Bachan Singh v. State of Punjab (1980) : case analysis

March 12, 2024

This article has been written by Ria Verma and further updated by Shefali Chitkara. This article aims to analyse the landmark judgement of Bachan Singh v. Union of India and its aftermath. The author has tried to give a brief overview and background of the judgement, with a focus on the need, relevance, and limitations of the ‘rarest of rare doctrine’ that was formulated by the Hon’ble Court in this case. Further, the author has mentioned the key highlights of the judgement, including a note on aggravating and mitigating circumstances, the reform test, and the 35th Report of the Law Commission of India. The author has also tried to explore key judgements on the death penalty over the years.

Table of Contents

Introduction

Recently, a 38-year old man was convicted for killing his mother and attempting to kill his neighbour as well. The Court considered the case to be ‘rarest of the rare’ and awarded him the death penalty. Another man was awarded the death penalty for committing the gruesome act of raping a minor girl and then killing her.

Capital punishment has been a topic of discourse since its inception. Would hanging the culprit justify their actions? Would there be deterrence in society, and would the number of crimes be reduced? The answers to these questions are ambiguous.

Bachan Singh v. State of Punjab (1980) is a well-known and landmark judgement credited with developing the jurisprudence on the death penalty. It answered the constitutional validity of the death penalty and examined whether it was in consonance with the Articles of the Indian Constitution.

This case addressed the issue of whether the procedure given under Section 354(3) of the Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC”) pertaining to sentencing the convicted person is unconstitutional. The courts are given unguided discretion, and it is completely in their hands to decide whether the death penalty should be awarded or not.

This case has been widely regarded as a landmark judgement given by a bench consisting of five judges and is known for establishing the “rarest of the rare” doctrine applicable while deciding whether the death penalty is to be imposed on the accused.

We need to address the question of whether, 44 years after the judgement, the court successfully created a coherent basis for imposing the death penalty in India.

In the present case, the accused, Bachan Singh, was convicted for the murder of two persons and was given the death sentence by the Sessions Judge, which was upheld by the Punjab and Haryana High Court. This decision was further appealed but dismissed by the Supreme Court of India. The death penalty has always been a topic of debate, and this case stands as a landmark in Indian criminal law. It addressed the constitutionality of the death penalty, established the importance of considering aggravating and mitigating circumstances, and introduced the guiding principle of the ‘rarest of rare doctrine’. This judgement has had a significant impact on the sentencing process in death penalty cases, aiming to maintain a balance between justice and the fundamental rights of convicted persons.

What is this rarest of the rare doctrine and under what circumstances can the Court impose the death penalty upon a convicted person? Let us try to find an answer for the same.

History of death penalty

In earlier times, the punishments for criminals included boiling to death, crucifixion, crushing, stoning, and flaying. The death penalty was imposed for various reasons that today would seem barbaric. The history of the death penalty, or capital punishment, is long and can be traced back to the code of Hammurabi. In the Eighteenth Century B.C., it codified the death penalty for twenty-five different offences. Mention of the death penalty is also found in the Fourteenth Century B.C.’s Hittite Code and the Seventh Century B.C.’s Draconian Code of Athens. In Britain, when capital crimes increased, around 222 crimes were made punishable by death, including stealing. Later, this led to reforms in Britain’s death penalty laws, resulting in the removal of capital punishment for 100 of the 222 offences.

The British were the first to set up a centralised government over the whole country, and their law prescribed death sentences for twelve offences. Influenced by them, the Indian Penal Code (hereinafter referred to as “IPC”) came into force in 1862, incorporating the English tradition of capital punishment in a codified form.

Death penalty in India

In India, the death penalty is imposed in cases of murder, gang robbery coupled with murder, abetting the suicide of an insane person, a minor, abetting a mutiny by a member of the armed forces, and waging war against the government. Capital punishment is also awarded under anti-terror laws for those who have a significant involvement in committing terrorist acts.

The general approach of the courts is to award the death penalty to the convicts in a murder case. As per the facts and circumstances of the case, it is scrutinised whether the case would fall under the ambit of ‘rarest of the rare’ cases.

India is thus one of those countries that retains the death penalty within its legal framework for the rarest of the rare crimes, and yet it is not in favour of abolishing it completely. The death penalty is the execution of a convicted person under a death sentence imposed by a competent authority. It is also referred to as ‘capital punishment’. The word ‘capital’ is derived from the Latin word ‘capitalis’ which means ‘of the head’. The reason being that in ancient times, the death penalty was carried out by beheading a person. Capital punishment represents the maximum quantum of punishment permitted by law for a criminal in India. In the present case of Bachan Singh v. State of Punjab, the Supreme Court held that the death penalty must be imposed in the most heinous crimes where the doctrine of the rarest of rare case applies.

In the present scenario, where around 142 countries have abolished the death penalty, it remains a topic of debate in India. The argument often centres around the belief that life is a gift from God, and only he has the right to take it back. Although capital punishment can be imposed only in the ‘rarest of rare’ cases, it sparks concerns in a country that values human rights. How can capital punishment be justified when it seemingly violates fundamental human rights? Moreover, is the phrase ‘rarest of rare’ defined anywhere? The answer is negative, indicating that the ambiguity in this phrase can lead to judgments that are erroneous, as it is totally within the discretion of the judges deciding that case. Multiple considerations come into play before deciding if someone should face capital punishment.

India had not cast a vote in favour of the UN resolution that called for the abolition of capital punishment. The power to grant mercy in a case of the death penalty is with the president. If a convict is sentenced to death by the Sessions Court, it must be confirmed by the High Court. Subsequently, the convict has another option to appeal to the Supreme Court. If the appeal fails, then he may make a mercy petition to the president of India under Article 72 of the Indian Constitution. This Article grants the president the power to pardon, reprieve, or remission the punishment or reduce the sentence of a person who has been convicted of an offence.

The first person to be hanged in independent India in 1949 was Nathuram Godse in the case of Nathu Ram v. Godse v. The Crown (1949). Then, a terrorist, Afzal Guru, who attacked the Indian parliament in 2001, was executed in 2013 in the case of State v. Mohd. Afzal and Ors. (2003). A lone survivor of the Mumbai attack of 2008, Ajmal Kasab, was executed in 2012 in the case of Mohammad Ajmal Amir Kasab v. State of Maharashtra (2012). In 2020, in Mukesh and Anrs. v. NCT Delhi (2017), Nirbhaya convicts were also hanged after years of legal proceedings, highlighting the data on delayed executions in death penalty cases in India.

However, amidst these considerations, a stark development emerges – the death row population in India reached 561 prisoners by the end of 2023, the highest since 2004. In an unexpected turn, the Supreme Court acquitted nearly 55% of these individuals during its 2023 hearing, signalling a notable departure from traditional trends. This shift raises crucial questions as to where India is heading with its views on the death penalty.

The situation gains added importance when we consider a step taken by the Court in September 2022. They decided to form a special bench to look into how death penalties are given. But, given the persistent problems with how sentences are decided in India’s courts, it’s not clear if this panel can actually bring about significant improvements.

Instead, when we see more and more people being acquitted and the number of people on death row increasing rapidly, it makes us question whether the Court should not only focus on how sentences are decided but also rethink the whole system of reforming the death penalty in India.

Offences punishable with death sentence

The Indian Penal Code specifically and other statutes also provide for capital punishment as one of the punishments for rare crimes. In the IPC, these offences are made punishable with the death sentence:

Waging war against the government (Section 121)
Abetting mutiny when committed (Section 132)
Giving or fabricating false evidence through which an innocent person suffers death (Section 194)
Threatening any person to give false evidence, and if an innocent person is convicted in consequence (Section 195 A)
Murder (Section 302)
Abatement of suicide by a child or insane person (Section 305)
Kidnapping for ransom (Section 364 A)
Rape and causing death or resulting in the persistent vegetative state of the victim (Section 376 A)
Rape on women under 12 years of age (Section 376 AB)
Gang rape on women under 12 years of age (Section 376 DB)
Punishment for repeat offenders in rape cases (Section 376 E)
Dacoity with murder (Section 396)

The other statutes that provide for the death sentence are:

Section 354(3) of the Code of Criminal Procedure

Section 354 of the CrPC, which was added to the Code in 1973, mandates judges to provide specific justifications when imposing the death penalty.

Adding nuance to this, Section 354(3) emphasises that judges must provide reasons for any sentence that is awarded and offer ‘special reasons’ when the convict is punished with the death penalty.

The sentencing follows conviction and is proportional to the degree and intensity of the crime committed. However, no straitjacket formula is applicable while sentencing the convicts.

Background of Bachan Singh v. State of Punjab (1980)

There were quite a few judicial pronouncements before the Court gave the judgement in Bachan Singh regarding whether the death penalty is in lieu of constitutional provisions.

In Jagmohan Singh v. State of U.P. (1972), the Supreme Court held that the death penalty did not violate Articles 14, 19, and 21 that guarantee the right to equality, freedom of speech and expression, and the right to life. The facts, circumstances, and nature of the crime committed would be the factors scrutinised by the judge when making the choice between awarding the death penalty or life imprisonment. Therefore, the decision to award the death penalty was made according to the procedure that has been laid down by law under Article 21.

In Rajendra Prasad v. State of U.P. (1979), the Court held that unless it was shown that the individual is a terrible and continuing threat to social security, capital punishment would not be justified. Justice Krishna Iyer opined that the death penalty should be inflicted in the case of three categories of criminals:

for white-collar offences,
for social offences, and
for eradicating a person who is a threat to society, that is, a seasoned killer.

The Court also held that the death penalty for the offence of murder, which is awarded pursuant to Section 302 of the IPC, 1860, would not be a violation of the constitutional provisions. In grave cases of extreme culpability, capital punishment can be awarded, and the convict’s condition must be taken into consideration.

Provisions involved in the case

Section 354 (3) of the CrPC, 1973.
Section 302 of the IPC, 1860.
Articles 14 and 21 of the Constitution.

Facts of Bachan Singh v. State of Punjab (1980)

Having previously been convicted for the murder of his wife under Section 302 of the IPC, Bachan Singh served 14 years in prison. After his release, he resided with his cousin, Hukum Singh, and his family. However, this living arrangement was objected to by the wife and children of his cousin. On July 4, 1977, the appellant committed an atrocious act by murdering three out of four children of his cousin using an axe.

Bachan Singh was thus convicted for the offence of committing the murder of Desa Singh, Durga Bai, and Veeran Bai by the Sessions Court. He was given the death penalty under Section 302 of the IPC. He appealed to the High Court; however, the Court dismissed his appeal and upheld the death sentence.

He then appealed to the Supreme Court and raised the question of whether the facts of the case would fall under the ambit of the ‘special reasons’ under Section 354(3) of CrPC, 1973.

Prominent issues raised

Whether the death penalty that has been provided as the punishment for the offence of murder under Section 302, Indian Penal Code, 1860, is unconstitutional?
Whether the sentencing procedure stipulated in Section 354(3) of the CrPC, 1973, is unconstitutional insofar as it vests the courts with unguided and untrampled power and allows the death sentence to be imposed arbitrarily on an individual found guilty of any offence punishable with death or life imprisonment?

Contentions of the petitioner

The petitioner raised the contention that the death penalty awarded for the offence of murder mentioned under Section 302 of the IPC violates Article 19 of the Indian Constitution. The death penalty puts an end to all the freedoms guaranteed under Article 19(a) to (g). No social purpose is served by the death penalty, and it does not fall under the purview of unreasonable restriction.

The petitioner relied on the doctrine of proportionality and contended that the death penalty in this case is an extreme punishment and should only be imposed in the rarest of the rare cases where imprisonment for life is considered inadequate. The counsel also referred to the Rajendra Prasad case to emphasise the importance of the rarest of the rare doctrine. Imposing the death penalty unnecessarily would infringe upon the fundamental rights of the accused person under Article 21 of the Indian Constitution. Thus, he demands a stringent standard of interpretation.

Contentions of the respondents

The respondents contended that an individual must own property in a way that does not infringe the rights of another individual, that is, the principle of sic utere tuo ut alienum non laedas. They further contended that the rights guaranteed under Article 19 are not absolute in nature and are subject to certain reasonable restrictions.

The counsel for respondents argued that the death penalty serves as a powerful deterrent for the people, preventing them from committing heinous crimes and instilling fear in potential criminals. They also argued that judges have the discretion to impose any penalty depending on the facts and circumstances of each case to promote justice. The respondents further asserted that special reasons in this particular case justified the imposition of the death penalty, considering the past conduct of the convicted person. As per the respondents, the death penalty was rightly imposed on the convicted person, according to the established precedents and the authority of the Constitution of India.

Judgment in Bachan Singh v. State of Punjab (1980)

The Supreme Court, with the majority opinion, had dismissed the appeal. The Court dismissed the challenge to the constitutionality of Section 302 of the IPC in so far as it prescribed the death penalty as one of the punishments, as well as the constitutionality of Section 354(3) of the CrPC, 1973.

The Court stated that the provision of the death sentence is only an alternative to other punishments prescribed for murder under Section 302 of the IPC, 1860, and cannot be considered unreasonable and not in the public interest since the Parliament had already taken this into consideration while revising the Code of 1898, eventually replacing it with the CrPC, 1973. The Court did not hold the sentence of death penalty as unconstitutional but established the doctrine of the ‘rarest of the rare’, wherein only cases falling under rarest of rare category could be punished with a death sentence, and that too only after the courts provide special reasons for such punishment.

The Court also laid down the aggravating and mitigating circumstances that must be considered by the judges while granting a death sentence to any convicted person, emphasising the need to assign proportionate weight to both elements.

Section 302 of the IPC, 1860, and Section 354(3) of the CrPC were held to be constitutional and not violative of Articles 14, 19, and 21 of the Indian Constitution.

Analysis of the judgement in Bachan Singh v. State of Punjab (1980)

In the landmark judgement of Maneka Gandhi v. Union of India (1978), the scope and the interrelationship between Articles 14, 19, and 21 were given a new dimension. It was held that every law of punitive detention must pass the test of all three articles, both from a procedural and substantive angle.

In A.K. Gopalan v. The State of Madras (1950), all six learned judges were of the opinion that if the accused was awarded punitive detention or imprisonment after being convicted of committing an offence under the Indian Penal Code, it would be beyond the scope of Article 19.

The Supreme Court dismissed the challenges regarding the constitutionality of Section 302 of the IPC and 354(3) of the CrPc. The Court further opined that the six fundamental rights given under Article 19(1) are not absolute in nature.

Firstly, they are subject to restrictions emanating from an obligation of an individual to not use their rights in a way that injures or infringes on the rights of other members of society. This is based on the maxim sic utere tuo ut alienum non laedas, that is, an individual using their property in a manner that does not infringe the legal rights of another individual.

Secondly, under Clauses (2) to (6) of Article 19, these rights are expressly mentioned as being subject to the power of the state, which can impose certain reasonable restrictions. These restrictions could extend to prohibiting the exercise of these rights in special circumstances.

Another issue is whether the courts have untrampled power in imposing the death penalty and the nature and extent of the special reasons. The expression ‘special reasons’ as stated in Section 354(3) of the CrPC means exceptional reasons owing to the grave nature of the crime. The Apex Court laid down the doctrine of ‘rarest of the rare cases’ for imposing the death sentence. Life imprisonment is the rule, and the death sentence is awarded as an exception for those convicted of murder. Exercise of discretion under Section 354(3) of the CrPC, 1973, would be exceptional. The death penalty would be awarded only for crimes that shake the collective conscience of society. The imposition of the death sentence should only be in the rarest of rare cases.

The Court also referred to the foreign judgments while delivering the judgement in the present case. In the case of Furman v. Georgia (1972), the death penalty was held to be unconstitutional by the US Supreme Court for violating the 8th Amendment, which prohibits cruel punishments. However, in the present case, the Supreme Court of India rejected the reasoning of the aforementioned decision. Subsequently, in Gregg v. Georgia (1976), the constitutional validity of the death penalty was upheld by the US Supreme Court, and the Court had established a set of guidelines for its imposition. In the present case, the Supreme Court used these guidelines to develop its own criteria for determining whether the death penalty should be imposed or not.

Further, Justice Sarkaria stated the following points in the judgement:

The extreme death penalty can be inflicted in the gravest cases of extreme culpability.
Along with the facts and circumstances of the offence, the circumstances of the offender must be taken into account. The court must scrutinise both the crime as well as the criminal, and then decide whether life imprisonment is to be awarded or the death penalty. Accordingly, the presence or absence of ‘special reasons’ must be established. The emphasis is to be laid on the aggravating and mitigating factors, which are dependent upon the facts and circumstances of the case.

A few parameters were suggested by Dr. Chatale in the judgement for ascertaining ‘aggravating circumstances’. He drew inferences from the American penal statutes framed after Furman v. Georgia (1972), in general, and Clauses 2(a), (b), (c), and (d) of the Indian Penal Code (Amendment) Bill that was passed in 1978 by the Rajya Sabha (but was not ultimately enacted). The parameters are as follows:

The murder was premeditated and involved extreme brutality;
The murder involves exceptional depravity; or
A member of any of the armed forces of the Union, or a member of any police force, or any public servant was murdered while the member or public servant was discharging their duties;
The public servant was discharging their duty; or in consequence of anything done or attempted to be done by such a public servant during the lawful discharge of their duty as such a public servant, whether at the time of the murder he was such a public servant or had ceased to be such a public servant; or
If the murder is of a person who had acted in the lawful discharge of his duty under Section 43 of the CrPC, 1973, or who had assisted a magistrate or a police officer demanding his aid or requiring his assistance under Section 37 and Section 129 of the said Code.

He further suggested a few mitigating circumstances that the Court should take into account as per their discretion:

The offence was committed by an individual who was extremely mentally or emotionally disturbed.
The age of the accused is to be taken into account. If the accused is a minor, he shall not be sentenced to death.
The probability that the accused would not commit criminal acts of violence that would act as a threat to the well-being of the members of society.
The probability that the accused can be reformed and rehabilitated. The state would need to prove that the accused does not fulfil these conditions by giving sufficient evidence.
If the accused felt that he was morally justified in committing the act as per the facts and circumstances of the case.
The accused acted under duress or was dominated by another individual’s will.
The condition of the accused showed that he was mentally ill, and because of the illness, he was not capable of understanding the criminality of his conduct.

Dissenting opinion

The rule of law penetrates the entire fabric of the Indian Constitution. It does not include arbitrariness. Article 14 acts as a guarantee against arbitrariness and prohibits state action, whether legislative or executive, that suffers from a high level of arbitrariness.

Justice PN Bhagwati was of the view that Section 302 of the IPC, in so far as it provides for the imposition of the death penalty as an alternative to a life sentence, is ultra vires. It is unconstitutional and void since it is an infringement of Articles 14 and 21 of the Constitution, and no legislative guidelines are laid down as to when life should be permitted to be extinguished by the imposition of the death sentence.

Another dissenting opinion was that it is difficult to answer the question of whether the death penalty serves any penological purpose. It is a difficult, complex, and intractable issue. There has been significant discourse on the purposes of the death penalty and whether it serves the purpose of deterrence. A large proportion of people, including sociologists, legislators, jurists, judges, and administrators, from the length and breadth of the country as well as the world, still have averse opinions towards the necessity of imposing capital punishment.

Further, in 1979, India became a member of the International Covenant on Civil and Political Rights (ICCPR), adopted by the General Assembly of the UN. India is committed to a policy for the abolition of the death penalty.

The Supreme Court, with the majority opinion, dismissed the appeal. It was held that the provision of the death penalty as an alternative punishment for the offence of murder under Section 302 of the IPC, in so far as it prescribes the death penalty, as well as the constitutional validity of Section 354(3) of the CrPC, 1973, is neither unreasonable nor is it against the public interest. It is constitutionally valid and does not violate the provisions of Article 19 of the Constitution.

Critiques of the judgement in Bachan Singh v. State of Punjab (1980)

There is a lack of theoretical framework in the present case, which has impacted the procedural fairness of sentence hearings.
Abolitionists of the death penalty still held a different view and were not satisfied with this judgement.
Despite the Court’s clarity on the constitutionality of the death penalty, various ambiguities persisted, resulting in the absence of meaningful criteria for awarding death sentences.
The judgement failed to clarify the correlation between the aggravating and mitigating circumstances, thereby giving more discretion to the judges in filling gaps while awarding death sentences.

Rarest of rare doctrine

As mentioned previously, the doctrine of “rarest of rare” was developed in the present case. Retentionists have argued that it has limited the scope of imposing a death sentence, ensuring that it is imposed in a reasonable rather than arbitrary manner. In contrast, abolitionists have argued that there is ambiguity involved in this doctrine, as the power to decide will always be in the hands of the judges and is thus based on their discretion. Furthermore, they emphasise that once the punishment has been executed, it becomes irrevocable in nature.

Views on same-day sentencing

Same-day sentencing refers to a situation where a person, when convicted, receives the sentence order from the court on the same day. This practice is often criticised and is generally argued as being biassed against the accused person. Since the accused gets a chance to produce evidence to show mitigating circumstances in their favour only after their conviction, this same-day sentencing hinders the rights of the convicted person. The following issues relate to this matter:

Whether the hearing on sentencing should be held on the same day of conviction or on a subsequent day.
Whether deciding the sentence on the same day prevents convicted persons from having a fair chance to explain reasons for a life term instead of the death penalty?
Whether there is a legal requirement to hold a separate hearing to decide the quantum of sentence after the date of conviction.

In Bachan Singh’s case, the judgement also stressed the need for holding a separate hearing for sentencing, stating reasons for either granting or not granting the death penalty. According to Section 235 of the CrPC, 1978, when the accused is convicted, the court will have to hear the convicted person on the sentencing to pass a sentencing order. Further, Section 354(3) emphasises the necessity of recording reasons for the sentence awarded, in cases of the death penalty or imprisonment for life.

It is to be noted that even though the courts separately hear the parties on sentencing, the case is not adjourned to a future date. Rather, it is done on the day of conviction itself. It has been argued that such same-day sentencing violates principles of natural justice, as convicts do not get enough time to argue about mitigating factors. While some courts support the practice of same-day sentencing, others oppose it. There is a pressing need for the Supreme Court to frame comprehensive guidelines on the same-day sentencing policy.

Key highlights of the judgement in Bachan Singh v. State of Punjab (1980)

The court stated that the fact that India is a member of the International Covenant on Civil and Political Rights does not affect the constitutional validity of capital punishment.
Unlike Article 21, Article 19 does not deal with the right to life and personal liberty and is not applicable for checking the constitutional validity of the provisions of Section 302 of the IPC, 1860.
The Court noted that the state had discharged its burden by producing the 35th Law Commission Report, 1967, and several judgements in which the death penalty has been recognised as a deterrent.
The question of whether the death penalty serves a penological purpose is a difficult one and has various divergent views.
The propositions stated in the Jagmohan Singh case remain unchanged, except that the award of the death penalty is an exception to be made for “exceptional reasons” that were founded on grave circumstances relating to the crime and the criminal as per Section 354(3) of the CrPC, 1973.
A pre-sentence hearing for the accused has been introduced by virtue of Section 235(2) of the CrPC, altering the Jagmohan judgement. The courts will now have to consider both the circumstances of the criminal as well as those of the crime.
The imposition of the death penalty cannot be restricted only to cases where the security of the state, public order, and the interests of the general public are threatened.

Aggravating and mitigating circumstances

Various aggravating and mitigating circumstances were considered by the Court in the present case and were enumerated in the judgement for future reference by the Courts.

Few mitigating circumstances are:

The offence was committed under the influence of an extreme mental disturbance.
The accused is either too young or too old to be given the death sentence.
There is a probability that the accused can be reformed and rehabilitated.
There is a probability that the accused would not commit any wrongful acts of violence, posing a continuing threat to society.
The accused had a reason to believe that he was morally justified in committing the said offence.

Few aggravating circumstances are:

A grievous offence has been committed with a prior record of conviction (which was precisely what happened in the instant case).
The offender, by his act, created a great risk of death for more than one person in public.
The offender committed the offence for the purpose of receiving any monetary consideration.
The offense was outrageously vile, horrible, or inhuman and involved torture or aggravated harassment of the victim.
The offence was committed by a person who escaped lawful confinement.

35th Report of the Law Commission of India

The Court in this case had referred to the 35th Law Commission Report, 1967, which was submitted to the government after an extensive study on the subject of the death penalty in India. As per the report, the issue of the abolition and retention of the death penalty needs to be decided by balancing various arguments for and against its retention. There is a need to protect society in general and individual human beings by arriving at a conclusion on this subject. Considering the conditions of India, such as the disparity in the level of morality and education of the country, the diversity of the population, and the need to maintain law and order in society, the report suggests that India cannot risk experimenting with the abolition of the death penalty.

This report was also considered by the Court in the Jagmohan Singh case, and based on the same, the challenge to the constitutionality of Section 302 of the IPC was not entertained.

Reform test and its ramifications

The death sentence should be used only in situations where an alternative option is unquestionably foreclosed, or when the alternative punishment of life imprisonment serves no purpose. Imprisonment for life can only be considered futile when the purpose of reformation cannot be achieved. Thus, while giving special reasons for granting the death penalty to an accused person, the court should provide evidence as to why the convict cannot be reformed. The double qualification has to be satisfied before imposing the death penalty:

The case should be one of the rarest of the rare.
The alternative option of life imprisonment is not sufficient as per the facts and circumstances of the case.

This principle was considered in the judgement of Santosh Kumar Satishbhushan Bariyar v. State of Maharashtra (2009). The Court derived its judgement from a radical interpretation of the Bachan Singh case. The Court in this case tried to address the problem of arbitrariness, acknowledging that the question of the death penalty cannot be separated from the subjective element and that the imposition of the death penalty depends greatly on the personal discretion of the judges.

Judiciary’s stance after the judgement in Bachan Singh v. State of Punjab (1980)

In the case of Mithu v. State of Punjab (1983), the mandatory death sentence under Section 303 of the IPC was declared unconstitutional and removed from the Code. This section stated that any criminal who has been sentenced to life imprisonment and committed a murder while in custody would be sentenced to death. An interpretation of this section can be that the culprit is beyond reformation and does not deserve to live.

In Machhi Singh v.State of Punjab (1983), the Court elucidated the doctrine of ‘rarest of rare.’ The Court laid down certain guidelines pertaining to the parameters to be considered when deciding whether a case falls under the purview of the ‘rarest of the rare’.

The guidelines are as follows:

Modus operandi: The Court stated that if the crime committed is so extremely brutal and heinous that it shocks the collective conscience of society, it would fall under the purview of the ‘rarest of the rare’ cases. A well-known example of this would be the Nithari killings. The culprit was recently held guilty of murder, attempted rape, abduction, and destruction of evidence and awarded the death penalty.
The motive for committing the crime: when the crime is committed using a deliberate design to kill the victim brutally, or assassins are hired to torture and kill the victim, or the act is done to betray the nation, it would fall under the purview of a ‘rarest of rare’ case.
The severity of the crime: The gravity of the crime must be taken into account. For example, murdering every member living in a particular locality or all the members of a family.
Victim of the crime: If the victim of the crime is vulnerable, that is, a minor, a senile person, an insane person, or if the victim is an influential figure that has received much love from society, the crime would then also fall under the purview of the ‘rarest of the rare’ case.
Balance sheet: A balance sheet must be prepared, taking into account the aggravating as well as the mitigating circumstances of any case. The mitigating circumstances have to be given full weightage and a balance must be struck between the aggravating and the mitigating circumstances, before making the final decision.

Aftermath of the case of Bachan Singh v. State of Punjab (1980)

It is often argued that the ambiguities present in Bachan Singh’s case have led to the absence of significant criteria for imposing the death penalty. A number of reiterations of the case have arisen that are not in consonance with the actual judgement.

The central argument against the framework given in Bachan Singh’s case is the lack of normative clarity. It does not clearly explain the interrelationship between the aggravating and mitigating factors. A number of factors and parameters are considered, such as age, mental state, and the socio-economic background of the culprit. The judges have the discretion to fill this normative gap while giving sentences in the future, with their own considerations.

Further, the procedural fairness of sentencing proceedings has been significantly impacted due to the lack of a theoretical framework developed in Bachan Singh’s case.

One major argument in the Bachan Singh case was that only 18 states have abolished the death penalty. The current situation is much different than it was then. In 2019, Amnesty declared that 106 countries had discontinued the death penalty in law for all crimes, and 142 countries (more than two-thirds of the total countries) had put an end to imposing the death penalty in law or practice. India is among those countries that have yet to abolish the death penalty from its punishments.

In Bachan Singh’s case, the majority was of the opinion that the death penalty would act as a deterrent to heinous offences. A lot of surveys and statistical reports have concluded that the death penalty does not act as a deterrent. In 1988, a survey conducted by the UN was unable to provide any evidence to support the claim that executions were more of a deterrent than life imprisonment.

In Canada, the homicide rate was 23% lower than the previous year, after they abolished the death penalty in 1976. In a state-by-state analysis in the USA, it was found that during the 1980-2000s, the homicide rate in states that imposed the death penalty was 48 percent to 101 percent higher than in states without the death penalty.

Another issue is imposing the death penalty on innocents. For example, in the USA, more than 184 prisoners given the death penalty since 1973 were exonerated or released on the ground that they were innocent.

In India, it is common to see biases in criminal investigations against marginalised religious communities or lower caste or class groups. They are disproportionately subject to the death penalty. In 2015, the 262nd Law Commission Report called for the abolition of the death penalty for ordinary crimes. Activists continue to argue for abolishing the death penalty for all crimes. The constitutionality of the death penalty will continue to be challenged in courts, and the Supreme Court will soon have to clarify whether the absence of a political will is sufficient ground to supersede an individual’s right to life.

Key judgments on death penalty over the years

The discussion by the Hon’ble Supreme Court on the constitutional validity of the death penalty can be traced back to the case of Jagmohan Singh v. State of Uttar Pradesh in 1973. In this case, a five-judge bench upheld the validity of the death penalty, stating that as the death penalty is imposed according to the procedure established by law, it cannot be said to be violative of the right to life under Article 21. The court also affirmed that it does not violate Article 19 and Article 14, and the court’s discretion in granting the death penalty is not unfettered. This decision was reaffirmed by another five-judge bench of the Hon’ble Supreme Court in the present case in 1980. While upholding the constitutional validity of the death penalty as an alternative punishment for murder under Section 302 of the IPC, 1860, the court also clarified the need to consider the circumstances of the criminal along with the circumstances of the crime, stating that imprisonment for life is considered as a rule, and death penalty as an exception.

As aforementioned, In 1983, a five-judge bench of the Supreme Court in the case of Mithu v. State of Punjab struck down Section 303 of the IPC, 1860, as it violated Articles 14 and 21 of the Indian Constitution. According to Section 303, if a person committed murder while undergoing imprisonment for life, the person would be sentenced to death. This mandatory death penalty in such cases had prevented the courts from exercising discretion and was thus held to be arbitrary.

Additionally, in the case of Machhi Singh v. State of Punjab, as mentioned above, a three-judge bench of the Supreme Court stated that the courts must consider the following, while imposing the death penalty:

Motive of the accused person,
Manner in which a crime was committed,
Anti-social nature of the crime,
Personality of the victim, and
Magnitude of the crime.

The courts must strike a balance between aggravating and mitigating circumstances while deciding any case for the death penalty.

In 1988, a five-judge bench of the Supreme Court in the case of Kehar Singh v. Union of India noted that the powers of the President and Governor of the State under Articles 72 and 161 of the Indian Constitution to decide on mercy petitions have to be exercised differently from the powers of the courts in deciding for the death penalty. Further, the courts may grant oral hearings to the convicted persons. In such cases, the courts must also ensure that the decisions of the president and the governor are in accordance with the principles of the Constitution and the other procedural mandates.

In 2008, a three-judge bench in the case of Swamy Shraddhananda and Murali Manohar Mishra v. State of Karnataka clarified that the circumstances mentioned by the Court in the Machhi Singh case that are required to be considered while deciding on the death penalty must not be taken as absolute because the Court in the Bachan Singh case intended to make this flexible.

In 2009, a two-judge bench of the Supreme Court in the case of Santosh Kumar Satishbhushan Bariyar v. State of Maharashtra interpreted the doctrine of the ‘rarest of rare’ laid down in the Bachan Singh case. To impose the death penalty, the courts must apply a two-part test. First, the courts have to determine whether the case falls under the doctrine of the ‘rarest of the rare’. Second, the courts must consider life imprisonment as the initial alternative. If they still choose to opt for the death penalty, they must give reasons for this decision and explain why the convict cannot be reformed.

Subsequently, in 2014, a three-judge bench of the Supreme Court in the case of Shatrughan Chauhan v. Union of India stated that an inordinate delay in the execution of the death sentence due to pending mercy petitions can be considered as a ground to commute the death penalty.

In the case of Manoj v. State of Madhya Pradesh (2022), there were three persons who were convicted for the offence punishable under Section 302 IPC for committing murder during the course of robbery. They were given the death penalty by the Additional Sessions Judge of Indore, and this was further confirmed by the High Court of Madhya Pradesh. The convicted persons filed an appeal before the Supreme Court of India, and the Supreme Court commuted the death sentences of all three accused persons to imprisonment for life for a minimum term of 25 years.

The Supreme Court of India reasserted the principles laid down by the Court in the Bachan Singh judgement. The Court noted that all the mitigating circumstances must be considered by the judges while finally awarding the death sentence; the parameters given in the Bachan Singh judgement and the scope for reformation and rehabilitation of the accused person must be assessed. The courts must check if there is something uncommon about the crime that would render the punishment of imprisonment for life inadequate. In respect of the same, the Court gave various guidelines:

To consider the mitigating circumstances at the trial stage by obtaining such information from the accused person and the state.
Information regarding the age, family background, criminal antecedents, and employment of the accused person is to be gathered by the state.
Information regarding any other medical or mental illness of the accused person is to be taken into consideration.
The behaviour of the accused person while in custody during the trial and the report of the officials regarding such behaviour are to be considered by the courts.

The Court mandated that the trial courts will have to take into consideration the psychiatric and psychological evaluation reports of the accused before awarding the death sentence in any case.

Also, in Manoj Pratap Singh v. State of Rajasthan (2022), the death sentence of a 37 year-old man was confirmed by the Supreme Court of India after measuring the mitigating circumstances against the aggravating circumstances, including his criminal antecedents. The man was convicted for raping and killing a minor girl of 7.5 years old in Rajasthan in 2013. In reaching the conclusion of upholding the death sentence, the Court considered various factors:

The manner in which the crime was committed by focusing on the vulnerability of the victim being known to the accused person.
The kidnapping of the victim was done on a stolen motorcycle by taking advantage of the trust gained through the offer of confectionery items.
The victim was sexually assaulted and suffered multiple injuries, including a fracture of the frontal bone. The victim also had severe injuries to his private parts.
The accused had a criminal history and had been involved in a minimum 4 cases involving theft, the destruction of public property, and attempted murder. He had already been found guilty of murdering another inmate and had received a seven-day sentence for fighting with another prisoner.

After considering these factors and noting that the convict was a danger to the maintenance of order in society, the court confirmed the death sentence that was awarded to the convicted person.

