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Technology and freedom of the press

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This article has been written by Rashmi Dewangan pursuing a Remote freelancing and profile building program from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

Freedom of the press gives individuals and organisations the right to express, publish, and share information and ideas. An individual can share ideas without fear of censorship or government interference. But defamation, hate speech and incitement to violence are not included in it. Free media uncovers the truth and shares the information that educates the public. Corruption and misuse of power  have been brought to light many times by journalists. A free press is required for citizens to criticise the government or expose any of its potential wrongdoings. But, for security purposes, the government is allowed to block the press from publishing about some issues. For example, the enemy of a country could gain an advantage by reading about military plans in the media, so the government has the right to prevent information related to plans and security.

It is legal to post information after the event, but sometimes it causes problems for editors and publishers. In  New York Times Co. vs. United States (1971), the secret documents ‘Pentagon Papers’ were leaked by defence department employee Daniel Ellsberg, but the primary concern was whether the New York Times could publish them. The government tried to stop publishing because it would have hurt the government’s image. The court gave judgement in favour of the Times, which strengthened the freedom of the media.

According to RSF’s World Press Freedom Index 2023, Norway, Ireland, and Denmark occupied the top three positions and Vietnam, China, and North Korea were at the bottom of the list. Such an index is evaluated for 180 countries and territories and is published on World Press Freedom Day.

Role of technology in journalism

The evolution of digital technology has taken journalism to the next level. The growth of social media and the widespread use of camera phones have promoted free media and strengthened democracy. It brought information about public affairs closer to the people. Anyone can participate in giving and receiving news in any part of the world. People get the opportunity to participate in and report the news about politics, entertainment, sports, business, natural disasters, or wars via social media networks. It provides a platform to educate and inform the public about world affairs. 

Technology is changing every part of our society, but we must recognise that technology is creating problems as well as benefits. It requires new and urgent solutions to these problems. Social media platforms like Facebook, Instagram, etc. have become concerned about the spread of false content. They not only face litigation but also damage their reputation. It reduces their credibility, irritates advertisers, and potentially reduces their audience. Technology is not only transforming the working methods of journalists but also changing the way the government censors the media. “Impact of Technology on Journalism and the Production of News”  has covered all advanced technologies and helped to understand the technological changes. 

Digital revolution

The digital era has brought about a drastic change in traditional print media and journalism. It enables journalists to provide real-time updates. Social media platforms like Facebook and Twitter deliver breaking news faster than traditional methods. Traditional print is limited to text and static images; on the other hand, digital media uses videos, infographics, and interactive content. Digital platforms are beyond borders. For example, anyone can access the New York Times with just an internet connection.

Social media provides direct interaction between journalists and readers. Readers can give feedback on the news. Nowadays, data-driven journalism plays an important role and it keeps track of data essential for national conversation. On the other hand, there were some challenges to monetization, like ad-blockers and changing ad models, so the traditional media tended to digitise. Ethical and responsible reporting is a must on digital platforms. The BBC is the best example of ethical reporting. Currently, we use advanced technology like AI that takes journalism to another level. As an example, the Washington Post uses AI for automated storytelling and identifying data for complex articles about financial transactions. Several media outlets and insurance companies use drones empowered by AI to get images from difficult locations, which increases the efficiency of publishing news articles.

An interactive, computer-generated artificial environment called VR is extensively used in art, music, film, video games, and advertising. The New York Times also uses VR and has produced many films and documentaries with it. The Times introduced the Daily 360 series, which produces videos from different places. Similarly, AR (augmented reality) is a technology that uses information in the form of text, audio, and graphics integrated with real-world objects. Social media already uses AR in conjunction with VR. However, these two technologies are very costly, so smaller news agencies cannot adopt them.

Challenges associated with democratic society

The media is an essential part of a functional and healthy democracy. In journalism, accuracy, impartiality, and responsibility in their reporting are required to successfully overcome the challenges. Journalists have the right to freedom of speech and expression; however, they have faced a range of challenges, including threats, attacks, and harassment from government officials and politicians.

Citizens get information about political issues, government policies, and events through the media so that they can make decisions about their leaders and government. Public debate and discussion about political issues are conducted by the media, which represent a range of perspectives. The media should educate citizens about the democratic process and provide a variety of opinions and ideas through public debate. The media faces some challenges in a democratic society, which are as follows:

  • Sometimes the media spreads half information to the public due to partiality, which leads to distortion and imbalance of information. As a result, citizens show a lack of trust in the media.
  • Fake news easily spreads through social media, leading to confusion and misinformation among the public.
  • Editorial policies and media reporting can be affected because large organisations often own press corporations. They can focus on profit rather than public interest, which can lead to a lack of perspective.
  • Censorship works as a barrier to the flow of information. The government can use it to suppress disagreement, leading to a lack of transparency and accountability in the government. It limits the ability of the media to act as a watchdog.
  • The lack of female journalists is another important issue, which limits the diversity of perspectives and voices in the media.
  • Sometimes the media spreads some news about the accused person before the court judgement, which makes the person guilty in front of the public. This can affect the life of that person for a long time.

Social media and citizen journalism

Common people can report on the news about what is happening around them. It is called citizen journalism. It requires the ability to tell a good story. Citizen journalists use blogs, podcasts, Facebook, Twitter, etc. for it. They convey their message through smartphones, laptops, tablets, voice recorders, and any other portable devices. Blogs and social media content help them establish their community of viewers. Citizen journalism is a faster way of spreading news. It encourages people to participate in ongoing events. Citizen journalists can work independently or with professional journalists. Live events or incidents, such as sports events or protests, can be captured using live broadcasting.

Cybersecurity and journalism

Every person who works digitally is at risk of cyberattacks, especially journalists. Government agencies and different kinds of organisations are particularly interested in the data kept safe by reporters. Journalists can take advantage of cybersecurity to protect their data. Digital cybersecurity should be as important as reporting on current events in journalism. Journalists’ data is more important when it is based on any investigation or exposure to something. The physical safety of journalists is at risk due to unprotected data. The situation is more dangerous when the government and other organisations are against them.

Government surveillance and privacy concerns

The governments of multiple countries are increasingly using spyware products to target journalists and media organisations, posing a severe threat to press freedom and freedom of expression. Spyware, a type of malicious software, can be installed on computers, smartphones, and other devices to monitor and collect sensitive information without the user’s knowledge or consent. This technology allows governments to engage in surveillance, track the movements and activities of journalists, and expose their sources and private communications.

By using spyware, governments can effectively silence critical voices and deter journalists from reporting on sensitive or controversial issues. This can lead to self-censorship, where journalists fear reprisal and choose not to publish information that could be damaging to the government or powerful individuals. The consequences of this are far-reaching, as it undermines the public’s right to know and stifles the free exchange of ideas and information, which are essential for a democratic society.

Governments may employ various methods to deploy spyware, including phishing attacks, drive-by downloads, and social engineering techniques. Once installed, spyware can grant unauthorised access to a device’s camera, microphone, and GPS location, enabling governments to monitor journalists’ activities, record conversations, and track their movements. This invasion of privacy not only compromises the safety and security of journalists but also chills freedom of expression and hampers investigative journalism.

Instances of government-sponsored spyware attacks against journalists have been documented in several countries. For example, in 2018, it was revealed that the Mexican government had used the Pegasus spyware, developed by the Israeli company NSO Group, to target journalists, human rights activists, and political opponents. Similarly, in 2020, the Hungarian government was accused of using Pegasus to spy on journalists and members of the opposition party. These cases, among others, have raised serious concerns about the misuse of spyware and its implications for press freedom and democracy.

To address this growing threat, there is an urgent need for governments to adopt strong regulations and safeguards to prevent the misuse of spyware. This includes implementing strict export controls on spyware technologies, ensuring transparency and accountability in the development and use of surveillance tools, and providing legal protections for journalists and media organisations. Additionally, technology companies must play their part by enhancing the security of their products and taking steps to prevent their software from being exploited for malicious purposes.

The future landscape

In the era of rapidly advancing technology, the impact of AI tools on journalism is undeniable. These intelligent systems are increasingly being utilised to automate various tasks traditionally performed by journalists, from news gathering and fact-checking to content creation and distribution. As a result, journalism finds itself at a pivotal turning point, facing both challenges and opportunities.

One key challenge posed by AI tools is the potential for job displacement. As AI systems become more sophisticated, they are increasingly capable of performing tasks that were once exclusively within the realm of human journalists. This automation can lead to job losses and decreased employment opportunities for journalists, particularly in areas such as data-driven reporting and routine news coverage.

However, AI tools also present significant opportunities for enhancing journalistic practices. By automating repetitive and time-consuming tasks, AI can free up journalists to focus on more creative and strategic aspects of their work. AI-powered analytics can help journalists identify patterns and insights hidden within large datasets, enabling them to uncover important stories and provide deeper analysis. Additionally, AI can assist in verifying information, detecting fake news, and ensuring the accuracy and credibility of news content.

Furthermore, AI tools can enhance the reach and impact of journalism. By analysing audience data and preferences, AI can help journalists tailor their content to specific demographics and deliver personalised news experiences. This targeted approach can increase reader engagement, foster trust, and strengthen the connection between journalists and their audience.

To navigate this transformative landscape successfully, journalists must adapt and evolve their skills. They need to develop a solid understanding of AI technologies and how they can be harnessed to enhance their work. This includes acquiring skills in data analysis, machine learning, and natural language processing. Additionally, journalists must continue to uphold the core principles of journalistic ethics, ensuring that AI tools are used responsibly and with integrity.

AI-generated news is designed to automate some of the tasks more quickly and efficiently than traditional journalists perform. AI-generated news has a few key implications, like efficiency and automation, increased personalisation, new business models and ethical and societal implications.

Conclusion

Technology has brought a dramatic change in the field of journalism by making it possible to access news instantly for audiences. There are various examples where AI takes the place of reporters. The rapid growth of technology creates hopes for development in media. AI is not a substitute for human reporters; it can assist them with content creation. Social media platforms like Facebook and Twitter are used to spread real-time news. Reporters use these platforms to collect data and report and they find that they can communicate better with their audience. Spyware and cyberattacks harm the personal data of journalists. They should follow some security tips like authentication, VPN, using the TOR browser and using strong passwords.

References

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Prospectus under Company Law

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This article has been written by Pankhuri Anand. The article seeks to provide a brief analysis of the concept of prospectus under the Companies Act, 2013. An attempt has been made to identify the kinds of prospectus under the Companies Act and the procedure followed for filing a prospectus.

Introduction

One of the major reasons why businesses choose the company form of business is because it allows greater accessibility to funds. A public company that has been incorporated under the Companies Act, 2013 is allowed to raise investments from the general public through different modes. Since a company raises funds from the public, it also becomes necessary that such a company be accountable to the public. Accordingly, to secure the interests of the investors in the company, the Companies Act, 2013 mandates the filing of a prospectus with the Registrar prior to raising funds. 

A prospectus is a document issued by a company to invite deposits or subscriptions from the public by way of issuing securities of the company. It can be understood as a document or a booklet containing crucial information about the company and its securities for potential investors. Section 2(70) of the Companies Act, 2013 defines a prospectus as “prospectus means any document described or issued as a prospectus and includes a red herring prospectus referred to in section 32 or shelf prospectus referred to in section 31 or any notice, circular, advertisement or other document inviting offers from the public for the subscription or purchase of any securities of body corporate”

Meaning and purpose of a prospectus under Company Law

From the perspective of the issuer

A prospectus is a document that provides all the essential information about the company at the time of raising an investment from the public. It can be understood as an invitation to offer the securities of the company. The public intending to invest in the company can make an offer above the offered price but within the price band. It is upon the company to allot shares to the public in the manner it deems fit. Every time a company has to raise an investment from the public, it is the duty of the company to inform the public about its financial position and the purpose of the investment. A prospectus is the first document through which a company publicises or discloses its financial and other relevant information.

Section 28(2) of the Companies Act, 2013 provides that any document through which an offer for sale is made to the public shall be deemed a prospectus. It is pertinent to note that the document has to be issued to the public and not a particular set of persons. Even if an advertisement is made in a newspaper regarding certain shares left for purchase by the company, it shall constitute a prospectus, as has been held by the Hon’ble Calcutta High Court in Pramatha Nath Sanyal v. Kali Kumar Dutt (1924). From the perspective of the Investor

In order to be able to make an informed decision regarding an investment, an investor must have access to all the information about a company before investing in it. Institutional investors might receive such information without much trouble. However, it is the retail investors whose interest might be compromised if such information is not provided in due course. Thus, a prospectus becomes the most crucial document for any investor intending to invest in a company. This is also the reason why the company law mandates the filing of a prospectus every time before raising a public investment. It can also be safe to infer here that issuing a prospectus is one of the means of ensuring good corporate governance practices in a company as it encourages transparency, accountability and responsibility.

Golden Rule by VC Kinderseley

The ‘Golden Rule’ of the prospectus was propounded by Judge VC Kinderseley in the landmark judgement of The New Brunswick Railway Company v. Muggeridge (1859). In this case, it was held that “Prospectus is one of the means by which the investor is informed about the soundness of the company’s venture.” The essence of the rule is that it is mandatory on part of the company to issue a prospectus; it is not only required to accurately put forth all the relevant facts and information but also ensure that it does not hide any information which might affect the decision of an investor. The rule is also known as the ‘Golden Legacy’ as has been described by Judge Pagewood in Henderson v. Lacon (1865).

This aforementioned rule has been reflected under various provisions of the Companies Act, 2013 which seeks to protect the interests of investors by providing comprehensive and elaborative guidelines and requiring relevant disclosure of material facts to ascertain the financial soundness of a company.

Essentials for a document to be called as a prospectus

The essential conditions required to be fulfilled for a document to be considered as a prospectus under the Indian company law are as follows:

  1. Invitation to the Public – One of the most important points that one must remember is that a prospectus is an invitation to offer rather than an offer itself. This means that a company makes an open declaration to the public at large that some of its securities are available for subscription. A document shall be deemed to be an invitation to the public only if it is open for any person to subscribe, though there may be a possibility that ultimately the securities may not be issued to him owing to oversubscription or any other disqualification.
  2. Invitation by the company – The prospectus must be issued by the company itself that wishes to raise the funds. Even if all the requisite disclosures are made available by the public by some other authority, that would not satisfy the criteria for making the invitation. However, an entity, on behalf of the company or on the authorisation of the company, may follow the stipulated process in order to make an invitation to offer to the public. Hence, an invitation to offer must be made by the company itself or on behalf of the company by some other authority authorised by the company.
  3. Nature of document and particulars therein – A prospectus shall be in the nature of an invitation to offer, allowing subscription to the securities of the company. Any document merely disclosing the details of the securities shall not be considered a prospectus. It must fulfil all the required stipulations that have been provided under the Companies Act, which have been discussed in the later section of the article.
  4. Information regarding securities of the company – A prospectus is required to contain all the details regarding the securities. The prospectus must specify the nature of securities, whether equity-based or debt-based. It must also specify the category as to whether it is an equity or preference share, debenture, bond, warrant, etc. It must specify the number of securities available for subscription. It must also provide for other particulars, such as redemption, rate of interest, etc., as may be applicable to the category of securities.

Advertisement for a prospectus under Company Law

Section 30 of the Act provides for certain particulars to be mentioned whenever a prospectus is being advertised in any manner for call for subscription to securities. These particulars include specifying the contents of the memorandum regarding the primary object for raising funds, liability of the members, amount of total share capital, names of the signatories and the number of shares subscribed by each of them, and the capital structure of the company.

Types of prospectus under Company Law

M&A

The definition of prospectus under Section 2(70) is an inclusive definition. It provides that a prospectus shall include a Shelf Prospectus (as mentioned under Section 31), a Red Herring Prospectus (as mentioned under Section 32), or any other document inviting applications for subscription/purchase of securities of the company. The various categories of prospectus under the Companies Act, 2013 have been discussed hereafter.

Shelf prospectus

Drafting a prospectus is a cumbersome process as it requires a number of disclosures and information to be passed on to the investor. It may also be possible that a company makes multiple public offers in one financial year itself. In such a case, it will become nearly impossible for the company to draft an entirely new prospectus every time. Yet, it is also crucial to note that significant changes may take place in the financial status of the company. To balance the interests of the company as well as that of investors, the law provides for the concept of shelf prospectus.

Explanation to Section 31 of the Companies Act, 2013 provides that “the expression “shelf prospectus” means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.” A company issues a shelf prospectus when it has to offer for subscription by the public, more than one round of issue. Shelf prospectus is a single prospectus that can hold good for multiple public offers.

The Securities Exchange Board of India (SEBI) shall have the power to prescribe the class or classes of listed companies that may be allowed to file a shelf prospectus. The validity of a shelf prospectus shall not exceed one year from the date of the first offer. The provision also provides a more stringent rule for disclosures by the company issuing a shelf prospectus.

An information memorandum has to be filed by the company while filing a shelf prospectus, containing the following material facts:

  • new charges created;
  • all the changes in the financial position that have occurred after the first offer of securities or the previous offer of securities and before the succeeding offer of securities; and
  • such other changes as may be prescribed.

Such an information memorandum must be filed with the Registrar within the prescribed time period (three months) prior to the issue of the second or subsequent offer made under the shelf prospectus.

Further, it is also the obligation of the company to inform an investor about the changes if they have been allotted the securities in advance before the adjustments. Further, based on such information, an investor has also given the right to withdraw their application and they will be refunded their money within fifteen days thereof.

Red Herring prospectus

Though most of us imagine big companies when talking about investments and funding, mid-size and small companies also require investments and they also make public offers. To safeguard their rights and enable them to have better access to finance, the law provides for red herring prospectus. Explanation to Section 32 of the Companies Act, 2013 provides the definition of a red herring prospectus as “the expression “red herring prospectus” means a prospectus which does not include complete particulars of the quantum or price of the securities included therein.” A red herring prospectus is a prospectus wherein information regarding either the quantity of securities or the price of securities is not disclosed by the company. Rather, the company only provides a price band. This enables a company to gauge the worth of its securities and enables them to achieve the requisite minimum subscription, which may not otherwise be possible had they already supplied the entire information . 

A red herring prospectus is subjected to same regulations as a prospectus. It has to be filed before the Registrar of Companies at least three days before the issue has to be made public. Further, the company must file the complete details of the issue with the Registrar and the SEBI after the securities has been duly subscribed to.

Abridged prospectus

A prospectus could run into hundreds of pages in a single issue, which may prove to be a hectic task for retail investors. Retail investors, having limited access to financial knowledge as well as resources, might not be competent enough to understand the intricate details mentioned in the prospectus. A solution to this problem is an abridged prospectus. 

Section 2(1) of the Companies Act, 2013 defines an abridged prospectus as a memorandum containing the salient features of an issue. The features to be included in an abridged prospectus are to be provided by  SEBI. Further, Section 33 of the Act mandates for annexing an abridged prospectus along with form for application of purchase of securities. However, the proviso to sub-section (1) provides that this requirement may be dispensed with where the form of application was issued for:

  • “in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to such securities; or
  • in relation to securities which were not offered to the public.”

Section 33(3) of the Act provides that if the company fails to comply with the provisions of abridged prospectus as discussed above, it shall be subjected to a penalty of up to Rs.50,000 for every default.

Deemed Prospectus

When a company wishes to issue its securities through an intermediary, the document containing the details of such securities is considered a deemed prospectus. Section 25(1) of the Companies Act, 2013 governs the deemed prospectus. The document shall be a deemed prospectus for the company whose securities are being offered to the public. 

Process for filing and issuing a prospectus under Company Law

Contents

For filing and issuing the prospectus of a public company, it must be signed and dated and contain all the necessary information as stated under Section 26 of the Companies Act, 2013:

  1. Name and other crucial information, such as the registered address of the office, its secretary, auditor, etc.;
  2. The dates of issue, including the opening date and the closing date;
  3. Undertakings of the Board of Directors regarding separate bank accounts for the purpose of keeping receipts of the issue;
  4. Undertakings of the Board of Directors regarding the details of utilisation and non-utilisation of receipts of previous issues;
  5. Consent of the directors, auditors, and bankers to the issue, and expert opinions;
  6. The details of the resolution passed for the issue;
  7. Procedure and time scheduled for the allotment of securities;
  8. The capital structure of the company;
  9. The objective of the issue;
  10. The objective of the business and its location;
  11. Particulars related to risk factors of the specific project, gestation period of the project, any pending legal action and other important details related to the project;
  12. The amount is payable on the premium;
  13. Details of directors, their remuneration and the extent of their interest in the company;
  14. Reports for financial information such as auditor’s report, report of profit and loss of the five financial years, business and transaction reports, statement of compliance with the provisions of the Act and any other report.

As per Section 26(4) of the Companies Act, 2013, the company issuing the prospectus has to deliver a copy of the prospectus, signed by every person whose name has been mentioned in the prospectus as a director of the company or the attorney of the director, to the Registrar on or before the date of publication. 

Delivery of a copy of the prospectus to the registrar

As per Section 26(6) of the Companies Act 2013, the prospectus shall duly state that a copy of the prospectus has been served to the registrar. It should also mention the documents submitted to the registrar along with the prospectus.

Registration of a prospectus

Section 26(7) states when the registrar can register a prospectus when:

  1. It fulfils the requirements of the provision; and
  2. It contains the written consent of all the persons named in the prospectus. 

The invalidity of a prospectus

The prospectus is considered invalid if it is not issued within 90 days from the date of delivery to the Registrar.

Contravention of Section 26

The punishment for contravention of the mandatory provisions is provided under Section 26(9) of the Act, which includes a fine of not less than Rs. 50,000 extending up to Rs. 3,00,000.

Any person knowingly participating in the issue of prospectus even after knowing that it is in contravention of the provisions shall be punished with imprisonment up to a term of 3 years, or a fine of more than Rs. 50,000 not exceeding Rs. 3,00,000.

Liability for misstatements in a prospectus under Company Law

A prospectus is used by potential investors to gather information about the company. Thus, it is the duty of the company and its authorised persons to make true and correct statements in the prospectus. Generally, when false or incorrect information is added to the prospectus, it becomes a misstatement. Even an omission of important information amounts to a misstatement in a prospectus. Making a false or misleading statement thus entails certain liabilities. Under the Companies Act, 2013, there are two types of liability for misstatements in the prospectus.

Civil Liability

Civil liability under the Companies Act, 2013 is provided under Section 35. It provides that where a person has subscribed to the securities of the company acting on any misstatement included in the prospectus and has consequently suffered any loss, the company and the persons authorising the issue of such prospectus are liable for such loss, provided that certain conditions are fulfilled. These conditions include:

  1. Subscription to the securities acting upon the misstatement
  2. Loss or damages due to such misstatement
  3. Knowledge of the Defendant must be proved by the Plaintiff
  4. Such misstatement must be material to the facts

If the above conditions are met, the Plaintiff can claim remedies against the company as well as against the authorised personnel. The remedies include rescission of the contract, damages, and damages for the non-disclosure of material facts.

Criminal Liability

Apart from the civil liability in case of misstatements, Section 34 of the Act also provides the liability of the authorised personnel for the misstatements in the prospectus. Criminal liability has been provided under Section 447 of the Act. In case of fraud on the Plaintiff (investor of the company), a criminal suit can be filed against the following persons:

  1. All the directors authorising the issue of the prospectus
  2. All the proposed directors of the company
  3. Each promoter
  4. Any expert involved in the issue

Section 447 of the Act prescribes a minimum imprisonment of six months but not more than ten years, along with a fine which shall not be less than the amount of damages suffered but not more than three times of such amount. The proviso to the provision provides that in case the issue involves a public interest, the minimum term of imprisonment of the aforesaid persons shall be three years. 

Important judicial pronouncements

Kiran Mehta v. Universal Luggage Manufacturing Co. Ltd. (1988)

In this case, the Plaintiff filed a PIL against a company alleging that the company had issued a prospectus containing false statements. It was stated that the Plaintiff himself did not have any interest in the matter but filed the case as the statements were likely to confuse or mislead the general public. The Hon’ble Bombay High Court dismissed the case stating that a locus standi of the Plaintiff was required to file such a case. 

Vijay Kumar Gupta v. Eagle Paint & Pigment Industries Ltd. (1997)

In this case, the question before the Company Law Board (now replaced by the National Company Law Tribunal) was whether a private company could issue advertisements for inviting deposits from the public. It was held by the Board that a private company cannot do so as per the provisions of the Act. Moreover, when the company accepts deposits from its members or directors, it has to obtain a declaration stating that the deposits are not a debt to the company.

Mohandas Shenoy Adige v. Securities and Exchange Board of India (2021)

In this case, the question raised by the complainant was whether the non-compliance with the statements made in the prospectus amounted to misstatement in the prospectus. The allegations included that the company raised public funds only to syphon funds to the group of companies. The Securities Appellate Board held that no case of misstatement was found as the complainant was unable to establish that the funds were actually being syphoned. In case of no fact-based finding, the non-adherence with the statements in the prospectus cannot be held to be misstatements. It was further held that “If a statement made in the prospectus is not adhered to by the Company it does not become a misstatement. At best it can be a case of the Company violating the terms and conditions of the prospectus”. 

Conclusion

A prospectus is an official document containing crucial information about the company and the investment round for the perusal by the public at large so that they can invest in the securities of the company. Every company that wants to raise investments from the public has to file a prospectus with the Registrar of Companies and circulate it for the information of the potential investors. Under the Companies Act, 2013, there are various kinds of prospectus. Each of these types serves a distinct purpose, as has been elaborated in the article. However, each of them has to fulfil the basic criteria of a prospectus. The conditions for a valid prospectus are to be complied with irrespective of the kind of prospectus being issued by the company.

Based on the kind of investment round that the company wishes to raise, it can adopt the type of prospectus that has to be issued. The regulation of each kind of prospectus is provided under the provisions of the Companies Act, 2013 as well as various Regulations issued by the Securities Exchange Board of India (SEBI). Compliance with all the regulations is mandatory for raising investment from the public. Moreover, such information provided under the prospectus shall be carefully added as the provisions of the Companies Act provide punishment in the form of a fine for misrepresentation by the company under the prospectus.

Frequently Asked Questions (FAQs)

Whether a document circulated in an envelope marked “confidential” for the sale of securities of a company be deemed as a prospectus?

When a document is circulated to a selected audience in an envelope marked as “confidential”, it is not for the purpose of an advertisement to the public. In such a case, it cannot be said that the company intends to raise public funds through the issue of securities. Even if the contents of the document include an offer for the sale of securities of the company, such a document cannot be said to be a prospectus.

Upon whom would the criminal liability fall for misstatements made in a prospectus?

Under the Company law, the ‘Golden Rule’ of issuing a prospectus is followed. The same has been adopted under the Companies Act, 2013 as well. Under Section 34 of the Act, every person who authorised the issue of the prospectus shall be liable for any misstatements shall be punished under Section 447 of the Act. Section 447 of the Act prescribes a punishment of not less than six months which may extend up to ten years, and also be liable for fine which may extend up to three times of the amount of fraud. 

What is the ‘Golden Rule’ of issuing a prospectus?

The ‘Golden Rule’ of issuing a prospectus provides that if a company is making any voluntary statements regarding the financial health of the business, it must include true and verified information. A prospectus is issued for the benefit of the potential investors, which are from the general public. In case there are any misstatements, it would amount to fraud with the public. Thus, the company issuing a prospectus must include only true and correct information for the perusal of the public.

References

  • Avtar Singh, Company Law (EBC Reader 2021)
  • Dr. G.K. Kapoor, Company Law and Practice (Taxmann 2021)
  • A Ramaiya, Guide to the Companies Act (Lexis Nexis 2020)
  • Companies Act, 2013
  • Companies (Incorporation) Rules, 2014
  • Companies (Prospectus and Allotment of Securities) Rules, 2014
  • Company Law Ready Reckoner (Taxmann 2021)

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Labour laws in Kerala

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This article is written by Pruthvi Ramkanta Hegde. This article emphasises the various legislations with regard to labour laws in the state of Kerala. The article further covers the different provisions, objectives, and major definitions of the different labour laws in Kerala. The article further highlighted the legislation for women’s and children’s safety in the workplace and also highlighted the challenges and recommendations for the existing challenges.

Table of Contents

Introduction

Work is not just about earning. It’s about maintaining the dignity, fairness, and safety of the workers too. In this regard, labour laws play an important role in protecting the interest of both employer and employee. It establishes a fair and balanced approach between employee and employer. The labour laws are like a rule book, it guides how employers and employees work together. The Seventh Schedule of the Indian Constitution, which allocates powers between the Union and State legislatures. The Seventh Schedule covers three lists that includes Union List, the State List, and the Concurrent List. 

While the Union List delineates subjects exclusively under the jurisdiction of the Union government, Entry 55 pertains to the regulation of labour and safety in mines and oilfields. The Concurrent List entry number, 22, 23, 24, 25 outlines matters on which both the Parliament and State Legislatures have shared responsibility for making laws. Specifically, these entry numbers include provisions related to trade unions, social security, welfare of labour, and education. This shared responsibility allows for a collaborative approach in crafting legislation that addresses the diverse needs of workers and employers in Kerala. In this regard in Kerala, there are different legislations enacted by the government in order to provide definite rules for this purpose. These rules cover many things like purpose, working hours, minimum wages, eligibility of the employee to work, provisions for women’s safety, equal opportunity and some other aspects. 

Evolution of labour department in Kerala

After the Second World War, a lot of industries started growing up in Kerala, to address emerging labour issues, well-established departments became more essential. In this regard, Diwan Sir C.P Ramaswamy Iyer took the initiative to establish the labour department in Kerala. Before that, it was part of the industrial department. In response to the growing importance of handling labour-related issues, H.H Maharaj, Sri Chithira Thiruynal Balarama Varma, approved the creation of the position of the Labour Commissioner on January 26, 1946. This marked the beginning of the labour department operating independently from the industrial department.

