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Treaties for Intellectual Property Rights (IPR) protection

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This article is written by Shriya Singh. The article, in-depth, discusses the various international treaties as well as theories and doctrines governing intellectual property rights around the globe. It covers all the possible international treaties and conventions on intellectual property rights, namely- Paris Convention, Berne Convention, Geneva Convention, Trade-related aspects of Intellectual Property Rights, Patent Law Treaty, World Intellectual Property Organisation Performances and Phonograms Treaty, World Intellectual Property Organisation Copyright Treaty, etc. It further discusses the theoretical justifications for intellectual property rights as well as the related doctrines.

Table of Contents

Introduction

According to the World Trade Organisation, intellectual property rights are those rights that are given to persons over the creation of their minds. Intellectual property rights are important rights in both the domestic and international spheres. There have been various multilateral and bilateral treaties in the field of intellectual property law to mark its international development. 

Although the protection of intellectual property rights seems like a recent concept, it can be traced back to the early days when most of the writings used to happen on leaves and parchments and the need for protection was realised in terms of copyright protection and originated the printing rights protection and subsequently censorship. It finally led to the passage of the Statute of Anne which recognised the rights of the authors. 

Similarly, the ancient Greeks mostly used certain kinds of symbols and marks to indicate the source of artefacts and potteries. Some symbols we used on swords as well for the differentiation. With the increase in trademarks were eventually associated with merchandise makers. When a lot of cases regarding the infringement of such marks and symbols began to see light the need for its regulation arose and subsequently Merchandise Marks Act 1862 was introduced and it allowed traders to bring actions on the basis of deceiving the owner of the mark. 

Another intellectual property right which can be traced long back is patent laws. The system of guilds is one of the first which granted a certain amount of monopoly to the guilds. Then subsequently statute of monopolies was introduced. 

Furthermore, with evolving society and technology, people have become more creative in terms of both innovation as well as misuse regarding such innovation which led to the need for a universal regulation regarding the protection of intellectual property rights.

The conventions are more than a hundred years old, yet they provide a vital basis for the international dimensions of the current position of intellectual property rights.

These international treaties and conventions provide international protection for intellectual property rights by creating a broad framework of protection containing certain common elements. The primary regulation of the conduct of intellectual property rights within a country emanates from domestic legislation. However, the provisions of these national laws are shaped by the obligations created by international conventions and treaties.

Let us discuss them in detail.

Intellectual property rights (IPR)

Intellectual property, being intangible property, indicates the creation of the human mind. The creation of the human mind mainly includes inventions and literary and artistic works, including symbols, names, images, and designs used in commerce. 

There are three components to intellectual property rights – 

  • It is related to the intelligence of the human mind, which is new and unique.
  • It is an intangible commodity that is protected. The most important difference between any other form of property and intellectual property is that intellectual property is intangible and does not qualify to be defined or identified by the medium of physical parameters.
  • The idea per se is not protected. The idea has to be published as a form of intellectual property, and only then is it granted protection. 

The meaning and scope of intellectual property are, with time, evolving and thus are involved with the inclusion of newer forms of intellectual property in addition to its four separate and distinct types, namely, patents, trademarks, copyrights and trade secrets. In current times, the protection of geographical indication, protection of varieties of plants, the protection of semiconductors and integrated circuits and undisclosed information have been covered under the ambit of Intellectual Property Rights 

Principles of the international intellectual property regime

It was with the Paris Convention for the Protection of Industrial Properties, 1883, which is commonly known as the Paris Convention, that the principles of intellectual property rights began to take shape. It was followed by the Convention for the Protection of Literary and Artistic Works, 1886 which is infamously known as the Berne Convention. 

Both the above-mentioned conventions were negotiated and also re-negotiated as well as amended throughout the years, and eventually, they were finally incorporated and advanced in Trade-Related Aspects of Intellectual Property Rights (TRIPS) through the Uruguay Round of Negotiations from 1986 to 1994, which came into effect from the 1st of January 1995. Let’s understand each convention in detail.

Paris Convention, 1883

The Paris Convention covers all forms of industrial property, such as patents, trademarks, industrial designs, utility models, geographical indications, service marks, trade names,  and the prevention of unfair competition.

The Paris Convention was created with two goals, which are- 

  • first, to prevent the unforeseen loss of patent protection eligibility by publishing 81 patent applications and taking part in international exhibitions before submitting national patent applications; and 
  • second, to some extent, harmonise the various patent laws of the various countries.

The substantive provisions of the Paris Convention can be divided into three main categories- 

  1. National treatment– As per the terms and conditions of the convention, every secretary state must ensure that the citizens of their nation and the citizens of other contracting states have an equivalent degree of protection regarding industrial property. Citizens of non-contracting states shall be entitled to national treatment under the convention in the same manner as in their own state if they reside in the contracting state or have a lawful and functioning industrial or commercial presence there.
  2. Priority rights– It covers within its ambit industrial designs, trademarks, and utility models. This right gives the holder the ability to file an application for protection in any other contracting state within a certain amount of time, that is, 6 months for industrial designs and trademarks and 12 months for patents and utility models, based on a standard initial application that was filed in one of the contracting states. It would be assumed that these additional applications were filed on the same day as the first application. To state it otherwise, it means that they will supersede any application filed by third parties for the same invention, utility model, trademark or industrial design during the previously indicated term.

The subsequent applications would not be influenced by any subsequent event, including the publication of an invention or the sale of items bearing an industrial design or mark, because they have their foundation in the original application.

  1. Common rules – They are as under:
  • Patents– Patents issued for the same invention in different Contracting States are independent of one another. A patent cannot be refused, cancelled, or terminated in any Contracting State on the grounds that it has already been so in another Contracting State, and the granting of a patent in one Contracting State does not obligate other Contracting States to do the same. The refusal to award a patent or the invalidation of a patent on the grounds that the sale of the product or of a product made using the patented technique is subject to domestic legal restrictions or limitations is not permitted.
  • Marks– The filing and registration requirements for marks are governed by local law in each Contracting State and are not governed by the Paris Convention. As a result, neither a registration nor a request for registration of a mark that is put forward by a citizen of any Contracting State may be denied or invalidated on the grounds that the application, registration, or renewal was unaffected in the country of origin.
  • Registration– A trademark’s registration in one Contracting State is unrelated to any potential registrations in other nations, including the place of origin.
  • Industrial Designs– Each Contracting State is required to preserve industrial designs, and protection cannot be revoked because products containing the design were not produced there. 
  • Trade Names– Trade names must be protected in every Contracting State without being required to file or register the names.
  • An indication of Source– Each Contracting State is required to take action to prevent the direct or indirect use of misrepresentations regarding the origin of commodities or the identity of their producer, maker, or trader.
  • Unfair competition– Each Contracting State shall offer adequate safeguards against unfair competition.

Berne Convention, 1886

States began to become more interested in the potential for international cooperation on intellectual property during the nineteenth century because of increased literacy piracy. Literary pirates misrepresent someone else’s ideas as their own. This desire of such cooperation initially showed itself through bilateral agreements. Most country copyright laws were only a few decades old in 1886. The only protection offered was that provided by monopolies, or privileges granted for the publication of specific works.

Eight countries ratified the Berne Convention for the first time in 1886, namely- Belgium, France, Germany, Italy, Spain, Switzerland, Tunisia, and the United Kingdom.  India has been a member of the Berne Convention since April 1928.

The Berne Convention, like the Paris Convention, was based on the idea of national treatment and stipulated a set of basic rights that all nations had to uphold. The multilateral age of global intellectual property cooperation began with the Paris and Berne Conventions.

The Berne Convention covers the rights of authors as well as the preservation of works. The treaty is founded on the below-mentioned fundamental principles and includes a number of provisions that specify the minimum level of protection that must be provided, as well as exceptional measures that developing nations may apply. 

Principles Enshrined

The principles which got enshrined in the Berne Convention of 1886 and form the bedrock of intellectual property laws today are- 

  • Principle of national treatment– According to the principle of national treatment, treatment is no less favourable than that provided to people belonging to other member countries as people of one’s own country. This principle is enshrined very much in general agreements regarding tariffs and trade. It forms one of the most important principles of the World Trade Organization structure. 

The works of authors who are citizens of such States, or works first published in such States, should be accorded in each of the other Contracting States the same protection as such other Contracting States provide to the works of their own citizens. 

  • Principle of automatic protection– The principle of automatic protection provides unconditional protection which does not require any compliance with any formalities in all the member countries.
  • Principle of independence of protection– This principle provides for intellectual Property Rights protection, specifically for copyright protection, to be affordable irrespective of whether the protection is given in the country of origin or not. 

Protection is provided in accordance with the convention, regardless of whether there is protection in the nation where the work was created. However, if a Contracting State grants a longer period of protection than the minimum period required by the Convention and the work loses its protection in the place of origin, protection may be withdrawn.

The works and rights that must be protected, as well as the length of the protection, are addressed by the minimum requirements of protection. Each production in the literary, scientific, and creative fields must be protected, regardless of how it is expressed.

  • Principle of minimum standard protection– This principle concerns original works and rights to be protected. For example, for copyright, the different rights protected are transaction, adaptation and arrangement of work, performance in public, citation, communication, broadcast, reproductions, and basis of audio-visual works.
  • Principle of moral rights of authors– The Convention also establishes the rights pertaining to morals, i.e., “moral rights”. The moral rights include the right to claim authorship of a work as well as the right to object to any alteration of the work, mutilation, deformation, or modification. It also contains the right against derogatory actions that would be detrimental to the honour or reputation of the author.

The rights recognised as exclusive rights of permission include the following, subject to any permissible reservations, restrictions, or exceptions: 

  • The right to translate;
  •  the right to adapt and arrange the work;
  • the right to perform musical, theatrical, and dramatical-musical works in public;
  • the freedom to do literary readings in public;
  • being able to publicise the performance of such works;
  • the privilege of broadcasting; and
  • the freedom to create copies in any way or form, with the potential for a contracting State to allow copies without permission in specific circumstances as long as they don’t interfere with the work’s regular exploitation or unfairly damage the author’s legitimate interests; and the potential for a Contracting State to grant the right to just compensation for music sound recordings.

The Madrid Agreement

In 1891, the Madrid Agreement for the International Registration of Marks and the Protocol of 1989 thereto were concluded. It was adopted in Madrid, Spain. It had 55 members as a party to it when it was stated, which currently reached 114 members. By acquiring an international registration that is valid in all specified Contracting Parties, this procedure enables the protection of a mark in various nations. The agreement provides for the cases and the manner in which seizure may be requested and affected in the case of goods bearing a false or deceptive indication of the source. It prohibits the use, in connection with the sale, display or offering for sale of any goods, of all indications in the nature of publicity capable of deceiving the public as to the source of the goods. However, the agreement does not provide for the establishment of a union, governing body or budget.

Application for trademark registration in Madrid Agreement

A natural person or legal entity with an affiliation to a Contracting Party to the Agreement or the Protocol by establishment, domicile, or nationality may only submit an international application for international registration of a mark.

Only marks that have already been registered with the trademark office of the contracting member country with which the applicant has the required links, referred to as the ‘office of origin’, are eligible to be the subject of international applications. The international application may, however, be based solely on a registration application submitted to the office of origin in cases where all designations are implemented in accordance with the Protocol. 

The World Intellectual Property Organization’s Overseas Bureau must receive an overseas application through the office of origin.

One or more Contracting Parties in which protection is desired must be specified in an application for international registration. Later, more designations may be made. Only Contracting Parties that are signatories to the same treaty as the Contracting Party whose office serves as the office of origin may be named. The International Bureau conducts an examination after receiving an international application to see whether it complies with the Agreement, the Protocol, and its Common Regulations.

An international registration, from the date of the international registration, has the same consequences for each designated Contracting Party as if the mark had been registered directly with that Contracting Party’s office.

The Hague Agreement 

The Hague Agreement Concerning the International Registration of Industrial Designs, 1925 by submitting a single application to the International Bureau of the World Intellectual Property Organization, permits applicants to register an industrial design. It allows the design owners to protect their designs in multiple countries or regions with the fewest possible formalities. Since subsequent changes can be recorded and worldwide registration can be renewed in a single procedural step, the Hague Agreement also makes managing an industrial design registration easier.

The Nice Agreement

A classification of products and services was established by the Nice Agreement Concerning the International Classification of Goods and Services for the purpose of the Registration of Marks (1957) for the purposes of registering trademarks and service marks. The trademark offices of Contracting States are required to include the numbers of the classes of the classification to which the goods or services for which the mark is registered belong in official documents and publications in connection with each registration. It provides for 45 classes, out of which classes 1 to 34 are dedicated to goods and classes 35 to 45 belong to services. The 1957 Agreement’s conclusion was followed by revisions. States that have sanctioned the Paris Convention for the Protection of Industrial Property of 1883 are eligible to join the Agreement.

Functions

The administrative benefits that the Nice Agreement brings about are given as follows-

  • It simplifies the search for and determination of whether an identical or similar mark has previously been registered or applied for in relation to identical or similar products or services. 
  • It also permits the intellectual property officers to charge per class applied for, allowing charges to be roughly proportional to the monopoly being claimed.
  • In addition , applications do not need to be re-classified when they enter the jurisdiction because the majority of jurisdictions have adopted it; however, the formulation of the specification might require change.

The Lisbon Agreement, 1958

The Lisbon Agreement for the Protection of Appellations of Origin and their International Registration came into force in 1958. According to this agreement, an appellation that has been registered will be protected from usurpation or imitation, even when it is used in translation or is followed by words like “kind,” “type,” or the like, and it may not be deemed to have become generic in a Contracting State as long as it is still protected in the country of origin.  

Rome Convention,1961

The first international treaty to recognise the three neighbouring rights was the Rome Convention, and the rights that it recognised were Performers’ rights, rights of the broadcasting organisation, and rights of phonogram producers.

Performers’ rights

Performers receive protection from some actions that they have not authorised. These include-

  • broadcasting and making a live performance available to the public;
  • fixing a live performance; and 
  • reproducing a fixation if the original fixation was made without the performer’s permission or if the reproduction was made for purposes other than those for which permission was granted.

Rights of the broadcasting organisation

The following are some of the actions that broadcasting organisations have the authority to permit or forbid- 

  • the rebroadcasting of their broadcasts;
  • the fixing of their broadcasts;
  • the reproduction of such fixes; and 
  • the communication to the public of their television broadcasts if such communication is made in locations where the public may enter by paying a fee.

Rights of phonogram producers

Producers of phonograms have the authority to allow or restrict direct or indirect replication of their phonograms. A single equitable remuneration must be paid by the user to the performers, the phonogram manufacturers, or both when a phonogram released for commercial use gives birth to secondary uses.

For phonograms and performances included therein, protection must last at least until the end of a 20-year period calculated from the end of the year in which–

  1. the fixation was made,
  2. the performance took place, and
  3. the broadcast took place.

The Rome Convention permits limitations and exceptions to the afore-mentioned rights in national laws with regard to private use, the use of brief excerpts in connection with reporting current events, temporary fixation by a broadcasting organisation using its own facilities and for its own broadcasts, use exclusively for teaching or scientific research, and any other situations where national law permits exceptions to copyright in literary and artistic works.

The convention took a minimalist view of protection for these neighbouring rights, but indeed it granted protection. This narrow approach came to an end when the World Intellectual Property Organisation Performance and Phonogram Treaty, 1996 took place. The agreements stipulated a number of significant rights, which included the exclusive right to distribute to the public the original and copies of their performances recorded on phonograms through sales or other transfer of ownership or commercial rentals as well as the right to split an equitable payment with the phonogram producers for the use of recordings of their performances made for commercial purpose or broadcasting or for any other form of public communication. In addition, it acknowledges the protection of moral rights which are significant, such that the performers were granted the right of integrity and paternity.

World Intellectual Property Organization Convention

The World Intellectual Property Organization Convention, which serves as the organisation governing document, was signed in Stockholm on July 14, 1967. It went into effect in 1970 and underwent an amendment in 1979. The World Intellectual Property Organisation is an intergovernmental organisation that joined the United Nations system of organisations’ specialised agencies in 1974.

WIPO

The World Intellectual Property Organization is an agency of the United Nations that specialises in the promotion and protection of intellectual property rights throughout the world. It was established in 1967, with its headquarters in Geneva, Switzerland. It carries or mandates poster innovation economic development and creativity by providing a framework for the protection of intellectual property globally. 

The primary mission of the World Intellectual Property Organisation is to encourage the use and protection of intellectual property with the aim of creating a balanced and effective international intellectual property system which facilitates innovation investment as well as technology advancement. It is one of the largest specialised agencies within the United Nations system, and its membership is open to any UN member state. It administers various International treaties and agreements which are related to intellectual property. It provides a platform on an international level for the filing of patterns, making it easy for investors as well as companies to see protection of patterns in multiple countries with just a single application. 

Its Madrid system simplifies the registration and management of trademarks across multiple jurisdictions. It also supports the protection of copyright and other related rights. Furthermore, it offers various services relating to intellectual property information and capacity building, including various training programs. 

The World Intellectual Property Organisation conducts research and analysis on intellectual property trends and policies across the world and publishes its report along with various valuable insights worldwide. 

It offers arbitration and mediation services as a form of dispute resolution between parties without the need for costly and time-consuming litigation. It takes the initiative in bringing about development programmes across countries to build their capacity in intellectual property protection and management. It also encourages the transfer of knowledge and technology from developed to developing countries in order to promote economic growth and development, considering the development of the world as a whole. 

It plays a crucial role in harmonising the facilities for global protection of intellectual property rights.

World Intellectual Property Organization’s Development

The Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works, respectively, were the founding documents of the World Intellectual Property Organisation. An “International Bureau” was to be established under both Conventions. Due to the World Intellectual Property Organisation Convention, the two bureaus were combined in 1893 and replaced by the World Intellectual Property Organisation in 1970. 

The goals of the World Intellectual Property Organisation

The two main goals of the World Intellectual Property Organisation are-

  1. to encourage the protection of intellectual property around the world; and 
  2. to ensure administrative cooperation between the intellectual property Associations established by the treaties that the World Intellectual Property Organisation oversees.

In addition to carrying out the administrative duties of the Unions, the World Intellectual Property Organisation engages in a number of activities to achieve these goals, such as

  • normative activities, which encompass the formation of international trees to create norms and standards for the protection and enforcement of intellectual property rights.,
  • programme activities, involving legal and technical assistance to States in the area of intellectual property,
  • international classification and standardisation activities; and 
  • trademark and industrial design registration, as well as filing and registration services relating to foreign applications for patents on inventions. 