In the case of Mohd. Arif @ Ashfaq v. State (NCT of Delhi) (2022), on 22nd December, 2000, a few intruders opened fire, which killed three people, including two army officers. One of the intruders, Mohd. Arif, who was a citizen of Pakistan, was taken into custody on 25th December, 2000. He was found guilty by the Trial Court in 2005 and later sentenced to death. In 2007, the Delhi High Court upheld his death sentence, and his appeal and revision were also rejected by the Supreme Court of India in 2011. In 2016, the Supreme Court decided to hear his review petition and, in light of the same, issued a stay of execution for his sentence. However, this review petition was also rejected by the Supreme Court, which noted that terrorist acts are one of the most aggravating and heinous acts and pose a threat to the unity, integrity, and sovereignty of the nation. This act, being such a grave act, outweighed all other factors that could possibly be considered as mitigating circumstances.

United Nations on death penalty

Even the United Nations expressed its views against capital punishment. Though a member of the UN, India has still not abolished the death penalty.

The United Nations Economic and Social Council, in its resolution No. 15 of 1996, encouraged its members to abolish capital punishment or the death penalty. There are various provisions that demand the abolition of capital punishment. A few of these are:

Article 5 of the Universal Declaration of Human Rights, 1948 which provides that no person shall be subjected to torture, inhuman or degrading treatment or punishment.
It has also been provided in Article 7 of the International Covenant on Civil and Political Rights, 1966, that no person shall be subjected to torture or cruel behavior, degrading treatment, or punishment.

So, as per the UN as well, all the nations should come together to abolish the death penalty. The UN considers it a myth that the death penalty deters crime and urges the nations to for universal abolition of the death penalty as it is not consistent with the right to life.

Various international and regional human rights conventions prohibit the use of capital punishment, encourage its abolition, and strictly limit its application. In particular, the Second Optional Protocol to the International Covenant on Civil and Political Rights (ICCPR), aimed at the abolition of the death penalty. Further, the Convention on the Rights of the Child (CRC) specifically prohibited capital punishment for offences committed by persons below eighteen years of age. In October 2008, the European Union and the Council of Europe established a “European Day against the Death Penalty”in a joint declaration. Various states like Montana, New Jersey, New York, North Carolina, and Kentucky have moved against the death penalty through measures including a moratorium on executions or abolition of the death penalty. The UN noted that having a degrading, discriminatory, and arbitrary punishment is unacceptable to the States, which respect human rights, and that recourse to such a punishment carries the risk of executing innocent people.

Why does death penalty still prevail in India

There are numerous arguments in favour of and against the punishment of the death sentence. Though the death penalty is awarded in the rarest of the rare cases, there exists a question as to why the death penalty still prevails in India. A few reasons for the existence of such a punishment in our Indian legal system could be:

The death penalty is seen as an effective deterrent for heinous crimes.
To improve the safe conditions of living for the general public.
The reformative theory has failed miserably in India, and the crimes are increasing day by day.
It is believed that abolishing the death penalty now would only increase crimes in the near future without any strict punishment.

Though it is a part of our Indian legal system, it is applied only in cases where there are exceptional reasons for doing so and not otherwise. However, there is a need for expeditious disposal and timely implementation in such cases where the death penalty has been awarded.

Conclusion

The category of ‘rarest of the rare’ is always evolving. The Nirbhaya case violated collective conscience and clearly fell under the scope of this doctrine. However, this doctrine is quite arbitrary, subjective, and discriminatory.

It is quite difficult to draw a line of distinction between a rare and an ordinary murder, and subsequently the rarest case. The crime is mostly described as heinous, grotesque, and so on, but it does not lay a clear line of demarcation. It is ultimately up to the judges to award the death penalty as per their values, sensitivity, and special reasons regarding the gravity of the crime.

In the Kathua rape case as well as the Unnao rape case, the facts and circumstances were quite brutal. However, the courts did not award the death penalty to the culprits. It raises the pertinent question of whether a rare form of crime becoming common causes the courts to punish the culprits with life imprisonment instead.

It is the dire need of the hour to enact an effective framework for imposing the death penalty and contemplate whether the death penalty is in the interests of society.

The main aim of courts is and should always be focused on eliminating crime rather than just punishing criminals. The emphasis should be on reformation in cases where it is possible, and punishment should be given in order to achieve the goal of maintaining an orderly society. There needs to be a balance between the rights of convicted persons and victims to ensure the restoration of peace and prevent future crimes. The present case of Bachan Singh v. State of Punjab is a landmark Supreme Court judgement on the constitutionality of the death penalty in India. It introduced the rarest of the rare doctrine, which has since served as a precedent in many cases. Courts need to be extremely careful while imposing the death penalty, considering its irreversible nature, leading to the necessity of establishing guidelines.

Frequently Asked Questions (FAQs)

When was the death penalty introduced?

The history of the death penalty can be traced back to the Code of Hammurabi, and it has been a form of punishment in India since the time of the British.

Is the death penalty still awarded in India as a punishment?

Yes, India is one of those countries where the death penalty is still awarded for a few crimes as a punishment.

Why is the punishment of death sentence still awarded in India?

The punishment of death sentence is still in existence in our country, as it is believed to be a better deterrent than any other punishment.

Which is the landmark judgement on the death penalty?

Bachan Singh v. State of Punjab is considered the landmark case on the death penalty, as it limited the scope of this punishment to offences falling under the rarest of the rare cases.

What was held in the case of Bachan Singh v. State of Punjab?

The constitutionality of the sentence of the death penalty was upheld under Section 302 of the Indian Penal Code and Section 354(3) of the Code of Criminal Procedure.

Which doctrine was introduced in the case of Bachan Singh v. State of Punjab?

The doctrine of “rarest of the rare” was introduced in the case of Bachan Singh v. State of Punjab.

Which provisions of the Constitution are said to be violated by the death penalty in the case of Bachan Singh v. State of Punjab?

It was contended that the death penalty violated Articles 14, 19, and 21 of the Indian Constitution; however, the Court rejected this contention and held that the death penalty is not violative of Articles 14, 19, and 21.

What is the doctrine of “rarest of the rare”?

According to this case, only those criminals can be punished with the death sentence whose offence is exceptional, and the criminal’s actions are so heinous and extraordinary that they constitute the rarest of the rare cases. This doctrine was developed to limit the scope of the death penalty.

What are the provisions dealing with the death penalty in India?

Sections 53 and 54 of the IPC talks about the punishment of a death sentence and its commutation thereof, and Section 354(3) of the CrPC covers the mandate of recording special reasons by the Court while imposing the death penalty.

Who was the first person executed in independent India?

Nathuram Godse was the first person to be executed in independent India in 1949.

What are the aggravating and mitigating circumstances that are to be considered by the courts before imposing the death penalty?

The aggravating circumstances are those that increase the likelihood of giving the maximum punishment or worsen the offence, such as a previous conviction. On the other hand, mitigating circumstances are those that could minimise the punishment for an offence, such as acting without malafide intention due to mental illness.

References

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Divisible contracts : an insight

Vanshika Kapoor

March 11, 2024

This article has been written by Menaga Devi S.N. pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution course from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

The Indian Contract Act of 1872, defines the term “contract” under Section 2 (h) as “an agreement enforceable by law.” In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land. A contract is generally between two or more parties and follows the legal maxim “Quid pro quo,” which means an agreement between two or more parties in which there is a reciprocal exchange of goods or services. For example, consider a business agreement where one exchanges something for something else of similar value. In other words, “favour for favour.” Even if a quid pro quo is considered legal, it may be perceived as unethical or shady in some cases.

Contract law governs the legal principle of the exchange of goods or services between individuals or businesses. It also examines contract principles such as enforceability, breach, voidability, performances, etc. It also provides remedies available to parties who suffer damages or harm from another party’s breach.

What is a divisible contract

A divisible contract is a contract in which the performances of each party are divided into matching pairs of duties. A divisible contract is one that has multiple parts or is divided into multiple segments. Each segment exists and can be completed independently. The performance of one segment doesn’t relieve the party from the obligations over other segments, and further, a breach of one segment doesn’t excuse the performance of the other segments by the parties.

Divisibility refers to the ability to separate a contract into distinct segments, parts or sections, each of which can be treated as an independent agreement. Not all contracts are divisible, and it depends on various factors, including the intent of the parties, the nature of the contract and the practicality of performance. For example, the construction of a building is undertaken by a contractor through a contract, which includes various phases of work such as plumbing, electrical work, flooring, ceiling, finishing, site planning, etc.

Essential requirements for a valid contract

There must be an offer and acceptance.
According to Section 11 of the Indian Contract Act 1882, every person who enters into the contract must be competent, of sound mind, and major, i.e., over 18 years and above.

Case law

Mohori Bibee vs Dharmodas Ghose

Facts of the case

Dharmodas Ghose entered into an agreement with a moneylender to secure a loan amount of Rs 20,000 while he was a minor. At the time of the agreement, the person who acted on behalf of the moneylender had knowledge that Dharmodas Ghose was a minor. On attainment of majority, Dharmados brought an action against the defendant, alleging that when he executed the mortgage, he was a minor, therefore the mortgage itself is void ab initio.

Issues involved in the case

Whether the mortgaged deed is void under Sections 2, 10, and 11 of Indian Contract Act 1872 or not?
Is the mortgage deed void or not?
Whether the mortgage deed comes under Sections 64 and 65 of Indian Contract Act 1872.

Judgement of the Court

The Court states that the agreement entered into between minors is void ab initio, i.e., void at the beginning. The person acting on behalf of the money lender knows the fact that Dharmados is a minor, conceals the fact and proceeds with the agreement willfully, so the application of the doctrine of estoppel is not valid.

Under Section 23 of Indian Contract Act 1882, lawful consideration is essential for valid contracts, i.e., the consideration should be legal and should not be impossible to perform.
Consent should be free, not given under undue influence, coercion, fraud, misrepresentation or mistake.
There must be an intention to create a legal agreement and an intention to perform the contract.

Difference between divisible contracts and indivisible contracts

In a divisible contract, it is easy to separate, i.e., partial fulfilment is allowed and doesn’t affect the validity of the contract. But in an indivisible contract, it is undividable. When one cannot perform the object, the whole contract becomes void.

Examples:

A agrees to pay $4000 to B in monthly instalments – Divisible contract

If A defaults on paying the second instalment, it doesn’t affect the validity of the contract.

A agrees to pay B $2000 on December 23, 2023, the full amount for a purchase made by him- indivisible contract

If A defaults on paying that amount on the due date, the contract is void, and it is a breach of contract.

Case laws surrounding divisible contracts

Lowy vs. United Pacific Ins. Co (1967)

Facts of the case

In this case, the petitioner and respondent entered into a contract for area development, including paving the streets, installing barriers, and installing a sewer.

The defendant completed 98 percent of the contracted work, but a dispute arose concerning the payment of $7,200 for extension work. The plaintiff introduced changes to the original plan, leading to disagreements. Subsequently, the defendant ceased performance. In response, the plaintiff promptly engaged alternative contractors to complete the remaining 2 percent of the work. Despite successful completion, the plaintiff filed a breach of contract case against the respondent, alleging non-compliance with the agreement terms. The core issues involve payment disputes, alterations to the original plan, and the defendant’s cessation of performance.

Issues involved in the case

Whether the contract is divisible or not? Is the respondent eligible to claim the amount for the work completed by him?

Judgement of the Court

The Court said that the contract is divisible in nature. Because the petitioner gave a surety bond of $73,500 to the respondent for area development work, the respondent asked for another surety bond for the extension work before the second phase began, and the appellant refused to pay, so the respondent stopped the performance.

Further, the contract is divisible, and the respondent is entitled to claim the amount for the work done by him. Because the respondent breached the second phase of the contract, it does not make the whole contract null and void.

Steele vs. Tardiani (1946)

Case related to breach of contract and quantum meruit, part performance.

Facts of the case

In this case, Tardiani and Steele entered into a contract to cut the firewood. Steele makes the condition that the wood must be 6 feet long and 6 inches in diameter. As per the requirement, Tardiani and other workers cut the wood. But the requirement of 6 inches in diameter was changed in mid of work and Tardiani and others cut the wood to 6 inches in diameter mistakenly.

Issues involved in the case

Whether Tardaini is entitled to the payment? Is there a breach of contract?

Judgement of the Court

Yes, Tardiani is entitled to the payment even though there is a breach of contract

because when Steele received the woods, which varied in range, he didn’t notify Tardiani about the breach of contract and simply accepted the woods and sold them to his customers. It implies the express acceptance given by Steele in this case. Even though it is part performance, Tardiani and others are entitled to receive remuneration based on the Latin maxim Quantum Meruit – one deserves to receive pay as much as his work is done. This case highlights the importance of communication and quantum meruit.

Access Insurance Planner Inc. vs. Gee (2015)

Facts of the case

In this case, Gee and Phillip Wardell, who runs Access Insurance planners, entered into an employment agreement where Gee would self generate business for access and Phillip Wardell would pay the commission to Gee.
Philip Wardell agreed to pay 50 percent commission on the amount paid by an insurer to Access on health policies and 25 percent commission on property and casualty policies. Access agreed to pay initial and renewal policies commission to Gee.
Gee started work in 2004. She became suspicious in the year 2007 when her commission in the year 2005 was unpaid. In the beginning of 2009, she communicated with Phillip Wardell through email about the payment discrepancies, but it didn’t lead to any final conclusions. Gee pleaded to correct that financial mistake by paying her commission but Wardell refused that there was no mistake and eventually, in 2010, he terminated Gee.
Access Insurance Planner Inc. stated that it is time barred according to the statute of limitations and that it is an indivisible contract so Gee has no rights because she just proceeded with the contract even though she became suspicious.

Issues involved in the case

whether the issue is time barred under the statute of limitations or not?
Is the employment agreement divisible or divisible in nature?
Is Gee eligible for damages?

Judgement of the Court

The Florida Supreme Court stated that it is a divisible contract because whenever Gee gets paid for insurance, it is a divisible one, i.e., able to separate because the parties agreed to pay commissions for each and every insurer that is introduced by Gee.

Gee became suspicious in 2007 and she communicated about the issues to Phillip Wardell and she got terminated. In this issue, it is not a time barred issue because it is a divisible contract. The final judgement awarded damages only for the premium received by the defendant after January 11, 2007.

Darst vs. Meduna (1942)

In this case, the difference between a divisible and an indivisible contract is clearly explained by the Court. When the subject of the sale of a contract consists of different articles and the apportionment of the purchase price to each is made, then the contract is a divisible contract. The Supreme Court ruled in favour of Darst, holding that the state could not involuntarily commit a person to a mental institution and subject them to treatment without first providing them with a hearing. The Court also held that the state must prove that the person is mentally ill and that the treatment is necessary and in the patient’s best interests.

The Darst vs. Meduna decision was a major victory for the rights of mental patients. It established the principle that patients have a right to due process of law and that they cannot be subjected to involuntary treatment without their consent. The decision has also been cited as precedent in other cases involving the rights of people with disabilities.

The case had a significant impact on the way that mental health care is provided in the United States. In the wake of Darst vs. Meduna, states began to develop more stringent procedures for involuntary commitment and treatment. The decision also led to the development of new laws and regulations to protect the rights of mental patients.

Bariel vs. Tuinstra (1954)

Facts of the case

In this case, Tuinstra owns cows and runs a dairy farm. The animal health department inspected his farm and identified that some cows were infected by the disease and some were suspects so the inspection department ordered him to stop dairy farming and sell cows for slaughter. At that time, Bariel came to the defendant and said he would like to buy the livestock and lease the dairy farm. The defendant concealed the facts about the infections and sold the livestock to the appellant.

Bariel and Tuinstra entered into a contract for the sale of real estate and personal property, i.e., cattle and farm machinery and equipment, in a single document. The contract says that the amount should be paid every month. The appellant sells milk and dairy farms, and the amount is paid to the defendant.

The inspection takes place on the dairy farm and identifies some infections in the cows. The Health Department restricts the sale of milk and cows during this time. Then the appellant went to the health department to check the health of the cows and he found that when he purchased the cows themselves, they were infected and the health department put restrictions on selling these cows, but the respondent willfully concealed the facts and sold the cows to the appellant.

The appellant communicated about this issue and asked to return the purchase amount of the cows, but the respondent refused to refund. The appellant filed a case against the respondent.

Issues involved in the case

The respondent says that the contract is an indivisible one so it is unable to rescind on part of it.

Whether the contract is divisible or indivisible?

Judgement of the Court

The Court said that the contract is divisible in nature even though the apportionment is a gross payment and entered in a single document, but the purchase of personal property, i.e., livestock, machinery and equipment, and the contract of lease are divisible.

So, the appellant has the right to rescind the contract because, here, the respondent willfully concealed the fact of the infection of the cows.

Contract drafting checklist

S.No	Considerations	Clause	Significance
1	There is a likelihood of a fifth wave of the COVID pandemic and the parties intend to suspend the agreement if there is a nationwide lockdown.	Force majeure clause	It provides a legal mechanism to the parties to suspend the agreement under unforeseen circumstances.
2	Woodpeckers is proposed to be appointed as the sole distributor to sell the furniture and other products of Norwood in the State of Kerala. Norwood has agreed to not appoint any other distributors in Kerala.	Exclusivity clause	It signifies that both the parties will be in an exclusive commercial relationship.Here, it grants woodpeckers the exclusive right to distribute and sell Norwood’s product in a specified region (Kerala), preventing Norwood from appointing any other distributor in that specified region.
3	Any damages to be paid by either of the parties will be restricted to a maximum of twice the amount of consideration/payment involved for the specific consignment or order in dispute.	Liquidated Damages / Limitation of Liability	signify the predetermined financial consequences agreed upon by the parties in case of a breach.
4	The parties have agreed to use emails and couriers addressed to the official email ID and registered address of the respective parties for all correspondence under the agreement.	Notices	It signifies how and to whom the official communication, legal notice, or notification related to the contract should be delivered.It ensures proper and effective communication between the parties involved.
5	Norwood intends to reiterate its right in the agreement to compel Woodpecker to perform/undertake their part of the contract if there is no justifiable reason for such non-performance.	Enforcement Clause / Remedies clause	It provides the rights and actions that the parties can take in the event of a breach of contract, including the ability to compel performance or seek remedies for non-performance.
6	Norwood will be sharing some secretive data and marketing strategies with Woodpecker and wants to limit its disclosure.	Confidentiality Clause	It is intended to restrict the disclosure of confidential information and proprietary strategies between the parties involved in the agreement.
7	Woodpecker is apprehensive that Norwood may poach its sales experts and retailers in Kerala since Norwood is a more profitable and powerful company than Woodpecker. They want to protect themselves by introducing a specific clause in the agreement.	Non-Compete & Non-Solicit	It is designed to prevent Norwood from hiring or enticing away Woodpecker’s sales experts and retailers in the specified region.
8	There are other furniture companies planning to enter the retail market space in Kerala and Norwood does not want	Exclusivity / Non- Compete	It signifies that Woodpecker is proposed to be appointed as the sole distributor and Norwood agrees not to appoint any other distributors in the specified region.
9	Woodpecker will be using the logo, graphical representation and other packaging/branding material which bears the name of Norwood for advertising and sales of furniture and other products.	Intellectual Property Right	It signifies in protecting Norwood’s brand identity and assets, ensuring exclusive use of its logo and branding material by Woodpecker for advertising and sales. It establishes the rights, limitations, and obligations related to intellectual property, preventing unauthorised use and potential harm to Norwood’s brand reputation.
10	Woodpecker has conveyed to Norwood that they possess the required trade licence and other registrations under applicable state legislation which permits them to advertise and sell the furniture and other products in Kerala.	Representations and Warranties Clause	It is a contractual provision in which one party makes specific statements about the accuracy of certain facts, and the other party relies on those statements when entering into the agreement

Matching essential clauses of a contract with contract checklist

S.No	Considerations	Clause	Significance
1	Should any provision of this Agreement be determined to be void, invalid, unenforceable or illegal for whatever reason, such provision(s) shall be null and void; provided, however, that the remaining provisions of this Agreement shall be unaffected thereby and shall continue to be valid and enforceable.	Severability clause	It stipulates that if any provision of the contract is found to be invalid or unenforceable, the remaining provisions will still be valid and enforceable. This helps to ensure that the overall contract remains effective and operational, even if certain parts are deemed legally problematic
2	Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.	Assignment clause	It signifies the parties’ agreement on whether one party can transfer or assign its rights, obligations, or duties under the contract to another party
3	This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements, and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof	Entire agreement clause	It signifies that the written contract contains the complete understanding and agreement between the parties, superseding any prior oral or written agreements, negotiations, or understandings. It helps prevent the parties from relying on extraneous materials or oral representations that are not explicitly included in the written contract.
4	The Courts of Kerala have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).	Jurisdiction	It helps determine the specific court that will have the authority to hear and decide legal matters related to the contract, providing clarity and avoiding potential jurisdictional conflicts.
5	This Agreement may be amended or modified only by a written instrument signed by the duly authorised representatives of both parties.	Amendment / variation clause	It signifies the provision within a contract that outlines the procedures and conditions under which the parties can make changes or modifications to the terms and conditions of the agreement

Drafting clauses of the instrument

The disclosing party is Kiran Beverages Limited is a well-established company located in Kolkata, West Bengal, exclusively engaged in the manufacturing and distribution of signature beverages known for their unique taste. Kiran Beverages Limited acts as a first party in this agreement.
The First Party’s beverages (“product”) have gained widespread consumer acceptance, and the manufacturing process, considered “one of its kind,” is a closely guarded trade secret protected by necessary licences.
The First Party, having selected exclusive manufacturers and distributors across India, operates its manufacturing units in full secrecy and confidentiality.
The receiving party is Mr. Amit Roy, acting as a second party. A distributor based in Bengaluru, Karnataka, has successfully distributed and sold the product, establishing a commendable relationship with the first party.
The parties acknowledged that during the course of discussion between them, the receiving party shall become privy to certain confidential information relating to the disclosing party, and the receiving party has agreed to be bound by the non-disclosure provisions of this agreement to govern the use and disclosure of the confidential information.
In consideration of the mutual promises and agreement between the parties hereto, the parties agreed to enter into this agreement to govern the terms and conditions of their association.

Confidentiality clause

The confidentiality clause has to protect confidential information that is disclosed by the first party to the second party. Whenever the receiving party receives confidential information from the disclosing party, he is bound to protect the information from disclosure.

Here,

The first party is the disclosing party and the second party is the receiving party. The disclosing party may, from time to time, provide to the receiving party under or relating to this agreement all information communicated in writing or orally relating to business affairs, any technical data, or know-how, including but not limited to, that which is or relates to:

Business Plan, secret Recipe to the Beverages, inventions, ideas, techniques, and data;
non-public market information and product plans;
product plans, products, services, customers, markets, software, developments, inventions, processes, designs, drawings, engineering, and hardware configuration information.

Which pre-contractual instrument is beneficial for the client at this stage

A Memorandum of Understanding is beneficial for the client at this stage. Here, the first party and second party have a mutually beneficial relationship. The first party has received knowledge about the intention of the second party to expand its business through joint ventures or mergers. The first party needs some confidential information to enter into the joint venture, amalgamation, or merger and the MOU helps secure the confidential information, which has separate clauses to secure the information.

Can ‘confidentiality clause’ in such an instrument be enforced independently

Yes, even though a contract is terminated between the parties, confidentiality clauses will prevail to secure the rights of the second party and the first party is obliged to safeguard the confidential information that is shared by the second party.

After termination of the contract or MOU, if the first party discloses the confidential information that is shared by the second party, then the instrument is enforceable against the first party.

In the MOU, the duration of non disclosure of confidential information should be clearly mentioned and remedies should also be mentioned in case the first party violates the non disclosure clause.

Other clauses of the instrument

Proposed arrangement

The term “proposed arrangement” refers to a plan or agreement that is suggested, recommended, or put forward for consideration and encompasses the terms, conditions, and details that are currently under discussion and negotiation between the two parties.

The First Party has expressed its willingness to explore the possibility of a joint venture, amalgamation/merger, or another business arrangement with the Second Party. Based on that, the second party shares confidential information. Whether the parties enter into a MOU or NDA, both help secure confidential information.

Term and termination

The parties mentioned the effective date of the contract or agreement. When the second party shared his confidential information with the first party, the agreement was enforced and the first party was obliged to protect the confidential information. He should not disclose it to anyone without the previous approval of the second party. Even though the contract is terminated, the first party is bound to secure the confidential information. The mode of termination should be clearly mentioned in the agreement. Notice period and remedies in case of violation of provisions should be clearly mentioned in that agreement

Remedies

S.No	Material breach	Remedies
1	The distributor may fail to maintain the quality/ quantity of the products.	The distributor has to pay compensation to the company.
2.	The distributor may fail to deliver the products within the delivery time or delay delivery.	The distributor has to pay compensation to the company.
3.	Distributor may fail to correct the material breach within the cure period	The company may sue for damages or terminate the agreement as per this agreement.
4.	Distributors may fail to share the accounts and sales records with the company.

Conclusion

Overall, the pivotal concept of divisibility in contract law is to ensure that each party is aware of their responsibility under the contract. It is important to understand and communicate the principles of divisibility to ensure that contracts are clear, concise and legally enforceable.

References

Role of education in dealing with social issues in India

Vanshika Kapoor

March 11, 2024

This article has been written by Meenakshi Mishra pursuing a Startup Generalist & Virtual Assistant Training Program course from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

On July 31, 2008, a public limited company, National Skill Development Corporation (NSDC), entered the scenario under Section 25 of the Companies Act, 1956. It was set up by the Ministry of Finance as a Public Private Partnership (PPP) model. The organisation is working on the theme of Skill India. The main aim of the organisation is skill development by establishing vocational institutes. This is one of the steps taken by the government to decrease unemployment in the country by increasing the skilled workforce. Satisfied and successful individuals make up a progressive and developed society. In the development of an individual as a successful person, education and skill development play a vital role.

Education can be considered a social activity that is a purposeful, organised, planned and systematic approach to imparting knowledge. A nation requires knowledgeable talents and versatile skills for its overall development. Education can work towards world peace, human development, scientific knowledge, entrepreneurship and economic growth.

Education is about teaching and nurturing young minds; it is responsible for the development of human civilization.

In modern-day society, the interrelationship of education and societal change has taken a central position. Education and societal change are reciprocal. Education nurtures knowledge, skill sets, values, morals and principles in a child, which shapes their social wellbeing. Conversely, a change in social structure brings changes in the structure, composition, content and technique of delivering education.

Education enlightens the path of an individual through the walk of life by bridging cultural, social and regional divides and building a peaceful society.

Education system in India

For a developed nation, the prime determining factor is education. India had world-renowned universities like Nalanda and Takshila in the past. But slowly, as time passed, our education system changed its look and there appeared to be a gap between our education system and its adaptability in real life. During British rule, India suffered major stagnation in every field. Education was also one of them. However, during later periods of rule, the British introduced an education system in India that was out of reach of the common people of India. After independence, education was included in the concurrent list of the Indian Constitution in the 42nd Amendment of the Indian Constitution in 1976. Since independence, numerous plans, programmes and schemes have been introduced for the betterment of the citizens of India. Samagra Shiksha and Rashtriya Uchchatar Shiksha Abhiyan were a few of the efforts in this direction. But, to make India a developed nation, new age learning has to be introduced. It was said

“The destiny of India is now being shaped in her classrooms. This, we believe, is no mere rhetoric. In a world based on science and technology, it is education that determines the level of prosperity, welfare, and security of the people.”

Kothari Commission Report, 1966

Our government is aware of the importance of education so after independence, from time to time, various commissions came to make advancements in the field of education.

As quoted by our Prime Minister, Mr. Narendra Modi

“A society that does not give importance to education cannot progress. Let there be any government; it must have a vision to make India shine in the field of education.”

As we know that the global ecosystem is changing at a faster pace, it has become important that children not only learn but also learn how to learn. It should have less focus on content and direct students towards learning and developing qualities like critical thinking and problem-solving. A gap was found in our educational system and the need for reform was suggested. The government suggested having an education system by 2040 that is second to none. The National Education Policy 2020 is introduced as the first education policy of the 21st century. The policy satisfies the goals of 21st century education, including SDG 4. The NPE aimed to address the challenges faced by the education system and provide a framework for its future development. It focused on expanding access to education, improving the quality of education, and making education more relevant to the needs of society. The NPE also emphasised the importance of vocational education and skill development.

The Right to Education Act (RTE), enacted in 2009, was a landmark piece of legislation that guaranteed the right to free and compulsory education for all children aged 6 to 14 years. The RTE Act aimed to address the issue of educational inequality and ensure that every child had the opportunity to receive a quality education.

These commissions and initiatives have significantly contributed to the development of education in India. They have helped to improve access to education, enhance the quality of education, and make education more inclusive and equitable. As a result, India has made significant progress in achieving the goal of universal education.

Role of education in social change

Education is a powerful instrument to bring about social revolution. If we want to bring about social change, we have to educate all age groups. Teachers, instructors and educational institutions are the agents through whom change can be brought about.

The relationship between education and social change is a two-way path. It can change social conditions and be affected by social change. According to the needs and changes in society, the structure of education changes. Thus, we can say that education can act as a

Education can be used as an instrument for social change. Education supports and shows direction for solving problems related to the economy, social issues, etc. Education leads to an increase in the skilled population. The outlook of society can be changed by properly educating it.

Role of education in modern India

Considering the efforts of the Indian government towards the betterment of education and skill development in the young generation of the country, various factors are taken care of. Some of them are:

Developing and preserving cultural and scientific values

Education should have scientific values incorporated into the personality of an individual as a whole, not some part of it. In a country like India with diverse geographical and physical features, education facilitates harmony between people living in various regions who have faith in various religions. Education can only preserve the cultural heritage of a country.

Making a cultured society

Various issues related to the environment and social concerns can be incorporated into the curriculum to teach children values. By educating children about the earth, natural resources, global warming, climate change and social issues like child labour, child marriage, gender equality and dowry, the attention of the students can be grabbed. This can lay the foundation of a good society. Education should encourage critical thinking in students.

Promoting international understanding

Education can help in intercultural exchange and collaboration by introducing learners to various languages, historical events, cultures and traditions.

Democratic values

Democratic values can be fostered in children by properly educating them. Critical thinking, decision-making and civic participation can be encouraged in citizens through education. A democracy can only be successful if its citizens are aware of their rights and responsibilities. Civic education, human rights education and media literacy develop critical thinking and a sense of civic awareness.

Social integration

Education helps maintain social harmony in society by encouraging social integration and decreasing social disparity. It develops scientific viewpoints in life and teaches social justice and civic responsibility. Children of all castes, religions and economic standards study together in a classroom. This is the place to share their thoughts and traditions. Thus dismantling the social barriers of caste and creed and making a more egalitarian society.

Modernisation of the society

Modernization and digitalization of society are shaping the education sector. With the advent of virtual classrooms, digital material and online classroom systems, the shape of the education sector has been moulded. Technological advancement has redefined learning paradigms.

Economic growth

Education should make individuals skilled enough to meet the needs of the workplace and industries. Skill development would satisfy the needs of industry, agriculture, trade and commerce. The Skill India mission of the government is working in this direction and teaches students leadership and entrepreneurship skills. The new education policy has introduced many skill subjects as a part of the school curriculum to produce skilled personnel. This paves the path for economic development.

Social evils

Many social evils prevail in society due to a lack of education and the blind faith of the people. Indian society from ancient times had many social evils for which many great leaders worked, like child marriage, child labour, female infanticide, domestic violence and dowry. Most people, due to illiteracy, get trapped in superstitions.

Importance of education for a unified and harmonious nation

Education is the key point that can make the foundation of a society stronger. Although education is a powerful tool for changing society, there are certain other factors, like policies, the interests of people, and economic development, that affect growth prospects.

Education motivates children to become dynamic and broad-minded. In India, educational institutions of various cultural groups reflect their values; here, the responsibility of a teacher increases in terms of imparting quality and valued education.

Conclusion

Since ancient times, education has played a pivotal role in the development of mankind. It leads to the holistic development of an individual. A good education system can mould society in a better way. It can identify problems and their solutions for the betterment of human beings.

In our country, with the advent of the new education policy, focus is given to early childhood education. It is the critical phase of an individual’s life when social, emotional, cognitive and physical development occur.

Education has a multifaceted value in the life of an individual. It teaches a range of curricula, skills and social interaction to the young generation. It acts as a resource that urges us to think and make sensible decisions. Education teaches us to be disciplined, respectful, and broad-minded individuals. Investing in education can build a nation, ensuring its peace and prosperity.

References

Challenges faced by media-related technology companies in India over loopholes in existing legislations

Vanshika Kapoor

March 11, 2024

This article has been written by Liza Borah pursuing a Diploma in Technology Law, Fintech Regulations and Technology Contracts course from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

The media has become an integral part of human life. The word media is derived from the word medium, which is used to communicate information in various forms. More than before, in current times, media has become an indispensable part of our lives.

In India, the media industry is considered the sunrise industry. It is one of the fastest sectors in India and has outperformed the Indian economy. Due to rampant digitisation and internet usage, this sector has grown exponentially.

The media industry can be classified into three categories:

Electronic media:- Television, radio, films, etc.
Print media:- Newspapers, books, press releases, etc.
Digital media:- OTT, Social Media, Blogs, podcasts, etc.

The media is considered an integral pillar of a democracy. So it is crucial to have a media environment that is free, diverse, and capable of providing accurate and unbiased information. But to function as a fair, unbiased sector, media related organisations or media technology companies face several challenges due to existing loopholes in legislation in India as well. In this article, we will be discussing the existing loopholes in the legislation that pose a challenge to the media industry.

Regulatory uncertainty

Regulatory uncertainty in the media industry refers to the lack of clarity or predictability of the rules, regulations and policies that govern media organisations and their activities This uncertainty can be caused by various factors, such as the change of a product of technology, changing public opinion and changing politics.

Causes and consequences of regulatory uncertainty

common causes and consequences of regulatory uncertainty in the media are:

Changing technologies

Rapid technological advances can override existing laws, creating uncertainty about how laws should be applied and enforced in the digital age. For example, there may be a lack of a clear regulatory framework in the context of online content, streaming services, and social media.

Political involvement

Media laws can change as a result of changes in government leadership or political opinion. Controversy arises when policies are proposed or implemented by new administrations, leaving news organisations unpredictable.

Media owners and focus

Regulatory uncertainty can arise from debates about media ownership restrictions and concentrations and changes in regulations. Questions about who controls media outlets and their potential impact on voices could lead to legislative change.

Content policy

Concerns about inappropriate and harmful issues such as hate speech, false information, or transparency can lead to legislative efforts. Doubts then arise about balancing freedom of expression with the need to protect the public.

Data privacy and security

The extensive collection and use of user information raises legal doubts about data privacy and security issues. Governments may introduce new laws or amend existing laws to address these concerns, which will affect the privacy of news organisations that rely on user data for targeted advertising or the content itself.

Cross border challenges

Media organisations operating across borders face legal uncertainty related to conflicting or overlapping regulations from different industries. Harmonising laws internationally is often a difficult task.