Different legislations relating to labour laws in Kerala 

In Kerala, various laws govern labour rights and working conditions. These include covering areas such as minimum wages, working hours, safety regulations, and provisions for employee welfare. Additionally, specific legislation addresses issues like trade unions, industrial disputes, social security, and women’s rights in the workplace. The major legislation includes as follows:

Kerala Shops and Commercial Establishment Act, 1960

The Kerala Shops and Commercial Establishment Act (hereinafter referred to as ‘Act’) was enacted by the state of Kerala in 1960. The Act applies to the entire state of Kerala. Initially, the Act is applicable to specific areas, including Trivandrum City, municipalities under the Madras District Municipalities Act 1920, certain areas in the Malabar district, and areas classified by the government under specific Acts. The government can extend the application of this law to other areas by providing three month’s notice through an official announcement in the Gazette.

For detailed analysis of the Kerala Shops and Commercial Establishment Act (1960), you can also refer to this link.

Objective of the Act

The Act in its preamble has stated the objective  behind the enactment of this Act. The main purpose is to bring definite rules for governing working conditions and employment in shops and businesses throughout the state of Kerala. The objectives include establishing well-structured legislation in order to simplify existing regulations, also aims to protect worker’s rights and make sure the rules are the same everywhere in the state. The Act also allows for future adjustments if needed. The Act aims to create fair and clear guidelines for the working structure of people who work in shops and businesses throughout the state of Kerala.

Important definitions of Kerala Shops and Commercial Establishment Act, 1960

  • Apprentice – Section 2(1) of the Act, an ‘apprentice’ is a person who has attained at least twelve years old and is employed by an employer to receive training in a specific trade or profession. The training can be provided either by the employer or by someone else involved in the same trade or profession.
  • Child- As per Section 2(2) of the Act, a ‘child’ means a person who has not attained the age of 14 years.
  • Commercial establishment – Section 2(4) of the Act, ‘commercial establishment’ refers to places like businesses involved in commerce, industry, trade, banking or insurance. It also includes office hotels, restaurants, boarding houses, cafes and other places providing refreshments. Further definition covers services such as administrative work and entertainment venues like theatres. The government can declare other place’s commercial establishments through an official announcement. However, it doesn’t include factories covered by the Factories Act of 1948.
  • Day- Section 2(5) of the Act, defines ‘days’ as a duration of twenty four hours starting from midnight. However, if an employee starts working before midnight and their work continues past midnight, their day starts when they begin working, but not at midnight.
  • Employee- Section 2(6) of the Act defines the ‘employee’ as a person who works mainly in connection with a particular establishment, and this includes apprentices.
  • Employer- Section 2(7) of the Act, defines the ‘employer’ as a person who owns or has the ultimate control over the affairs of an establishment. The definition also includes managers, agents, or any other person who is responsible for general management.
  • Shop- As per Section 2(15) of the Act, ‘shop’ refers to any place where a trade or business is conducted, or services are offered to customers. This includes offices, storage rooms, warehouses, or any other places related to the business. However, it does not include commercial establishments and also if a shop is connected to a factory where the shop employees receive benefits under the Factories Act 1948, it is not considered a shop under this Act.
  • Week- Section 2(17) of the Act, ‘week’ is a span of seven days, starting from midnight on Saturday night. In certain areas, the starting night of the week may be approved in writing by the prescribed authority.

Exemptions from Kerala Shops and Commercial Establishment Act, 1960

Section 3 of the Act provides exemptions for certain groups of persons on whom this Act would not be applicable, and also prescribes exceptions with regard to working hours. Section 3(1) of the Act provides that this Act would not be applicable on the following person-  

  • Managers in any establishment.
  • Travelling employees, canvassers, caretakers not on muster rolls.
  • Government, local authorities, Reserve Bank of India, and cantonment authorities.
  • Mines and oil fields establishments.
  • Temporary establishments in bazaars during fairs or festivals, up to 15 days.
  • Non-factory establishments in Kerala covered by a separate law.

Exemptions from requirements under Section 10

Section 3(2) of the Act prescribes the provisions for the specific situations or establishments that are not subject to the regulations mentioned in Section 10 of the Act, that include:

  • Hospitals and institutions for sick, infirm, destitute, or mentally unfit.
  • Chemist’s or druggist’s shops specified by the Government.
  • Clubs, residential hotels, hostels, and establishments in boarding schools related to boarding and lodging of pupils.
  • Stalls and refreshment rooms at railway stations, docks, wharves, or ports.

Power of Government to apply Act and modify notifications

As per Section 4 the government has the power to decide if certain people or businesses should follow the rules mentioned in this law. They can choose to apply some or all of the rules to specific groups of people or businesses, and they can also change or cancel these decisions whenever they want.

Exemptions granted by the Government

As per Section 5 if the government believes it’s necessary for public interest or if there are special circumstances, they can decide that certain businesses or groups of people don’t have to follow all the rules of this law. They can do this either permanently or for a specific time period, but they may still put some conditions or restrictions on these exemptions.

Registration of establishments 

Section 5A of the Act prescribes the different rules for the registration of establishments such as shops or commercial entities.

Registration process- The employer of every establishment is required to submit an application to the authority specified by the Government. It is referred to as competent authority. This application must be made in the prescribed form. The payment of designated fees needs to be paid in order to obtain a registration certificate for the establishment.

Timeline for application- The application must be submitted within sixty days from the date when this Section comes into effect. For establishments commencing operations after the enactment of this Section, the application deadline is within sixty days from the commencement of work.

Application details: The application should include the following particulars:

  • Name of the employer and the manager 
  • Postal address of the establishment
  • Name of the establishment 
  • Category of the establishment 
  • Number and names of employees in the establishment 
  • Any other particular as prescribed by regulations

Process of registration- Upon receiving the application, the competent authority will examine it. If the authorities are satisfied that the application complies with the provisions of this Act and associated rules, the authority will register the establishment and issue a registration certificate in the prescribed form to the employer. This registration certificate would be conclusive evidence of the completion of the registration process. 

Validity and renewal- The registration certificate is valid only for the year in which it is granted, but can be renewed annually. An application for renewal must be submitted at least thirty days before the certificate’s expiration, with the prescribed fees. The certificate remains effective until the renewal is granted, or the application is rejected. 

Compliance and renewal: The competent authority will not grant or renew a registration certificate unless it is convinced that the establishment has complied with the Act’s provisions and related rules.

Suspension or cancellation: After providing the certificate holder with an opportunity to be heard, the competent authority may by order suspend or cancel a registration certificate, if it believes that the certificate was obtained through misrepresentation or fraud or if the employer has violated any provisions of the Act or associated rules.

Appeal  

Section 5B of the Act prescribes that if someone is unhappy with an authority’s decisions that denied their registration certificate, refused its renewal, or suspended it, they can have the option of appeal. The appeal must be made within 60 days of receiving the decision, and a specified fee must be paid. The government will identify the appropriate authority for appeals through a notification in its official Gazette. This designated authority can then review the decision and either confirm, change, or overturn the original decision.

Duty of the employer

Section 5C of the Act, states the duty of the employer with regard to the registration certificates for their establishments. It includes:

  • The employer must display the registration certificate prominently at the establishment. If there are any changes to the information provided during the application for registration, the employer must inform the competent authority and the relevant inspector within seven days. This notification should be accompanied by a prescribed fee.
  • After receiving the notice and fee, the competent authority will review the information. If everything is correct, they will update the registration certificate or issue a new one.
  • If the employer decides to close the establishment, they must notify the competent authority and the inspector within ten days. Once the competent authority verifies the closure, they will remove the establishment from the register and cancel the registration certificate.

Sections 5A, 5B and 5C were inserted in the Amendment Act of 1969.

Hours of work

Chapter II of the Act prescribes the hours of work of the employees, including:

  • Section 6 states that employees in any establishment should not work more than eight hours a day or forty-eight hours a week. However, total work hours including overtime should not exceed ten hours in a day except during stock-taking and account preparation or fifty hours in a quarter.
  • Section 7 states that, if an employee works more than eight hours a day or forty-eight hours a week, they are entitled to twice their ordinary wage rate for overtime. The ordinary rate of wages includes basic wages, allowances, and certain benefits, but excludes bonuses.
  • Section 8 and Section 9 state that, an employee’s daily work period should not exceed four hours without a rest break of at least one hour. The total daily work, including rest breaks, should not exceed ten and a half hours.
  • Section 10 states that establishments must follow the government-specified opening and closing hours. However, customers present at closing time may be served for an additional fifteen minutes. The government may also set opening and closing times for specific establishments or areas.
  • Section 11 states that shops must remain closed one day a week as specified by the shopkeeper and displayed in the shop. Employees are entitled to a whole day off each week. However, this doesn’t apply if the worker has worked for fewer than six days in the week, or if they have already been given a day off when the shop was closed. Wage deductions should not be made for holidays, and employees should be paid as if they worked their usual day if a holiday falls on their scheduled workday.

Holidays and leaves for the employees

Chapter III of the Act prescribes the holidays and leave for the employees. Section 12 of the Act, prescribes the provisions for the application of Chapter III that deals with holidays and leave. Accordingly, this Chapter’s rules won’t override any rights that employees might have under other laws or their employment agreements. However, if those agreements offer more extended leave or additional weekly holidays than what is stated in this chapter, the employee can still avail themselves of those longer periods. It is important to note that, for the purposes of this chapter, leave does not include regular weekly holidays or holidays for festivals or similar events, except as outlined in Section 13. Accordingly, following Sections prescribe the various rules in this regard, that include as following:

Section 13 contains the provision for annual leave with wages. It states that after twelve months of continuous service, every employee is entitled to twelve days of holidays with wages. Additionally, every twelve months employees get:

  • Up to twelve days of leave with wages for sickness or accidents.
  • Up to twelve days of casual leave with wages for reasonable grounds.

If an employee is not granted entitled holidays and is discharged or quits, the employer must pay for those holidays. Further, this Section states that, If an employee is fired while sick or injured, the employer must pay them for the sick leave they were entitled to. Even if there are breaks in employment due to sickness, authorised leave, lockouts, legal strikes, or short periods of unemployment, employees are still considered to have worked continuously for a year. Employees working in certain places, like hostels or boarding schools, get these benefits too, but the number of days off may be different based on how long they have been working.

Section 13A was inserted after the Amendment Act of 1969. The Section states that employees undergoing sterilisation are entitled to special casual leave with wages:

  • Six days for male employees.
  • Fourteen days for female employees.

If an employee is discharged during this leave period, the employer must pay for the entitled special casual leave. However, the leave starts from the day when the employee undergoes such an operation.

Section 12 states that leave, except as mentioned in Section 13, doesn’t include weekly holidays or holidays for festivals. If any other law or agreement provides longer leave or more weekly holidays, those terms will apply.

Section 14 states that during a period of leave as stipulated in section 13 or section 13A, the employee should be paid at a rate equivalent to their average daily earnings from their regular work, excluding any overtime pay and bonuses, but including dearness allowance and any benefits received from the employer such as meals or discounted food and other items, for the days they worked in the month just before taking leave.

Section 15 states that inspectors can take legal action on behalf of employees to recover any unpaid amounts owed by employers under this Chapter.

Section 16 states that, if the government believes that the leave rules of an establishment are at least as favourable as those in this Chapter, it may exempt the establishment from certain or all provisions of this chapter with specified conditions.

Application of wages

Chapter IV of the Act prescribes the provisions related to wages and the application of the Payment of Wages Act, of 1936. Accordingly, Section 17 of the Act, prescribes the provisions about how the Payment of Wages Act, 1936 applies to employees in certain establishments. The government has the authority to decide, through a notification, whether the provisions of this Act should be applied to all employees or specific classes of employees in establishments. If the government decides to apply the provisions of the Payment of Wages Act to a particular establishment, the Inspector will be responsible for enforcing the Payment of Wages Act within that area. 

Rules for the dismissal of an employee

Section 18 of the Act outlines the rules regarding the dismissal of an employee by an employer:

  • An employer cannot dismiss an employee who has been working continuously for at least six months without a valid reason. If dismissal is necessary, the employer must provide one month’s prior notice or pay the employee for that period.
  • If an employee feels unfairly dismissed, they can appeal to a designated authority. The appeal must be made within a specified time. It can be based on the claim that there is no valid reason for dismissal or that the alleged misconduct did not occur.
  • The authority handling the appeal can either reject the appeal or order the reinstatement of the employee with or without back wages. Alternatively, Section 18(4A) is inserted by the Amendment Act of 1979 states that authority may direct the employer to pay compensation without reinstating the employee.
  • If reinstatement is ordered and the employer fails to comply, the authority can specify a compensation amount to be paid by the employer.
  • The decision of the appellate authority is final and binding on both the employer and the employee. Such a decision cannot be challenged in court, and both parties must adhere to the decision within the specified timeframe.
  • If the employer fails to pay the required compensation, it can be recovered as overdue land revenue under the applicable Revenue Recovery Act.

Employment of children and women 

Section 19 and Section 20 of the Act discuss rules related to the employment of children, women, and individuals below seventeen years old. These Sections state that:

  • Section 19 of the Act prohibits the employment of the child. Children are not allowed to work in any workplace, except in specific jobs defined by the government for apprenticeship.
  • Section 20 prohibits the employment of women at night time and individuals below seventeen years. It states that women and individuals below seventeen years old cannot be employed or allowed to work in any establishment before 6 A.M. or after 7 P.M. This aims to protect them from working during the early morning or late evening hours.

Health and safety of the employee

Criminal litigation

Chapter VI of the Act discusses rules related to the health and safety of employees in workplaces. It includes various provisions which state that:

Section 21 of the Act, covers three major aspects that include:

  • Cleanliness- Every workplace must be kept clean and free from unpleasant odours, and regular cleaning, including methods like lime washing, colour washing, painting, and disinfecting should be followed.
  • Ventilation-  Workplaces must have proper ventilation as per defined standards.
  • Lighting- Adequate lighting is required during working hours.

If an Inspector finds that a workplace is not meeting cleanliness, lighting, or ventilation standards, they can issue a written order to the employer, specifying necessary measures and a deadline for compliance.

Precautions against fire

Section 22 of the Act prescribes the provisions for the precautions against fire. It states that workplaces must implement prescribed precautions to prevent fire hazards.

Appeals

Section 23 of the Act, contains the provisions for the appeals against an Inspector’s order under this Chapter. The appeal must be made to the designated authority within a specified time.

Apportionment of expenses

As per Section 24, if someone, either the owner or occupier of a workplace incurs expenses to meet the requirements of cleanliness, ventilation, or fire precautions, if such person believes that another party should share the expenses, they can apply to the local court. The court can issue an order by determining a fair distribution of expenses by considering all relevant circumstances. It includes any existing contracts between the parties, too. The court may also order for the nullification of any contracts inconsistent with its terms.

Enforcement and inspection

Chapter VII of the Act prescribes the provisions for the enforcement and inspection. It includes: 

  • Appointment of Inspectors- Section 25 of the Act states that the government can appoint officers or individuals, through a Gazette notification, as Inspectors for implementing this Act. These Inspectors will have assigned local limits.
  • Powers and duties of Inspectors- Section 26 of the Act states that Inspectors within their designated areas and subject to government rules can enter any place which they believe is an establishment at reasonable times with suitable assistants if needed. Inspect premises, relevant registers, records, and notices, and gather evidence from individuals as necessary for enforcing this Act. Inspectors need to exercise other powers essential for the enforcement of this Act. However, individuals cannot be compelled to answer questions or provide evidence that may incriminate them under this Section.
  • Inspector as a public servant- Section 27 of the Act states that any Inspector appointed under section 25 is considered a public servant as per Section 21 of the Indian Penal Code.
  • Submission of required documents- Section 28 of the Act outlines that after an Inspector’s request, every employer must present all registers, records, and notices required under this Act for inspection.

Penalties provisions

Section 29 of the Act prescribes the provisions for the punishments in case of violating the provisions of this Act. Accordingly, it states that:

If anyone breaks the rules of Sections 5A (registration of establishment) and 5C (duties of employer)  of the Act they can be punished in the following ways:

  • A fine of up to two hundred and fifty rupees. If the violation continues after the first conviction, there could be an additional fine of up to ten rupees for each day of the ongoing breach.
  • A fine of up to ten rupees for every day the violation continues after receiving a notice from the competent authority to stop the breach.

Violations of Section 6 (daily and weekly hours), Section 8 (intervals for rest), Section 9 (spread over), Section 10 (opening and closing hours), Section 11 (closing of shops and grant of weekly holidays), Section 13 (annual leave with wages), Section 13A (special casual leave for sterilisation operation), Section 14 (wages during leave period), Section 18 (notice of dismissal), Section 21 (cleanliness, ventilation and lighting), and Section 22 (precaution against fire) will result in fines upon conviction:

  • For a first offence, a fine of up to two hundred and fifty rupees.
  • For a second or subsequent offence, a fine of up to five hundred rupees.

Breaking the rules in Sections 7 (extra wages for overtime work), Section 19 (prohibition of employment of children), Section 20 (prohibition of employment of women and persons below seventeen years during night), Section 28 (employer to produce registers, records etc., for inspection), and Section 30 (maintenance of registers and records and display of notices) can lead to a fine of up to fifty rupees upon conviction. The court cannot consider any offence under this Act or its rules unless:

  • An employee or their union files a complaint within three months of the alleged offence.
  • An Inspector files a complaint within sixty months of learning about the offence.

Only a Magistrate of Second Class or above can hear cases related to offences under this Act or its rules.

Maintenance of registers, records, and display of notices

Section 30 states that an employer must keep and maintain certain registers and records, and also display prescribed notices on the premises of their establishment. This is subject to the general or special orders given by the Government. All these registers and records should be physically present at the establishment to which they relate.

Preservation of certain rights and privileges

Section 31 of the Act contains provisions for the preservation of certain rights. Accordingly, the enactment of this Act does not invalidate any rights or privileges that an employee in any establishment already possesses, on the date when this Act comes into effect. These rights or privileges can stem from other laws, contracts, customs, or agreements applicable to the said establishment. If these existing rights or privileges are more beneficial to the employee than what is provided in this Act, they will be upheld.

Indemnity 

Section 32 of this Act states that if a person does or intends to do anything in good faith, then he shall not be prosecuted for the same under this Act. 

Delegation of powers

Section 33 of the Act states that the Government can grant authority to any officer or subordinate authority, through an official notification in its official Gazette, to carry out some or all of the powers granted to the Government by this Act. However, the power mentioned in Section 34 cannot be delegated. The delegation is subject to any specified restrictions and conditions outlined in the notification. The exercise of the powers delegated under Section 33(1) is under the oversight of the Government or individuals empowered by them for that purpose. The Government retains the authority to control and review the actions or proceedings of any person empowered in this manner.

Power to make rules

Section 34 of the Act outlines the power of the government to make the rules. The Section states that:

  • The Government has the authority to enact rules, as published in the official Gazette, in order to implement the provisions of this Act.
  • Specifically, without limiting the general power mentioned above, these rules can cover the health, safety, and welfare of the employees.
  • When making rules under this section, the Government can decide that breaking these rules could result in a fine of up to fifty rupees.
  • The authority to create these rules, as granted by this section, requires the rules to be made public before they become effective.
  • All rules created under this section must be presented to the Legislative Assembly for at least fourteen days as soon as they are made. During this time, the Legislative Assembly can make changes to the rules, either in the current session or the one immediately following.

Power of government to suspend provisions during fairs and festivals

Section 35 of the Act states that during special occasions related to fairs, festivals, or a series of public holidays, the Government has the authority, through an official Gazette notification, to temporarily suspend the application of all or specific provisions of this Act for a defined period.

Repeal of certain enactments

Section 36 of the Act outlines that starting from the effective date of this Act, in any given area the legislations listed in the Schedule will be repealed in their application to that area. However, any actions taken under those legislations, which could have been performed under this Act, if it was already in force at that time, will be considered as if they were carried out under this Act.

Kerala Labour Welfare Fund Act, 1975

The Kerala Labour Welfare Fund Act, which was enacted in 1975. It applies to the whole state of Kerala. 

Objective 

The purpose of this legislation is to create a fund to support the well-being of labourers and address certain related matters. The Act in its preamble has stated that it is necessary to establish a fund that will help to improve the lives of workers in Kerala and deal with related issues. The main intention of the Act is to protect the lives of workers by providing well-established funds.

Important definitions of Kerala Labour Welfare Fund Act, 1975 

Board: Section 2(a) of the Act, the ‘Board’ refers to the Kerala Labour Welfare Fund Board, which is created as per Section 4 of the Act.

Commissioner: Section 2(b) of the Act, the ‘Commissioner’ is the person appointed as the Labour Welfare Fund Commissioner under Section 22 of the Act.

Contribution: Section 2(c) of the Act, ‘Contribution’ means the amount of money that needs to be paid to the Board. This payment follows the rules outlined in Section 15 of the Act.

Employee- Section 2(d) of the Act, An ‘employee’ means:

General Employee: Any person hired to do work, whether skilled or unskilled, manual, supervisory, clerical, or technical, in a business or company. This includes someone employed for at least thirty days in the past year, whether the employment terms are clearly stated or implied. However, it does not include:

  • Someone employed mainly in a managerial role.
  • Someone holding a certain office or performing managerial functions due to the nature of their duties or the powers vested in them.
  • Apprentices or those working on a part-time basis. An apprentice is someone recognized as such by the established rules of the organisation or declared by the Government.

Government Declaration- Any other person working in a business or company, whom the Government may officially recognize as an employee through a notification. If there’s any uncertainty about whether a person qualifies as an employee under this law, the matter will be decided by the Government or an authorised officer, and their decision will be final.

Employer- Section 2(e) of the Act, An ‘employer’ means any person who hires one or more employees directly or through someone else, whether it’s for themselves or another person. It also includes:

  • In a factory, it refers to a person named under a specific clause (f) of subsection (1) of Section 7 of the Factories Act, 1948, who is identified as the manager.
  • In any other kind of workplace, it refers to any person responsible either for supervising and controlling the employees or for handling the payment of wages.

Establishment- Section 2(f) of the Act includes definitions of ‘establishment’ in a different spectrum, that state:

  • For a factory, a place defined as a factory under the Factories Act, 1948, or any place deemed to be a factory under specific circumstances in that Act.
  • For motor transport undertaking, a business is involved in motor transport as defined in the Motor Transport Workers Act, of 1961.
  • For agricultural Land,  any land used for growing tea, rubber, coffee, cardamom, oil palm, or cocoa, where ten or more persons are employed or were employed on any day in the past twelve months.
  • For commercial establishment or shop, any commercial establishment as defined in the Kerala Shops and Commercial Establishments Act, 1960 or shop that employed two or more persons on any working day in the preceding twelve months. Special provisions apply to such establishments even if the number of employees decreases later.
  • For societies and other businesses any establishment, including a society registered under specific acts, engaged in business, trade, or related work, employing more than twenty persons on any working day in the past twelve months. It excludes establishments of the Central or any State Government.
  • Any other establishment that the Government officially declares through a notification in the Gazette for the purposes of this Act.

Fund- Section 2(g) of the Act, ‘Fund’ refers to the Labour Welfare Fund created under section 3 of this Act.

Inspector- Section 2(f) of the Act, an ‘Inspector’ means a person appointed under section 24 of this Act.

Unpaid accumulation- Section 2(k) of the Act defines ‘unpaid accumulation’. Accordingly, it refers to all payments but not including gratuity, that are owed to an employee, but have not been paid within three years from the date they became due. This applies to payments due both before and after the start of this Act. It includes gratuity that an employee earned after the enactment of this legislation began, but hasn’t been paid within three years from the accrual date. However, it does not include any contributions made by an employer to a provident fund established under the Employees Provident Funds Act, 1952 or any other provident fund set up by the government. 

Labour Welfare Fund

Section 3 of the Act outlines the establishment and management of the Labour Welfare Fund. Accordingly, the government is responsible for creating a fund named the Labour Welfare Fund. This fund serves as a savings pool for receiving payments owed to employees but not yet paid. It is referred to as unpaid accumulations. Employers are obligated to pay these unpaid accumulations to the Board at specified intervals. The Board then credits these amounts to the Labour Welfare Fund. The Board maintains a separate account for these accumulations until their claims are settled according to the procedures outlined in Section 13.

Section 3(2) of the Act includes provisions for the various sources of contributions to the Labour Welfare Fund. The Labour Welfare Fund receives contributions from a variety of sources. This includes-  

  • unpaid accumulations paid to the Board under sub-section (2) of Section 13;
  • fines imposed on employees by employers, 
  • deductions made under specific Section (Section 9) of the Payment of Wages Act, 1936;
  • contributions from both employers and employees;
  • penalty interest under Section 14; 
  • voluntary donations;
  • funds raised by the Board from other sources;
  • amounts transferred under under sub-section (6) of Section 17; and
  • money borrowed under Section 18;
  • unclaimed amounts credited to government as per  Payment of Wages of 1936 and Minimum Wages Act, 1948; and 
  • grants or advances from the Central or State Government or any local authority.

The specified amounts collected from these various sources are managed by different agencies at prescribed intervals by following specified procedures. Additionally, the accounts of the Labour Welfare Fund are maintained and audited according to rules outlined by regulations.

Establishment, constitution, terms, disqualification, and functions of the Board

Establishment of Board 

Section 4 of the Act contains the provisions for the establishment of the Board. The Board is named ‘Kerala Labour Welfare Fund Board’, and it will be set up by the Government. This Board will officially come into existence on a date specified by the Government through a notification in its official Gazette. The Board is like a legal entity that continues to exist over time (perpetual succession), and it has the ability to take legal actions, and it can sue and be sued. It is a body corporate with a common seal.

Constitutions of the Board

Section 5 of the Act, prescribes the provisions for the constitutions of the Board. Accordingly, it includes:

  • The Board will have members appointed by the government, and these members will fall into two categories:
    • Representatives of employers and employees, with an equal number from both groups. The specific number will be decided as per the regulations.
    • Officials and non-officials, also in a number determined by regulations.
  • The Government will choose one member from the Board to serve as its Chairman.
  • The total number of members on the Board, including the Chairman, shall not exceed twenty-five members.
  • Section 6 of the Act states about the appointment of the Chairmen. The Government will officially announce the appointments of the Chairman and other members of the Kerala Labour Welfare Fund Board through an official notification. 

Term of Board members:

Section 7 outlines the terms of Board members, it states that:

  • Members of the Board will have a term of three years from the date of their appointment, but not including official members.
  • Members are eligible for reappointment.
  • A member can continue until their successor is appointed.

Disqualifications of the Board member

Section 8 of the Act, outlines the conditions that disqualify a person from being a member of the Kerala Labour Welfare Fund Board. It also covers the circumstances under which a member can be removed. A person cannot become or continue to be a board member if:

  • They are an officer or employee under the Board.
  • They are undischarged insolvent, which means someone who hasn’t been released from bankruptcy.
  • They are of unsound mind.
  • If someone has been found guilty of a serious crime that shows they lack morals, unless that decision has been reversed, 
  •  if they owe money to the Board and haven’t paid it back yet.

As per Section 8(2) of the Act, the government has the authority to dismiss any board member if:

  • They have acquired any of the disqualifications listed above or,
  • They have been absent from three consecutive board meetings without obtaining leave from the Board.

Resignation of the members

Section 9 of the Act outlines the resignation of the members. It states that if any member except an official member wants to leave their position, they can do so by writing a letter to the Government. Once the Government accepts the resignation, the member is considered to have left the position. If a member’s position becomes vacant unexpectedly, the Government can appoint someone new to the role as soon as possible. The newly appointed member will serve for the remaining time left in the term of the member who left.

Powers of Board

Certain provisions of the Act prescribes the power of the boards, the major provisions are:

  • As per Section 10 of the Act, the Board has the authority to form committees to help with its duties, especially concerning specific tasks mentioned in Section 17(3) of the Act. These committees must include at least one Board member.
  • As per Section 11, any actions taken by the Board or its committees under this Act won’t be considered invalid just because:
    • There’s a vacancy or some problem with how the Board or committee is set up,
    • There’s an issue with how someone was appointed to the committee, or
    • There’s some irregularity in the actions taken, as long as it does not affect the main point of the case.
  • As per Section 18 of the Act, the Board can borrow money when needed, but they have to get permission from the Government first. They can only borrow according to the rules of this Act and any conditions set for borrowing. This money is used for the purposes laid out in the Act.
  • Section 32 states that the Board has the authority to oversee the money that an establishment sets aside specifically for the welfare of its employees. It further states that:
    • The Board can ask the employer of the establishment to show documents about how they’re using the money meant for employee welfare. This helps the Board make sure the money is actually being used for that purpose.
    • The Board can also ask the employer for any information they think is important to understand how the money is being used.
    • If the Board thinks it is necessary, they can give instructions to the employer on how to use the money to improve the welfare of the employees.

Functions of the Board

Section 12 of the Act states the functions of the Board. The main function of the Board is to manage and administer the Fund. Along with this, the Board is also responsible for any additional tasks or duties as per the Act or other regulations related to its functioning.

Procedure for handling the unpaid accumulations

As per Section 13, any money owed to employees but not paid by the employer is considered abandoned property. If the employer pays this money to the board constituted by the government, they are not responsible for paying the employee any more, but only up to the amount paid to the board. Thus,  liability to make payment to the employee to the extent aforesaid shall be deemed to be transferred to the Board 

The board must put up notices and publish them in the newspaper to let employees know they can claim their unpaid money and the Board also needs to publish in its official Gazette. Notices must be posted twice a year for three years in June and December, the month after the money is paid to the board. If there is a question about whether notices were properly given, the board’s certificate saying they were is final. 

Employees have four years to claim their money. If they do, it’s handled by a special authority (Section 15 of the Payment of Wages Act), which follows the provisions of the Payment of Wages Act, 1936 and reimburses the amount. This authority can decide if the claim is valid. If it is, the board must pay the employee accordingly. The board can’t pay more than what was originally handed over to them. If a claim is rejected, the employee can appeal to the District Court within sixty days. The decision of the authority and the District Court is final. If nobody claims the money, or if the claim is rejected, it becomes the property of the state and is added to a Fund. 

