It was referred to the Lokayukta police who registered an FIR but in 2013, the High Court had quashed the FIR and remitted the matter back to the Special Court Judge.
The Trial Court once again referred the complaint to the Lokayukta police (subsequently Anti-Corruption Bureau) which had registered an FIR in 2017 but in the same year, the High Court had quashed this FIR. Once again, the Trial Court referred the matter to ACB but after it was scrapped and all its cases shifted to the Lokayukta police, the FIR was investigated by it which was challenged in 2021 before the High Court.
It was argued that in spite of quashing the FIR twice, the Special Court once again had referred the complaint without getting the sanction from the Government to prosecute. Therefore, continuing the investigation based upon the private complaint was an abuse of process of law. The private complaint being referred to the police and registering of the FIR was illegal as the petitioner was an MLA, and a prior sanction was required while directing the police investigation of the matter.
The Single-Judge Bench of Justice K. Natarajan while quashing the latest and the third FIR pointed out to the fact that since sanction under Section 19 of PC Act had not been obtained from the Government to prosecute the then MLA, he was protected under Section 197 of CrPC which provided with the fact that no Court could take cognizance of alleged offence by public servants without obtaining the sanction of the Government, and therefore the private complaint was not sustainable under the law.
The Court while placing reliance on the judgment of the Supreme Court in Priyanka Srivastava v. State of U.P. observed that a complainant could not directly file a private complaint under Section 200 CrPC for the purpose of referring the complaint to police under Section 156(3) CrPC without the compliance or without approaching the police by the complainant under Section 154(1) CrPC. He shall approach the higher officer of the police under Section 154(3) CrPC and only after exhausting the remedies before both the provisions, only then the complainant should approach the Magistrate under Section 200 CrPC for the purpose of reference under Section 156(3) CrPC.
Thus, the Bench held that there was no document to show that there was a compliance of the aforesaid legal position in order to refer the complaint and to register the FIR and to investigate the matter as against the accused. Accordingly, the Court held that the private complaint was not sustainable in law and therefore continuing the investigation was nothing but an abuse of the process of law and was liable to be quashed. The Court thus allowed the Writ Petition.
Read Order: M/s Nagarjuna Agro Chemicals Pvt. Ltd v. State of U.P. and Another
Chahat Varma
New Delhi, June 1, 2023: The Allahabad High Court has ruled that issuance of notice under Section 61(3) of Central Goods and Service Tax Act, 2017 (CGST Act), is not a condition precedent for initiating action under Section 74 of the Act.
Briefly stated facts of the case were that the petitioner, an assessee under the GST regime, had submitted returns for the assessment year 2019-20. The department had initiated proceedings under Section 74 of the CGST Act against the petitioner with regard to classification and consequential tax payable of certain goods. The department passed an order demanding deposit of appropriate short fall in the deposit of tax as also interest and penalty. The petitioner's counsel argued that since the petitioner had already submitted returns, the department should have first pointed out any deficiencies in the returns, giving the petitioner an opportunity to rectify them before initiating action under Section 74 of the Act.
The division bench of Justice Ashwani Kumar Mishra and Justice Vinod Diwakar observed that in the present case the department did not identify any discrepancy or deficiency in the petitioner's returns, nor any such deficiency was pointed out to the petitioner for it to be rectified by it. It was only during the consideration of the returns, that the department found that proper tax had not been deposited, leading to the initiation and conclusion of proceedings under Section 74 of the CGST Act.
The bench held that in the statutory scheme, the course followed by the department was permissible in law. The argument that the department cannot proceed under Section 74 without pointing out deficiencies in the return and giving the petitioner an opportunity to rectify them, was rejected by the court.
“In our view, merely because no notices were issued under Section 61 of the Act would mean that issues of classification or short payment of tax cannot be dealt with under Section 74 as exercise of such power is not dependent upon issuance of notice under Section 61. The argument is misconceived is thus, repelled,” said the court.