The institution of uncertain regulations could lead to the following consequences:

Investors may find it difficult to invest in new technologies and content creation owing to uncertainty in regulations.
Due to uncertainty about which regulations to comply with, media service providers may tend to overcompliance and self censor under such confusion.
With constantly changing regulations, media houses find it difficult to comply with a specific regulation
Regulatory uncertainty can distort the market, disenchant certain players or prevent fair competition.

Content regulation

Content regulation in India faces a paradox of challenges due to a variety of factors, including technological advancements, cultural diversity, political considerations, and the need to balance freedom of expression with societal concerns, reflecting the complex and diverse nature of the media landscape in the country.

The challenges faced in content regulation can be classified into various sectors:

OTT platforms: Content is the heart of the OTT platforms. If the service providers are not able to cater content according to their audiences, the OTT platform will suffer severe losses. It is important to determine standards for OTT content, including factors like censorship, classification, age restrictions, etc.
Balancing freedom of expression and regulation: It is important to strike a balance between freedom of expression and the need for reasonable restrictions, as allowed by the Constitution.
Political interference and press freedom: In order to preserve the integrity of unbiased journalism and the freedom of journalism, it is important to maintain concerns about political interference and attempts to curb press freedom.
Effectiveness of self regulatory bodies: Although there are several regulatory bodies in India, like the Press Council of India (PCI) and the News Broadcasting Standards Authority (NBSA), the effectiveness and enforcement of these self-regulatory bodies still remain debatable.
Regulating online hate speech: The definition of hate speech is very ambiguous. But generally, it is defined by the cultural and moral ethos of any society. Thus, defining and regulating hate speech online while safeguarding freedom of expression is a complex task.
Sensitive content: It is important to navigate through various perspectives when it comes to balancing content that may be perceived as offensive or insensitive by certain sections of society.

Data privacy concerns

The upsurge of digital platforms, e-commerce, and social media has led to an explosion in the volume of personal data being generated, collected, and processed. The challenges revolve around ensuring the protection of individuals’ privacy while allowing for the legitimate use of data for journalistic and business purposes. Although the DPDA bill has been passed, there are concerns pertaining to the media that need to be addressed.

Consent and transparency mechanism: The DPDA emphasises obtaining informed and explicit consent from individuals before collecting and processing their personal data. A vast majority of non-compliances in the data privacy legislation are due to non compliance with the consent required and personal data being processed for any other requirement not consented to.
Data minimisation: It is very challenging for most organisations to differentiate between personal data and business data. As a result, too much data gets collected. Therefore, it is important to limit the collection of too much data and restrict usage to only the requirements it is gathered for.
Data retention: Another crucial factor for media organisations to consider along with data minimization is not storing personal data longer than legally required. Establishing appropriate data retention policies is crucial for media organisations.
Cross border transfers: Balancing data flow for international business operations and complying with data protection regulations is another ongoing challenge.
User profiling and behavioural tracking: Media platforms use personal data for user profiling and behavioural tracking to personalise content and ads, with users having no control over the personal data collected.
Data security and breaches: Another challenge the media industry faces in dealing with data security and privacy breaches. As media organisations deal with robust data, including sensitive data, they also need to invest in robust cybersecurity measures to protect against unauthorised access and data leaks.

Intellectual property (IP) issues

In recent times, there has been rampant development in the use of technology in the field of media and as a result, the content created and delivered to the masses is also immense. As such, the matter of intellectual property rights becomes a very crucial topic. Intellectual property rights can be broadly classified into copyright, trademark, patent, and design rights, and the media faces violations of the above due to which legal issues tend to arise.

Copyright law and piracy

The Copyright Act, 1957 (Act), along with the Copyright Rules, 2013, govern the laws and rules related to copyright protection in India. The Copyright Act, therefore, provides rights to the authors and owners, as well as certain provisions in the Copyright Act (such as Section 52 of the Copyright Act) that allow fair use. The basic aim of this law is to offer protection against the unauthorised use of artistic, literary, and musical works such as songs, films, novels, etc. Even though it is preferred, it is not a mandate in India for a person to register for copyright in order to get protection. To be actionable in court for infringement, the copy must be substantial and not small. Therefore, there would be no infringement if the two works’ themes were the same but presented in different ways.

Trademark law and infringement

Trademarks are that type of intellectual property right that enables individuals to retain ownership of their inventive products and creative efforts. It could be a name, a sign or a word that helps in distinguishing businesses. With an authorised trademark, it becomes possible to sell or market any goods or services. Unauthorised use of trademarks in the media, including in advertising, branding, and promotional materials, can lead to trademark infringement issues. Protecting the distinctiveness of brands is crucial.

Patents in media technology: In the media industry, patents are often used to protect technological advances in production or distribution. With the advancement of new technologies in the media industry, issues related to patent protection are on the rise.

Protecting celebrity rights: Another issue faced by the Indian media is securing celebrity rights. There have been instances where there was unauthorised use of celebrity images, names, or personas. It has been observed that if the identity of any celebrity is used for commercial purposes without their consent, it leads to infringement of the right to publicity.

Broadcasting Regulation Bill and its challenges

The Broadcasting Services Regulation Bill, 2023, was introduced by the Ministry of Information and Broadcasting (MIB) to replace the three decade old Cable Television Networks Regulation Act of 1995 (CTN Act). The bill was introduced broadly to include OTT platforms and other digital news platforms, along with TV channels and FM radio, under its regulatory framework. Even this bill has its own limitations and challenges, which are stated below:

The proposed legislation will not cover the social media intermediaries that are specified in the Information Technology Act of 2020.
The above legislation proposes to introduce a clause of self-certification of content by the Content Evaluation Committee (CEC), which will obstruct the creative freedom of TV broadcasters and OTT players alike.
Many stakeholders are also of the opinion that the requirement of CEC approval before publishing any content will be similar to getting approval from an internal censor board.
OTT platforms are apprehensive of the fact that by applying outdated TV regulations to their sector through the programme code, their freedom to disseminate content without much filtering will be jeopardised.
Any violation of the proposed act or any rules under it that would lead to the seizure of equipment by government officials of both broadcasting services (TV channels, OTT, and digital news) and broadcasting networks (Cable, DTH, and IPTV) has been a matter of great concern amongst the stakeholders in the broadcasting sector.

The Broadcasting Services Regulation Bill of 2023 also aims to establish a comprehensive regulatory framework that encompasses various aspects of broadcasting services, including television channels, streaming platforms, and online content providers. Here are some key highlights and implications of the Bill:

Unified Regulatory Authority:
- The bill proposes the establishment of a unified regulatory authority, the Broadcasting Regulatory Authority of India (BRAI).
- BRAI will be responsible for regulating all broadcasting services, including television channels, streaming platforms, and online content, under one umbrella.
- This centralised regulatory approach aims to streamline the regulatory process and ensure consistency in regulations across different platforms.
Licencing and Registration:
- The Bill introduces a licencing regime for broadcasting services, including television channels and streaming platforms.
- All entities providing broadcasting services will be required to obtain a licence from BRAI.
- Registration requirements for online content providers will also be implemented, bringing them under the ambit of the regulatory framework.
Content regulation:
- The Bill proposes a comprehensive set of content regulations to ensure responsible and ethical broadcasting practices.
- It includes provisions related to the classification of content, age-appropriate programming, and adherence to advertising standards.
- The bill also empowers BRAI to take action against broadcasters who violate content regulations, including imposing penalties and suspending licences.
Consumer rights and protection:
- The Bill emphasises consumer rights and protection in the broadcasting sector.
- It includes provisions for transparent billing practices, redressal of consumer grievances, and ensuring the quality of service provided by broadcasters.
- The bill also mandates broadcasters to provide accessible services for people with disabilities.
Convergence of media platforms:
- The Broadcasting Services Regulation Bill, 2023, recognises the convergence of traditional television and digital platforms.
- It seeks to create a level playing field for all broadcasting services, regardless of their platform or technology.
- The Bill aims to ensure fair competition and prevent anti-competitive practices among different broadcasting entities.
Promotion of local content:
- The Bill includes provisions to promote local content and diversity in programming.
- It mandates broadcasters to allocate a certain percentage of their airtime to local content, including regional languages and indigenous cultures.
- The Bill also encourages co-productions and collaborations between broadcasters and independent content creators to foster a vibrant and diverse broadcasting ecosystem.

The Broadcasting Services Regulation Bill, 2023, is a much-needed reform in the Indian broadcasting sector. It aims to establish a modern and comprehensive regulatory framework that addresses the challenges and opportunities presented by the convergence of traditional and digital media. The Bill has the potential to improve consumer protection, promote local content, and ensure a level playing field for all broadcasting entities, thereby contributing to a vibrant and diverse broadcasting ecosystem in India.

Impact of Indian IT laws on media and its challenges

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 20213 (IT Rules) are an important law in order to control the usage of digital and social media and their intermediaries. Even the implementation of this law has its own flaws and challenges, which are discussed below:-

The IT regulations regulate freedom of expression, which has consequences for social media and its intermediaries as they are required by the IT Regulations to delete or restrict access to any content that is deemed illegal or disruptive to the public order. Hence, many critics are of the belief that the IT regulation provides censorship on freedom of expression and allows the government excessive authority to control internet information.
Another implication of the IT law is privacy, wherein social media intermediaries need to reveal the identities of certain content creators before the law enforcement authorities.
Some of the guidelines of this act have faced social criticism as they are believed to have violated the right to free speech and could be used to silence dissenting opinions.
This Act also actively encourages private sponsorship, involving executive action with no judicial oversight.
Section 66A of this act has garnered much attention and criticism as this provision is used to track behaviour on the Internet and can be criminalised based on that and it has been observed that many activists have been arrested and summoned for posting comments critical of political parties or persons.
Another section of this legislation allows the government to block any content from being accessed by the public on various grounds and whoever fails to comply with directions to block content is liable to be imprisoned for up to seven years.
There is also a provision in this act to avail of an exemption from liability; it requires an intermediary to observe certain guidelines, which also mandates the intermediary to take down any content that is found unlawful or objectionable acting upon private complaints or on their own.
The social networking media are considered intermediaries within the scope of IT Act 2000, thus making social networking sites in India liable for various acts or omissions that are punishable under Indian legislation.

Competition and monopoly concerns in Indian media

Another challenge that the Indian media faces with respect to litigation is the bare minimum or no laws to contain monopolies in the Indian media industry and promote healthy competition. Some of the issues with legislation regulating monopolies in India are stated below:-

There are laws regulating horizontal monopolies in the Indian media sector, but no laws to ensure diversity in media ownership. This is vividly visible in Indian news channels specifically, wherein only a handful of people control the entire gamut of English news.
Another challenge is that there is no law to regulate cross-media ownership and vertical integration in the media, which has given rise to the problem of monopolies in Indian media. The news watched on TV, read in the newspaper or for that matter, accessed on the internet might come from various sources. But actually, they might be owned by a single person.
Laws to prevent widespread community ownership and media usage are another legislative challenge for the Indian media. The big media giants in this country might not be involved in regulatory tangles but the bottom up, less-commercial media sector gets tangled in a web of regulatory affairs. To start up a community radio,providing broadcast coverage for small local areas will require various bureaucratic levels to procure a licence.
Lack of comprehensive framework to disclose norms for media ownership is a significant issue in media monopolies. The corporate disclosures, mandate to make minutes of board meetings and related public transactions are not rigid for privately owned media organisations. The formats for above are also different for both privately and publicly owned media organisations, wherein the former enjoys laxity over information disclosure.
Pluralism in media content, composition and ownership is seen as an integral part of freedom of speech and expression. With the existence of monopolies and the lack of diversity in media ownership or content, certain fundamental rights like freedom of speech and the right to information become questionable.

Conclusion

The loopholes that exist in the current legislation that are faced by media related technology companies are a matter of great concern. This needs a collaborative effort from media organisations, regulatory bodies, the judiciary and other stakeholders to create a regulatory framework that is both comprehensive and adaptable to the dynamic nature of the media technology landscape. The existing legislation needs to be amended in such a way that it maintains freedom of expression without jeopardising privacy and strikes a balance between speech restrictions. In order to uphold the security and safety of Indian citizens in this digital age, all these loopholes need to be addressed accordingly.

References

Janhit Abhiyan v. Union Of India (2022) : case analysis

Vanshika Kapoor

March 11, 2024

This article is written by Aarushi Mittal. The article discusses the intricacies of the landmark judgement of Janhit Abhiyan v. Union of India (2022) and the EWS Reservation in India. Furthermore, it includes all the relevant details, facts, issues, arguments of the parties and the judgement delivered by the Bench in this case.

This article has been published by Shashwat Kaushik.

Table of Contents

Introduction

Reservations have invariably been a subject of contention and controversy. It emerged in the wake of Indian independence, as a means to counter the injustice meted out to certain sections of society and work towards the upliftment of these backward groups. At the time of its inception, it was expected to persist for a period of ten years; however, it has continued to exist due to the prevailing inequalities present in Indian society. The Constitution’s First Amendment Act came with enabling provisions, allowing the Government to provide reservations to the Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs). The Constitution (One Hundred and Third Amendment) Act, 2019 (hereinafter, the Amendment Act) introduced a 10% reservation, apart from the existing reservation, for the Economically Weaker Sections. Numerous petitions were filed challenging this Amendment Act and the same was heard before the Court in Janhit Abhiyan v. Union of India (2022).

Janhit Abhiyan was a landmark judgement that reviewed and dealt with the issue of reservation of seats for economically weaker sections of society in education and employment. A five-bench constitutional bench of the Supreme Court heard this case in 2022, putting the debate on the matter to rest. The Bench consisted of the then Chief Justice of India, U.U. Lalit and Justices Dinesh Maheshwari, S. Ravindra Bhat, B.M. Trivedi and J.B. Pardiwala.

Background of the case

Articles 15 and 16 of the Constitution of India, form part of the doctrine of equality and deal with the concepts of “equality, social justice and social harmony”. Subclause (4) of Articles 15 and 16 is not an exception but rather allows for certain special provisions to further its objectives. With the passing of the Amendment Act on January 9, 2019, by the Parliament of India, Articles 15(6) and 16(6) were introduced into the Constitution of India. Article 15(6) allowed the State to reserve seats for the economically weaker sections in educational institutions and Article 16(6) enabled the State to make similar provisions for reservation in job appointments. The Amendment Act received presidential assent just a few days later, on January 13, 2019, and was published in the Gazette. By amending Articles 15 and 16, a 10% reservation was created in jobs and educational establishments for the Economically Weaker Sections (referred to as EWS) of society. The constitutional validity of this Amendment Act was challenged before the Court through several writ petitions.

The Supreme Court in Indra Sawhney v. Union of India (1992) limited the total permissible reservation to 50%. It was argued by petitioners that the same was violated by the Amendment Act. Furthermore, there were questions about whether the reservation violated the basic structure of the Constitution. The Court commenced hearing on a batch of these petitions and ultimately upheld the constitutional validity of the EWS Reservation by a majority of 3:2.

Important principles found in the case

EWS Reservation

The Economically Weaker Section (EWS), is a section of Indian society that has an annual family income of less than eight lakh rupees. This section includes those people who do not belong to the Scheduled Caste (SCs), Scheduled Tribe (STs) or Other Backward Classes (OBCs) categories. The Parliament introduced the Amendment Act, which empowers the state government to create special reservation provisions for the EWS category with a maximum ceiling of 10%. In other words, a 10% reservation was to be made for the economically weaker sections in educational establishments and employment opportunities. This was in addition to the reservations provided to the SC, ST and OBC categories. However, such a reservation was not mandated by the Act; rather, it gave an option to the respective state governments to make provisions for the same.

Criteria for EWS Reservation

The following are the criteria, for which an individual is eligible to claim the benefits of the EWS Reservation:

The individual must be a ‘general’ candidate (i.e., not eligible for reservation for SC, ST, or OBC).
The individual’s annual ‘family’ income should be less than 8 lakh rupees. The same includes ‘all sources of income’, i.e., agriculture, salary, business, and other professions, etc., for the financial year preceding the year of application.
They should not own agricultural land of 5 acres and above.
They should not own a residential flat with an area of 1000 square feet or more.
They should not own a residential plot of an area of 100 square yards or more in notified municipalities; and of 200 square yards or more in areas other than the notified municipalities.

Basic structure doctrine

In the present case, the petitioners have challenged the constitutionality of the Amendment Act on the grounds, inter alia, that it violates the Constitution’s ‘basic structure’. According to the petitioners, the Equality Code (a fundamental feature of the Constitution), is breached as a result of the Amendment Act. Therefore, the entire case is to be examined based on the ‘basic structure doctrine’.

The Parliament has the power to make amendments to the Constitution. However, this is subject to the restriction that these amendments should not violate the ‘basic structure of the Constitution’’. In Kesavananda Bharati v. State of Kerala (1973), a 13-judge bench of the Supreme Court ruled that Article 368 (power to make amendments to the Constitution) does not enable the Parliament to alter the ‘basic framework’ of the Constitution. This landmark judgement is referred to as the ‘basic structure’ doctrine. It states that any amendment that changed the character or form of the Constitution would be held invalid. It aims to safeguard and preserve the very essence and spirit of our Constitution.

The Constitution does not specifically mention or refer to the term ‘basic structure’. This idea that such a fundamental framework exists that cannot be altered by the Parliament, evolved over many years. The Apex Court in Sri Shankari Prasad Singh Deo v. Union of India (1951), held that the Parliament’s power to amend the Constitution under Article 368 included the power to amend the Fundamental Rights found in Part III of the Constitution. The same was reaffirmed in Sajjan Singh v. State of Rajasthan (1965). However, the 11-judge Supreme Court bench in I.C. Golaknath v. State of Punjab and Anr (1967), reversed its previous judgement. It ruled that the Fundamental Rights of the Constitution were “primordial rights necessary for the development of human personality” and could not be amended. These judgements set the stage for the introduction of the ‘basic structure doctrine’ in the Kesavananda Bharati judgement.

This historical verdict also laid down some of the features of the Constitution that constitute its ‘basic structure’. Some of these features are listed below:

Unity and Sovereignty of India,
Constitutional supremacy,
Separation of power among the Legislative, Executive and Judiciary,
Rule of law,
Secular and federal character,
Free and fair elections,
Equality Code.

Expansion of Doctrine of Equality

The Doctrine of Equality or Equality Code, consists of Articles 14 to 18 of the Indian Constitution that grant a citizen the ‘right to equality’. The drafters of the Constitution enacted these provisions to deal with the rampant social and economic inequalities that were prevalent in Indian society. These Articles were framed to eradicate these inequalities and establish an egalitarian society.

Essentially, the basic principle underlying this doctrine is that “equals must be treated equally while unequals need to be treated differently.” This involves reasonable classification, which involves distinguishing between those who are equal and those who are not.

Affirmative action by reservation

To ensure equality for all of its citizens, the State takes affirmative action to remove inequalities and any discrimination prevalent in society. Reservation is one form of affirmative action by way of ‘compensatory discrimination’. This primarily works to curb discrimination and oppression and ultimately eradicate them so as to achieve real and substantive equality.

Reservation, also known as the ‘quota system’, finds its roots in Malta before it was even introduced in India in the 19th century. At this time, the country was divided into British India and several princely states. A few of the more progressive states had advanced and modernised their societies by promoting education and industry. For instance, the Princely States of Kolhapur, Mysore and Baroda worked towards the upliftment and progress of the disadvantaged sections of society. Kolhapur’s ruler, Chhatrapati Shahuji Maharaj, was considered to have been influenced by the ideas of egalitarian thinker Jyotirao Phule and introduced reservations in administrative posts for the disadvantaged classes in 1902.

Therefore, the doctrine of equality or the Equality Code forms the foundation for the creation of reasonable classification under which ‘affirmative action’, either legislative or executive, is authorised to be undertaken. Over the years, with every case, the Indian Courts have helped contribute to the evolution of the term ‘reservation jurisprudence’.

Details of the case

The Janhit Abhiyan case was listed as Writ Petition (Civil) No. 55 of 2019 [WP (C) 55/2019] on September 8, 2022. These petitions challenged the Amendment Act, which allowed for a 10% reservation for the EWS category in education and employment.

Supreme Court Bench

The Bench comprised of the following:

Former Chief Justice of India- Justice Uday Umesh Lalit,
Justice S. Ravindra Bhat,
Justice Dinesh Maheshwari,
Justice Bela M. Trivedi,
Justice J.B. Pardiwala.

Date on which judgement was delivered

The judgement was delivered on November 7, 2022, by the constitutional bench of the Supreme Court.

Parties involved

Petitioners

The petitioners in this case were Janhit Abhiyan Akhil Bhartiya Kushwaha Mahasabha, the Peoples Party of India, the SC/ST Agricultural Research and Education Employees Welfare Association and Youth for Equality.

Advocates for Petitioners

The petitioners were represented by Advocates Gopal Sankaranarayana, Meenakshi Arora, Rajeev Dhawan and MN Rao.

Respondents

The respondents in this case were the Union of India, the State of Maharashtra, the Ministry of Personnel, Public Grievances and Pensions, and the Ministry of Social Justice and Empowerment.

Advocates for Respondents

The respondents were represented by the Attorney General of India, KK Venugopal and the Solicitor General of India, Tushar Mehta.

Related laws

Article 14, Article 15, Article 16, Article 17, Article 21, Article 23, Article 24, Article 26, Article 29, Article 35, Article 38, Article 39, Article 45, Article 46, Article 335, Article 340, Article 366, and Article 368 of the Constitution of India.

Facts of the case

The 103rd Amendment Act created a separate reservation quota for members from economically weaker sections of society. This reservation was in addition to the already existing reservations for Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs). Article 15(6) stated that such reservations could be made in any educational establishment. This included private institutions that both received or did not receive government aid and excluded minority educational establishments. Article 16(6) provided for similar reservations in appointments (10% of which would be independent of any existing reservation).

Subsequently, several writ petitions were filed before the Court contending that the reservation was violative of the Constitution’s basic structure as it went against the principles of non-discrimination and equal rights for all citizens (i.e., it violates Article 14).

Before the enactment of the Act, 49.5% of seats were reserved in both public appointments and educational institutions. This included separate quotas for SCs (15%), STs (7.5%) and OBCs (27%). Following the hearing on the issue of referring the case to a Constitution bench, the Court on August 5, 2020, decided to refer the case to a larger bench (a five-judge bench). The matter was listed to be heard on August 30, 2022, for the first week of September. Attorney General K.K. Venugopal framed the issues for the case, which were admitted by the Bench on September 8, 2022.

Issues of the case

The Court accepted the following issues framed by the Attorney General:

Whether reservation could be granted on the sole criteria of economic status?
Whether SCs, STs and OBCs could be excluded from the scope of EWS Reservations?
Whether the EWS Reservation could breach the ceiling (50%) for reservations that were fixed by the Court in Indra Sawney?
Whether the States could provide reservations in those private educational establishments that did not receive government aid?

Arguments

Arguments of the petitioner

The following are the arguments of the counsels representing the petitioner presented before the court:

Violative of the basic structure of the Constitution

The learned counsel for the petitioners argued that the Amendment Act in question was violative of the Constitution’s ‘basic structure’ as it looked to unjustly enrich the privileged sections of society that were neither socially and educationally backward nor inadequately represented. The petitioner’s counsel quoted various parts of the Constituent Assembly Debates to support their contention that “reservation should not be used by the forward class as a self-perpetuating mechanism depriving the disadvantaged”. From these debates, they found that the Constituent Assembly was of the clear view that the term backwards would be preceded by a class of people. Therefore, despite the poverty prevalent in the country, the focus of reservations has been, since the very beginning, on social stigma.

Against the vision of the makers of the Constitution

It was argued that the idea of reservation envisaged by the constitutional makers was specifically made for social and cultural reasons and the addition of economic criteria would devalue their vision since the principal reason for the conception of reservation was to uplift and recognise the historical injustice meted out to people belonging to backward groups. It was submitted that the Amendment attempted to provide those people with the benefits of the reservation who had never experienced social disadvantages. It was therefore against the idea of the Constitution envisaged by the makers.

The petitioners relied on the Supreme Court’s decision in Indra Sawhney v. UOI (1992), T. Devadasan v. UOI (1964), Dayaram Khemkaran Verma v. State of Gujarat (2016), and State of Kerala v. N.M. Thomas (1976) to submit the claim that the Court had declared reservations and special provisions to be an “effective affirmative action to mitigate inequalities and ensure social justice and equality of opportunity.” It was further submitted that the non-obstante clauses in Articles 15(6) and 16(6) had vetoed the precondition of being “socially and educationally backward or inadequately represented.” The Constitution lays out social and educational backwardness as a criterion, not social or educational backwardness for reservation. This goes completely against the principle of social justice for historically disadvantaged and marginalised sections. The petitioners also argued that the Apex Court in Indra Sawhney ruled that “economic criteria cannot be the sole basis to grant reservation under Article 16.” In this judgement, the Court also distinguished between the backward class [Article 16(4)] and weaker sections (Article 46). The counsel for the petitioner argued that Article 46 had no restrictions or limitations and therefore could not serve as a ground for reservation.

Violation of Right to Equality

On the issue of exclusion of Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs), it was submitted before the Court that the Amendment Act violated the fundamental Right to Equality as it did not apply to all persons, i.e., it kept certain sections out of the scope of reservation. Essentially, the economically weaker sections that also belonged to the SCs, STs or OBCs could not reap the benefits of the EWS Reservation. The Amendment Act was therefore violative of the basic structure of the Constitution, as it provided for the “inclusion of forward class and exclusion of disadvantaged class from the protection and benefit of reservation.” Further, they urged that Article 46 should be read while applying the rule of ejusdem generis, and thus, by the exclusion of SC, ST, and OBC classes, the rule was violated.

Breach of ceiling limit on Reservation

The Amendment violated the 50% reservation cap laid out by the Supreme Court. They argued that such a ceiling limit could only be breached in exceptional circumstances and there was no reason to consider the present scenario to be such an exceptional circumstance. The petitioner’s counsel submitted that the intention behind ‘positive discrimination’ was to end the monopoly of certain sections and create a society that is inclusive and ensures equality of opportunity for the marginalised sections. The Amendment, however, created a ‘perpetual monopoly‘ and was against the idea and essence of reservation.

Lastly, the counsel argued that the Amendment was not based on a ‘multi-dimensional economic condition’, but rather on financial incapacity, which, by its nature, is temporary and ‘rewards poor financial behaviour’. Therefore, it is not a reliable ground for granting reservations.

Arguments of the respondent

The following are the arguments of the counsels representing the respondents submitted before the court:

Not violative of the ‘basic structure’ of the Constitution or the Equality Code

The Attorney General of India, submitted before the Court that the Amendment Act did not violate the ‘basic structure of the Constitution’, but rather fostered it. He argued that the exclusion of certain classes (already covered under Articles 15(4) and 16(4)), did not go against the Equality Code. Relying on the decision in Bhim Singhji, it was contended that a mere violation of Article 14 did not amount to a violation of the ‘basic structure’ unless “the violation is a shocking, unconscionable, or unscrupulous travesty of the quintessence of equal justice”.

The Solicitor General of India, further submitted that to set aside a constitutional amendment, there is a requirement for a very high judicial threshold. He found that the Constitution has recognised different zones of ‘affirmative action’, wherein reservation extends as per the needs of each section of society. It does not stop the Parliament from safeguarding a section of its people in order to further the ‘preambular vision of economic justice’.

No breach of ceiling limit on Reservation

The counsel for the respondents argued that the EWS Reservation did not violate any prior reservation that was granted to the Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs). The objective of the State with respect to the Amendment Act was to grant reservations to those who have been left out on the margins on the basis of their economic status. The respondents contended that the total percentage of reservations stood at 49.5% (SCs-15%, STs-7.5% and OBCs-27%). They submitted that although the Supreme Court had established a ceiling limit of 50% in the Indra Sawhney case, the same could be breached during exceptional circumstances as it was not a ‘sacrosanct rule.’ They believed that the creation of new criteria by the State was an exceptional situation, as it was derived from Article 21 of the Constitution (right to live with dignity). Further, since the ceiling limit of 50% laid down by the Court was for the benefit of general merit candidates, it did not provide any justified reason for the candidates that already enjoyed the benefits of reservation to raise any grievance regarding the additional 10%. They contended that in any case there could be no question of a violation of basic constitutional principles.

Important judgements referred to in this case

Indra Sawhney v. Union of India and Others (1992)

In Indra Sawhney v. UOI (1992), a nine-judge bench of the Supreme Court delivered a landmark judgement on reservations for backward classes in India. The Court upheld the idea of reservation as a means to secure “social justice, economic justice and political justice, as well as equality of status and equality of opportunity.”

Brief summary of facts

In accordance with Article 340 of the Constitution, the Kaka Kalelkar Commission (the First Backwards Class Commission) was set up on January 29, 1953. The Commission submitted its report with a number of recommendations, which were subsequently rejected by the Central Government in 1961.

Consequent to this, Prime Minister Moraji Desai appointed the Second Backwards Class Commission on January 1, 1979. The Commission was chaired by B.P. Mandal and aimed to determine and establish criteria to classify “socially and educationally backward classes (SEBCs)” and propose measures for their upliftment. The Mandal Commission submitted its recommendations in 1980, suggesting a 27% reservation of seats for Other Backward Classes (OBCs) in government service along with an added 10% reservation for “other economically backward sections of people not covered by an existing reservation scheme”. However, these suggestions could not be implemented, due to internal disturbances within the ruling party leading to a change in power at the Centre. It was only when the Janata Dal Party returned to power in 1989, that an office memorandum implementing the Commission’s recommendations was issued. This was met with widespread anti-reservation protests across India. Despite the subsequent fall of the Janata Dal, the violence and protests continued. As a result, the Supreme Court began hearing the petitions challenging the implementation of the Commission’s suggestions.

Issues

The following were the main issues identified by the Court:

Scope of Article 16(4), whether it extends to both economic and social backwardness.
Criteria classifying and identifying ‘backward classes of citizens’.
Extent to which reservations are permissible under the Constitution.

Judgement and other findings by the Court

The bench, with a 6:3 majority, ruled that under Article 16(4), ‘backward classes of citizens’ can be classified on the basis of caste and such classification cannot be restricted to an economic basis. It differentiated between ‘Backward Classes’ and ‘Socially and Educationally Backward Classes’ and held that the ‘creamy layer’ must be excluded from these reservations. Essentially, it was ruled that these reservations existed for the upliftment of the unprivileged sections and should only apply to ‘initial appointments and not promotions’. Furthermore, the Court established the ceiling limit for the number of reservations at 50%. It underscored the fact that providing reservations to more than 50% of the applicants would lead to an ‘imbalance in the structure of society’ and that this limit could only be breached in ‘extraordinary circumstances’.

M.R. Balaji and Others v. State of Mysore (1962)

Brief summary of fact

In M.R. Balaji and Ors v. State of Mysore (1962), a challenge was made to the order passed by the State Government of Mysore that concerned the classification of “socially and educationally backward classes”. The order in question categorised all communities, excluding the Brahmin community, into socially and economically backward classes, Scheduled Castes, and Scheduled Tribes, wherein the reservation amounted to 75% of the total number of seats in educational institutions. Similar reservation policies were passed in the subsequent years, all of which were challenged and struck down.

The government of Mysore passed another order in 1962, supplementing these previous orders. In this order, backward classes were categorised into ‘backward classes’ and ‘more backward classes’. Moreover, 68% of the total seats in the government medical and engineering colleges were reserved for SEBCs, SCs, and STs, leaving only 32% of seats for the merit pool. The order was challenged before the Supreme Court in the present case.

Issues

The following were the main issues identified by the Court:

Whether 68% reservation of seats was ‘reasonable‘ and in accordance with Article 15(4)?
If the government was justified in classifying backward classes into ‘backward classes’ and ‘more backward classes’.

Judgement and other findings by the Court

The Supreme Court found that there were no extraordinary circumstances that justified the 68% reservation and held it to be invalid. The Bench held back from establishing a strict, fixed upper limit on the reservation of seats but underscored the importance of the reservation percentage being reasonable. The Court held that although it is of utmost significance to uplift the weaker sections, the same should be done while balancing and taking into account the interests of every Indian citizen and that ”it is extremely unreasonable to assume that in enacting Article 15(4), Parliament intended to provide that where the advancement of the backward classes or Scheduled Castes and Tribes were concerned, the fundamental rights of the citizens constituting the rest of the society were to be completely and absolutely ignored. Considerations of national interest and interests of the community and society as a whole have already to be kept in mind.” Furthermore, it found the classification between ‘backward classes’ and ‘more backward classes’, on the sole basis of their caste, to be in violation of the principles of the Constitution.

Judgement of the Supreme Court

The bench, after hearing all the parties, reserved its judgement for September 27, 2022. The five-judge bench of the Court unanimously upheld the validity of the Amendment Act and dismissed the petitions challenging the legality of the same. They ruled that the Amendment Act did not violate any provision of the Constitution, much less the ‘basic structure’ of the Constitution. Justices Pardiwala, Maheshwari and Trivedi, formed the majority opinion in their respective concurring judgements, while Justice R. Bhat wrote the dissenting (minority) judgement on behalf of himself and the then CJI.

Majority judgement

As per Justices Maheshwari, B.M. Trivedi, and Pardiwala, the petitions challenging the Act were liable to be dismissed. They found that the Act could not be considered to violate any fundamental principles of the Constitution and did not violate the basic structure doctrine.

Justice Bela Trivedi in her concurring judgement states that ‘equality of opportunity would also mean fair opportunity not only to one section or the other but to all sections by removing the handicaps if a particular section of the society suffers from the same.‘ She emphasised the ‘Statements of Arguments and Justifications for the Constitution’s (One Hundred and Third Amendment) Bill’ and underscored the fact that a significant section of the economically weaker sections were unable to receive a quality education, simply due to financial constraints. They neither had the means nor resources to finance their education nor were they eligible to receive the benefits of reservations. Consequently, the government passed the presently disputed Amendment Act. She held that the laws introduced by the legislature were to combat the problems of its people, which were made apparent with experience. Therefore, any such amendment could not be declared arbitrary or discriminatory if the ‘state of facts’ were reasonably formulated to justify it. This Act was essentially a form of affirmative action taken by the Parliament for the progress of the economically disadvantaged sections. She also found the economic criterion to be intrinsically related to the concept of ‘distributive justice’ proposed in the Preamble and Articles 38 and 46.

Justice Maheshwari underscored the importance of reservation as an ‘instrument of affirmative action’ by the State. He established that it was not just a tool for the inclusion of socially disadvantaged and backward classes but also for any other section or class that was disadvantaged. By this rationale, he found that reservation built solely upon economic status was not constitutionally impermissible. Further, the barring of SCs, Sts and OBCs from benefiting under the economic criteria did not violate the right to equality and equal treatment. He found that the ceiling limit of 50% established by the Court in prior judgements was not inflexible and therefore the breach of the same was not violative of any provisions of the Constitution.