To know more about the Payment of Wages Act, refer here.

Contribution to the Welfare Fund

Section 15 outlines the rules and requirements related to contributions to a Fund, it states that:

  • Employees are required to contribute four rupees every six months, and employers need to contribute eight rupees for each employee during the same period. These contributions must be paid to the Fund by employers before the 15th day of July and the 15th day of January each year.
  • Employers can collect the employee’s contribution by deducting it from their wages or using any other specified method. This deduction is considered authorised under the Payment of Wages Act, of 1936.

To know more about payment and deduction, click here. 

Consequences of non-payment to the Welfare Fund

Section 14 has provisions for the rules and consequences for employee failure to pay the contributions funds. It states that:

  • If an employer fails to pay the contributions owed to the fund on time or doesn’t pay the Board the unpaid amounts or fines from employees within the specified period, the commissioner can issue a notice to the employer. The notice requires the employer to pay the amount within a period of at least thirty days from the date of service.
  • If the employer, without a valid reason, doesn’t pay the specified amount within the given period mentioned in the notice, they will be liable to pay an additional penalty. This penalty is in the form of simple interest at a rate of nine percent per annum, and it will be calculated from the date when the amount was originally due.
  • The government may have the authority, under prescribed conditions, to forgive or reduce the entire or a portion of the penalty for any specific period.

Further, as per Section 27 any sum payable to the Board or into the Fund under this Act shall, without prejudice to any other mode of recovery, be recoverable on behalf of the Board as an arrear of public revenue due on land. 

As per Section 16 of the Act, the government has the authority to provide financial support to the Board for the implementation of this Act. This support can come in the form of grants or loans, and the specific terms and conditions attached to each grant or loan will be determined by the government.

Vesting and utilisation of fund

Section 17 of the Act outlines the rules regarding the vesting and application of a Fund. The Section specifically related to the welfare of employees. The Board acts as a trustee for the Fund. It will handle and utilise the fund in accordance with this Act. The Board will use the money in the Fund for covering the expenses of various measures determined by the Government in order to enhance the well-being of employees and their dependents. The Board can use the money for specific activities, such as:

  • Community and social education centres, including reading rooms and libraries
  • Games and sports
  • Vocational training
  • Community necessities
  • Entertainment and recreation
  • Convalescent homes for tuberculosis patients
  • Holiday homes in health resorts
  • Part-time employment for housewives of employees
  • Preschools
  • Higher education
  • Nutritious food for children of employees
  • Employment opportunities for disabled employees
  • Administrative costs of running this Act, including salaries and allowances of staff
  • Other activities to improve living standards and social conditions of labour

It also mentioned in Section 17(3) that if there is a legal requirement that the employer must fulfil such as providing a certain benefit by any law, in such circumstances the employer cannot use this Fund to cover the costs of meeting those legal obligations. Further, the section states that any money collected as unpaid amounts or fines, without considering the other existing legal frameworks or agreements, should be directed and managed by the Board in accordance with the provisions of this Act. 

Section 17(4) of the Act outlines that, with the Government’s approval, the Board can provide grants from the Fund to local authorities or other bodies in order to carry out activities benefiting the welfare of the employee. Section 17(5) states that, if there is a question about whether a specific expense is eligible for the Fund, such matter will be referred to the Government and the Government decision will be final.

Management of board’s fund

Section 19 explains how the Board’s Fund is managed and its accounts are audited. Accordingly it states that:

  • All the Fund that Board receives needs approval from the Government before being deposited. It can be put in certain banks specified by law, and only authorised Board officers can access these accounts.
  • Every year, the Board’s accounts are checked by an auditor, and these certified accounts, along with the audit report, are sent to the Government. 
  • The Government can give instructions to the Board based on these reports, and the Board must follow them.
  • The Government then presents the Board’s accounts and audit report to the State’s Legislative Assembly every year for review.

Investment of funds

Section 20 of the Act contains the deposit and investment of the fund if it cannot be used immediately. Accordingly, if for some reason the Fund or a portion of it cannot be used immediately for the activities mentioned in the Act, in such situations the Board has a specific course of action. The Board will deposit the funds in Government Treasuries or nationalised banks, in scheduled banks, in district cooperative banks, or it can invest the funds in certain specified securities. The types of securities in which the Fund can be invested are specified in Section 20 (a) to (d) and (f) of the Indian Trusts Act, 1882. 

Government power to give direction to the Board

Section 21 of the Act states that the Government has the authority to provide instructions to the Board with regard to the use of the Fund and the implementation of provisions of this Act. These instructions are considered necessary in managing the expenses from the Fund and in achieving the objectives of this Act. It is the duty of the Board to follow and comply with these directions given by the government.

Appointment of various officers

Commissioner appointment, powers, and duties

Section 22 of the Act contains the provisions for the appointment, powers, and duties of a Commissioner for the Labour Welfare Fund. The government has the authority to appoint a Commissioner for the Labour Welfare Fund. This Commissioner will serve as the Chief Executive Officer of the Board and will be responsible for managing the Fund. While appointing the Commissioner the nature of service, and the salary scale for the Commissioner will be considered in accordance with the established guidelines. The Commissioner’s main responsibility is to determine if the provisions of this Act and the established rules are properly enforced or not. To fulfil this duty, the Commissioner has the power to issue orders that are in line with the Act and its rules. These orders can cover a range of matters, and the Commissioner may issue orders to implement decisions made by the Board under this Act.

Appointment of Finance Officer

As per Section 23 of the Act, the government will appoint a Finance Officer for the Board through an official announcement in the Gazette. The Finance Officer will have specific powers and duties, and these will be determined as per prescribed rules. The terms and conditions of the Finance Officer’s appointment, the nature of their service, and their salary scale will be determined according to established guidelines.

Appointment of Inspectors

As per Section 24 of the Act, the government can appoint Inspectors, through an official announcement in the Gazette. These Inspectors should have the qualifications specified in the rules. The government can specify the geographical areas as local limits and types of establishments where these Inspectors will carry out their duties. Within their designated area an Inspector has the authority to:

  • Conduct examinations and inquiries to ensure in accordance with the provisions of this Act.
  • Request the employer to produce any required registers and documents related to the amounts payable to the Fund.
  • Enter premises with suitable assistants during reasonable hours.
  • Exercise any additional powers as specified in the established rules.

Appointment of board staff

As per Section 25 of the Act, the Board has the authority to hire a suitable number of officers and other employees required to fulfil its duties under this Act. The terms and conditions of the appointment, including the nature of service and salary scales, for the officers and staff will be determined according to regulations set by the Board.

Penalty provisions 

Penalty for obstructing an inspector

Section 28 of the Act contains a penalty for obstructing an inspector or failure to produce documents. It states that if someone intentionally obstructs an Inspector from doing their job or refuses to provide necessary documents for inspection, they can be punished.

  • For a first offence, the punishment could be imprisonment for up to three months, a fine of up to five hundred rupees, or both.
  • For a second or subsequent offence, the penalty may include imprisonment of up to six months, a fine of up to one thousand rupees, or both.

If the court imposes a fine, it should not be less than fifty rupees unless there are specific reasons mentioned in the judgement.

Penalty for non-compliance with Board’s directions

As per Section 33 of the Act, if someone intentionally fails to provide documents or information as required by the Board, or does not follow the directions issued by the Board they can be punished.

  • For the first offence, imprisonment for up to three months, a fine of up to five hundred rupees or both can be ordered.
  • For a second or subsequent offence, the punishment may include imprisonment for up to six months, a fine of up to one thousand rupees, or both.

Penalty for other offences 

Section 28A states that any violation or failure to comply with the Act, rules, or regulations can result in imprisonment of up to six months, a fine of up to five hundred rupees, or both.

The court, when convicting a person for default in paying amounts due to the Fund or Board, can order the recovery of that amount as if it were a fine.

Cognizance of offences

As per Section 29, courts can only consider cases under this Act if a complaint is made by an Inspector with the prior written sanction of the Commissioner. Only a Magistrate of the first class or a higher court can try offences under this Act.

Offences by companies

As per Section 30, if a company commits an offence, the person in charge and responsible for the company’s business at the time of the offence, along with the company, is considered guilty. Individuals in charge can avoid punishment if they prove the offence happened without their knowledge or that they took all due diligence to prevent it. If the offence is committed with the consent or neglect of any director, manager, secretary, or officer, they can also be held guilty.

Limitation of prosecution

As per Section 31, prosecution for offences under this Act must be initiated within one year from the date the Inspector became aware of the offence. No court can consider an offence after three years from the date the offence is alleged to have been committed.

Annual report

As per Section 34 of the Act, the Board is required to prepare and submit a report to the Government at the end of each year. This report should detail the Board’s activities during the previous year and also outline any planned activities for the upcoming year. The Government must present this report to the Legislative Assembly of the State after receiving it.

Supersession of board

As per Section 35 of the Act, if the Government believes that the Board is unable to fulfil its duties, has consistently failed in its responsibilities, or has misused its powers, they have the authority to temporarily dissolve the Board through an official announcement. Before taking this step, the Government must notify the Board, allowing it to provide reasons why it should not be dissolved. Once dissolved, all Board members vacate their positions, and the powers and duties of the Board are transferred to an authority or person designated by the Government. The funds, property, and liabilities of the Board during this period also transfer to the designated authority or person. 

Delegation of power

Section 36 contains the provision about how certain powers can be given to other authorities or officers. Accordingly, it states that:

  • The Government can give certain powers to any authority or officer through an announcement in the Gazette. They can also take back these powers later. However, they cannot delegate the power to make rules under Section 40 of the Act.
  • The Board itself can also give its powers to the Commissioner or other officers by a written order. Again, they can take back these powers later, except for the power to make regulations under Section 42.
  • When powers are given to someone else, there are rules and conditions they must follow, mentioned in the order. The Government or the Board can still control or change how these powers are used.
  • The Government or the Board also has the authority to review and change the actions of any officer who has been given these delegated powers.

Public servants

Section 37 states that certain individuals involved in the functioning of the Board are considered as public servants, it includes:

  • Members of the Board
  • The Commissioner
  • The Finance Officer
  • Inspectors
  • All officers and employees of the Board
  • Anyone else assigned to carry out tasks under this Act

They are all regarded as public servants according to the definition provided in Section 21 of the Indian Penal Code, 1860. This means they are subject to the same legal standards and responsibilities as other public servants outlined in that Act.

Protection from legal action

Section 38 provides protection from legal action for individuals and entities acting in good faith under the provisions of the Act. It states that no lawsuit, prosecution, or legal proceedings can be initiated against any person for any action taken or intended to be taken in good faith in accordance with the Act, its rules, or orders made under it. Similarly, it ensures that neither the Government nor the Board can be sued for any damage caused or likely to be caused by actions taken or intended to be taken in good faith under the Act, its rules, or orders made under it.

Exemption from provisions of Kerala Labour Welfare Fund Act, 1975

Section 39 allows the Government to exempt certain establishments or types of establishments from following some or all of the rules in this Act. The Government can announce this exemption in the Gazette, which is an official government publication. However, this exemption can come with conditions specified in the announcement.

Power of Government

Under this Act, many powers have been provided to the Government, that includes:

Power to call for records

As per Section 26 of the Act, the Government can request and review the records of the Board. They can also inspect these records and oversee how the Board is functioning.

Power to make rules

As per Section 40, the Government through an official announcement in the Gazette has the authority to establish rules to implement the provisions of this Act. These rules can cover various aspects, including but not limited to:

  • The frequency and deadlines for paying sums specified in Section 3 to the Board or the Fund, the method of payment, and the collection agency.
  • Guidelines for maintaining and auditing the Fund’s accounts.
  • Allowances, if any, for Board members.
  • Procedures for deducting employee contributions from wages.
  • The format of notices regarding unpaid amounts.
  • Processes for making grants from the Fund.
  • Procedures for covering administrative expenses from the Fund.
  • Conducting the business of the Board.
  • Delegating the Boar’s powers and functions to the Commissioner or other officers, along with conditions and limitations.
  • Specifying the percentage of the Fund’s annual income that the Board can spend on staff and administrative expenses. 
  • Requirements for maintaining registers and records as per the Act.
  • Guidelines for publishing reports on activities funded by the Fund, including statements of receipts, expenditures, and accounts.
  • Any other matters that may be prescribed.

Power to make regulations 

Section 42 of the Act states that the Board has the authority to create regulations to support and implement the provisions of this Act. The Board needs to notify such regulations through an official announcement in the Gazette. These regulations should not contradict the Act and the rules established under it. The regulations cover various aspects, that includes:

  • Procedures for conducting business during Board meetings, including determining the required attendance.
  • Guidelines for forming temporary associations of individuals for specific purposes.
  • Responsibilities, functions, and terms of service for committee members.
  • Methods and formats for maintaining the Board’s accounts.
  • Any other matters that need or may be prescribed through regulations.
  • Any regulation or its cancellation or modification is only effective if approved by the Government.

The Section also allows the Government to revoke any regulation made under this section through an official announcement in the Gazette.

The Kerala Labour Welfare Fund (Amendment) Bill, 2021

The Kerala Labour Welfare Fund (Amendment) of 2021 passed in the Fifteenth Kerala Legislative Assembly. The proposed bill is intended to make further amendments to the Kerala Labour Welfare Fund Act, of 1975. The Bill primarily focuses on amending the amounts specified in the Act of 1975. Additionally, it repeals a previous ordinance of the Kerala Labour Welfare Fund (Amendment) Ordinance 2020 on February 11, 202, related to the same subject. 

Changes to Section 15 of the Kerala Labour Welfare Fund Act, 1975

As per Section 2 of the Bill made several changes to Section 15 of the Kerala Labour Welfare Fund Act, 1975. Under the previous provision, employees were required to contribute an amount of eight rupees. However, now in Section 15(1) of the Kerala Labour Welfare Fund Act of 1975, the amount that used to be four rupees is now forty-five rupees. Similarly, under the previous provision, employees were required to contribute an amount of eight rupees. But, with the revision, this contribution amount has also been increased to forty-five rupees.

Cancelling and saving 

As per Section 3 of the Bill, Kerala Labour Welfare Fund (Amendment) Ordinance, 2020 is repealed, and it is no longer valid. Even though it’s cancelled, anything done or thought to be done under the main Act with the changes from that Ordinance is still considered as done under the main Act, with the changes from this new Act.

Reasons for the amendment to Kerala Labour Welfare Fund Act, 1975

Earlier, employees had to give four rupees, and employers had to give eight rupees every six months. However, the Fund’s income is not sufficient. Government thought it would be better if employees gave forty-five rupees, and employers also gave forty-five rupees. This extra money would help the fund to do more good things. The government needed to make this change as soon as possible and the assembly wasn’t meeting, so an ordinance on January 16, 2020, was passed. It’s like a temporary rule. They tried to make it a permanent law, but it didn’t work in 2020. So, they kept using the ordinance three more times in the same year because the assembly still wasn’t meeting. They tried again in 2021 to make it a proper law, but it didn’t happen during the assembly sessions. The current Bill aims to replace the latest Ordinance with a permanent law that is passed by the State Legislature.

The Kerala Contract Labour (Regulation and Abolition) Rules, 1974

The Kerala Contract Labour (Regulation and Abolition) Rules of 1974 are the rules made by the Government of Kerala under the Contract Labour (Regulation and Abolition) Act, 1970 which is the central Act. The Government has the authority to make these rules under Section 35 of the Act. These rules were published as required by the Act. 

Major definitions of the Rules are included as follows

  • Appellate Officer- As per the Rule 2(b) of the Rules, ‘Appellate Officer’ refers to the person appointed by the State Government under Section 15(1) of the Act to handle appeals.
  • Board- As per Rule 2(c) of the Rules, ‘Board’ means the State Advisory Contract Labour Board formed under Section 4.
  • Chairman- Rule 2(d) of the Rules, ‘Chairman’ refers to the leader or head of the Board.
  • Committee- Rule 2(e) of the Rules, states ‘Committee’ as a group formed under Section 5(1).
  • Labour Commissionerate Automation System- Rule 2(fa) of the Rules defines the Labour Commissionerate Automation System. Accordingly, it states that software is owned and operated by the Labour Department. It provides effective solutions to employers, employees, and labour administrators.
  • Licensing Officer- Rule 2(g) of the Rules, defines ‘Licensing Officer’ as a person appointed under Section 11(a) of the Act to handle licensing matters.
  • Registering Officer- As per Rule 2(h) of the Act, a ‘Registering Officer’ refers to an official appointed under Section 6(a) of the Act to manage registrations.

Constitution of the State Advisory Board

As per Rule 3, the State Advisory Board will be made up of the following members:

Chairman- The Board consists of a Chairman and will be chosen by the State Government.

State Labour Commissioner- The State Labour Commissioner will be appointed as an ex-officio member.

Government Representative- The State Government will appoint a person from its officials to represent them.

Employer and Contractor Representatives- Four individuals will be appointed by the State Government, two will represent employers, and the other two will represent contractors to whom the Act applies.

Worker Representatives- The State Government will appoint four individuals who will represent workers. Two of them will represent workers of contractors to whom the Act applies.

Duration of the members

Rule 4, prescribes the term of office of the members, it includes as follows:

  • The Chairman of the Board will serve for three years from the date of his appointment. It will be announced in the official Gazette.
  • The member representing the State Government mentioned in Rule 3 they will continue as long as the State Government wants them to.
  • Members representing employers and workers will each serve for three years from the date of their appointment and will be announced in the Gazette. If the State Government hasn’t announced a successor within these three years, the current member will continue until a successor is officially announced in the Gazette.

Resignation

As per Rule 5, any member of the Board, except those who are automatically members because of their positions, can quit by writing a letter to the State Government. Once the State Government accepts the resignation or after thirty days from the date the resignation letter is received by the Government, whichever comes first, the position of that member becomes vacant.

Cession of membership

As per Rule 6, if any member of the Board, who is not automatically a member due to their position and misses three meetings in a row without getting permission from the Chairman for their absence, they will stop being a member. However, if the State Government believes that the member had a good reason for missing those three meetings, they can decide that the member won’t stop being a part of the Board. If this decision is made, the member will continue to be a part of the Board.

Disqualification for membership

Rule 7 provides the disqualifications of the member’s membership. A person cannot be chosen or continue as a member of the Board if:

  • They are declared of unsound mind by a competent court.
  • They are undischarged insolvent, someone who hasn’t paid off their debts.
  • They have been convicted of an offence that, according to the State Government, involves immoral conduct.
  • If there is any doubt about whether someone is disqualified under these rules, the State Government will make the decision.

Removing a member

Rule 8 prescribes that the State Government has the authority to take away the position of any member of the Board if they believe that the member will no longer truly represent the interests they were needed to represent on the Board. However, before removing any member, the government must give them a fair chance of hearing to express their views and make a case against the decision.

Filling vacancies on the Board

Rule 9 states that, when a position on the Board becomes empty or is about to become empty, the Chairman must inform the State Government. Once notified, the State Government will take action to fill the vacancy by appointing someone from the same category as the member who left. The new appointee will serve for the remaining term of the member they are replacing. However, if a member dies or resigns, the Government can appoint a replacement without waiting for a report from the Chairman.

Staff appointment and duties

As per Rule 10, the State Government has the authority to appoint a Secretary to the Board, who can be one of its officials, either on a full-time or part-time basis. Additionally, the government can hire other staff members deemed necessary for the Board’s functioning. The salaries, allowances, and other conditions of service for these staff members will be determined by the State Government.

Duties of the Secretary:

  • The Secretary assists the Chairman in organising Board meetings.
  • The Secretary can attend the meetings but cannot vote.
  • It is the Secretary’s responsibility to maintain records of the minutes from the meetings.
  • The Secretary ensures that the decisions made during the Board meetings are carried out effectively.

Allowances for Board members

The Rule 11 prescribed the provision for the allowances for Board members. This includes:

  • Official members of the Board will receive travelling allowance as per the rules applicable to them for official journeys. This allowance will be paid by the authority responsible for paying their salary.
  • Non-official members of the Board will be provided with travelling allowance and daily allowance when they attend Board meetings. The rates for these allowances will be equivalent to those admissible to Grade I Officers of the State Government.

Meetings of the Board

Rule 13 states that the Board will arrange the meeting with its members. The place and times are decided by the Chairman. The Chairman leads every meeting, and if he’s not there, the members present will choose one of the official members to lead the meeting.

Notice and agenda

Rule 14 prescribes for regular meetings, members get a ten-day notice, and for urgent meetings, they get a five-day notice. 

Disposal of business in the meeting

The Rule 12 basically states that whenever the Board of a company needs to make a decision, they have to discuss it at a meeting. The decision will be made based on what most of the Board members agree on. If there’s a tie, the Chairman of the meeting gets to break the tie by casting an additional vote. The Chairman mentioned here includes the main Chairman or any other person nominated to lead the meeting. So, the person in charge has the final say if there’s any disagreement among the Board members.

Quorum for the meeting

Rule 15 states about the number of people needed to be present for a meeting to be valid. It says that at least five members must be present for any business to be discussed and decided upon. But, if fewer than five members show up, the Chairman (the person leading the meeting) can postpone the meeting to another day. They have to inform the members who are there and let the other members know about the new meeting date. At the postponed meeting, even if there still aren’t enough members present, the Chairman can still go ahead and discuss and decide on the business that needs attention. So basically, if there aren’t enough people, the Chairman can still handle important matters.

Committees of the Board

Rule 16 allows the Board to create committees for specific purposes as it sees fit. When forming a committee, the Board can choose one of its members to be the Chairman of that committee. Committees will meet at times and places decided by the Chairman of the committee. The Rules 12, 13(2), 14, and 15 that apply to the Board’s meetings also apply to the Committee, with a change in the quorum requirement. For the Committee, one-third of the members is enough instead of five members. The rules regarding attendance that apply to Board members also apply to Committee members when attending Committee meetings.

Registration and licensing procedures

Rule 17 states that to register an establishment under Section 7(1), the application must be submitted through the Labour Commissionerate Automation System using Form 1. Fees for the application should be paid through the Labour Commissionerate Automation System.

Certificate of registration

Rule 18 states that the certificate of registration, granted under Section 7(2), will be in Form II and contain details like the establishment’s name, address, maximum workmen to be employed, type of business, and other relevant particulars. The registering officer will maintain a register Form III listing establishments with registration certificates. If there are changes in the registered particulars, the principal employer must inform the registering officer within thirty days.

Rejection of registration application

Rule 19 prescribes if an application is incomplete, the registering officer will ask the principal employer to make it complete. If the principal employer doesn’t comply, the registration application may be rejected.

Amendment of registration certificate

Rule 20 states that if the registering officer finds out that the fees paid for registering an establishment are less than what is required, they will ask the employer to deposit the extra amount. The employer must show a receipt for this deposit. If there are changes in the establishment’s particulars, the registering officer will update the register Form III. However, these updates won’t have any impact on past events or any rights or responsibilities that were established before the changes. Additionally, the officer won’t proceed with making any updates unless the employer has paid the necessary fees.

Applying procedure for a licence

As per Rule 21, contractors must apply for a licence through the Labour Commissionerate Automation System using Form IV. The application should include a certificate Form V from the principal employer, confirming the contractor’s employment and agreement to abide by the Act and rules. Fees and security deposits must be remitted through the Labour Commissionerate Automation System.

Licence considerations

As per Rule 22, these are the factors considered when deciding whether to grant or refuse a licence:

  • Eligibility of the applicant is considered. It includes whether the applicant is a minor, declared mentally unsound by a competent court, an undischarged insolvent, or convicted of a morally questionable offence in the past five years.
  • Whether there are any state government orders or agreements to abolish contract labour for the specific type of work the applicant intends to do.
  • Whether any previous orders have been issued against the applicant under Section 14, and if so, whether three years have passed since the order.
  • Whether the required application fees have been paid according to Rule 26.
  • Whether the applicant has deposited the required security as per Rule 24.

Refusal to grant licence

As per Rule 23, the licensing officer investigates the contractor’s application and, if necessary, rejects it after giving the applicant a chance to be heard.

Security deposit

Rule 24 prescribes the provisions for the security deposit. It states that Before issuing a licence, the contractor must deposit security calculated at the rate of Rs.100 per workman or Rs. 5 for cooperatives for compliance with licence conditions.

Licence forms and conditions

Rule 25, stated the forms and conditions for the licensing.

Licence forms

Every licence Form VI is non-transferable and is issued or renewed under specific conditions.

General Conditions

  • The number of contract labourers must not exceed the maximum specified in the licence.
  • Fees paid for the licence, or its renewal, are non-refundable.
  • Wage rates paid by the contractor should not be lower than those prescribed by the Minimum Wages Act, 1948, or as agreed upon in settlements or awards.

Wage Rates and Conditions

  • For similar work as directly employed by the principal employer, the contractor’s labourers should receive the same wage rates, holidays, and working hours.
  • In other cases, the State Labour Commissioner specifies wage rates, holidays, and working conditions, considering similar occupations.

Special Considerations

  • In establishments with twenty or more women workers, two rooms for their children under six years old must be provided.
  • One room is for play, and the other for sleeping.
  • The contractor must supply toys, games, cots, and bedding as per standards set by the State Labour Commissioner.

Notification of Changes:

  • Any changes in the number of workmen or working conditions must be notified to the licensing officer.

Fees

Rule 26 prescribes the aspect of Fees. It states that Fees and security deposits are remitted through the Labour Commissionerate Automation System. Contractors must adhere to standards set by the State Labour Commissioner for creche construction and maintenance.

Validity of the licence

As per Rule 27, any licence issued under Rule 25 or renewed under Rule 29 shall be effective for twelve months from the date of issuance or renewal.

Amendment of the licence

As per Rule 28, the licence issued under Rule 25 or renewed under Rule 29 may be amended by the licensing officer for valid reasons. The contractor seeking an amendment to the licence must submit an application to the licensing officer by stating the nature of the amendment and providing reasons for it. If the licensing officer approves the application

the applicant will be required to provide a treasury receipt for any additional fees, if applicable, resulting from the amendment compared to the original issuance fees. Upon receipt of the treasury receipt, the licensing officer will proceed to amend the licence as per the applicant’s request. If the application for amendment is denied, the licensing officer must provide reasons for the refusal and communicate them to the applicant.

Renewal of the licence

As per Rule 29, the licence needs to be renewed, accordingly it states that:

Every contractor must request renewal of their licence from the licensing officer. Each renewal application must be submitted using Form VII through the Labour Commissionerate Automation System and must be made at least thirty days before the licence’s expiration date. If this deadline is met, the licence will be automatically renewed.

The renewal fees for the licence will be the same as those for its initial issuance. However, if the renewal application is not submitted within the specified time frame in sub-Rule (2), an additional fee of 25% above the standard renewal fee will be charged.

Nevertheless, if the licensing officer acknowledges that the delay in submitting the application is due to circumstances beyond the contractor’s control, they may reduce or waive this extra fee as deemed appropriate.

Issuance of duplicate certificate

As per Rule 30, If a certificate of registration or a licence issued or renewed according to the previous rules has been lost, defaced, or accidentally destroyed, a duplicate may be provided upon payment of a fee of ten rupees.

Refund of security

As per Rule 31, when a contractor’s licence expires, and they decide not to renew it, they can request a refund of the security deposit they made when obtaining the licence. If the licensing officer finds that the contractor hasn’t violated any licence conditions and there is no order to forfeit the security, they will refund the security deposit. If there is an order to forfeit part of the security deposit, that amount will be taken out, and the remaining balance will be refunded. Any refund application should ideally be processed within 60 days of receiving the request.

Grant of temporary certificate of registration and licence

As per Rule 32, if an establishment urgently needs contract labour for a short duration, not exceeding fifteen days, the Principal Employer or the contractor can apply for a temporary certificate of registration or licence from the registering officer or the licensing officer, depending on the area where the establishment is located. The application for this temporary certificate or licence must be submitted in triplicate using Form VIII or X, accompanied by a treasury receipt indicating the payment of appropriate fees and, for a licence, the required security deposit. Once the complete application is received, and it’s verified that the work requiring contract labour is urgent and can not be delayed, the registering or licensing officer will promptly issue a certificate of registration (Form IX) or a licence (Form XI) valid for up to fifteen days. If a certificate or licence is not granted, the reasons for refusal will be recorded.

Once the temporary registration certificate expires, the establishment must stop employing contract labour covered by that certificate. The fees for temporary registration certificates are determined based on the number of workers proposed to be employed, as specified. Similarly, the fees for temporary licences are also based on the number of workers to be employed by the contractor. The rules regarding refusal to grant licences and the grant of licences apply to the temporary certificates and licences as well.

Appeals and procedure

Chapter IV, from Rules 33 to 39 prescribes the provisions for filing an appeal. Accordingly, it includes the following rules:

  • Rule 33 states that every appeal under Section 15(1) of the Contract Labour (Regulation and Abolition) Act be submitted using a Memorandum. This Memorandum must be signed by the appellant or their authorised representative and presented in person or sent via registered post to the Appellate Officer. It should be accompanied by a certified copy of the appealed order and a treasury receipt of Rs. 10. The Memorandum should clearly outline the grounds of appeal under distinct heads. 
  • As per Rule 34, if the Memorandum of Appeal doesn’t comply with the rules, the Appellate Officer can reject it or send it back to the appellant for amendments within a specified time. If rejected, the Appellate Officer must record the reason and communicate it to the appellant. If in order, the Appellate Officer will admit the appeal, endorse the presentation date, and register it in the Register of Appeals. The Appellate Officer notifies the Registering Officer or Licensing Officer, requesting the case record, once received the Appellate Officer schedules a hearing and notifies the appellant.
  • As per Rule 35, if the appellant doesn’t appear on the scheduled hearing date, the Appellate Officer has the authority to dismiss the appeal.
  • Rule 36 states that the dismissed appellant can apply for readmission within 30 days by explaining the sufficient cause for non-appearance. If such reasons are valid, the Appellate Officer restores the appeal with its original number.
  • Rule 37 states that the Appellate Officer proceeds with the hearing, allowing the appellant and their authorised representative to present their case. The Appellate Officer delivers a judgement confirming, reversing, or varying the appealed order. The judgement outlines the points for determination, decisions, and reasons for those decisions. The order is communicated to the appellant, with a copy sent to the Registering or Licensing Officer.
  • Rule 38 includes that all applicable fees must be paid into the local treasury under the specified account and a receipt, obtained for the payment, should be submitted with the application or appeal.
  • Rule 39 states that Copies of orders from the Registering Officer, Licensing Officer, or Appellate Officer can be obtained by paying a fee of Rs. 2 for each order. An application specifying the date and other particulars of the order must be made to the concerned officer.