Read Order: Bhausaheb Sopanrao Bhoir v. ITO
Chahat Varma
New Delhi, June 1, 2023: The Pune bench of the Income Tax Appellate Tribunal has held that capital gain does not refer to taxing the gross receipt. The Tribunal referred to Section 48 of the Income Tax Act, which provides the mechanism for computation of capital gain, i.e., the cost of acquisition of the asset and cost of any improvement should be reduced from the full value of consideration, in addition to the expenditure incurred wholly and exclusively in relation to the transfer.
In the matter at hand, the assessee had raised an additional alternative ground contending that deduction of cost of acquisition should be given in the computation of the capital gain. Further, in the said case, the Assessing Officer (AO) had added a sum of Rs. 4,95,37,200/- to the assessee's income, invoking the provisions of Section 56(2)(vii)(b) of the Income Tax Act. This was based on the AO's observation that soon after purchasing the land, the assessee entered into an agreement to sell it and hence the assessee’s claim that the purchase was not complete, was wrong.
The bench comprising of R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial) noted that the AO had computed the capital gain at the gross value of the stamp value without allowing any deductions towards the cost of acquisition and cost of improvement. Therefore, the bench directed the AO to consider the deduction towards the cost of acquisition while computing the capital gain in accordance with the law.
The bench further noted that in this case, a registered agreement to sell was executed between the assessee and the sellers, with proper documentation including photographs and thumb impressions of all parties involved. Based on this evidence, the bench rejected the assessee’s contention that the sellers were not the real owners of the land. Furthermore, the fact that the assessee had simultaneously agreed to sell the same property to another person on the same day provided further proof that the land was indeed purchased by the assessee at the declared consideration of Rs.1.85 crore. The bench held that Section 56(2)(vii)(b) of the Income Tax Act was applicable in this case, which mandated adding the difference between the stamp value and the declared purchase consideration in the hands of the assessee.
Read Order: Kanpur Fertilizers & Cement Ltd v. Income Tax Officer
Chahat Varma
New Delhi, June 1, 2023: In a relief to Kanpur Fertilizers & Cement Ltd. (assessee), the Delhi bench of the Income Tax Appellate Tribunal has directed the Assessing Authority (AO) to delete the disallowance, holding that the interest earned by the assessee from the short-term fixed deposits with scheduled banks, being inextricably linked to the project, was a capital receipt, that reduced the project’s cost and accordingly, the assessee had correctly reduced the same from the cost of expenditure on the project.
In the present case, the AO while framing the assessment, noticed that the assessee in its account had shown pre-operative expenditure of Rs. 54,37,00,000/- and out of which the interest received on short-term deposits with scheduled banks was deducted, amounting to INR 1,93,75,802/-. The explanation of the assessee was not found acceptable and this amount was added into the income of the assessee under the head income from other sources. Aggrieved against this, the assessee preferred an appeal before the CIT(Appeals), who also sustained the addition.
The bench referred to the judgment of the Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd v. Income Tax Officer [LQ/DelHC/2009/4960], to analyze whether the interest earned on term deposits could be considered ‘inextricably linked’ to the revamping or renovating of a sick unit.
The bench took note of the arguments put forth by the counsel representing the assessee, wherein the counsel highlighted that the amount in question was incurred on the project and referred to the balance sheet, that it was being utilized for renovating and revamping a sick industrial unit. Additionally, the counsel pointed out that the assessee had issued bank guarantees to Indian Oil Corporation and state governments against the FDR, amounting to INR 1417 lakh and INR 7.50 lakh respectively. The bench held that this information demonstrated that the interest income earned by the assessee was inextricably linked to the revival of the project.
The bench also referred to the decision rendered in ITO vs. M/s Adani Power Rajasthan Limited [LQ/ITAT/2019/1205], wherein the Tribunal was in complete agreement with the action of the CIT(A) in upholding the action of AO to reduce interest income arising from deposits placed with SBI out of project development expenditure.
Read Order: Ankit Sharma v Union of India
Simran Singh
New Delhi, June 1, 2023: The Delhi High Court declined relief to the doctor-petitioner who had sought a direction to the National Board of Examinations (NBE) to permit him to participate in the Post Diploma Centralised Entrance Test Counselling (CETC) on the basis of marks obtained by him in the Post Graduate Diploma in Maternal and Child Health (PGDMCH) course completed from the Indra Gandhi National Open University (IGNOU).