Justice Pardiwala observed that in India, with a population of over 1.4 billion, economic backwardness was not limited to those who were protected by Articles 15(4) and 16(4). In fact, only a slight percentage of the Indian population was above the poverty line. To deny the economically disadvantaged the possibilities of education and employment is to refuse those who are competent and qualified what they justly and rightfully deserve. He highlighted how the persistent development and spread of education had led to the considerable closing of the gap between different sections of society. With the increasing numbers of members belonging to disadvantaged classes attaining quality education and employment, they must be excluded from the backward category quotas so that extra focus can be given to others. Justice J.B. Pardiwala underscored the importance of formulating a method to identify and distinguish between different members of backward classes and verify whether the standards adopted for the classification of the disadvantaged sections remain relevant in the present day. B.R. Ambedkar envisioned social equality within ten years of the implementation of the reservation system. However, it has continued to exist for over seven decades.

Therefore, the Apex Court held ‘Economic Disabilities or Economic Backwardness Criterion’ to be a valid criterion for reservation. They observed that this reservation was intended to deal with the hardships arising from economic disadvantages and was sanctioned by the Constitution of India. They found that the equality clause present in the Constitution did not restrict itself to formal equality but actually embodied the concept of real and ‘substantive equality’. Furthermore, the goal of our Preamble is to secure justice for all its citizens, including social justice, economic justice and political justice.

Minority opinion

Justice Bhat and the Chief Justice of India, U.U. Lalit, were of a different view and declared the Act to be unconstitutional. With respect to the inclusion of Article 15(6), Justice Bhat held that it was violative of the Constitution since it excluded the poorest sections of society who were both socially and economically disadvantaged. Therefore, it was discriminatory and against the fundamental right to equality.

Further, in regard to Article 16(6), he ruled that it was unconstitutional for two reasons. First, providing the EWS with reservations under Article 16 excluded the already socially and educationally disadvantaged classes. Second, since Article 16 deals with the lack of representation in specific classes or communities, providing reservation on the sole basis of economic status was violative of the fundamental principles of the Constitution.

Analysis

As mentioned earlier in this Article, reservations were introduced in India to uplift the socially weaker sections of society. Despite being in existence since the Constitution came into force, post-independence, it continues to be a topic sparking heated debates and discussions among people. Many argue that the uplifting of the SCs, STs, and OBCs has proven to be unjust for the other members of society who, although not from a disadvantaged caste, might be economically weak. Often, those benefiting from these reservations are those who are already well-off, with resources and access to quality education

Most reservation policies provide access to education and government jobs, but questions have been raised as to whether the same compromises the quality of education and workforce in the long run. Some contend that reservation only deepens the divide among the citizens, creating resentment and hindering development. Furthermore, it has become a long-standing practice for reservation policies to be wrongfully used by political parties for electoral gains. Many state governments introduce policies that flout the reservation ceiling limit set by the Court in Indra Sawhney for political gain. However, it is clear that there continues to be a need for such policies to counter the widespread disparity and poverty prevalent among the citizens of India. Despite its misuse, there exists a requirement for strong measures to disburse social and economic benefits to all the marginalised groups and communities in our country.

Outcome and impact of the case

The Society for the Rights of Backward Communities filed a review petition on December 6, 2022, challenging the decision to allow EWS Reservations. However, a five-judge bench headed by CJI D.Y. Chandrachud dismissed the petition on May 9, 2023. They found no grounds to review the decision taken by the earlier Bench and refused to hear on the matter further. In the order passed, the Bench recorded, “Having perused the review petitions, there is no error apparent on the face of the record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules, 2013. The review petitions are, therefore, dismissed”.

The judgement upholding the 10% reservation for the Economically Weaker Sections has widened the scope for the interpretation of the Constitution. It ensures that the economically weaker classes are provided with equal opportunities in education and employment and marks significant progress towards addressing socio-economic disparities amongst individuals. The Supreme Court provided for a flexible analysis by ruling that the additional 10% neither damages the basic structure of the Constitution nor violates any provision or past judgements. Essentially, it does not dilute the already existing reservations for Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs). By breaking the established reservation structure, which had its basis in class rather than economic criteria, the Amendment Act sought to provide an equal opportunity to those who were unable to compete with the general population due to financial constraints. Some see this ruling as a move towards achieving the egalitarian society envisioned by the makers of our Constitution. They consider it an impetus, seeking to create a “level playing field”, where individuals from socially and economically weaker backgrounds are provided equal access to quality education and employment. However, others raise concerns and fears about reservations becoming a perpetual system of allocating benefits and opportunities solely based on criteria rather than merit.

Recommendation

Reservations affect every single citizen of our country, regardless of caste or status. Since the time of Independence, such policies and provisions have existed that aim to uplift and help the disadvantaged and backward classes of society. Keeping in line with this idea, the Amendment Act was introduced by the Parliament to provide reservation benefits to the ‘general category of economically weaker sections’.

However, the reservation provisions adopted at that time were formulated keeping in view the scenario of Indian society at the time. These policies and provisions must be revisited, taking into account the changing socio-economic conditions of the people. These policies have occasionally resulted in unjust enrichment and are even used for political advantages and electoral gains. The Supreme Court, in this landmark judgement, repeatedly highlighted the need for revisiting the existing system of reservation so as to ultimately achieve the egalitarian society envisioned by the makers of our Constitution.

Conclusion

The equal protection framework provided by the Constitution operates largely through affirmative action in the manner of reservation for different sections of Indian society. Reservation in India has been and continues to remain one of the most contentious issues due to the deprivation and discrimination meted out to a certain section of our society. It finds its roots in India’s ‘age-old caste system’. The makers of the Constitution intended to ensure social equality and justice for the oppressed and deprived classes. As a result, numerous provisions were added to the Constitution that provided a reservation of seats to ensure fair representation for these classes.

The 103rd Amendment Act deviated from the status quo by awarding benefits to certain classes of people on the sole basis of their economic status. Ultimately, the Amendment Act was upheld by a constitutional bench of the Apex Court and although heavily debated, the Court’s decision intended to fulfil the goals set out in the preamble of the Constitution- to render economic and social justice to all.

Frequently Asked Questions (FAQs)

What is a reservation?

Reservation involves ‘facilitating access’ to seats in legislatures, government jobs or educational institutions for certain sections of society. It was introduced to uplift the backward and disadvantaged sections of our society.

What is the need for reservation?

Reservation provides the historically oppressed and backward classes with resources and opportunities that are not available and accessible to them. It aims to correct the historical injustices faced by certain sections of people and ensure equality on the basis of merit. It provides equal representation and a platform for all citizens of India, irrespective of their social and economic status.

How to apply for EWS Reservations?

To apply for an EWS Reservation, the individual must obtain an EWS certificate (‘Income and Asset Certificate’) from the competent government authority. They must submit additional documents, such as passport-size photographs, a PAN card, an Aadhar card, and bank statements, in addition to the Income and Assets Certificate. The aforementioned documents will be verified and the designated government officer will issue the certificate. The certificate is valid for a year and needs to be renewed periodically.

What are the Constitutional provisions governing reservation in India?

The following are the various provisions of the Indian Constitution pertaining to reservation:

Part XVI of the Constitution deals with the reservation of Scheduled Castes and Scheduled Tribes in the Central and State Legislatures.
Articles 15(4) and 16(4) allow different States and the Central government to reserve seats for SCs and STs in government services
Article 243D provides for the reservation of seats for SCs and STs in every Panchayat.
Article 243T provides for the reservation of seats for SCs and STs in every Municipality.
Article 330 discusses the reservation of seats for SCs and STs in the House of People (Lok Sabha).
Article 332 discusses the reservation of seats for SCs and STs in the Legislative Assemblies of the State.
Article 335 maintains that the claims of SCs and STs shall be taken into consideration in making appointments to different services or posts that are connected with the affairs of the Union or of a particular State.

References

Suspension of fundamental rights

Vanshika Kapoor

March 11, 2024

This article is written by Rachna Kumari. This article provides an in-depth analysis of the suspension of fundamental rights by revisiting the constitutional history of India and observing how the conundrum of individual rights and societal interests is balanced during an emergency.

This article has been published by Shashwat Kaushik.

Table of Contents

Introduction

“The liberties of the individual are not mere privileges, they are the essence of human dignity”

– Justice V.R. Krishna Iyer

Fundamental rights are the cornerstone of any free and democratic society. They are the essential freedoms that every human being deserves, regardless of their religion, caste, sex, etc. These rights promote individual liberty, dignity, well-being and ensure that the State does not misuse its power arbitrarily. Though fundamental rights are of utmost importance, a seemingly paradoxical dilemma arises in exceptional circumstances when it becomes a necessity to suspend these rights to safeguard public safety and national security for the greater good.

The Constitution of India is considered as one of the most comprehensive constitutions around the world which encompasses a robust framework of fundamental rights. However, it also includes provisions for suspending these rights under extraordinary circumstances. These provisions enable the Central Government to meet any abnormal situation effectively. The rationale behind the incorporation of these provisions in the Constitution is to safeguard the sovereignty, unity, integrity and security of the country, the democratic political system, and the Constitution. Throughout its history, India has witnessed three instances of national emergency during the Indo-China War in 1962, Indo-Pakistan War in 1971 and Internal Emergency from 1975-77.

All these emergencies led to suspension of certain fundamental rights and amendments in the current constitutional framework. During an emergency, the Central Government becomes all powerful and the states go into the direct control of the Centre. It converts the federal structure into a unitary one without a formal amendment of the Constitution. Though the suspension of fundamental rights seems like a blow to the constitutional framework; however, in times of war, civil unrest, etc. restrictions on freedom of movement, assembly, and expression can help in controlling violence to protect citizens.

To avoid misuse of the power, from time to time, the Hon’ble Supreme Court of India has played a crucial role in shaping the legal framework surrounding the suspension of fundamental rights.

Historical context

Immediately after the end of World War I, Germany’s emperor, Kaiser, left Germany to be governed by what would later be known as the Weimar Republic. There were several contradictions that plagued this system until its end when Adolf Hitler rose to power.

After facing defeat, a shattered economy, and a power vacuum that gave rise to political violence, framers of the Weimar Constitution and the leadership of the Weimar Republic found themselves in an incredibly difficult position. In 1918, the drafting of the founding document of the Weimar Republic began. The framers deemed it necessary to enshrine personal liberties like freedom of speech, equality before the law, etc, in the Constitution.

Though the Weimar Constitution provided liberties to the citizens; Article 48 empowered the President to intervene when public security and order were seriously disturbed or endangered within the German Reich. It allowed the President to take the assistance of armed forces if needed. Further, it also allowed the President to suspend civil liberties guaranteed in the Weimar Constitution. This was usually done when there was a threat to the safety and stability of the country. Under this Article, the President can declare a state of emergency in Germany in times of national danger and to rule as a dictator for a short period of time. The intent behind it was to offer an opportunity for a strong leader to make decisions in times of difficulty without getting involved in the long and slow legislative process.

The provision for suspension of fundamental rights during an emergency is taken from the Weimar Constitution of Germany. Article 48 of the Weimar Constitution gave the President the powers to impose emergency which included the right to suspend civil rights and rule by decree. The key rationale behind suspension of fundamental rights during an emergency is to protect national security, prevent unnecessary chaos, espionage and other such activities that can jeopardise the stability of the country. Another important consideration is the preservation of public order and safety. Sometimes, the suspension of a few rights becomes important to avoid big disruptions to protect citizens, maintain law and order and ensure the smooth functioning of essential activities.

India, being a socialist country has to strike a balance between addressing the emergency and safeguarding the individual as well as collective interests. Therefore, it becomes necessary to regulate the powers of the State.

Since independence, India has faced challenges with regard to the extent of power of the State during an emergency as evidenced by a series of Supreme Court cases and constitutional amendments. Landmark cases of the Apex Court have, time and again, reiterated the importance of balance between safeguarding individual rights and powers of the State during an emergency.

Similarly, through various constitutional amendments such as 38th Amendment Act, 1975, 42nd Amendment Act 1976; the State tried to maximise its power.

Constitutional framework

The federal government, according to Bryce, means weak government because it involves a division of power. Every modern federation, however, has sought to avoid this weakness by providing for the assumption of larger powers by the federal government whenever unified action is needed because of emergent circumstances, internal or external. While in countries like the United States, the expansion of federal power took place through various judicial interpretations, the Constitution of India itself provides for conferring extraordinary powers upon the Union in case of different kinds of emergencies.

India, that is, Bharat is its own kind of ‘federal republic’ as observed by Dr. BR Ambedkar in the Constituent Assembly where he stated, “ All federal systems including the American are placed in a tight mould of federalism. No matter what circumstances, it cannot change its form and shape. It can never be unitary, On the other hand, the Constitution of India can be both unitary as well as federal according to the requirements of time and circumstances. In normal times, it is framed to work as a federal system. But in times of war, it is so designed as to make it work as though it was a unitary system”. The emergency provisions under Part XVIII( Articles 352 to 360) of our Constitution enable the Union government to acquire the strength of a unitary system whenever any emergency arises.

The Constitution of India provides for three different types of abnormal situations that call for a temporary suspension of the normal functioning set up by the Constitution–

Under Article 352, an emergency due to war, external aggression or armed rebellion. This is popularly known as ‘National Emergency’.
Under Article 356, an emergency due to the failure of constitutional machinery in the states. This is popularly known as ‘President’s Rule’, ‘State emergency’, or ‘Constitutional emergency’. Though, the Constitution doesn’t use the word ‘emergency’ for this situation.
Under Article 360, an emergency due to a threat to the financial stability or credit of India. It is known as a ‘Financial emergency’.

The President can proclaim a national emergency if she is satisfied that the security of India or any part thereof is threatened by war, external aggression, or armed rebellion. During this, the President has the power to suspend all fundamental rights except those given under Article 20 and Article 21 of the Constitution. A proclamation of national emergency declared by the President must be approved by both the Houses of Parliament within a month. If approved, the emergency can be in force for a period of six months that can be extended with parliamentary approval. Parliamentary approval is significant to prevent the President from declaring an emergency on her whim and mandates an open parliamentary discussion and justification for such an extreme measure. Further, it mandates the government to explain its actions and obtain the consent of other elected representatives before suspending the fundamental rights.

Article 355 of the Constitution imposes a duty on the Centre to ensure that the government of every State is working in accordance with the provisions of the Constitution. Under Article 356, in case of failure of the constitutional machinery of a State, it is the responsibility of the Centre to take over the government of a State. This is popularly known as ‘President’s Rule’. A proclamation imposing the President’s rule must be approved by both the Houses of Parliament within two months from the date of its issue. If approved by both the Houses of Parliament, the President’s rule continues for six months. It can be extended for a maximum period of three years with the approval of Parliament every six months. It is noteworthy that the 42nd Amendment Act, 1976 raised the period from six months to one year. Thus, once approved by the Parliament, the President’s rule could continue for one year. But, the 44th Amendment Act, 1978 restored the previous situation and reduced the period to six months.

Under Article 360, the President can declare a financial emergency if a situation of unstable economy is encountered. A financial emergency has never been proclaimed in India.

Situations in which fundamental rights can be suspended

The suspension of fundamental rights in India is a significant issue that demands delicate attention from all the pillars of democracy. It is often necessitated by extraordinary circumstances that pose a threat to the country’s security, stability and public order. There are some situations when fundamental rights are suspended.

National Emergency

A situation where the President is satisfied that the security of India or any part thereof is threatened by war, external aggression, or armed rebellion. The suspension of fundamental rights during a national emergency is justified on the grounds that there is a need to address a grave and imminent threat to the sovereignty and integrity of the nation.

For example, a National emergency was declared during the Sino-Indian War in 1962. The conflict arose due to territorial disputes in the Himalayan region between India and China. In October 1962, the Chinese forces launched simultaneous offensives in the Ladakh region and across the McMahon Line in the north-eastern region of India. Following the Chinese invasion of Indian territory, the Indian government declared a national emergency under Article 352 of the Constitution. The declaration of emergency led to suspension of some fundamental rights such as the right to freedom of movement, assembly, expression, and the right to protection against arrest and detention. Similarly, emergency was declared during the Indo-Pakistan War in 1971 which is also known as the Bangladesh Liberation War. The war began due to political and economic disparities between East and West Pakistan. In the 1970 elections, the Awami League led by Sheikh Mujibur Rahman won a majority in East Pakistan. However, the West Pakistani leadership refused to hand over power, sparking mass protests and civil disobedience in the East. East Pakistani nationalists formed the Mukti Bahini, an armed resistance movement, seeking independence. India provided support to Mukti Bahini. In December 1971, Pakistan launched a preemptive air strike on Indian airbases and started the war. In collaboration with Mukti Bahini, India launched a swift offensive in East Pakistan. Pakistan’s surrender in the East marked the end of the war and it led to the formation of Bangladesh. During this period, a national emergency was declared in India on the ground of ‘External aggression’. The declaration of emergency led to suspension of fundamental rights of individuals. Right to freedom of speech, assembly and movement were suspended. The press was also severely censored. Thousands of people were arrested without trial.

State Emergency

President’s rule can be imposed in a State if the President is satisfied that the governance of a state is not carried out in accordance with the provisions of the Constitution. While the imposition of Presidential rule doesn’t automatically suspend fundamental rights, it does grant the Central Government to suspend state government provisions for restoring order and governance in the State. There have been several instances when a State emergency was declared in several States of India.

A very recent example is of Jammy and Kashmir where President’s rule was imposed in 2019 owing to the revocation of the special status of Jammu and Kashmir under Article 370 of the Constitution. The President’s rule was imposed under Article 356 on the grounds of the failure of the constitutional machinery in J&K. Freedom of speech and expression under Article 19 was suspended. Suspension of internet services for a prolonged period gave rise to the case of Anuradha Bhasin v. Union of India( 2020). The petitioners challenged the suspension of internet shutdown in J&K. The Hon’ble SC held that an indefinite suspension of internet services would be illegal under Indian law and that orders for internet shutdown must satisfy the tests of necessity and proportionality. Though the Court did not lift the internet restrictions, it directed the government to review the shutdown orders according to the tests outlined in the judgement.

Civil Rebellion

When a national emergency is declared on the ground of ‘war’ or ‘external aggression’, it is known as ‘External emergency’ whereas when it is declared on the ground of ‘armed rebellion’, it is known as ‘Internal emergency’. A proclamation of emergency may be applicable to the entire country or a part of it. The 42nd Amendment Act, 1976 enabled the President to limit the operation of a National emergency to a specific part of India. The most notable instance of the suspension of fundamental rights due to civil rebellion occurred during the Emergency declared by Prime minister Indira Gandhi in 1975. This was prompted by what the government termed as an “internal disturbance,” primarily referring to the political unrest and civil disobedience movements led by opposition parties.

Initially, the Constitution mentioned ‘internal disturbance’ as the third ground for the proclamation of a National Emergency, but this expression ‘internal disturbance’ was too vague and had a wider connotation. The term ‘internal disturbance’ lacked a clear definition and could be interpreted subjectively by the ruling government. This ambiguity allowed the government to justify the proclamation of emergency even in situations that might not constitute a genuine threat to national security or public order. Further, the broad scope of this term could be used by the government to misuse emergency powers for political gains or suppress opposition and curtain civil liberties. Due to the ambiguous nature of this term, the 44th Amendment Act, 1978 substituted the words ‘armed rebellion’ with ‘internal disturbance’. Hence, it is no longer possible to declare a National emergency on the ground of ‘internal disturbance’ as was done by the Congress government headed by Indira Gandhi in 1975.

Health Emergency

Crises that are extraordinary in nature, at times, may necessitate the curtailment of a few rights such as the right to freedom of movement, right to speech and expression, etc. The restrictions on movement are generally done to stop a disease from spreading. Similarly, the right to speech and expression may be temporarily curtailed to stop the spread of information that may create unrest in the country. India observed such a situation in the year 2019-2020 when COVID-19 started to spread. The government enforced lockdowns and imposed quarantine measures to ensure public safety and health.

Political instability/ Clashes among religious, ethnic groups, etc.

Fundamental rights can be temporarily suspended in case of political instability, clashes between religious and ethnic groups, etc. The rationale behind the suspension is to prevent further escalation of the conflict and safeguard the overall public order of society. For instance, the Centre invoked Article 355 of the Constitution in Manipur in 2023 owing to the violence in the State due to clashes between Meitei and the Kuki-Zo tribal community. Article 355 empowers the central government to take all necessary steps to protect a state against internal disturbance and external aggression.

Similarly, mobile internet services were shut down temporarily in the Nuh district of Haryana after communal clashes between a group of men and the Vishwa Hindu Parishad( VHP) during the ‘Shobha Yatra’ procession.

Article 352 : proclamation of emergency

Article 352 of the Constitution of India empowers the President to declare a National emergency if the country faces a threat to its security or unity due to reasons like war, external aggression, or armed rebellion. By proclamation, the President may make a declaration to that effect in respect of the whole of India or any such part of the territory as may be specified in the proclamation.

The President may make a proclamation of emergency even before the actual occurrence of war or any such aggression or rebellion if she is satisfied that there is an imminent danger.

To ensure that the President does not make such a decision arbitrarily, under clause 3 of Article 352, the President shall not issue a proclamation unless the decision of the Union Cabinet (which consists of the Prime Minister and other Ministers of the Cabinet) regarding such a Proclamation is communicated to her in writing.

In 1975, the then Prime Minister, Smt. Indira Gandhi advised the President to proclaim an emergency without consulting the cabinet ministers. The Cabinet was intimated after the proclamation was made, as a fait accompli (something has already happened and cannot be reversed now). The 44th Amendment Act, 1978 introduced this safeguard to eliminate any possibility where the Prime Minister alone takes any decision in this regard.

According to the 38th Amendment Act, 1975, the declaration of National Emergency was made immune to judicial review restricting the power of the judiciary. However, the 44th Amendment Act, 1978 deleted this provision. In the case of Minerva Mills v. Union of India(1980), the Hon’ble Supreme Court examined the validity of the 42nd Amendment that amended Article 368 stating that amendments made in the Constitution (including Part III) under this Article shall not be called into a dispute in any court for any reason. This Amendment gave immense power to the Parliament. After a thorough examination of the facts, issues and challenges, the Hon’ble SC categorically held that the proclamation of National emergency can be challenged in the Court on the ground of being malafide or that the declaration was made on superfluous and irrelevant facts.

Approval of parliament and duration of the emergency

The proclamation of emergency must be approved by both the houses of Parliament within one month from the date of its issuance. However, if the proclamation is issued during the time when Lok Sabha is dissolved or the dissolution of Lok Sabha takes place during the period of one month without giving approval to the proclamation; in that case, the proclamation will survive till 30 days from the first sitting of Lok Sabha after its reconstitution. Provided that, in the meantime, the Rajya Sabha has approved the proclamation.

If the proclamation of emergency is approved by both the houses, the Emergency can continue for six months and can be extended for an indefinite period of time subject to the approval of Parliament every six months. Every resolution regarding the approval of proclamation of emergency or its continuation must be passed by either House of Parliament by a special majority i.e. 2/3rd of members present and voting.

The provision regarding periodical parliamentary approval was also added by the 44th Amendment Act, 1978. Prior to this, once an emergency is approved by the Parliament, it could remain in force as long as the cabinet desired. Additionally, the provision for a special majority regarding proclamation or continuation of emergency was also added by the 44th Amendment. Before that, such a resolution could be passed by a simple majority, i.e. 50% of the members present and voting.

Revocation of the proclamation

The President may revoke the proclamation of emergency at any time by a subsequent proclamation. The revocation of proclamation does not require approval of the parliament.

Further, the 44th Amendment added a safeguard that the President is bound to revoke the proclamation if the Lok Sabha passes a resolution disapproving its continuance. Before the Amendment, the proclamation could be revoked by the President on her own will and the Lok Sabha did not have control over it.

Furthermore, the 44th Amendment provided that if one-tenth of the total members of the Lok Sabha give a notice in writing to the Speaker or to the President when the House is not in session; a special sitting shall be held within 14 days for consideration of the resolution disapproving the continuation of emergency.

National Emergency has a significant effect on the relations between the Centre and State, life of the Lok Sabha and State assembly, etc. Other than that, national emergency has a substantial impact on the fundamental rights of individuals too as stated under Articles 358 and 359 of the Constitution. Article 358 deals with the suspension of rights guaranteed under Article 19 whereas Article 359 deals with the suspension of other fundamental rights.

Article 358 : suspension of provisions of Article 19 of the Constitution

Article 358 provides for the automatic suspension of six fundamental rights guaranteed under Article 19 of the Constitution when a proclamation of emergency is made. A separate order of suspension of these rights is not required.

The six rights suspended under Article 358 are as follows:

Freedom of speech and expression
Right to assemble peaceably and without arms
Right to form associations or unions
Right to move freely throughout the territory of India
Right to reside and settle in any part of the territory of India
Right to practise any profession, or to carry on any occupation, trade or business

When a proclamation of emergency is operating, the State is not bound by the restrictions imposed by Article 19. In simple words, the State is free to make any law or take any executive action taking away the rights mentioned in Article 19. Any law or order made by the State during the emergency cannot be challenged on the ground that they are restrictive of Article 19. Article 19 automatically revives on the expiration of emergency.

The 44th Amendment restricted the scope of Article 358 by making the following provisions:-

Article 19 can only be suspended when the National Emergency is declared on the grounds of war or external aggression and not on the ground of armed rebellion
Only those laws which are related to the emergency are protected from being challenged. Other laws that do not have a connection with the emergency can be challenged. Similarly, the executive actions taken only under the laws related to the emergency are protected.

Article 359 of the Constitution : suspension of Part III of the Constitution

Article 359 of the Constitution authorises the President to suspend the right to move any court for the enforcement of fundamental rights during a National Emergency. This means that the fundamental rights per se are not suspended but only their enforcement is. The rights are theoretically alive but the right to seek remedy in case of their violation is suspended. The suspension of enforcement relates to only those fundamental rights that are specifically mentioned in the order of the President. Suspension could be for the period during the operation of emergency or for a period shorter than as mentioned in the order. The suspension may be extended to the whole of India or any part of it. While the aforementioned Presidential order suspending the specified fundamental right/s is in force, the State can make any law or take executive action abridging the specified fundamental rights. Any law or executive action that is inconsistent with the mentioned fundamental rights cannot be challenged. As soon as the President’s order ceases to operate, inconsistent laws also cease to exist. It is noteworthy that no remedy lies for anything done during the operation of the order.

The 44th Amendment restricted the scope of Article 359 by making the following provisions:-

The President cannot suspend the right to move the Court for enforcement of fundamental rights guaranteed under Articles 20 and 21 of the Constitution. Hence, the right to protection in respect of the conviction for offences (Article 20) and right to life and personal liberty (Article 21) are enforceable even during an emergency.
Only those laws which are related to the emergency are protected from being challenged. Other laws that are not connected to the emergency can be challenged. Likewise, the executive action taken only under the laws related to the emergency is protected.

Distinction between Article 358 and 359 of the Constitution

Aspect	Article 358 of the Constitution	Article 359 of the Constitution
Basis of difference	It suspends the fundamental rights enshrined under Article 19 of the Constitution.	It empowers the President to suspend the enforcement of all or all fundamental rights(except Articles 20 & 21) during a national emergency.
Affected rights	Rights given under Article 19( Freedom of speech and expression, right to assemble, right to form associations or unions, to move freely throughout the territory of India, etc) are automatically suspended.	All fundamental rights(except Protection in respect of conviction for offences i.e. Article 20 and Protection of life and personal liberty i.e. Article 21) can be suspended with a separate Presidential order specifying the rights that can be suspended. Article 359 does not automatically suspend any Fundamental right. It only empowers the President to suspend the enforcement of specified fundamental rights.
Applicability	It applies only during a proclamation of External emergency (when emergency is declared on the grounds of war or external aggression) and not in case of armed rebellion.	It can be invoked during a proclamation of both Internal Emergency or threat of External Aggression (war).
President’s role	The President issues the proclamation of Emergency and Article 19 is suspended automatically. A separate order of suspension is not required.	The President issues the proclamation of Emergency.
Scope of suspension	It extends to the whole country.	It may extend to the whole country or any part of it.
Freedom of the State	The State can make any law or take any executive action that is not consistent with Article 19.	It enables the State to make any law or take any executive action that is inconsistent with only those fundamental rights whose enforcement is suspended by the President’s order.
Duration of suspension	It suspends Article 19 for the entire duration of the emergency.	It suspends the enforcement of fundamental rights for a period specified by the President which can be either the entire duration or a shorter time frame.

Indira Gandhi period

The Indira Gandhi period marks as a significant episode relating to the suspension of fundamental rights during an emergency. In 1975, facing legal and political challenges, the then Prime Minister recommended the imposition of emergency to President Fakhruddin Ali Ahmed on grounds of internal disturbance. The emergency was declared under Article 352 of the Constitution. With the declaration of Emergency, Indira Gandhi’s government invoked Article 359 which empowered the President to suspend the enforcement of fundamental rights. The imposition of emergency gave rise to the consolidation of power in the hands of the centre during which opposition leaders were arrested, censorship was imposed on media and civil liberties of individuals were curtailed. Many saw the suspension of fundamental rights during the emergency as an attempt to suppress political opposition, imposition of parliamentary supremacy over the basic and fundamental rights of the citizens and a blow to the constitutional set up of the country. The emergency was lifted in 1977 and India could finally return to a democratic form of government through a legitimate and proper electoral process. The Janata government came into power and appointed the Shah Commission to probe into the circumstances which led to the declaration of emergency in 1975. The commission in its report held that there was no evidence of any circumstances which could warrant the declaration of the emergency in 1975. There was no unusual event to justify the imposition of the emergency. The Janata government made 43rd and 44th constitutional amendments to prevent the misuse of emergency powers in the future.

38th Amendment

The 38th Amendment Act, 1975 introduced a couple of changes with regard to emergency provisions and the power of the President in this regard.

Firstly, the proclamation of emergency made by the President was made non-justiciable which meant that it could not be questioned in the Court. The President’s satisfaction regarding an ordinance was excluded from judicial review.

Secondly, the ordinance couldn’t be challenged on the grounds of motives or non-application of mind. Any promulgation of ordinances by the President, governors and other executive bodies of Union territories was made non-justiciable.

Thirdly, when the President had declared an emergency under Article 352, he couldn’t declare more than one proclamation when an emergency was functional. The 38th Amendment made provisions for different proclamations on different grounds during the time when the previous proclamation was in action.

42nd Amendment Act, 1976

The 42nd Amendment Act, 1976 remains one of the most controversial amendments in the Constitutional History of India as it tried to alter the basic structure of the Constitution by limiting the powers of the court, giving primacy to Directive Principles of State policy over fundamental rights, etc. The preamble was amended and ‘Socialist’, ‘Secular’, ‘Republic’ were added. ‘Unity of the Nation’ was replaced with ‘Unity and Integrity of the Nation’. This amendment brought so many changes that it is also known as the ‘Mini Constitution’ of India.

The major changes regarding emergency are as follows:-

It expanded the emergency powers of the State, extending the one time duration of the President’s rule from six months to one year.
It broadened the scope of fundamental rights that could be suspended during an emergency. It included the suspension of Articles 20 and 21 with Presidential order.
It tried to establish parliamentary supremacy over the Judiciary by empowering the Parliament to amend any part of the Constitution including the basic structure. Further, Article 368 was amended such that no constitutional amendment could be called into question in court on any ground. It restricted the scope of judicial review.
The President’s decision was made immune from Judicial review granting immense powers to him.

It is argued that the 42nd Amendment tried to undermine the democratic values of the country and concentrated the power in the hands of the government. Further, putting limitation of scope of judicial review was seen as a blow to the independence and accountability of the judiciary.

In the case of Minerva Mills v. Union of India(1980), Section 55 of the 42nd Amendment was challenged. Section 55 stated that, “No amendment of the Constitution (including the provisions of Part III) made or purporting to have been made under this article whether before or after the commencement of section 55 of the Constitution (Forty-second Amendment) Act, 1976) shall be called in question in any court on any ground”. Article 368 of the Constitution was amended and unfettered power to amend the Constitution was given to the Parliament. The Hon’ble SC held that amendments made in Article 368 were against the basic structure of the Constitution as it also hampered the review authority of the courts which was against the spirit of the Constitution. Further, the Court relied on the importance of the golden triangle which signifies the interconnectedness and interdependence of Articles 14, 19 and 21 on each other.

Post-emergency reforms

After the expiration of emergency, re-elections and formation of a democratic government; the Janata Government came up with the 44th Amendment, 1978 which restored a few provisions, included and deleted some to ensure that the emergency powers are not misused by the government in future.

44th Amendment Act, 1978

The 44th Amendment Act, 1978 is believed to be a corrective and restorative response to the 42nd Amendment. It aimed to address concerns about expansion of government’s power during an emergency, limited scope of judicial review, etc introduced by the 42nd amendment. The key changes are as follows:-

As the term ‘Internal disturbance’ was very broad and gave an expanded scope of interpretation including every major to minor disturbance in the country; it was replaced with ‘armed rebellion’ which limited the scope when an emergency could be proclaimed.
The President was not empowered to issue a proclamation of emergency unless the cabinet had confirmed the same with a written notice to him.
The approval of both houses for the continuation of the emergency was made mandatory.
The expanded emergency powers of the State extending the one time duration of President’s rule from six months to one year was restored from one year to six months.
It was made obligatory for the President to revoke the proclamation if the Lok Sabha passed a resolution disapproving its continuation.
It provided that when one-tenth of the total members of Lok Sabha give a written notice to the Speaker or to the President when the House is not in session, a special sitting should be held within 14 days to consider a resolution regarding discontinuation of the proclamation.
The enforcement of rights under Articles 20 and 21(because of their fundamental nature) could not be suspended even during an emergency.
The right to life and personal liberty was strengthened with the provision that no one could be detained for more than two months unless an advisory board confirmed the necessity of the arrest due to unavoidable circumstances.
The power of judicial review by the court was restored and the Court had the authority to look into the mala fide issuance of a proclamation or mala fide continuation of emergency.

Due to the grave miscarriage of justice in the case of ADM Jabalpur v. Shivkant Shukla(1976), also known as the Habeas Corpus case; it was and still is heavily criticised. This judgement is viewed as the darkest chapter in the history of Indian Courts as it jeopardised the fundamental rights of the citizens by giving primacy to power of the government over fundamental rights enshrined under Part III of the Constitution. Basically in this case, Shivkant Shukla, a political activist, was arrested during the emergency and detained without a trial under the Maintenance of Internal Security Act, 1971( MISA). His wife filed a writ of habeas corpus. The main issue in this case was whether the courts had the power to inquire into the detention of Mr. Shivkant and whether the right to life and personal liberty could be suspended during an emergency. The SC held that Article 21 could be suspended and courts did not have the authority to interfere with the detention of individuals under MISA.

This judgement was overruled by the Hon’ble SC in the case of Justice K.S. Puttaswamy(Retd) v. Union of India(2018) where it recognised the right to privacy as a fundamental right under the Constitution.

Exceptions to suspension of fundamental rights

During an emergency, certain fundamental rights may be suspended or restricted to some extent. However, there are some rights that are so basic and fundamental that it is not possible to derogate them. Articles 20 and 21 of the Indian Constitution are non-derogable, hence, cannot be suspended even during an emergency.