Welfare and health of contract labour

Chapter V of the Rules deals with the welfare and health of contract labour. Accordingly, the Rules include the following:

  • Rule 40 – Contractors must provide essential facilities to the employees within seven days of existing establishments and within seven days of hiring contract labour for new establishments. These facilities include an adequate supply of clean drinking water, a proper number of toilets and urinals, washing facilities, and basic first-aid amenities. If the contractor fails to provide any of the mentioned facilities within the defined time, the principal employer takes charge. The principal employer should step in and check these facilities are in place within seven days after the given time frame.
  • Rule 41 – If contract labour is required to stay overnight for at least 3 months in connection with the establishment’s work, in such situations the contractor must establish restrooms within 15 days of existing establishments and within 15 days of hiring for new establishments. If the contractor fails to provide these rest areas within that time, the principal employer is responsible for setting them up within 15 days after the given period. This Rule also includes separate rooms available for women employees. Further, it states that adequate ventilation in every room is essential for fresh air circulation. Sufficient and suitable natural or artificial lighting must be maintained. The rest areas should provide at least 1.1 sq. metre of floor area per person. Construction should ensure protection against heat, wind, and rain, with a smooth and impervious floor surface. The rest areas or alternative accommodations should be easily located and there should be a good supply of clean drinking water. This Rule is intended to ensure that workers have comfortable and safe rest areas during their overnight stays. 
  • Rule 42 – For establishments where contract labour numbering a hundred or more is employed for at least six months, in such circumstances the contractor must provide a canteen within 60 days of existing establishments and within 60 days of hiring for new establishments. If the contractor fails to set up the canteen within the specified time, the principal employer takes charge within 60 days after the deadline. The contractor or principal employer must efficiently maintain the canteen.
  • Rule 43 – The canteen should include a dining hall, kitchen, store room, pantry, and separate washing areas for workers and utensils. Further, it also covers that adequate lighting is necessary at all times. The canteen premises must be kept clean and sanitary and along with this proper drainage and waste disposal systems should prevent accumulation and nuisances.
  • Rule 44 – The dining hall should accommodate at least 30% of contract labour working at a time. The floor area per dinner excluding service areas should be at least one square metre. A portion of the dining hall and service counter should be reserved for women workers too.
  • Rule 45 – Sufficient tables, stools, chairs, or benches should be provided to the workers. Utensils, crockery, cutlery, and other equipment must be sufficient and maintained hygienically.
  • Rule 46 & Rule 47 – Food items served should align with the normal habits of contract labour. Canteen prices should be based on no-profit, no-loss and prominently displayed.
  • Rule 48 – Certain expenditures, rent, depreciation, maintenance, etc. should not be considered when determining food prices.
  • Rule 49 and Rule 50 – Canteen accounts and records must be available for inspection by any Inspector. Annual auditing of canteen accounts by registered accountants is mandatory, with exceptions approved by the State Labour Commissioner based on feasibility.
  • Rule 51 – Establishments covered by the Act, toilets should be provided based on the following scale:
    • One toilet for every 25 females.
    • One toilet for every 25 males.
    • For more than 100 males or females, one toilet for every 25 individuals up to the first 100, and one for every 50 thereafter.
  • Rule 52 – Each toilet should be covered, partitioned for privacy, and equipped with proper doors and fastenings. 
  • Rule 53 – Establishments with both male and female workers, a notice indicating ‘For Men only’ or ‘For Women only’ in the language understood by the majority should be displayed outside each block of toilets and urinals. The notice should also include appropriate symbols.
  • Rule 54 – One urinal for every 50 male workers up to 500, and one for every 100 or part thereof thereafter. and the same is maintained for female workers too.
  • Rule 55 – Toilets and urinals should be conveniently located and accessible to workers at all times. Toilets and urinals should contain proper lighting and be maintained in a clean and sanitary condition. Toilets must comply with public health authorities’ requirements, especially for non-flush systems.
  • Rule 56 – Water should be provided, either through taps or other means easily accessible in or near the toilets and urinals.
  • Rule 57- Correct and suitable washing facilities must be provided and maintained for the use of contract labour in every establishment covered under the Act. Separate and proper screening facilities should be provided for male and female workers. These facilities should be conveniently accessible and maintained in a clean and hygienic condition.
  • Rule 58 – This Rule states about first-aid facilities. It states that there should be first-aid boxes that are easily accessible during all working hours at a rate of one box for every 150 contract labour or part thereof ordinarily employed.
  • Rule 59 – The box marked with a red cross on a white background, should contain essential equipment based on the number of contract labour.
    • For up to 50 labourers- Sterilised dressings, burn dressings, iodine solution, snake-bite lancet, potassium permanganate crystals, scissors, aspirin tablets, ointment for burns, and surgical antiseptic solution.
    • For more than 50 labour- Additional quantities of the above-listed items.
  • Rule 61 – In establishments with 159 or more contract labour, the person in charge of the first-aid box should be trained in First-Aid treatment.

Wages 

Chapter VI of Rules deals with different provisions with regard to wages. 

  • Rule 63 deals with the period of wage to be paid to the workers. Accordingly, it states that the contractor is responsible for setting wage periods for which payments are due.
  • Rule 64 states that no wage period should extend beyond one month.
  • Rule 65 states that for establishments with fewer than a thousand workers, wages should be paid within the seventh day from the end of the wage period. In other cases, payment should be made before the tenth day.
  • Rule 66 states that, if a worker’s employment is terminated, the wages earned must be paid within two working days from the termination date.
  • Rule 67 states that all wage payments should occur on a working day, at the work premises, during working hours, and on a predetermined date. If work is completed before the end of the wage period, the final payment must be made within 48 hours of the last working day.
  • Rule 68 states that wages should be paid directly to the worker or a person authorised by the worker.
  • Rule 69 states, all wages should be paid in current coin or currency or both.
  • Rule 70 states that wages should be paid without any deductions, except those specified by the State Government or permitted under the Payment of Wages Act, 1936.
  • Rule 71 states that a notice indicating the wage period, place, and time of wage disbursement must be displayed at the workplace, and a copy sent to the Principal Employer.
  • Rule 72, the Principal Employer should ensure the presence of their authorised representative during wage disbursement, and the contractor must disburse wages in their presence.
  • Rule 73 states that, the authorised representative of the Principal Employer should certify, under their signature, that the wages have been paid in their presence.

Register, records and collection of statistics

Chapter VII, from Rules 74 to 83 deals with various rules on the register, records and collection of statistics, it includes as follows:

  • Principal employers must maintain a register of contractors for each registered establishment.
  • Contractors should maintain a register of persons employed for each registered establishment where they employ contract labour.
  • Contractors are required to issue employment cards to workers within three days of employment, keeping them updated.
  • After termination, contractors must provide a service certificate to the terminated worker.

Maintenance of Muster Roll, wages register deduction, overtime register

  • For establishments covered by certain Acts, specific registers and records must be maintained, including Muster Roll, Register of Wages, Register of Deductions, Register of Overtime, Register of Fines, and Register of Advances.
  • For other establishments, contractors should maintain the Muster Roll and Register of Wages, with wage slips issued a day before disbursement.
  • Deductions, fines, and advances should be recorded in separate registers, and overtime worked should be documented.
  • Contractors should display a summary of the Act and rules in English, Malayalam, and the majority language spoken by workers.
  • All registers and records must be maintained, complete, and up to date, in English or Malayalam language.
  • Records should be preserved for three years from the last entry.
  • All records must be produced on demand by the Inspector or authorised personnel.
  • Notices regarding rates of wages, work hours, wage periods, payment dates, Inspector details, and unpaid wages should be displayed in English, Malayalam, and the local language understood by workers.
  • Contractors and principal employers must submit half-yearly and annual returns, respectively, in the specified forms within the designated timelines.
  • Authorities have the power to request information or statistics related to contract labour, and those called upon are legally bound to provide the required details.

Kerala Industrial Establishments (National And Festival Holidays) Act 1958

The State of Kerala in the year 1958 enacted the Kerala Industrial Establishments (National and Festival Holidays) Act. It was enacted in the Ninth Year of the Republic of India. It applies to industrial establishments across the entire state of Kerala.

This Act certifies, under Section 11, that the provisions of this Act will not affect any rights or privileges of the employee which are related to national and festival holidays granted by any other law in force or under any contract, custom, or usage. This condition is valid only if such rights or privileges are more favourable to him than those to which he would be entitled under this Act.

Purpose of the Act 

The main aim of this law is to guarantee that people who work in factories and industries in the state of Kerala get specific days off or some vacations for both national holidays and festivals.

Important definitions of the Act

  • As per Section 2(a), a ‘day’ in this Act, is considered as a period of 24 hours starting from midnight.
  • As per Section 2(b), an ‘employee’ includes any person like an apprentice who is hired to do various types of work in an industrial establishment. It covers both manual and office work, and the government can also declare other individuals as employees through an official announcement.
  • As per Section 2(c), the term ‘employer’ refers to the person who has the ultimate control over the industrial establishment. If someone else is in charge of the establishment’s affairs, that person is also considered an employer within the ambit of this Act.
  • As per Section 2(d), a ‘holiday’ means the days off as specified in this Act.
  • As per Section 2(e), ‘industrial establishment’ includes any place, like a factory or plantation, where 20 or more people are employed. The government can also declare other places as industrial establishments.
  • As per Section 2(f), an ‘Inspector’ is someone appointed to ensure that the rules of this law are followed.
  • As per Section 2(g),  ‘Plantation’ refers to an estate that is at least twelve hectares in size or employs twenty or more people, and it’s maintained for growing certain crops like cardamom, cinchona, coffee, rubber, or tea.
  • As per Section 2(h), ‘wages’ include all the money or benefits that an employee should receive for their work. This covers allowances, the value of accommodation or services provided, but it doesn’t include:
    • Any bonuses.
    • Contributions by the employer to pension or provident funds or other benefits required by law.
    • Gratuity payments when employment ends.
    • Any extra money given to the employee to cover specific work-related expenses.
    • Travel concessions or allowances.

Grant of national and festive holidays

Section 3 states that every worker is entitled to certain holidays each year. This includes a full day off on the 26th of January, the 15th of August, the 1st of May, and the 2nd of October. Additionally, there are nine more holidays for festivals, and these specific festivals are decided by the Inspector after consulting with both the employer and the employees of the industrial establishment. If an industrial establishment starts its operations for the first time during a calendar year, the Inspector will determine the number of festival holidays for the remaining part of that year. However, this number should not be less than the calculation of one day for every three months or part of the remaining period of the calendar year.

Duty of the employer to display a statement of holiday

The employer has a duty to put up a notice in the workplace. Such notice must consist of detailed information about the holidays allowed for each calendar year as per Section 3. This notice should be in a specific form, it must be displayed within a certain timeframe, and in a manner specified by the regulations. 

However, the employer has the authority, as outlined in Section 4A, to instruct an employee to work on a holiday mentioned in Section 3. This instruction must be given in writing and served to the employee in the way specified by regulations. A copy of this notice should also be sent to the Inspector, and another copy must be displayed in the workplace at least twenty-four hours before the holiday in question. If an employee works on a holiday from Section 3, they get double their regular wages. They may also take substituted leave for holidays. 

Payment of wages during holiday

Section 5 of the Act speaks about the payment of wages to employees during holidays. Accordingly, it includes as follows:

  • Every employee must be paid wages for holidays mentioned in Section 3 without considering any work requirements as per Section 4A or whether there’s a strike or lockout. If a holiday falls during a lay-off, the employee gets 50% of the basic wages and dearness allowance.
  • If a holiday falls during a strike considered illegal under the Section 24 of the Industrial Dispute Act of 1947, and the employee took part in it they won’t be paid for that holiday.
  • If an employee works on a holiday from Section 3, they get double their regular wages. They also have the option to take another day off as a substitute holiday with the same pay.
  • Employees paid per day or based on their work output receive holiday pay calculated from the average of their daily earnings over the 30 working days leading up to the holiday.
  • If they work on the holiday, they get paid at double the average rate and can take another day off with the same pay. However, for holidays other than January 26th, August 15th, May 1st, and October 2nd, they must have worked for the employer for at least 30 days within the 90 days before the holiday.
  • Any money owed to an employee under this law can be collected as if it’s land revenue arrears under the existing Revenue Recovery Act.

Appointment of Inspectors

As per Section 6 of the Act, the government can appoint individuals or a certain category of individuals as an Inspector through an official notification in the Gazette. These Inspectors will work within specific areas outlined by the government. As per Section 21 of the Act,  an Inspector is considered a public servant under the Indian Penal Code 1860. 

Powers of Inspectors

An Inspector has the following powers as per Section 7:

  • He can enter any place believed to be an industrial establishment at reasonable times, bringing along assistants if needed.
  • He has the authority to inspect the premises, examine prescribed registers, records, and notices, and collect evidence from relevant individuals on-site or through other means.
  • He can use additional powers necessary to fulfil the objectives of this Act.

However, individuals questioned under this section are not required to answer any questions or provide evidence that might incriminate them.

Penalties provisions

  • Section 8 of the Act, prescribes the penalties for the contraventions of provisions of this Act. Accordingly, employers who violate the rules outlined in Section 3 or Section 5 shall face penalties in the form of fines, with the maximum amount set at two hundred and fifty rupees.
  • As per Section 9 of the Act, if someone intentionally hinders an Inspector from exercising their authorised powers under this Act or refuses to provide the information which is demanded by an Inspector, they shall face punishment for those acts. The information may include any register, record, or notice in their possession required by this Act or its rules, they can be punished. In such situations, the punishment may include imprisonment for up to three months, a fine that can go up to five hundred rupees, or both. 

Exemptions to certain class of people

Section 10 of the Act, certain individuals and establishments are exempt from the provisions of this Act. This includes employees in management roles, those whose jobs involve frequent travel, industrial establishments which are under the control of the Central Government, the Reserve Bank of India, a railway administration operating any railway as defined in Article 366(2) of the Constitution, or a cantonment authority, and mines or oil fields are exempt from the Act. The government has the authority to exempt certain establishments or individuals from the rules of this Act. This exemption can be either permanent or for a specific period, and such exemption will be officially announced in the Gazette through a notification. The government can set conditions for the exemption as they find appropriate.

Power of the government to make rules

Section 12 of the Act, the government has the authority to create rules through an official announcement in the Gazette to implement the provisions of this Act. If a rule is violated, the government may decide to impose a fine of up to fifty rupees. Additionally, any rule made under this Act must be presented before the Legislative Assembly during its session. The Legislative Assembly has a total of fourteen days, which can be in one session or two successive sessions, to either agree to the rule, suggest modifications, or reject the rule. If the Legislative Assembly agrees with modifications or rejects the rule within the specified timeframe, the rule will only take effect in its modified form or will be deemed invalid. However, any actions taken under the rule before the modification or rejection will be valid.

Laws concerning the safety of women and children in a workplace in Kerala

In Kerala, there are specific laws and regulations that aim at ensuring the safety of women and children in the workplace. These laws cover various aspects such as working conditions, harassment prevention, and protection of rights. Some of the major legislations are as follows:

Kerala Child Labour (Prohibition and Regulation) Rules, 1993

The Government of Kerala has enacted the Kerala Child Labour (Prohibition and Regulation) Rules in 1993 (hereinafter referred to as Rule). This Rule is associated with and derived from Child Labour (Prohibition and Regulation) Act, 1986 (hereunder referred to as Act), which is a central government Act. The central Act sets the framework, and the Kerala Rules provide specific details and guidelines for the implementation of the provisions within the state of Kerala. The main intention of the Act is to protect children from unsafe work. This law makes it illegal for children to work in certain jobs. The main goal of the law is to stop any kind of child abuse through employment and prevent children under 14 years old from doing dangerous work. This law was created to provide a comprehensive set of rules to address the issue of child labour. The Rule also contains the same intentions in order to implement those provisions in Kerala.

Important definitions of the Rules

  • Rule 2(a), ‘Act’ means the Child Labour (Prohibition and Regulation) Act, 1986
  • Rule 2(b), ‘Board’ means the Medical Advisory Board constituted under Rule 5.
  • Rule 2(c), ‘Chairman’ means the chairman of the Medical Advisory Board.
  • Rule 2(f), ‘Register’ means the register required to be maintained under section 11
  • of the Act.
  • Rule 2(h), ‘Section’ means a section of the Act.

Working hours

As per Rule 3, children cannot work for more than four and a half hours a day in places covered by Part III of the Act. Employers must send a notice showing the working hours in both English and a language that the majority of workers understand. This notice should be in a noticeable location within the establishment. Further covers that, children cannot be asked or allowed to work on their designated rest days.

Medical Advisory Board

As per Rule 5, the government shall establish a Medical Advisory Board. This Board’s purpose is to offer effective advice and guidance on issues related to providing medical facilities. The goal is to determine that matters concerning the health and safety of individuals are addressed and sorted out effectively.

Constitution of Medical Advisory Board

As per Rule 6, the Board will be made up of the following people:

  • Chairman- The head of the Board is the Secretary to the Government in the Labour Department. They automatically hold this position.
  • Medical Officers- Two medical officers not lower than the rank of District Medical Officer, chosen by the Government.
  • Employer Representatives- Two individuals representing employers, appointed by the Government.
  • Employee Representatives– Two individuals representing employees, selected by the Government.
  • Convener- An officer, at least as high as the rank of Joint Labour Commissioner, chosen by the Government. This person is responsible for coordinating the Board’s activities.

Duration of the term of the members of the Board

Rule 7 states the duration of the members of the Board, it includes:

  • Non-Official Members- Members who are not a part of the government will serve on the Board for three years from the date of their appointment. They can leave earlier if they resign, pass away, or if the government removes them for specified reasons recorded in writing.
  • Official Members- Members who are government officials, mentioned in item V of Rule 6 will serve at the pleasure of the government. Their term is not fixed and depends on the government’s decision.
  • Filling Vacancies- If a non-official member leaves before their term ends, a replacement will serve for the remaining period of the original member’s term.

Travelling allowance for the members

As per Rule 8, every person who is not a government official but is a member of the Board will get money for travelling and daily expenses. The amount they get will be the same as what a high-ranking government officer gets when they travel for work. This money is given to them when they go to meetings of the Board.

Power and functions of the members of the Board

As per Rule 9, the Board will give advice to the government about the standards for medical facilities that employers should provide, as stated in Rule 14. The Board will look into and provide feedback on any issues related to the arrangement of medical facilities. These could be things the government or the Board’s Chairman specifically asks them to consider and report on.

Meetings of the Board 

As per Rule 10, the Board should have a meeting every six months. If more than half of the members request a meeting in writing, the Chairman must call a meeting within fifteen days.

Notice of the meetings 

As per Rule 11, the Chairman decides the date, time, and place of each meeting. A written notice, including these details and a list of topics to be discussed, is sent to each member at least fifteen days before the meeting. If the meeting is called due to a written request, a notice of seven days is sufficient.

Chairman to preside at meetings

As per Rule 12, the Chairman leads the Board meetings. If the Chairman is not present, members can choose someone from among themselves by a majority vote to preside over the meeting.

Quorum 

As per Rule 13, for any business to be conducted in a meeting, at least one-third of the members and representatives from both employers and employees must be present. If the required number is not met, the Chairman can adjourn the meeting to a new date within seven days. In the adjourned meeting, business can be conducted regardless of the number or type of members present.

Medical facilities in an establishment 

Rule 14, states that medical facilities need to be present in establishments where children are employed. It includes the following facilities:

  • In every place where children work, there must be a first-aid box with necessary supplies. The box should be clearly marked and kept stocked and in good condition.
  • If an establishment employs more than 150 children, it must have a dispensary. This dispensary should be equipped with the necessary tools and medications as directed by the government.
  • The dispensary should be overseen by a qualified medical practitioner. They will have assistance from staff as directed by the government.
  • The dispensary should have a minimum floor area of 250 square feet, with smooth and hard walls and floors. It should be well-ventilated and lit, using both natural and artificial means. Additionally, there should be a good supply of wholesome drinking water.

Register maintenance 

As per Rule 15, the person in charge of a workplace must keep a record of all the children working there. This record is called Form B, and it needs to be updated every year. The employer has to keep this register for three years after the last entry.

Certificate of age 

As per Rule 16, young people working in specific jobs or workshops must provide a certificate of their age when requested by an Inspector. The certificate, known as Form C, is issued by a qualified medical authority. In this regard, the employer is responsible for paying any fees associated with obtaining this certificate. The medical authority who issues the certificate should be a government medical officer, at least at the rank of an Assistant Surgeon in a district, or an officer with a similar rank working regularly in Employees State Insurance dispensaries or hospitals.

Kerala Maternity Benefits Rules, 1964

The state of Kerala in 1964 enacted the Rules called Kerala Maternity Benefits Rules (1964) which are associated with the central law called the Maternity Benefits Act 1964. The Maternity Benefit Act sets rules for the employment of women in specific establishments for a certain period before and after childbirth. Its purpose is to ensure that women receive maternity benefits and other related benefits during this time. The Act aims to safeguard and support women in the workforce during the critical phases surrounding pregnancy and childbirth. The Act also applies to the state of Kerala. The Rules include major provisions for the implementation of the Maternity Benefit Act 1964.

Major definitions 

  • Rule 2(b), ‘Competent Authority’ into two heads, for the plantation its the chief Inspector of Plantations and for other establishments, it’s the Chief Inspector of Factories.
  • Rule 2(d), ‘Muster Roll’ means a record maintained as per Rule 3.
  • As per Rule 3(e), ‘Registered Medical Practitioner’ is a  doctor whose name is officially listed in a registry governed by existing laws for registering medical practitioners.
  • Rule 2(f) ‘Section’ refers to a specific part or division of the Maternity Benefit Act 1964.

Muster Roll

As per Rule 3, employers in establishments with female workers must create and keep a Muster Roll using Form ‘A’. This document should include details about all the women working in the establishment. However, if the Competent Authority believes that another register or record in the establishment already contains the necessary information, they can allow it to substitute for the Muster Roll, as long as it meets the requirements. All entries in the Muster Roll must be made in ink, regularly updated, and be accessible for inspection by an Inspector during working hours. Employers have the flexibility to include additional details in the Muster Roll for other purposes related to the Act.

Proof related to pregnancy, childbirth, and related events

As per Rule 4, in order to establish that a woman is pregnant, has given birth, had a miscarriage, or is dealing with health issues related to these, a certificate is compulsory to be provided. The certificate format should be in Form ‘B’. This certificate can be obtained from:

  • A Medical Officer at a Government hospital or dispensary.
  • A Registered Medical Practitioner.

Confirmation of childbirth can also be established through:

  • A certified extract from a birth register governed by current laws.
  • A certificate signed by a registered midwife.
  • If a woman has experienced a miscarriage, this can be evidenced by a certificate signed by a registered midwife.

In case of the death of a woman or a child, proof can be provided by:

  • A certificate in Form ‘C’ from the mentioned authorities in Rule 4(1).
  • A certified extract from a death register under current laws.

Certificates from registered midwives confirming events like childbirth or miscarriage should be in Form ‘D’.

Maternity and other benefit payments

Rule 5 contains the provisions for maternity and other benefit payments for women. Accordingly, it states that 

  • A woman working in a company, eligible for maternity benefits, needs to inform her employer using Form ‘E’. 
  • The employer is responsible for making timely payments of maternity benefits and any other amounts owed under the Act. 
  • If the woman passes away before receiving these benefits, the employer pays them to the person nominated by the woman as stated in Form ‘E’ or, if no nominee exists then such benefits go  to her legal representative. In situations where the legal representative is uncertain, the employer seeks a decision from the Competent Authority. 
  • The Authority investigates and determines the legal representative, directing the employer to make the payment within a specified time. 
  • A receipt in Form ‘F’ must be obtained by the employer upon making the payment. The medical bonus is dispersed along with the second instalment of maternity benefits. Maternity benefits and other amounts under Section 7 of the Maternity Benefit Act Must be paid within two months of the woman’s death. 
  • Wages under Section 9 are paid to the woman, who is entitled to receive them, within 48 hours of presenting the certificate in Form B’ or Form ‘D’.
  • Wages under Section 10 are also paid within 48 hours to the entitled woman.

Rest hours for nursing mothers

Rule 6 states about breaks for nursing mothers. It says that there are two breaks, each lasting 15 minutes. In addition to these breaks, women are allowed extra time based on how far they have to travel to and from the place where their children are taken care of. This extra time should be at least 5 minutes and not more than 15 minutes. If there is any disagreement about how much extra time is needed, the issue will be decided by the Competent Authority.

Power and duties of Competent Authority and Inspectors

The Rule 7 outlines the duties and powers of the Competent Authority and Inspectors in overseeing and enforcing certain Rules. The Competent Authority is in charge of administering these rules throughout the state. Each Inspector has a designated area assigned by the government and works under the supervision and control of the Competent Authority. During inspections, an Inspector must check various aspects, including:

  • Whether proper action has been taken on notices issued under Section 6.
  • The correct maintenance of the Muster Roll as per Rule 3.
  • Any cases of discharge or dismissal in violation of Section 12 since the last inspection.
  • Compliance with various Sections like Section 4(1), Section 6(5) and Section 6(6), Section 8, Section 9, Section 10, Section 11, Section 13, and Section 19, and timely payment of amounts due.
  • Cases of deprival of maternity benefits or medical bonus against Section 12(2).
  • Progress in addressing irregularities from previous inspections and compliance with previous orders.

If an Inspector identifies irregularities, they must issue written orders to the employer. These orders should specify the irregularities and request the employer to rectify them within a given period. The employer must then report the compliance to the Inspector.

Gross misconduct 

As per Rule 8, the following  are the serious behaviours that are considered very wrong in accordance with Section 12. These wrongs are considered as gross misconduct under this Rule. Such gross misconducts includes:

  • Purposefully breaking or damaging things that belong to the employer. 
  • Physically attacking a boss or coworker while at work. 
  • Committing a crime that shows a lack of honesty or morality and getting convicted in court. Stealing, lying, or being dishonest in any way related to the employer’s business or belongings. 
  • Intentionally ignoring safety rules or interfering with safety equipment or fire-fighting tools.

Appeals 

Rule 9 outlines the filing of an Appeal under Section 12. Accordingly, it states that an appeal under Section 12(2)(b) of the Act should be submitted to the Competent Authority using Form ‘G’. The appeal can be in writing and can be submitted personally or sent via registered mail to the Competent Authority. Upon receiving the appeal, the Competent Authority must provide a copy of the appeal to the employer. The employer is required to submit a reply and relevant documents by a specified date. The Competent Authority may collect additional details from both the employer and the woman involved. After considering the facts, the Competent Authority makes a decision. If the employer fails to respond within the given period, the Competent Authority may decide on the appeal without the employer’s input as an ex parte. Section 12 of the Maternity Benefit Act, 1961 protects pregnant women from being dismissed unfairly from their jobs. Accordingly, it states that:

  • If a woman takes time off work because of her pregnancy, her employer can not fire her or change her job conditions because of it.
  • If a woman is fired while she is pregnant and would have been entitled to maternity benefits, she can still get those benefits. However, if she is fired for serious misbehaviour (like breaking important rules), her employer can stop her from getting those benefits.
  • If a woman is denied maternity benefits or fired unfairly because of her pregnancy, she can appeal within 60 days. An authority will decide if she should still get her benefits or keep her job.

Filing of complaint

As per Rule 10, a complaint under Section 17 (1) (power of Inspector to direct payments to be made) must be made in writing, using Form ‘H’ or ‘I’ as applicable. When an Inspector receives a Section 17 complaint, they examine relevant employer records, interview employees, and collect statements for the inquiry. If the Inspector determines that maternity benefit or payment has been improperly withheld, they direct the employer to make the payment promptly or within a specified period.

Appeals against Inspector’s decision

As per Rule 11 An appeal against the Inspector’s decision under Section 17(2) can be made in writing to the Competent Authority using Form ‘J’, along with supporting documents. Upon receiving the appeal, the Competent Authority reviews the case record and may record statements from the aggrieved person and the Inspector. The Competent Authority considers the documents, evidence, and facts before making a decision.

Non submission of notice, appeals or complaint in a prescribed form

Rule 13 outlines the preservation of the rights of the women in case of non-submission of notice, appeals and complaints. Rules 5, 9, and 10 outline certain procedures and requirements, but nothing in these rules affects the rights of a woman entitled to maternity benefits or any other amount due under the Act. Even if a woman fails to submit a notice, appeal, or complaint in the prescribed form as per the mentioned rules, her entitlement to maternity benefits or other amounts due under the Act remains unaffected. If a woman submits a notice, appeal, or complaint in a form other than the prescribed one, the concerned authority has the discretion to accept it. However, within 15 days of receiving such notice, appeal, or complaint in a non-prescribed form, the authority can request the woman to resubmit it in the prescribed form.

Supply of forms

Rule 12 states that employers must give female employees certain forms for free if they ask for them. These forms are called Form ‘B’, ‘C’, ‘D’, ‘E’, ‘F’, ‘G’, ‘H’, and ‘I’. These forms are likely related to maternity benefits, such as maternity leave, medical benefits, and other entitlements under the law.