The Single-Judge Bench of Justice Prateek Jalan stated that the case of a regulated profession, such as medicine, was entirely different. The Post Graduate Diploma in Maternal and Child Health course of Indra Gandhi National Open University (IGNOU/respondent 3) was never recognised as a qualification by the Medical Council of India (MCI) with National Medical Commission (NMC), and to compel NBE to confer a benefit on the basis of such a qualification by reducing the period of training for Diplomate of National Board (DNB) would, in view of the Court, propagated a benefit being granted for a course which the regulator did not recognise.
The Bench stated that the admission to any other Post Graduate DNB course eligibility criteria for DNB-Post Diploma Centralised Entrance Test, required a Post Graduate Diploma recognised by the MCI/NMC. The petitioner admittedly did not possess such a qualification, and had also not challenged the eligibility criteria.
He had also sought a direction for allotment of a seat in the DNB for Family Medicine (Secondary) course on the basis of marks obtained by him in the PGDMCH course completed from IGNOU. He also preferred an alternative prayer for allotment of a seat in DNB for Obstetrics and Gynecology (Secondary) or Paediatrics (Secondary) course, or a seat in DNB Family Medicine (Primary) course, exempting him from appearing in the entrance exam, and also from payment of fee for first year, again on the basis of his PGDMCH qualification.
It was the case of the petitioner that PGDMCH qualification entitled him to admission in the DNB-FM course as a Secondary candidate vis-a-vis public notice dated 31-03-20101, issued by the NBE, and the 'Guidelines for Competency Based Training Programme in DNB- Family Medicine’ , which provided that a holder of the PGDMCH qualification would not be required to appear in the CETC, and could participate in counselling for DNB-FM (Secondary) course. He was aggrieved by the fact that when he had sought to apply for DNB-FM in the year 2021, NBE did not provide for such a benefit to PGDMCH qualified candidates. The petitioner raised his grievance with the Prime Minister’s Office, to which he received a response on 11-06-2021, stating that ‘the PGDMCH course of IGNOU was not recognised by MCI / NMC.
The Bench stated that the relief sought by the petitioner could not be granted both on account of the fact that the Secondary DNB-FM course had been discontinued by NBE, and on the ground that NBE was, in any event, entitled to modify the eligibility criteria in respect of the PGDMCH course.
“In any event, an academic body’s right to so decide is well established, and the proposition that courts should not sit in appeal over a policy decision is no longer res integra.” This principle had been laid down in the Supreme Court case in National Board of Examinations v. G. Anand Ramamurthy wherein it was stated that the High Court was not justified in directing the petitioner to hold examinations against its policy which was in complete disregard to the mandate of this Court for not interfering in the academic matters particularly when the interference in the facts of the instant matter lead to perversity and promotion of illegality.
The Bench disregarded petitioner’s reliance upon Suresh Pal v State of Haryana and stated that the Supreme Court was concerned with qualification for the purpose of employment as Physical Training Instructors. The qualification of the petitioner therein was recognised at the time when he took admission into the course. There was no question of requirement of a qualification recognised by a professional regulatory body such as the MCI/NMC and the recognition in question was only by the prospective employer for the purposes of the job.
It further stated that the petitioner’s alternative prayer for admission in Post MBBS DNB in Family Medicine without taking the NEET-PG examination was unmerited. The award of an unrecognised
qualification could not, in any event, confer a right upon the petitioner to an admission to a course without taking the basic qualifying examination. Petitioner’s final submission that he be allotted a Sponsored seat in DNB- Family Medicine also could not be granted. He was not qualified for the Sponsored seats which were available to government employees.
The Bench was of the view that in any event, the request was beyond the scope of writ petition, and had made by way of an additional affidavit dated 26-07-2022, when the admissions to the 2021-22 sessions were already long over. “The petitioner could not claim a vacant seat for which he is not otherwise eligible, merely on the ground that the seat remains vacant.”
Read Order: VIKRAM RUHAL Vs. DELHI POLICE & ORS
Tulip Kanth
New Delhi, June1, 2023: While considering a matter where the candidate applying for the post of Sub Inspector in Delhi Police had disclosed information regarding the FIR relating to allegations of dowry demand made against his brother whereby the petitioner-candidate and his family members were roped in as accused, the Delhi High Court has asked the Delhi Police to consider the candidate’s appointment by observing that merely naming in the FIR does not lead to an inference that the employer can keep in abeyance the employment of an applicant for an indefinite period.