Membership in the World Intellectual Property Organisation

Any country that satisfies the following requirements is eligible to join the World Intellectual Property Organisation- 

  • Must be a member of the United Nations, any of the specialised agencies associated with the United Nations, or the International Atomic Energy Agency,
  • Must be a party to the Statute of the International Court of Justice; or
  • Must have received an invitation from the General Assembly.

Membership in the World Intellectual Property Organisation does not impose any duties on a party with regard to other treaties that it manages. To become a member of the World Intellectual Property Organisation, an instrument of admission to the convention must be filed with the director general of the organisation.

Locarno Agreement

A classification system for industrial designs is defined by the Locarno Agreement Establishing an International Classification for Industrial Designs in 1968. The contracting state should designate the classes and sub-classes of the classification to which the products containing the design belong. Any publication that the offices provide on the submission or registration of an industrial design must also include such information. A committee of experts is established under the agreement, and it is their duty to update the classification on a regular basis depending on the requirement. The categorisation system is also used by other international organisations.

In 1979, the Locarno Agreement of 1968 was modified. There is an assembly in the union created by this Agreement, and there is one delegate from each of the states of the union in this assembly. One of the most important responsibilities of the assembly is to adopt the yearly program and budget of the union.

The Patent Cooperation Treaty

According to the Patent Cooperation Treaty of 1970, by submitting an international patent application, an invention can receive simultaneous patent protection in several different countries. An application may be submitted by any citizen or resident of a contracting member state. After meeting the connection through establishment requirement, it can typically be filed with the national patent of the contracting member state where the applicant resides or is a citizen, or, at the applicant’s option, to the World Intellectual Property Organisation’s Geneva-based International Bureau as well as its regional offices.

The treaty regulates in considerable detail the formal requirements that must be fulfilled by international applications. All contracting states that are parties to the treaty as of the international filing date are automatically identified upon submission of an application under the patent cooperation treaty. On the international application, a global search is carried out. Such a search is carried out by one of the authorised international search authorities in accordance with the provisions of the Patent Cooperation Treaty. In light of the search report’s result, a preliminary and non-binding written opinion is also offered about whether the invention seems to meet the standards of patentability. After receiving the written opinion and international search report, the applicant may choose to modify the clauses of the application or withdraw it altogether, especially if the content of the report and opinion suggest that patent issuance is unlikely. The overseas bureau publishes the foreign application and the findings of the worldwide search if it is not withdrawn. 

A union was established with an assembly as a consequence of the Patent Co-operation Treaty. Every state that has ratified the Patent Cooperation Treaty is a member of that assembly. Adopting the biennial agenda and budget of the union, updating the regulations issued under the Patent Cooperation Treaty and changing some costs associated with utilising the system are among the key goals of this assembly.

Strasbourg Agreement

The Strasbourg Agreement Concerning the International Patent Classification of 1971 created the international patent classification. It is essential for retrieving patent papers while looking for “prior art.” Such retrieval is necessary for prospective investors, research and development organisations, and other parties interested in the use of technology. 

All the states that ratified the agreement became members of the committee of experts. The union with the assembly was founded by this agreement. One of the most important responsibilities of the assembly is to adopt the yearly programme and budget of the union. In 1979, an amendment was made to the 1971 Agreement, which is commonly referred to as the International Patent Classification Agreement.

The Geneva Convention

The Geneva Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms (1971) is also referred to as the Phonograms Convention. According to this convention, each of the Contracting States is required to defend and safeguard the producer of phonograms belonging to another Contracting State from copies being made without his or her permission 

Additionally, it offers a defence against the importation of such copies where production or importation is done with the intention of public distribution. After the first fixation or first publication of the phonogram, protection must extend for at least 20 years. The same restrictions that are stipulated with respect to the protection of writers are permitted by the Convention. There are restrictions on when non-voluntary licences can be granted.

Vienna Agreement

The Vienna Agreement establishing an International Categorization of the Figurative Elements of Marks, (1973) established a categorisation for marks that are composed of or contain figurative components. The numbers of the categories, divisions, and sections of the classification to which the figurative elements of such marks belong must be indicated in official documents and publications connected to the registration and renewal of marks. 

The Industrial Property Offices of at least 30 additional States, in addition to the other international organisations, apply the Classification even though only 31 States are party to the Vienna Agreement. An Assembly was established under the Vienna Agreement to govern the Union. The Assembly is comprised of representatives from each State that is a part of the Union.

Brussels Convention

The Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite, which is also referred to as the Satellites Convention, was adopted in 1974. Each Contracting State is required by the convention to take reasonable precautions to prevent the unauthorised dissemination of any satellite-transmitted program-carrying signal on or from its territory. If a distribution has not been approved by the organisation—typically a broadcasting organisation—that made the program’s content decisions, it is deemed to be illegal. The organisations belonging to the Contracting States are subjected to such rules dutifully. The Convention allows it in the form of protection restrictions.

The distribution of signals that carry programmes by unauthorised individuals is allowed if the signals contain brief excerpts of current event reports, brief quotations from the programmes carried by the emitted signals, or, in the case of developing nations, if the programmes are distributed solely for educational purposes, including adult education or scientific research. However, where the distribution of signals is done through a direct broadcasting satellite, the terms of this Convention do not apply.

The Convention does not specify the duration of protection, leaving that up to national law. 

Budapest Treaty

The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure, 1977 is a landmark for its central provision that any Contracting State that permits or mandates the deposit of microorganisms for the purposes of patent procedure shall recognise, for such purposes, the deposit of a microorganism with any “international depositary authority,” regardless of whether that authority is on or outside the territory of the said State.

In actual usage, the phrase “microorganism” is defined broadly to include any biological material that must be deposited for disclosure reasons, particularly in the case of inventions in the food and pharmaceutical industries.

The innovation must be disclosed in order for a patent to be granted. A written description is typically used to reveal an invention. When an invention involves the use of a microbe that is not generally available to the public, disclosure cannot be made in writing and must instead be accomplished by depositing a sample of the microorganism with a specialised institution.

Nairobi Treaty

All nations that have sanctioned the Nairobi Treaty on the Protection of the Olympic Symbol (1981) are required to prevent the five interlocking rings that represent the Olympic Games from being used for commercial gain in signs, merchandise, or other contexts without the IOC’s consent.

One significant outcome of the Treaty is that, in the event that the International Olympic Committee grants permission to use the Olympic symbol in a State party to the Treaty, the National Olympic Committee of that State is entitled to a portion of any revenue the International Olympic Committee generates as a result of the said authorisation.

Trademark Law Treaty, 1994

The Trademark Law Treaty aims to harmonise and simplify processes for regional and national trademark registration. This is accomplished by streamlining and harmonising a few aspects of those processes, which makes the administration of trademark registrations across several countries and the filing of trademark applications less complicated and more predictable. The majority of the Trademark Law Treaty’s provisions are related to the application for registration, amendments made after registration, and renewal phases of the process before a trademark office. Additionally, each Contracting Party must permit applications to relate to products and/or services from different Nice Classification classes.

A Contracting Party cannot demand that the applicants produce, for instance, an extract from a register of commerce, evidence of a specific commercial activity, or proof that the mark has been registered in the trademark register of another country because the list of permitted requirements is exhaustive. A power of attorney may also be related to several applications or registrations made by the same person or entity, according to the Trademark Law Treaty.

For use by applicants, a Contracting Party may also create its own Individualised International Form, provided that it does not call for any mandatory components outside of those mentioned in the associated Model International Forms. A necessity for the attestation, notarization, authentication, legalisation, or certification of any signature is specifically prohibited under the Trademark Law Treaty, except for when a registration is being surrendered.

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

International intellectual property laws developed in the 20th century. Numerous changes were also made to the Paris and Berne Conventions. International organisational structures developed together with the signing of intellectual property treaties. International bureaux were established as a result of the Paris and Berne Conventions, and they united to become the United International Bureaux for the Protection of Intellectual Property in 1893. A new organisation, the World Intellectual Property Organisation, replaced it in 1967. The international intellectual property community, which was governed by the United International Bureaux for the Protection of Intellectual Property and later the World Intellectual Property Organisation, was governed by a set of guiding principles, the most significant of which was the concept of national treatment.

It was not, however, a world where technical regulations were standardised. States maintained a great deal of sovereign flexibility in establishing intellectual property rules.

Intellectual property was added as a negotiating topic at the Ministerial Meeting in Punta del Este in September 1986, the meeting that launched the Uruguay Round of trade negotiations. With the signing of the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations on April 15, 1994, the Uruguay Round came to an end in Marrakech. The Final Act was ratified by more than 100 nations. It included a number of accords, notably the Trade-related aspects of the Intellectual Property Rights Agreement and the Agreement Establishing the World Trade Organisation. There was no way for a state to avoid the TRIPS Agreement if they wanted to join or stay in the multilateral trade system.

Structure of Trade-Related Aspects of Intellectual Property Rights

The TRIPS Agreement is regarded as a comprehensive new framework defining norms of intellectual property protection and addresses the protection of intellectual property in trade-related industries to a major extent. The TRIPS Agreement also holds the distinction of being the first global agreement that covers all forms of intellectual property and includes a wide range of substantive provisions.

The TRIPS Agreement is a comprehensive and in-depth agreement with 73 Articles broken down into 7 Parts. General regulations and fundamental principles are included in Part I. The TRIPS Agreement, which defines “intellectual property” as “all categories of intellectual property that are the subject of Sections 1 to 7 of Part II” of the Agreement, requires member countries to implement domestic legislation to give effect to its provisions. Additionally, the TRIPS Agreement mandates that Members honour their commitments to uphold their obligations related to intellectual property rights under existing agreements.

The Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, and the Treaty on Intellectual Property in Respect of Integrated Circuits are among the treaties that must be complied with. Both national treatment and most-favorable-nation treatment were stipulated as fundamental concepts in the TRIPS Agreement. The TRIPS Agreement’s Part II sets rules for the accessibility, scope, and application of intellectual property rights.

Purpose of Trade-Related Aspects of Intellectual Property Rights Agreement

The preamble of The Trade-Related Aspects of Intellectual Property Rights agreement along with Article 7 clearly lists out the purposes for the TRIPS agreement-

  1. To reduce distortion and impediment to international trade.
  2. To promote effective and adequate protection of intellectual property rights.
  3. To ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade.

Article 7 of the TRIPS agreement gives its objective, which is that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and the transfer and dissemination of technology, to the mutual advantage of producers and users of technology, and in a manner conducive to social and economic welfare as well as to balance the rights and obligations.

Features of Trade-Related Aspects of Intellectual Property Rights Agreement 

The three main features of the TRIPS agreement are- 

  1. Standards– it sets the minimum standard of protection for the intellectual properties provided by each member country.
  2. Enforcement– it entails domestic legislation, procedures, and remedies provided by member countries for the enforcement of intellectual property rights.
  3. Dispute settlement– it is a unique feature of the World Trade Organisation which provides for a complex system of dispute settlement through dispute settlement understanding.

Trade-Related Aspects of Intellectual Property Rights about several intellectual property rights

The Paris Convention for the Protection of Industrial Property has been included in the TRIPS Agreement, and it stipulates that Members shall abide by its substantive requirements even if they are not parties to the Convention. The Agreement on TRIPS has been reported to have adopted a “Paris Plus” approach as an outcome. The ‘Berne Convention for the Protection of Literary and Artistic Works’ is also included in the TRIPS Agreement, and it is stated that Members must abide by its substantive requirements even if they are not parties to the Convention. The TRIPS Agreement is supposed to take a “Berne Plus” approach as a result. The level of protection for writers’ moral rights under the TRIPS Agreement is, however, less than it is under Article 6bis of the Berne Convention because it is not included in the TRIPS Agreement.

Copyright 

The Berne Convention is the fundamental international agreement that safeguards copyright. The TRIPS Agreement further elevates and widens the levels of protection to include application of the law of the forum, automatic protection, and national treatment, in addition to making compliance with the standards of protection under the Berne Convention a fundamental condition for Members. Applying the law of the forum means that the country where protection for the work is sought, not the country of the author’s nationality or the place of origin of the work, will determine how the work is protected.

When a work is automatically protected, it means that no formalities are required and the rights attached to the work are established as soon as the work is created. As a result, by virtue of the act of creating the work, the author automatically acquires the copyright.

The following is outlined for the duration of copyright protection-

  • The author’s life, and fifty years after his passing,
  • Cinematographic works,
  • Works with anonymous or fictitious names: fifty years after the work has been properly made public, and
  • Photographic works and works of applied art that are protected as artistic works are subject to the laws of each country, but the duration of the protection must be at least 25 years from the day the work was created.

The TRIPS Agreement allows for the licencing or prohibition of the commercial rental of phonograms, and it grants rental rights to phonogram manufacturers and any other phonogram right holders as established by a Member’s law.

Trademarks 

According to the TRIPS Agreement, “any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark.” As a result, the TRIPS Agreement treats service markings that identify services as well as trademarks related to goods, and Members are now required to set up a service mark registration system. The TRIPS Agreement also states that “signs, in particular words, including personal names, letters, numerals, figurative elements, and combinations of colours, as well as any combination of such signs, shall be eligible for registration as trademarks.”

The TRIPS Agreement also acknowledges that Members may make the need for registration that a sign be visually recognizable in situations when the sign is not inherently able to distinguish the relevant products or services, or base registrability on distinctiveness obtained through use.

Although a Member may enable the registration of a trademark due to use under the terms of the TRIPS Agreement, it is specified that-

  • actual use of a trademark shall not be a requirement for filing an application for registration; and
  • an application shall not be refused solely on the basis that the intended use has not occurred prior to the passing of a period of three years from the date of application.

In addition, the TRIPS Agreement mandates that Members shall publish each trademark either before it is registered or right away after it has been registered. They also must provide a platform for opposition to a trademark’s registration, as well as petitions to cancel the registration.

According to Article 16(1) of the TRIPS Agreement, the owner of a registered trademark has the exclusive right to prevent any third parties from using identical or similar signs for goods or services that are identical to or similar to those for which the trademark is registered. This prohibition extends to all third parties without the owner’s consent. It has also been acknowledged that certain rights are protected under the Paris Convention.

Geographical Indications 

With regard to wines and spirits, the TRIPS Agreement offers more comprehensive protection. Geographical indications are defined by the TRIPS Agreement as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin.” Regarding the preservation of geographical indications, the TRIPS Agreement also lists a few restrictions.

The geographical indicators of wines and spirits are further protected under the TRIPS Agreements. It includes exclusions from the enhanced protection for wine and spirit geographical indicators. The TRIPS Agreement also calls for the creation of a multinational framework, which strengthens protection.

Industrial Designs 

Both the requirements for protection and the protection of industrial designs themselves are covered by the TRIPS Agreement. The TRIPS Agreement specifies that Members may protect industrial designs under either system, since some nations use the registration approach to protect industrial designs in the same manner as patents and other nations protect them as creative works in the same way as copyright.

According to the TRIPS Agreement-

  • Members must protect independently created industrial designs that are new or original, 
  • Members may specify that this protection does not apply to designs that are not new or original because they do not significantly differ from existing designs or combinations of existing design elements.

This clause was created to cover both the copyright technique and the patent strategy that are employed in various jurisdictions. The TRIPS Agreement further stipulates that the conditions for acquiring protection for textile or clothing designs shall not unreasonably limit the ability to apply for and get such protection.

This aims to guarantee that registration is completed quickly for Members using the patent strategy for registering industrial designs which have a limited lifecycle, such as textiles or clothing.

Patents 

In terms of patentable subject matter, the TRIPS Agreement stipulates that-

  • patents shall be available for all inventions, whether products or processes, in all technological fields, provided that they are novel, inventive, and capable of industrial application, and
  • patents shall be available and patent rights enjoyed without regard to the location of the invention, the technological field, or whether products are imported or produced locally.

However, the TRIPS Agreement specifies the following restrictions on what constitutes patentable subject matter – Members may exclude from patentability plants and animals other than microorganisms, diagnostic, therapeutic and surgical methods for treating humans and animals, as well as essential biological processes for producing plants or animals other than microorganisms. Members may do this in order to upload morality or public order, including to safeguard the health or well-being of people, animals, or plants or to prevent grave environmental harm.

The TRIPS Agreement further states that Members must take steps to safeguard unique plant varieties using patents, an efficient sui generis system, or any combination of the two. 

Apart from a few specific exceptions, the TRIPS Agreement forbids Members from making unreasonable exceptions to the patentable subject matter and establishes the general rule that any invention—be it a product or a process—in any area of technology should be eligible for patent protection if it satisfies the patent requirements. Thus, provisions that in the past had been passed specifically in the laws of developing countries, excluding inventions in specific fields from being patentable subject matter, such as pharmaceuticals, chemicals, and foods, conflicting with the TRIPS Agreement, give rise to the expectation that protection of inventions in developing countries will be improved.

Additionally, as will be discussed later, the TRIPS Agreement recognises a 10-year grace period for developing nations to establish a product patent system if they did not already have one at the time the World Trade Organisation Agreement entered into force. However, even in relation to these nations, when a member party does not provide patent protection for the pharmaceutical and agricultural chemical products as of the World Trade Organisation Agreement’s entry into force date, they are required to put in place measures that are equivalent to recognising patent applications for these inventions as of the World Trade Organisation Agreement’s entry into force date.

In addition, the TRIPS Agreement has clauses that categorically forbid discrimination, including-

  • discrimination based on the country of invention,
  • discrimination based on the technical sector, and
  • discrimination based on whether a product is imported or made domestically.

According to the TRIPS Agreement, a patent grants its owner the following exclusive rights:

  • The acts of making, using, offering for sale, selling, or importing that product for these purposes when a patent’s subject matter is a product, and
  • The acts of using, offering for sale, selling, or importing at least the 30 products obtained directly by that process when a patent’s subject matter is a process.

The TRIPS Agreement further affirms that the owner of a patent may enter into licencing agreements and that patent rights may be licenced or passed through succession.

The TRIPS Agreement states that regarding a patent owner’s obligations when applying for a patent, applicants must efficiently disclose their innovations and members must also ask them to specify the best way to implement their invention. The reason for this is to acknowledge that patent rights are exclusive once which are given in exchange for disclosing the innovation to the public. The TRIPS Agreement also stipulates that data related to international patent applications must be submitted.

According to the TRIPS Agreement, Members may grant limited exceptions to the rights granted by a patent as long as those exceptions do not unreasonably conflict with a patent’s normal exploitation and do not unreasonably adversely harm the legitimate interests of the patent owner while also taking into account the legitimate interests of third parties. This clause replicates the requirements of many nations’ patent laws pertaining to activities including-

  • using a patented invention for testing-related research and
  • prescription medicine dispensing by medical professionals.