Records

Rule 14 outlines that any records that employers are required to keep according to the law and its rules must be saved for at least two years from when they were made. These records could include things like employee attendance records, payroll information, or documents related to labour regulations. Keeping these records for the specified time ensures that they’re available if needed for legal or administrative purposes.

Annual returns

Rule 16 outlines the requirement for employers to submit annual returns to the Competent Authority, which is typically a government body responsible for enforcing labour laws. Accordingly, this Rules states that:

  • Every employer must submit two forms, Form ‘L’ and Form ‘M’, to the Competent Authority by the 31st of January each year.
  • These forms provide information about the establishment for the previous year, detailing specific particulars as required by law.
  • If an employer sells, abandons, or stops operating the establishment covered by the law, they must submit additional returns.
  • Within one month of selling or abandoning the establishment, or within four months of discontinuing operations, the employer must submit another set of Form ‘L’ and Form ‘M’.
  • These additional returns cover the period from the end of the previous year to the date of sale, abandonment, or discontinuance.

Application of maternity leave for women working on a contract basis

Court order

The Kerala High Court, in RaKhi P.V vs State of Kerala (2017) case, has extended the scope of the Maternity Benefit Act’s application. The judgement in this case establishes that women on a contract basis, specifically those engaged in state-funded projects, are also entitled to maternity leave of 26 weeks. The court stated that all women employees, without any discrimination whether they are on a contract or not, should get better maternity leave. 

Here are the key changes they made:

  • Maternity leave benefits are now given to all women employees working on a contract, regardless of the duration of their contracts. They can take leave for up to 180 days.
  • Maternity leave now covers female officers on contracts who experience a miscarriage or abortion. They can take leave for up to six weeks.
  • To qualify for these benefits, a female officer must have worked for at least 80 days before the expected delivery or miscarriage date.

This decision is effective from February 27, 2018. However, it may not help those who had issues before that date. Maternity leave is only allowed three weeks before the expected delivery date, so it doesn’t have a big impact on past cases. 

Recent development and amendment in labour laws in Kerala

Recently many changes have been made by the government of Kerala with respect to the labour laws in Kerala. The changes have been done by considering the interests and welfare of the labourers in Kerala. Some of the major amendments include as follows:

  • The Kerala government has announced in the official notification a change in the rates specified in the Kerala Shops and Commercial Establishments Worker’s Welfare Act, 2006. They are doing this by using the authority given in Section 4(6) of the mentioned Act. This change involves increasing the rate from Rs 20 to Rs. 50 in Section 4(3). The decision to make this revision is based on the consideration of the expenses associated with implementing the Kerala Shops and Commercial Establishments Worker’s Welfare Fund Scheme. Section 4 of the Kerala Shops and Commercial Establishments Worker’s Welfare Act, 2006 allows the Government to reassess the rates for the worker’s welfare fund every three years. Following this provision, the Government has decided to notify the public about changing the existing rate from Rs 20 to Rs 50.
  • The Kerala government has introduced some major changes through the Kerala Shops and Commercial Establishments (Amendment) Ordinance, 2018, as per the notification issued on October 4, 2018. This ordinance comes into effect immediately. Here’s a breakdown of the amendments:
    • Amendment of Section 2- The definition of ‘Employee’ is updated to include anyone employed in connection with an establishment, including apprentices or any other group declared by the Government as employees.
    • Amendment of Section 20- Women employees can now be engaged between 9 PM to 6 AM under certain conditions:
      • Consent of the female employee is required.
      • Women should work in groups of at least five, including a minimum of two females.
      • Adequate measures must be in place to ensure dignity, safety, and protection from sexual harassment.
      • Transportation should be provided from the workplace to their residence.
    • Insertion of new Section 21B: Every shop and establishment must provide suitable seating arrangements for all workers during their work hours. It includes women workers too. This means that employers must ensure that workers have access to suitable seating options in order to prevent long periods of standing during their work shifts. The intention behind this amendment is to enhance the working conditions for employees by promoting comfort and minimising physical strain.
    • Amendment of Section 30: Registers and records can now be maintained electronically, but during inspections, a hard copy must be submitted to the Inspector.
  • The Government of Kerala has made a new rule for women working on a contract basis. If a female officer has a contract for more than a year, women can now take maternity leave, which means women can take time off when she is going to have a child. However, if her contract is for one year or less, she cannot take maternity leave. This rule was decided on January 4, 2021. On February 27, 2018, the High Court said that female employees on a contract should get maternity leave according to the rules for government workers and the Maternity Benefit Act, of 1961. Now, after looking into it carefully, the government has decided that female officers on contract can get full-pay maternity leave for up to 180 days or until their contract ends, whichever is sooner. This is according to Rule 100, Part I of the Kerala Service Rules. The leave can only start three weeks before the expected date of delivery as certified by a doctor and for an extra 6 weeks or until the contract ends, whichever is sooner, they can get leave on full pay according to Rule 101, Part I of the Kerala Service Rules. They need to provide a doctor’s certificate for this leave. To get these benefits, the female officer must have worked for the employer for at least 80 days just before her expected delivery date or the date of miscarriage. These rules have been in effect since February 27, 2018, and any changes to the Kerala Service Rules will be announced separately.

Current challenges in implementing the labour laws in Kerala

There are many challenges in implementing the labour laws in Kerala. On the other hand, there are some discrepancies with regard to the legislation on this behalf which includes:

  • In Kerala, about two-thirds of the people whose work falls into the informal economy. This includes individuals who work for themselves like small business owners, those who have regular jobs in small businesses, people who do temporary or casual work, and those who currently don’t have a job unemployed. Now, the issue is that many of these workers don’t have access to things like social security. Social security includes benefits like pensions, health care, and maternity benefits. 
  • The growth of secure jobs in large manufacturing industries has been slow. Most people find work in smaller factories, but these places are not as organised or structured, they may not offer the same level of job security and benefits as the established companies provide. So, while there are jobs in smaller places, they might not be as stable or provide as many advantages to the workers.
  • Even though more people in Kerala live in cities, there hasn’t been a big advantage in terms of more women finding jobs. There has been a shift away from traditional jobs like farming and fishing. More women are now working in jobs related to trade, transport, and services, which are part of the tertiary sector. However, despite these changes, the increase in job opportunities for women hasn’t been increased. So, there’s a gap between the higher urban population and the expected increase in women working in jobs.
  • In Kerala, unfair restrictions are imposed on women in certain industries. For example, though the government has adopted safer water-based dyes in the stencilling and dyeing process, the Kerala Factories Rules 1957 still classify this process as ‘dangerous.’ As a consequence, women are being prevented from working in these specific areas within coir factories. 
  • In chemical factories, where hazardous substances are used, women are mainly assigned housekeeping tasks. However, the rules continue to prevent women from engaging in various activities, branding them as ‘dangerous.’ This distinction between men’s and women’s roles seems unjustified.
  • In sectors like cashew processing, women are mostly involved in low-paying jobs like selling nuts, while activities like roasting and oil extraction are considered ‘dangerous’ and restricted for women. This restriction supposedly aims to protect women, but it ends up preventing them from having better-paying jobs and career advancement. 
  • On the other hand in government-owned companies like FACT and BPCL, women with technical skills are often placed in administrative roles instead of being allowed to work on the factory floor due to such jobs being considered as dangers. The efforts are made to call for a review of this draft government to change the Draft Rules of 2021 to check that equal opportunities for everyone are given without considering the aspect of gender.
  • Additionally, the government of Kerala introduced a draft of the Occupational Safety and Health (OSH) Code Rules in 2021, which aims to replace the outdated Kerala Factories Rules of 1957. While the new rules aim to make it easier for women to work night shifts, there’s confusion in the draft about the details of how many women can be employed during nighttime in factories.

Suggestions to combat the challenges to labour laws in Kerala

In order to combat such challenges the following measures can be taken:

  • Government has to support the development of small and medium-sized businesses to create more job opportunities and ease the burden on formal employment.
  • Need to determine that workers in informal jobs would receive fair pay, work in safe environments, and have access to social security benefits.
  • For many people working in small businesses or doing temporary jobs, the government can help make their work more official. This means they would have better job security and benefits like health care and pensions.
  • Some jobs are labelled as ‘dangerous’ for women, which prevents them from doing certain tasks. This should be reviewed to make sure men and women have equal chances to work in all types of jobs. 
  • To help people get better jobs, the government and companies can teach them new skills. This way, they can find jobs in growing industries and have better chances for career growth.
  • In government-owned companies, women with technical skills should have the same chances as men to work on the factory floor. They should not be limited to administrative roles just because of their gender.

Conclusion

In Kerala, there are various rules which regulate labour-related issues. These rules cover things like work hours, pay, and the safety of the workers. These rules are intended to protect the rights of both men and women who work. This helps to make sure that employers and workers get along well. The labour laws play a very important role in safeguarding the interests of the workers. Certain labour laws in Kerala make sure that women and children are safe and treated fairly at work. These laws give pregnant women time off and benefits so they can take care of themselves and their babies. They also stop children from working in dangerous jobs. Kerala is the first state which has adopted the maternity benefit even to the private education sector. Though there is a well-structured enactment in the state of Kerala however some of the discrepancies are still present in some of the enactments. Recently, the government has made many changes in order to combat some of these discrepancies within the legislation. Overall Kerala has well structured labour laws that protect the employees and also establish definite rules for the employers to follow.

Frequently Asked Questions (FAQs)

What do labour laws cover in Kerala?

Labour laws include different aspects of employment like working hours, wages, and safety at the workplace. These laws aim to provide fair treatment of workers and create decent working conditions within the state of Kerala.

How do labour laws in Kerala contribute to social development?

Labour laws intend to provide fair and equal treatment of all workers. It promotes equality in the workplace and creates conditions that prioritise the welfare of the workers. This will help to contribute to the overall progress of the state.

Do central labour laws apply to the state of Kerala?

Yes, the central labour laws apply to the state of Kerala. Some of the major laws like the Minimum Wages Act 1948, the Maternity Benefit Act, Equal Remuneration Act 1976 and many others.

References


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Eco art and environmental wellness

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issues on environment

This article has been written by Bhuvaneshwari Krishnan pursuing a Personal Branding Program for Corporate Leaders from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

The sound of chirping birds settling down for the evening on top of a grand tree caught my attention. I admired the tree from root to treetop for its radiating beauty, with the winding vines and large leaves adding to its charm. The various insects crawling and some buzzing around as the tree stood majestically made me realise it is a living ecosystem with its own delicate balance. This delicate balance is what promotes the wellness of the tree and its coexisting interdependent lives that call it their home. ‘Eco’ is a word derived from Greek origin meaning ‘home’. Earth is an ecological system where there is interdependence among living organisms, including humans. Pollution, deforestation, climate change and other human influences have disrupted the delicate balance on Earth, leading to calamities.  We need to focus on environmental wellness by taking a holistic approach towards building a good physical, mental and emotional connection with the environment. This ensures the well-being of the entire ecosystem.

Concept of eco art and environmental wellness

Eco-art and environmental wellness are interconnected. Eco-Art is a contemporary activist art movement that promotes environmental wellness. The vision is to bring positive change to the environment by using the power of art. It focuses on eco-friendly methodology and sustainable practices, with an emphasis on environmental issues. Eco-art history dates from the 1960s, when the Earth art and land art movements were getting attention. The artist Robert Morris, one of the  pioneers in this genre, created works that explored the relationship between society and nature. Since then, artists have used eco-art to engage themselves with environmental issues or promote sustainable practices.

Eco-Art addresses aesthetics, ethics, politics, economics, cultural practices and the impact all of these have on the world’s ecosystems. Eco-artists can be viewed as environmental activists, drawing awareness of environmental concerns regarding our planet Earth through the medium of creative expression.

The Eco-Art forms focus on ecosystems and their interrelation with our environment by encouraging awareness, stimulating dialogue and emphasising the need for a sustainable lifestyle.

Principles 

Climate change and its effects on the environment at an alarming rate are putting a spotlight on the expanding field of eco-art. It prioritises ecological dynamics and sustainable practices.

The main principles of eco-art:

  • Eco-friendly materials: Materials that are sustainable and renewable are used. Natural materials, natural fibres, organic matter and recycled materials are some examples.
  • Nature connect: The art focuses on building a connection between nature, artist and people. It creates awareness and appreciation for the environment, encouraging participation and willingness to take action to protect the environment.
  • Care for the environment: Eco-art focus is to raise awareness about environmental issues, which promotes discussions on these issues. Art is used as a medium to promote activism, encourage participation, take action, and change lifestyles, all of which benefit the wellness of the ecological balance.
  • Reducing, recycling and repurposing: Eco-art promotes sustainable sources for materials to minimise the impact on the environment. It encourages reducing waste, recycling and repurposing materials that otherwise generate waste.
  • Collaborative work: Many professionals, such as architects, landscape architects, interior designers, scientists, educators and others, work in collaboration with the eco-artist to create works.

Eco art – material and methodology

The core essence of eco-art is the principles of sustainability, conservation and ecology. Artists integrate these principles, sustainable materials and techniques into their works. Environmental wellness being the main goal of an Eco Artist; the materials used for art are organic materials, recycling of waste, repurposing of waste, etc.

Organic forms and textures, colours and hues inspired by nature are used to establish the lost connection between the viewer and their environment.

Eco-art installations can be site specific where-in the artwork is created specifically for that particular site and is a permanent installation to inspire the viewers. It can also be an ephemeral art form like land art, where the art form is transient with time and non-permanent in nature.

Land art, also known as earth art, is a form of art that is created directly in the natural environment using materials such as stones, rocks and organic elements. It can be a simple arrangement of stones or a large-scale sculpture covering a vast area of land. This art form has existed from prehistoric times until the current date due to its deep appreciation for nature.

There are various approaches the artist can take to express his creativity and achieve the goal of environmental wellness. Some of the well-known ones are:

  • Activist projects: Eco-art, where the focus is to raise awareness on a particular social or environmental issue in order to protect the environment.
  • Remediation project: Eco-art where-in the focus is on restoring damaged and polluted landscapes using artistic techniques
  • Representation work: Eco-art where the focus is on the representation of objects or events in the real world related to ecological or environmental issues.
  • Social sculpture: Eco-art, where the focus is on sculptural forms with social and environmental themes. They are mostly made out of natural materials to promote sustainability.
  • Direct encounter: Eco-art where the focus is on the viewer’s experience, where the viewer encounters art in a direct and immersive way. It can also be an interactive art form with the environment with a theme of environmental wellness.
  • Ecopoetic art: Eco poetry is an art form that combines the elements of ecology and poetry to raise awareness about environmental wellness.
  • Relational aesthetics: The relationship between the viewer and the ecology is highly emphasised in these artworks, giving a deeper understanding of environmental wellness.
  • Pedagogical or didactic works: These are educational methodologies where-in the art forms are used as tools to educate about environmental wellness. It provides more hands-on learning, allowing the student to explore various materials and techniques to establish and rediscover their own relationship with the environment.

Eco art – sustainability in practices

Green architecture, also known as “sustainable architecture” or “green building,” is an idea that focuses on sustainable building practices. It is based on environmentally friendly principles such as energy efficiency, waste reduction, and water conservation to minimise the carbon footprint of the building on the environment. Key features of green architecture are the use of renewable materials, passive solar designs, green roofs and walls and rainwater harvesting systems.  The goal of green architecture is to create visually appealing buildings that are also energy efficient, sustainable and promote environmental wellness.

Sustainable interior design embraces eco-friendly practices and utilises natural materials to create and enhance living spaces. The goal is to create beautiful functional spaces while minimising the impact on the environment. Design involves incorporating natural elements such as natural textiles, plants and other organic materials to bring the beauty of nature indoors. The organic forms, with their natural hues, create a calming effect, bringing one closer to nature. Wood, cork, bamboo and other sustainable materials responsibly sourced and harvested are also used. Some of the eco-friendly features include optimising energy efficiency by using solar panels, reducing waste and minimising the use of harmful chemicals. The goal of these practices is to promote a more environmentally friendly and sustainable lifestyle.

Eco art – Indian context

Eco-friendly and sustainable practices in art have been part of Indian tradition and culture. Ethnic, regional and folk-art methodologies use natural pigments and eco-friendly approaches to promote environmental wellness.

The eco artist scenario is currently brimming with talent, with more and more artists adapting this methodology for their creative expressions with a cause.

Recycled and repurposed art forms are gaining popularity in India. The artist recycles waste, such as e-waste, and industrial waste, into sculptures, murals, etc. Galleries and museums provide a platform for eco artists to showcase their art-works which promotes dialogue and citizens’ involvement in protecting nature. The artworks featured give the viewer an insight into the artist’s power of imagination to examine the relationship between humans and nature and creatively express it by emphasising a sustainable lifestyle.

Children are taught about safeguarding the environment. Eco-art for children brings out their creativity and promotes an appreciation for the natural world. Eco-friendly paintings, nature collages, and recycled art are explored for a deeper connection with nature. Eco-friendly colours for Holi and eco Ganeshas are trending during festival seasons.

The ‘Art for Climate Action; India Art Facts’ summit was recently held in Delhi in September 2023. More than 100 young artists from various fields took part actively in the summit. Sustainability through art was explored in the form of panel discussions, documentaries and workshops. G20 dignitaries, MPs and ministers honoured the summit with their presence.

Conclusion

Eco-art, is an important form of artistic expression that promotes environmental wellness and sustainability. It focuses on ecosystems and their interdependent relationships as an environment. The choice of artistic mediums is gravitating towards sustainable options such as land art, ephemeral art and upcycled art to create masterpieces. The art projects are mostly community based, restorative or interventionist art. The objective is to establish a strong connection between the viewer and the environment. The art forms stimulate dialogue and encourage awareness, leading to the ultimate goal of environmental wellness.

Eco-art serves to highlight environmental issues within communities. While the change may not be immediate, it has the potential to influence thoughts and actions. This shift in perspective can have positive implications for overall environmental wellness.

References

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Bijoe Emmanuel v. State of Kerala : case analysis

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The article seeks to provide a brief analysis of the landmark judgement in the case of Bijoe Emmanuel v. State of Kerala. An attempt has been made to analyse the importance of the National Anthem and the duty of every citizen to respect it. The article delves into the question of whether it is mandatory to stand and participate in singing the National Anthem every time it is recited or played and whether a person can be compelled to sing the national anthem even if it conflicts with their right to religion.

It has been published by Rachit Garg.

Table of Contents

Background

The National Anthem holds significant importance as a symbol of unity, patriotism, and national identity. It serves to honour the history, values, and sacrifices of a nation’s people, evoking a sense of pride and belonging among citizens. Through its lyrics and melody, the National Anthem fosters a shared emotional connection, transcending differences in background, beliefs, and experiences. It is often performed at key national events, ceremonies, and sporting occasions, reinforcing a collective spirit and reminding individuals of their allegiance to their country. Additionally, the National Anthem can inspire citizens to uphold the principles of democracy, liberty, and justice, serving as a reminder of the freedoms and rights that they enjoy as members of their nation.

The issue of respecting the Indian National Anthem has been under consideration for decades. The government intended to inculcate the values at an early stage. Hence, the National Anthem is recited in school assemblies across the country. Every teacher and pupil is expected to stand and sing the National Anthem during this period. However, when it was noticed that certain students in a school in Kerala did not participate in singing the National Anthem during the assembly due to their religious beliefs, the question became a nationwide issue. It was the landmark judgement of Bijoe Emmanuel v. State of Kerala [(1986) 3 SCC 615], which has been discussed further.

Facts of Bijoe Emmanuel v. State of Kerala

The facts of the case involved three children, namely Bijoe, Binu Mol, and Bindu Emmanuel, who were believers of Jehovah’s Witnesses. They were students at a school in Kerala. The students participated in the school assembly every day. However, they did not participate in singing the National Anthem during the assembly. It was noted that the children never disrespected or insulted the National Anthem during the assembly but stood respectfully and quietly. This was done due to their belief in Jehovah’s Witnesses, which provided that the Witnesses would participate only in religious offerings and none other. On being noticed by a Member of Legislative Assembly (MLA), followed by Assembly debates on the issue, the students were expelled from the school on the instructions of the Inspector of Schools. Aggrieved by the expulsion, the father of the children sought relief from the decisions of the school administration. However, the plea was to no avail. 

A writ petition was filed before the Single Judge, Kerala High Court, who dismissed the same. The Division Bench of the High Court also rejected the appeal of the children. Thus, a Special Leave Petition was preferred before the Hon’ble Supreme Court under Article 136 of the Constitution.

Issues involved

The issue involved before the High Court and the Hon’ble Supreme Court was whether the non-participation of the children in singing the National Anthem during the school assembly amounted to disrespect for the National Anthem.

Contentions of the parties in Bijoe Emmanuel v. State of Kerala

Petitioners’ contentions

The Petitioners in the case relied on their fundamental right to speech and expression enshrined under Article 19(1)(a) of the Constitution. It provides that no citizen shall be denied the right to speech and expression, subject to the limitations provided under Article 19(2) of the Constitution. They contended that their religious beliefs do not allow them to participate in any offerings or recitals other than their offerings to their God. Thus, standing peacefully and not creating any hindrances in the school assembly cannot be said to be disrespectful towards the National Anthem. It was never the intention of the Petitioners to disrespect the National Anthem. Thus, the expulsion from the school on this pretext was unjustified and must be quashed. 

Moreover, reliance was placed on Article 25 and Article 26 of the Constitution, i.e., the fundamental right to practice any religion and manage religious affairs, respectively. This can be subject only to public order, morality and health and to the other provisions of Part III. Thus, no legislation can be enforced on any other grounds against the Petitioners’ right to freedom of religion. Thus, the non-participation of the Petitioners in singing the National Anthem forms part of the freedom to practice a religion and does not, in any manner, create any hindrance to public order, morality and health or violate any of the fundamental rights guaranteed under Part III of the Constitution. Expulsion on the said grounds would be patently void.

The Petitioners also contended that neither the Kerala Education Act, 1958, nor the rules made thereunder, authorise any school to prevent the students from attending classes for the sole reason of not participating in singing the National Anthem.

Respondents’ contentions

The first contention raised by the Respondents was that the Jehovah’s Witnesses are not even a religious sect, let alone them being a religious belief. They are only an association of people following Christianity. Thus, they cannot seek protection under Article 26 of the Constitution. Not participating in singing the National Anthem cannot be insulated by Article 26.

Another contention raised by the Respondents was that the actions of the Witnesses violated Article 51A of the Constitution. Article 51A of the Constitution provides that it is the fundamental duty of every citizen to abide by the Constitution and respect the National Flag and the National Anthem. By choosing not to sing the National Anthem at the school assembly, the Witnesses are disrespecting the National Anthem.

Additionally, the Respondents relied upon Circular H6-47833/69, dated 18-2-1970 issued by the Director of Public Instruction for the Code of Conduct of the Teachers and Pupils in Schools. It stated that “it is compulsory that all schools shall have the morning Assembly every day before actual instruction begins. The whole school with all the pupils and teachers shall be gathered for the Assembly. After the singing of the National Anthem, the whole school shall, in one voice, take the National Pledge before marching back to the classes.” The Respondents argued that the Petitioners violated the said circular as well. 

On the above grounds, the Respondents argued that it is compulsory for each and every student to participate in singing the National Anthem during the school assembly, and since the Petitioners did not do so, they were rightly expelled from the school.

Ruling by the Kerala High Court

The Division Bench of the Kerala High Court, in its judgement dated October 7, 1985, rejected the contentions raised by the Petitioners and held that the Head Mistress of the school rightly prohibited the pupil from attending the school. The judgement of the Court was based on the following reasons:

  1. The Court highlighted the importance of the National Anthem by delving into the intent of the Parliament in introducing the Fundamental Duties of the citizens under Article 51A of the Constitution through the Constitution (Forty-Second Amendment) Act, 1976. It was held that the Parliament wanted to emphasise on the integrity and unity of India. Moreover, the fundamental duties under the Constitution are the political responsibilities of the citizens. The citizens cannot be absolved of this political responsibility on the grounds of different practices by their political society.
  2. The Court ruled the Jehovah’s Witnesses to be nothing more than a charitable society. The contention of the Respondents that the Witnesses are not even a sect of Christianity, let alone a religion in itself, was accepted by the Court. Hence, the Witnesses cannot be granted the fundamental right of religion as provided under the Constitution. This was even substantiated by the findings that the Witnesses had various registered offices around the globe, including in India. Thus, the Witnesses are not entitled to protection under Articles 25 and 26 of the Constitution.
  3. Further, the Court held that the fundamental right of religion cannot be exercised independently of the fundamental duties enshrined under the Constitution. It was stated that where there is a mandatory duty cast on the citizens that they should show respect to the National Flag and National Anthem, the citizens are bound to show unqualified respect to them, notwithstanding any special rights, they may claim under the Constitution. Article 51A of the Constitution contains such a mandate. It is well-established that such Constitutional provisions must be read into every enactment, or, in any event, must be deemed to be there by implication because “the Constitution is the paramount law of the country to which all other laws are subject.”

Judgement in Bijoe Emmanuel v. State of Kerala

The Hon’ble Supreme Court overturned the decision of the Kerala High Court through its judgement dated August 11, 1986, for the following reasons:

  1. The patent issue involved in the case was whether the students could be expelled from the school for not fulfilling their fundamental duties enshrined under the Constitution. However, the Supreme Court noted that the High Court swayed away from the issue to analyse if the Witnesses did not acknowledge the words and ideals of the National Anthem. The High Court minutely discussed each word of the National Anthem to conclude that no word or thought in the National Anthem could offend any person’s religious belief. However, the Court held that it was not the words or ideals of the National Anthem that the Witnesses and their beliefs disapproved of, but rather the singing that was against their religious beliefs. Relying on various international judgements, including Adelaide Company of Jehovah’s Witnesses v. The Commonwealth (1943) and Minersville School District v. Gobitis (1940), the Court held that the Jehovah’s Witnesses have certain unusual beliefs, but they did not intend to disrespect national values.
  2. Article 19(1)(a) of the Constitution guarantees the right to freedom of speech and expression to the citizens of India. Article 19(2) of the Constitution authorises the Parliament to enact any law that could put a reasonable restriction on the exercise of such rights on the grounds mentioned under the clause itself. On such grounds, the Parliament has the power to enact laws to restrict speech and expressions that may be against national honour. The Respondents argued that the Kerala Education Act, 1958 and the rules made thereunder fall within the competence of the Parliament to put reasonable restrictions on the citizens’ right to freedom of speech and expression. However, the Court rejected this contention and held that the Parliament had already enacted the Prevention of Insults to National Honour Act, 1971. Section 2 of the Act deals with insults towards the National Flag and the Constitution of India, whereas Section 3 of the Act deals with insults to the National Anthem. It cannot be stated that the Parliament made an omission by not including the non-singing of the National Anthem as an insult to it. The provision only penalises the act of preventing others from singing the National Anthem. It is not the case at hand. The students remained respectfully quiet and did not prevent any other students or cause any disturbance during the school assembly. Hence, it cannot be stated that the students insulted the National Anthem. 
  3. On the issue of violation of the circulars issued by the Director of Public Instruction, the Court noted that the circulars did not have any backing from any statute. It also did not obligate every pupil in the assembly to participate in singing the National Anthem. Moreover, the circular did not provide any sanction for violating the said directions. Thus, it was stated that “If the two circulars are to be so interpreted as to compel each and every pupil to join in the singing of the National Anthem despite his genuine, conscientious religious objection, then such compulsion would clearly contravene the rights guaranteed by Art. 19(1)(a) and Art. 25(1).”

Finally, the Court concluded that the authorities, including the School Headmistress and the Deputy Inspector of Police, breached the limitation to their powers under the Constitution by violating the Petitioners’ rights enshrined under Article 19(1)(a) and Article 25(1) of the Constitution. The judgement of the Kerala High Court was set aside with directions to the Respondents to reinstate the children in the school.

Analysis of Bijoe Emmanuel v. State of Kerala

The importance of the National Anthem of a country cannot be emphasised upon enough. It is a matter of pride and honour for the whole country. Disrespecting it in any manner is intolerable. The Legislature has enacted the Prevention of Insults to National Honour Act, 1971, to prevent anyone from insulting the National Anthem, National Flag, the Constitution, etc. Section 3 of the Act prescribes the punishment for preventing any person from singing the National Anthem or causing any disturbance during the assembly, which includes imprisonment, which may extend to three years, a fine or both. Moreover, through the Forty-Second Amendment to the Constitution, the Parliament has added the fundamental duties of a citizen, which include honouring the National Anthem.

After the crucial ruling in Bijoe Emmanuel v. State of Kerala, there have been a number of cases wherein the non-participation in singing the National Anthem has been alleged as showing disrespect towards it. Some of the landmark decisions have been discussed hereinbelow:

Union of India v. Naveen Jindal (2004)

Facts of the Case

In this case, the Respondent, Naveen Jindal, was the Managing Director of a factory in Delhi. The factory premises of the Respondent were flying the National Flag. However, this was objected to by the government authorities on the grounds that the act violated the Flag Code of India, 2002. Aggrieved by this, Respondent filed a writ petition before the High Court of Delhi. The High Court stated that the Flag Code of India was merely an executive direction and not a law. Hence, the Petition was disposed of, stating that the Flag Code was not a valid ground for restricting the right to freedom of speech and expression guaranteed under Article 19(1)(a). Aggrieved by the decision of the High Court, the government preferred an appeal before the Hon’ble Supreme Court.

Issues before the Court

The issue before the Court was whether it is a fundamental and absolute right of a citizen to fly the National Flag at a public place or whether the Central Government is authorised to regulate the same.

Contentions of the Parties

Appellant’s Contentions

The Appellant contended that the Central Government was authorised to regulate the conduct of the citizens regarding the use of the National Flag in public places under Section 3 of the Emblems and Names (Prevention of Improper Use) Act, 1950. They further contended that the Central Government was authorised to impose reasonable restrictions, under Article 19(2) of the Constitution, on the fundamental right of freedom of speech and expression. They further argued that it was a policy decision whether to allow or not the use of the National Flag by the citizens and the Courts were not authorised to intervene.