“Merely being named in the FIR cannot be treated as an impediment for public appointment, unless the involvement is substantiated on investigation, specially in relation to matrimonial offences”, the Division Bench of Justice V. Kameswar Rao & Justice Anoop Kumar Mendiratta asserted.
The petitioner had applied for the post of Sub Inspector in Delhi Police in response to the recruitment notice issued by the Staff Selection Commission and successfully cleared all the examinations. In the interregnum, before the announcement of final result, an FIR under Sections 313/323/406/498A/506/34 IPC was registered by the petitioner’s sister-in-law, implicating all the family members including the petitioner.
Thereafter, petitioner was recommended for appointment as Sub Inspector in Delhi Police, subject to verification. During verification carried out by Delhi Police, petitioner disclosed about the pendency of aforesaid FIR.
Thereupon a show-cause notice was issued to the petitioner as to why the candidature of the petitioner for the post of SI (EXE) Male in Delhi Police-2017 should not be cancelled due to alleged involvement in the aforementioned FIR as disclosed by him at the time of verification In the meantime, a charge-sheet was issued and cognizance was taken by the Court of JMIC, but the petitioner was not summoned.
The petitioner was informed that his reply to the show-cause notice was examined by the Screening Committee and it was decided to keep his case pending till final decision of the criminal case. Petitioner had filed representations before the Commissioner of Police, Delhi thereby requesting to consider his candidature to the post of Sub Inspector, reiterating that no criminal case was pending against him as his name was reflected in Column 12 of the charge-sheet.Since no response was received from respondents, petitioner preferred an application before the Tribunal.
The petitioner challenged the order of the Central Administrative Tribunal whereby the Tribunal declined to set aside order issued by the Deputy Commissioner of Police, Recruitment NPL, Delhi thereby keeping the recruitment of the petitioner to the post of Sub Inspector (Exe) in Delhi Police pending, till final outcome of the proceedings arising out of the FIR.
The Bench reiterated that even if a disclosure has been truthfully made by the applicant, the employer has the right to consider antecedents and fitness and cannot be compelled to appoint a candidate.
Referring to the guidelines laid down in Avtar Singh vs. Union of India, the Bench held that the Competent Authority in the present case, was required to consider the suitability of the petitioner having regard to result of investigation and cognizance taken thereupon on the charge-sheet. The Competent Authority was accordingly under obligation to examine the nature of offence, the evidence appearing against the petitioner and the attendant circumstances.
While noting the petitioner had truly disclosed on verification regarding the FIR registered before announcement of result and there had been no concealment or suppression in this regard by the petitioner, the Court made it clear that the FIR arose out of a matrimonial dispute between the brother of the petitioner and his wife, wherein the petitioner and all other family members had been named as an accused.
Petitioner being the brother-in-law of complainant was only a "collateral accused" and not the main accused. It was also be noticed that the investigating agency had removed Section 313 of the IPC on investigation and the surviving offences related only to Sections 498-A/406/506/323/34 IPC which were generic in nature who was just aged about 19/20 years at the time of the alleged incident.
As per the charge-sheet, petitioner was placed in column No. 12 and it was categorically observed that from the statement of the witnesses and record that the allegations of demand of dowry and harassment from the petitioner were found false and he was found innocent.
“Mere possibility of being summoned after filing of chargesheet, when the petitioner has been placed in Column 12 of charge-sheet, has no legal foundation for withholding the appointment, specially in matrimonial offences under Sections 498-A/406 IPC”, the Bench held.
The petitioner appeared to have already suffered ignominy due to registration of FIR and also the appointment stood deferred despite the investigation pointing to his innocence. Considering that the petitioner had been placed in Column No. 12 of charge-sheet and the fact that evidence did not establish his involvement in aforesaid offences after investigation, the Bench opined that he should have been logically considered suitable for appointment.