Standard essential patents refer to a breed of patents where compliance to a standard is absolutely essential and there is no non-infringing alternative to the patent if the third party wishes to comply with the technological standards. Each of the technology standards is formulated from a consensual mechanism by a standard-setting organisation.

The manner in which the owner of the standard essential patent is expected to conduct in order to ensure the fair adoption of standards from all third parties and fair and reasonable access to technology standards to all third parties affects the enforcement of such patents.

There were attempts to include a small number of definite exceptions to patent rights in the TRIPS Agreement, but it was ultimately decided to instead include an umbrella clause that clearly outlined the requirements for exceptions and took into consideration, both, the interests of the patent owner and third parties.

The Doha Declaration, 2001 on the TRIPS agreement highlighted and stressed that individual governments have the ability to grant compulsory licences in circumstances of public emergencies. The TRIPS Agreement has clear and comprehensive provisions regarding compulsory licences.

The Doha Declaration makes reference to a number of TRIPS provisions, including the freedom to establish the regime of exhaustion of intellectual property rights, the freedom to establish what constitutes a national emergency and circumstances of extreme urgency, the freedom to grant compulsory licences and the freedom to determine the grounds upon which licences are granted. By defining these provisions, the Doha Declaration clarifies the conditions under which licences may be granted.

Trade Secrets 

The TRIPS Agreement protects information that has been provided to governments or governmental agencies as well as information that has been kept hidden, such as know-how and trade secrets. The TRIPS Agreement has the additional feature of including rules for the intellectual property rights enforceability. The TRIPS Agreement includes measures for the acquisition and upkeep of intellectual property rights, as well as related inter-party processes for dispute prevention and resolution, temporary arrangements, institutional arrangements, and final provisions. 

Members are required to establish basic standards of protection under the TRIPS Agreement.  The term “minimum standards” refers to- 

  • minimum requirements that must be consistently met by all Members; and
  • the freedom for Members to enact more comprehensive protection in their legal systems than what is mandated by the TRIPS Agreement.

Utility Models

The so-called minor patents are protected by the utility model systems. However, there are no restrictions pertaining to utility models in the TRIPS Agreement. As a result, there are no requirements for utility model systems under the TRIPS Agreement, and each country is free to design its own unique utility model system. Utility model systems are currently used in numerous nations, and this number is rising. Systems for protecting utility models vary from nation to nation, depending on factors like the length of the protection and whether or not registration should be subject to inspection. It is clear that each nation uses the utility model system to safeguard and expand its industries. 

Enforcement of intellectual property rights

If rights cannot be effectively enforced in response to infringements, there is no use in implementing intellectual property rules and regulations. As a result, rules relating to the protection of intellectual property rights are included in the TRIPS Agreement. Since a country’s legal system is determined by its Constitution, many of the rules in the TRIPS Agreement regulating the enforcement of IP rights are restricted to broad and abstract terms. However, the enforcement of IP rights involves not just IP law but also civil and criminal law. However, the fact that a global agreement was established on the enforcement of intellectual property rights is quite significant.

According to the TRIPS Agreement, members must make sure that legal enforcement processes are accessible to them in order to take action against any violation of intellectual property rights. Members may handle cases of intellectual property rights violations using their regular legal systems, and this provision does not require Members to establish a unique judicial system for the enforcement of intellectual property rights. The TRIPS Agreement further stipulates that processes for enforcing intellectual property rights must be just and equitable. They must not be overly complicated, involve arbitrary deadlines, or cause unneeded delays.

The TRIPS Agreement mandates that Members publish their internal rules and regulations and notify the Council for TRIPS of them in order to prevent disputes from forming between nations as much as possible and to ensure the openness of domestic laws. 

According to the TRIPS Agreement, Members must use the new World Trade Organisation dispute resolution procedures to resolve any actual disputes that emerge about the application of the TRIPS Agreement and must refrain from acting unilaterally.

Trade-Related Aspects of Intellectual Property Rights regarding anti-competitive practices

Certain contractual licences could have provisions that limit competition, like grant-back clauses that give the licensor an exclusive licence over an improved invention made by the licensee. The TRIPS Agreement addresses these issues by stating that-

  • Clauses that restrict competition may have negative effects on trade and may obstruct the transfer and dissemination of technology, 
  • Members have the right to specify and control anti-competitive practices,
  • If anti-competitive practices are used with regard to a Member country, that country may request consultations with the country of the intellectual property right owner, and
  • The country of the intellectual property right owner may request consultations with the country that has imposed the regulations.

Criticism of Trade-Related Aspects of Intellectual Property Rights

Although the TRIPS agreement sets fundamental and compulsory obligations on signature member states to implement the bare minimum standards of IP protection in all of its components, the agreement is not free from criticism.

  • TRIPS effectively have little to do with trade directly and have instead led to trade being negatively impacted and restricted, which goes against the ideologies of the World Trade Organisation.
  • Intellectual property rights are domestic and territorial. They are governed by domestic laws and regulations. There is no worldwide patent.
  • The approach of ‘one size fits all’ is inappropriate for countries that are in their developing stage, and have not yet been developed completely.
  • Companies doing ‘generic’ are not doing something innovative and have gotten unwarranted rights and protections on them.
  • The rationale for the TRIPS agreement was trans-border and not domestic, but domestic rights and protection of intellectual property have proliferated over the years. There is nothing trans-border in it.

Patent Law Treaty, 2000

The Patent Law Treaty of 2000 aims to harmonize, simplify, and make more user-friendly formal processes relating to national and regional patent applications and patents.

The Patent Law Treaty specifies the maximum set of conditions that the office of a Contracting Party may impose, with the notable exception of filing date restrictions. This means that while a Contracting Party is permitted to establish standards that are more lenient towards applicants and owners, the Patent Law Treaty’s requirements are necessary with regard to the imposition of as many conditions as an office may demand of applicants or owners. To reduce the chances that applicants would unintentionally lose the filing date, which is crucial to the patent process, the Treaty includes standards for acquiring a filing date.

The Patent Law Treaty mandates that upon satisfaction of three straightforward formal requirements (mentioned below), the office of any Contracting Party shall award a filing date to an application. A Contracting Party is permitted to require indications on both the identification and the contact of the applicant. The formalities are given below-

  • An indication that the elements received by the office are meant to be a patent application for an invention. 
  • A  statement indicating the information received by the office is intended to constitute a patent application for an invention.
  • Indications that would enable the office to locate or get in touch with the applicant. A Contracting Party may, however, demand indications on both, and

A component that seems to be an inventive description. A filing date cannot be assigned based on any additional criteria. For instance, a Contracting Party is not allowed to incorporate a filing fee or one or more claims in a filing date requirement. As was previously stated, these requirements are absolute requirements, rather than maximum requirements, and a Contracting Party would not be permitted to grant a filing date until all of those requirements are met.

The Patent Law Treaty outlines procedures to follow in order to prevent substantive rights from unintentionally being lost due to formality violations or missed deadlines. These include the requirement that offices give applicants or other concerned parties notice, extensions of deadlines, ongoing processing, restoration of rights, and limitations on revocation or invalidation of a patent for formal flaws in cases where they were not discovered by the office during the application stage.

World Intellectual Property Organization Performances and Phonograms Treaty 

There are certain types of commercial rights in their phonograms allowed to the creators of phonograms by the World Intellectual Property Organization’s Performances and Phonograms Treaty (1996).

With the exception of nations that, as of April 15, 1994, have a system in place for equitable remuneration of such rental, all Contracting Parties have the following rights:

  • The right of reproduction, which authorises direct or indirect reproduction of and copies of the phonogram as determined by national law, and
  • The right to authorize the release of a phonogram to the public by wire or wireless methods in tales granting the public access to the phonogram at a time and place of their choice. The interactive, on-demand services offered by the Internet are explicitly covered under this right. 

Subject to certain restrictions and exclusions, each of the rights described above is an exclusive right. The Treaty requires each Contracting Party to treat nationals of other Contracting Parties with the same treatment it gives to its own nationals with regard to the specifically granted rights in the Treaty, subject to various exceptions and limitations in terms of both performers and phonogram producers. The Treaty further states that phonogram performers and producers are entitled to a single equitable payment for any direct or indirect usage of phonograms that are broadcast or communicated to the general public for commercial reasons.

However, if a Contracting Party submits a reservation to the Treaty, it may limit or deny this power. The other Contracting Parties are allowed to withhold national treatment from the reserving Contracting Party in the event and to the extent of such a reservation by a Contracting Party.

The treaty mandates that the contracting member countries provide legal remedies against the infringement of technology safeguards such as encryption used by performers or phonogram producers in the course of exercising their rights, as well as against the removal or alteration of information like indication of specific data that identify the performance, producer of the phonograph and the phonogram required for management such as collection, distribution and licencing.

Each Contracting Party is required by the Treaty to take the steps necessary to ensure that the Treaty is applied in line with its own legal framework.

The Treaty creates an Assembly of Contracting Parties, whose major responsibility is to discuss issues pertaining to the upkeep and development of the Treaty. It assigns the administrative responsibilities for the Treaty to the World Intellectual Property Organization Secretariat. The Treaty was signed in 1996, and on May 20, 2002, it became operative.

The European Community and States that are the World Intellectual Property Organization members are eligible to sign the Treaty. Other international organizations may be permitted to join the Assembly established by the Treaty.

World Intellectual Property Organization Copyright Treaty

Under the Berne Convention, the World Intellectual Property Organization Copyright Treaty, 1996, is a special agreement. Any Contracting Party shall adhere to the substantive terms of the 1971 Act of the Berne Convention for the Protection of Literary and Artistic Works, 1886, even if that party is not bound by the Berne Convention. 

Additionally, the treaty lists items that are protected by copyright:

  • computer programs, regardless of the way they are expressed, and
  • collections of data or other materials, in any format, that are considered intellectual creations because of the way their contents have been chosen or arranged. 

The Treaty addresses three rights related to writers’ rights:

(i) The right of distribution is the authority to permit the sale of or other transfer of ownership that makes the original and copies of a work available to the public.

(ii) The right to rent is the legal authority to permit the original and copies of three different types of works to be commercially rented to the general public, they are- 

  • Computer programs, with the exception of situations where the computer program itself is not the primary object of the rental,
  • Cinematographic Works, but only in situations where commercial rental has led to widespread copying of such works, materially impairing the exclusive right of reproduction, and 
  • Works incorporated in phonograms as defined in the national law of contracting parties.

(iii) The right to communicate with the public involves making works accessible to the public in a way that allows users to access the work from a location and at a time of their choice. This covers any wired or wireless public communication. It must be noted that interactive and on-demand communication over the internet is referred to.

According to this treaty, Contracting Parties must offer legal recourse for the management of authors’ rights against the removal or alteration of information, including specific data that identifies works or their authors, and against the evasion of technological safeguards used by authors in connection with the exercise of their rights. 

Each Contracting Party is required by the Treaty to take the steps necessary to ensure that the Treaty is applied, in conformity with its own legal framework. To enable effective action against any act infringing on rights protected by the Treaty, each Contracting Party shall guarantee that enforcement measures are accessible under its law. 

Such action must include quick fixes to stop infringement and fixes that operate as a deterrent to future infringement. The Treaty creates an Assembly of Contracting Parties, whose major responsibility is to discuss issues pertaining to the upkeep and development of the Treaty. It assigns the administrative responsibilities for the Treaty to the World Intellectual Property Organisation Secretariat. 

The Treaty was finalised in 1996, and on March 6, 2002, it became operative. The European Community and States that are World Intellectual Property Organisation members are eligible to sign the Treaty. Other international organisations may be permitted to join the Assembly established by the Treaty.

Singapore Treaty on the Law of Trademarks

A modern and dynamic worldwide framework for the harmonisation of administrative trademark registration procedures is what the Singapore Treaty on the Law of Trademarks (2006) aims to achieve. Expanding upon the trademark law treaty of 1994, the Singapore treaty is more comprehensive and incorporates new developments in communication technology.

The Singapore treaty applies to every type of mark that can be registered under the laws of specific contracting parties. The contracting parties may choose to use any method of communication, including electronic messaging and communication, to communicate with their offices. The creation of the assembly of the contracting party is a company by the introduction of regulations governing the documentation of trademark licence and time constants alleviation.

Unlike the trademark law treaty, the Singapore treaty covers all marks that might be registered under a contracting party’s legal system. Above all, this is the first worldwide trademark law to officially identify non-traditional trademarks. The treaty includes all types of markings, including intangible ones like sound, smell, taste and feel, as well as ones that aren’t usually visible, like holograms, three-dimensional marks, colours, location and movement marks. The regulations allow for the use of non-graphic or photographic copies of these marks in applications.

Beijing Treaty on Audiovisual Performances 

The Beijing Treaty on Audiovisual Performances of 2012 is the most recent agreement pertaining to copyright. It is the first to be ratified following the passing of the World Intellectual Property Organisations Performance and Phonograms Treaty in 1996 and the Copyright Treaty. 

The agreement was approved during the Beijing Diplomatic Conference on the Protection of Audiovisual Performances which took place in the month of June 2012.

There were 155 countries present at the diplomatic conference, including the member states of the European Union, six inter-government mental health organisations, and 45 non-governmental organisations. 

The performers who include their performances in audio-visual fixation are not protected in any way by the World Intellectual Property Organisation Performances and Phonograms Treaty of 1996.

The audio-visual performers are actors and other performers whose performances are featured in the audio-visual work. 

There were also new international rules that were formed through this convention. These rules aided in appropriately handling the problems brought by social, technical and other likewise factors.

The acknowledgement of the impact of the development and convergence of information and communication technology on the production and reception of audio-visual performances was another endeavour undertaken under this significant treaty. 

This agreement was primarily motivated by the need to preserve a balance between the rights of performers over their audio-visual performances and the interests of the general public, which include access to information, research and education.

Rights allowed for the performers

The performer is permitted to use their moral and pecuniary rights according to the contract. 

The category of moral rights includes the right to integrity as well as authorship. 

In reference to the economic rights, it stipulates-

  • The freedom to focus on the unscheduled performances of the artist and the freedom to share those performances with the public by broadcast unless they have previously been shared on the same through any medium, and 
  • The freedom to broadcast and make public those scheduled performances as well as the rights to copy, distribute, rent and have them available.

The treaty also allows National legislatures to either do nothing at all or restrict or reserve the rights of performers to broadcast and distribute recordings of their scheduled performances. The two essential rights that have been mentioned above will be protected among all the signatory countries to the treaty.

Significance of the treaty

There are several reasons why the newly discussed treaty is a major development. A few of them are stated below- 

  • It gives a long overdue update on international audio-visual performer protection and modernises it by acknowledging the rights of performers in today’s digital environment.
  • It is the result of considerable international collaboration, and it demonstrates that uniform copyright guidelines may be advanced and established in multilateral forums.
  • Many of the recommendations that were discussed during the diplomatic conference were given by Nations from all around the world and by this important treaty, they were acknowledged and received substance. 
  • This treaty also acknowledges that copyright protection benefits all countries, whether is established or at a developing stage. Further, it is advantageous, especially when it comes to the development of their own talent and industries. A few examples of nations that have a booming audio-visual industry globally are China India Brazil and Nigeria.

Theoretical justification for Intellectual Property Rights (IPR)

Intellectual property rights theory plays a vital role in helping people understand the rights that are available and why they are available. A few significant theories are discussed below-

The utilitarian theory

John Stuart Mill espoused the utilitarian theory of property. He said that an act is said to be good if it results in the greatest good for the greatest number of people. Consequently, it was Jeremy Bentham who actually started with this theory, but Mill eventually modified and formulated the concept. He said that one has to count the amount of happiness and a particular act that causes it, as well as the amount of harm that is caused, to understand stability or to determine right and wrong. If one weighs the harm against the happiness, and if the happiness outweighs the harm, then such an act would be a good act; otherwise, it is a bad act. 

The intellectual property right mainly works as an incentive system. For instance, in patents, the monopoly is granted to the investors for a period of 20 years. 

Utilitarians would say that the end result of granting patents would actually be good for society. Providing protection for innovation or any new creation would encourage people to openly disclose their innovation without any fear. If no monopoly is granted, then any person who actually comes up with innovation will basically not come forward to announce his invention in public, and it will make room for replication and the time, money and labour of the person would go to waste. However, if the patent is granted, the innovators enjoy protection for a certain period of time wherein they can actually practice their innovation, disclose how it was created, and at the same time recoup the money during the monopoly period. 

Mill agreed that patent monopolies are appropriate compared to earlier practices of rewards or privileges granted by the monarchy or the government because they actually reward a person who has worked on a new invention which is unique. 

A number of companies have secret formulas that are secret because it is thought that the moment they are actually disclosed and if there is no protection granted, others will use it and compete in the market, which would reduce profit margins. But if protection is granted, then a number of innovators will disclose such formulas, which can enable the public to learn about new innovations, and also allow downstream innovators to come up with notifications about a new technology. 

Utilitarian theory is also used to justify the trademark law. If there is no trademark protection at all then there will be confusion as to which product is sold by which manufacturer. If protected, then it would largely help consumers avoid search costs and would ensure that there is no deception from a manufacturer’s perspective. It is a good kind of incentive for them to maintain the quality and ensure that their products throughout are of particular quality because the moment the consumer identifies the mark with a certain quality, he is likely to keep buying the same product time after time.

Mill’s theory works well to justify the existence of the copyright regime as well. If a certain Monopoly period is not allowed for the author of a book, then others can actually replicate the book and earn revenue out of it but if a certain period of protection is granted, then it will allow him to actually come forward with a work,  publish it and also recoup the cost and earn royalties by himself. 

Criticism 

Utilitarian theory, in effect, says that the protection of all three different kinds of intellectual property rights would, in the end, result in maximum happiness for the maximum number of people. However, the theory has been criticised because it has not been able to evenly balance private and public interests. Private intellectual property restricts the use of ideas. A patent regime based on an incentive system restricts people other than the first person to register the idea from freely using the idea. 

If a person who has come up with new technology and a patent is granted, then no one else can use that technology for a period of 20 years unless the person secures the licence from the patent holder. That means no modification can be made to such an innovation until the expiration of the monopoly. If any addition or modification has to be made to a new technology, then it will be expensive for society.

Granting property rights to intangible ideas actually impedes the flow of knowledge and also prevents or delays downstream innovation.

Though there is a system of disclosure and the patent system, it provides exclusive ownership to the person who owns the patents. Today, the owner of the invention can restrict others from freely using it for a certain period of time. Had it been there when wheels were invented, then it would have seriously restricted the development of mankind as many inventions with the small or big or improvements immediately followed after the invention of the wheel. Thus, Intellectual Property Rights do not actually allow the free flow of ideas and restrict the diffusion of technology, in a way impedes innovation based on original patents. 