Article 20 discusses the right to protection in respect of conviction for offences. It states that, ‘No person shall be convicted of any offence except for violation of the law in force at the time of the commission of the act charged as an offence’. Further, a person cannot be subjected to a penalty greater than what would have been inflicted under the law in force at the time of the commission of the offence.

Furthermore, no person can be prosecuted and punished for the same offence more than once and cannot be compelled to be a witness against himself.

Article 21 discusses the protection of life and personal liberty and states that, ‘No person shall be deprived of his life or personal liberty except according to procedure established by law’. Right to life and personal liberty cannot be suspended to prevent arbitrary actions or excessive usage of power by the State.

By the virtue of the case of Maneka Gandhi v. Union of India(1978), the non-suspension of Article 21 was solidified by the Constitution of India. The Hon’ble Court struck down Section 10(3)(c) and 10(5) of the Passport Act, 1967 which was violative of Article 21 of the Constitution. This judgement paved the way for the Hon’ble SC to expand the ambit of Article 21 by including the right to clean water, right to clean air, right to clean environment, etc. The court overruled the case of A.K. Gopalan v. State of Madras(1950) and held that Articles 14, 19 and 21 are interconnected and any law must meet the standards laid down by these Articles.

In the case of Justice K.S. Puttaswamy (Retd) v. Union of India(2018), the SC unanimously recognised the fundamental right to privacy, overruled the case of M.P. Sharma v. Satish Chandra(1954) and Kharak Singh v. State of Uttar Pradesh(1962).

Role of judiciary in suspension of fundamental rights

The Judiciary has played a crucial role in upholding the fundamental rights and limiting the power of the government during emergency. The record of the Supreme Court in securing fundamental rights has been exceptional but not without controversies. Given below are some landmark judgements that shaped the jurisprudence around suspension of fundamental rights during emergency.

Makhan Singh Case

Makhan Singh v. State of Punjab (1964) is a landmark case that dealt with the interplay between powers of the State during an emergency, impact of emergency on the writ of habeas corpus and other fundamental rights. In this case, the SC differentiated between Articles 358 and 359 of the Constitution. The SC held that till the proclamation of emergency is in force; rights under Article 19 shall remain suspended.

Facts

Due to Chinese aggression on September 8, 1962, the President declared a National emergency under Article 352 of the Constitution on October 26, 1962. The Defence of India Ordinance was also promulgated the same day. An ordinance promulgated on November 3, 1962 suspended the rights to move any court for the enforcement of rights enshrined under Articles 21 and 22 of the Constitution till the emergency is proclaimed. The appellants were detained under Rule 30(1)(b) of the Defence of India rules. The appellants were detenues who were detained by the Punjab and Maharashtra State governments under Rule 30(1)(b) of the Defence of India rules made by the Central Government by exercising its power conferred upon it by the Defence of India ordinance. The appellants had applied to the Punjab High Court and the Bombay High Court under section 491(1)(b) of the Code of Criminal Procedure( CrPC) alleging their arrest as illegal. Their contention was that Sections 3(2), 3(15)(i), 40 of the Defence of India Act, 1962 and rule 30(1)(b) under which they had been detained were constitutionally invalid as they violated the fundamental rights mentioned under Articles 14, 21, and 22.

Issue

What is the nature of proceedings that are barred by the presidential order issued under Article 359(1) of the Constitution?
Whether the bar created by the presidential order operates with respect to the writ of habeas corpus made by the arrested persons, not under Article 226 of the Constitution but under Section 491 of CrPC?

Judgement

The Hon’ble Supreme Court examined the scope and effect of the presidential order and pointed out the difference between the suspension of rights under Article 358 and Article 359. The Court held that, since the object of Article 359 is to suspend the rights of the citizens to move any court; it includes approaching the Supreme Court. Further, it was held that though the right to claim relief under CrPC was distinct and separate from that conferred by Articles 32 and 226 of the Constitution, however, the main point of examination was not the technicalities of procedure in which the action was taken and not whether the writ petition was filed under Articles 32 or 226 but rather that it was the “substance of the matter” which was decisive.

Therefore, proceedings taken under Section 491 of CrPC would be on equal footing with the writ petitions under the Constitution. The most important proposition of law that was laid down in the case was that even though the order did not allow a challenge to an order of detention under the Articles specifically mentioned, it did not prevent a challenge on other grounds such as excessive delegation, improper application of law, etc. The arrest of the appellants was not declared illegal.

Ghulam Sarwar case

Ghulam Sarwar v. Union of India( 1966) is a landmark judgement in Indian constitutional history, shaping debates around fundamental rights and their suspension during a national emergency. The court drew a distinction between the order per se and the effect of the presidential order. The Hon’ble SC held that if an order in itself is violative of Part III, then it would be considered void.

Facts

In 1962, India declared a state of emergency during the war with Pakistan. The President invoked Article 359 of the Constitution and suspended specific fundamental rights through two orders which were subsequently amended. By one, as amended, the right of a foreigner to move any court for the enforcement of the rights conferred by Articles 14, 21 and 22 of the Constitution was suspended during the period of emergency. By the other order, as amended, the right of any person to move any court for the enforcement of the rights conferred by Articles 14, 21 and 22 was suspended during the emergency.

In 1964, Ghulam Sarwar, a Pakistani national was arrested in New Delhi by the Customs authorities under Section 135 of the Indian Customs Act, 1962 for unlawfully entering India. On May 9, 1964, he was granted bail, but a year later, on May 18, 1965, as he was being released, the Central Government served him with a detention order under Section 3(2)(g) of the Foreigners Act,1946. This action was taken due to an ongoing police investigation regarding his alleged involvement in gold smuggling. He was convicted for an offence under the Customs Act and was sentenced to undergo rigorous imprisonment for a period of nine months and a fine of 2,000 rupees. The petitioner filed the writ of Habeas Corpus challenging his detention which was dismissed. The petitioner filed a fresh writ petition of Habeas Corpus challenging the provisions of the Foreigners Act and contended that the presidential order was violative of Article 14 of the Constitution.

Issue

Whether Article 359(1) of the Constitution is valid or not?
Whether the presidential orders issued under Article 359 could be challenged based on violation of Article 14 of the Constitution or not?
Whether the detention of the petitioner under Section 3 of the Foreigners Act, 1946 valid or not?

Judgement

The court dismissed the petition and held that the President’s orders issued under Article 359(1) are neither discriminatory nor violative of Article 14 of the Constitution and are based on reasonable classification. However, the court also held that if an order in itself violates Part III of the Constitution then it would be considered void and would not result in the suspension of the remedies in the articles mentioned. While this decision might be technically correct, if we look at this case practically, it defeats the purpose of the order issued under Article 359. Therefore, this case was overruled in Mohd. Yaqub v. The State Of Jammu & Kashmir(1967) where the court interpreted ‘law’ in Article 13(3)(a) to exclude a presidential order under Article 359.

Kesavananda Bharati case

Kesavananda Bharati v. State of Kerala (1973) is one of the landmark judgements to understand the importance of fundamental rights. Though not directly related to the emergency, this case established the ‘basic structure doctrine’. The Court held that Parliament can amend the Constitution but cannot alter the basic structure of the Constitution. This doctrine played a pivotal role in limiting the amending powers of the Parliament and overreach during emergencies.

Facts

Kesavananda Bharati( the petitioner) was the head priest of Edneer Mutt in Kerala. The petitioner had certain land areas of the sect registered under his name. The Kerala Land Reforms Act, 1969, aimed to redistribute landholdings. This Act empowered the State to acquire surplus land from religious institutions including the petitioner’s mutt. The petitioner approached the SC under Article 32 of the Constitution claiming violation of their fundamental rights under Article 14, i.e., right to equality, Article 19(1)(f) i.e. freedom to acquire property, Article 25, i.e., right to practise and propagate religion, Article 26 i.e. Right to manage religious affairs and Article 31, i.e., compulsory acquisition of property.

As the court entertained the petition, the Kerala government introduced the Land Reforms Amendment Act, 1971.

The 24th Amendment Act, 1971 that gave Parliament the power to amend any provisions of the Constitution was challenged. Further, the 25th Amendment Act, 1972 which specified that the state government is not responsible for equally compensating the owner of the property if his private property is taken by the government, was also challenged.

Issue

Whether the 24th Amendment is constitutionally valid or not?
Whether the 25th Amendment is constitutionally valid or not?
Whether Parliament can amend the Constitution or not?

Judgement

With a ratio of 7:6, the Hon’ble SC held that the Parliament can amend any provision of the Constitution, however, it cannot amend the Constitution in such a way that it alters the ‘Basic structure’ of the Constitution. Accordingly, the court upheld the constitutionality of the 24th Amendment Act. The court struck down the 2nd part of the 25th Amendment Act and declared it ultra vires, i.e., beyond the scope of legal authority. Further, the court rules that Parliament must respect the ‘Basic structure’ while amending any part of the Constitution.

Raj Narain case

Indira Gandhi v. Raj Narain (1975) is a pivotal case in Indian legal and political history. In this case, the Supreme Court invalidated the provisions of the 39th Amendment Act that kept the election disputes involving the Prime Minister and Lok Sabha speaker outside the jurisdiction of all courts. As a response to the Kesavananda Bharati case the Parliament enacted the 42nd Amendment Act, 1976 and amended Article 368 declaring that no amendment (including in Part III of the Constitution) made under it can be questioned in any court. This was done to establish Parliamentary supremacy over the Judiciary. The Supreme Court reaffirmed the doctrine of Basic structure.

Facts

In the 1971 Lok Sabha elections, Indira Gandhi was also a candidate in the Rae Bareli constituency of Uttar Pradesh. She was representing the Congress party and her opponent was Sh. Raj Narain. Indira Gandhi won the elections. Dissatisfied with the outcome Raj Narain filed a petition in the Allahabad High Court alleging violation of election rules outlined in the Representation of People’s Act, 1951( RP Act) and engagement of Indira Gandhi in other unfair practices during the electoral process. The accusations were also that Indira Gandhi misused government resources to gain unfair advantage during campaigns. The Allahabad HC held her guilty of these allegations under Section 123(7) of the RP Act, 1951. Indira Gandhi appealed the decision of Allahabad HC in the Supreme Court. While the proceedings were going on, President Fakhruddin Ali Ahmed declared a National emergency on the grounds of internal disturbance. During this period, the 39th Amendment Act introduced Article 329A which stated that the election of the Prime minister and speaker could not be challenged in any Indian court.

Issue

Whether Article 329A(4) of the Constitution of India is valid or not?
Whether the Representation of People’s (Amendment) Act, 1974 and the Election Laws (Amendment) Act, 1975 are constitutionally valid or not?
Whether the election of Indira Gandhi is valid or not?

Judgement

In this landmark judgement, the SC relied heavily on the case of Kesavananda Bharati. The SC held that the amending power of the Parliament, under Article 368 of the Constitution, is limited and should be in such a way that it does not alter or undermine the basic structure. The court emphasised on the importance of free and fair elections and held Article 329(A) as violative of the Constitution.

Habeas Corpus case

A.D.M. Jabalpur v. Shiv Kant Shukla (1976): This case is seen as a black spot on the record of the Supreme Court regarding the protection of the fundamental rights of the citizens. In this case, the scope of preventive detention under the Maintenance of Internal Security Act( MISA) was questioned.

Facts

This case arose from the Emergency declared in India in 1975. Many civil liberties and fundamental rights were suspended during this period. Shivkant Shukla, a political activist, was arrested during the emergency and detained without trial under the Maintenance of Internal Security Act. Shukla’s wife filed a writ of habeas corpus that mandates the detained person to be presented before the court.

Issue

Whether Article 21 of the Constitution can be suspended during an emergency?

Judgement

The court upheld the validity of MISA and held that even Articles 20 and 21 can be suspended during an emergency. The decision in this case is highly criticised. Justice H.R. Khanna was the only judge in this case who gave a dissenting opinion and stated that Article 21 is the sole repository of one’s right to life and personal liberty. ‘The moment the right to move any court for enforcement of Article 21 is suspended, no one can complain to the court of deprivation of life and personal liberty for a redress sought from the court on that score would be enforcement of Article 21’. Justice Khanna lost his due post of Chief Justice of India due to his dissent in this case. This case was overruled in the case of KS Puttaswamy v. Union of India.

International perspective on suspension of fundamental rights

In times of emergency, countries can be seen suspending some fundamental rights such as the right to movement, the right to free speech and expression, etc. The concept of suspension of fundamental rights during emergencies is not just limited to India but is relevant on the global level with each country trying to find a delicate balance between safeguarding public safety and preserving individual rights. Countries approach this issue based on their legal system, constitutional history and other relevant factors. Given below is a comparative analysis of the constitutional framework of the United States of America(USA), the United Kingdom(UK), Russia and Germany.

USA

The Constitution of the USA does not mention any provision explicitly for suspending fundamental rights during an emergency. However, Section 9 of Article 1 provides for suspension of the writ of habeas corpus on occasions of rebellion, invasion, etc. It states that, ‘The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it’.

The Courts have played a crucial role in upholding the fundamental rights. The power to suspend some fundamental rights has been implied through various judgements of the Supreme Court of the US. The power of judicial review plays an important role in upholding individual rights even during emergencies. Through its’ judgements the Supreme Court has held that the suspensions must be tailored to deal with the specific exigencies rather than putting blanket prohibitions on fundamental rights of citizens. In landmark judgements such as Rasul v. Bush( 2004), and Hamdi v. Rumsfeld(2003), the Supreme Court has upheld the right to due process, the right to file writs in federal courts for writs of habeas corpus to review the legality of detention of US citizens.

United Kingdom

Since the UK does not have a written Constitution; the Parliament derives its power to suspend fundamental rights from the Human Rights Act, 1998 to enact emergency legislation suspending certain rights and the Civil Contingencies Act, 2004 that mentions the powers of the Parliament. The suspensions of rights need to be in consonance with the UK’s international human rights obligations and cannot affect the core fundamental rights such as the right to life, etc.

Russia

The Constitution of the Russian Federation allows for the declaration of a state of emergency where fundamental rights of citizens can be suspended. Article 56 of the Constitution states that, ‘In the conditions of a state of emergency, in order to ensure the safety of citizens and the protection of the constitutional order and in accordance with federal constitutional law, certain restrictions may be imposed on human rights and freedoms with an indication of their limits and the period for which they have effect.’ However, the Constitution also provides for protection of the right to life under Article 20, Protection of Human dignity under Article 21, etc.

Germany

The Basic Law for the Federal Republic of Germany contains provisions for the restriction of fundamental rights during an emergency under Article 115. Germany’s Federal Constitutional Court plays a crucial role in safeguarding individual rights, independence of the judiciary and power of judicial review, even during emergencies.

All the countries try to maintain a fine balance between balancing the interests of the State as well as the individual.

Contemporary issues in suspension of fundamental rights

Till now, the national emergency has been imposed thrice. Since 1950, President’s rule has been imposed 134 times in India. The recent case with regard to the suspension of fundamental rights and imposition of the President’s rule is discussed in Anuradha Bhasin v. Union of India( 2020). The legality of the shutdown of the internet and restrictions on movement was challenged under Article 32 of the Constitution. The SC held that the freedom of speech and expression is an integral part of Article 19 of the Constitution. Further, the court held the right to internet is a fundamental right. In the era of rapidly evolving challenges and the need for a dynamic and robust legal system, it becomes necessary for countries to handle unprecedented threats like cyber attacks, health emergencies such as COVID-19, etc. As the world acknowledges that ‘Data is the new fuel’; data has the potential to grow or destroy a country’s GDP, businesses and economy. Considering the power of data in today’s world, cyber attacks, hacking the computer systems, and smart devices of a country sounds like an opportunity for the enemies. Though, India has shown great potential in technology and digitalisation, a testament to which is the fact that it topped the world ranking in digital payments beating China by a huge margin; it is imperative that a time may come when emergencies would be declared because of cyber warfares.

In terms of rights and liberties; the most affected individuals are the citizens themselves during an emergency. While emergency measures are often implemented to safeguard public safety and security, they significantly impact various rights and day to day aspects of citizens. Generally, the government restricts the free movement of citizens from one place to another, imposes curfews, limits the right to use the internet, etc. as measures of control. During emergencies like COVID-19, the government can direct closure of operation of certain non-essential industries that can impact the right to work of individuals working in those industries. Further, the government can make rules to limit large gatherings and public events that is a right under Article 19. During the Presidential rule in Kashmir, we witnessed several limitations imposed by the government to minimise the conflict and spread of misinformation in the valley. Curfews, suspension of internet services, restrictions on right to move the court during emergency, etc are all the measures adopted by the government where individuals get directly affected.

Furthermore, global pandemics like COVID-19 call for framing policies in such a manner that the balance between the protection of fundamental rights and the protection of National interest is maintained. In an interconnected world, the response to emergencies like cyber warfare, and global pandemics necessitates global collaboration. These issues are borderless and common to all which further calls for nations to coordinate amongst themselves and ensure a collective response safeguarding human rights.

Conclusion

The emergency provisions have remained in debate since the inception of the Constitution. These provisions are important for maintaining law and order in the country, however, it is important to keep in mind that these provisions are not misused and not used as a weapon to curtain the fundamental rights of the citizens. While replying to the criticism of these provisions in the Constituent Assembly, Dr. B.R. Ambedkar hoped that the drastic power conferred by Article 356 would remain a ‘dead letter’ and would only be used as a measure of last resort.

In the context of the proclamation of emergency in 1975, HV Kamath, a member of the Constituent Assembly commented that ‘Dr. Ambedkar is dead and the Articles are very much alive.’ He also observed that he fears that by the single chapter on emergency provisions, the assembly is seeking to lay the foundation of a totalitarian state, a police state, a state completely opposed to all the ideals and principles that were kept aloft. It will be a day of shame and sorrow when the President makes use of these powers that have no parallel in any Constitution of the democratic countries in the world. T.T. Krishnamachari feared that ‘by means of these provisions the President and the Executive would be exercising a form of constitutional dictatorship. There were many leaders who criticised the emergency provisions, however, there were also protagonists of the emergency provisions in the assembly. Sir Alladi Krishnaswami Ayyar labelled them as ‘the very life-breath’ of the Constitution. Mahabir Tyagi opined that these provisions would work as a ‘safety valve’ and would work towards maintaining the Constitutional setup of the country.

While defending these provisions, Dr. B.R. Ambedkar did accept the possibility of their misuse and observed that he does not altogether deny the possibility of abuse of these articles for political purposes.

With the 44th Amendment, ever evolving and expanding fundamental rights, advancement in the society where most of the people are aware of their rights and the proactive role of the Hon’ble Supreme Court, we can firmly say that the history of 1975 will not repeat itself!

Frequently Asked Questions( FAQs)

Which fundamental rights cannot be suspended even during an emergency?

The right to protection in respect of conviction for offences and protection of life and personal liberty under Articles 20 and 21 respectively cannot be suspended even during an emergency.

Why was ‘internal disturbance’ replaced with ‘armed rebellion’ in the 44th Amendment, 1976?

The Constitution of India originally mentioned ‘internal disturbance’ as one of the grounds for declaring an emergency, however, because of its wider scope it was misused. Therefore, through the 44th Amendment, 1976; the term ‘internal disturbance’ was replaced with ‘armed rebellion’ to limit its scope.

Which Article of the Constitution discusses the procedure of declaring a National emergency?

Under Article 352 of the Constitution, the president can declare a National emergency when the security of India or a part of it is threatened by war or external aggression or armed rebellion.

References

The Dark Side of Indian Democracy: Emergency, 1975–1977″ by Atul Kohli
“The Power of Judicial Review and the Right to Constitutional Remedies” by Justice D.Y. Chandrachud
“Fundamental Rights, Democracy, and Judicial Review” by Upendra Baxi
Indian Constitutional Law by MP Jain
The Indian Constitution: Cornerstone of a Nation by Granville Austin
Polity by M. Laxmikanth, 7th Edition
https://www.constitutionofindia.net/constitution-assembly-debates/

All about the National Company Law Appellate Tribunal (NCLAT)

Rachit Garg

March 10, 2024

The article is written by Shriya Singh. It aims to discuss in detail the constitution, powers, advantages, composition, jurisdiction, etc. of the National Company Law Appellate Tribunal. The article also covers a few of the significant judgments produced by the Appellate Tribunal and some related FAQs.

Table of Contents

Introduction

When the world transitioned from a police state to a welfare state, the responsibilities of the state increased. Thus, the bifurcation of the judicial system happened which gave light to the existence of tribunals. Tribunals are quasi-judicial institutions that are set up in order to deal with various subjects of law, such as administrative problems, tax-related disputes, etc. It helps to overturn the pendency of cases and reduce the workload on various courts.

The term tribunal derives its term from the word “tribunes” which means ‘Magistrates of the Classical Roman Republic’. It has all the trappings of the court but it does not strictly follow any rule of evidence which came into existence to combat the pressure on the traditional courts. There is no procedure per se that is required to be followed by the tribunals in a straight-jacket manner but they abide by the principles of the law of natural justice. A lot of tribunals have been established such as the Industrial Tribunal, Revenue Tribunal, Election Tribunal, Rent Control Tribunal, etc.

In an infamous case of Bharat Bank Ltd. vs. Employees of the Bharat Bank (1950), the Supreme Court of India observed that the basic test of the tribunal is that it is an adjudicating authority other than a court vested with the judicial powers of the state under a statute or statutory rule.

Among all the other types of tribunals which are dedicated to a particular section of the law, there exist appellate tribunals to deal with the appeals against the Judgments of the tribunals. In this article, we will understand the National Company Law Appellate Tribunal (NCLAT) in great detail, let us delve into it.

What is the National Company Law Appellate Tribunal (NCLAT)

The NCLAT is an appellate tribunal formed in order to hear appeals of the aggrieved against the orders of the National Company Law Tribunal (NCLT). It was constituted under Section 410 of the Companies Act, 2013 (hereinafter, referred to as Act, 2013) and it came into effect from 1st June, 2016.

The NCLAT plays a crucial role in providing a forum for parties aggrieved by the decisions of the NCLT to seek redressal and ensure that justice is served. It aims to expedite the resolution of corporate disputes and promote transparency and efficiency in the corporate governance and insolvency processes in India.

Overall, the NCLAT is an important institution in the Indian legal system that adjudicates on appeals related to company law matters and plays a significant role in shaping corporate jurisprudence in the country.

Jurisdiction of the National Company Law Appellate Tribunal (NCLAT)

The NCLAT is not only a company law appellate tribunal but also an appellate tribunal for hearing appeals against the orders passed by the NCLT under Section 61 of the Insolvency and Bankruptcy Code, 2016. This came into effect from 1st December, 2016.

Further, the NCLAT is also the appellate tribunal for an aggrieved against the orders of the Competition Commission of India (CCI). This was led to by an amendment to Section 410 with effect from 26th May 2017 through Section 172 of the Finance Act, 2017.

Additionally, the NCLAT also hears and disposes of appeals of the aggrieved against the orders of the National Financial Reporting Authority. Section 83 of the Companies(Amendment) Act, 2017 brought this amendment to Section 410 and it came into effect from 7th May, 2018.

Section 430 of the Act, 2013 provides that there shall be no jurisdiction of a civil court to hear any suit or proceeding to any matter which the NCLAT has been authorised to determine by or under this Act or any other law for the time being in force. The profession further states that no injunction shall be granted by any Court or other authority in respect of any action that is taken or that ought to be taken by the NCLAT in pursuance of any power conferred on it by or under this Act or any other law for the time being in force.

Need for the establishment of the National Company Law Appellate Tribunal (NCLAT)

As we all know there were courts existing in order to cater to the disputes, appeals and related matters with regards to the matters that are now taken up by the NCLT and NCLAT. The constitution of both such tribunals and other tribunals was a step towards improving the ease of doing business by bringing all the aspects of particular legal matters under one roof. All the aspects of company law matters were brought under the NCLT and NCLAT.

Let us understand the need for the establishment of the National Company Law Appellate Tribunal (NCLAT) that arises from several critical factors.

The most significant and prominent advantage of NCLAT is there is a single window for the settlement of all company or related disputes effectively. Because of this, the multiplicity of proceedings before various other authorities or courts is avoided easily.

Due to the mandate to dispose of cases as expeditiously as possible, the whole process becomes a speedy one under the NCLAT. It will not only save time but also the energy and money of the parties.
Another important reason is that it reduces the work of the High Courts. We are all aware of the fact that there are a high number of pending cases before the High Courts. The matters of compromise, arrangement, amalgamation, winding up, etc. now come within the ambit of NCLT and NCLAT, thus, reducing the work of already overburdened High Courts.

Functions of the National Company Law Appellate Tribunal (NCLAT)

The major functions of the NCLAT are as follows –

It acts as a link between the NCLT and the Supreme Court of India in respect of the appeals in matters it adjudicates or which come within its jurisdiction.
It primarily hears appeals that are filed against the orders of the NCLT. It serves as an appellate authority to the NCLT.
It also plays a crucial role in matters related to insolvency and bankruptcy as it hears appeals for such matters.
It also has its jurisdiction over the appeals that are related to the competition law cases as it hears appeals against the decisions made by the CCI.
It also exercises its authority to review its own orders and the orders that are passed by the NCLT.
It also enjoys advisory jurisdiction when a legal issue has been referred to it by the President of India for opinions and advice.

NCLAT being a quasi-judicial body is responsible for interpreting and applying legal principles towards the cases that are brought before it and thus plays a crucial role.

Are proceedings of NCLAT judicial in nature

The proceedings of the NCLAT can be considered judicial proceedings. As the NCLAT is a quasi-judicial body established under the Act, 2013 and it functions as an appellate tribunal to hear appeals against the orders of the NCLT.

The NCLAT has the power to accord approval, sanction, consent, confirmation, or recognition in relation to various matters under the Companies Act. It has the authority to regulate its own procedures and has powers similar to those vested in a civil court under the Code of Civil Procedure, 1908. These powers include summoning and examining witnesses, requiring the production of documents, receiving evidence on affidavits, issuing commissions, and more.

Furthermore, any order made by the NCLAT can be enforced in the same manner as a decree made by a court in a suit. The NCLAT can send its orders for execution to the court within the local limits of the jurisdiction where the registered office of the company against which the order is made is situated. The NCLAT follows specific procedures for the institution of appeals, including the presentation of appeals in English or translated into English, the format of pleadings, and the description of parties involved in the appeal.

Thus, it is understood that the tribunal’s quasi-judicial nature, its powers, and the enforcement mechanisms available for its orders. The NCLAT plays a crucial role in the adjudication of appeals related to company law matters and ensures that justice is served in accordance with the provisions of the Act, 2013.

Constitution of the National Company Law Appellate Tribunal (NCLAT)

It was on the recommendations of the Justice Eradi Committee that the journey of the Company Law Board (governed by the Companies Act, 1956) came to an end and eventually NCLAT was established. The committee was set up on law relating to insolvency and winding up of the companies and it led to the setup of the tribunal, a specialised institution for corporate justice.

Finally, the NCLAT was constituted under Section 410 of the Companies Act, 2013 by the Central Government. The provision purports that the Central Government will establish, by notification, an appellate tribunal which would be known as the NCLAT. Such establishment would be effective on the date that may be specified in such notification. It further states that the tribunal will hear appeals against the orders of the NCLT or the National Financial Authority and will be composed of a chairperson and as many judicial and technical members as it deems appropriate. It was further prescribed that it should not exceed eleven members, appointed by notification by the Central Government.

In light of the above provision, it is noteworthy that the Central Government established the NCLAT, by notification, effective from 1st December 2016.

Composition of National Company Law Appellate Tribunal (NCLAT)

The NCLAT shall consist of a chairperson and as many judicial and technical members as the Central Government deems appropriate. However, the number of judicial and technical members shall never be more than eleven.

Within the meaning of Section 21 of the Indian Penal Code, 1860, as per Section 427 of the Act, 2013, the chairperson, members, officers and other employees of the NCLAT shall be deemed to be public servants.

Let us understand the structure of the NCLAT in depth.

Selection of the members

Section 412 of the Act, 2013 provides that upon consultation with the Chief Justice of India, the chairperson and judicial members of the NCLAT shall be appointed.

The provision further states that the technical members of the NCLAT are appointed upon the recommendations provided by the Selection Committee. The Selection Committee consists of-

Chief Justice of India or his nominee, who acts as the chairperson of the committee, and
The following would be the members of the Committee –

A senior most judge of the Supreme Court or the Chief Justice of a High Court,
Secretary in the Ministry of Law and Justice, and
Secretary in the Department of Financial Services in the Ministry of Finance.

Additionally, the provision states that the convener of the selection committee shall be the secretary of the Ministry of Corporate Affairs.

Furthermore, it is provided that the Selection Committee will determine its own procedure for the recommendation of the members.

Also, it is really significant to note that any vacancy or other deficiency in the composition of the NCLAT shall not render an appointment of the NCLAT invalid.

Qualification of members of the NCLAT

The qualifications of the chairperson and members of the NCLAT are provided under Section 411 of the Act, 2013.

The position of chairperson can be served by

A judge of the Supreme Court of India, or
Chief Justice of a High Court.

The position of judicial member shall be served by

A judge of the High Court, or
A person who served as a judicial member of the tribunal for 5 years.

A technical member is a person with demonstrated or proven ability, integrity and standing who possesses specialised knowledge and experience of not less than 25 years in the fields mentioned below-

Law,
Industrial finance,
Industrial management or administration,
Industrial reconstruction,
Investment,
Accountancy,
Labour matters,
Such other discipline pertaining to management,
Conduct of affairs,
Corporate revival,
Rehabilitation of companies, or
Winding up of companies.

Term of office

Section 413 of the Act, 2013 envisages the provision for the term of office of chairperson and other members of the NCLAT.

Section 413(3) states that after taking the office of appointment, the chairperson or the members of the NCLAT will remain in that position for a period of 5 years. During the tenure of 5 years, they will be eligible for reappointment for a further term of 5 years.

Section 413(4) provides that the members of the NCLAT will remain in that capacity until he or she attains-

The age of 70 years in the case of the chairperson, and
The age of 67 years in the case of any other member.

The provision further provides that to be eligible for appointment as a member a person must have reached the age of 50 years at least.

Furthermore, the provision purports that while holding office as such, the member will keep his lien with his parent cadre, ministry or department, as applicable, for a maximum period of 1 year.

Salary and allowances

Section 414 of the Act, 2013 puts out the provisions for salary, allowances and other terms and conditions of service of members.

The provision states that the salaries, allowances and other terms and conditions of the members of the NCLAT shall be specified by law as may be prescribed. It further states that following their appointment and during their term, the terms and conditions of employment of the members cannot be changed in a way that would be detrimental or disadvantageous to them, including their salary and allowances.

Vacancy of members

Section 415 of the Act, 2013 provides for the provisions regarding the chairperson of NCLAT.

It provides that the senior most member will step into the post of chairperson in the event of a vacancy in those positions due to death, resignation or other likewise cause. This will continue until a new chairperson is appointed in accordance with the provisions of the Act, 2013 to take over the position.

It further provides that the senior most member will carry out the responsibilities of the chairperson as applicable until the chairperson returns to his or her duties in the event that he or she is unable to do so due to absence, illness or any other reason.

Section 431 of the Act, 2013 envisages a provision regarding the proceedings of the NCLAT in the event of a vacancy of the office. It states that no act or decision that is made by the NCLAT shall be contested or declared invalid just because there has been a vacancy in existence or any other defect pertaining to the constitution of the NCLAT.

Resignation of Members

Section 416 of the Act, 2013 provides for the provisions pertaining to the resignation of members of the NCLAT.

The provision states that the chairperson or any member of the NCLAT may resign from their offices by giving a return notice under their signature that is addressed to the Central Government. Furthermore, the chairperson or the members of the NCLAT will remain in office in accordance with any of the following specifications in order of their first occurrence-

until the end of their term of office, or
3 months from the date of notice sent to them by the Central Government, or
until a legitimately nominated successor takes over the office.

Removal of members

Section 417 of the Act, 2013 provides for the provisions regarding the removal of the members or the chairperson of the NCLAT.

The provision states that the chairperson or any member of the NCLAT can be removed by the Central Government after consultation with the Chief Justice of India, when-

the position holder has been determined to be insolvent, or
he or she has been found guilty of a crime and has been convicted, which in the opinion of the Central Government involves moral turpitude, or
he or she is no longer able to perform the duties of the chairperson or member competently due to physical or mental incapacity, or
he or she has misused the position to such an extent that it is against the public interest for him or her to remain in the office.

However, the chairperson or the members of the NCLAT shall never be removed for any of the reasons that are listed above unless he or she is given a fair opportunity of being heard, owing to the principle of audi alteram partem, of the principle of natural justice.

Further, no removal from office shall be made except by order of the Central Government based on evidence of proven conduct or incapacity following an investigation conducted by a Supreme Court judge. Such a Supreme Court judge would be appointed by the Chief Justice of India and would be referred to him by the Central Government. During this time period, the chairperson and the members would be informed about the allegations posed against them so that they can be given a fair chance to represent themselves in order to hear both the parties involved.

Furthermore, the chairperson or any member regarding whom a referral has been made to the judge of the Supreme Court may be suspended from office by the Central Government with the approval of the Chief Justice of India until the Central Government has passed an order upon the receipt of the report submitted by the judge of Supreme Court upon such reference.

Additionally, the provision empowers the Central Government to establish regulations to govern the process for the investigation of apparent misconduct or incompetence of the chairperson or members of the NCLAT. The Central Government will establish such regulations after consultation with the Supreme Court.

Staff of the National Company Law Appellate Tribunal (NCLAT)

Section 418 of the Act, 2013 provides for the provisions about the staff of the NCLAT. It states that the officers and other staff that may be required for the NCLAT to exercise their respective powers and carry out their functions will be provided by the Central Government after consultation with the NCLAT.

Further, it is provided that under the general supervision and control of the chairperson or any other member to whom the authority has been delegated for exercising such supervision and control, the officer and other staff members of the NCLAT will carry out their duties.

Furthermore, the officers and other staff members of the NCLAT will receive the salaries, allowances and other terms of employment that may be specified.

Institution of an appeal

The National Company Law Tribunal Rules, 2016 provides for the rules and regulations to be followed regarding the procedure to be followed in the initiation of appeal in the NCLAT and all the other ancillary particulars related to it.

Let us discuss them in detail.

Procedure to institute an appeal in the NCLAT

In the manner given below, an appeal must be instituted before the NCLAT-

All documents submitted to the tribunal, including appeals, petitions, applications, caveat petitions, objections, and counters, must be in English.
If the documents are in another Indian language, a copy translated into English must be included.
The documents must be fairly and legibly typewritten, lithographed, or printed in double line spacing, on one side of standard petition paper, with an inner margin that is approximately four centimetres wide on top, and with left and right margins of five and two centimetres respectively, appropriately paginated, indexed, and bound together in the form of a paper book.
The appeal, petition, application, reply, and objections should all be organised into paragraphs and numbered sequentially.
Each paragraph should, to the greatest extent possible, include a distinct fact, accusation, or claim.
When using Saka or other dates, the appropriate Gregorian calendar dates must also be provided.
The following details must be provided at the beginning of the appeal, petition, or application- full name, parentage, age, description of each party, address, and, if a party is being sued or sued on behalf of another party, these details need not be repeated in any further proceedings involving the same appeal, petition, or application.
Each party’s name and description should be given their own line, and the names of the parties must be numbered sequentially.
These numbers cannot be altered, and in the event that a party passes away while the appeal, petition, or matter is pending, the names of that party’s legal representatives or legal heirs, if any, will be indicated by sub-numbers.
When new parties are added, they may be numbered in the order that they were added inside the specific category.
Every proceeding must specify the legal provision under which it is preferred right after the cause title.