Noting the fact that the Competent Authority as well as the Tribunal ignored the fact that there is a growing tendency amongst the women to rope in all the relatives including minors in case an FIR is lodged with reference to matrimonial disputes, the Bench held, “Merely naming in the FIR does not lead to an inference that the employer can keep in abeyance the employment of an applicant for an indefinite period, even if the applicant has been placed in column No. 12 of the charge-sheet and has not been summoned.”
Thus, dismissing the petition, the Bench held, “It is difficult to presume that the petitioner would be a threat to the discipline of Police Force merely on account of registration of the aforesaid FIR wherein he has even not been summoned.”
Read Order: R.K. Industries IV v. Commissioner of GST & Central Excise
Chahat Varma
New Delhi, June 1, 2023: The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled that services used for testing of raw materials, are eligible for credit or refund, as they have a nexus with the manufacturing of finished products.
Brief facts were that the appellants, engaged in manufacture of ready-made garments, had filed refund claim in terms of Notification No.17/2009-ST dated 07.07.2009 for refund of service tax paid by them on services provided to them by Custom House Agents, Technical Testing and Analysis Agencies. The refund claim was rejected on two grounds. Firstly, that it was time-barred. Secondly, that the conditions set out in the notification had not been fulfilled by the appellant.
The two-member bench reviewed para 2(f) of Notification No. 17/2009, which stated that the refund claim had to be filed within one year. The bench held that the rejection of the entire claim for a quarter solely based on a few shipping bills beyond the one-year limit was not justified. They held that the invoices filed within the one-year period should have been considered for the respective quarters. The issue was remanded back to the adjudicating authority with directions to examine the shipping bills within the one-year time limit.
The bench further noted that the Notification did not impose any conditions regarding refund claims specifically related to testing and analysis services. Consequently, the rejection of the refund claim on the grounds that the services were utilized for testing raw materials was not deemed acceptable by the Tribunal.
The bench concluded that when there was no dispute with regard to the services availed and the service tax paid, the rejection of refund was without any basis.
Read Order: Tata Sia Airlines Limited v Vistara Home Appliances Private Limited
Simran Singh
New Delhi, June 1, 2023- The Delhi High Court has set aside the impugned order dated 28-10- 2021 of the Trial Court which had dismissed the application filed by the appellant under Order XXXIX rules 1 & 2 read with Section 151 of Code of Civil Procedure, 1908 (CPC) in a suit for infringement of trademark and passing off against the respondents.
The Division Bench of Justice Manmohan and Justice Saurabh Banerjee stated that “Tainted adoption of the impugned mark VISTARA by respondents, under suspicious circumstances, is a discerning factor playing a dominant role throughout which leaves no doubt in the mind of this Court that the interim application of appellant deserves to be allowed.”
It was further stated that “Having once adopted the impugned mark ‘VISTARA’ with their eyes and ears open, there is no scope left for the respondents to take refuge of the usage or projected loss of customers, trade channels and industry of operation as it is already too late in the day and when much water has flown under the bridge since then.”
In the matter at hand, the appellant was a joint venture between TATA Sons Private Limited and Singapore Airlines Limited operating a full-fledged service airline under its trademark ‘VISTARA’ which is a ‘well-known trademark’ as per Section 2(1)(zg) of The Trade Marks Act, 1999 (TM Act) and was entitled to a higher degree of protection under law. In India, the appellant has since obtained registration of the trademark ‘VISTARA’ logo in Classes 12, 39, 16, 21, 25, 27, 28, 18, 9, 35, 39, 43 and 45 from time to time, the earliest being in Classes 12 and 39 on 02-06-2014. A third party had also became the owner of the same trademark ‘VISTARA’ in Class 39 subsequently, however, the same had since been assigned with goodwill to the appellant on 11-02-2016.
The appellant came to know in September 2020 that respondents 1 had been using its trademark ‘VISTARA’ as its corporate name ‘Vistara Home Appliances Private Limited’; as its domain name 'www.vistarahome.com' and as its device marks, without any authorisation. The respondents were also found selling and offering home appliances like LED TV, OTG, fans and coolers under the impugned mark VISTARA (device) on its website and on third party websites and was active on social media platforms, like Facebook and YouTube since their adoption in December 2018, also without any authorisation from the appellant.