There is also a negative effect it tends to have on the market. A certain period of monopoly eliminates competitors in the market, creating a monopoly situation that prevents others from entering the industry itself. This leads to the patent holders controlling the price of the product in the market. For instance, in the pharmaceutical industry, a manufacturer of life-saving drugs generally, when he had obtained a patent, would not allow others to enter the market.

Locke’s labour theory

John Locke, in his Two Treatises of Government, mentions that a person deserves the fruits of his labour. The above-mentioned belief is one of the most powerful bases for justifying intellectual property rights. Locke asserts that all that is in nature is provided by God, and it is available to all men as it is held in common for the benefit of all. 

He therefore believes that nothing should be monopolized or held as property by a particular individual. In fact, it should be allowed for everyone to enjoy what is given to all of us by God. He says that an individual can have prior claim over substances that are available in nature, as it is meant for the enjoyment of the entire humanity. 

He asserts that when an individual exerts his labour over resources, he can claim it as his property because he has added value through his labour to it. For instance, while digging ground someone finds gold, then, according to him, that will become his property as he actually used his labour to dig and as a result he found gold. 

Locke’s version of this labour justification is based on the assumption that each individual has prior property rights in one’s body. According to him, labour exerted by an individual is his own property, as he is the owner of his body. It is impossible to separate labour and its product. Once the labour is mixed with something existing in nature and transformed, then it becomes difficult to differentiate. Only the person’s effort is relevant, no less to others as a pre-condition for property acquisition. Thus, anything an individual mixes his labour with becomes his property. No one has a superior or conflicting claim over it. 

Locke would readily grant patent rights if an individual exerts labour to come up with an innovative product or a machine that is useful. For instance, James Watt used his labour to develop and improve steam engines that could be used in locomotives. That invention added value and spurred the growth of the economy. This labour theory can be used to justify patent protection in the light of the above statement as even though steam engine had been made, labour contributed to develop new technology.

As per Locke, an author, painter, photographer or musician who has exerted his labour to express his original thoughts in the form of books, paintings, photos, or a music album should readily be granted copyright, but he also brings in a sufficiency provision saying that property rights can be allowed only if it does not deny the others of resources existing in nature. If there are enough resources available in nature, then property rights can be claimed over resources when a person exerts labour over them. 

He expresses concern that if a particular substance is not available in abundance, then property rights over it would deny others access to that scarce resource. When such circumstances occur, an individual who exerted his labour over the scarce resource cannot claim property rights over it. Thus, Locke would have a responsibility if natural phenomena or natural resources like genes were monopolised, even if an individual had exerted labour to identify or discover their existence, as it would prevent others from using it for a certain period of time.

Criticism

According to Robert Nozick, fruits of labour are usually valuable, and property rights enable the labourers to appropriate this value. He clarifies that Locke allowed private property rights only if there was enough left for others from the common pool of resources. He explained that Locke only allowed private property rights if it did not cause harm to others and left enough for others. 

Locke suggests that 99% of the value is created when labour is mixed with a naturally existing substance to create an object. However, this is not plausible when labour is mixed with a naturally existing substance, it does not result in the transformation of the substance. 

It is also criticised as it fails to take into account the value added to the production by contributions made by others in the evolution of the product. For instance, the steam engine would not have been invented by James Watt alone, but he was definitely involved in improving the technology.

Hegel’s personality theory

Hegel’s theory of personality has been used to justify intellectual property rights. According to this theory, any work or any invention would be long to its author or inventor because it is the manifestation of the creator or inventor’s personality. 

George Wilhelm Friedrick Hegel states in his book Elements of Philosophy of Rights that the individual’s will, should be given more importance as compared to other elements that make up an individual. He identifies the personality as the will’s struggle to actualise itself. He gives prominence to the will compared to external properties, which are manifestations of the will. Property according to him becomes an expression of the will. He gives that society except the external manifestation of an individual’s personality as a property. 

When an individual expresses himself through his work, it is nothing but an external manifestation of his own personality. Property rights are vested in the external object purely because it is the resultant manifestation of the will of an individual. Labour is the means by which the will of an individual occupies the object.

Hegel believes that this external manifestation, which is seen as property, cannot be alienated at any point in time as it is the reflection of the self. 

This theory can be used to justify claims by authors, musicians, artists, sculptures, photographers, etc in their world. An author’s personality is manifested through his or her work. Books written by authors are external objects through which there is a personality, that is, their feelings, emotions, experiences, and imaginations are manifested. For instance, J.K. Rowling manifested herself when she wrote Harry Potter. 

Innovative technology is a manifestation of the inventor’s will and, as such, merits of property rights.

Criticism

The theory is not without criticism. The question is whether there is a personality, taking in the particular object, which is the external manifestation of the will, or not. 

Hegel’s preposition is that works are external manifestations of the personality, which possesses problems within the realm of intellectual property rights.

A person copying someone’s work would also be manifesting his personality, regardless of the fact that he is boring to someone else. Thus, this would be protected as per this theory, but it would be counter-productive to an intellectual property regime as it does not recognise the emitter as a property rights holder.

Intellectual Property Rights (IPR) and fundamental freedoms

The doctrine of the idea-expression dichotomy

The doctrine of idea expression dichotomy is indeed paramount to the very existence of copyright. The idea is that one who creates a particular work is entitled to his contribution of expression and not the underlying idea. 

Dichotomy serves two purposes- 

  • It ensures that the extent of ideas remains constant or can be built on further, but are never diminished. 
  • Copyright law is a mechanism to stop somebody else from copying what you have contributed.

The purpose of this doctrine is to keep ideas in the public domain and outside the purview of the copyright monopoly.

In the case of Indian Express Newspapers v. Union of India and Ors. (1994), the Bombay High Court stated that an unfortunate incident involving the rape of a woman was subsequently made into a film by Mundra. The newspaper claimed copyright over the newspaper report regarding the incident and alleged Jagan Mohan Mundra to have used it while making his film. The honourable High Court has rejected the argument, stating that, in respect of the facts present in the public domain, there cannot be a copyright. 

The doctrine is particularly important because the standard of skill and judgement required for copyright protection is extremely low, and the law has to, therefore, look elsewhere to prevent the overreach. As a result, copyright protection is extended only to the actual expression and not the idea underlying it.

The merger doctrine

The merger doctrine is connected with the idea-expression of dichotomy. It applies in situations where there is a unique or core idea and there are limited ways to express it. 

The essence of this doctrine was used by the Delhi High Court in Emergent Genetics India Pvt. Ltd v. Shailendra Shivam And Ors (2011) famously known as the Emerging Genetics Case, where the seed manufacturing company alleged that some of its former employees had virtually used its data to reproduce the same kind of seeds. The copyright here was of genotypic information, which is generated due to the DNA structure of the seeds. 

The Delhi High Court held that nobody could claim a copyright monopoly over a piece of genotypic information for the simple reason that the Deoxyribonucleic acid or DNA structure was something found in nature, and even if it was altered, the alteration was something that was found existing in nature, and it was inevitably a biological product. Therefore, granting a monopoly over such biological products would in effect stop anybody else from recreating or reproducing the product. The court applied the merger doctrine, saying that in cases like this where there are very limited ways or probably one way of expressing it, there cannot be a copyright monopoly. The rationale behind the doctrine is to prevent monopoly over the idea through indirect means in special cases where forms of expressing the idea are limited.

Fair use doctrine

The doctrine of fair use allows limited use of copyrighted material without the permission of the copyright holder. The intent behind the doctrine was to provide a balance between the rights of the copyright owner and the public interest in using such copyrighted work for the purpose of commentary, criticism, education, research, or news reporting. 

It permits the use of such material under particular circumstances, which would amount to infringement of the copyright owner’s exclusive right otherwise, and the factors that it takes into account for determining such circumstances are- 

  • Whether the use of such copyrighted material is for the purpose of commentary, criticism, news reporting or for educational or research purposes which are likely to be considered fair. Such use of copyrighted material, which is transformative in nature that they are used in a unique or creative way, is often seen as acceptable.
  • Works such as non-fictional or factual are more amenable to fair use than highly creative and original works like novels or music.
  • When a very small or a non-crucial portion of the copyrighted material is used, it is considered to be fairer than using the substantial or core part of that work. 
  • However, the most important factor is taking into account the potential market harm that can be caused to the copyright owner. If the use of such material washes away the market for the original work, then such circumstances are considered not fair for the use of the copyrighted work.

Sweat of the brow doctrine

The sweat of the brow doctrine is the traditional approach to copyright protection. This test recognises the labour put in by an author or compiler into the making of a work. According to this doctrine, irrespective of any creativity or judgement on the part of the author, if it can be proved that the author has expanded considerable labour and expenses over the making of his work, he is liable to get his work protected by copyright. 

The landmark case of Walter v. Lane (1900), which was pronounced by Lord Halsbury, is said to be a paradigmatic sweat of the brow doctrine. In this case, several public speeches were reported in the Times newspaper on various occasions. Later, the defendant published a book containing them all and in addition, he added short notes on them. It was also admitted by the defendant that these speeches were taken from the reports in the Times. The Times sued for copyright infringement of the speeches they published. Lord Halsbury laid down that there is considerable labour involved in reproducing spoken words into writing or print and first publishing it as a book. And so if a telephone directory can be protected by copyright, so can a verbatim report of the public. Thus, the House of Lords decided that the speeches published by the Times were protected under the copyright legislation.

This doctrine can be thought to be one which does not distinguish between an author and a publisher. According to it, they equally are entitled to the copyright in a work. 

It emphasizes the fact that the objective of copyright law is less to protect authorship and more to prevent others from misappropriating others’ labour.

The doctrine of creative standards

The doctrine of creative standards maintains that a work must be creative to be original and thus protected by copyright. A major landmark case that glorified this doctrine in the United States is Financial Information Incorporation v. Moody’s Investors Service (1984) which involved a daily use issue of 4 inches v/s 6 inches of index cards printed with information concerning current municipal bonds being called for redemption. 

Typically, the information consisted of the identity of the issuing authority, the series of bonds being redeemed, the date and price of the redemption, and the name of the trustee or paying agent to whom the bond should be presented for payment. According to the plaintiff, they had extended considerable effort and money to compile such pieces of information. The second circuit on appeal while rejecting the copyrightability of the bond cards and remanding it back affirmed that a compilation may receive a valid copyright only if something has been added to the data, the authorship of the compiler in making the requisite selection, coordination or arrangement of the data. 

In Fiest Publications v. Rural Telephones Services Company (1991), the situation of copyrightability of a directory listing the names, towns and telephone numbers of a large number of people in a certain area arose. On the question of copyrightability of compilations, the Supreme Court of the United States empathetically laid down- 

  • The author is the one to whom anything owes its origin. He is, therefore, the originator or the maker. 
  • Facts do not owe their origin to an act of authorship. The first person to find and report a particular fact has not created that fact. He or she has merely discovered its existence. 
  • The choices undertaken by the compiler as to the selection and arrangement, as long as they are made independently by him or her and entail a minimal degree of creativity, are copyrightable. In plain words, it means that copyright protection may extend only to those components of the work that are original to the author. 
  • Originality is not a stringent standard. It does not require the facts to be presented in an innovative or surprising way. It is equally true, however, that the selection and arrangement of the facts cannot be so mechanical or routine as to require no creativity whatsoever. The standard of originality is low, but it does exist. 
  • The copyright statute does not support the sweat of the brow doctrine, as it requires the selection, coordination and arrangement of facts in such a way that it as a whole constitutes an original work of authorship. 

The American Court concluded that the impugned directory was copyrightable because of its originality in alphabetically arranging the same.

Intellectual Property Rights (IPR) Regime in India

In the past 20 years, India’s economy has continued to grow at one of the fastest rates in the world, and the game of entrepreneurship and industry has played a significant role in this remarkable expansion. A structured system of IP protection aids in the growth and development of enterprises in a hassle-free environment, while businesses and their successful operation are crucial to the expansion of the economy. With a systemized legal system to handle IP protection, India is now in line with international practices. The Department of Promotion of Industry and Internal Trade, commonly referred to as DPIIT is one such department of the Indian government which inter alia manages the intellectual property rights-related chores in India.

In India, intellectual property rights were governed by the Copyright Act of 1957, the Patents Act of 1970, the Trade and Merchandise Marks Act of 1958, and the Patents and Designs Act of 1911.

In reaction to the establishment of the World Trade Organisation and the nation’s participation in the Agreement on TRIPS, India passed a number of new pieces of legislation for the protection of intellectual property rights. India became a party to TRIPS and the World Trade Organisation in April 1994 and January 1995, respectively.

These included the Trade Mark Act of 1999, the Designs Act of 2000, which superseded the Designs Act of 1911, the Copyright (Amendment) Act of 2012, which was the most recent change to the Copyright Act of 1957, and the  Patents (Amendment)  Act of 2005

Additionally, new laws pertaining to plant species and geographic indications were approved and adopted. The Protection of Plant Varieties Act of 1999, the Farmers Rights Act of 2001 and the Geographical Indications of Goods (registration and protection) Act of 1999 are these new laws. 

Over the past fifteen years intellectual property rights have become increasingly important to the expansion of the world economy. In the 1990’s numerous countries unilaterally strengthened this section of their laws and regulations and many more were willing to do the same.

The successful multilateral conclusion of the agreement on TRIPS by the World Trade Organisation raised the protection and enforcement of intellectual property rights to the status of a significant International commitment. 

A more globally competitive market with stronger Intellectual Property Rights protection is required to increase incentives for research and to enhance returns on foreign technology transfer. Regarding Intellectual Property Rights in particular, the trade policy forums working group on intellectual property remains in touch with India. 

In 2016, India released its extensive National Intellectual Property Rights policy which emphasized public awareness and administrative capacity building. 

Copyright and semiconductors are currently under the jurisdiction of the Department of Industrial Policy and Promotion under the Ministry of Commerce of India. 

The newly formed cell of intellectual property promotion and management is in charge of inter-agency cooperation and the execution of intellectual property rights policies.

In order to combat the threat of online piracy, the state of Telangana established India’s first intellectual property crime unit in 2016. Subsequently, commercial courts opened for business in India and the industry started to witness some favourable decisions pertaining to patents. 

The United States Government hosted two workshops one on trade secrets and the other one on copyright with the Government of India as part of their growing engagement. 

The patents rule and the trademark rules have also underground modifications. The copyright board and the intellectual property appellate board were merged. 458 examiners engaged by the Indian patent office to handle the backlog of patent and trademark applications.

Conclusion

In summary, the time frame for the emergence of intellectual property rights was established by the 18th century. Through the trade-related Intellectual Property Rights agreement, the World Intellectual Property Organisation and the World Trade Organisation played a crucial role in bringing intellectual property rights to a worldwide scale after the end of the 19th century and during the start of the 20th century. The utmost nature of intellectual property rights was its national territory, and the international development that has been discussed above states that the scope has been widened to international protection as well. 

The development demanded the adoption of the same treatment to the foreigners as is awarded to the nationals. Also, the unprecedented level of degree of universal harmonisation of intellectual property rights has been increased. In special reference, developing countries are bound to incorporate standards of basic protection and accord with those that are in force in the industrial countries.

Frequently Asked Questions (FAQs)

What is the meaning of bilateral and multilateral treaties? 

A bilateral treaty is a treaty between two States, that is, the treaty would have the two participating States as its signatory or contracting states. 

A bilateral treaty may take the form of a multilateral treaty when more than two states get involved, making the contracting states more than two for the particular treaty.

What is the personhood theory?

The personhood theory states that whenever a person puts his efforts and works on anything, he expresses his personality on that subject, leaving a mark of his efforts there. As humans, they can put in labour and hard work and bring themselves in such a position by extension of their efforts that they should also be the owners of the subjects or objects they have worked on as their work becomes an extension of their own personality.

What is the theory of the democratic paradigm?

Copyright has also been looked upon from three different functions, that is, it serves production function expressive function and structural function.

One of the main uses of copyright is that it puts in many more works out there it increases the volume of creative works, making the expression function one of the most important functions of all, this is known as the theory of democratic paradigm.

What is the Doha Declaration?

The Doha Declaration on the TRIPS Agreement and Public Health was a result of the TRIPS Agreement. It was a declaration where specifically a  compulsory licence meant for export purposes could be granted. It was primarily to avoid or to remedy the legal impairments created by the existing provisions.

What is the incentive theory of intellectual property?

According to the incentive theory of intellectual property, as an incentive for the author of a certain work to continue their intellectual work, intellectual property rights do include copyright. It must be noted that it is not intellectual work to copy someone else’s work after researching.

References


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All about criminal profiling

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This article is written by Kaustubh Phalke. The article explores the complex field of criminal profiling and how it is used. As we dive into the article, we go through a brief introduction of the topic and then key terms related to criminal profiling that make the article more comprehensive, followed by its history, meaning, application, and purpose. Further, after discussing the methodology and procedure of criminal profiling, the article concludes with the criticism that sparked debates within the fields of criminology and criminal justice and possible solutions to improve criminal profiling.

Let’s plot a route through the intricacies of criminal profiling together and understand the practical application of criminal profiling and its importance as a part of the investigation.

It has been published by Rachit Garg.

Table of Contents

Introduction

The criminal justice system in India runs on the reformative theory of punishment, also known as rehabilitation theory. This focuses on the rehabilitation of the offender. The key principle that works under reformative theory is that criminal behaviour is influenced by several things, such as society and financial conditions, and hence the criminal justice system in India focuses on the reintegration of offenders into society. We tend to focus on the root cause of the crime and then rehabilitate the offender as a law-abiding citizen of the country. We believe that a crime must be abolished, not a criminal.

It becomes really difficult at times to understand the root cause of a crime, even when many criminologists have given several theories, such as social theory, psychological theory, etc., to pave the way for the cause of a crime.

It is generally observed that in almost every heinous offence, the offender follows a particular method, technique and pattern of committing a crime. The offender carries a psyche in his mind, which provokes him to commit such a crime. This psyche should be determined at the earliest to stop the offender from committing more such crimes and to rehabilitate him. Determining this psyche can prevent more such crimes than criminals.

Such psychopaths are commonly called ‘Serial killers’. These killers typically follow a characteristic and are certainly predictive.

The technique of criminal profiling here helps to determine this psyche.

Criminal profiling is the process of anticipating the nature of the offender by analysing his traits at the crime scene. It is used by law enforcement agencies to identify probable offenders and suspects. These are primarily used to link the cases that are committed by the same offender.

Criminal profiling is also known as offender profiling, crime scene profiling, psychological profiling, and personality profiling.

Now the technique of criminal profiling is known to everyone and many countries, like the UK, US, etc., have started using this technique to determine the psyche of a serial killer or even a terrorist.