Respondent’s Contentions

The Respondent argued that it was the fundamental right of a citizen to use or fly the National Flag with respect and dignity. Moreover, the Flag Code was merely an executive order by the government and not a law, making it a directory and not mandatory. 

Judgement

The Court analysed various aspects of this case. On the question of the Flag Code being a law, the Court held that it cannot be stated that the Flag Code is a law under the provisions of Article 13 of the Constitution. Further, on the contention of the Respondent that the free use of the National Flag was a fundamental right of every citizen, the Court stated that it was more of a fundamental duty rather than a fundamental right of the citizen to respectfully use the National Flag, National Anthem and the Constitution.

Additionally, the Court analysed the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950, and the Prevention of Insults to National Honour Act, 1971; to state that it is of paramount importance to respect the National Flag, National Anthem and the Constitution of India. These are symbols of secularism. They represent the supreme collective expression of commitment and loyalty to the nation, as well as patriotism for the country. They are necessary adjuncts of sovereignty, being symbols and actions associated therewith. Thus, the Supreme Court dismissed the appeal by the government and held that using the National Flag respectfully was a fundamental right of freedom of speech and expression.

Although the issue in the case was regarding the use of the National Flag by private entities, the Court stated that it is important for every citizen to respect the National Anthem as well.

Shyam Narayan Chouksey v. Union of India (2018)

Background of the Case

The background of the case involves a Writ Petition filed at the High Court of Madhya Pradesh in 2001, in the case of Shyam Narayan Chouksey v. Union of India (2003). The Petitioner went to watch the film ‘Kabhi Khushi Kabhi Gham’ in a cinema hall. While viewing the said movie, the Petitioner found that in a particular portion, the background of the film is set in London, and the child, the son of the main protagonists, sings the National Anthem of India in the school function. The Petitioner, being a nationalist and patriotic citizen, immediately stood up. However, he was surprised to find out that not only the crowd watching the film did not stand up to pay homage to the National Anthem, but rather objected to the Petitioner for obstructing their view. As a result, the Petitioner started protesting in front of the cinema hall and filed complaints with the police, but to no avail. Finally, a writ petition was filed before the High Court of Madhya Pradesh for the issue of a writ of mandamus to direct the Central Board of Film Certification (CBFC) to be cautious and avoid certification of films commercialising the National Anthem. The writ petition was allowed and the CBFC was directed to not certify the film without deletion of the relevant portion.

Aggrieved by the decision, the Producer and the Director of the film preferred an appeal before the Hon’ble Supreme Court of India, in the case of Karan Johar v. Union of India (2004). The said appeal was allowed and the directions to the Central Government were nullified by the Apex Court.

Facts of the Case

In this case, the Petitioner approached the Supreme Court under Article 32 of the Constitution, praying for the issue of a writ of mandamus directing the Respondents to take appropriate steps for inculcating in the public a proper sense of paying due respect to the National Anthem; to issue a writ, order or direction as to what is required to be done and not to be done when the National Anthem is being played or sung; to specify what will constitute disrespect and abuse of the National Anthem; and to restrain the use of the National Anthem for any commercial exploitation or to gain financial advantage in any manner. 

Issues before the Court

The issue in the present case was whether it was mandatory to play and sing the National Anthem before the featured film starts in a cinema hall.

Contentions of the Parties

Petitioner’s Contentions

The Petitioner argued that the National Anthem is not only a song, but rather a national honour. It depicts the culture and the history of the country. It depicts the national struggle to gain independence. Thus, it is the duty of the citizens to respect the National Anthem by standing and singing it whenever it is recited or played. The Petitioner also argued that it is also a fundamental duty of the citizens under Article 51A of the Constitution, and thus, the Court may issue directions as to what may constitute disrespect towards the National Anthem, and direct that no one should gain a commercial advantage from it.

Respondents’ Contentions

The Respondents, in this case, argued that the Central Government was in the process of formulating guidelines regarding the conduct of citizens while the National Anthem was recited. However, it may not be made mandatory for the citizens to stand up while the National Anthem is part of the storyline of the film. Thus, the Writ Petition may be dismissed.

Interim measures by the Court

The Supreme Court, as an interim measure, issued the following directions:

  1. There shall be no commercial exploitation of the National Anthem. No person singing it or depicting it in any manner should gain any commercial advantage out of it.
  2. There shall be no dramatisation of the National Anthem as it is the duty of every citizen to pay due respect to the national honour. Dramatisation of any manner is inconceivable.
  3. The National Anthem or a part of it shall not be printed on any object and also never be displayed in such a manner at such places that may be disgraceful to its status and tantamount to disrespect.
  4. All the cinema halls shall play the National Anthem before the feature film starts and every person in the cinema hall shall stand and sing the National Anthem.
  5. The entry and exit doors of the cinema halls shall remain closed while the National Anthem is played.
  6. The picture of the National Flag shall be displayed while the National Anthem is being played.
  7. No one should play or depict an abridged version of the National Anthem.

Judgement

While the Supreme Court was determining the case on merits, the Respondents submitted that it had formed a twelve-member Inter-Ministerial Committee to recommend whether the National Anthem must be played before the feature film starts in cinema halls. The Ministry of Home Affairs also issued certain directions vide Order No. 14/6/2016-Public dated May 12, 2017, regarding exemptions granted to persons with disabilities from standing while the National Anthem was played in the cinema halls. Accordingly, the Court modified its interim order to the extent that playing the National Anthem in cinema halls was directory and not mandatory and provided that the exemptions granted to persons with disabilities shall remain in force.

Dr. Tawseef Ahmad Bhat v. State of Jammu and Kashmir (2021)

Facts of the Case

In this case, the Petitioner approached the Hon’ble Jammu & Kashmir High Court, praying for the quashing of an FIR registered against him under Section 3 of the Prevention of Insults to National Honour Act, 1971 for allegedly causing a disturbance during the assembly and disrespecting the National Anthem. The Petitioner was a professor at a college on a contractual basis. One day, a special assembly was arranged to celebrate the surgical strike against a neighbouring country. During the said assembly, the National Anthem was sung by everyone present. It was the case of the complainants that the Petitioner did not stand up and sing the National Anthem in the said assembly. The complainants approached the Sub-Divisional Magistrate (SDM), who directed the complaint to the police station with a direction to file the impugned FIR.

Issues and contentions

The Petitioner challenged the facts in the complaint. According to him, he participated in the singing of the National Anthem and did not, in any manner, disrespect it or cause any disturbance during the assembly. Moreover, he contended that the SDM was not competent to direct the police to register an FIR against him. The Petitioner also contended that disrespecting the National Anthem was not punishable under the provisions of the Act.

Judgement

The High Court took note of the issues involved in the case. On the first issue, the Court analysed Section 156(3) of the Code of Criminal Procedure, 1973 (CrPC). It was held that only a judicial magistrate is competent under Section 156(3) of the CrPC to direct the police to file an FIR. An Executive Magistrate is not authorised to give such directions. Even if the SDM finds that an offence has been committed, he is obliged to inform the police so that they can take action under Section 154 of the CrPC. Thus, the FIR against the Petitioner ought to be quashed on this ground.

Further, the High Court also analysed Section 3 of the Prevention of Insults to National Honour Act, 1971, and what acts shall constitute an insult or disrespect of the national honour. It was held that the Act penalises only the wilful prevention of singing the National Anthem or the act of causing disturbance during the assembly. It does not penalise the disrespect of the National Anthem. The Court also placed reliance upon the Prevention of Insults to National Honour (Amendment) Bill, 2019, which was tabled in Parliament for amending Section 3 of the Act to penalise the act of not standing during the National Anthem. Since the Bill was not accepted in Parliament, the Court held that it was not the intention of Parliament to include such an act as an insult or disrespect towards the National Anthem. Thus, it is not mandatory to stand during the National Anthem, even though it is a fundamental duty under Article 51A of the Constitution. Even though the Petitioner violated his fundamental duty, the FIR was found to be baseless and was quashed by the Court.

In the cases discussed above, it can be seen that the judicial approach towards ‘disrespect of the National Anthem’ has been rather strict. In all the cases, the alleged disrespect was depicted by not standing during the assembly or standing quietly but not singing it. In Bijoe Emmanuel’s case, it was seen that the students were respectfully quiet during the assembly. They did not cause any kind of disturbance. A similar case was seen in Shyam Narayan Chouksey’s case, as well as Dr. Tawseef Ahmed Bhat’s case. In none of these cases did the accused cause disturbance of any kind or prevent any other person from singing the National Anthem.

Sankar Ghosh & Ors. v. State of West Bengal & Ors. (2023)

Facts of the Case

In this case, an FIR was lodged against 12 members of the Legislative Assembly of West Bengal for disrespecting the National Anthem. During a session of the Legislative Assembly, the members of the Ruling Party, i.e., the Trinamool Congress, started protesting. The protest was against the Central Government for withholding the funds sanctioned under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Objecting to the protest, the 12 members of the Opposition Party, i.e., the Bharatiya Janata Party, started shouting slogans and allegedly blocked the exit of the Assembly building. Amidst the shouting, the protest of the TMC members concluded with the singing of the National Anthem. While the National Anthem was sung in the Assembly by certain members, the 12 accused were shouting slogans. This, according to the complainants, was disrespectful of the National Anthem. Accordingly, an FIR was registered. The Petitioners approached the High Court of West Bengal to quash the said FIR.

Issues before the Court

The issue before the Court was whether shouting slogans at the time when certain members sang the National Anthem at the Assembly was disrespectful of the National Anthem.

Contentions of the Parties

Petitioners’ Contentions

The Petitioners argued that the protest resulted in a situation of chaos. They argued that it was indecorous on the part of the members of the Ruling Party to sing the National Anthem in such a situation. It was not a case of wrongful restraint, as an alternative exit was available for the members. Moreover, the protests by the Petitioners and the Respondents were taking place in two different areas of the Assembly. It was impossible for the Petitioners to hear the National Anthem, let alone wilfully disrespect it. 

Respondents’ contentions

The Respondents placed reliance on Lalita Kumari v. Government of U.P. & Ors. (2013) to argue that since the case related to a cognizable offence, the police were right in registering the said FIR and proceeding further. Thus, the FIR ought not to be quashed by the High Court, as quashing has to be done in the rarest of the rare cases. Further, reliance was placed on CCTV video recordings of the Assembly.

Judgement

The Court noted that it was necessary to hear the case at length. No prima facie case was found against the Petitioners and the Court stayed the proceedings until further directions.

The Prevention of Insults to National Honour (Amendment) Bill, 2019

The Bill was introduced in 2019 to amend Section 3 of the Prevention of Insults to National Honour Act, 1971. The proposed amendment was to add the phrase “intentionally causes disrespect to the National Anthem” to the penal provision. Additionally, an explanation was also proposed to be added, which read, “For the purposes of this section, the word “disrespect” shall include any person refusing to stand for or recite the National Anthem except when such person is suffering from any physical disability in that regard.” The Statement of Objects and Reasons provided that the intention of the amendment was to make it mandatory for every person to stand and recite the National Anthem whenever it is sung or played in an assembly of people.

It is pertinent to note that the proposed bill was not accepted by Parliament. This implies that it is not the legislative intent to penalise the act of not participating in singing or standing while the National Anthem is recited. Such acts would not be considered disrespectful of the National Anthem, but rather would be treated as the right to speech of the individual.

Code of Conduct by the Ministry of Home Affairs

The Ministry of Home Affairs has issued Orders relating to the National Anthem of India, which is the code of conduct to be followed by every citizen of the country to pay due respect to the National Anthem. It provides the contents of the National Anthem. Moreover, it also provides a short version, which is as follows:

“Jana-gana-mana-adhinayaka jaya he 

Bharata-bhagya-vidhata. 

Jaya he, jaya he, jaya he, 

Jaya jaya jaya jaya he.” 

The Code of Conduct also provides the occasions on which the National Anthem has to be played. These include:

  1. Civil and Military investitures;
  2. National Salute to the President or the Governor/Lieutenant Governor;
  3. During Parades;
  4. On arrival and departure of the President or the Governor/Lieutenant Governor at official State functions;
  5. Before and after the President addresses the nation on All India Radio;
  6. When the National Flag is brought on parade; 
  7. When the Regimental Colours are presented; 
  8. For hoisting of colours in the Navy;
  9. Drinking toasts in Messes (short version has to be played);
  10. Any other special occasion.

Further, the Code of Conduct also provides the occasions on which the National Anthem shall be sung in masses. These include:

  1. On cultural and ceremonial functions when the National Flag is unfurled;
  2. On arrival and departure of the President at Public functions;
  3. In schools, before the commencement of the classes, by way of community singing.

The Code of Conduct also provides the conditions for playing the National Anthem of a foreign state. Additionally, it states that whenever the National Anthem is played or sung, everyone has to stand in attention. However, when it is played as a part of a film, it is not mandatory to stand, as standing is bound to interrupt the exhibition of the film and would create disorder and confusion rather than add to the dignity of the Anthem. The citizens are expected to abide by these rules under the Code of Conduct.

Conclusion

In all the cases discussed above, the Courts took note of this fact and applied the law as laid down in the Prevention of Insults to National Honour Act, 1971. The Courts stated that the accused were not to be penalised for not singing or standing during the National Anthem. It was not an act of disrespect towards the National Anthem, either due to religious beliefs or even when the depiction was in the middle of a film. Although it was noted that these acts violated the fundamental duties of the citizens, they were not to be penalised.

Even the legislative intent was not to penalise non-participation in singing the National Anthem. This is evident through the rejection of the 2019 Amendment Bill to the Prevention of Insults to National Honour Act, 1971, as the proposed amendment was to change the meaning of disrespect in the context of the Act. Thus, it can be stated that even though it is a fundamental duty of every citizen to stand and participate in singing the National Anthem, they cannot be compelled to do so by penalising it.

Frequently Asked Questions (FAQs)

Which case is known as the ‘National Anthem’ case?

Bijou Emmanuel v. State of Kerala (1986) is popularly known as the ‘National Anthem’ case. In this case, the Supreme Court held that not singing the National Anthem while it is recited is not an offence under the Prevention of Insults to National Honour Act, 1971, if the accused is not disrespecting it.

What is the ruling by the Supreme Court about standing up for the National Anthem?

While the Supreme Court has stated that singing the National Anthem is not mandatory under the provisions of the Prevention of Insults to National Honour Act, 1971, it has clarified in Shyam Narayan Chouksey’s case that everyone shall be expected to stand up while the National Anthem is being recited.

What is the punishment for disrespecting the National Anthem?

Section 3 of the Prevention of Insults to National Honour Act, 1971, provides that anyone disrespecting the National Anthem shall be punished with imprisonment for a term that may extend up to three years, a fine, or both.

Is it mandatory to stand up and participate in singing while the National Anthem is being recited?

It is not mandatory to stand up and participate in singing when the National Anthem is being recited. However, it is pertinent to note that it is the fundamental duty of every citizen to honour the National Anthem. Disrespecting the National Anthem is not tolerable, and it is even a penal offence under Section 3 of the Prevention of Insults to National Honour Act, 1971, to the extent of preventing any other person from singing the National Anthem or causing a disturbance during the assembly. Not singing the National Anthem while it is recited is not an offence.

Is it mandatory to stand up while the National Anthem is recited?

While it is not mandatory for the citizens to sing the National Anthem if they are respectful towards it, they may need to remain standing while it is recited. This is because the act of not standing up while the National Anthem is sung may constitute disrespect towards it. Such conduct would attract the penal provisions of the Prevention of Insults to National Honour Act, 1971.

However, sometimes the National Anthem is played as part of a movie. However, the public cannot be expected to stand up during such a recital. The case of Shyam Narayan Chouksey v. Union of India was filed on a similar issue. However, the Court held that it is not mandatory to stand up during such a recital.

Exemptions have also been granted to persons with disabilities, as it may be impossible for them to stand due to their physical conditions. Thus, persons with disabilities cannot be compelled to stand when the National Anthem is recited. However, it is pertinent to note that the conduct of such persons still needs to be respectful.

References


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Hussainara Khatoon v. State of Bihar (1979) : case analysis

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This article has been written by Sakshi Jain. The article contains a brief overview of the case of Hussainara Khatoon v. State of Bihar. It examines the right to a speedy trial and the right to free legal aid for every citizen guaranteed as part of the fundamental rights. The article also discusses the aftermath of the judgment and the subsequent steps taken by the judiciary to ensure every citizen gets to exercise their fundamental rights. 

Introduction

As Indian citizens, the Constitution of India, 1950 has guaranteed us certain fundamental rights. But what if we say that certain fundamental rights aren’t given to everyone? Sounds unfair! Let’s ask one more question. What if those certain fundamental rights can be exercised only when you’re rich, not accused, etc.? It will not only result in social bias but also violate Article 14 of our Constitution, which provides for equality before the law and equal protection of the law. The case of Hussainara Khatoon v. State of Bihar (1979) is one such case that talks about fundamental rights that are essential for every prisoner, i.e., the right to a speedy trial and the right to free legal aid. This is a landmark case where the Court held that every prisoner has a fundamental right to a speedy trial under Article 21 of the Constitution of India. The case holds significance as it extensively outlines the human rights of prisoners and marks the inception of public interest litigation in India. 

Details of Hussainara Khatoon v. State of Bihar

  • Case name: Hussainara Khatoon v. State of Bihar (1979) 
  • Equivalent Citations: 1979 AIR 1369, 1979 SCR (3) 532 
  • Act involved: Constitution of India 
  • Important provisions: Article 21 and 39A of the Constitution of India
  • Court: Supreme Court of India
  • Bench: Justice P.N. Bhagawati, Justice R.S. Pathak, and Justice A.D. Koshal
  • Petitioners: Hussainara Khatoon & Ors. 
  • Respondents: State of Bihar
  • Judgement Date: 09/03/1979

Facts of Hussainara Khatoon v. State of Bihar

Advocate Pushpa Kapila Hingorani, known as the Mother of Public Interest Litigation, filed a Habeas Corpus writ before the Court, highlighting instances of injustice against prisoners in Patna and Muzaffarpur jails. In her writ, she highlighted the denial of the right of prisoners to a speedy trial and the issue of prolonged detention without the grant of bail, even after the expiration of their detention period.

A report was made by R.F. Rustum during his tenure in the National Police Commission in Bihar in 1977, which was later printed in the form of an article in the Indian Express newspaper. On his visit to Muzaffarpur and Patna jails, he noticed there are many under trial prisoners (men, women, and children) and accused who are in the jail, even after the expiration of their detention periods. Due to a lack of legal knowledge, they were not aware of the procedure followed by the Court. And every time they’re produced before the Court, their hearing is shifted to another date.

After reading the article, Advocate Pushpa Kapila Hingorani presented a writ before the Supreme Court of India on behalf of Hussainara Khatoon and all the present prisoners at that time (whose names were mentioned in that article). Hussainara Khatoon, who had been in jail for 4-5 years, remained detained despite a direct government order to release prisoners held under the Foreigners Act (1946).  

Issues raised in Hussainara Khatoon v. State of Bihar

Law and principles involved 

There are mainly two provisions that are involved – Article 21 and Article 39A of the Constitution of India

Article 21

Article 21 is also known as the ‘heart of fundamental rights’. The Article guarantees the protection of the right to life and personal liberty, except in certain procedures prescribed by the law. The protection of the right to life and personal liberty cannot be taken away except through some legal procedures. Though the protection of life does not mean protection against any injury, it includes one’s dignity and all those exposure where worth of a human life is concerned. 

Personal liberty provides freedom to move freely, freedom to reside, etc. In fact, the under-trials or citizens who are detained in prison are also guaranteed the right to life. Prisoners can exercise their fundamental rights when they are illegally detained. 

Over the years, Article 21 has evolved through many landmark judgements. In Maneka Gandhi v. Union of India (1978), the Court held that personal liberty has a broader scope under this Article. The right to life and personal liberty is also extended to the right to live with dignity. One’s right to live with dignity shall also be protected under this Article and considered a part of Article 21. The Court also held that procedures established by the law shall be fair, just and reasonable. If any procedure or proceeding does not follow fair, just, and reasonable standards, it shall be terminated. 

Further, in Olga Tellis v. Bombay Municipal Corporation (1985), the Court held that the right to livelihood is an integral part of the right to life, and it shall also be protected under Article 21.

Important Note: For the interest of public order, national security, or morality, certain restrictions can be imposed on the Article, but such restrictions should not be made a norm.

Article 39A 

Article 39A guarantees equal justice and makes provision for free legal aid under the Constitution of India. It ensures justice for all citizens and requires the provision of free legal aid by the government through legislation or directives of the relevant authority. This provision was introduced through the 42nd Amendment in 1977. The State bears the responsibility to ensure that our legal system promotes justice based on equal opportunity and provides free legal aid services by the respective authorities, without discrimination.

Arguments of the parties in Hussainara Khatoon v. State of Bihar

Petitioner

  • The petitioner argued that prisoners in Patna and Muzaffarpur jails were kept in remand on unfair and unreasonable grounds. 
  • They are presented before the magistrate at the hearing, but instead of hearing the parties, the Court passed an order to keep them in judicial custody as per the request of the police. 
  • Many prisoners were confined under police custody despite the fact that their detention period was over. 
  • As per the Article 21, the right to a speedy trial and the right to life are violated.
  • The names of prisoners were also presented before the Court in the form of a printed article, which served as evidence. It clearly stated how the magistrate and our judicial system failed to provide justice to them.  

The Supreme Court of India passed an interim order due to the absence of the respondent and held that the allegations against the respondent in the newspaper and in the writ are presumed to be correct. 

Judgement in Hussainara Khatoon v. State of Bihar

The judgment was pronounced by the Division Bench comprising of Justice P.N. Bhagwati and Justice D.A. Desai. Due to the non-appearance of the respondent despite the notice, the Court considered the allegations in the report (published article) and the writ as correct. Further, the Court emphasised that our Constitution vehemently opposes discrimination in fundamental rights and drew attention to the irresponsible behaviour of our judicial system, which failed to address discrimination within its purview. The Court held that the names mentioned by Advocate Pushpa Kapila Hingorani in her writ should get bail along with personal sureties as it violates their right to life as guaranteed under Article 21 of the Constitution. 

Immediate bail was granted for men, women, and children. The Court further ordered the state government and the high Court to make a list of all the pending cases and submit it before the Court by December 31st,1978, while stating the reasons. Further, the Court ordered the provision of free legal aid to under-trial prisoners who are charged with bailable offences. 

The Court highlighted the irresponsible behaviour of our judicial system that discriminated between rich and poor and failed to ensure that every prisoner could exercise their fundamental rights under Article 21 even after the case of Maneka Gandhi.

While dealing with the provisions of bail, Justice Bhagwati outlined the grounds to be considered, providing guidance on the factors to be taken into account when granting bail. They are as follows;

  • length of his residence in the community; 
  • his employment status, history, and financial credibility; 
  • his family ties and relationships; 
  • his reputation, character, and monetary condition;
  • his prior criminal record; 
  • identify any responsible person who will vouch for his presence in the Court when needed; 
  • nature of the offence he is charged for, probability of conviction, and 
  • low/no risk of wilfully disappearing. 

If the Court is satisfied with the above mentioned grounds, then the accused shall be released on his personal bonds. The Court shall fix the bond on the basis of relevant factors and not according to the mechanical nature of the offence. The Court also stated that if the accused released on bond fails to appear before the Court at the time of hearing, then the bond is forfeited, which will lead to the denial of bail in the future. 

With the above stated points, the Court ordered the release of all those under-trial prisoners (whose names are mentioned in the published article) with bonds.                               

Outcome of the judgement 

Justice was granted not only to the prisoners in Bihar jails. But a total of 40,000 prisoners from across the nation were released as they were kept in illegal detention. The Court held that detention shall be based on reasonable, fair, and just rather than mere adherence to procedures. If the procedures fail to uphold these principles, then it shall get terminated. Article 21 clearly states that the right to life and the right to liberty shall be protected at every level. Also, it helps to create a balance between basic norms and speedy justice in every procedure.

Subsequent directions by the Supreme Court

Though the judgment achieved a milestone in securing the rights of the under-trial prisoners, subsequent orders were passed by the Hon’ble Supreme Court to give effect to the rights that were entitled to these prisoners by way of the judgment. 

In Hussainara Khatoon II (1980 1 SCC 91), Mrs. Hingorani highlighted that women and children, after getting released on bonds, have no idea where to reside. Thus, the Court directed the Social Welfare Department of the Government of Bihar to contact those women and children and look after them until the final disposal of the writ petition. Also, it directed the Jail Authorities to inform the release of women and children on bonds to the Social Welfare Department of the Government of Bihar or the District Officer-in-Charge so that arrangements for them can be made. 

In Hussainara Khatoon III (1980 1 SCC 93),  several orders and directions were passed:-

  • The Court held that if police failed to submit the charge sheet over a period of two years, in which further three months are also given, then the state shall withdraw the case. 
  • The Court passed direct orders in favour of women and children who are kept in jail under ‘protective custody’; though presence is required for giving any evidence but if the detention period is over, they shall be released and shall be taken over to rescue homes for proper care. 
  • The Court held affidavits have to be submitted by the government to show whether under-trial prisoners were presented before the magistrate according to Section 167(2) of the Code of Criminal Procedure, 1973. Further, inquiry needs to be conducted by the High Court on how the detention period was extended from two to ten years even after proving their innocence. 
  • The Court further directed the state government of Bihar to submit a revised chart showing year-wise breakdown of under trial prisoners in two categories: minor and major offences. 
  • The Court further directed the state government to release those prisoners against whom the charge sheet has not been filed as per the Section 468 of the Code of Criminal Procedure, 1973. They will not be liable for any further detention as it will violate their fundamental right under Article 21. 
  • The State Government and the High Court were directed to look into cases where the investigation is being continued for over a period of more than six months without satisfying the magistrate the special reason to be extended. Such under-trial prisoners shall also be released.

In Hussainara Khatoon IV (1980 1 SCC 98), the Court considered the affidavits filed in response to its earlier order passed in Hussainara Khatoon I and III and passed new directions:

  • As per the Hussainara Khatoon II order, the jail superintendent submitted the affidavits before the Court, stating prisoners were presented before the Court ‘as and when required by the Courts’. In contrast, the Court held that the State of Bihar has to file a proper affidavit within two weeks stating whether the under-trial prisoners directed to be released on personal bonds were presented before the Magistrate according to Section 167(2) of the Code of Criminal Procedure, 1973 and also mention the dates of being remanded by the Magistrates. 
  • The Court directed the release of under-trial prisoners who have been illegally detained. The continuation of their detention period will lead to a violation of their fundamental right under Article 21. 
  • The Court directed the State government to provide under-trial prisoners with lawyers as part of free legal aid. The same shall be applicable for non-bailable offences. Further, it advised the Government of India and the State government to introduce a legal service programme. 

Importance of speedy trial

Criminal litigation

Justice P.N. Bhagwati highlighted that detention must be reasonable, fair and just and if a person is deprived of even one of these, then it will violate its fundamental rights under Article 21. He further quotes, “Speedy trial is of the essence of criminal justice, and there can be no doubt that delay in trial by itself constitutes denial of justice”. If there is any procedure which fails to support the criteria of being reasonable, fair and just, then it would fall foul of Article 21. 

Legislative framework in India for speedy trials

Some of the provisions relating to speedy trial under the Code of Criminal Procedure 1973, are as follows:

  • According to Section 157(1) of the Code of Criminal Procedure 1973, the police officer is bound to take immediate action for the offence. This section provides him with a duty to carry out the investigation and submit a report before the magistrate. This provision ensures the timely completion of necessary procedures before the trial.   
  • Section 173 of the Code of Criminal Procedure, 1973 grants two months for the investigation of certain offences provided under Indian Penal Code, 1860. The police in-charge have been provided two months to commence the investigation from the date it was recorded. Therefore, this will ensure a speedy trial, and justice will be granted in a reasonable period of time.
  • As per Section 207 of the Code of Criminal Procedure 1973, the accused has been granted a right to get a copy of:
    • a police report
    • the FIR recorded under Section 154
    • statement recorded under Section 161(3)
    • confessions and statements recorded under Section 164
    • and any document that has been forwarded to the magistrate along with the police report under Section 173(5)

This section states that the accused must have the thorough knowledge about the case filed against him when appearing before the magistrate. 

  • A summary trial of petty offences has been provided under Chapter XXI of the Code of Criminal Procedure 1973. The Chapter constitutes offences not punishable with death, imprisonment for life, or imprisonment for a term not exceeding two years. The provision emphasises the duty of the magistrate in summary trials and shall mention:
    • the date on which the offence is committed
    • date on which a complaint is filed
    • the date on which a report is made
    • the names of the parties
    • offence committed
    • plea of the accused
    • the finding
    • and the final order
  • According to Section 167(2)(a) of the Code of Criminal Procedure 1973, the accused can be detained in police custody for only 15 days during the initial stage of the investigation. The police officer has to present adequate grounds before the magistrate. To increase the detention period of the accused:
    • 90 days are provided for the investigation in cases like murder, imprisonment for life, and imprisonment for a term not less than 10 years.
    • 60 days are provided for other offences; at the time of the expiration, if the police officer fails to present the evidence, then bail shall be granted to the accused. 

The provision focuses on the number of days provided to the police in charge to collect all the evidence against the accused and investigate the matter. If the collected evidence fails to prove that the accused is guilty or if the same is not sufficient, then the accused shall be released on bail with sureties. Hence, it can be inferred that the provision aims to highlight the right to life and the right to a speedy trial. 