The appellant, vide its Legal Notice dated 09-09-2020 followed by a reminder notice dated 16-03-2021, called upon the respondents to cease and desist their acts of infringing and passing off the trademark ‘VISTARA’. Non receipt of response to either of them by respondents despite due receipts led to institution of a suit for infringement of trademark, passing off by the appellant in May 2021 seeking a decree of permanent injunction from infringing and/ or passing off by advertising, directly or indirectly offering any goods or services, using or registering corporate names, domain names or in any other manner using the trademark VISTARA before the Trial Court.
The respondent contended that they had applied for registration of the impugned mark VISTARA (device) in Classes 7, 9 and 11 and the appellant was neither using the trademark ‘VISTARA’ nor had applied for registration for products falling in the said Classes. Further, there could be no confusion as VISTARA was a dictionary word and the respondent 1, since existence as a Company from 2015, had entered into various contracts and established very deep trade channels and business networks and also built a reputation and made extensive investments. Therefore, if the respondents were restricted from using the mark, it would be catastrophic for them. As per respondents, the trademark ‘VISTARA’ of appellant was not a ‘well-known mark’ when respondent 1 commenced using the impugned mark VISTARA (device). They also claimed to be very very cautious that they do not have their mark be confused with that of appellants which was why they had represented their mark in a completely different manner by choosing a different colour combination, font, style of writing, structure and overall representation. As per respondents, they were dealing in goods totally unrelated to those of the appellant and they were not unauthorised users as per Section 29 of the TM Act.
The Trial Court agreed with the contention of the appellant qua its adoption and uninterrupted extensive use of the trademark ‘VISTARA’ since 2014 and qua it being arbitrary and inherently distinctive with respect to travel services even though it was a Sanskrit word ‘Vistaar’. The Trial Court stated that both the marks were used in different classes of goods and catered to different customers thus granted no injunction against respondents, as there were remote chances of respondents encashing upon the goodwill and reputation of the appellant.
The Trial Court extended no benefit to the appellant as the subsequent registration by respondents prima facie was neither invalid nor cancelled, as neither any objection to the applications for registration of the impugned mark VISTARA (device) of respondent 1 in Classes 7, 9 and 11 nor objection to use of the website ‘www.vistarahome.com' of respondents since 2018 was filed and as the respondents were using the said impugned mark for unrelated goods. Thus dismissed the interim application of the appellant.
The Bench noted that the appellant was incorporated in the year 2013, i.e. prior to the formation of the respondent 1 and the appellant was already using the trademark ‘VISTARA’ prior to the respondents. However, the respondents had not given any plausible basis or reason for adopting the impugned mark VISTARA at any stage. Thus, was of the view that this was a sufficient reasons for the Trial Court to allow the interim application of appellant.
“The respondents subsequently adopted an already existing registered trademark ‘VISTARA’ of the appellant firstly as its corporate name ‘Vistara Home Appliances Private Limited’ in the year 2015, secondly as a (device) mark in the year 2016 and thirdly as its domain name ‘www.vistarahome.com' in the year 2018.”
It was stated that the respondents were always well-aware of the appellant and its registered trademark ‘VISTARA’, both while adopting and while filing for registration of the impugned mark VISTARA which was apparent from their own reply to the interim application wherein they pleaded that they were very cautious and they their mark be not confused with that of the appellants. Thus, both adoption and usage of the impugned mark VISTARA by respondents were per se, dishonest since inception.
The Bench disagreed with the contention that the impugned mark VISTARA was a common dictionary word having a meaning in different languages including Sanskrit stated that it was an invented word having no meaning, especially as it was distinct, unconnected, arbitrary and neither synonymous nor related to a particular class of services/ goods of any kind whatsoever and which was bona fidely and genuinely adopted by it. The said trademark ‘VISTARA’ of appellant was thus arbitrary and distinctive.
“It would not be wrong to infer that the respondent no.1 mala fidely chose to apply for registration of a (device) mark instead of a (word) mark simply to circumvent the hurdles in the way qua the appellant and its registered trademark ‘VISTARA’.”