Particulars to be set out in the address for service

The address for summons delivery must be included with every appeal, petition, application, or caveat submitted on behalf of a party, and it must, to the greatest extent feasible, include the following-

the address of the home, including the name of the street, lane, municipal door, municipal division, or ward;
the village or town’s name;
the PIN Code, postal district, and post office;
any other details required to find and identify the recipient, including, if applicable, a working email address, cell phone number, or fax number.

Presentation of appeal

The appeal shall be presented in the following manner-

Each appeal must be filed in triplicate at the filing counter using the prescribed form and the required fee. Failure to comply with this requirement may be a legitimate reason not to consider the appeal. This can be done in person by the appellant, applicant, petitioner, or respondent, as applicable, or through his legally authorised representative or an advocate duly appointed in this capacity.
Documents properly certified from the originals by the authorised person or advocate filing the petition, application, or appeal may be included to any appeal.
Every document submitted to the tribunal must include a triplicate index that includes the contents of each document as well as the fee that was paid for it.
In accordance with these requirements, an adequate number of copies of the appeal must also be filed and served on the opposing party.
Along with the memorandum of appeal, the processing fee specified by these regulations, the necessary number of large enough envelopes, and notification forms must be filled out.

Number of copies to be filed

The party making the appeal, petitioner, applicant, or respondent must file three authenticated copies of the appeal, petition, application, counter, or objections, as applicable, and provide one copy to each opposing party.

Endorsement and verification

Every petition, appeal, and pleading must include the authorised representative’s name and signature at the bottom. Each petition or appeal must be signed and validated by the relevant party in accordance with the NCLT Rules.

Translation of document

Any document intended for use in a tribunal proceeding, which is in a language other than of English, must be submitted to the Registry with an English copy that has been approved by both parties or certified as a true translation by an authorised representative acting on behalf of the parties involved or by any other advocate or authorised representative, whether or not they are involved in the case. If the advocate or authorised representative involved in the case authenticates the certificate, it must be prepared by a translator the Registrar has approved for the purpose in exchange for fees that he may specify. The hearing of an appeal, petition, or other case cannot be scheduled unless all parties have confirmed that all of the documents they want to rely on are in English or have been translated into the language and that the necessary number of copies have been lodged with the tribunal.

NCLAT as Competition Law Appellate Tribunal

The Competition Appellate Tribunal (COMPAT) which was a specialised independent appellate tribunal which heard appeals against the ruling of the CCI now stands superseded by the NCLAT. The NCLAT now has a much wider and broader scope as it handles appeals from 3 different statutes, namely- the Act, 2013, the Insolvency and Bankruptcy Code code, 2016 and the Competition Act, 2002.

Ambuja Cements Limited vs. Competition Commission of India( 2017) which is also referred to as the seminal cement cartel case, was one of the first decisions involving competition law to be resolved by the NCLAT. The case had come up in an appeal for the second time. In the last appeal, the COMPAT had remanded the matter for the CCI to rehear on the grounds that the CCI had violated the principles of natural justice. In the second ruling, the CCI concluded that 11 cement companies had engaged in anti-competitive agreements, fixed cement prices, restricted and managed the supply in the market as well as the production was being controlled. This ruling of the CCI was affirmed by the NCLAT after it examined the pricing of the cement producers, production and statistics of the dispatch. The NCLAT had approved the largest cumulative penalty in the history of India, in this case, which was a total of Rs. 6300 Crore.

Another significant case decided by the NCLAT is the All India Online Vendors Association vs. competition Commission of India (2019). In this case, the NCLAT reversed the decision of the CCI to reject information against Flipkart Private Limited and instructed the CCI to look into the possible misuse by the company of its dominant position in the market. Consequently, Flipkart became the subject of an investigation by the CCI on claims of abuse of power and anti-competitive behaviour.

The difference in the methods and approach adopted by COMPAT and NCLAT is noteworthy. The NCLAT has concentrated on the important issues surrounding competition law over the straight-jacketed strict adherence that was followed by the COMPAT of the principles of natural justice.

Difference between NCLT and NCLAT

Both NCLT and NCLAT are established by virtue of the Act, 2013 in the light of the same ideology. There are certain differences between them which are provided under

Basis	NCLT	NCLAT
Which provision established the tribunals?	The NCLT was established under Section 408 of the Act, 2023.	The NCLAT was established under Section 410 of the Act, 2023.
What are their jurisdictions?	The jurisdiction of the NCLT is the original one.	The NCLAT is a body which enjoys appellate jurisdiction.
Jurisdiction over competition law-related matters.	The NCLT does not have any jurisdiction over the cases that involve the competition law matters.	The NCLAT, on the other hand, is designated as an appellate authority for the orders that are passed by the National Financial Reporting Authority and Competition Commission of India.
Replacement for the Competition Appellate Tribunal	The NCLT has not replaced it.	The NCLAT has replaced and taken over the Competition Appellate Tribunal in toto.
How many benches?	The NCLT has 16 benches throughout the country.	The NCLAT has 2 benches throughout India.

Perjury in National Company Law Appellate Tribunal (NCLAT)

Perjury is the intentional act of providing false information or lying under oath in a legal proceeding. In the context of the NCLAT, perjury would involve knowingly providing false information or making false statements while under oath during a hearing or trial before the NCLAT. Perjury is a serious offence as it undermines the integrity of the legal system and can lead to miscarriages of justice.

In the legal context, perjury is considered a criminal offence and can result in severe consequences for the individual found guilty of committing perjury. These consequences may include fines, imprisonment, and damage to one’s reputation and credibility. Perjury is taken very seriously in legal proceedings as the truthfulness and accuracy of the information provided are crucial for the fair and just resolution of disputes.

It is essential for all parties involved in legal proceedings before the NCLAT to provide truthful and accurate information. Any attempt to deceive the tribunal through false statements or misrepresentation of facts can have serious legal repercussions. The NCLAT, like other judicial bodies, relies on the honesty and integrity of the information provided by the parties involved to make informed decisions and deliver justice.

It can be concluded that perjury can be applicable in NCLAT proceedings if a party intentionally provides false information or makes false statements under oath. However, it is crucial to consider the specific facts and circumstances of the case and follow the procedure prescribed under Section 195 and Section 340 of the Criminal Procedure Code, 1973 before initiating perjury proceedings.

Notably, the NCLAT is regarded as a “court” for the purposes of, among other things, Section 340(1) CrPC. Upon an application under the aforesaid provision and following a preliminary investigation, one can file a complaint with the Magistrate of the First Class, who has jurisdiction over the commission of the perjury crime in the NCLAT. The Magistrate of the First Class will then handle the complaint in the same manner as they would in a typical criminal trial. The same has time and again been observed in a number of cases, one of the important ones is Lalji Haridas vs Income-Tax Officer And Anr (1961) in which the Supreme Court of India reiterated the same.

Landmark judgments by the honourable National Company Law Appellate Tribunal (NCLAT)

Naren Seth Liquidator Of Ciemme Jewels Ltd. vs. Sunrise Industries (2023)

Facts of the case

In this case, the two appellants filed two appeals under Section 61 of the IBC against the impugned ruling of the Mumbai bench, NCLT which set aside the adjudicating authority’s e-auction, dated April 8th, 2022, of the corporate debtor’s only property.

Issues raised

The issue that was raised in the case was that the liquidator published a notice on 2nd April 2022 about the sale of the assets. The notification specified an online option on 8th April 2022 from 2 pm to 4 pm. The notice also erroneously stated that the deadline for submitting an expression of intent by the interested bidders was 15th April 2022 at 5 pm and that the earnest money deposit payment deadline was 16th April 2022 at 5 pm.

The liquidator contended that these contradictory dates were only a typographical error and thus, the error should not be made a big issue.

Judgment

It was held that the entire e-auction was conducted in a hurry and the adjudicating authority had rightly observed that there were hardly any sufficient gaps in dates in the application and completion of the e-auction. The NCLAT further mentioned that it is not ethical and appropriate for the appellant to reject a bid that is more than the liquidation value just because of a typographical error in the notice.

Finally, the tribunal was of the view that there was no error in the impugned order where the auction was set aside and the liquidator was held responsible to bear all the expenses incurred by that auction. In addition, the NCLAT pointed out that it does not appreciate the conduct of the liquidator in the entire process.

Ashok Kriplani vs. Ms. Ramanathan Bhuvaneshwari RP (2023)

Facts of the case

The facts of this case are such that the adjudicating authority had rejected the interlocutory application which sought to intervene on the grounds that the corporate insolvency resolution process cost was still owed by virtue of the contested order. Thus, the appeal.

Issues raised

The issue is such that by the decision, a corporate insolvency resolution process was commenced against Dreamz Infrastructure India Ltd., the corporate debtor. The appellant was designated as an insolvency resolution professional and thereafter as a resolution professional. He claimed that the adjudicating authority ordered the resolution process to be conducted on a project-wise basis. As a result, the appellant was forced to file an interlocutory application requesting the adjudicating authority’s direction to determine the amount of unpaid corporate insolvency resolution process cost that must be paid to the appellant before admitting the case regarding another project of the same corporate debtor.

Judgment

The NCLAT observed that the appellant was already removed from the capacity of resolution professional and was replaced. Thus, he holds neither the position of interim resolution professional nor the position of resolution professional, which is why he was not eligible to seek any unpaid fees or costs from the members of the committee of creditors of another project of the corporate debtor.

MEL Windmills Pvt. Ltd. vs. Mineral Enterprises Ltd & Anr. (2019)

Facts of the case

In this case, the facts are such that there was a demerger that was in question. A company application for the disbursement of the members or creditors meeting was submitted to the Bangalore bench of NCLT. Upon evaluation of the merit of the scheme and taking into account the ongoing investigations, the NCLT rejected the application. Thus, an appeal against the order was filed with the NCLAT.

Issues raised

The issues raised in the case are as follows-

There was a demerger plan which involved a corporation that had some ongoing enquiry about its mining operations.
There was no demerger of the mining industry.

Judgment

The order was set aside by the NCLAT and it observed that-

It is evidently clear that the tribunal is not obligated to analyse the merits of the plants in relation to the proposed compromise or arrangement at the time of the meeting of the creditors or the members for consideration of the scheme of compromise or arrangement. Any such intelligence on the part of the tribunal would be unconstitutional and outside the purview of Section 230(1) of the Act, 2013.
The firms may amalgamate with other firms under the Act, 2013. However, the Limited Liability Partnership Act, 2008 allows the amalgamation of limited liability partnerships with other limited liability partnerships.
While the merging of a foreign body corporate or foreign limited liability partnership with an Indian company is explicitly authorised, the cross-merger of an LLP and a company is neither permitted nor forbidden.

Rajat Metaal Polychem Pvt. Ltd. vs. Neeraj Bhatia Resolution Professional(2021)

Facts of the case

In this case, the Appellant filed an Appeal against the order passed by the NCLT, New Delhi. The order rejected the application filed by the appellant, which raised the grievance that the Resolution Professional did not accept his claim in full and discredited the interest amount.

Issues raised

The issue raised in the case is whether the appellant’s claim can be considered despite the rejection by the Resolution Professional.

Judgment

The NCLAT held that there is no provision to file an appeal against the rejection of the claim by the Resolution Professional. However, the court set aside the order of the Adjudicating Authority and disposed of the appeal with the observation that the Adjudicating Authority should consider the objection of the appellant while considering the approval of the Resolution Plan.

The tribunal did not express any opinion on the merits of the objection filed by the appellant. It stated that it is for the Adjudicating Authority to consider and take an appropriate decision in accordance with the law.

M/s. Hasmukh N. Shah & Associates vs. M/s. Victoria Entertainment Pvt. Ltd.(2021)

Facts of the case

In this case, the appellant filed appeals before the NCLAT.

Issues raised

The main issue in the case was whether the appeals were filed within the prescribed time limit or if they were barred by limitation. The appellant argued that there was no delay in filing the appeals and that they were within time.

Judgment

The NCLAT dismissed all the appeals as barred by time. The reasoning behind the dismissal of the appeals was that Section 61 of the IBC provides for appeals and the appellate authority. Initially, the filing of appeals to the Appellate Tribunal was governed by the provisions of the Act, 2013. Rule 50 of the NCLT Rules, which is part of the general procedure, obliges the registry to send a certified copy of the final order to the parties concerned free of cost. However, Section 61 of the I&B Code read with Rule 50 of the NCLT Rules does not suspend the limitation period until the free copy is received by a party.

Conclusion

The legal system is a long and drawn-out procedure and it might take years for a suit to be granted an order, tribunals follow a much shorter process and provide their decisions on disputes. Tribunals may be more proficient at gathering evidence using flexible criteria or standards and exercising discretionary powers. It serves to experience the administration of justice while simultaneously lessening the workload of the higher courts.

The previous regime which involved the Company Law Board was ineffective in resolving the disputes timely and efficiently which led to its failure. In addition, the previous system had a lot of delays and bottlenecks which did not help to revive the sick companies and also led to a drag of cases.

Thus, the NCLAT was created to serve as a standardised forum for resolving disputes pertaining to the working of companies where adjudicating it promptly helps not only save time but also smoothens the operation of the economy.

Frequently Asked Questions (FAQs)

What is a tribunal?

A tribunal is an administrative body that is established for the purpose of discharging the duties which are quasi-judicial in nature. It is generally understood as any person or institution which has the authority to judge, adjudicate, and determine claims or disputes.

In the State of Gujarat vs. Gujarat Revenue Tribunal Bar Association (2012), it was declared that tribunals basically deal with the cases that come within the ambit of special laws which is why they provide special adjudication outside courts.

What is the difference between a tribunal and a court?

It is understood that the difference between a court and a tribunal basically pertains to their manner of deciding a dispute. In Virendra Kumar Satyavadi vs. The State of Punjab (1956), the honourable Supreme Court observed that, “What distinguishes a court from a quasi judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive Judgment.”

Following are the differences between a court and a tribunal-

S. no.	Court	Tribunal
1.	A court has the duty to decide disputes in a judicial manner and declare the rights of parties by giving a judgment.	A tribunal basically deals with cases under special law, therefore, they provide special adjudication outside the courts.
2.	It is a judicial body.	It is a quasi-judicial body, which means that they are similar to courts.
3.	They are formed by constitutional, civil and criminal laws.	These are always governed by some special laws.
4.	The scope of a court is wider as it can take different matters under different acts within its purview.	They can take matters only related to some special laws and thus, they have a narrow scope.
5.	It follows procedures written under the procedural laws.	They make their own rules and abide by the principles of natural justice.
6.	Only advocates can practise in courts.	Advocates, practising company secretaries, practising chartered accountants, and even practising cost accountants are allowed to practise in a tribunal.

What are the principles of natural justice that NCLAT abides by?

The two most celebrated and acceptable principles of natural justice that even the, NCLAT follows are given as under-

Audi alterem partem, which means that both the parties must be heard and no judgment must be made only after hearing one party.
Nemo judex in causa sua, which means that a judge should not be a judge of his own matter or case as intentionally or unintentionally there is bias involved.

Following are the norms of natural justice that are laid down by the Committee on Minister’s Power or which is commonly known as the Frank Committee–

One should not determine one’s own case,
No one should be judged and convicted without being heard,
A party has the right to know all the causes of the decision, and
A copy of the statutory report must be made accessible.

Who is a public servant?

A public servant is a person who is employed or engaged by any public body in the conduct and supervision of any examination recognised or approved under any law.

Section 21 of the Indian Penal Code defines it and provides an inclusive list, given as under-

Any officer with an appointment in the armed forces, air forces or navy of the country.
Any judge or designated person who possesses the legal authority to carry out any adjudicatory duties either independently or in conjunction with other bodies of persons.
Any Court of Justice official whose duty lies with investigating or reporting on any matter of law. Any officer designated by the court with the authority to carry out these tasks is the officer who is permitted to maintain the case file or to assume responsibility for disposing of property, carry out legal proceedings, administer oaths or maintain code orders.
Every juryman, assessor or member of the panchayat, who supports and assists the public servant or the court of justice.
Any and every arbitrator who is designated by the court to hear a case that has been assigned for decision making as well as any other qualified public official who is a competent authority.
Any person who is competent to hold a position of authority which gives him the empowerment to imprison or confine someone.
Any officer whose responsibility is to keep the public well and safe, to report crimes or to prevent them from happening and to also prosecute the offenders in the light of the well-being of the society.
Any and every officer whose duties include taking, receiving on maintaining property expansion on behalf of the government, conducting survey assessment or contacts, carrying out revenue procedures, conducting investigations or reporting on matters affecting the financial interest of the government, stopping the breaking of any law in order to safeguard the financial interests of the government.
Any officer, the responsibility of whom is to take. receive or maintain property expansion, conduct service or assessments or impose taxes on any village municipality or district for secular common purposes.
Every person holding the position is endowed with the authority to organise, publish, maintain and amend an electoral roll as well as to oversee and conduct elections.
Any person who is employed by the government and is paid by it or compensated by fees or commission for carrying out any official government duties.
Any individual employed by a municipal government, a corporation operating under a federal state or local authority or as further defined as specified in Section 67 of the Companies Act, 1956.

Who can represent in NCLAT?

Section 432 of the Act, 2013 provides that the parties involved in any proceeding or appeal before the NCLAT choose to represent their case-

In-person, or
Through the use of one or more-

Chartered accountants, or
Company secretaries, or
Cost accountants, or
Legal practitioners, or
Other representatives, as the case may be.

How many benches does NCLAT have?

The NCLAT has 2 functioning benches, stated below-

Principal bench– 2nd & 3rd Floor of Mahanagar Doorsanchar Sadan (M.T.N.L. Building), 9, CGO Complex, Lodhi Road, New Delhi — 110003. (Near Scope Complex), and
Chennai bench– 6th Floor, Ezhilagam Annex, Chepauk, Chennai – 600005.

Where does the appeal against the order of the NCLAT lie?

Section 423 of the Act, 2013 states that a person who feels aggrieved by the order of the NCLAT has 60 days from the day the order was sent to them to file an appeal with the Supreme Court of India over any question of law arising from such order. However, if the Supreme Court of India is satisfied that there is any sufficient cause because of which the appellant was precluded from submitting his or her appeal, then it can allow the appeal to be submitted within an additional period of 60 days.

Does the NCLAT have the power to punish for contempt?

Section 425 of the Act, 2013 provides that the NCLAT shall have the same jurisdiction, power and authority, as the High Courts, in respect of contempt of themselves, as provided under the Contempt of Courts Act, 1971.

.However, there would be certain modifications when it comes to the power of the NCLAT. They are stated below-

The reference given to the high court shall be construed as including the reference to the NCLAT, under the said Act, and
The reference of advocate general under the said Act shall be deemed to construe the reference to such law officers as the Central Government specifies on that behalf.

Can the NCLAT delegate its powers?

Section 426 of the Act, 2013 provides that the NCLAT may direct any of its officers or employees or any other person authorised by it to enquire into any matter connected with any proceedings or appeal before it and to report it. Such direction shall be made by either general or special order and it may be subject to conditions deemed appropriate by the NCLAT.

Does the provision of the Limitations Act, 1963 apply to the proceedings under the NCLAT?

Section 433 of the Act, 2013 provides that the provisions of the Limitation Act, 1963 will apply to the appeals before the NCLAT, as applicable.

What is the lodging caveat?

Lodging caveat does not mean surrendering but it means that a person is requesting and maintaining that no action should be taken on him or her before any notice is served to him or her.

Any person can lodge a caveat in triplicate in any appeal or petition by paying the prescribed fees. It must be in the prescribed form and shall contain the required details and particulars pertaining to the orders, directions and details of authority against whose order or direction the appeal of petition or application is being instituted by the expected applicant or petitioner or applicant with full address of service on the other side. The caveat shall be valid for a period of 90 days from the date of its filing.

Are decisions of the NCLAT binding?

The decisions made by the NCLAT shall be dutifully binding on the NCLT.

References

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Artificial Intelligence and laws persisting over it

Vanshika Kapoor

March 10, 2024

This article has been written by Shubham Chavan pursuing a Diploma in Corporate Law & Practice: Transactions, Governance and Disputes course from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

We can perceive that with each passing decade, there’s a technological advancement episode that brings change and challenges to the overall adaptability and applicability of the functioning world. Be it the “.com” boom of the ’90s, the applications flood of the 2000s, or the cloud computing/hyper-accessible internet of the 2010s,. Considering the prior trend and where the horses are headed currently, it would be safe to place our bets either on artificial intelligence (AI) or quantum computing for this decade’s piquant revolution. Given that the whole wide world has already jumped on the bandwagon of artificial intelligence and has begun integrating it in non-cognitive and cognitive functions to some extent, it is hard to overlook its prominence for the future and the possibilities it would unfold.

The scope or serviceability of AI or it as a whole concept, is pretty well known to everybody so it would take a lot of effort to do a deep dive into what AI is. Rather, this article would try to zone in on the reasons why there’s a need to regulate it, the current advances and government takes on the technology, and how it should be perceived further. It is also to be considered that industry experts are trying to forecast the potential of the technology so it would be harsh on the legislators to censure their inability to fully legislate the AI ecosystem. AI’s clientele and integration into world-moving mechanisms are on the rise and the organisations providing these services are domineering over the general public just like any of the conquerors from the past centuries, so there is a need to secure the masses from the snag of the technology. There also seem to be antithetical ideas as to how the development should progress, and this fictional fear for the time being, of an AGI taking over has alarmed the common consensus even more.

Bearing all the above-mentioned possibilities, it appears that regulations and laws in the industry are imminent and a legal professional should get versed in them in their inception stage rather than catch up with them later.

Why is there a need to legislate AI

The regulation of any sector or activity is imperative due to the perilous implications for the plebians, who are the primary recipients of exposure and who have often instigated tumultuous protests across the globe against the desecration inflicted upon them. Hence, it is indispensable to enact stringent laws to govern the functionality of any potential advancement that can have altering effects.

Some of the prominent reasons why there is a need to regulate AI are:

Autonomous weapons

The International Committee of the Red Cross has defined autonomous weapons as any weapon that can attack its set target without any human intervention or control. The integration of AI in the development of this kind of advanced arsenal is ongoing. While the US Department of Defence has ensured that the development will be in correspondence with the renowned AI ethical principles, it still isn’t ensuring enough to neutralise the fear of Mayday. The confidentiality of the technology also remains in question, as incendiary organisations would also be waiting to lay their hands over these weapons.

Data collection and privacy

The development of advanced chatbots, generative AI, and AI-based search engines has generated concerns over the private data of users. The main concerns over data being collected and applied are data life, i.e., the data of a subject lasting longer than the subject itself.

Data recycling is data being used for something other than the original purpose for which it was collected. “Supplementary data” is data being collected and stored by people not originally being the subject of collection or additional data accruing from any person that is ancillary and was not intended to be collected.

The role of data in LLMs is crucial, as its algorithm acts upon past users’ data to generate responses. This is an example of how sensitive user data is processed and collected and raises concerns about proprietary code or personally identifiable information. The trepidation of proprietary information getting exuded on such AI platforms is also a probability. For instance, an employee at Samsung leaked a company confidential code on Chat GPT in May, which resulted in the tech giant banning all its employees from using generative AI.

Transparency and explainability

The industry experts working day in and day out on the technology sometimes lack the ability to acknowledge and communicate the progressions in AI development; therefore, it’s rational to figure that getting familiar with the AI mechanisms is not that uncluttered. Internal organisational misconduct and the unethical progression of possible technologies are the main reasons why transparency and explainability are necessary. “Black box AI systems” is another challenge that needs to be overcome for better transparency. Complications caused by decision biases, unintended consequences, and past data reliability in crucial situations by AI systems can be resolved by tracing decision system data points.

Biases and discrimination

This is another reason why there seems to be a need to regulate AI. The past data sets on which these AI models have been trained or, for example, models using user responses to generate further responses, could be corrupted or worse, their algorithm could be set up in such a way that it generates biassed or discriminatory responses. For instance, the infamous 2019 “Image Net Roulette,” which was trained on datasets made in Princeton in 2009, resulted in misogynistic, racist, and sexist results. Another recent incident in the UK dating somewhere in October 2023 cemented the proposal of legislating AI, where the use of AI tools by the Department of Works & Pensions and Home Office caused biassed outputs.

Misuse of generative AI

Generative AI is a new phenomenon that has taken over the world in recent times, be it as simple as a language model. Computer-generated video models all fall under the generative AI group. In recent times, generative AI has caused a lot of stir as it is being misused to cause harm or being litigated against for its copyright infringements. Many of the substantial AI mammoths like Microsoft, Github, and OpenAI are being litigated against in a class action suit for training their products upon publicly generated code without crediting them. Other incidents of school bullying through deep fake technology have also come to light, which just showcases why new legislation covering such incidents is required.

AI development policies and regulations around the world

The attempt to regulate AI can be dated back to 2016, when the National Strategic Research and Development Plan for AI was passed in the United States, which stated the federal research aspect of the technology and provided some ethical considerations. Though there hasn’t been much of a full-fledged legislation attempt previously, other related acts have broadly covered the potential AI threats and have commented on points of transparency and bias.

USA

In the short term, the focus is more on how to apply the existing laws prevalent in the country to AI organisations and their general usage, and there have been no enacted AI-specific laws. As of the historical timeline in August 2019, the National Institute of Standards and Technology released a report on U.S. leadership in AI, identifying areas of focus for AI standards and recommending actions to advance national AI standards development. Later, NIST released the AI Risk Management Framework, which provided guidelines for the private sector to consider while developing any AI services. In an attempt to cover AI-related matters, in April 2021: FTC, EEOC, CFPB, and DOJ issued a joint statement on AI enforcement. The four federal agencies clarified that their existing legal authorities apply to the use of automated systems and innovative new technologies, including AI, and expressed their commitment to ensuring compliance with federal laws. In May 2021, the NTIA issued an AI accountability policy request for comments from the public for the development of audit structures and algorithm explainability. In January 2023, the NIST also released its Artificial Intelligence Risk Management Framework, which provided voluntary, non-sector-specific guidelines. Biden has also issued an executive order as of October 30, which is to guide responsible AI development and use across government, industry, and society. The executive order covers policy areas such as safety and security, innovation and competition, worker support, AI bias and civil rights, consumer protection, privacy, federal use of AI, and international leadership.

Japan

Japan’s first attempt to regulate AI was the publication of Social Principles of Human-Centric AI in 2019. There is no legislated law covering AI in Japan as of now; instead, it is facilitated by contracts and agreements among the parties. In 2023, Japan, being the host of the G7 summit, approached the regulation of AI from a human-centric perspective.

China

China’s government has been active in attempts to regulate AI. Some of the major events the Chinese government considered were the 13th and 14th Five-Year Plans (2016-2020) and (2021-2025) wherein the government specified AI as key for achieving economic growth targets and further committed state investments in AI. Later, in July 2023, the Cyberspace Administration of China laid out some rules to regulate generative AI. AI regulations are designed in such a manner that they instil the communist values of the CCP and thus are not in parlance with the world’s attempt to regulate the technology.

India

In 2018, NITI Ayog released its strategy on AI, which was a document that focused on responsible AI development and explored ethical considerations. The strategy also sets out a vision for the future of AI in India. It calls for the creation of a vibrant AI ecosystem that will foster innovation and ensure that India is at the forefront of the global AI race. To achieve this, the strategy recommends a number of initiatives, including:

Investing in research and development in AI
Promoting collaboration between academia, industry, and government
Creating a regulatory framework for AI
Educating the public about AI

In 2022, as a follow-up to the strategy, the government of India announced the establishment of a Centre of Excellence in AI. This centre will serve as a hub for research, development, and innovation in AI. It will also provide training and support to startups and businesses that are working on AI technologies.

Also in 2022, the government launched the IndiaAI portal. This portal is a one-stop shop for information on AI in India. It provides access to resources on AI research, development, and policy.

Finally, in 2022, India joined the Global Partnership on Artificial Intelligence (GPAI). The GPAI is a multi-stakeholder initiative that aims to promote responsible AI development and use. India’s membership in the GPAI is a signal of its commitment to working with other countries to shape the future of AI. India too does not have a proposed or enacted law to govern the AI ecosystem but recently, in 2023, we passed the Digital Personal Data Protection Act, which does cover the data acquired and serviced by organisations, which would also cover the workings of AI organisations. India is still figuring out which approach it should apply while legislating AI-specific laws, i.e., should it opt for the risk approach of the EU’s AI Act or the U.K.’s progressive approach?

The Digital Personal Data Protection Act of 2023

The DDPA establishes a comprehensive framework for the protection of personal data, addressing important issues such as consent, data minimization, and cross-border data transfers. It aims to safeguard individuals’ rights and privacy while fostering responsible and ethical use of data in the digital age.

While the DDPA does not explicitly address AI, its provisions are relevant to AI systems since they rely on data to function and make decisions. The act imposes obligations on organisations, including AI companies, to ensure that personal data is collected, processed, and stored in a lawful and ethical manner.

Here are some key aspects of the DDPA that are applicable to AI organisations:

Consent: The DDPA requires organisations to obtain individuals’ explicit consent before collecting and processing their personal data. This includes data that may be used to train or develop AI models.
Data minimisation: The act mandates organisations to collect only the minimum amount of data necessary for the intended purpose. This principle is particularly important in the context of AI, where large datasets are often used for training and experimentation.
Transparency: Organisations must provide individuals with clear and concise information about how their personal data will be used, including any potential AI applications.
Cross-border data transfers: The DDPA regulates the transfer of personal data outside India, ensuring that adequate safeguards are in place to protect individuals’ privacy rights. This is significant for AI organisations that may operate globally or collaborate with international partners.
Enforcement: The act establishes a Data Protection Authority to monitor and enforce compliance with the provisions of the DDPA. This body can investigate complaints, impose penalties, and issue guidelines to organisations.

While the DDPA does not specifically target AI, its provisions provide a foundation for addressing ethical and legal considerations related to the use of AI systems. By ensuring that AI organisations operate in a responsible and transparent manner, the act contributes to building trust and fostering innovation in the AI industry in India.

U.K.

The UK’s major AI attempt can be dated back to November of 2017, when the government pushed the development of AI and considered it one of the four grand challenges for the government. Later, with its exit from the EU, the U.K. in September 2021 announced its pro-innovation approach to regulating AI and its commitment to minimising the regulations. In March 2023, the Department for Science, Innovation, and Technology and the Office for Artificial Intelligence published a white paper detailing plans for implementing a pro-innovation approach. As for an Act, the U.K. government doesn’t seem to be willing to introduce an AI-specific act and has suggested that its industry regulators adapt the existing laws with the AI provisions. The U.K. also hosted the first global AI summit on November 1 and 2, 2023, at Bletchley Park, which had discussions about inclusive measures for frontier AI systems.

EU

Perhaps the EU has been the centre point of AI regulation around the globe with its recent decision on the AI Act. The AI Act was first proposed on April 21, 2021, by the European Commission. On June 19, 2023, the lawmakers agreed to changes in draft rules that banned the use of AI in biometric surveillance and generative systems to disclose or explain the reasons behind the content generated by them. On December 9, 2023, after extensive negotiations between the council and the parliament, a decision was made by the bodies provisionally considering the AI Act. The act categorises AI systems into four categories based on the risks they advance and thus determines their operationality and compliance. The low-risk systems such as mail segregating algorithms are far from any compliance requirements, while generative AI systems such as chatbots are categorised as limited-risk systems. Employee assessment systems or social engineering systems are classified as high risk while biometric recognition systems with some governmental applicability exceptions are prohibited from use. The Act applies to organisations similarly to how GDPR applies to any entity operating in European territories, be it foreign or European. The act also establishes penalties to be levied on defaults to comply with the provisions, which would extend to 35 million euros or 7% of the worldwide annual turnover of that organisation. It is expected that the Act will be enacted within the next fifteen months, which has raised worries for many organisations operating in the European Union territories.

Conclusion

In the current dynamic world, the race to cash in on AI technology is tremendous and mostly unregulated. We have seen requests and pleas from the industry’s very own tech giants, like Sam Altman and Elon Musk, requesting the US federal body to consider regulating AI before there’s an event causing public uproar. The business potential of AI is vast and every government would want to focus on the development of the business side but also consider the downside of a major AI leak or outrage. Governments will have to side with either accelerationists or doomers, both having their perspectives justified for their specific reasons. Intergovernmental alliances, as seen before for development and regulation, need to be multiplied so that there’s more of a global approach and better business prospects.

In the Indian context, regulation and development of these technologies are still behind the world by at least 5 years, which provides us legal professionals with a head start to predict and prepare ourselves for the regulatory challenges that our government will be facing.

References

Tax policies and their influence on music industry

Vanshika Kapoor

March 9, 2024

This article has been written by Tushar Sachdev pursuing an Executive Certificate Course in US Accounting and Bookkeeping from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

Taxation is majorly divided into two types in India. Direct tax and indirect tax. Direct tax is the tax that is directly paid by citizens to the Indian government. An example of direct tax is income tax, in which citizens assess their income annually and pay tax on it directly to the government. Whereas in indirect tax, tax is collected by a person from another person and paid to the government. Examples of indirect taxes are Goods and Service Tax (GST), VAT, Excise, Service Tax, etc. GST is collected by businesses from other people while providing goods and/or services and paid to the government. Different tax laws are framed by the government for charging or collecting taxes and paying them to the government. Let’s dive into the tax policies pertaining to the music industry.

Direct tax

There are different types of income earned in the music industry and each is taxed differently. In the music industry, income is earned by selling music directly to any production house for a movie. By way of royalty income for the right to use music copyrighted by the music company or musician, live performance by a musician or income earned by a musician providing professional services to a music company. Also, there are different tax laws for different types of people like for individuals, companies, Partnerships, etc. Let’s look at the tax consequences of each type of income for different types of people in the music industry.

Income tax

There are different rates of tax for different types of people. Like for individuals, income is bifurcated into different slabs and each slab has a different rate, for example. For Income up to Rs. 250000/- tax is Nil, Income slab Rs. 250000-500000 tax is 5%, Income Slab Rs. 500000-1000000 tax is 20%, Income Slab Exceeding 1000000 tax is 30%. The government has given extra benefits to senior citizens and super senior citizens by providing extra exemptions of up to 3 lakhs and 5 lakhs, respectively, in place of the basic exemption limit of 2,50,000. Accordingly, partnership firms are taxed at a flat rate of 30%, whereas body corporates are taxed at 25%, providing relief at this rate for certain body corporates satisfying certain conditions.

So based on the type of person musicians or music companies are, they are taxed as per the above rate for income earned by way of producing and selling music during the financial year. Cess at 4% is charged on income tax over and above tax. Also, a surcharge is charged at different rates if income exceeds a certain limit.