Key terms for criminal profiling

There are many words in criminal profiling that cannot be easily understood by the layman. Understanding the meaning of these words makes the understanding of the process more comprehensible. The following are the keywords used in criminal profiling:

Homicidal triad

This was introduced by a famous psychiatrist, Mr. J. M. Macdonald. This is popularly known as the ‘Macdonald Triad’ or ‘sociopathy’. This is a common childhood trait found in criminals. This triad is a set of three factors, such as bedwetting, cruelty to animals and the urge to start a fire. The presence of any two is considered to be predictive. Usually, these are violent tendencies.

Linkage analysis

A procedure of linking the evidence and the information gathered from the crime scene that is likely to have been committed by a particular individual in order to make him a suspect because of the behavioural similarity evident across the crimes.

Minnesota Multiphasic Personality Inventory (MMPI)

The most widely used and researched assessment analysis tool used by psychologists to diagnose mental health disorders.

Modus operandi

It refers to a particular way of working. In the context of this article, modus operandi means a specific manner in which the criminal commits the crime.

Offender homology

A theory that believes that offenders of a specific type of crime have certain characteristics in common. This theory suggests that there will be a similarity between different offenders who commit similar crimes.

Signature behaviour

Signature behaviours refer to acts that are not necessarily required for the commission of offence. This is a trait that gives us foresight into an individual’s underlying values. In this context, it is a requirement for the emotional fulfilment of the offender but not for the commission of a crime. For example, anger issues, any special pattern on crime scenes, etc.

Victimology

It is a scientific study of the connection between the victim and the offender. It can be any common connection between all the victims.

History of criminal profiling

Criminal profiling was first used in the case of Jack the Ripper. The story of Jack dates back to 1888. He was a serial killer of the Whitechapel district of London who not only used to snuff out life with a knife, but he also mutilated and disembowelled women, removing organs such as the kidneys and uterus, and his crimes seemed to portray an abhorrence for the entire female gender. The adroitness and skills with which the killer used to mutilate the bodies of the victims foreshadowed the killer’s knowledge about anatomy and surgery. Jack was sagacious about the evidence as well.

The then-police surgeon, Thomas Bond, was given the case and was asked to submit his conjectures about the killer. He later examined the cases of previous victims through post-mortem reports and the clues available thereon.

He created a killer’s profile by observing his signature personality traits and modus operandi. The profile summarised that the killer must be a strong man with a good physique. He was a dauntless person who is believed to be a patient of periodic attacks of erotica and homicidal mania. Additionally, Bond could also conclude that the murderer may be suffering from an abnormal sexual condition similar to Satyriasis.

The process of criminal profiling became more familiar to the investigators after psychologists and psychiatrists took an interest in examining the psyches of criminal minds and more details were published.

What is criminal profiling

Criminal profiling is a branch of forensics and the art of hypothesising an offender’s traits from circumstantial pieces of evidence available and clues ascertained from the investigation. According to Douglas and Olshaker (1995), “Criminal profiling is the development of an investigation by means of obtainable information regarding an offence and crime scene to compile a psychosomatic representation of the known architect of the crime.” (Douglas and Olshaker, 1995, quoted in Muller, 2000:235).

Criminal profiling is based on two basic assumptions: behavioral consistency and homology. Behavioral consistency refers to the linking of the crime with a suspect based on past incidents, and homology means a belief that similar crimes are committed by similar criminals. The primary purpose of criminal profiling is to identify the perpetrators of a crime. For example, the principles of psychology can be applied to the information gathered from the crime scene and the victim to ascertain the background of the offender, such as their social life, nature of the job, gender, etc., and then to identify the suspects.

Linkage analysis is a way to link the evidence obtained from the crime scene to an individual by way of principles of psychology; if the links get connected, then the individual is made a suspect. This pattern of links suggests the modus operandi and signature. Modus operandi is subject to change but the signature is believed to be an unchanging trait of an individual.

For example, the “homicidal triad” of bedwetting, cruelty to animals and the urge to start a fire are some common childhood traits found in criminals, to be specific, murderers.

Criminal profiling is a new concept, also called psychological profiling, criminal personality profiling, offender profiling, or investigative psychology. The Federal Bureau of Investigation (FBI) calls it “criminal investigative analysis.” A homicidal triad is believed to be a desire to show dominance over others by inflicting pain on them.

Significant features of criminal profiling

Criminal profiling is a process used by investigators for a crucial purpose. Let’s understand the significant features of criminal profiling:

Analysis of the crime scene

The investigators analyse the crime scene and gather all the relevant information regarding the characteristics of the crime, victim, and offender. This is done to analyse the modus operandi of the suspect, its signature traits and to predict his future crime.

Analysis of behaviour

The investigators analyse the behaviour of the offender to ascertain the intention, motive and mental state at the time of the commission of the crime. This helps to understand the thought process of a criminal and why he has committed the crime. This indeed helps us to determine the type of behaviour or pattern of crime that the offender is using.

Analysis of the victim

Criminal litigation

A thorough analysis of the victim is done to understand the preferences of the criminal. This analysis includes factors like age, gender, caste, relationship with the offender, etc. This gives an insight into the motive of the criminal.

Geographical profiling

This refers to the analysis of the location of the crime scene, where the victim resides. This gives a clue as to where the offender might reside. This produces a probable map of the offender’s home base. This map can help in identifying the threats involved in catching the offender. After getting the location and foresight of the home base of the offender, investigating agencies can search for databases, criminal records, addresses of suspects, selection of intensive patrol areas, etc.

Analysis of time

This is done to identify the pattern or trend of the crime and the criminal. Such as specific days of the week or occasions, etc. As per the author’s analysis, it is generally observed that criminals, especially serial killers, commit crimes after some abnormal event in their lives. An analysis of that time period may help the investigators predict the future target of the killer.

Analysis of signature behaviour

The investigators try to analyse the modus operandi and signature behaviour to get insights into the offender’s personality. For example, mutilation of the body after killing, leaving any object or message on the crime scene, traces of necrophilia, etc.

Psychological profiling

This is part of criminal profiling, which is done to identify the psyche of the offender and to understand the personality of the offender better. Psychologists are called during the police investigation to understand and analyse the psyche of the offender at the crime scene. There is a consistency between the way offenders act and who they are. Generally, three areas are focused on generating the profile of the offender, which are individual differentiation, behavioral consistency, and inferences about offender characteristics.

Criminal investigative experience

The investigators use their experience and knowledge together to link the available information with the individual and then identify a suspect. For example, investigators study previous case studies made by senior investigators using their experience to link the traits of the criminal with those of another similar criminal.

Dynamic analysis

Criminal profiling is a dynamic process, i.e., the analysis and the result change when the investigators get new information or a new clue about the crime scene, offender and victim. For example, if the investigator finds a new clue or leads about the offender or at the crime scene, then the inferences drawn from the new profile may differ from the previous one.

Integrating with law enforcement agencies

The profilers integrate with law enforcement agencies to help them in investigations. The analysis of this information helps to approach the investigation more effectively. Integration with law enforcement agencies makes the process of investigation easier. It gives direction to law enforcement agencies to better investigate the offender.

Purpose of criminal profiling

Criminal profiling is very helpful in identifying offenders, especially in crimes like hostage takers, rapists, kidnappers, murderers, arsonists and the identification of senders of threats. It includes a blend of psychology and investigative experience to speculate on the traits of the offender. Criminal profiling is a technique of identifying patterns and then drawing inferences on the motive, modus operandi and signature traits; these recurring patterns make the offender predictable. All these things are linked together to make a criminal profile and then to establish a probable chain of incidents that might have happened during the commission of a crime and identify the suspects. Criminal profiling helps to predict the next step of the offender and helps the investigators understand where to intervene.

The criminal profilers may also testify as expert witnesses in court because of their expertise in the knowledge of criminal behaviour, investigating experience, etc.

Criminal profiling helps in making the strategy to catch an offender and to speculate on the risks involved in catching him. This helps to maintain public security by identifying the traits of the offender and taking preventive measures thereon.

To summarise :

  • Criminal profiling helps assist the criminal justice system in fighting against crime.
  • This helps in making a successful strategy to catch a criminal and gives an insight into the criminal’s psyche and decision-making.
  • This gives law enforcement agencies a particular direction to make the investigation faster and more effective.
  • This gives clarity on all the problems and helps in using the resources in the best way possible.
  • Criminal profiling may even lead to the identification of the offender.
  • This gives clarity on the motive of the offender.
  • When conventional methods of investigation go in vain, criminal profiling comes into play and makes the investigation process smoother.

Application of criminal profiling

Criminal profiling is the most used technique in the criminal justice system, especially in India. Mostly, it is used in the assessment of the offenders of heinous crimes like rape, murder, sexual homicides, etc. Such crime creates a great sense of fear in society at large and is therefore given more attention. Resulting in which has become a greater obligation for law enforcement agencies to arrest criminals as soon as possible. Secondly, such cases are difficult to solve and take more time to get solved as compared to other crimes.

Earlier, profiling was done only in the case of heinous offences or where the crimes were done in a pattern. Habitual offenders are so skilled in committing crimes that they leave no clue behind to reach them; in such cases, criminal profiling becomes a helpful technique to assess the behaviour of the criminal and other things such as modus operandi and signature.

Criminal profiling is mostly applicable in the following cases:

  • Sex-related assaults and homicides.
  • Unique homicides, such as those involving torture, mutilation, evisceration, and ritualistic violence.
  • Assassination.
  • Child molestation and abduction.
  • Fire setting, arson and bombing.
  • Extortion.

Approach to criminal profiling

The approach to criminal profiling can be understood as the approach used by the investigators to generate the profile of offenders. Several approaches to criminal profiling help in predicting the nature of the offender. The following are approaches to criminal profiling:

The typological approach

It refers to the analysis of the clues and evidence available at the crime scene. It is used to draw a full profile of the criminal. This is based on the technique developed by the FBI’s behavioural science unit, which has now evolved into a profiling and behavioural assessment unit.

Geographical profiling

This approach involves connecting the anecdotes of information gathered from the crime scene to pinpoint the location of the offender’s current residence. Through this, investigators generate a probability map to ascertain the most likely place of the offender’s residence. This probability map is then used to draw references such as where the offender lives, select suspects, etc. For example, every offender leaves certain clues or evidence behind him, like clothes, shoes, etc.; these are analysed, and the offender’s location is predicted based on this geographical profiling.

Investigative psychology

This involves identifying if a single criminal committed the crime or if more than one individual was involved. It is used to develop strategies to solve a case. It also aids in revealing tactics and signatures to assist investigators in looking for associated activities. This helps in determining the motives of offenders and sheds light on the intentions of criminals. It is also used to assess the psychological state of the offender and determine how dangerous they are.

Clinical approach

This is used to assess the kind of mental health disorder that the offender is suffering from. Mental health disorders such as dementia, schizophrenia, etc. This helps to assess whether the offender has committed that crime due to that ailment or is making a false claim of being mentally unfit. This approach helps to identify the psyche of the criminal at the time of the commission of the offence, and the case is approached from a psychological point of view.

Serial crime profiling

This is used to identify the patterns and signature behaviour of the criminal. This approach is used in cases where multiple crimes have been committed by a single individual or a group of criminals.

Psychological autopsy

This is done after the death of the victim. Psychological autopsy helps to ascertain the mental state of the victim, marks of hesitation, his background, etc. This is generally used in the case of suicides or unnatural, suspicious deaths.

Methods of criminal profiling

The methods of criminal profiling are used to create a profile of the offender that may include the age, sex, ethnic and economic background, possible professions, personality traits, physical characteristics, etc. During the analysis, most inferences are drawn from the choices he made after and before the commission of a crime. All these inferences based on physical evidence and clues available at the crime scene are clubbed together and compared with already-known mental abnormalities to make a profile of the perpetrators.

This profile is an assessment based on some reasoning. There are two types of reasoning, which are discussed below:

Inductive reasoning

Inductive reasoning includes an analysis of all the other criminals of a single type, e.g., serial killers. This reasoning assumes that common characteristics are found in similar types of criminals.

This reasoning is mostly used by the FBI, psychologists and criminologists. Inductive reasoning includes broad generalisation and statistical reasoning. This is an assessment of the offenders of a similar crime based on their correlation, experiential, and statistical inferences. This can be best understood as an average of the offenders and their characteristics. Since it is a product of such comparative analysis and is an educated generalisation, it is hence called “inductive reasoning.” It can be considered a common syndrome in offenders of a similar type. The results of this reasoning are mostly accurate.

Deductive reasoning

Deductive reasoning includes an analysis of the physical evidence found at the crime scene and then drawing inferences from the characteristics of the offender. This is primarily used by the investigating officer of the police. It involves an analysis of the pattern of crime and behaviour shown by the offender at the scene of the crime. It is known as deductive reasoning, as the characteristics are deduced from the physical evidence available at the crime scene.

Both the crime scene evidence and the victim are analysed to draw the profile of the most probable individual to commit the crime. This process is based on forensics and the behaviour of the offender.

This reasoning can be best termed as ‘behaviour evidence analysis’ since it is based on the deductions from the behaviour of the offender and the evidence available at the crime scene.

Certain assumptions are made during deductive reasoning. The assumptions which are made during deductive reasoning are as follows:

  • Every act has some motive behind it.
  • Every offence should be investigated as having its own uniqueness in terms of behaviour and pattern.
  • Different offenders show similar behaviours for different reasons.
  • Similar to human nature and behaviour, every case is unique in its own way.
  • The modus operandi of a criminal may change with the passage of time and over the commission of multiple offences.
  • An offender can have a different motive for a single offence or multiple offences.

Though deductive reasoning is more time-consuming, it is more useful as an investigative guide. This is most reliable in terms of establishing the motive and signature of the probable offender.

Phases of criminal profiling

The phases of criminal profiling are the assessment of the various factors that are necessary for the generation of a profile. These phases are the foundation pillars to predict the nature of the offender. The following are the phases of criminal profiling:

Phase – 1: Antecedent

This is the first phase of criminal profiling in which the analyst and investigator try to read the mind of the offender. The purpose is to assess the plan the offender had before the commission of a crime to ascertain the motive behind the crime. This helps to know what triggered the offender to commit the crime.

Phase – 2: Method and manner

The analyst may predict the method and manner in which the crime was committed, for example, what could have been the weapon of crime, i.e., a knife or a gun, etc., or the manner of commission of a crime such as stabbing, strangulation, etc. The reason behind selecting the victim may also be predicted.

Phase – 3: Body Disposal

This is the third phase of criminal profiling. This includes analysing the method by which the disposal of the body was done. This gives foresight into the psyche of the offender. For example, the disposal of the body was done in a single place or it was mutilated.

Phase – 4: Post-offensive behaviour

This includes analysing the behaviour of the offender after the commission of the crime. Things such as the cooperative behaviour of the suspect in the investigation give an insight into the behaviour of the offender. For example, interaction with media, contacting investigators and staying in contact with the investigating officer, etc.

Stages of criminal profiling

Nowadays, criminal profiling is not the only technique left; there are recent developments as well. Crime scene analysis and investigative psychology are two kinds of criminal profiling that have recently developed, though similar methods are used in both kinds of criminal profiling. Crime scene analysis is most popularly used by the behavioural science unit of the FBI, especially in cases of heinous offences such as murder, rape, child molestation, etc. Certain criteria is set by the FBI for the analysis of cases and the generation of profiles that are required by law enforcement agencies. The criteria set by the FBI is that the case needs to be of a heinous nature, the offender should be unknown and the clues and leads available should be exhausted.

Stages involved in FBI profiles

Data assimilation stage

The first step is to gather information from the crime scene and every other place that is related to the crime, victim or offender. All the necessary documentary evidence is to be assimilated together. These documents include the medical report showing the cause of death made by the pathologist, photographs and videos captured at the crime scene, witness statements, the final report of the investigation and many more. This information helps a lot to gain insight into the offender’s personality.

Crime scene classification

The profiler has divided the crime scene into two categories: organised crime scenes and disorganised crime scenes.

Let’s discuss them further:

Organised crime scene

At such a crime scene, the crime is committed with good planning and strategy, i.e., leaving no leads behind. Some basic characteristics of such crime scenes are proper disposal of the body, removal of a weapon of offence from the crime scene, execution through proper strategy and planning, targeted victim, use of restraints, etc.

Such crime scenes suggest that the offender has a good IQ and is skilled. Such offenders are generally obsessed with media coverage.

Disorganised crime scene

Such crime scenes look chaotic when observed. For example, improper disposal of the body, leaving clues behind, etc. Such a crime scene shows that the offender must have been anxious while committing the crime and is unskilled. The victim is usually killed in an uncontrolled manner. It is observed that the disorganised criminals do not plan their weapons; they are generally acquired at the crime scene. Most probably, he lives near the crime scene and does not maintain his personal hygiene.

Crime scene reconstruction

In crime scene reconstruction, the crime scene is reconstructed by having one person play the role of the offender and another person play the victim. The crime scene may look chaotic and complex at first sight; hence, this reconstruction gives a clear idea about the weapon of offence, angle of hit, etc.

The information collected at the data assimilation stage is used for the reconstruction of the crime scene. This reconstruction may help in connecting the case in hand with other similar cases, which can be used for further investigation.

Profile generation

Profile generation is the process of drawing inferences about the behaviour and nature of the offender. This hypothesis may include demographic analysis, lifestyle, behavioural habits and personality dynamics. In the FBI, the criminal profile has several functions, such as linking the crime with the suspect and other possible offenders.

Criminal profiling in India

Criminal profiling is a complex process that requires the assessment of every clue found on the crime scene. Certain procedures are to be followed to make an effective and accurate profile of the offender. The following are the procedures followed by the investigators to prepare a profile of the offender:

Profiling inputs

The process begins with the criminal profile generation of the offender. It is better to have comprehensive case material for an effective criminal profile. Basically, this is the collection of all the evidence from the crime scene, for example, clothes, fingerprints, hairs, etc., or any inference drawn from the crime scene, for example, photographs, notes, videos, etc.

For example, in homicidal cases, information such as a synopsis of the crime, details about the crime scene, geographical profiling, etc. All this information makes the case more comprehensive and makes it easier to generate a criminal profile.

All the details about the criminal and victim are gathered. These details include nature, job, sex, fears, physical condition, financial condition, criminal history, family conditions, conduct in society, etc.

Forensic information about the crime is also crucial for criminal profiling. This information includes an autopsy report with Toxicology/ Serology results, autopsy photographs, and photographs of the cleansed wounds. These reports shall necessarily contain the medical examiner’s remarks regarding the estimated time and cause of death, type of weapon, and suspected sequence of delivery of wounds.

Everything found at the crime scene is of the utmost importance, such as the crime scene sketch, the position of the body, and the spot map.