The Bench was of the view that the impugned mark VISTARA (device) of respondents would always be referred visibly, seen and called by the general public as the word VISTARA, it was highly improbable that a man of average intelligence and normal recall would be able to differentiate the said mark with the registered trademark ‘VISTARA’ of appellant which in all likelihood would lead to confusion.
The Bench stated that there was no occasion for the Trial Court to deny the relief of injunction merely because the respondents adopted and used the impugned mark VISTARA in different Classes/ products, more so, whence the adoption was itself tainted and was not backed by any material particulars.
The Bench was of the view that there was no proof qua the contention of the respondents that they had entered into various contracts, established deep trade channels, business networks and industry of operations, and that they had many dependent employees and an injunction would result in their loss of customers. Thus stated that the Section 12 of TM Act could not come to the aid of the respondents under suspicious circumstances.
“It is a settled principle in trademark law that ‘adoption’ takes precedence over ‘usage’ and any subsequent usage after wrongful adoption of a mark cannot/ ought not be given any credence.” The Court opined that undue importance had erroneously been given to the wrongful adoption and unwarranted usage of the impugned mark VISTARA by the respondents as the same was dissimulating without any explanation from them.
The Bench was of the view that the Trial Court neglected to give due weightage to its association, existence and popularity with the appellant as those were certainly relevant factors worthy of consideration for any mark to be declared as such, more so, when the legislature in its wisdom had knowingly recognised and accorded a better protection than to an already existing registered trademark.
“It is reiterated that once a trademark is registered it is well and truly entitled to all the statutory protection recognized and available under the TM Act. This is why, as per the Statute (TM Act) when a word is adopted under Section 2(m) as a ‘mark’ under the TM Act it can not only qualify to become a trade mark as per Section 2(p) of TM Act but can also, with the passage of the time, certainly progress and qualify to become a ‘well-known mark’ as per Section 2(zg) of TM Act.”
The Bench stated that the existence of third parties apart from the respondent 1, who were either using VISTARA as their corporate name or using it as a mark, was immaterial and of no relevance for the purposes of adjudication of the present dispute.
“A registered proprietor was a master of its own ring and is not expected to be on its toes always to chase each and every infringer passing off its trademark and is free to initiate appropriate actions, if any, against any infringing party of its choice, on its own volition.”
The Bench noted that the appellant was vigilant in pursuing its concern with the respondents as on becoming aware of the adoption of the impugned mark VISTARA by respondents, it issued a legal notice followed up with a reminder thereto, both of which were never replied despite due service, and had instituted the suit before the Trial Court.
It was of the view that the Trial Court had erred in overlooking the fact that the respondents had, admittedly, not initiated any proceedings against the appellant, either before the Trade Mark Registry or before any Court of law in all the time while the interim application was being heard till passing of the impugned order.
“Therefore, it would not be wrong for this Court to conclude that the defenses raised by the respondents are after-thoughts and the learned Trial Court ought to have ignored them while passing the impugned order.”
The Court found that impugned order was contrary to the settled principles of law, which did not concur with either the reasonings or the findings given by the Trial Court.
Read Order: Shamim Akhtar v. Directorate General of GST Intelligence, Gurugram
Chahat Varma
Chandigarh, June 1, 2023: The Punjab and Haryana High Court has granted bail to the petitioner, who was accused of offenses under the Central Goods and Services Tax Act, 2017 (CGST Act). The court took into account that the trial was still in the pre-charge evidence stage and was unlikely to conclude in the near future.
The petitioner had sought the concession of regular bail under Sections 132(1)(A) & (I) of the CGST Act. The petitioner had contended that they were falsely implicated in the case, as evidenced by the absence of any cash or Agriculture Grade Urea being recovered from them. It was argued that the arrest of the petitioner on 26.04.2022 was in contravention of the statutory provisions of the CGST Act, as the adjudication and assessment of tax liability had not yet commenced. On the other hand, the respondent, while opposing the prayer and submissions made by the petitioner, contended that the Agricultural Grade Urea was utilized by the petitioner for producing Resin. The resin was subsequently sold without issuing tax invoices, resulting in a loss to the State Exchequer, on account of the evasion of GST.
The court found no justification for continuing the petitioner's incarceration and thus granted bail.
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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