Income earned from concerts is also taxed similarly. Income received by musicians for performing in concerts is taxed under the heading “Income from business and profession. Also, the income of organisers will be under the same heading.

Royalty income

Royalty income, received by music companies or individuals involved in the creative industry, is subject to a special tax rate as per the latest amendment to the Finance Bill, 2023. This amendment aims to provide clarity and consistency in the taxation of royalty income, ensuring fairness and transparency in the music industry.

Under the revised tax structure, royalty income is taxed at a reduced rate of 20%. This preferential tax treatment recognises the unique nature of royalty income, which often arises from intellectual property rights, creative endeavours, and licencing agreements. By offering a lower tax rate, the government aims to incentivize and support the creative industry, encouraging artists, musicians, and content creators to continue producing valuable works. Previously, it was taxed at 10%. Also, there is a deduction allowed under Section 80QQB of the Income Tax Act of 1961 up to Rs. 300000/-. A condition of minimum royalty of Rs. 150000/- to be received in a financial year is to be satisfied to claim this deduction.

Applicability

The special tax rate of 20% applies to royalty income derived from various sources, including:

Music royalties: Income earned by artists, composers, and musicians from the use or exploitation of their musical works, such as song royalties, performance royalties, and mechanical royalties.
Literary royalties: Income received by authors, writers, and publishers from the sale or licensing of their literary works, including books, articles, and manuscripts.
Patent royalties: Income generated from the licencing or sale of patented inventions, designs, or processes.
Trademark royalties: Income derived from the use or licencing of trademarks, brand names, or logos.
Franchise royalties: Income earned from franchising agreements, where a franchisor grants the right to use their business model, trademarks, and processes to a franchisee.

Reporting and compliance

Individuals or music companies receiving royalty income must accurately report and declare it in their tax returns. Proper documentation, such as contracts, invoices, and royalty statements, should be maintained to substantiate the income received. It is crucial to comply with the tax laws and regulations to avoid potential penalties or legal issues.

Impact and benefits

The introduction of a special tax rate for royalty income offers several benefits and implications for the music industry:

Encouragement for creativity: The reduced tax rate provides a financial incentive for artists and creators to continue producing original and innovative works, fostering a vibrant and diverse music ecosystem.
Fairness and consistency: The amendment ensures uniformity and fairness in the taxation of royalty income, addressing any ambiguities or inconsistencies that may have existed previously.
Support for emerging artists: The preferential tax treatment can assist emerging artists and small music companies in retaining a larger share of their earnings, allowing them to invest in their careers and further develop their craft.
Economic growth: By supporting the creative industry, the government recognises its significant contribution to the economy. A thriving music industry can generate employment opportunities, boost tourism, and enhance the overall cultural landscape.

Indirect tax

Indirect tax comprises mainly GST and was introduced in 2017. Before that, there were taxes like excise duty, service tax and VAT. The introduction of GST has adversely impacted the music industry. Before GST, musical instruments were sold and VAT was charged @ 5.5% or 14.5%, depending on the state. But after the introduction of GST, GST is levied differently on Western instruments and in a different manner on handcrafted instruments. GST is levied @ 28% on western instruments and GST on hand made musical instruments is nil. So music instruments like drums, guitars, and pianos are charged at 28% and some handmade Indian instruments are not charged any GST, only to promote these artisans and local industry.

The sector has taken a hit due to the significant increase in prices of western musical instruments due to the high rate of GST charged on these instruments, making students, amateurs and middle class people hesitant to purchase these costly instruments.

CDs, tapes, DVDs, and USBs are subject to GST at 18%. Sound recorders, amplifiers,and sound reproducers are subject to GST at 28%.

Now let’s take a look at GST on other types of income in the musical industry.

Live music concerts, dance performances, and theatre shows fall under the category of entertainment events. They are subject to GST.

Events with ticket prices below Rs. 250/- are exempt from GST.

Events with ticket prices below Rs. 250/- are considered exempt from GST. This exemption is in place to support small-scale events, making them more accessible and affordable for both organisers and attendees. It encourages the growth and participation in cultural and artistic activities within the community.

Events with ticket prices above 250 up to 500/- are subject to GST at 12%

Events with ticket prices ranging from Rs. 250/- to Rs. 500/- are subject to a GST rate of 12%. This rate applies to a wide range of entertainment events, including live music concerts, dance performances, and theatre productions. It aims to strike a balance between supporting the event industry and generating tax revenue for the government.

Events with ticket prices exceeding Rs. 500/- are subject to GST at 18%

Events with ticket prices exceeding Rs. 500/- are subject to a higher GST rate of 18%. This rate applies to premium and high-end entertainment events, such as exclusive concerts, VIP shows, and large-scale theatrical productions. The higher tax rate is intended to generate more tax revenue and fund various government initiatives while still allowing for the enjoyment of luxury entertainment experiences.

It is essential to note that GST is applicable not only for selling tickets but to other activities too, like sponsorship services, advertising and hospitality services.

Small event organisers with an aggregate annual turnover of up to Rs. 1.5 crore have the option to avail composition schemes and pay GST at a flat rate of 1% of their turnover.

Event organisers have the benefit of claiming GST paid on their input goods and services as an input tax credit. Organisers availing of the composition tax payer cannot avail input tax credit. Musicians working as professionals in a music company on a salary basis are not required to pay any GST, as salary income is out of the purview of GST and is taxed only under the Income Tax Act, 1961.

A music company selling music to another person is liable to charge and pay GST @ 18%. Also, any person providing online services is also liable to charge and pay GST. If any person provides OIDAR (online information database access and retrieval services) to a person in India, there will be taxes based on whether he/she is registered or not. If a non-resident provides OIDAR services to a registered person, then the registered person will be liable to pay GST under the reverse charge mechanism, i.e., the recipient of services is liable to pay GST. But if such a non resident person provides OIDAR services to a non resident person, then such a non resident will be liable to pay GST in India.

Therefore, if any Non resident person outside India provides services related to music online in India by way of access to music online to a non registered person in India, then such person will have to get himself registered and pay GST in India.

Conclusion

The tax structure in India is quite vast for any industry and the same is true for the music industry too. There are various tax implications for the music industry in India. It is mainly divided into two parts: direct tax and indirect tax. Various income streams in the music industry, like income from selling music directly, salary income and royalty income, are taxed as per the structure, like individual, Firm or body corporate, at different rates as per the rate applicable to that particular form. Also, TDS is deducted from royalty income and is claimed as a tax credit at the time of paying annual income tax.

With the introduction of GST under the indirect tax system, the musical industry is highly affected due to the high GST rate on western musical instruments. The overall entertainment industry is taxed highly under GST. Even a non-resident providing services in India to a Non registered person is required to get registered in India and collect and pay GST to the Indian Government.

To conclude, tax policies in India have highly influenced the musical industry, especially after the introduction of the Goods and Services Tax.

References

Tamil Nadu Prohibition Act, 1937

Rachit Garg

March 9, 2024

This article is written by Shriya Singh. It seeks to discuss in detail the state legislation of Tamil Nadu regarding the prohibition of liquor, intoxicating drugs, or any other substance containing such intoxicating matter. It covers the important definitions, the prohibition regarding manufacture and consumption, as well as the punishment provided under the Act. Furthermore, it discusses the exemptions and licences, the powers, duties, and procedures of officers, rules and regulations, as well as the legal proceedings.

Table of Contents

Introduction

The grundnorm of India, that is, the Constitution of India, provides a Directive Principle of State Policy under Article 47 that proclaims that the State shall endeavour to bring about prohibition of consumption except for medical purposes of intoxicating drinks and of drugs that are injurious to health. Such prohibition is necessary in order to raise the level of nutrition and standard of living of people as well as to improve public health, which is a fundamental right guaranteed under the Constitution of India.

As the objectives in the body of the Constitution are of a socialistic nature, it is necessary to maintain a balance between the social and economic objectives. In light of the importance of the stated notion, the state of Tamil Nadu introduced prohibitory legislation regarding liquor intoxicating drugs, or any other substance that contains such intoxicating matter in the whole state.

Let us delve deeper into the discussion regarding it.

Prohibition of alcohol in Tamil Nadu

The Tamil Nadu Prohibition Act, 1937 (hereinafter referred to as the Act, 1937) provides for the provisions relating to the prohibition of the manufacture, sale, and consumption of intoxicating liquors and drugs in the State of Tamil Nadu. Let us discuss all the chapters of the Act in detail.

Chapter 1 of Tamil Nadu Prohibition Act, 1937 : preliminary

Chapter I of the Act, 1937 deals with the preliminary portion of the Act by providing the short title and extent of the Act along with its commencement and definitions, which are crucial in understanding the whole Act.

Extent of the Act

The Act, 1937 as per Section 1(2) extends to the whole of the state of Tamil Nadu as it is state legislation.

Exceptions

The exceptions regarding the application of the Act, 1937 are outlined in Section 1(3). It specifies that this section, together with Sections 3 and 6, will all take effect immediately across the State of Tamil Nadu.

The remaining provisions of the Act, 1937, however, will take effect as follows:

immediately in the Salem district, and
on that date, in any other locality within the State of Tamil Nadu, as the State Government of Tamil Nadu may specify, by notification.

Important definitions

Bottle

The term ‘bottle’ for the purpose of the Act, 1937, is defined under Section 3(1-A) and states that it means to transfer liquor from a cask or any other vessel to a bottle, jar, flask, pot, or any other container eligible for the purpose of sale, and it does not matter whether any process regarding the manufacture is indulged in or not. It also includes rebottling within its ambit.

Collector

Section 3(3) of the Act, 1937, defines the term ‘collector’ as a collector of land revenue or any other person appointed in that record under Section 25(d) to perform the required duty of a collector for the purpose of this Act.

Section 25(d) states that the State Government of Tamil Nadu is empowered to appoint a paid or honorary officer with such designation power or duties as the state government may think fit from time to time by notification.

The explanation to Section 3(3) purports that the collector of land revenue includes an additional collector as well as a district revenue officer.

Commissioner

Section 3(4) of the Act, 1937 states that a commissioner is an officer appointed under Section 25(a) of the same Act.

Section 25(a) states that the State Government of Tamil Nadu can, from time to time, appoint an officer, by notification, to exercise all the powers of a collector required under this Act in all local areas in which the Act is enforced. Such an officer can also be appointed in order to have control of the administration of the provisions of this Act in the areas in which the Act is applicable.

Cultivation

The term ‘cultivation’ is defined under Section 3(5) after the Act, 1937 and it states that cultivation is inclusive of protecting or tending a plant during its growth, and the process does not necessarily imply that such a plant is raised from seed.

Excisable Article

Section 3(5-A) defines the ‘excisable article’ as any alcoholic liquor suitable for human consumption. It further states that the excisable article does not include medical and toilet preparations mentioned in Entry 48 belonging to List I of the Seventh Schedule of the Constitution of India.

Export

The term ‘export’ is defined under Section 3(6) of the Act, 1937. It states that export means to take out of any local area, to which the Act is applicable, any other area in the state of Tamil Nadu to which the Act has not yet been made applicable.

The provision is extended to cover the taking out of the state of Tamil Nadu, including crossing the customs frontiers of India.

Foreign liquor

Section 3(6-A) defines the term ‘foreign liquor’ to include every liquor that is imported into India, barring the foreign spirits made in India, plain rectified spirits, and denatured and methylated spirits.

Import

Section 3(7) of the Act, 1937 defines the term ‘import’. In common parlance, import means bringing products or services from one country to another. In accordance with the definition provided under this Act, import refers to bringing things into any local area of the state of Tamil Nadu where the Act is applicable. Further, the things are brought from any other local area of the state of Tamil Nadu where the Act is not applicable yet.

The proviso attached to this provision envisages that import also implies bringing something into the state of Tamil Nadu which includes the crossing of customs frontiers of India.

Indian-made foreign spirits

Section 3(7-A) of the Act, 1937 defines ‘Indian-made foreign spirits’. It states that the Indian-made foreign spirits are the spirits that are manufactured and compounded in India. These spirits are made in flavour and colour to resemble gin, brandy, whisky, and rum that are imported into India. The provision further states that these foreign spirits that are made in India include milk punch and other liquors consisting of or containing spirits.

Intoxicating drug

Section 3(8) defines an intoxicating drug by dividing it into four categories, which are:

The leaves, small stalks, and flowering or fruiting tops of the Indian hemp plant, which is also referred to as connadis satival, includes all forms of bhang, siddhi, and ganja, as they are known.
Charas, which is the resin that is obtained from the Indian hemp plant. These should not have been subjected to any manipulation other than those necessary for packing and transport.
Any mixture of the above two mentioned forms of intoxicating drug or any drink prepared from them with or without neutral materials.
Any other intoxicating or narcotic substance that the State Government of Tamil Nadu may declare to be an intoxicating drug by notification. However, opium cocoa leaf or a manufactured drug as described in Section 2 of the Dangerous Drugs Act, 1930, does not come within the ambit of such declaration.

Liquor

Liquor is defined under Section 3(9) of the Act, 1937. The provision states that liquor includes toddy or arrack, spirits or wine spirits, which are also referred to as denatured spirits, wine, beer, and all liquids consisting of or containing alcohol.

The explanation of the same provision further defines the term ‘denatured’. It states that being denatured means being subjected to all processes prescribed by the State Government of Tamil Nadu for the purpose of rendering it unfit for human consumption. Such a prescription would be made by notification.

Local body

Section 3(10) provides the definition for the term ‘local body’ and states that it means:

The Corporation of Chennai,
Any municipality that is constituted under the Tamil Nadu District Municipalities Act, 1920, or
Any other local board that is constituted under the Tamil Nadu Local Boards Act, 1920.

Manufacture

According to Section 3(11) of the Act,1937 manufacture means every process by which any fermented, spiritual, or intoxicating liquor or drug is produced, prepared, or blended, irrespective of whether the process is natural or artificial. It also includes re-distillation and every other process for the rectification of liquor.

Molasses

The term ‘molasses’ as per Section 3(11-A) of the Act, 1937 is defined as a heavy, dark coloured residual syrup that is drained away in the final stage of manufacturing jaggery, which is commonly known as gur, or a solution that contains sugar or suspension sugars that can be fermented.

It further states that it includes any product that is formed by the addition to such symp of any ingredient which does not substantially alter the character of such syrup.

However, it does not include any article that the State Government of Tamil Nadu declares not to be included for the purpose of this Act by notification.

Neer or Padani

Section 3(11-B) defines ‘neer or padani’ as juice drawn from a coconut, date, palmyra, or any other kind of palm tree into receptacles treated so as to prevent any fermentation. These should not be fermented for this purpose.

Spirits

Section 3(17) of the Act, 1937, defines the term ‘spirits’ as any alcohol. The provision further states that it includes any liquor that contains alcohol and is obtained by distillation, whether such liquid is denatured or not.

Toddy

‘Toddy’ has been defined under Section 3(19) as fermented juice that is drawn from date, coconut, palmyra, or any other type of palm tree.

Chapter 2 of Tamil Nadu Prohibition Act, 1937 : prohibitions and penalties

Chapter II of the Act, 1937 deals with prohibitions and penalties with respect to the manufacturing, trafficking, and consumption of liquor and intoxicating drugs. It also deals with the advertisement regarding the aforementioned and the conspiracy that surrounds the prohibitory acts with regard to their prohibition and punishment.

Let us understand the chapter in detail.

Prohibition on manufacture, traffic, and consumption

Section 4 of the Act, 1937 explicitly provides for certain activities that are not permitted. Further, it provides penalties if these prohibited activities are ever carried out. The punishment has been provided keeping in mind the gravity of the result caused by such activity. Also, there are certain areas where this prohibition of Section 4 does not apply, and the provision also simplifies that.

Prohibited activities

Section 4(1) of the Act, 1937, lists certain activities that are prohibited, and hence the commission of which becomes punishable. The activities are given below:

The activity of importing, exporting, transporting, or processing of liquor or any intoxicating drug.
The activity of importing, exporting, transporting, or processing liquor that exceeds 50 litres but is less than one hundred litres in quantity.
The activity of importing, exporting, transporting, or processing liquor, the quantity of which is a hundred litres or above.
The manufacturing of liquor or any intoxicating drugs.
Cultivating the hemp plant in any other manner except in accordance with the rules that are made by the State Government of Tamil Nadu on this behalf. Also, the collection of any portion of such a plant from which the intoxicating drugs can be manufactured.
Tapping any tree capable of producing toddy and permitting toddy to be drawn from any such tree that belongs to him or her or are in his or her possession.
Drawing a toddy from any tree or granting permission to others to draw it from any three that belong to him or her or is in his or her possession.
Constructing any distillery or brewery.
Using, keeping, or having in place any material, still, utensil, implement, or apparatus in order to tap toddy or manufacture liquor or any other intoxicating drug. Also, keeping or having any material that has undergone any process in order to manufacture liquor or other intoxicating drugs in his or her possession.
The activity of bottling any liquor to produce it for sale purposes.
The activity of selling liquor or any other intoxicating drugs.
Consumption or even buying any liquor that has not been specified by the State Government of Tamil Nadu is eligible for search purposes through a notification of any intoxicating drug.
Investing or applying any monetary resource in the direct furtherance or support of the commission of the prohibited acts that are mentioned above. Also, such felicitation has to be done with prior knowledge.
Allowing any of the acts that have been mentioned above upon any premises to be in his or her immediate possession.

Non-applicability of Section 4(1)

The proviso to Section 4(1) of the Act, 1937, provides that nothing contained in the provision shall apply to:

Any act that is done under or in accordance with the provisions of this Act or the terms of any rules, notifications, orders, licences or permissions that are issued there under.
The possession, sale, purchase, usage and consumption of duty that is paid for medicinal or toilet preparations for bonafide medicinal or toilet purposes.
The transport or possession of personal consumption of the prescribed quantity of liquor that is specified by the State Government of Tamil Nadu.

Punishment for prohibitory activities

Rigorous imprisonment for a term that may extend to three years and a fine that may extend to ten thousand rupees are provided for the activities that are mentioned below

The activity regarding the imports, exports, transports, or procession of liquor in quantities of one hundred litres and above,
The activity regarding the manufacture of liquor or any other intoxicating drugs,
The activity regarding the construction of any distillery or brewery, and
The activity of bottling any liquor for the purpose of sale.

Regarding the activity of importing, exporting, transporting, or possessing liquor, the quantity of which exceeds 50 litres but is below one hundred litres, the punishment that has been provided is imprisonment for a term that may extend to 6 months and a fine that may extend to two thousand rupees.

For any other activity that has been prohibited under Section 4(1), the punishment that has been provided is imprisonment for a term which tends to three months or a fine which may extend to one thousand rupees.

Section 4(1-A) provides for a special kind of punishment where death or grievous hurt is likely to be caused to the consumer because of the liquor or intoxicating drug that has been involved in the prohibitory activities that have been committed by the offender. The specific activities are stated below:

The activity involves the importing, exporting, transporting, or processing of liquor or any intoxicating drug.
The activity regarding importing, exporting, transporting, or processing liquor that exceeds fifty litres but is less than one hundred litres in quantity.
The activity involves importing, exporting, transporting, or processing liquor, the quantity of which is one hundred litres or above.
The activity of manufacturing liquor or any intoxicating drugs.
The activity of bottling any liquor to produce it for sale purposes.

The punishment for the activities mentioned above would be in such a manner as provided below:

If the death was due to the consumption, then the punishment would be rigorous imprisonment for life and with a fine which shall not less than five thousand rupees.
In any case other than that, the punishment would be rigorous imprisonment for a term that may extend to ten years, with a fine that may extend to seven thousand rupees.

Presumption

There are two presumptions that are provided under Section 4(2) of the Act, 1937. They are provided below:

That a person who is charged with an offence under Section 4(1) excluding for the activity that allows any of the acts under Section 4(1) upon the premises to the offender’s immediate possession, has committed the offence concerning liquor or intoxicating drug or any still, utensil, tool or apparatus used in the manufacture of such liquor or intoxicating drug any other material that is typically used in the production of liquor or intoxicating drug or any other material that has undergone any process that results in the production of liquor or intoxicating drug or from which any liquor or intoxicating drug has been produced and for which such person is unable to provide a satisfactory explanation.
Any person who is charged with the offence relating to any activity that has been listed to be prohibited under Section 4(1) on the property under the immediate possession of the offender that has committed the offence if it is established that the offence was committed on such property involving any liquor or intoxicating drug or any still, utensil, tool, or apparatus used in the production of liquor or intoxicating drug or any other material which is commonly used in the manufacture of such liquor or intoxicating drug or any other material that has undergone any process which leads to the production of liquor or any intoxicating drug from which such substance has been produced.

Punishment for being found intoxicated

Section 4-A of the Act, 1937, provides that whoever is found in a state of intoxication in a public place shall be punished with imprisonment for a term that may extend to three months or with a fine that may extend to one thousand rupees.

Further, the provision states that this punishment would also apply to a person who is otherwise not permitted to consume any liquor or any intoxicated drug according to this Act but is found in such a state of intoxication at a private place.

Punishment for rendering spirits fit for human consumption

Section 5 of the Act, 1937, provides that anyone who denatures any spirit, irrespective of whether it is made in India or not, renders or attempts to render any spirit fit for human consumption, preparation containing such spirit or someone who has in his possession such spirit or preparation containing such spirit, would face rigorous imprisonment, which may extend to a time period of three years, and a fine that may extend up to ten thousand rupees.

Further, the provision provides that the person who is an offender here has to have the knowledge or reason to believe that such an attempt has been made.

Furthermore, the provision enunciates that as long as a spirit or any preparation containing spirit is shown by chemical analysis to contain any amount of one of the approved denaturants, it is assumed that the spirit is or has been generated from the denatured spirit.

Prohibition on advertisement

According to Section 6, anybody who prints or publishers any advertisement or any other matter that encourages the use of or the offering of liquor or intoxicating drugs other than liquor or drugs that are exempt in any newspaper, book, leaflet, booklet, or any other single or periodical publication shall be punishable with imprisonment up to six months or a fine that may extend to one thousand rupees or with both. The provision also covers the advertisement with regards to the display or distribution of any of the newspaper, book, leaflet, booklet, or likewise mediums for the punishment that has been mentioned above.

Non-applicability of the prohibition under Section 6

The proviso to Section 6 of the Act, 1937, states that the prohibition provided under Section 6 shall not be applicable to:

Plane catalogues and price lists that may be approved by the commissioner, generally or specially.
Advertisements in medical journals, notices, and literature circulated exclusively to members of the medical profession. However, such advertisement, notice, or literature that relates to liquor or intoxicating drugs has to have been specially approved for medicinal value by the following:

A medical council established by the Tamil Nadu Medical Registration Act, 1914,
Any other medical council which has been formed under any law for the time being enforced in any other state or which has been recognised by the government of such state, or
Any such authority with respect to Indian medicine may be notified by the State Government of Tamil Nadu.

The normal circulation within the state of Tamil Nadu of newspapers, periodicals, and books printed in published in accordance with the law outside the state.
Any advertisement that is contained in a newspaper that is printed and published in a state before the first day of January for the year 1938.

Regulation of molasses

Section 6-A of the Act, 1937, expressly provides that no person shall import, export, transport, sell, or even have in his own possession any quantity of molasses.

However, sub-sections (2) and (3) of the same provision provide for two exceptions stated below, respectively:

The state government is empowered to authorise any officer or to authorise a licence for the import, export, sale, or possession of molasses by general or special order.
The state government is also empowered to authorise any officer to grant permission for the transportation of molasses.

Regulation on the transit of liquor

Section 6-B of the Act, 1937, explicitly prohibits a person from transiting in liquor.

However, there is an exception provided to it under subsection (2), which states that the collector or any officer not being lower than the rank of deputy collector that is authorised by the collector in this regard may issue permission for the transit of any liquor in the form. Further, such permission could be accompanied by some restrictions established to be subjected to the condition and supervision of the State Government of Tamil Nadu.

The provision further states that an application for such permission of transit must be submitted within the time period that is specified by the State Government of Tamil Nadu. Also, required copies of import and export licences from the relevant state from where the liquor is being transported must be accompanied by such an application.

Section 6-B(3) provides the condition that shall be coupled with the permission to transit that would be issued under sub-section (2) of Section 6-B. They are stated below:

That all routes designated in the permit shall be used for the transportation of liquor, and
The person transporting liquor must pay for the police escort during transit according to the scale that the prescribed authority may specify.

Punishment for conspiracy

Section 7 of the Act, 1937 covers the punishment for conspiracy. It states that whenever two or more persons agree to commit or cause to commit any offence under Section 4(1) or under Section or to evade or nullify the provisions of the Tamil Nadu Prohibition Act 1937, each such person shall be punished with imprisonment for a term that may extend up to three months or a fine that may extend up to one thousand rupees.

However, despite the fact that none of the parties performed any conduct other than what was stated in the agreement of conspiracy, they would face such penal consequences.

Punishment for vexatious search or arrest

Punishment for vexatious search or arrest has been provided under Section 8 of the Act, 1937. It states that any officer or person exercising powers under this Act shall be punishable with imprisonment up to the time period of six months or with a fine up to the amount of five hundred rupees, or with both imprisonment and fine, who:

Enters, searches, or orders a search of any closed area without a valid basis to do so,
Vexatiously, aggressively, and needlessly confiscates someone else’s property under the guise of looking for or taking anything that might be subject to confiscation under this Act,
Harasses and needlessly stops, searches, or arrests somebody,
Intentionally and deceptively provides information that justifies a search, seizure, arrest, detention, or
In any other way, he or she willfully goes beyond his or her authorised authority.

Confiscation order

According to Section 14(1), the court shall order the confiscation of any property deemed subject to seizure, whether the offender is found guilty or not of violating this Act, even in cases where the accused is found not guilty.

Furthermore, Section 14(2) stipulates that the court shall order the seizure of everything it determines is subject to confiscation under the prosecution of an infraction against this Act.

The proviso provides that no animal, vessel, cart, or other vehicle may be seized under sub-section (1) or (2) if the court determines that the owner and those parties have taken reasonable precautions to prevent the commission of the relevant offence after hearing from the owner of the animal, vessel, cart, or other vehicle and parties claiming ownership rights.

Section 14(3) purports that if an offence against this Act is committed but the preparator is unknown or cannot be located, or if anything that is subject to confiscation under this Act is in the possession of anyone who can be satisfactorily account for it, the collector or another district prohibition officer in charge will investigate the matter and make a determination. Also, any other officer designated by the state government in this capacity will order the confiscation.

However, no such order may be issued until fifteen days have passed after the items targeted for confiscation were seized and until the parties cleaning the rights to the items have been heard and have had a chance to represent any relevant evidence.

According to Section 14(4), despite the provisions in subsections (1) to (3), if the collector or any other prohibition officer in charge of the district or any other officer designated by the State Government of Tamil Nadu in this regard is convinced that an offence has been committed against this Act, he may order the confiscation of any animal, vessel, cart or other vehicle used in the commission of such offence without affecting the other penalties the offender may be subjected to under this Act.

The understanding is that the owner of the person from whom the animal, vessel, cart or other vehicle is taken must disclose the following information before the issuing of an order of confiscation:

A written notice explaining to him the reason for the intended seizure of the animal, vessel, cart, or other vehicle,
A opportunity to subject to the reasons for confiscation in writing within a reasonable amount of time, not more than fourteen days, depending on the notice at any moment, and
A reasonable opportunity to be heard on the whole matter.

The additional provision provides that the owner of the person from whom the animal, vessel, cart, or other vehicle is taken will have the option to pay some not to exceed the market value of such animal, vessel, cart or other vehicle in lieu of having it confiscated.

Section 14(5) after the Act, 1937 provides that anybody who feels wronged or aggrieved by a confiscation order issued under the sub-section (4) of Section 14, can file an application with the Sessions Court. Such an application can be filed within one month from the day the order was received. Also, the Sessions Court shall be the one which has jurisdiction over the matter.

Summary trial

Regardless of anything stated in the Code of Criminal Procedure 1973, Section 15-A of the Act, 1937 states that the State Government of Tamil Nadu may grant authority to try summarily any or all of the offences that are punishable under this Act by a term of imprisonment that would not exceed six months, with a fine or with both, in accordance with the provisions that are contained in Section 262 to Section 265 of the Code of Criminal Procedure, 1973.

However, no sentence other than a fine shall be imposed as a result of such a trial, on-

Any first-class judicial magistrate,
Any second-class judicial magistrate, and
Any special judicial magistrate designated pursuant to Section 13 of the Code of Criminal Procedure, 1973

Chapter 3 of Tamil Nadu Prohibition Act, 1937 : exemptions and licences

Just like a right gives rise to a duty corresponding to it, a prohibition regarding something also sometimes clears the path for exemption. Chapter III of the Act, 1937, provides for certain exemptions in the bona fide light. The chapter also provides for different licences granted for the purpose of this Act.

Let us discuss them.

Power to notify exemption

According to Section 16(1), any specified liquor intoxicating drug or any other article which contains such liquor or intoxicating drug may be exempted from all or any of the provisions of this Act if the state government determines that the liquor drug or article concerned is required for a medical, scientific, industrial, or likewise purposes. The State Government of Tamil Nadu is empowered to provide such an exemption by notification and can also subject it to certain conditions it deems appropriate.

Furthermore, the provision under Section 16(2) stipulates that anybody who violates those terms and conditions that are imposed by the state government while granting such exemption may attract the punishment of imprisonment for a time period that may extend up to three months or a fine that may go up to one thousand rupees.

Exemption of bona fide travellers

Section 17 provides for the exemption of bona fide travellers and legitimate consignments. It provides that the provisions of the Act, 1937, will not be regarded as applicable until and unless the State Government of Tamil Nadu notifies it differently to the following:

To liquor that law-abiding travellers hold for their personal consumption while passing through any locality where this Act has an effect, or
To legally transport liquor consignments into any local area or legally transported drugs that cause intoxication by means of or into any local area.

Exemption of members of the armed forces

Section 17-A provides for the exemption of members of the armed forces. The provisions stipulate that the following may be exempt from any or all of the provisions of the Act, 1937, which shall be declared by notification and under any condition that is deemed fit by the State Government of Tamil Nadu:

The members of the Union Armed Forces,
Any other armed forces raised or maintained by the Union, and
Any member of the medical or other staff related to any of the armed forces mentioned above.

The provision further states that any individual who violates the terms and conditions under which such exemption has been granted by the State Government of Tamil Nadu will face penal consequences. The punishment could be imprisonment for up to three months or a fine that may go up to one thousand rupees.

Licence for the manufacture of potable liquor

According to Section 17-B, the State Government of Tamil Nadu or the collector acting under the direction of such a state government may grant a licence to manufacture liquor for human consumption to any individual or organisation, irrespective of whether it is managed by the government, and can subject them to certain conditions as they deem fit.

Such manufacture must be fit for human consumption for

The purpose of selling such liquid to individuals and establishments that hold licences or permits in this regard.
For any other reason that is allowed by this Act, or
For transportation, the import or export of liquor that is intended for human consumption

Licence for import-export

Section 17-E provides that a licence for the export, import, transport, or possession of any liquor or article which contains liquor may be granted by the State Government of Tamil Nadu or a collector acting under the authority of the state government. It can be granted to any individual or to any institution, whether or not it is managed by the government, provided that the liquor or the article is required for legitimate purposes by such individual or institution.

Licences for bona fide medicinal or other purposes

Section 18 provides that the licence for the manufacture, export, import, transport, sale, and possession of liquor and intoxicating drugs may be generated by the State Government of Tamil Nadu or the collector acting under its authority to any individual or institution whether it is governed by the government or not. It is further stated that the licence may be granted if the liquor intoxicating drug or the article involving them is needed by the individual or institution for a legitimate medical, scientific, industrial, or likewise purpose.

Exemption from payment of excise duty, countervailing duty, or fee

Section 18-H stipulates that, by notice, the State Government of Tamil Nadu is empowered to impose any limitation or condition that it may deem fit through such notification.

Provide an exemption rate reduction or other change with regards to the excise duty, countervailing duty, or any other fee that is due by or under this Act to any individual or group of individuals, and

To revoke or alter the exemption, reduce it, or make other changes to it.

Licence for tapping neera or padani

According to Section 19, the Commissioner of Prohibition and Excise, the functional registrar of the Tamil Nadu Palm Products Development Board, any registrar of the Tamil Nadu Palm Products Development Board, or any other officer designated by the government on this behalf, may issue:

The licence for the tapping of neera or padani to be consumed unfermented is used to make products like sugar, biscuits, honey, jaggery, and other items that the State Government of Tamil Nadu may notify.
Permissions for the sale, transportation, or possession of neera or padani.

Permits and licences

Section 20 addresses licences and permits. It specifies that the State Government of Tamil Nadu or any representative authorised by them may issue:

Permission enabling any individual to use and process for personal use any liquor other than those listed by the state government under Section 4 or any other intoxicating drugs,
Licences to any establishment to carry liquor and distribute it to members who have the permissions stated above,
Permits enabling the owner of a restaurant car connected to a railroad to keep liquor and serve it to legitimate passengers, and
Licences to anybody to possess liquor and distribute it to individuals or organisations that are in possession of permits or licences issued under this Act or have been granted exemption from several of the restrictions given under Section 4(1) concerning the purchase, possession, and consumption of liquor.

Matters to be taken into consideration by the licensing authority

Section 20-A envisages matters that are to be taken into consideration by the licensing authority. It states that under this Act, the authority competent to grant a licence or permit, as the case may be, shall consider certain factors when evaluating an application for the grant of a licence or permit, subject to the provisions of Section 20-B, which outline the preferences to be given to the co-operative societies in granting licences over the other applicants. The following are the factors that are to be taken into account:

The appropriateness of the applicant for the issuance of a licence or permit as applicable,
Such other matters as may be prescribed.
According to the explanation attached to the provision, it is accordingly declared that the authority competent to provide such a licence or permit should take into consideration certain elements when determining whether the applicant is suitable for the issuance of a licence or permit, as the case may be. The elements are given as follows:

The solvency of the applicant,
If the applicant has violated any of the terms and conditions of the licence or permit granted under the provisions of this act or any other rules made there under,
Whether the applicant has violated any of the provisions of this act or of any rules, notifications, or orders made to effect this Act,
Whether the applicant has been found guilty of any crime covered by this Act or any other offence recognised as having no bail requirements, any offence that is covered under the Dangerous Drug Act, 1930, any offence covered by the Trade and Merchandise Marks Act, 1958, or any offence covered under Sections 482 to 489 of the Indian Penal Code, 1860,
If the applicant is engaged in any other activity that would hinder him from giving the reason for the request for a licence a permit under this Act enough consideration,
If the applicant has a payment history with the State Government of Tamil Nadu of any taxes or other payments owed or for any other amount payable under this act or its provisions,
Any other information pertinent to the reason for which a licence or permit under this act is being requested.

Licence for possession and use of denatured spirit in the manufacture of specified commodities, etc.