  • Section 309(1) of the Code of Criminal Procedure 1973, allows for the daily conducting of the trial until the examination of all witnesses is completed. This amendment was introduced to address and prevent delays in the trial process.
Criminal litigation

Reasons for delay in trial

In the case of the State of Maharashtra v. Champalal Punjaji Shah (1981), the Court highlighted reasons that can lead to a delay in trial, which includes:

  • Non-availability of the counsel
  • Non-availability of the accused
  • Belated service of the summons and warrants on the accused or witnesses
  • Non-production of under trial prisoners in the Court
  • Judges are on leave and
  • Seeking an adjournment 

Judicial response to Right to Speedy Trial

After declaring the right to a speedy trial, many accused started exploiting their right. In Champalal Poonjaji Shah v. State of Maharashtra (1982), the Court set the criteria to identify denial of speedy trial: whether the defendant himself caused the delay, whether he was disinterested in preparing the evidence, or whether the delay was intentional. If the Court is satisfied with the reasons, the accused retains the right to a speedy trial; otherwise he will not be obliged to exercise the right. In the case Abdul Rehman Antulay vs. R.S. Nayak (1991), the Court held that speedy trial shall be applicable to all the stages: investigation, inquiry, trial, appeal, revision, and retrial. 

In Raj Deo Sharma v. State of Bihar (1998), the Court held that for offences punishable for 7 years, the Court shall close prosecution evidence after two years from recording the plea, and for offences exceeding 7 years, irrespective of the status of custody of accused, the Court shall close prosecution evidence after three years from recording the plea. Thereafter, in P. Ramchandra Rao v. State of Karnataka (2002), the Court stated directions for identifying unreasonable delay due to the defendant’s irresponsible behaviour, justification, and prejudice. The judgement in Raj Deo Sharma was overruled and the Court stated that focus must not be on setting a time limit for criminal proceedings and rejecting termination due to time lapses. 

In Sheela Barse v, Union of India,(1986), the Supreme Court held that if the accused is not tried speedily, then his right to speedy trial under Article 21 of the Constitution of India is violated. If the accused, on purpose, avoids the hearing or any legal procedure, or if the superior Court has passed an interim order, then in that particular case, it cannot be said that the right to speedy trial under Article 21 of the Constitution of India is violated. 

Importance of Article 39A

In Khatri & Ors. v. State of Bihar (1980), the Court held that every Court shall make sure every accused has a lawyer and that the right to get free legal aid is being exercised. This shall initially help in understanding the offence he is being charged with, and he shall present himself (with the help of a lawyer) before the Court. It will help in providing free legal service to every citizen, irrespective of any discrimination, and especially to those who are in need. This provision applies equally to both civil and criminal cases. 

The objective of Article 39A is to provide equal justice and equal opportunity without any discrimination. It creates a mandatory situation where the Government has to provide an authority for free legal aid at the national level and one for each state or union territory, known as the National Legal Services Authority and the State Legal Services Authority. Justice P.N. Bhagwati also highlighted that in addition to providing free legal aid to the poor, it is also important that they are made aware of the right to free legal aid.

After this case, under-trial prisoners were provided with the necessary information regarding their case through the respective authorities. They were made well aware of their rights and liabilities and economically backward people could avail their due benefits. 

Legal Service Authority Act,1987

The Act came into force due to the effect of Article 39A of the Constitution of India. This Act helps the economically weak, the backward, and the disabled receive free legal aid services. It makes sure that every citizen, whether poor, backward, or disabled, shall be entitled to free legal aid and get all the assistance necessary to provide legal information. It shall not discriminate among people on the basis of economic background. Criteria for giving free legal aid services have been provided under Section 12 of the Act.  

National Legal Services Authority

Sections 3 to 5 of the Legal Service Authority Act,1987 provides the constitution of the National Legal Services Authority (NALSA). Its objective is to provide legal knowledge to the whole country. The main responsibilities of NALSA are: 

  • To provide legal aid camps to all societies.
  • To provide legal knowledge irrespective of any discrimination.
  • To use arbitration, mediation, and conciliation methods to solve disputes

Institutions that provide legal aid shall be granted with the funds and all the expenses are managed by the authority.

State Legal Services Authority 

Sections 6 to 11B provide for the constitution of the state legal services authorities. Every state has a duty to provide free legal advice to the poor, backward, or disabled. The main responsibilities of the state legal services authorities are: 

  • Duty to set up legal assistance programs.
  • To conduct Lok Adalat sessions.
  • To assist the clients,
  • To ensure the promotion of all the schemes of NALSA, and
  • To solve disputes.

Effect of strikes on right to speedy trial 

Until a couple of decades ago, frequent strikes by lawyers had become a norm. Accordingly, a writ was filed by way of a PIL before the Hon’ble Supreme Court in the case of Ex-Capt. Harish Uppal v. Union of India (2002). Highlighting the importance of lawyers in our justice delivery system, the Court held that no lawyer has a right to attend or call out a strike or boycott. Even if a protest is required, it shall be communicated through statements, interviews, carrying banners out of the Court premises, wearing any colour armband and peaceful protest march away from the premises of the Court. It was only in the rarest of the rare cases involving the integrity and independence of the Bar/Bench that the strike could be allowed, that too after permission of the Court.

The judgment was premised on the verdict of the Supreme Court in Hussainara Khatoon. The Court stated that  one’s right to exercise its fundamental right is limited if it infringes on another’s fundamental rights. The frequent strikes by lawyers greatly impacted the right to speedy trial of parties guaranteed under Article 21 of the Constitution. Hence, it can be witnessed how the judgment of Hussainara Khatoon acted as an important precedent in guaranteeing the right to speedy trial not only when the police or state was at fault but also when the act of lawyers affected the trials.

Conclusion

In the case discussed above, the Court highlighted the plight of undertrials owing to irresponsible behaviour of our justice delivery system and how the violations of fundamental rights took place under the hood. The judgement made a huge impact on the right to a speedy trial and the right to get free legal aid. Therefore, to prevent such a case, the Court advised the Parliament to make amendments to bail procedures. The Parliament introduced the Legal Service Authority Act, 1987, whose objective is to provide awareness about fundamental rights of the persons. Further, various amendments can also be seen in the Code of Criminal Procedure, 1973 to ensure a speedy trial. Lastly, it can also be witnessed from the above discussion how the judgment paved the way for more rights in different aspects.  

Frequently Asked Questions (FAQ)

What do you mean by the speedy trial?

It is a trial conducted according to the procedures without unreasonable or undue delay.   

What does a fair trial encompass? 

It includes the right to be heard without any discrimination and within a reasonable time (as envisaged under the law). 

At which stage can a speedy trial be demanded?

A speedy trial can be demanded at all stages which include investigation, inquiry, etc. 

Whether legal aid is available through the telephone?

Yes, the helpline number is 1516. 

Who will pay the fee for legal aid?

All the legal expenses would be incurred by the government. 

How can an eligible person approach the legal service authority?

Anyone can approach the committee by sending an application to the legal service authority, orally to the officer, or by filling out an online form as well under the Legal Services Authority Act, 1987. After filling out an application, the concerned authorities will provide the necessary information about the case.

References


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An analysis of music and lifestyle of musicians

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This article has been written by Silvester Clifford pursuing a Remote freelancing and profile building program from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

Music, in all its infinite forms, has always been part of human history. Even from primitive ages, it has shown its presence in varied patterns. Since then, music has evolved in unlimited ways to be an inextricable aspect of modern living. Similarly, there are arguable reasons to associate the lifestyle of a musician with the kind of music performed.

Origin of music

For a start, no one can date the origins of music, and few aspects of the living world, apart from music, have transcended cultures, traditions and boundaries. In ancient times, sounds were used with different intentions, and with its wide range, the human voice itself would likely have been the first musical instrument. While music, as a means of entertainment or for recitation, would have been a relatively recent development. The evolution of music can also be seen as distinctly intertwined with geography. The kinds of instruments used in different regions and the natives’ preferences are proof of this. There is documentation of humans even in the Stone Age using stones and other hunting tools as percussion.

Research and experiments

Music has been at the centre of numerous discussions and experiments over the past few decades. The avenues for thought behind this phenomenon are unparalleled. In an experiment, researchers have tried to unfold the intricacies between music and a listener’s rollercoaster ride of emotions while listening to new songs as well as their favourites. This particular study finds out the reaction and release of brain substances or chemicals at a particular point in time while the music is played. It even mentions the simultaneous set of feelings experienced by the audience towards one of their preferred musicians.

Music as language

Another most debated facet is the use of music as a means of communication. This, too, has been the subject of many studies recorded over the years. While the appetite for music is universal, no one doubts the efficacy of music concerning expression, suddenness and satisfaction. Even in early times, it was not only sounds, if not words, but the lengths, the pitch and the rhythm of those sounds that were used to express themselves. This could have paved the way for the music that people use nowadays. Just take a note, children are commonly taught to communicate through music in the form of rhymes and songs. It is understood that it becomes easier for the young ones to recognise language when supported with rhymes and melody. Approval of this mode of communication arises from the fact that it can be done in any kind of situation.

Entertainment

While it would be an understatement to say that music is an excellent means of entertainment, the mediums and platforms that are available to everyone with the sophistication of the technology, primarily the internet and the universal acceptance of the same are proof of its utilisation. Although music may be said to have some underpinnings regarding its usage in other spheres of human life, when it comes to pure entertainment, it overcomes all the barriers known to man. Listening to music is an obvious way to make any kind of activity interesting and make you feel less burdened. It can also be noted that many people are able to carry out multiple tasks while listening to their favourite songs, artists, or even musical instruments. Nowadays, the wide array of music produced or ‘genre’ as it is called, makes it possible to pick and choose the best suited one for any occasion, be it national celebrations, a private party marking an event or even celebrating some personal space.

Music and health

Music comes with its own health benefits, as its impact on mental health is a well-known aspect. It has been understood to relieve anxiety, reduce stress and reduce the likelihood of depression. It stems from the fact that music heightens the levels of dopamine and endorphins—two of the chemicals responsible for the emotional well-being of an individual—in the brain. Overall, it can enhance the feel-good factor for the listeners.

Musicians’ lifestyle

Whether music proposes a universal lifestyle for all musicians across the globe or generations is widely debatable. Understandably so, it is unlikely to witness musicians in different geographical regions or from distinct eras following a particular lifestyle. While some musicians have been widely considered introverts and reclusive in nature, there are many others who have been really eccentric in terms of their behaviour. Some may have expressed both traits in public. But still, there are certain qualities that can be commonly observed in all these geniuses. They do not go through the well-trodden paths that a normal being goes. One prominent facet is their level of creativity. All people plying this trade invariably think in an unconventional way.

Trying to find that one missing piece in their puzzle, wanting to add that one special cord,  musicians experience their own ‘Eureka’ moment as well. The spontaneity they feel when solving that puzzle—as if from nowhere—is a common path that they all go through.

Melody in a musician’s life

A musician’s life is often portrayed as glamorous as it could be—stadiums fully thronged by fans, boundless space for creativity—and while there’s a bit of that, there’s something else too that is not seen in public. It’s their desire, dedication to their art, sacrifice and never-say-die attitude to fulfil that dream. The rhythms that define a musician’s lifestyle—the highs, the lows, and the unwavering commitment that keeps music alive—are worth being observed closely.

Excitement of the arena

The stage is where the musicians belong. It is the platform from which they express their heart and soul. The crowd’s roar, the lights’ pulsing, the energy of shared emotion—it’s an intoxicating blend of adrenaline and elation. Each performance is a one-of-a-kind tapestry woven into the fabric of the moment. It’s a testament to how powerfully music connects and inspires. Backstage, pre-show nerves turn into focused preparation. The band mates form a temporary family, bound together by the invisible bonds of their shared love. The applause, the encore, and the lingering feeling of accomplishment—those are the rewards. They’re the fuel that ignites the fire, igniting the next stage of diving.

The grind

Still, the road to the stage isn’t always paved with gold. A musician’s life is a never-ending cycle of gigs, recording, and networking. Days are spent rehearsing, writing songs, and working day jobs to make ends meet. Nights are reserved for late-night shows, smoke-filled bars, and the constant threat of the next payday. The financial uncertainty can be unbearable, and the endless rejection is a sickening melody in your ears. But in the midst of it all, resilience flourishes. Musicians learn how to navigate the industry’s maze, embrace the entrepreneur’s spirit, and find innovative ways to make their voices heard. The grind becomes a badge of honour, a testament to their unwavering dedication to their craft.

The wandering waves

Home is wherever the music takes them, for a lot of musicians. They eventually become modern-day nomads, living a life that alternates between hotels, airports, and the transient comfort of rental vans. It can be thrilling to constantly travel because it exposes them to different cultures and expands their creative horizons. But loneliness, the longing for known faces, and the security of routine are also fostered by it.

In this constantly changing environment, finding comfort in the companionship of other musicians, forming communities along the way, and valuing fleeting moments of intimacy become crucial pillars.

Living on the move turns into a bittersweet symphony that requires constant balancing the exhilaration of discovery with the need to fit in.

The trials along

The life of a musician is like a crucible, with emotions serving as the raw material and music serving as the finished product. Their songs incorporate a range of emotions, including love, grief, joy, and loss, turning personal experiences into anthems that speak to all people’s hearts.

Periods of creative drought and debilitating self-doubt can result from the overwhelming pressure to create, innovate constantly, and stay relevant.

However, the creative process itself—the act of transferring feelings into tunes, lyrics, and rhythms—provides comfort to the true artist. The things that fuel the creative flame are epiphanies, breakthroughs in the studio, and the pure delight of creating something exquisite from the core of one’s being.

Breathing life into the soundtrack

In the end, the life of the musician serves as an example of the strength of passion. A life driven by an unwavering faith in the power of music and devoted to the pursuit of a dream. It’s a life full of passion, purpose, and the unceasing thrill of creation, even though it’s also unorthodox, difficult, and financially unpredictable.

The heartbeat of their music, rather than the passage of time on clocks or calendars, determines the rhythm of life for the true musician.

They remind us all that life, like a song, is most beautiful when played with passion, dedication, and a little bit of soul because they live and breathe the soundtrack of their own creation.

Conclusion

A musician’s life isn’t a rockstar montage set against glittering stages. It’s a complex symphony where passion and dedication interweave with sacrifice and uncertainty. The allure of artistic expression and audience connection is undeniable, yet the path is riddled with gruelling practice sessions, financial struggles, and the ever-shifting terrain of the music industry.

But amidst the cacophony of challenges, a powerful melody of fulfilment resonates. For some, the act of creation itself is a solace, a way to translate emotions into vibrant soundscapes. For others, music becomes a bridge, forging connections and fostering a sense of community through shared rhythms and harmonies. And for those who reach wider audiences, the impact transcends personal fulfilment, touching lives in ways that words alone cannot.

Ultimately, a musician’s life is a tapestry woven with unique experiences, demanding both unwavering self-discipline and the resilience of a seasoned conductor. It’s a life less ordinary, where work and passion become an inseparable melody, driven by the relentless pursuit of a sonic vision. Whether performing on a global stage or honing their craft in a quiet studio, each musician contributes a vibrant thread to the world’s soundscape.

So, the next time a song washes over you, remember the journey behind it. Every note carries a story, a testament to the countless hours of practice, the relentless pursuit of mastery, and the unwavering dedication that brought it to life. In these stories, we find not just the echoes of individual struggles and triumphs, but the enduring power of music to bridge divides, lift spirits, and connect us all, one harmonious melody at a time.

References

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Recognition of animal rights : where does the world stand

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This article has been written by Supriya Pillai pursuing a Diploma in Legal English Communication – oratory, writing, listening and accuracy course from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Rights of non-human beings

Do animals have rights? It’s not that easy to answer. What are the rights of animals? Animal rights are moral principles grounded in the belief that non-human animals deserve the ability to live as they wish without being subjected to the desires of human beings. Animal welfare and rights have become global concerns that require global regulation. It’s the notion that they should be protected from harm, cruelty, and exploitation. They have certain rights, just like humans do. And they should be protected from all the suffering and torture  of human beings. Advocates for animal rights say that they experience pain, pleasure, and different kinds of emotions just like humans do. Animals also deserve rights to life, liberty, and freedom, as they are also part of our ecosystem. Animals are not mere commodities or resources for human use; they should be treated with respect and consideration for their intrinsic value. Essentially, it’s about recognising that animals have feelings and should be treated with consideration. This article aims to explain the evolution of animal rights and their significance to our world.

Time-bound analysis

Concern for animal suffering is not new or modern. The notion of animal rights has been around for ages. The ancient Hindu, Buddhist, and Jainism scriptures advocate a vegetarian diet for ethical reasons. The most important principle of the scriptures was ahiṃsa, meaning ‘non-injury and non-killing’. Ahimsa means kindness and non-violence towards all living beings, including animals; they believe that they are integral parts of our society.

Western countries have also expressed their support for animal rights in the past. Many people contributed to the development of the animal rights movements; however, Richard Martin, an Irish politician, played an important role in the animal  rights movement. He passed one of the first farmed animal welfare laws (the Cruel Treatment of Cattle Act) in 1822 and founded the first animal welfare charity (the Royal Society for the Prevention of Cruelty to Animals) in 1824. With the passage of time, animal rights have evolved around the world. Countries have amended their animal-pertinent laws and legislation. Animal abusers are now subject to more stringent laws. 

Global perspectives on animal rights recognition

Various countries and government policies  have taken cognizance of animal rights as an issue that requires regulation. Global laws are changing. Consumer purchasing decisions on products for animal welfare have changed. They are now more mindful of the welfare of animals. And so do industries; they are making products that are vegan and cruelty free. There are many organisations and activists who are advocating for animal rights and wellbeing. One of the famous organisations is PETA , they educate people on how animals are tortured and slaughtered to meet human needs. For the sake of human needs, animals have been subjected to torture on various levels. Sometimes, as part of scientific experiments, entertainment, or cosmetic industries. But gradually these things are changing and getting better for animal society. 

Recently passed legislation pertaining to the animal world

In 2009, Bolivia became the first country to outlaw the use of animals in circuses, acknowledging the potential for suffering and distress in such settings. In similar vein, Spain was the first nation in Europe to formally acknowledge animal sentience in 2021, giving them some fundamental rights and outlawing their employment in circuses and other similar entertainment. Recently, South Korea passed a law banning dog meat trade in 2023. The legislation, set to come into force by 2027, aims to end the centuries-old practice of humans eating dog meat. Dog meat stew is called boshintang in South Korea. The ban was necessary to promote animal rights. South Korea’s perspective has been changed towards dogs. “Dogs are like family now and it’s not nice to eat our family.” The new legislation focuses on the dog meat trade – offenders facing up to three years in prison for killing dogs, and upto two years for raising dogs for meat or selling dog meat.  Farmers and restaurant owners have to find a substitute for dog meat before the act becomes operative.People are being more considerate and empathetic towards dogs. Nevertheless, some people have different perspectives on the prohibition. Many elderly farmers and restaurateurs  are in their 60s and 70s and it would be difficult for them to switch to different livelihoods and hence, they will lose their livelihoods. India with the animals: Last year, Supreme Court’s five-judge Constitution Bench comprising of KM Joseph, Ajay Rastogi, Aniruddha Bose, Hrishikesh Roy and CT Ravikumar, has upheld the constitutional validity of the state amendments that Tamil Nadu, Karnataka, and Maharashtra made to the Prevention of Cruelty to Animals Act of 1960, allowing the states to conduct animal sports like Jallikattu, Kambala, and bull-cart racing. In Tamil Nadu, a sport called Jallikattu, also called eruthazhuvuthal, is played as part of the Pongal harvest celebration. Additionally, the same kind of sport takes place in Karnataka, called Kambala, where  two buffaloes are tethered to a plough and one person anchors them. 

Animal Welfare Board of India vs. A. Nagaraja and Others (2014)

In the case of Animal Welfare Board of India vs. A. Nagaraja and Others (2014), the state law that allowed the bull-taming sport in Tamil Nadu. The petitions say that animals also have fundamental rights too. Animals are subjected to torture . However, the Court opined that Article 14 of the Constitution cannot be invoked by any animal as a person.The bench said notwithstanding the cruelty involved in the bull-taming sport, it cannot be called a blood sport since there are no weapons involved.

The respondents in the case, who included the state government of Tamil Nadu and the Animal Welfare Board of India, argued that Jallikattu was a cultural tradition that was deeply ingrained in the lives of the people of Tamil Nadu. They claimed that the sport was not inherently cruel and that it could be regulated to minimise the suffering of the bulls.

The Supreme Court of India ruled in favour of the petitioners and declared the state law allowing Jallikattu to be unconstitutional. The Court held that the fundamental rights of animals include the right to be free from cruelty and that Jallikattu violated this right. The Court also noted that there were less cruel ways of preserving cultural traditions and that Jallikattu was not essential to the culture of Tamil Nadu.

The decision of the Supreme Court in the Animal Welfare Board of India v/s A. Nagaraja and Others case was a landmark ruling that recognised the fundamental rights of animals in India. The decision has also had a significant impact on the way that animals are treated in India, leading to stricter laws and regulations against animal cruelty.

In addition to the legal arguments, there are also several ethical considerations that weigh against the practice of Jallikattu. Animals are sentient beings who are capable of feeling pain and suffering. Therefore, it is morally wrong to subject them to unnecessary cruelty. Jallikattu is a brutal and barbaric practice that has no place in a civilised society.

There are also several practical reasons why Jallikattu should be banned. The sport is dangerous for both the bulls and the human participants. Bulls can become enraged and attack the people who are trying to tame them. There have been several cases of people being killed or seriously injured during Jallikattu events.

Jallikattu is also a public health hazard. The blood and saliva of the bulls can spread diseases to   people who come into contact with them. There have been several outbreaks of diseases, such as brucellosis and tuberculosis, following Jallikattu events.

The amendments include certain guidelines that prohibit causing any physical disturbance to the bulls, like beating and poking them with sharp objects or sticks, pouring chilli powder in their eyes, twisting their tails and other pain inflicting acts. Further, the Amendment Act Jallikattu has been described as part of the culture and tradition of Tamil Nadu. It needs to be protected but bulls should not be ill treated.The Court ensured that animals are not subjected to abuse for the purpose of sports. It needs to balance out.

The legal framework for animal rights in India is a complex and evolving one. While there are a number of laws that protect animals from cruelty, there is still much room for improvement.

The most important law protecting animals in India is the Prevention of Cruelty to Animals Act, 1960. This law prohibits a wide range of cruel acts towards animals, including beating, mutilation, and starvation. It also provides for the establishment of animal shelters and the appointment of animal welfare officers.

In addition to the Prevention of Cruelty to Animals Act, there are a number of other laws that provide some protection for animals. These include the Wildlife Protection Act of 1972, which protects wild animals and their habitats; the Animal Welfare Board of India Rules, 1998, which regulate the use of animals in circuses and other entertainment venues; and the Performing Animals (Registration) Rules of 2001, which require the registration of animals used in performances.

Despite these laws, animal cruelty is still a serious problem in India. Animals are often beaten, starved, and neglected. They are also used in a variety of cruel practices, such as bullfighting and cockfighting.

There are a number of things that can be done to improve the protection of animals in India. One important step is to raise public awareness of animal cruelty. Another is to strengthen the enforcement of existing laws. Finally, it is important to educate people about the importance of treating animals with compassion and respect.

Things that can be done to improve animal rights in India

Here are some specific things that can be done to improve animal rights in India:

  • Strengthen the enforcement of existing laws. The Prevention of Cruelty to Animals Act and other laws protecting animals are often not enforced effectively. This is due to a number of factors, including a lack of resources and a lack of political will. It is important to increase funding for animal welfare enforcement and to ensure that the police and other law enforcement agencies take animal cruelty seriously.
  • Educate the public about animal cruelty. Many people are simply unaware of the extent of animal cruelty in India. It is important to educate the public about the issue and to encourage people to report cases of cruelty. There are a number of organisations that are working to educate the public about animal cruelty, such as the Animal Welfare Board of India and the People for the Ethical Treatment of Animals (PETA).
  • Promote compassion and respect for animals. It is important to teach people from a young age that animals are sentient beings who deserve to be treated with compassion and respect. This can be done through education, the media, and popular culture. By promoting compassion and respect for animals, we can create a more humane society for all.

Industries and animal rights

Animals are used for experiments for various purposes. Especially to develop new drugs or test the safety of the products. These experiments cause them severe pain, and sometimes they die as a result. It is morally and ethically wrong to torture them.

Ethical issues in animal testing and research

There is a wide range of opinions on the ethics of animal testing and research. It is difficult to develop new drugs without some animal testing. Moreover, if there are human illnesses that cannot be treated without new medicine that requires some animal testing, should we still  think of animal research as a moral obligation? It is difficult to distinguish between science and moral obligation. Humans will suffer if research is discontinued , both parties suffer. That is the crux of the ethical argument in favour of animal research, and those who are against it ought to make a stronger case for it.

Entertainment Industries and Animal Rights (Zoos and Circuses)

People have experienced the pain of confined animals at zoos during the lockdown. Animals have been confined to zoos for many years, some of them have never experienced sunlight or lush grass. Animals have been subjected to torture in the name of zoos or circuses for the purpose of human amusement. It is an unnecessary and inhuman practice. Some people  say zoos can be used for educational purposes. Children can learn from them and interact with them. While other people oppose keeping animals in captivity indefinitely in order to entertain humans. Zoos are very popular and they generate a lot of money so they are unlikely to cease to exist any time soon. But there are ways in which zoos could be improved to promote animal welfare, environmental education, and human/animal interaction. A sanctuary may be preferable for animals, according to some. They’ll experience the sensation of being lodged in a forest.                               

In the circus, unlike human performance, they are forced to act and do certain things without their will: these acts are involuntary. Some sections of society think it is fun but reality is different. Sometimes, the trainer beats the animals to keep them in control. They have been subjected to torture every day. Circus animals spend countless hours travelling inside the cage. They spend most of their lives tethered. Many nations forbid the use of animals in circuses. The advancement of technology has made it possible to replace live animals in circuses with holographic images. It will change the face of the circus. Animals have no place behind the cage for amusement.

Conclusion

Animals surely deserve to live their lives free from suffering and exploitation. All animals are capable of suffering to the same extent as people. They experience joy, anguish, fear, annoyance, isolation, and maternal love. We have a moral duty to consider their needs as well. Animals shouldn’t be used as a justification for entertainment. The animal rights movement is gathering steam thanks to films, undercover reports that reveal the inhumane treatment of animals in public places, and ongoing studies that highlight the social and cognitive complexity of nonhuman animals. The majority of people are aware that our lives are just as important to us as the lives of animals are. Despite this, they are treated as objects rather than as living individuals in our culture. Humans and animals are part of the ecosystem; one cannot exist without the other. Animals play a vital role in our environment. They struck the balance. They are part of the food chain, and if the chain breaks, the ecosystem will suffer at large. Indeed, animal rights and wellbeing are as important as our own.

References

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Removal of directors in Company Law

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This article is written by Uneza Khan. In this article, the author provides a comprehensive analysis of Section 169 of the Companies Act, 2013, along with the reasons and procedure for the removal of the director. Furthermore, it also discusses the exceptions to this provision and, in case of contravention, the penalty that is provided in Rule 30 of the Companies (Management and Administration) Rules, 2014.

Introduction

A company is an artificial person, invisible, intangible, and having existence only in contemplation of law. It neither has its own body nor the ability to think, which makes it crucial that the company’s business be entrusted to some human agents who are usually called the ‘Directors’ of the company.

Viscount Haldane L.C. in Lennard’s Carrying Co. Ltd v. Petroleum Company Ltd (1915), inter alia, commented: ‘A corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directive will must consequently be sought in the person of somebody who, for some purposes, may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.’ Their position in the company is very versatile, as depending on the circumstances, a director can act as a trustee, an agent, or a managing partner.

Under the Companies Act 2013 (hereinafter referred to as “the Act”), a director is an individual elected by the shareholders of the company to look after the affairs of the company. Their role includes making strategic decisions, monitoring the company’s operations, ensuring compliance with rules and regulations, and acting in the best interests of the corporation and its shareholders. Directors also have fiduciary duties towards the company, which are duties of care, loyalty, and good faith; they are obliged to act honestly and in the best interests of the company, shareholders, and employees. His role is significant for maintaining transparency, ensuring accordance with the provisions of the Act, and also promoting the sustainable growth of the company while protecting the interests of the stakeholders.

Definition of director

Section 2(34) of the Act states that a director is any individual appointed to the board of a company. This definition correlates with Section 2(13) of the Companies Act, 1956, which defines the director as any person who occupies the position of director by whatever name is called. The definition given under Section 2(34) is not exhaustive because this definition may overlook persons who are not appointed formally to the board but still hold significant authority over the company, whereas the definition under the 1956 Act includes any individual by whatever title it is signified. Therefore, Section 2(34) does cover all scenarios where a person acts as a director of the company.

The directors have supreme executive authority over the company’s management. They are assigned to conduct the functions and responsibilities of a company’s director in compliance with the Companies Act of 2013. 

It was held by the Karnataka High Court in the case of S. Gururaja Rao v. State of Karnataka (1979) that the director cannot be called a servant of a company. They cannot be addressed as employees of a company. They are the company’s officers, having direct control over the management and affairs of the company.

In the case of Albert Judah, Judah v. Rampada Gupta and Anr. (1958), it was ruled that any affairs of the company incorporated under the Companies Act shall be managed by the director. They are the individuals whose appointments are done in compliance with the prevailing law. The director’s responsibility may vary from acting as an agent to that of a managing partner, a trustee, etc. However, one must understand that these expressions are not meant to define the authority, responsibility, and duties granted to them exhaustively. It is restrictive for the purpose of suggesting useful perspectives from which they may be examined.

Who can be appointed as a director

Section 149 provides for companies to have a board of directors. It states that only an individual can be appointed as a director, and a body corporate, association, or firm can’t be appointed as a director of the company.

Section 149(1)(a) states that a public company shall have a minimum of three directors, a private company shall have a minimum of two directors, and a one-person company will have one director.