Decision process models

All the pieces of information assimilated in the first step are arranged together to make a comprehensive profile of the offender. This information is arranged in such an order as to identify the pattern of the crime. Identifying the pattern of crime gives an insight into the nature of the offender.

By arranging the information, the investigator may get foresight on whether the crime was part of a series of crimes, a common factor in crimes, similarity in victims or offenders, etc.

Crime assessment

In this step, the reconstruction of the sequence of events is done to better understand the chronology of the events that happened at the time of the crime. Based on the arrangements made in the second step, i.e., understanding the chronology of the events, it helps to infer the specific characteristics to be generated for the criminal profile.

The assessment is about the classification of crime, the pattern of selection of victims, modus operandi, etc.

To summarise, the pieces of evidence are rearranged, the crime scene is reconstructed, and an assessment is done regarding the above-mentioned factors to generate a profile.

Criminal profile

Finally, the criminal profile is now made based on the evidence, the chronology of events, and the assessment of crime. This criminal profile deals with what kind of person the offender is, probable offender, pattern of crime, selection of victim, etc.

Once the criminal profile is completed, the investigators now make a strategy for further investigation. This profile gives them a direction to investigate to make the process faster and easier.

The criminal profile includes the behaviour of the offender, physical traits, habits, beliefs and values, thought process, pattern of crime, criminal history and other such important things.

It may also include investigative recommendations, i.e., the history of the offender, physical characteristics, etc.

This gives an insight into the crime and the criminal, which makes it easier for the investigators to identify the offender based on their criminal profile.

The interview of suspects is done based on this criminal profile.

Investigation

After the completion of the criminal profile, a written report is submitted to the law-enforcing agency that has requested this criminal profile. This criminal profile adds a new crucial piece of information to the ongoing investigation, which gives it a direction to investigate. The investigative recommendations added to the criminal profile are used to interview the suspects and identify the offender.

This criminal profile is reassessed if no information can be concluded or if there is some addition to the information regarding the offender.

The apprehension

When a suspect is identified, the next step is to interview the suspect.

Once the suspect is confirmed, the next step is to arrest the suspect. To make this arrest, a warrant is obtained from the magistrate having jurisdiction in a non-cognizable case.

Types of offenders for criminal profiling

The offender can be classified into two categories based on their modus operandi and pattern of committing crime. The following are two categories:

Organised criminal

Such criminals live an organised life, i.e., a well-planned life and kill people after some sort of special or abnormal life event. They execute everything with a plan. Similarly, their crime is planned and organised i.e., removing weapons of offence from the crime scene, wiping off fingerprints, misleading the evidence, tampering evidence, etc. It is generally observed that the IQ of such offenders is high and they are employed. 

Disorganised criminal

These criminals are the least organised with regard to the execution of crime. They generally leave evidence and clues behind them at the crime scene. For example, leaving footprints and fingerprints at crime scenes, unplanned weapons acquired from the crime scene, leaving blood stains at the crime scene, etc. Such criminals commit offences in the heat of the moment and are generally unemployed. These kinds of offenders are less social and have a lower IQ.

Criminal profiling guidelines for investigators

A profiler examines each and every piece of evidence and clue obtained from the crime scene in order to make an effective profile. This evidence may include a dying declaration, a post-mortem report, a spot map, the pattern of crime, etc. The investigators are guided to stay unbiased while making the profile, which can help in identifying the actual offender. The profile is made on the basis of the statements of the victim, information gathered from the crime scene, and a behavioural analysis of the offender. The behaviour of the offender before the commission of the offence and after the commission of the offence gives an insight into the nature of the offender and its possible next target to prevent any further crime. This reveals the psychodynamic process of the criminal.

Guidelines given to the investigators regarding the information to be necessarily gathered from the crime scene.

  • Entire crime scene photographs.
  • All the social data about the victim and the criminal.
  • Post-mortem report and medical examiner’s remarks on the victim and anything related to the offender.
  • Travel details of the victim and the offender.
  • A thorough investigation of the crime.

Guidelines given to the investigators regarding the profile.

  • Analysis of criminal acts.
  • Analysis of the crime scene.
  • Examination of the victim.
  • Examination of eyewitnesses, if any, other witnesses.
  • Analysis of the post-mortem report.
  • Making a profile with unknown subject traits.

Criminal profiling of serial killers in India

India has witnessed several serial killers in its criminal history. Amongst them were certain killers who crossed every limit of brutality. Following are some serial killer and their modus operandi who were known for committing heinous offences:

Satish Kumar (Haryana)

Satish Kumar was born in 1973. Satish was a habitual paedophile and serial killer from Bahadurgarh, Haryana. He was active from 1995-1998. He admitted his act of kidnapping, attempting to rape fourteen girls and murdering ten. He followed a pattern of crime i.e., his selection of victims was girls of five to nine years of age. Satish was popularly known as the “Bahadurgarh baby killer.” The police were unable to apprehend the criminal for a long period of time, which ultimately led to riots and protests against the police. Following these protests, police arrested three men in succession, but murders still continued. Satish was finally arrested in 1998 at the Haryana-Delhi border. His last victim led the police to apprehend and arrest him. He was then convicted of twelve sexual assaults and ten murders. Currently, he is serving a life sentence.

Mohan Kumar Vivekanand (Mangalore)

Mohan was a teacher turned dreaded serial killer in India. He was popularly known as the “cyanide mohan.” As per the reliable sources of law enforcement agencies, Mohan was accompanied by a goldsmith who later taught him about the poison cyanide. He was released from his first conviction due to a lack of evidence. Then he later married two women and had two children with each of them. When asked about his family, they said he was a kind man, a loving spouse, and a good father.

Later on, he started researching the poison and purchased it from a chemical store. He identified himself as a goldsmith to make the purchase easier.

His modus operandi was to search for unmarried women from Kerala and Karnataka by promising them fancy jobs and marriage. He then took these women to lodges near a bus stand and sexually assaulted them. He made them take these cyanide pills by convincing them to take contraceptive pills near the bus stop. After the death of the victim, he used her phone to call the next victim and looted everything that was in her possession. He continued this until there were twenty more such victims.

The investigation started with a cyber investigation used to trace the location from which the calls were made to the victim. On being traced, the location was found to be Dharalakatte, some point in the village. The police searched the area and found the phone to be in the possession of Dhanush, who said that the phone was given to him by Mohan, his uncle.

The police finally caught him in 2009, when he was accused of killing at least 20 women. Mohan was convicted and is life imprisoned for 15 murder cases. Currently, he is serving life imprisonment at the Hindalga Central Prison in Belgavi.

Sadashiv Sahu

“Killing someone is peaceful,” as said by Sadashiv Sahu. He was a cloth merchant who lived in Fursatganj, Uttar Pradesh. He was fond of reading religious books, but his dark deeds were revealed in front of everyone when police arrested him in a case in 2004.

As per Sadashiv, an invisible power told him to commit murder, and he started doing the same. During police interrogation, Sadashiv Sahu admitted the same and stated that after killing someone, when he went back home, he felt a sense of comfort and peace. He created havoc by doing this from 2000-2004. He admitted that Sadashiv made middle-aged friends. His modus operandi was to seduce the person, and once the person got seduced, he shot him/her dead with his pistol at close range to reduce any chances of escape.

Sadashiv was finally arrested in 2004 and was sent to jail when he admitted his offence in writing.

Criminal profiling and law

Criminal profiling is a crucial part of an investigation, but the information generated in criminal profiling may not always be admissible as evidence in court. Investigators may be called as expert witnesses under Section 45 of the Indian Evidence Act, 1872, which states that the opinion of experts can be sought by the court if the question is of foreign law, science, art, identity, handwriting or finger impressions, as these opinions are relevant under this provision. These opinions work on the principle of necessity, i.e., such opinions are asked when the question is on a subject matter that is beyond common experience or knowledge or where expertise is necessary to answer the question in dispute. The admissibility of such opinions is at the discretion of the court. 

During the generation of profiles, the profilers should respect the rights of individuals and should not violate the laws governing their privacy. The investigators should remain unbiased while generating profiles.

The confessions obtained for the purpose of profiling should be free from any undue pressure or coercion to avoid any prejudice with regard to the suspects in the crime.

The investigators should also abide by international laws while making a criminal profile of the offender.

The criminal profile should be scrutinised on the point of law. It should respect the rights of individuals and uphold the rule of law.

Criminal profiling in other countries

Criminal profiling is a widely accepted technique in various countries. Each country uses criminal profiling in its own cultural and legal aspects. Following are the techniques used by various countries.

Bottom-up approach

This is mostly followed in the UK. This approach is primarily based on psychological theories and methodologies. This is primarily based on the existing computer databases of the offender. According to this theory, no assumptions are made about the offender, and the behaviour of the offender is observed before the commission of the crime and post-commission of the crime. The bottom-up approach is considered a more reliable approach since no previous assumptions are made about the offender. The information gathered from the crime scene and other available clues are arranged together to draw an inference about the offender’s behaviour.

Two aspects of this technique

Interpersonal consistency

The reason behind the selection of victim and crime is analysed and it is based on the interpersonal relation between the victim and the offender before the crime was committed. This analysis is done to clarify the reason for the crime.

Special consistency

This is based on geographical profiling i.e., where the crime is committed. This is done to speculate on further crime of the offender and to prevent it as well. This gives a foresight as to why the execution of the crime took place at that particular place. This can be helpful in apprehending the offender.

Top-down approach

This was developed by Richard Gregory in 1970, also known as the American approach. This technique is most prevalent in the US. It begins with an analysis of the crime scene and the evidence found at the crime scene. This technique was developed after several interviews with the offenders of crimes like sexually-oriented murders. Using this information and connecting the anecdotes, the profiler generates the profile of the offender from ‘the top down’.

The offender is classified in the category of organised and disorganised criminals.

This technique is widely used by the FBI, but in spite of this, it is not very reliable. The technique is based on the interviews with the criminals. These criminals are very manipulative with their statements. Generally, this technique is used in high profile cases.

However, this technique is also criticised because it originated from research on the most dangerous criminal, Ted Bundy.

This approach is used for heinous offences such as murder, rape, etc.

Controversies on criminal profiling

Criminal profiling is the most used and popular technique to catch an offender, but it still gets surrounded by lots of criticism from law enforcement agencies. Critics believe that the profiling relies on subjective inferences rather than concrete evidence. This raises a question about the accuracy and effectiveness of the profile.

Profilers are blamed for introducing their bias to the profile, irrespective of the factor whether it was unintentional or not. The reason is that profiles are based on subjective inference and not on strong evidence. The criminal profile is merely a personal inference based on the information gathered from the crime scene and the evidence available after the investigation.

Since criminal profiling is merely a subjective inference of the behaviour of the offender, it may lead to the misidentification of suspects and may be inaccurate.

Criminal profiling is majorly based on opinions, which may vary according to the profilers, i.e., the results of the profiling of the same offender in the same case may be different for different profilers. This can lead to the misidentification of suspects and patterns followed by the offender. Over-reliance on such profiles may lead to the overlooking of crucial evidence. The investigative suggestion in the criminal profiling for the investigators may be at times coercive and against the rights of the individual. The information for criminal profiling is majorly gathered from the personal things of the offender and the victim, which may lead to a violation of the rights of the offender.

Despite being surrounded by controversies, criminal profiling is mostly used by investigators to identify suspects.

The criticisms mentioned above can be removed by proper training and research on criminal profiling, which will ultimately improve the accuracy and methodological errors.

Conclusion

Criminal profiling has attained good popularity amongst investigators, law students, and psychology students as well. Criminal profiling is the most important tool used to identify probable suspects and offenders. It is a comprehensive and detailed report about the behaviour of the offender based on the evidence obtained from the crime scene and linking them together. It is an effective tool to make the investigation effective and to give it a good direction. It helps in identifying the behaviour of the criminal, his modus operandi, and his pattern of crime. It is based on an analysis of the background of the criminal and the victim. The criminal profilers, after assessing various factors, draw inferences on the motive of the crime and the nature of the offender.

In contrast to its popularity amongst people, a lot of development is still required regarding the methodology of the profile, its accuracy and its application. Proper guidelines should be issued and standards should be set to improve the accuracy of the profile generation of the offenders. It is a multidisciplinary forensic practice. It requires knowledge of applied criminology, medico-legal death investigation, and psychology.

Certain rules should be followed while making an effective profile, such as:

  • Analysis of crime
  • Assessment of information from all the important places, such as the crime scene, the location around the crime scene, etc.
  • Arranging the information.
  • Making a written report.

At last, we should keep in mind that criminal profiling is used to draw inferences on the probable offender and suspect rather than the specific offender of the crime.

Frequently Asked Questions (FAQs)

Who is the father of criminal profiling?

Hans Gustav Adolf Gross, who was an Austrian criminal jurist and criminologist, is known as the father of criminal profiling.

What are the four approaches to criminal profiling?

Many types of criminal profiling help predict the nature of the offender. The following are approaches to criminal profiling:

Crime scene profiling

It refers to the analysis of the clues and evidence available at the crime scene. It is used to draw a full profile of the criminal. This is based on the technique developed by the FBI’s behavioural science unit, which has now evolved into a profiling and behavioural assessment unit.

Geographical profiling

This approach involves connecting the anecdotes of information gathered from the crime scene to pinpoint the location of the offender’s current residence. Through this, investigators generate a probability map to ascertain the most likely place of the offender’s residence. This probability map is then used to draw references such as where the offender lives, select suspects, etc. For example, every offender leaves certain clues or evidence behind him, like clothes, shoes, etc., these are analysed and the offender’s location is predicted based on this geographical profiling.

Investigative profiling

This involves identifying if a single criminal committed the crime or if more than one individual was involved. It is used to develop strategies to solve a case. It also aids in revealing tactics and signatures to assist investigators in looking for similar associated activities. This also helps in determining the motives of offenders and sheds light on the intentions of criminals. It is also used to assess the psychological state of the offender and determine how dangerous they are.

Clinical approach

This is used to assess the kind of mental health disorder that the offender is suffering from. Mental health disorders such as dementia, schizophrenia, etc. This helps to assess whether the offender has committed that crime due to that ailment or is making a false claim of being mentally unfit. This approach helps to identify the psyche of the criminal at the time of the commission of the offence, and the case is approached from a psychological point of view.

Serial crime profiling

This is used to identify the patterns and signature behaviour of the criminal. This approach is used in cases where multiple crimes have been committed by a single individual or a group of criminals.

Psychological autopsy

This is done after the death of the victim. Psychological autopsy helps to ascertain the mental state of the victim, marks of hesitation, his background, etc. This is generally used in the case of suicides or unnatural, suspicious deaths.

What is Bottom-Up profiling?

Bottom-Up approach

This is prevalent in the UK. This approach is majorly based on psychological theories and methodologies. This is majorly based on the existing computer databases of the offender. According to this theory, no assumptions are made about the offender and the behaviour of the offender is observed before the commission of the crime and post-commission of the crime. The bottom-up approach is considered a more reliable approach since no previous assumptions are made about the offender. The information gathered from the crime scene and other available clues are arranged together to draw an inference about the offender’s behaviour.

Two aspects of this technique

Interpersonal consistency

The reason behind the selection of victim and crime is analysed and it is based on their interpersonal relationship between the victim and the offender before the crime was committed. This analysis is done to clarify the reason for the crime.

Special consistency

This is based on geographical profiling, i.e., where the crime is committed. This is done to speculate on the further crime of the offender and to prevent it as well. This gives foresight as to why the execution of the crime took place at that particular place. This can be helpful in apprehending the offender.

What is an atavistic approach?

This approach was introduced by Lombroso in 1870, which suggests that some people are born with criminal traits in their personalities. The atavistic approach was used before the introduction of criminal profiling. It is a historical approach that was used to analyse the behaviour of criminals. This was majorly based on biological factors such as a sloping brow, a pronounced jaw, high cheekbones, large ears, etc. It is said that around 4000 criminals and the skulls of 400 dead criminals were analysed to create the database for the same.

Explain the types of offenders on the basis of their modus operandi.

The offender can be classified into two categories based on their modus operandi and pattern of committing crime. The following are two categories:

Organised criminal

Such criminals live an organised life, i.e., a well-planned life and kill people after some sort of abnormal or special life event. They execute everything with a plan. Similarly, their crime is planned and organised, i.e., removing weapons of offence from the crime scene, wiping off fingerprints, etc. It is generally observed that the IQ of such offenders is high and they are employed. 

Disorganised criminal

These criminals are the least organised with regard to the execution of the crime. They generally leave evidence and clues behind them at the crime scene. Such criminals commit offences in the heat of the moment and are generally unemployed. These kinds of offenders are less social and have a lower IQ.

References


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An overview on AI in disaster response

0
Artificial Intelligence

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

This article has been edited and published by Shashwat Kaushik.

Introduction

Artificial intelligence, usually known as AI, is a field that imitates human intelligence in computer systems and machines. It actually involves the development of software, hardware and algorithms that enable the machines to perform the tasks that, in the traditional sense, require human intelligence. These artificial intelligence systems aim to replicate cognitive functions such as problem solving, perception, learning, reasoning and language comprehension. The AI enables the machines to process and interpret data, make decisions and adapt to new situations without explicit human programming. Artificial intelligence has the ability to merge data from multiple sources and analyse it as a single stream that provides predictive insight.      

As AI technology is continuously  advancing, it is very much expected that proactive analytics will become more accessible, available and widely used. This means that before any disaster occurs, AI will hold the promise of accurately predicting it. Enabling the timely implementation of all the early warnings and preventive measures.

AI for disaster response is a platform to perform automatic classification of crisis-related microblog communication. AI enables humans and machines to work together to apply human intelligence to large-scale data at high speed. Artificial intelligence plays a pivotal role in disaster response, increasing the efficiency, accuracy and speed of various tasks during and after natural or man-made disasters. Timely disaster response requires up-to-date damage assessment to prioritise rescue and restoration resources. Artificial intelligence applications, such as geospatial analysis, remote sensing techniques, tracking and  mapping, machine learning, robotics, drone technology, telecom and network services, accident and hot spot analysis, environmental impact analysis, smart city urban planning, and transportation planning, are the technological components of societal change, having significant implications for research on the societal response to hazards and disasters.

A constructive overview of AI in disaster response

Risk assessment

AI algorithms are invaluable for assessing the vulnerability of infrastructure, communities and ecosystems to various hazards. This helps with disaster preparedness planning. Remote sensing technologies and Geographic Information Systems ( GIS ) are also used to map and analyse the high-risk areas.

Vulnerability analysis

AI-driven risk assessment models analyse a combination of historical data, geographic features and environmental conditions. This  enables a more comprehensive understanding of the disaster-prone areas and helps the planners make more informed decisions regarding land use, building codes and infrastructure development.