According to Section 20-C, no licence under this Act may be given in spite of anything else in the Act, for

The possession and use of denatured spirit in the production of varnish, picture varnish, insulating varnish, paint remover, gasket shellac, printing ink, or any other goods as the State Government of Tamil Nadu may specify from time to time. However, there is the exception of units of the state government department, government companies as defined under the Companies Act, 1956, or any corporation controlled or owned by the state or central government, as well as manufacturers of spirit-based products who are registered with the director of industries and commerce or the director general of technical development, Government of India, and
The ownership and sale of denatured spirit or varnish, whether at retail or wholesale, with the exception of departments within the state government, government companies as defined under the Companies Act, corporations controlled or owned by the state or central government, or cooperative societies that are registered or are deemed to be registered in accordance with the law in force for the time being.

Forms and conditions of licences and permits

The form and conditions of licences and permits are outlined in Section 21. It specifies that each licence of permission issued in accordance with Section 6-A shall:

Be granted subject to restrictions and limitations upon payment of such fees, if any, for such a time period and on such terms and conditions, including:

The requirement to deposit the specified amount as collateral for adhering to the terms and conditions of any such licence or permit,
The requirement that the entire amount thus placed be forfeited in the event that any terms or conditions of the licence or permit are violated,
The need for replenishing the amount forfeited within the time period that may be specified, and
Be in such form and shall include such detail that the State Government of Tamil Nadu may generally or specifically direct.

Power to cancel or suspend licences and permits

According to Section 23(1) of the Act, 1937, any licence of permission may be cancelled or suspended by the state government, the controller authorised by it on this behalf, or by any other specified body. The reasons for such cancellations are listed below:

If any sum due from the holder is not properly paid,
If any terms or conditions of such licence or permission have been broken by the holder, his employees, or someone working on his behalf with his express or implied consent,
If the holder is found guilty of any offence that is prohibited under this Act or any other offence for which a bail bond is not required,
If the holder of such licence or permission has used fraudulent or inaccurate information in order to acquire or renew such licence or permission,
If the terms and conditions of such licence or permission allow for its revocation or suspension at any given time, or
If the intended use behind such a licence or permission is no longer in existence.

Section 23(2) further provides that the State Government of Tamil Nadu may cancel or suspend any licence of permission that has been granted by the collector or any other designated body in light of the reasons that are mentioned above.

Section 23(3) stipulates that the holder of the licence or permission shall be afforded a reasonable opportunity to be heard so that he can raise his objections before the licence or permission is revoked or suspended. This opportunity should not exceed 14 days, and any representation made by the holder in this regard shall be duly taken into account before the final orders are passed. However, in the event that a prima facie case is established, the State Government of Tamil Nadu, the collector appointed on this behalf, or the prescribed authority as applicable may nevertheless suspend any such licence of permission at any time and for the reason that must be expressed in writing. Further, giving the opportunity of being heard under such circumstances won’t be necessary.

Penalty for breach of the conditions of licences and permits.

In addition to having the licence of permission granted to the holder revolved or suspended, the holder of such licence of permission or any other person acting on his behalf with his express or implied consent shall be punishable under Section 24 with up to three years of imprisonment or a fine up to the amount of three thousand rupees for any violation of any of the terms and conditions of such granted licence or permission.

Punishment for adulteration by a licenced vendor or manufacturer

Punishment regarding adulteration by a licensed producer or vendor is outlined in Section 24-A. It specifies that anybody who works for Tamil Nadu State Marketing Corporation Limited or who holds a licence or authorisation under this act for the production or sale of liquor:

Mixes or authorisation blends with the liquor he sells or manufactures- any harmful substances or foreign ingredients that might increase their real or perceived intoxication quality or intensity, provided that doing so does not constitute an adulteration offence under Section 272 of the Indian penal code, or any illicit or illegal liquor.
Either keeps, sells, or exposes for sale –

As foreign liquor, alcohol that he is aware of or reasonably suspects to be something other than foreign liquor, or
As foreign spirits created in India, liquor that he knows or has reasonable suspicion that is anything other than the liquor made in India, or
As illegal or illicit liquor, liquor that he either knows to be illegal or has a good cause to think that it is.

Dilute or allow to be diluted any liquor that he sells or manufactures using any kind of substance.
Create the cork for any bottle, case, package, or other receptacle that contains liquor other than that of another country, or use any of these articles with a mark on them or on the cork to lead one to believe that day contains liquor other than that of another country, provided that this conduct or practice does not violate Section 482 of the Indian penal code, which provides a prohibition against using a false trademark to deceive or harm others.
If someone sells stores or exposes for sale any liquor other than the foreign liquor in a bottle, case, package, or other receptacle with the mark on it or on the cork, they are intending to give the impression that the bottle, case, package, or other receptacle contains foreign liquor, even though this does not constitute the selling of goods marked with a counterfeit trademark under Section 486 of the Indian penal code.

The punishment that they would attract would be imprisonment for up to three years and a fine that would lead to up to three thousand rupees.

Offences by companies

Section 24-B of the Act, 1937, talks about offences by companies.

Section 24-B(1) provides that if a company commits an offence under this Act, every person who was in charge of the business of the company at the time of the offence and was accountable to it for its conduct will be considered guilty of the offence and will face the legal actions and punishments.

The proviso to the provision states that if any such person who is elected to have committed such an offence is able to show that the offence was committed without their knowledge or that they took all reasonable precautions and due diligence to prevent the offence from being committed, then the provision cannot hold such an individual accountable for any penal consequences.

Furthermore, Section 24-B(2) states that regardless of what is stated in Section 24-B(1), if any company commits an offence under this Act and it is established that the offence was committed with the knowledge or assistance of, or as a result of any neglect on the part of, a director, manager, secretary, or any other officer of that company, then such director, manager, secretary or any other officer of that company will be presumed to have committed the offence and will be subjected to legal actions and penal consequences accordingly.

Penalty for furnishing false or incorrect information

Section 24-C of the Act, 1937, provides that in addition to having the licence or permit granted in relation to the liquor that is revoked or suspended, the holder of the licence or permit in relation to liquor under this Act who furnishes any information in connection with the obtaining or renewal of the licence or permit under this Act that is false or which he knows or has reason to believe to be incorrect will attract penal consequences. Such punishment could be imprisonment for up to a period of three years and a fine that may extend up to two thousand rupees.

Chapter 4 of Tamil Nadu Prohibition Act, 1937 : establishment and control

For every duty, there has to be accountability that follows it. And to hold someone accountable, there has to be authority. In order to protect the intent of the Act, 1937, Chapter IV provides for its establishment and control.

Let us discuss it.

Appointment of officers and withdrawal of powers

According to Section 25, the State Government of Tamil Nadu may, by notification, from time to time do the following things:

Designate a person to oversee the administration of the provisions of this Act in all local areas where it is in effect and to exercise all the authority of a collector under this Act.
Designate any individual apart from the land revenue collector to carry out all or any of the responsibilities and powers that are assigned to a collector under this Act within a district, either in conjunction with or independently of the land revenue collector, subject to any supervision that the State Government of Tamil Nadu may specify from time to time.
Appropriate any or all of the authority granted to the commissioner of the land revenue collector by this Act.
Designate honorary or compensated officials with the titles, responsibilities, and authority that the state government deems appropriate.
Mandate that any current government employee or other individual may assume and carry out all or any of the authority and responsibilities granted to such paid or honorary officers, and
Assign the authority granted to them by this Act to any prohibition officer in the name of delegating such authority.

Delegation of powers of state government

According to Section 25-A, the commissioner or any other subordinate official may be granted authority by the state government to execute any of the powers granted to them by this Act, with the exception of the authority to establish regulations and to issue notices.

Furthermore, any authority granted may only be delegated under the conditions and limitations that the notification specifies, which may also be subjected to revision and modification by the State Government of Tamil Nadu.

Prohibition committees

Section 26 of the Act, 1937 provides for the provisions for prohibition committees.

The provision states that in light of achieving the goals of this Act, the State Government of Tamil Nadu may establish a prohibition committee for the entire State of Tamil Nadu, and the district collector may do the same for any reason within the district that the state government specifies in this regard by general or specific order.

Further, the provision provides that each member of the prohibition committee is required to monitor how the Act is being applied and to report to the State Government of Tamil Nadu if they are part of the state government-constituted prohibition committee and the collector if they are part of the collector constitute prohibition committee on any topic related to the Act at regular intervals and whenever they deem appropriate.

Further, every member of the prohibition committee has the right to provide information at any police station about any offence against this Act that has been committed or is suspected of being committed in the jurisdiction of such committee. The officer in charge of that station will then act upon such information and conduct an investigation into the matter in accordance with the procedures provided in the Code of Criminal Procedure, 1973.

Power of State Government to authorise officers to admit persons arrested to bail

Section 27 empowers the State Government of Tamil Nadu to authorise any or all the officers, classes of officers, or persons employed to make arrests of offenders and seizure of contraband liquor and articles without warrant throughout the state or any local area to release an individual arrested in that regard on bond so they can appear before a police officer, prohibition officer, or magistrate with jurisdiction to inquire about the offence for which they are arrested.

Such authorisation shall be made by virtue of notification by the state government. Also, the state government may cancel or modify such notification.

Chapter 5 of Tamil Nadu Prohibition Act, 1937 : power, duties, and procedure of officers

Chapter V of the Act, 1937, covers the powers, duties, and procedures that are given and required to be followed by the officers responsible under this Act.

Let us discuss it.

Issue of search warrants

Section 28 outlines regulations for granting search warrants. It purports that any collector, prohibition officer, or majestic who has reasons to believe that an offence under Section 4(1) that has been discussed above has been committed may issue a warrant for the search of any liquor, intoxicating drug material, still, utensil, implement, or apparatus related to the alleged offence. This is based on the information obtained and after making the necessary inquiries. Any person responsible for carrying out the execution of such a warrant may obtain and search these investigated areas, and if he deems it appropriate, he may make an arrest of the person he believes to be guilty of the alleged offence under this act.

Furthermore, it states that the person making the arrest must provide bail to any individual detained under the section if enough money is paid so that the detainee can appear before a magistrate, police officer, or prohibition officer, as per the requirement.

In addition, it is further stated that prior to issuing the warrant, the collector, prohibition officer, or magistrate must examine the facts provided under oath. Such review for examination must be summarised in writing and should be signed by the informant as well as by the collector, prohibition officer, or magistrate.

Powers of entry and search without warrant

The provisions pertaining to entrance and search rights without a warrant are outlined in Section 29. According to it, if a collector, a prohibition officer not below the rank that the state government may designate, a police officer, or any other paid or honorary officer authorised on this behalf by the state government has reason to believe that an offence under Section 4(1) has been committed, they shall act upon such anticipation.

However, if they are convinced that the delay caused by obtaining the search warrant will prevent the execution, then they can act based on such suspicion. In the meantime, he may enter and search any place at any time of the day or night, recording his justification and the basis of his belief. He may also seize anything that is found that he believes to be a subject attracting confiscation under this Act, and he may conduct a detailed search, and if he deems it appropriate, he can also arrest any person found there who is believed to be guilty of any offence committed under this Act.

It is further provided that if adequate collateral or enough money is offered for the appearance of the person arrested before a magistrate, police officer or prohibition officer, as per the demand of the case, the official will grant bail to such individual fulfilling the requirement of this provision.

Power of entry and inspection

The power and authority of entry and inspection are emphasised under Section 30. It states that any place where it is reasonably suspected that a toddy is being drawn or that the production of liquor or any other intoxicating drug is being carried out or where any police officer or other paid or honorary officer authorised by the State Government of Tamil Nadu in this behalf or any other prohibition officer not lower the rank that the state government has determined may enter and inspect at any time of day or night, in respect of:

That liquor or substance used to get intoxicated is stored or preserved for sale, or
An offence under Section 5 has been committed or is being committed.

They may inspect, test, weigh, measure, or analyse any object, utensil, device, liquor, or intoxicating drug discovered in such a location.

The arrest of offenders and seizure of contraband liquor and articles without a warrant

The rules pertaining to the arrest of offenders and the unwarranted seizure of elicit articles and liquor are outlined in Section 32 of the Act. It states that anyone found committing an offence that is punishable under Section 4(1), Section 5, Section 7, or Section 24, or any other offence that is punishable with rigorous imprisonment for a time period that may extend up to 3 years or more

May be arrested without a warrant by any prohibition officer, officer of the police or land revenue departments, or any other authority authorised on this behalf.
Such officers may confiscate and hold any drug, liquor, or any other article involving them that has caused a reason to believe such confiscation to be carried out under this Act.
Such an officer may conduct a search of any individual person, vehicle, vessel, package, or covering that he has a reasonable suspicion may contain liquor, intoxicating drugs, or any other items containing them that are to be concealed.

Furthermore, it states that if the officer making such an arrest under the section is not authorised to admit to bail, the person arrested will be sent right away to an officer who is authorised on this behalf. If this officer is known to be located within 5 miles of the location of arrest, it will be their responsibility to admit the person to bail if enough collateral is offered for their appearance before a police officer, prohibition officer, or magistrate with jurisdiction to inquire into the matter.

The provision further states that in the event that the officer a person seizes any toddy, wash, or sonti soru pursuant to this section, they may immediately destroy or cause to be destroyed such seized toddy, wash, or sonti soru to the police, prohibition officer, or magistrate within whose jurisdiction the investigation lies.

Furthermore, the provision provides that in the event that any officer person seizes unlawful or illicit arrack in accordance with this section, such officer person may in the presence of a prohibition officer or any other police officer ranking not below the rank of an inspector,

Collect two samples of such unlawful or illicit arrack, or as many samples as necessary. There would be directions given to them as to how they have to do such collection, and
Destroy such illicit arrack or cause it to be destroyed, and send the parts or other containers containing them, along with the samples that were taken and a certificate from the officer in whose presence the samples were extracted and the arrack that was destroyed, to the magistrate with the jurisdiction to investigate the matter. In addition to it, detailing the total amount in respect of the seized illicit arrack, the total amount taken as samples, and the total amount destroyed would also be sent to such a magistrate.

After receiving the samples, the magistrate is required to keep one in his court and transmit the other to the officer designated for chemical analysis.

There is an explanation attached to this provision and it states that:

‘Sonti sonu’ is a liquid made from rice or starch that has either finished fermenting into wine or liquor or is in the process of doing so, and
‘Wash’ means a combination of water and saccharine ingredients that have either finished or are still undergoing vinous or alcoholic fermentation.

Arrest of a person refusing to give the name or giving a false name

A person who refuses to reveal names or uses a fake identity may be arrested under Section 33 of this Act. It specifies that anyone who may be reasonably suspected of violating the provisions of this Act and who refuses to give their names and residence upon request from a prohibition officer, an officer of the police or land revenue department, or any other officer that is authorised in this capacity by the State Government of Tamil Nadu may be arrested by that officer in order to obtain their name and residence.

Persons arrested how to be dealt with

Section 38 specifies how those who are arrested are to be handled or dealt with. It states that if someone is arrested under Sections 28, 29, 32 or 33, the person making the arrest must send the arrested person right away to the closest police station or do a prohibition officer along with a report detailing the circumstances leading up to such an arrest, unless bail has been granted under Sections 28, 29 or 32.

It also outlines the protocol for police station officers and states that when a person is being brought to a police station as mentioned above, the officer in charge of that station will either grant him bail so that he can appear when called either before the prohibition officer or himself or before any police officer within the jurisdiction of which the offence for which he is accused is suspected to have been committed or, should bail be denied, will return him over to that officer.

It further outlines the process for police or prohibition officers who are authorised to make inquiries. It states that when a person is taken into custody by a prohibition or police officer or when that officer has made the arrest himself, that officer will conduct any investigation he deems necessary and will then either:

release the person from custody, or
forward him to another magistrate with the jurisdiction to investigate the matter, or
admit the person to bail.

The proviso further stipulates that if an inquiry is not initiated and concluded on the day the person is arrested, brought before, or appears before the officer, the officer must, upon the presentation of adequate bail for the appearance of the arrested person, release them on bail. The individual is then required to appear on a later date before the same officer or any other official with the authority to conduct the inquiry into the case.

Power of the Police or Prohibition Officer to summon witnesses

The authority to summon the witness is granted to the prohibition officer or to the power of the police under Section 42 of the Act. It states that any police officer or prohibition officer who is conducting an inquiry in accordance with Section 38 is empowered to summon any person to appear before him in order to provide testimony on the matter or to present any relevant document that may be in his control or possession. However, no such officer may allow someone to appear before him in such a way if the required travel distance to comply with such someone exceeds:

10 miles by road,
50 miles by rail, or
Any other restriction that the State Government of Tamil Nadu may have provided.

Terms of summons

The terms and conditions of the summons that are carried out under Section 42 are listed under Section 43. The provision specifies that every summons issued must specify whether the person receiving it is expected to appear before the designated officer at a certain time and place and provide testimony, present documents, or both.

Examination of witnesses

Section 44 of the Act, 1937 states that the person who has been summoned is expected to show up as scheduled and respond to any questions the officer may have about the investigation or examination.

It further provides that such an answer given by the person so summoned must be reduced to writing and shall be signed by the relevant officer in charge.

Power of the Police or prohibition officer to summon suspected persons

Section 46 grants the police or prohibition officer authority over someone they suspect. The provision says that any police or prohibition officer may be any individual with whom he has reasonable suspicion that he has violated the provisions of this Act. Such officers are required to document the cause of the action of such individuals in writing, which has led them to have a reasonable cause for it. When that individual shows up before that officer, the process prescribed by Section 38-45 will take effect. Prior to some meaning of the suspected individual, the officer may also use the authority granted by Section 42-45 if he deems it essential for the investigation of the case.

Power to release certain offenders of prohibition on good conduct

Section 52-B gives the authority to release certain prohibition offenders with good behaviour. Regardless of the provisions of the Probation of Offenders Act of 1958 or the Code of Criminal Procedure of 1973, if any individual is found guilty of:

Any offence covered by the punishment provided under Section 6
The commission attempts to commit or assist in the commission of any of the actions constituting any of such punishable offences when such commission attempt or assistance is subject to the punishment of Section 12.
The court that finds him guilty does not have any evidence of his prior conviction for any offence under this Act against him.

In the cases mentioned above, rather than immediately sentencing him to any punishment, the court may release the accused upon entering into a bond, requiring at least one surety to appear and answer for their offences whenever the court finds it necessary for a maximum period of 5 years and to refrain from committing any offences under this Act during that time period.

As long as the court is convinced that the offender and his surety have a fixed place to abode or regular occupation in the location for which the court acts or is in which the offender is likely to live during the period designated for the observance of the condition, the Court may not order the release of an offender under this provision.

If the offender is younger than the age of twenty-four, the court may appoint a probation officer named in the order under the Probation of Offenders Act of 1958 to supervise the offender during the period specified in such order. The order may also impose additional conditions to ensure the offender receives the supervision specified in the order. However, the period specified in the order cannot exceed the date the offender is expected to turn 25 years old, as determined by the court.

When a quote issues a supervision order, it must first require the offender to post a bond with at least one surety guarantee that he will abide by the terms of the order, as well as any additional requirements or conditions pertaining to housing, abstaining from liquor, and any other matter that the court deems appropriate to impose in order to prevent the offender from committing any offences under this Act.

When a court issues a supervision order, it is required to provide a written notice describing the terms of the bond in a plain language to both the surety and the offender.

It is further provided that any appellate court or high court may issue an order under this provision in the course of using its revisionary powers.

Chapter 6 of Tamil Nadu Prohibition Act, 1937 : rules and notifications

The whole Tamil Nadu Prohibition Act of 1937 revolves around the notifications that are to be made by the State Government of Tamil Nadu in order to promote the smooth functioning of this Act, and Chapter VI provides such power to make such rules and defines rules regarding such publication.

Let us discuss it.

Power to make rules

Section 54(1) empowers the State Government of Tamil Nadu to make rules for the purpose of giving effect to the provisions of the Act, 1937.

Section 54(2) provides a list regarding which the state government may establish regulations without affecting the generality of the provision stated above. The list is as follows:

For the issuance of licences and permits as well as for the upholding of the terms.
For imposing a penalty for loss or shortage of spirits beyond the specified limit of not more than sixteen rupees for every proof litre.
For specifying the authority that needs to be appointed and the duties or responsibilities that the honorary prohibition officers must fulfil in order to achieve the goals of the Act.
To define how the obligation regarding the excise duty or countervailing duty on liquors and intoxicated drugs may be applied.
For establishing the local authority of police and prohibition officers for inquiry and use of their investigation and preventive capabilities.
For enabling any official or any other authority assigned on that behalf to carry out any function or exercise any authority under this Act.
For defining the members of prohibition committees, their responsibilities, and the times at which committee members are required to provide their reports.
For controlling the transfer of any authority granted to the commissioner, collector, or other district authorities under this Act.
For controlling the growth of the hemp plant, the extraction of plant parts that can be used to make intoxicating substances, and the production of such substances from those parts.
To describe the process of creating denatured spirits.
For giving instructions on when and how to present appeals as well as regarding the process for handling them and stating in which cases of classes of cases and to which authorities such appeals from orders lie, whether original or appellate, past under this Act or any rules. Also, to determine by what authorities such orders may be revised.
For the payment of batta to witnesses, compensation for lost time to those freed under Section 38(3), which has been discussed above, due to unlawful arrest, and to persons accused of violating this Act before a magistrate but found not guilty.
For controlling the authority of police and prohibition officers to call witnesses from a distance under Section 42, discussed above.
For the removal of the items that are seized and the revenues from them.
For the control of the use of any liquor or intoxicating drug exempt from all or some of the provisions of this Act and for the prohibition of the use of medical or toilet preparations for any purpose other than the medicinal or toilet preparation.
For the appropriate collection of taxes on all types of drugs and liquor.
For the purpose of suspending or removing the application of any regulation created under this Act.
For all the matters that the Act, 1937 specifically requires to be prescribed.

Section 54(3) further provides that all rules under this Act must be placed on the table of the legislative assembly as soon as possible after they are made. The assembly may then amend or repeal the rules within the time period of 14 days once the sitting of the House commences, either in one session or multiple sessions.

Publication of rules and notifications

Section 55 provides that all the rules and regulations created and the notices that are sent out in accordance with this Act must be published in the official gazette in order to be effective.

Chapter 7 of Tamil Nadu Prohibition Act, 1937 : legal proceedings

Chapter VII of the Act, 1937 provides immunity to the government and defines the jurisdictional limitation that the civil court has over this Act.

Let us discuss it.

Actions against the Government

By virtue of Section 56, it is stipulated that no action for damages may be brought in a civil court against the government, police, or any other official for any lawful conduct that is carried out or directed to be carried out in accordance with this Act.

Bar of the jurisdiction of the Civil Court

Section 56-B bars the Civil Court from having any jurisdiction with respect to any action taken or to be taken by the Commissioner Officer, Tamil Nadu State Marketing Corporation Limited, or any other authority empowered with any power under this Act. Further, the provision states that no civil court shall grant injunction over any matter that the commissioner or other officer of the corporation or any other authority empowered by or under this Act has to determine.

Courts to take judicial notice of appointments

It is provided by Section 57 that every court must take judicial notice of all notifications and orders made under this Act that provide authority, impose an obligation, and make appointments.

Tamil Nadu Liquor (Retail Vending) Rules, 1989

The Tamil Nadu Liquor (Retail Vending) Rules of 1989 provide a set of rules that govern the retail vending of liquor in the state of Tamil Nadu. These rules provide provisions regarding the procedures and requirements for obtaining and renewing the licence for retail liquor shops. They also establish the guidelines for the selection of the applicants and operations of these shops. This further outlines the procedure for the sale of Indian-made foreign liquor in such retail shops.

The rule provides for the application process pertaining to the licence. It provides the eligibility criteria, the maximum number of shops that can be licensed by one applicant. In the selection process, circumstances are such that the application exceeds the number of shops available for the same.

It further provides for the renewal of the licence for the retailing and vending of Indian-made foreign liquor. These rules empower the State Government of Tamil Nadu to change or discontinue such a process of renewal in order to safeguard the public interest.

There are certain obligations that are imposed through these rules on licences, such as lifting the minimum take fixed for the shops by the licensing authority. Failure to meet these obligations would attract penalties or the cancellation of the licence.

The rules also provide that when a tenant comes into the picture in order to sell such liquor, he or she does not have a fundamental right to carry on any business on the premises that belongs to someone else. It states that a tenant is required to obtain permission and no objection certificate from the owner of the premises in order to carry out such business of selling India-made foreign liquor.

The rules also envisage that the principle of promissory estoppel cannot be used to compel the government or a public authority to carry out a representation which is contrary to the law or is beyond the authority of such an officer.

The State Government of Tamil Nadu can, from time to time, whenever the requirement is felt or is needed in the interest of the general public, change the policy of granting a licence or any other rule by issuing government orders in the official gazette.

These were replaced by the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003.

Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003

The Tamil Nadu Liquor Retail Vending (In Shops and Bar) Rules, 2003, now govern the retail sale of liquor in shops and bars in the state of Tamil Nadu. Further, it also governs the location and tendering process pertaining to the liquor retail vending shops in the state of Tamil Nadu.

Rule 2(d) defines a ‘bar’ as a place that is located within the shop or adjoining the shop and is used for the consumption of the liquor that is sold.

The rules further provide for the regulations regarding the licence that is required to be granted for the retail vending of liquor in the shop. It also specifies that an intending bidder submitting a tender schedule must quote the price for running a bar that is attached to an Indian-made foreign liquor shop.

It requires the tender inviting authority to obtain a copy of the first page of the blank passbook of the bidder, which would contain the photo and address attested by the bank branch manager or notary public.

Key provisions of the aforesaid rules are:

Rule 3

Rule 3 states that the corporation shall make an application for the grant of a licence to the Commissioner of Prohibition and Excise regarding the retail vending of liquor in shops and bars for the entire state of Tamil Nadu. It further states that a treasury receipt as proof of the payment of an annual privilege fee of one crore rupees and a licence fee of one thousand rupees for the grant of licence shall be accompanied with such an application.

Rule 4

Rule 4 states that the licence shall be issued in the name of such cooperation by the Commissioner of Prohibition and Excise in Form I for the retail vending of liquor in shops and bars in the entire state. The authorisation to the corporation for the retail vending of Indian-made foreign substances is to be issued in Form II.

Rule 5

Rule 5 further provides for the issue of a duplicate licence in the event of loss, mutilation, or damage to the licence during its validity period. However, a fee payment of one hundred rupees is payable for the same.

Rule 8

Rule 8 provides that no shop can be established in:

The municipal corporations and municipalities within a distance of fifty metres, and
From any place of worship or educational institution within a distance of one hundred metres.

Also, the location of the shop has to be approved by the collector before the commencement of business there.

Rule 10

The bar should be located either within the store or close to it, according to Rule 10.

Rule 11

Rule 11 provides that the business in the shops and bars shall only be within the working hours that are specified by the State Government of Tamil Nadu by order.

Rule 11-A

Rule 11-A bars the sale of liquor to persons who have not completed the age of twenty-one years.

Rule 17

Rule 17 provides that there shall be an inspection of the shops in respect of checking the accounts, doing physical verification of the stocks, and taking samples of liquor for chemical tests or analysis. The authorisation to enter a shop and inspect is provided to;

Officer of the excise department not below the rank of excise inspector,
Officer of the revenue department not below the rank of Tehsildar authorised by the collector.

In the event of a violation found upon such inspection, it would attract disciplinary action against the persons responsible for it.

Cases Laws

Janshi and Co. v. State of Tamil Nadu (1982)

Facts

In this case, the petitioners were dealers in Indian-made foreign liquor. They were holders of licences for composite wholesale and retail dealing. The wholesaler and retail licence for dealing in such liquor got delinked and separate licences were issued to wholesale dealers and retail dealers. Subsequently, the licence for wholesale dealers for the entire city of Madras was issued to one of the respondents and not to the petition.

The petitioners challenged the constitutionality of certain sections of the Act, 1937.

Issues raised

The issue was that the following provisions were challenged to be against the right to do any business or practise any profession under Article 19 of the Constitution of India:

Section 17-C provides for exclusive privileges for manufacturers.
Section 17-D regarding the payment of some inconsideration of the grant of any exclusive or other privilege of a licence for manufacture or sale.
Section 20-B provides preferences to go operative society over other applicants in granting a licence, and
Section 23-A, which provides for the licence for possession and sale of bottled liquor, to cease.

Judgement

The Honourable Supreme Court held that the petitioners were entitled to submit their applications for the grand licence for wholesale dealers in Indian-made foreign spirits, and their application would be considered on merit according to the law.

S.Jagannathan v. The Managing Director (2021)

Facts

In this case, a challenge to the practice of running bars in the state of Tamil Nadu under the Act, 1937 was made. The petitioner argued that allowing bars to operate in the state of Tamil Nadu is contrary to the provisions of the Act which only permit the consumption of alcohol in private spaces or in the comfort of one’s home. The petitioner further claims that the practice of running bars is also not in line with Article 47 of the Constitution of India, which promotes the prohibition of intoxicating liquors.

Issues raised

The main issue in this case was whether the practice of running bars in the entire state of Tamil Nadu under the Act, 1937 holds validity and whether it is constitutional in nature.

Judgement

The Madras High Court held that the respondents have the power to engage in wholesale and retail sales of liquor, but they do not possess the power to allow the consumption of liquor in public or in bars. It further stated that the consumption of alcohol within the Act, 1937 only permits such consumption in private spaces or homes of the person consuming. The court emphasised that if the Tamil Nadu State Marketing Corporation Limited, which is the respondent in this case, continues to encourage the consumption of liquor in bars, then this would attract an amendment to the substantive law under the Act.

Conclusion

Mohandas Karamchand Gandhi was not only a fearless politician but was also a tireless social reformer. He strongly opposed addiction and time and again inscribed his policies regarding the prohibition of such substances available for addiction into the manifesto for the elections.

Although his ideologies race back in time, the essence of it is alive today and is racing at a developing rate. One such safeguard in this light is the state legislation of Tamil Nadu, which we have discussed in detail above. The legislation not only covers the prohibition of liquor or intoxicating drugs but has also expanded its scope to include articles involving them. It also provides for authorities in this regard and other provisions regarding the rules and regulations for it that have been discussed in detail.

Frequently Asked Questions (FAQs)

What is meant by the term ‘socialist’?

By socialist, it means social and economic equality in its purest form. In order to achieve social equality, discrimination must be discouraged on any possible basis, such as caste, creed, race, gender, religion, language, etc. It also states that each and every citizen should be entitled to the same status and opportunity. The other face of it is economic equality, which is an effort to guarantee that the government makes every effort to ensure that resources and wealth are distributed equally in such a manner that each and every member of our nation has access to a respectable standard of living.

What does Article 47 of the Constitution of India state?

Article 47 of the Constitution of India states that it is the duty of the state to raise the level of nutrition as well as the standard of living, along with improving public health. It should be considered any state’s primary duty in such a manner that the state shall bring about the prohibition on the consumption except for medicinal purposes of intoxicating drinks and drugs which are injurious to health otherwise.

What do custom frontier and custom station mean under the Act, 1937?

The term custom frontiers of India has been defined under Section 7(i) of the Act, 1937 to mean the limit of the area of a custom in which imported goods or goods for export are ordinarily kept before clearance by customs authorities.

The term ‘custom station’ defined under Section 7(ii) of the same Act means any custom ports, custom airports, or land customs stations.

Are the offences under the Act cognizable or non-cognizable?

Section 15 of the Act, 1937, explicitly states that all the offences under the Act shall be cognizable. It further provides that the provision of the Code of Criminal Procedure 1973, which is a central legislation, shall be applicable with respect to cognizable offences.

What is a delegation of power?

Through delegation, decision-making power is transferred from one organisational level to another, enabling a subordinate to take action. If it is done appropriately, delegation is not the same as surrender. It does not mean the delegation of authority. An authority, if empowered, can delegate some or all of its power to another.

What are excise duty and countervailing duty?

Excise duty is one type of tax that is divided into items for the manufacture, licence and sale. It is an indirect tax that manufacturers of products pay to the government of India. It is applicable to items that are made within the nation.

Another type of duty is known as ‘countervailing duty’ and it is levied by the government to safeguard domestic producers by compensating for the detrimental effects of import subsidies. Therefore, a counselling duty is an import tax imposed on imported goods by the importing nation.

What is meant by adulteration?

The act of making any food or drug of poor quality by adding some substances to them is commonly referred to as adulteration. Such act of adulteration are mostly done in two ways, and these ways are:

By removing certain substances from the food, or
By altering the existing natural properties of the food that are known.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

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Bachan Singh v. State of Punjab (1980) : case analysis

Introduction

History of death penalty

Death penalty in India

Offences punishable with death sentence

Section 354(3) of the Code of Criminal Procedure

Background of Bachan Singh v. State of Punjab (1980)

Provisions involved in the case

Facts of Bachan Singh v. State of Punjab (1980)

Prominent issues raised

Contentions of the petitioner

Contentions of the respondents

Judgment in Bachan Singh v. State of Punjab (1980)

Analysis of the judgement in Bachan Singh v. State of Punjab (1980)

Dissenting opinion

Critiques of the judgement in Bachan Singh v. State of Punjab (1980)

Rarest of rare doctrine

Views on same-day sentencing

Key highlights of the judgement in Bachan Singh v. State of Punjab (1980)

Aggravating and mitigating circumstances

35th Report of the Law Commission of India

Reform test and its ramifications

Judiciary’s stance after the judgement in Bachan Singh v. State of Punjab (1980)

Aftermath of the case of Bachan Singh v. State of Punjab (1980)

Key judgments on death penalty over the years

United Nations on death penalty

Why does death penalty still prevail in India

Conclusion

Frequently Asked Questions (FAQs)

When was the death penalty introduced?

Is the death penalty still awarded in India as a punishment?

Why is the punishment of death sentence still awarded in India?

Which is the landmark judgement on the death penalty?

What was held in the case of Bachan Singh v. State of Punjab?

Which doctrine was introduced in the case of Bachan Singh v. State of Punjab?

Which provisions of the Constitution are said to be violated by the death penalty in the case of Bachan Singh v. State of Punjab?

What is the doctrine of “rarest of the rare”?

What are the provisions dealing with the death penalty in India?

Who was the first person executed in independent India?

What are the aggravating and mitigating circumstances that are to be considered by the courts before imposing the death penalty?

References

Divisible contracts : an insight

Introduction

What is a divisible contract

Essential requirements for a valid contract

Case law

Mohori Bibee vs Dharmodas Ghose

Facts of the case

Issues involved in the case

Judgement of the Court

Difference between divisible contracts and indivisible contracts

Case laws surrounding divisible contracts

Lowy vs. United Pacific Ins. Co (1967)

Facts of the case

Issues involved in the case

Judgement of the Court

Steele vs. Tardiani (1946)

Facts of the case

Issues involved in the case

Judgement of the Court

Access Insurance Planner Inc. vs. Gee (2015)

Facts of the case

Issues involved in the case

Judgement of the Court

Darst vs. Meduna (1942)

Bariel vs. Tuinstra (1954)

Facts of the case

Issues involved in the case

Judgement of the Court

Contract drafting checklist

Matching essential clauses of a contract with contract checklist

Drafting clauses of the instrument

Confidentiality clause

Which pre-contractual instrument is beneficial for the client at this stage

Can ‘confidentiality clause’ in such an instrument be enforced independently

Other clauses of the instrument

Proposed arrangement

Term and termination

Remedies