The maximum number of directors in a company will be fifteen, as mentioned in Section 149(1)(b), and they can exceed the limit in a general meeting by special resolution. This sub clause is not applicable to any government company, as mentioned in Section 2(45) of the Act, and states that a company in which not less than 51% of the paid up share capital is held by either the central government, the state government, or two or more state governments; partly by the central government; partly by one or more central governments.

At least one woman director shall be appointed for the prescribed classes or classes of companies.

Section 149(2) states that every company has to comply with the provisions of subsection (1) within one year of the commencement of the Act.

It also states in subsection (4) of Section 149 that every listed company shall have independent directors, which will be one-third of the total number of directors, and the central government may prescribe the minimum number for a class or classes of public companies.

Section 152 deals with the appointment of directors, and as per Section 152(3), no person shall be appointed as a director of the company unless he has not been allotted the Director Identification Number (DIN) under Section 154 of the Act. 

Rule 9 of the Companies (Appointment and Qualification of Directors) Rules, 2014 mentions that the DIN is allotted by the Central Government as a unique director identification number to any person intending to be a director or serving as a director of a company upon making an application in Form DIR-3 pursuant to Sections 153 and 154 of the Act. It is valid for a lifetime and has 8 digits. Directors ‘ information is maintained in a database through the Director Identification Number. If the director changes the company, he can use the same DIN because it is specific to a person.

Qualifications and disqualification of a director

There are no academic or professional qualifications prescribed for directors under the Companies Act. The directors are not subject to sharing qualifications. So, unless the company’s articles mention a provision to that effect, a director is not required to be a shareholder unless he wishes to be one voluntarily. However, the articles generally specify a minimum share qualification.

Disqualifications of a director

Section 164(1) of the Act provides that a person shall not be eligible for appointment as a director of a company if:

  • he is of unsound mind and has been declared so by a competent court; 
  • he is an undischarged insolvent;
  • he has applied to be adjudicated as an insolvent, and his application is pending; 
  • he was convicted of any offence related to moral turpitude or otherwise and is sentenced to imprisonment for not less than 6 months, and a period of 5 years has not elapsed from the end of the sentence;
  • if he is disqualified by any order of the tribunal; 
  • if any calls were not paid related to any shares of the company, either held jointly or individually, and six months have elapsed since the last day fixed for the payment of the call; 
  • if he is convicted under Section 188 of the Act concerning related party transactions in the last five years; 
  • if he has not complied with Section 152(3), i.e., he has not been allotted the Director Identification Number.
  • If they have not been present in the board meetings for over 12 months under the Companies Act, 2013.
  • If they enter into contracts or arrangements in violation of the provisions of Section 184 of the Act. Subsection (2) of Section 184 provides that every director of a company having any interest in or being concerned directly or indirectly in a contract, arrangement, or proposed contract or arrangement that is entered into or to be entered into: 
  1. with a body corporate in which the director,acting alone or in association with any other director, holds more than 2% shares of that body corporate, or is a promoter, manager, or chief executive officer of that body corporate; 
  2. with a company or other organisation in which the director is a partner, owner, or member, shall disclose the nature of his stake or concern at the board meeting in which the contract or arrangement is discussed and shall attend this meeting. If the director is not concerned or interested at the time of entering into such a contract or arrangement and later becomes concerned after entering into it, they shall promptly disclose it at the very first board meeting held after becoming concerned or interested.

Removal of directors 

The removal of directors can be understood through the following two categories:

  1. Removal by shareholders 
  2. Removal by the tribunal, as mentioned in Section 242 of the Act.

Removal by shareholders 

Section 169 of the Act gives the shareholders the inherent right to remove the directors appointed by them. The shareholders have the power to appoint a director by passing an ordinary resolution in the same way the shareholders can remove the director by passing an ordinary resolution at their discretion when it deems fit that the policies pursued by the director are not to their liking or that there is mismanagement, breach of trust, or misconduct on the part of the director of the company.

Procedure for the removal of directors 

Section 169 of the Act mentions the procedure for the removal of the director, allowing for their removal before the expiry of their tenure by passing an ordinary resolution.

Removal by ordinary resolution 

The board of directors needs to have a board meeting to fix the date, time, and location of Extraordinary Meeting or Annual General Meeting and to consider the resolution made for the removal of directors under Section 169. 

A resolution will be passed by the directors of the company for the removal of the director, which will be subject to the approval of the shareholders of the company at the general meeting, and a notice will be issued to call a general meeting of the members, which will mention a fixed date, time, and venue set forth in the resolution for the removal to be passed by the shareholders at the meeting.

The section provides that once the notice of general meeting has been finalised, it shall be accompanied with an explanatory statement to the notice of general meeting, which shall mention the comprehensive grounds for the removal, a copy of the special notice received from a shareholder, and the written presentation given by the director to be removed.

The ordinary resolution will be passed in the general meeting (or ordinary resolution simply means passing of the resolution with simple majority votes in compliance with the articles of the company) as a special business on the agenda for the extra-ordinary general meeting or annual general meeting, except in the case of an independent director, which is mentioned in Section 149(6). For the removal of the director of the company, a special resolution will be passed.

Under Section 149(10), the reappointment of an independent director for a second term in the office will be subject to removal only after passing a special resolution in the general meeting and giving the director a reasonable opportunity of being heard.  

The company has to comply with the requirements set forth by the registrar of the company, which include filing various returns and documents, such as the annual return, within 60 days from the date of the Annual General Meeting. The company has to file the necessary returns within thirty days from the date of the ordinary resolution passed in the general meeting. Non-compliance with this may lead to a penalty against the company under Section 117 of the Act.

Within 30 days of passing such a resolution, Form MGT 14 and Form DIR 12 are essential to be filed with the Registrar of Companies (ROC).

Form DIR 12 is an approval form, and the ROC, during the review process, may request additional documents. The additional documents may include a copy of:

  1. Representation letter by the concerned director,
  2. Special Notice for the director’s removal,
  3. Affidavit from the Director, who has signed the form, stating that they have complied with all the legal requirements for removal,
  4. Indemnity provided by the director who signed the form,
  5. A certificate from the practising company secretary who has signed the form,
  6. Evidence of documents dispatched to the director being removed and 
  7. Minutes of the board meeting, the extraordinary general meeting, and the attendance register. 

The ROC, at their discretion, may add or remove any of the above documents based on the situation, as this list is not exhaustive.

Following the resubmission of Form DIR 12, on the satisfaction of ROC, the Form DIR 12 will get approval. The approval time will be between 3 to 6 months from the date of filling of Form DIR 12.

Section 117 of the Act states that a resolution passed by the company in any meeting must be filed with the Registrar of Companies within 30 days in Form MGT-14. Form MGT-14 is basically used to file resolutions. It will be filed by the company with the Registrar of Companies (ROC) in compliance with Section 117 (the Act) and the rules made thereunder. 

There is no need to file MGT-14 by the company for matters mentioned in Section 179(3)(f) of the Act read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014.

Section 179(3)(f), which deals with the granting of loans, giving guarantees, or providing securities in respect of loans, and Rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014 state that the following powers shall also be exercised by the Board of Directors only by the resolutions passed at board meetings: 

  • to make political contributions;
  • to appoint or remove key managerial personnel (KMP) or 
  • to appoint internal auditors and secretarial auditors.

Thus, there is no need to file e-form MGT-14 by the companies with the Registrar of Companies regarding a resolution passed to provide security, grant loans, or give guarantees in the ordinary course of their business by:

  • A banking company,
  • Any class of non-banking financial company registered under the Reserve Bank of India,
  • Any class of housing finance company registered under the National Housing Bank Act, 1987.
Consequences of Failure to File MGT-14

The company may only file for MGT-14 after receiving an order of condonation if it fails to file it within 30 days of passing such a resolution. The Ministry of Corporate Affairs has the power of condonation.  

Condonation of delay the company has to follow :

  • In case of a delay in filing Form MGT-14  the company will have to file Form CG-1 with MCA for condonation. 
  • The company shall be liable for the payment of the penalty levied by MCA in the condonation order. 
  • The company shall file a copy of the order and penalty receipt in form INC-28 with ROC after the receipt of the order and payment of the penalty. 
  • The company shall then submit e-form MGT-14 by mentioning the SRN of INC-28.

Special notice

Section 115 of the Act read with Rule 23 of the Companies (Management and Administration) Rules, 2014 provides that a special notice by the members representing not less than 1% of the total voting power or holding shares on which such aggregate sum of not less than five lakh has been paid up on the date of the notice mentioning the intention to move a resolution for the removal of the director on various grounds such as misconduct or negligence or any other matters related to disqualification should be given to the company not less than 14 days before the meeting.

This privilege of special notice proposed by the members for the removal or appointment of the director cannot be subjected to the requirement of Section 111 of the Act regarding the circulation of a member’s resolution. 

When the company receives the special notice of intention to move a resolution for the removal of the director, the company shall furnish a copy of the notice and address the director, who will have the right to be heard and make representations against the resolution under Section 169 of the Act.

In the case of Queen Kuries & Loans (P.) Ltd. v. Sheena Jose (1993), it was held that the notice must disclose the reason for which the director’s removal is proposed.

Reasonable opportunity of hearing

Criminal litigation

If the director provides a written representation and appeals to the company for circulation among the members, the company will notify the members to whom the notice of meeting has been sent. In cases where there is insufficient time to complete this formal process, the representation should be read out to the members of the company at the meeting. The director is entitled to be heard in the meeting.

If, on the application of the company or any other person claiming to be aggrieved, the tribunal is satisfied that the rights conferred by subsection (4) of Section 169 are being violated to secure publicity for defamatory matter, then there is no need to send a copy of the representation, and even if the director is not a party to it, the tribunal may order the costs of the company on the application to be paid by the director in whole or in part. 

Provisions for vacancy created by removal of director

Under Section 169(5), if the director of the company was appointed at the general meeting or by board, and on his removal, any vacancy created may be filled by the appointment of a new director at the same general meeting for which a special notice of the appointment has been mentioned in subsection (2) of Section 169.

Section 169(6) states that the new director appointed shall hold the office till the tenure of the remaining predecessor, if he has not been removed.

Prohibition of re-appointment and unfilled vacancies

Section 169(7) states that the vacancy can be filled as a casual vacancy in compliance with the provisions of this Act if, under subsection (5), the vacancy is not filled. The director removed from the office shall not be re-appointed by the board of directors as a director.

Protection of rights of the director

Section 169(8)(a) of the Act mentions that compensation or damages for loss of office may be claimed by a director as per the terms of contract or terms of his appointment as director, who has been removed as a director consequent to termination of his appointment. However, if the removal is in compliance with the articles of association or terms of service, no compensation may be payable.

Section 169(8)(b) of the Act mentions that nothing in this section shall be taken as limiting the ability to remove a director in accordance with other provisions of this Act.

Section 169 is permissive in nature because it gives shareholders the authority to remove directors through an ordinary resolution; thus, they can make decisions at their discretion regarding the composition of the company’s board. This means that shareholders have the alternative of exercising their right to remove a director if they believe it is in the interest of the company, without being bound by stringent requirements or restrictions. 

The section describes the conditions and procedure for the removal of a director, but it does not require the removal of a director in specific circumstances, giving shareholders the right to decide based on their judgement and assessment of the director’s execution or conduct. Therefore, the permissive nature of this section assures shareholders flexibility and liberty in handling the company’s affairs.

Removal by tribunal

The director can be removed by the National Company Law Tribunal under Section 242 of the Act. If the members or shareholders file a petition under Section 241 before the tribunal for the prevention of mismanagement and oppression in the company, and if the tribunal deems fit, it may terminate or set aside any contract or agreement made by the director, managing director, or managerial personnel, or order his removal.

The director whose appointment is terminated is not eligible for appointment as managing director, director, or manager in any company until five years without the consent given by the tribunal under Section 243(1)(b), nor can he claim damages for loss of office that is directorship from the company under Section 243(1)(a).

Subsection (2) of Section 243 states that any person who knowingly acts as a managing director or director or manager of a company contravening clause (b) of subsection (1) and any other director who is party to such contravention shall be punishable with a fine which may extend to five lakh rupees.

When a director can’t be removed under Section 169 of Companies Act

As discussed above, Section 169 of the Act provides that a company may, after giving him a reasonable opportunity to be heard, by ordinary or special resolution, remove a director prior to the expiration of his term of office. Any contract made between a director and the company that the director renders irremovable by an ordinary resolution will be void, being contrary to the Act.

The following are the exceptions to Section 169 of the Act: 

  • A director appointed by National Company Law Tribunal under Section 242. 
  • A company operating under Section 163, that has adopted a system where two-thirds of its directors are elected through proportional representation. It means that the shareholders of the company vote for candidates in proportion to the number of shares they hold. This ensures adequate representation for minority shareholders within the company.

Penalties for contravention of Section 169 of Companies Act

Any company in default of compliance with the provisions of Section 169 and every officer of the company in default shall be liable for penalties, including a fine of Rs fifty thousand, and if the failure continues, Rs five hundred will be added per day till contravention continues. The maximum fine that can be imposed in the case of a company will be Rs. 3 lakh, and in the case of an officer in default, it will be Rs. 1 lakh.

Rule 30 of the Companies (Management and Administration) Rules, 2014 mentions the penalty for contravention of the rule. In case of any default in compliance with the provisions of this rule, a fine will be imposed on the company and every officer or other person, which may extend to five thousand rupees, and if the contravention continues, it will further extend to five hundred rupees for each day for which the contravention continues. 

However, it must be noted that the offences committed under Section 169 of the Act read with Rule 23 of the Companies (Management and Administration) Rules, 2014 are compoundable under Section 441 of the Act.

Landmark judgments on removal of directors

Bushell v. Faith (1970)

Facts of the case 

The facts of the case were that the articles of association of the company named Bush Court (Southgate) Ltd. mentioned that, at the time of any resolution being proposed at any general meeting for the removal from office of any director, any shares held by that director shall, on a poll in respect of such resolution, carry the right to three votes per share. 

The company had £300 of total issued capital, and fully paid-up shares were equally held by three persons, each holding 100 shares of £1 each. Mr. Faith had 100 shares, and his two sisters, Mrs. Bushell and Dr. Bayne held the other 200 shares. The two sisters tried to remove the third director, i.e. Mr. Faith. He defeated the motion and recorded 300 votes, and his two sisters recorded 200 votes together.

Issues in the case

Whether or not Article 9 of the company’s articles of association violates Section 184 of the Companies Act 1948?

Judgement of the case 

The trial court held that the weighted votes clause was unconstitutional and made a mockery of Section 184 of the English Companies Act, 1948. This decision was reversed by the House of Lords,arguing that the British Parliament was well aware of the fact that the company’s articles executed weighted votes, yet no provisions were against it. This made it clear that the legislation didn’t oppose such a practice. 

Tarlok Chand Khanna v. Raj Kumar Kapoor & Ors. (1983)

Facts of the case

As per the facts of this case, Tarlok Chand was removed by a resolution in a general meeting from the board of directors. The petitioner promoted a company that consisted of family members as members and shareholders. In 1965, when the petitioner, who held the majority shareholding, fell ill, the respondent, who belonged to the other group, took over the company’s management. Subsequently, some more shares were transferred to the majority shareholders, and the petitioner was removed from the Board of Directors of the company. Thereupon, the petitioner filed the petition on the grounds of oppression and mismanagement of the company and for other allied reliefs. He challenged this by arguing that the proper notice was not circulated to the shareholders regarding his removal. Other company petitions were also filed for various reliefs by members of each of the groups.

Issues in the case

Whether or not prior notice is to be given to the director before his removal, and whether or not Article 8 of the article of association of the company was invoked?

Judgement of the case

The court held that the removal of a director of the company must comply with the provisions of the Companies Act, 2013, and his removal was not valid due to the irregularities in the procedure. The purpose of Section 169 is to eliminate arrangements or contracts under which the directors were removed by extraordinary resolutions or were irremovable. The sector over which Section 169 operates is thus extensive. In this case, it was said that any restrictions on the power of removal would be void.

Bhankerpur Simbhaoli Beverages (P) Ltd. v. Sarabjit Singh & Ors (1995)

Facts of the case

The facts of the case were such that the appellant challenged his removal, stating that the proper procedure was not followed. The court found that the resolution passed was not in compliance with the company’s article of association, and proper notice to the shareholders was not sent.

Issues in the case

Whether or not compliance with the articles of association regarding the removal is necessary?

Judgement of the case

The court held in favour of the appellant and observed that his removal was invalid. It also emphasised adhering to procedures mentioned in the Companies Act, 2013 and highlighted the requirements for fairness and transparency in corporate affairs.

Any resolution without the opportunity to make a representation would be null and void. It is a denial of opportunity to the director if he has not received the letter prior to his removal. Section 169(4) provides that there is no need to read aloud at the meeting or circulate the representation where, on application to the tribunal, it is satisfied that the rights under this section are abused for arising publicity to a defamatory matter. 

Nazir Hossein and Anr. v. Darayus Bhattena & others (2000)

Facts of the case

In this case, the chairman of the board of directors of Indian Automotive Racing Club, in the company’s board meeting, appointed an additional director by resolution passed in compliance with Section 285 of the Companies Act, 1956, i.e., Section 169 of the 2013 Act. This was challenged in a civil suit. The court passed a consent order instructing the company to hold its meeting under the direction of a third person to reconsider the initial agenda of the earlier meeting in question.

Issues in the case

The issue revolves around additional directors acting as directors of the Suit Club and restraining directors, as well as additional directors and life members enrolled after 7-11-95 from casting their votes at the AGM.

Judgement of the case

The Apex Court ruled that the proceeding of the earlier meeting in which the Chairman presided, in which life members were inducted as additional directors, would not sustain and, therefore, the appointment of such additional directors as made in the earlier meeting stands void. 

Conclusion 

Section 169 gives the shareholders the power to remove the directors as well as the right to represent themselves. The removal of directors requires a high degree of attention and diligence. It is a very sensitive matter which requires an understanding of the legal framework and procedures. It should be regarded as a last resort, with careful evaluation given to the procedural intricacies involved.

Shareholders possess an inherent right to remove a director and must perform due diligence and prudence when considering the removal of a director, as it can significantly impact the company’s governance and operations.

The removal of directors cannot be limited to the methods as specified in Section 169. This provision balances the shareholders interests as well as provides a just and fair process for the directors.

Frequently Asked Questions (FAQs)

Is Section 169 an exhaustive method of removal?

No, Section 169 is not exhaustive, as it begins with the phrase that ‘A company may, by Ordinary Resolution……’ Here “May” denotes that the removal of the director’s procedure is not exhaustive and there can be other methods for removal as well. Section 169(8)(b) also states that the company is not deprived of any alternate methods for the removal of the director. 

What are the rights given to the director who is being removed by giving special notice?

The following are the rights for the welfare of the director:

  • The director subject to the removal can send a letter of representation to the company in return for the special notice received by the company for his removal. The company will send the special notice as well as the letter of representation to all the shareholders at least 7 days before the general meeting.
  • In case, due to any circumstances, the letter was not received by the shareholders, the director has the right to read it out loud in the general meeting. 
  • The concerned director may appeal to the tribunal if they disagree with the legal process.

Can a director challenge their removal under company law?

Yes, a director’s removal can be challenged by them under the Companies Act if they believe the removal was unjust, unlawful, or not conducted in compliance with the company’s articles of association or provisions of the Act. According to the jurisdiction and particulars relating to their removal, directors may take legal action to challenge their removal, including suit or arbitration. They may take action if they believe that the proper procedures were not followed, that the grounds for removal were invalid, or that their removal was on a discriminatory basis or in violation of their rights as directors.

What role do shareholders play in the removal of directors?

Shareholders play a vital role in the removal of the directors, as they have voting rights in the meeting. They have the right to be informed and can object to any proposed removal. They can also initiate a director’s removal by putting forward proposals.

Section 169(1) gives the company the power to remove a director unless he is appointed by the tribunal. The shareholders pass an ordinary resolution after giving him a reasonable opportunity to be heard.

What is the difference between a voluntary resignation and the removal of a director?

Resignation by a director of a company is voluntary, whereas removal is involuntary. The director is removed due to his disqualification or other reasons, whereas there is no requirement of any such reasons in resignation. 

References 


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Examining the legality of cryptocurrency in India

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This article has been written by Aditya Kapoor pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Introduction

Are you someone who’s looking to pay for a super car of their dreams with Bitcoin? Or are you wondering if you can pay for your coffee using your crypto wallet balance instead of using UPI? How about paying off for your own wedding with that ‘meme-coin’ that skyrocketed? First, let’s understand what crypto currency is, how it functions and its legal status in India in 2023.

Definition of cryptocurrency 

Cryptocurrency is a type of decentralised digital currency that is based on blockchain technology and verified by cryptography. Confusing, right? Let me break these terms down for you-

  1. Decentralised – It implies that cryptocurrency isn’t governed by a single body, unlike how banks and other nationalised institutions function; instead, all participating users retain control.
  2. Blockchain – It’s a type of technology where information is stored in data blocks that are connected by chain. In simpler words, it allows for peer-to-peer sharing of information, finance, and services, which eliminates the need for an intermediary. It results in significant reduction in cost of transfers.
  3. Cryptography – It’s a process that helps make cryptocurrency transactions secure, safe and anonymous.

About a decade earlier, everyone thought that it was a new scam that was booming and the majority of consumers didn’t exactly know the purpose of having cryptocurrencies in the first place. Who thought that the crypto-world would be such a huge deal after a decade?

Evolution of cryptocurrency in India

What if I told you that India contributes significantly to the cryptocurrency market and that it has a few of the largest crypto exchanges? Fascinating, right? However, in order to understand how India ended up being such a big player in the global market, we must understand how it all began.

The evolution of cryptocurrency in India can be traced back to 2009, when it was introduced in the form of Bitcoin, followed by its first commercial transaction dating back to 2010 and the establishment of the first cryptocurrency exchange in 2013.

In 2018, the Reserve Bank of India (RBI), the country’s central bank, delivered a significant blow to the cryptocurrency industry by issuing a ban on cryptocurrency transactions. This decision sent shockwaves throughout the Indian crypto community and raised concerns about the future of digital assets in the country.

On April 6, 2018, the RBI issued a circular directing all entities regulated by it, including banks, financial institutions, and payment gateways, to refrain from dealing in or providing services related to cryptocurrencies. This move effectively prohibited banks from facilitating cryptocurrency transactions, making it extremely difficult for individuals and businesses to buy, sell, or hold crypto assets.

The RBI’s rationale behind the ban was primarily rooted in concerns regarding financial stability, consumer protection, and the potential use of cryptocurrencies for illicit activities. The central bank highlighted the inherent volatility and speculative nature of cryptocurrencies, emphasising the risks associated with investing in them. Moreover, the RBI expressed apprehensions about the potential impact of cryptocurrencies on the stability of the Indian rupee and the country’s financial system.

The ban sent shockwaves throughout the Indian cryptocurrency community, leading to a sharp decline in trading volumes and a loss of confidence among investors. Many cryptocurrency exchanges and businesses were forced to shut down or relocate overseas as they were unable to operate within the confines of the regulatory framework.

However, the ban did not completely extinguish the enthusiasm for cryptocurrencies in India. Many individuals and businesses continued to trade crypto assets through peer-to-peer networks and offshore exchanges. The underlying technology behind cryptocurrencies, blockchain, also garnered attention, with several startups and enterprises exploring its potential applications in various sectors.

This led to a drastic loss of sentiment in the Indian crypto market; however, in March 2020, in the landmark case of Internet and Mobile Association of India vs. Reserve Bank Of India (2020), the Supreme Court of India struck down the RBI’s circular banning cryptocurrency via a unanimous decision as it was established to be unconstitutional and that it infringed the right to freely trade and do business under Article 19(1)(g) of the Constitution of India. So, what status does cryptocurrency hold in the current day? Is it legal or illegal? Let’s find out.

Legality of cryptocurrency in India 

The legal framework of cryptocurrency is not laid out prominently, as some aspects of it have been addressed while others continue to remain ambiguous.

As of 2023, the following are the points that a crypto user should be aware of –

  1. An individual can trade, hold and invest in cryptocurrencies, but they cannot be used to make official purchases, which implies that they cannot be used as legal tender.
  2. As per the Finance Bill of 2022, cryptocurrency has been defined under ‘Virtual Digital Assets’.
  3. Income from transfer of virtual digital assets such as crypto and NFTs will be taxed at 30%.

One of the key challenges in regulating cryptocurrencies is their decentralised nature. Cryptocurrencies operate on distributed networks, such as blockchain, which are not subject to the control of any central authority. This makes it difficult for regulators to apply traditional financial regulations, which are typically designed for centralised systems.

Another challenge is the global nature of cryptocurrency markets. Cryptocurrencies are not confined to any one jurisdiction, and they can be traded 24/7 on decentralised exchanges. This makes it difficult for regulators to enforce regulations and coordinate their efforts across borders.

As a result of these challenges, the regulatory landscape for cryptocurrencies is still in its early stages. Some jurisdictions have taken a proactive approach to regulating cryptocurrencies, while others have adopted a more cautious stance. Some of the key regulatory issues that are still being debated include:

  • How to classify cryptocurrencies: Are cryptocurrencies commodities, securities, or something else? This is an important question, as it will determine which regulatory framework applies to cryptocurrencies.
  • How to regulate cryptocurrency exchanges: Cryptocurrency exchanges are platforms that allow users to buy and sell cryptocurrencies. Regulators are still trying to figure out how to regulate these exchanges to protect investors and ensure market integrity.
  • How to address the risks associated with cryptocurrencies: Cryptocurrencies are volatile and speculative investments, and they pose a number of risks to investors. Regulators are still grappling with how to address these risks and protect investors.

The regulatory landscape for cryptocurrencies is likely to continue to evolve in the years to come. As the cryptocurrency industry matures, regulators will need to adapt their regulations to keep pace with the changing landscape.

Digital dilemma : challenges around cryptocurrency

The unregulated status of cryptocurrency poses a great deal of stress as it makes the entire crypto market volatile. Volatility not only results in sudden and major financial losses for inexperienced and even experienced investors but a sudden decline in the cryptomarket may result in panic-selling which in turn affects the economy as a whole.

Another concern and one of the reasons for the initial ban on cryptocurrency, is money laundering. Money laundering is a vice that is often associated with cryptocurrency. Due to its unregulated nature, it’s very difficult to reduce instances of money laundering because it might be disguised in the form of trading or gifts, as unlike our good old stocks, it has never been simpler or easier to indulge in cross-border trading.

Due to its anonymous and difficult to track nature, the government’s concerns about the misuse of cryptocurrency seem valid. They fear that the criminal-minded folks would use this advanced piece of technology to make fund transfers towards terrorism and to deal in drugs. In August 2023 itself, the Enforcement Directorate seized proceeds of crime amounting to a whopping Rs 1,144 crore and arrested 20 persons in cases related to frauds in cryptocurrency/ virtual digital assets.

There are no clear guidelines outlining the legal remedies for consumers/investors that indicate how a dispute shall be settled or where or how it needs to be addressed. The lack of investor protection plans discourages people on the fence from dive-in and gives the crypto market a fair chance.

The ambiguous legal landscape not only affects the investing side of the crypto market but it also stalls the growth of blockchain based applications, which can potentially benefit a lot of businesses.

Sadly, the misuse of cryptocurrency is not limited to the above-mentioned points. It has resulted in various new scams that the scammers try to pull off to get an easy buck from innocent people. Would you believe it if I told you that the scale of such scams is huge, amounting to $300 million. Click here to learn more about one such instance reported in November 2023. Numerous complaints have been registered where people have claimed to have lost a massive amount of their savings.

India, sleeping giant of the crypto world

Imagine a world where you can buy anything with a tap of your phone or smart watch. You must be asking yourself, Is that not possible already using NFC technology? But imagine the same scenario but this time instead of paying with your bank balance or credit card, you’re paying with a crypto balance. How does that sound?

Certainly, there is misuse of cryptocurrency but that doesn’t negate its potential to revolutionise the way our payment system has functioned for decades. If we and the government decide to look past the rupee and remittances, this dream may not be far-fetched.

Central bank digital currencies (CBDCs) or the eRupee, can be considered one of the revolutionising factors, as it’s a government initiative to have a digital token of their currency. If implemented or transitioned properly, the CBDCs can address a lot of concerns, such as:

  • Money laundering
  • Cross border transactions will be monitored to track illegal activities
  • Increased transparency will help reduce corruption and bribes

On the other hand, it may turn out to be a bad idea, as it’s potential downsides include:

  • Government surveillance on the citizens
  • Data privacy breaches

Having said that, even blockchain technology can streamline various financial processes, reducing costs and fraud in areas like supply chain management and healthcare, while cryptocurrency brings unbanked and underbanked populations into the formal financial system, boosting financial literacy and access to financial services.

Conclusion

In my opinion, a lot of individuals, businesses and even the nation as a whole can benefit because not only does India have one of the largest crypto user bases in the entire world, but we also have the potential to become the next superpower. Complete legalisation of cryptocurrency can provide a tremendous boost or kick start to our nation’s economy; however, it would require the following things –

  • Involvement of regulatory bodies such as SEBI and RBI.
  • A proper legal framework that clearly outlines the dispute resolution guidelines along with how crypto-related matters should be addressed.
  • The Cryptocurrency Bill 2021 is still pending in parliament; it should be passed as it would make the legal framework enforceable.
  • Proper technological infrastructure will also be required to support its adoption on a nation-wide scale.
  • Digital literacy should be increased among the less tech-savvy demographics. This will not only enable them to reap the benefits of this technology but also safeguard their interests and protect themselves against potential scams.

Finally, India should also participate in the existing collaborative measures to combat the misuse of cryptocurrency and solidify its position on a global scale. These measures include:

  • The Financial Action Task Force (FATF) has issued guidelines for regulating crypto assets and combating money laundering risks.
  • The G7 nations are collaborating on developing common cryptographic regulations. 
  • Interpol has established a dedicated unit to investigate crypto-related crime.

References

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