Real-time data integration

Artificial intelligence can integrate real-time data from a variety of sources, including weather stations, remote sensors, and social media. This enables a rapid update of risk assessments during ongoing disasters, enabling more agile response strategies.

Search and rescue

AI-equipped drones and robots are being used for search and -rescue operations in the disaster-affected areas. They excel at navigating challenging terrains and identifying human presence using various different types of advanced sensors, including thermal imaging.

  • Drones in rescue search: Drones equipped with  AI algorithms can be quickly deployed to survey disaster areas and can really be useful. They can identify the location of the survivors, assess the amount of damage done, and even deliver essential supplies to various isolated areas as well.
  • AI-enhanced robots: Robots with the capabilities of artificial intelligence can enter  dangerous environments, such as different kinds of collapsed buildings, to find and retrieve the survivors. Sensors and imaging systems controlled by artificial intelligence allow them to work autonomously in different kinds of complex situations.

Communication and information management

Artificial intelligence plays a vital role in filtering and prioritising information to alleviate information overload and misinformation. This ensures that the emergency agencies receive the critical data immediately.

  • Information filtering: Artificial intelligence can filter and prioritise the incoming information, further reducing respondent information overload. This ensures that emergency agencies receive critical and actionable data, reducing the risk of misinformation.
  • Natural language processing: NLP tools process and understand emergency calls, various text messages and posts on social networks. They can identify distress signals, gain situational awareness and coordinate response efforts more effectively.

Early warning systems

Sensors, satellites, and artificial intelligence weather forecasting models help in predicting and detecting disasters such as hurricanes, floods, earthquakes and wildfires. The machine learning algorithms also analyse historical data to offer early warnings, allowing the authorities to prepare and evacuate the affected areas in disasters.

Weather forecasts

AI plays a key and very important role in weather forecasting. Advanced AI models can analyse historical weather data, satellite imagery and atmospheric conditions to predict the path and intensity of storms. The ability to issue accurate forecasts well in advance allows the authorities to prepare and initiate the evacuations, potentially saving many lives.

Earthquake early warning

In earthquake-prone areas, AI-driven sensors can detect initial seismic waves and provide seconds to minutes of warning before the more destructive waves arrive. This kind of brief warning can trigger automatic responses, such as shutting down critical infrastructure or sending alerts to the public.

Predictive analytics

Machine learning models are deployed to predict the spread and impact of the disasters, enabling more efficient resource allocation and decision-making by the response agencies.

Disaster modelling

Artificial intelligence models simulate various disaster scenarios to predict potential consequences. For example, in the event of a flood, models can predict which areas are likely to be flooded and the likely extent of flooding, allowing authorities to plan evacuations and allocate resources accordingly.

In addition, models can be used to assess the risk of flooding in different areas, which can help communities make informed decisions about where to build and how to prepare for flooding. For example, a model might show that a particular area is at high risk of flooding, which could lead to the area being designated as a floodplain and being subject to regulations that restrict development.

Models can also be used to study the effects of flooding on the environment, such as the impact on water quality and wildlife habitat. This information can be used to develop mitigation strategies to reduce the negative impacts of flooding.

Overall, flood models are a valuable tool for managing the risk of flooding. They can help to save lives, reduce property damage, and protect the environment.

Resource allocation

Predictive analytics helps optimise the allocation of resources such as emergency response teams, medical supplies and equipment. AI models take into account factors such as population density, topography and available infrastructure to determine the most efficient distribution of resources.

  • Population density: The number of people living in a given area can affect the need for resources such as water, food, and healthcare.
  • Topography: The physical features of an area, such as mountains, rivers, and forests, can affect the availability of resources and the ease of transporting them.
  • Available infrastructure: The roads, bridges, and other infrastructure in an area can affect the ability to distribute resources efficiently.

AI models can use these factors to create a detailed map of the needs of a given area. This map can then be used to develop a plan for distributing resources in a way that maximises efficiency and minimises waste. For example, an AI model might identify a region with a high population density and a lack of access to clean water. The model could then recommend a plan to build a water treatment plant in the area or to provide residents with water filters.

AI models can also be used to track the distribution of resources over time. This information can be used to identify areas where resources are being allocated inefficiently or where there is a need for additional resources.

AI models are a powerful tool that can be used to improve the efficiency and effectiveness of resource distribution. By taking into account a variety of factors, AI models can create plans that meet the needs of specific areas and populations.

Data analysis and decision support

Artificial intelligence processes and analyses vast amounts of data, including social media and sensor data, and provides real-time information to respondents. Decision support systems help authorities make critical decisions during disaster response, such as managing evacuation routes and prioritising aid distribution.

Real-time data processing

During a disaster, AI systems can process real-time data feeds from sources such as social media, remote sensors, and emergency calls. This data is then structured and analysed to provide critical information to the respondents. For example, AI systems can be used to track the movement of people and resources, identify areas of need, and predict the spread of a disaster. This information can be used to make better decisions about where to deploy resources and how to allocate aid. AI systems can also be used to provide real-time updates on the situation, which can help keep people informed and safe.

In addition to providing information to first responders, AI systems can also be used to automate certain tasks, such as triaging patients or dispatching emergency vehicles. This can free up human resources and allow them to focus on more critical tasks.

AI systems are still under development, but they have the potential to play a significant role in disaster response. By providing real-time information and automating tasks, AI systems can help save lives and reduce the impact of disasters.

Decision support system

Decision support systems with artificial intelligence help authorities make various critical decisions during the disaster response. These systems can suggest evacuation routes, resource allocation priorities, and other critical information to streamline response efforts. For example, a decision support system could use AI to analyse real-time data on the location and severity of a disaster, as well as the availability of resources, to recommend the best evacuation routes for people in the affected area. The system could also use AI to identify the most critical areas that need resources, such as medical supplies or food, and prioritise the allocation of those resources.

Decision support systems with AI can help authorities make more informed and timely decisions during the disaster response, which can save lives and reduce the damage caused by the disaster. These systems are still under development, but they have the potential to revolutionise the way that disasters are responded to.

In addition to suggesting evacuation routes and resource allocation priorities, decision support systems with AI can also be used to:

  • Identify areas that are at risk of flooding or other hazards.
  • Predict the path of a storm or other natural disaster.
  • Coordinate the responses of different agencies and organisations.
  • Monitor the progress of the response effort.
  • Provide feedback to authorities on the effectiveness of their decisions.

Decision support systems with AI are a valuable tool for disaster response. They can help authorities make better decisions, save lives, and reduce the damage caused by disasters.

Disaster response coordination

AI-powered software is critical to coordinating and optimising the deployment of emergency response units and resources. Chatbots and virtual assistants facilitate the dissemination of information to affected populations and resolve their queries.

  • Resource coordination: AI-driven software can track the location and availability of response teams, equipment and supplies. This information is then used to effectively allocate resources where they are most needed.
  • Virtual assistants: Chatbots and virtual assistants help to disseminate information to the affected populations and answer their questions. These AI tools provide timely and accurate information to help people make informed decisions.

Natural Language Processing (NLP)

NLP tools are the ones used to process and understand emergency calls, various text messages and different social media posts. They identify distress signals, gather situational awareness, and help coordinate response efforts.

Adaptive systems

AI systems are actually designed to adapt and learn from each response to a disaster, improving their effectiveness in subsequent events.

  • Continuous learning: Artificial intelligence systems learn from each disaster response and gain insight into what works and what doesn’t work. Over time, this leads to more effective disaster management strategies.
  • Algorithm improvement: The adaptability of artificial intelligence actually enables continuous improvement of the algorithm, making the technology much more effective at predicting, responding to, and recovering from disasters.

Post-disaster recovery

Artificial intelligence plays a key role in assessing  infrastructure damage and the environmental impact of disasters, accelerating recovery efforts. Machine learning helps manage and optimise the distribution of  humanitarian aid and resources to affected communities.

  • Damage assessment: AI technology is used to assess the damage to infrastructure, buildings and critical equipment. Drones and AI image analysis can quickly provide a comprehensive view of affected areas.
  • Distribution of aid: Machine learning helps manage and optimise the distribution of aid and resources to affected communities. This ensures that help is provided where it is needed the most.

Remote monitoring

IoT devices and AI-driven analytics remotely monitor the critical infrastructure, such as the bridges, the buildings and power grids, for signs of damage or instability.

  • Infrastructure monitoring: IoT devices equipped with various sensors can continuously monitor the structural integrity of bridges, buildings and other critical infrastructure. AI analytics can detect anomalies and issue various warnings as and when necessary.
  • Environmental monitoring: AI technology can also monitor environmental factors such as  air quality, water level and soil condition. These data are essential for assessing the environmental impact of any disaster.

Conclusion

In short, we can sum up that AI in disaster response represents a remarkable marriage of technology and humanity’s desire to protect and help each other in times of crisis. It harnesses the power of artificial intelligence to make disaster prediction, its response and recovery more effective and efficient, ultimately saving  lives and reducing the impact of catastrophic events.

References

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All you need to know about taxation of virtual assets

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This article has been written by Ahmad Faraz Jahangir pursuing a Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Introduction

Cryptocurrency, in its simple sense, is a digital asset based on a blockchain and secured by cryptography. The first cryptocurrency, Bitcoin, was launched in 2009, right after the global financial crisis, by a pseudonymous person named Satoshi Nakamoto. He termed it a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution. The early adopters of Bitcoin saw it as a minable, decentralised, permissionless, borderless, non-inflationary, transparent digital money. After Bitcoin, Litecoin was launched in 2011, Dogecoin in 2013, and Tether in 2014. Until the launch of Ethereum in 2016, cryptocurrency was only “internet money.” Ethereum introduced the concept of smart contracts, allowing users to develop applications on the blockchain. This gave endless possibilities for the usage of blockchain. Price wise, Bitcoin, which was valued at $0.0006 in 2009, had soared to an all-time high price of $20000 by December 2017. Institutional investments started pouring into Bitcoin by 2021, when it appeared on the balance sheets of some US publicly listed companies. El Salvador became the first country to adopt Bitcoin as a legal tender. The total market capitalisation of all cryptocurrencies reached an all-time high of $3 trillion in November 2021. It is estimated that in India alone, there are more than 15 crore cryptocurrency holders.

Crypto exchanges vs stock exchanges

In the early days of Bitcoin, there were no liquid markets for crypto assets. Bitcoin was either tendered as currency in exchange for good or services, or it was sold for fiat on forums, chat groups, channels, etc. Over the years, many crypto exchanges have come up with huge markets for crypto assets. Crypto exchanges follow the order book method for settling trades, just like traditional stock exchanges. However, there are many differences, as noted below:

Stock exchangeCrypto exchange
Follows a heavily regulated statutory frameworkUnregulated with no statutory framework
Public and transparentPrivate with little or no transparency
Constrained, bordered accessBorderless access
Strict KYC norms for setting up accountLittle or no KYC norms for creating account
Trades are placed through depository participantTrades are placed directly by asset holders
Follows a T+2 settlement periodA trade settlement is immediate
Assets can only be sold in one currencyAssets can be exchanged for other assets
Open for a specific time onlyOpen 24 hours, 7 days
Example: BSE, NSEExample: Binance, Coinbase, and Huobi

Different forms of income from cryptocurrencies

The ability to develop apps on blockchain through smart contracts has provided coders with vast opportunities. Decentralized Finance (DeFi) is an entirely new segment with new income generation ideas. Today, there are a number of ways to earn income from cryptographic assets. These include:

Trading income

Trading of digital assets is very similar to trading of stocks in the cash/spot segment. Users can either sell crypto assets for fiat currency or for another crypto asset.

Derivative income

Just like futures and options in the stock market, crypto exchanges also offer derivative products with leverage of up to 100x. Some popular derivative exchanges are Bybit, Deribit, etc.

Airdrop

Airdrop is a marketing strategy where qualifying members are given free crypto at launch. This increases the number of holders and advertises the platform. Eg. In 2020, Uniswap, a decentralised exchange built on Ethereum, airdropped 400 UNI tokens each to 2.2 lakh eligible wallets when the price of 1 UNI token was $3. Thus, each eligible wallet received free assets worth $1200.

Staking income

Blockchains that are built on proof-of-stake technology require validator nodes to secure their network and validate transactions. Staking is a process where users delegate native assets to a validator node to participate in the security and verification of transactions on the blockchain. In return, the users receive a share in network fee. E.g., Cosmos blockchain provides an ROI of approx. 20% p.a. for staking ATOM and securing its network.

Yield farming

In yield farming, a pair of assets are combined together to form a pooled asset. This pooled asset, known as the liquidity pool, is deposited in a decentralised exchange. The liquidity pool helps decentralised exchanges offer asset swap facilities. As consideration, the depositor receives a share of the asset swap fee. To attract depositors, newer decentralised exchanges also offer additional income in the form of native token emissions. Eg., PancakeSwap, a decentralised exchange built on BinanceSmartChain, offers, as of the date of writing this article, an approximate 25% APR on the BNB-USDT liquidity pool. The current APR may be checked here.

Interest on asset lending

This is another form of passive income where users get interest on assets lent under a lending protocol. The lending protocol receives assets and lends them to borrowers. E.g., Aave, a multichain lending protocol, as of the date of writing this article, is offering a return of 9% p.a. to lenders of Tether (USDT). Current interest rates may be checked here.

Dividend

Some crypto protocols share platform fees and profits with users who buy and hold native tokens of the protocol. This is similar to the distribution of the profits of a company as a dividend. For example, UniDex, a cross-chain aggregator, distributes its platform fee to holders of the UNIDX token.

Taxability of cryptocurrencies

The taxability of cryptocurrencies is a significant problem for tax legislators. This is because there is no global consensus on the regulation of these classes of assets. There is also no single definition of what constitutes a cryptocurrency or at what event it is to be taxed. While some countries like Belarus, El Salvador, Portugal, Uzbekistan, Singapore, Dubai, and Saudi Arabia do not levy tax on cryptocurrency, other countries levy tax either through general provisions or specially enacted ones. In India, the legislators introduced a crypto specific tax scheme by amending the Income-Tax Act of 1961 (hereafter the “Act”) through the Finance Act of 2022. Under the scheme, India parted with the generic term “cryptocurrency” and called it “virtual digital assets” (hereafter “VDA”). A brief summary of the amendments is as follows:

  • Section 2(47A) defines the meaning of VDA.
  • Section 115BBH provides the rate and method for taxation of income from VDA
  • Section 194S imposes liability on certain buyers of VDAs to deduct tax at source.
  • Section 56(2)(x) creates a charge on receipt of VDA without consideration or inadequate consideration.

All VDA income arising from the transfer of VDA is taxed under Section 115BBH. Any other VDA income is taxed under the general provisions of the Act. The provisions are explained in detail below: 

Meaning of virtual digital assets

Section 2(47A) defines VDA as follows:

  • Any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account, including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically;
  • A non-fungible token or any other token of similar nature, by whatever name called;
  • Any other digital asset, as the Central Government may, by notification in the Official Gazette, specify:

Provided that the Central Government may, by notification in the Official Gazette, exclude any digital asset from the definition of a virtual digital asset subject to such conditions as may be specified therein.

Explanation.—For the purposes of this clause,

  • “Non-fungible token” means such digital asset as the Central Government may, by notification in the Official Gazette, specify;
  • The expressions “currency”, “foreign currency,” and “Indian currency” shall have the same meanings as respectively assigned to them in clauses (h), (m) and (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);

Breaking down the definition, it may be noted that VDA includes three categories of assets and excludes certain assets.

Inclusions to virtual digital assets

Category 1 – 2(47A)(a)

This is a general category that provides a very wide definition of VDA. It covers:

  • Any information, code, number or token,
  • Generated through cryptographic means or otherwise,
  • Provides a digital representation of value exchanged with or without consideration, or
  • Can be transferred, stored or traded electronically.

Every crypto asset is a code generated through cryptographic means. Not every crypto has a value, but every traded crypto has a digital representation of the value exchanged. The exchange may be with consideration or without consideration, as in the case of free airdrops. Tradable crypto assets have inherent value and also act as a store of value. Needless to say, every cryptocurrency can be transferred and stored electronically.

Thus, the definition covers all payment cryptocurrencies, gas coins, non-fungible tokens, utility tokens for decentralised applications, service cryptocurrencies, media coins, etc.

Category 2 – 2(47A)(b)

Non-fungible token (hereafter “NFT”) is a digital token generated by cryptography on a blockchain that has a distinct identity. The only difference between NFT and other crypto assets is that every NFT has a unique identity that can’t be replaced, whereas other crypto assets are interchangeable. This may be understood by the following example.

Example of fungibility: A person deposits 10 ETH in a lending protocol to earn interest. Later, he withdraws it. The 10 ETH that he withdraws now is not the same that he deposited. However, it is still ETH with the same value.

Example of non-fungibility: A person holds an NFT token “ABC” on the Ethereum blockchain. He may deposit the NFT under any lending protocol. However, when he withdraws it, the token remains the same NFT token, “ABC.” When he sells it, the token retains its unique identity with the additional details of its previous holder.

Example in Indian context: Unlisted equity shares held through physical share certificates are non-fungible in the sense that every share has its unique “distinctive number” printed on the share certificate with the details of previous holders at the back of it. In contrast, when the shares are dematerialized, they lose their distinct identity. The dematerialized shares are fungible, i.e., every share will be identical and inter-changeable and they will have no unique characteristic such as distinctive number, certificate number, folio number, etc.

NFTs or any other token of similar nature fall within the general definition of VDA 2(47A)(a). However, the legislature has clearly included it separately, probably to avoid confusion. This is also accepted by the Central Board of Direct Taxes (hereafter “CBDT”) in its Notification dated June 30, 2022, where it states that an NFT means a token that qualifies to be a virtual digital asset under 2(47A)(a).

Category 3 – 2(47A)(c)

To deal with the ever-evolving nature of the crypto industry, the Central Government is given the power to notify any other digital asset as a VDA. The Central Government has not notified any other digital asset as a VDA.

Exclusions from virtual digital assets

Under the proviso to Section 2(47A), the Central Government has the power to notify and exclude any digital asset from the definition of a VDA. In exercising such power, the CBDT has excluded the following digital assets:

  • Gift cards or vouchers that may be used to obtain goods or services or a discount on goods or services.
  • Mileage points, reward points or loyalty cards given without direct monetary consideration under a programme may be redeemed to obtain goods or services or a discount on goods or services.
  • Subscription to websites, platforms or applications. 

Section 2(47A)(a) defines VDA as “any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means……”. It is clear that a central bank digital currency issued by Central Banks would not fall within the definition of a VDA.

However, the definitions of “currency,” “Indian currency,” and “foreign currency” under the Foreign Exchange Management Act of 1999 make no distinction between a currency issued by the Central Bank and a currency issued by a private entity. Thus, it is not clear whether stable coins like Tether (USDT), Circle USD (USDC), Binance USD (BUSD), MakerDAO’s USD (DAI), and TrueUSD (TUSD), all being digital US dollars issued by private entities, would fall within the meaning of VDA or not. TUSD has already secured the status of a legal tender in Dominica, a Caribbean country. Since countries like El-Salvador and the Central African Republic have granted BTC the status of a legal tender, it is not clear whether it would fall under the exclusion of “foreign currency.”. CoinDCX, a leading crypto exchange operating in India, has taken the view that stable coins are also VDAs.

Rate and method for taxation of income from virtual digital assets

Income from transfer of VDA

The method for calculating income from the transfer of VDA and the rate of tax is given under Section 115BBH. The term “transfer” is defined under Section 2(47) and, therefore, 115BBH is attracted only upon sale, exchange, relinquishment of a VDA, extinguishment of any rights in a VDA, compulsory acquisition of a VDA under any law, or conversion of a VDA held as an investment into stock-in-trade.

The text of Section 115BBH can be viewed here. From a perusal of Section 115BBH, it may be seen that it is a fairly straightforward provision. Subsection 1 provides the rate of tax to be 30% for income from VDA. Subsection 2 provides a method for the calculation of income. Both of these subsections override all other provisions of the Income-tax Act, 1961.

  • The rate of tax of 30% applies to all forms of income from transfer of VDA, irrespective of the head of income under which it is offered for taxation.
  • Slab benefit is not allowed for VDA income.
  • The only deduction allowable from VDA income is the cost of acquisition of VDA.

Thus, an entity engaged in the trading of VDA shall not be allowed to take deductions from operating business expenses, even if the VDA income is its operating income.

The cost of acquisition in the context of capital assets, as judicially defined, means all costs incurred to acquire the asset. Thus, brokerage paid on purchase shall also form part of the cost of acquisition.

The period of holding of VDA makes no difference, as the benefit of cost indexation is not available. No allowance or set off of any loss shall be allowed against VDA income.

Thus, if a person executes 10 VDA trades, makes an aggregate profit of Rs.10,000 on 6 trades, and makes a loss of Rs.6,000 on 4 trades, he is required to pay tax on Rs.10,000 without setting off the loss of Rs.6,000.

  • Unlike deduction and allowance, Section 115BBH does not restrict the allowability of rebates. Thus, rebates under Section 87A may be allowed.
  • Losses on VDA cannot be set-off against any other income.
  • Losses on VDA cannot be carried forward to future years.

Any other income from VDA

As seen earlier, Section 115BBH applies only in the case of “transfer” of VDA. VDA income arising otherwise through the transfer of VDA is taxed under the general provisions of the Act. Such income includes airdrop, staking, yield farming, interest on lending VDA, and dividends.

A business entity earning these types of income as part of its operating activity can claim deductions for business expenses. The provisions of Section 28 – 44DB shall apply. Business losses can be set off and carried forward as in the case of any other business.

In the case of any person other than a business entity, these incomes are taxed under residuary Section 56(1) as “income from other sources.” A deduction of expenses can be claimed in accordance with Section 57.

Gifting VDA / Transferring VDA below the fair market value

Taxability in the Hands of Transferee / Recipient

The meaning of “property” under Section 56(2)(x) has been amended to include VDA. Therefore, where any VDA is gifted or transferred below its fair market value (hereafter “FMV”) to any person, the receiver will have to pay tax on such VDA as explained below:

TransferorAny person
TransfereeAny person
Asset transferredAny VDA
VDA gifted for free and FMV greater than Rs. 50,000Taxable income of the transferee:The fair market value of VDA.
VDA was transferred below FMV, and the difference between FMV and transfer value is greater than Rs. 50000.Taxable income of the transferee:FMV – Transfer Value of VDA
Applicability of 115BBH.Not applicable.

No tax is levied if the transferee receives VDA through one of the modes specified in proviso to section 56(2)(x), i.e., from relatives, on the occasion of marriage, etc.

Section 115BBH would not apply to the person receiving a taxable VDA gift. This is because income arises in the hands of the recipient upon receiving VDA for inadequate consideration and not the transfer of VDA. Therefore, it will be taxed under the normal provisions of the Act.

Taxability in the hands of transferor

Where a VDA held as a capital asset is gifted by a person, such a gift is not considered a transfer under Section 47(iii). Therefore, no tax is payable by the transferor.

In cases where a VDA is held as stock in trade and is gifted, no tax is payable by the transferor.

Where a VDA, held as a capital asset or a stock in trade, is transferred for a value below its FMV, the gains will be computed only on the basis of the transfer value and not the FMV.

Reporting VDA income in ITR

Type of IncomeBusiness Entity: Section and Schedule in ITRNon-Business Entity: Section and Schedule in ITR
Trading income, Derivative incomeSection115BBH – Schedule VDASection 115BBH – Schedule VDA
Airdrop, Staking, Yield Farming, Interest, Dividend, etc.Section 28 to 44DB – Schedule BPSection 56(1) – Schedule OS
Taxable Gift of ReceiverSection 56(2)(x) – Schedule OSSection 56(2)(x) – Schedule OS

If VDA is held on any exchange, it is advised that holdings should be reported in Schedule FA as the status of VDA is unclear. Failure to report foreign assets in Schedule FA invites a stringent penalty of INR 10 lakh.

TDS on Transfer of Virtual Digital Assets

To capture transactions involving the sale of crypto assets and widen the tax base, the legislature introduced Section 194S. The text of Section 194S can be viewed here. From a perusal of the section, it may be seen that the following transaction is covered under the provision:

Buyer / PayerAny person
Seller / PayeeAny resident
TransactionTransfer (sale, exchange etc.) of VDA
When tax deductibleCredit to seller’s account, or actual payment, whichever is earlier
ConsiderationIn cash, kind, or any other VDA
Rate of TDS1% (on value excluding GST)
No TDS requiredWhen buyer is a “specified person”:Aggregate consideration does not exceed Rs.50,000 in a financial year. Other buyers:Aggregate consideration does not exceed Rs.10,000 in a financial year.

“Specified person” means an individual or HUF.

  • that does not have any PGBP income.
  • that has PGBP income but turnover does not exceed 1 crore in case of business or 50 lakh in case of profession in year preceding the year in which VDA is transferred.

A separate category of “specified person” is created to give some relief to small buyers. These small buyers are required to deduct TDS only when they purchase a VDA worth more than Rs. 50,000 in a year. Further, if these buyers are required to deduct TDS, they are not required to apply for TAN under Section 203A. Further, they are also exempt from the applicability of 206AB.

Practical challenges in application of 194S

Generally, TDS provisions are applicable only to entities having sufficient knowledge of the Act and the infrastructure to comply with the provisions. This is because failure to comply with TDS provisions attracts penalties and, in some cases, even criminal prosecution. Though CBDT has issued Circular 13/2022 and Circular 14/2022 to address difficulties in the application of 194S, the provision still poses significant practical challenges. Some of these are discussed below:

  • This section imposes a TDS liability on any person buying VDA. A person buying any VDA on any exchange would be required to first deduct TDS of crypto exchange before releasing payment to exchange. This is highly unreal because a buy trade would never be executed unless the market price was released by the buyer. The buyer will have no opportunity to withhold TDS.
  • A study carried out by CoinSwitch in 2022 revealed that 45% of crypto investors are aged between 18-25, 34% are aged between 26-35. The process of setting up an account with a crypto exchange is far easier in comparison to stock exchanges, with little or no requirement for KYC. To expect these young individuals to comply with TDS provisions whenever they are buying crypto assets either on exchange or peer-to-peer, is too idealistic.
  • Obtaining PAN of sellers is a very difficult task, especially in peer-to-peer trades.
  • Though the section is applicable only in the case of resident sellers, there are no easy means to obtain proof of residential status. The buyer does not know whether he is dealing directly with a non-resident foreign exchange or their resident Indian counterpart.
  • Most of the trading pairs on crypto exchanges are VDA / VDA. If stable coins are also considered a VDA, in almost every transaction, buyer and seller will have to deduct each other’s TDS on a single transaction. Example: A person buys Bitcoin (BTC) with a stable coin called Tether (USDT). Here, the buyer is a buyer of BTC and seller of USDT. The exchange is buyer of USDT and seller of BTC. Thus, buyer will deduct TDS from USDT and exchange will deduct TDS from BTC on the same transaction. This is also explained in Circular 13/2022.
  • Circular 13/2022 goes beyond the language of Section 194S and states that the exchange can discharge a buyer’s liability under TDS if there is an agreement between the buyer and seller. In a practical scenario, no exchange will undertake to discharge a liability not imposed by the statute.

Conclusion

The crypto industry, across the globe, is an unregulated area. Even the most developed nations are struggling to find a way to regulate it. This is because crypto is a fully digital asset and is not restricted by sovereign boundaries. It is an asset that has its genesis in anonymity. Entry into the crypto industry is free and transacting on blockchain requires no KYC. Further, centralised crypto exchanges do not give proper contract notes with all details. Asset swaps on decentralised exchanges go through a web of smart contracts that can’t be easily deciphered. The legislators must understand the complex nature of the industry.

Under these circumstances, the Indian Parliament has introduced a law that taxes crypto gains at the highest rate of tax without indexation or slab benefit. VDA losses are not allowed to be set off against VDA gains and cannot be carried forward. No formal instructions are issued to the tax officers on how to deal with VDAs during assessments. The TDS provisions are so onerous that it is difficult even for exchanges to implement them. Wider issues, like the situation of VDA, remain unaddressed. It is hoped that such a tax law will not stifle crypto innovation in the country.

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Doctrine of estoppel

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Estoppel meaning in law
Image Source: https://bit.ly/2GDgF8T

This article is written by Aayushi Swaroop and updated by Upasana Sarkar. This article writes about  the meaning of the doctrine of estoppel, its types, various case laws and the different sections which have dealt with this doctrine. It deals with the doctrine of estoppel and provides a detailed understanding with respect to different situations when it can be applied. The main aim of this article is to analyse the doctrine of estoppel and analyse its application in contract law.

This article has been published by Shashwat Kaushik.

Table of Contents

Introduction

Dealt from Section 115 to 117 of the Indian Evidence Act, 1872 Doctrine of Estoppel is that provision which prohibits a person from giving false evidence by preventing them from making contradicting statements in a Court of Law. The objective of this doctrine is to avert the commission of fraud by one person against another person. This doctrine holds a person accountable for false representations made by him, either through his words or through his conduct.  

Nature and scope of doctrine of estoppel 

The nature of estoppel has been discussed in the Indian Evidence Act, 1872, which can be divided into the following three aspects-

  • Rule of evidence: It can be presumed that this rule and the notion of this doctrine of estoppel’s principle have some similarities that neither can be challenged nor disputed. This doctrine plays an important role by preventing a party from denying the statement, which he himself previously stated to be true. Moreover, this doctrine can be differentiated from the rule due to the two evidential characteristics of an estoppel.
  • Matter of pleading: This point states that the party must state the relevant fact in his pleading along with the reasons that made him rely on the doctrine of estoppel in his matter, subject to the exception to the rule that facts can only be pleaded and not the evidence under normal circumstances.
  • Substantive Law: This doctrine comes under substantive law and not procedural law as it deals with the procedure of a case. In the event that a plaintiff is prevented from establishing the required facts or evidence, it may act as a defence and help with claims for equitable relief. Therefore, it can be considered a substantive law.

Meaning of estoppel

Section 115 of the Indian Evidence Act, 1872 incorporates the meaning of estoppel as when one person either by his act or omission, or by declaration, has made another person believe something to be true and persuaded that person to act upon it, then in no case can he or his representative deny the truth of that thing later in the suit or in the proceedings. In simple words, estoppel means one cannot contradict, deny or declare to be false the previous statement made by him in the Court.

  1. Simran, a leading entrepreneur, wants to buy a car. Raj is her good friend who owns a classic car of great worth. When Simran contacts Raj to help her in purchasing a car, he says that she can buy his car which he has been planning to sell for some time now. Simran buys his car. Later on, the car becomes Raj’s property. Raj takes the defense that when he sold that car to Simran, he had no title over it. The court held that Raj would be liable and will have to prove his want of title. 
  2. If Thanos is an employee of company XYZ but in court, he denies to be an employee of that company, then, later on he could not claim the salaries and emoluments from that company. 
  3. A, an agent of C, mortgaged his property to B which he was in the possession of but was not the owner. B, the mortgagee, in good faith, believing the representation to be true took the mortgage. Thereafter, he obtained a decree and the property was sold. The real owner of the property, C, claimed that it was his property and that A had no power to mortgage them. The court would stop A from making such a claim under the doctrine of estoppel.
  4. M, a tenant in the house of N, falsely representing to Q that he had transferable rights over the property and thereafter transferring property to N, later on, cannot claim that he had no transferable interest in the property. He would be estopped from doing so under the doctrine of estoppel.

Principles of doctrine of estoppel

Conditions for application of Doctrine of Estoppel

The following conditions are to be satisfied in order to apply the doctrine of estoppel:

  • The representation must be made by one person to another person.
  • The representation made must be as to facts and not as to the law.
  • The representation must be made as to an existing fact.
  • The representation must be made in a manner which makes the other person believe that it is true.
  • The person to whom the representation is being made must act upon that belief.
  • The person to whom the representation would be made should suffer a loss by such representation. 

Types of estoppel under doctrine of estoppel

Estoppel by a matter of record or quasi-record

Alike res judicata once a court has given the judgement, the parties, their representatives, their executors, etc. all are bound by that decision. This doctrine stops the parties to a case from raising another suit in the same matter or to dispute the facts of the case after the decision has been made by the court. 

Situations where estoppel by record or quasi record arises are as follows:

  1. Where the dispute between the parties on the facts have been decided upon by the tribunal which was entitled to take decision in the particular case, and when the same dispute arises again in the matter subsequent to the first one, between the same parties;
  2. Where the issue raised between the parties which has been resolved by the judiciary, incidently comes again into question in the subsequent proceedings between the same party.
  3. Where an issue raised on the facts, affecting the status of the person or thing, has been willingly determined in a manner that in the final decision it be included as a substantive part of the judgment in rem of the tribunal that has been setup to decide the particular case. This should take place when the same issue comes directly in question in subsequent civil proceedings between any party whatever. 

For example, if Nano has been held guilty in a murder case, then neither he, nor his representative, Mantro, nor his executor Berna, would be allowed to raise a suit again in the same matter. Parties are stopped from doing so under this doctrine.

This doctrine has been dealt in:

  • Section 11 to 14 of the Code of Civil Procedure, and 
  • Section 40 to 44 of the Indian Evidence Act, 1872.

The judgements by the court can be of two types

Judgements in rem

Delivered by a competent jurisdiction, this type of judgements tells about the status of the person or a thing. For example, family court dissolving or establishing a marriage. Irrespective of whether the parties belong to the case or not, a judgement in rem is binding on all.

Judgement in personam

The judgements which are binding on the parties and their privies, and which determines the rights of the parties to a suit or the proceedings are called judgements in personam.

Judgement not falling under the said jurisdiction

In case if the judgement given by the court does not fall under the respective jurisdiction then the application of the doctrine of estoppel will have no effect. Section 44 of the Indian Evidence Act, 1872 states that in case the party wants to avoid the application of the doctrine of estoppel, he/she can plead that the court delivering the judgement has no jurisdiction over the matter or that it is fraudulently doing so.

Estoppel by deed

It is the concept where two parties enter into an agreement by way of a deed as to certain facts. This implies that neither he nor his representatives or any person claiming under him can deny the facts mentioned and agreed in the deed. 

For example, Mickey Shroff decided to make his will in favor of his two sons, Lion Shroff and Wolf Shroff, and his daughter’s son Deer Shroff. Lion Shroff induced some third person to buy Deer Shroff’s share of the property. This deed was attested by Wolf Shroff who was not aware of the facts mentioned in the deed. Deer Shroff died without giving birth to a male child. Lion Shroff filed a suit to recover the property from the third party. Here Lion Shroff would be estopped but not Wolf Shroff as Wolf was not aware of the facts of the deed.

Estoppel by pais or estoppel by conduct

The elucidated meaning of ‘Estoppel by Pais’ is ‘Estoppel in the Country’ or ‘Estoppel before the public’. It has been discussed in Ss. 115 to 117. 

Estoppel by conduct means when a person through agreement, misrepresentation or negligence makes the other person believe in certain things upon which the other person had taken some action causing a change in their current situation, then the first person cannot deny the veracity of the statements given by him in the latter stages. 

In the case of Sardar Chand Singh v. Commissioner; Burdwan Division, Chang Singh, the Managing Director of Messrs., was denied any revolver license as he was accused in a gruesome murder case and other cases. When the District Magistrate issued an order that he could not hold any revolver license on the grounds of public order and safety, Chand made no appeal. This planted a reasonable belief that he has consented to it. Later on when makes an application to the District Magistrate to reconsider his case, it was denied following the doctrine of ‘Estoppel by Conduct’.

Estoppel by election

Kantabai offers his maid Meena Malhotra her second-hand car. Meena out of generosity says that she would not take it for free. Kantabai says to Meena that she has the freedom to take it as a gift or to make a payment as per her willingness. Meena has the option to either take it as a gift or claim a right over it by purchasing the car. Now, Meena makes the payment and takes the car in her possession. After a year, Meena becomes bankrupt and asks Kantabai to return the money which she had given to her as the payment for buying the car, as she now wants it as a gift. 

According to the doctrine of estoppel by election the person receiving the gift or claiming the right can enjoy one of them and not both of them. So Meena cannot now go back upon it and take the other option. 

In para 17 in the case of Revision v. Lekshmy Sukesini Devi, the court clearly stated that: Parties should not take inconsistent pleas as it makes the conduct far from satisfactory. And also that parties should not take inconsistent stands and lengthen the proceedings unnecessarily. 

In another case, the petitioner was given a land on licence and not on interest. In the terms and conditions of the contract it was stated that in case a dispute arises, the decision of the chairman would be the final one. The land was given to the petitioner to build an amusement park on it. While building the park it was found that the necessary actions have not been taken for the establishment of the park and as a result half of the land remained undeveloped, which went on to violate the conditions of the contract. In the suit filed, the court said that the doctrine of estoppel cannot be pleaded in the given circumstances.

Equitable estoppel

When a person tries to take a legal action that would conflict with his previously given statements, claims or acts, this legal principle would prohibit him from doing so. So, the plaintiff would be stopped from bringing a suit against the defendant who acted pursuant to the commands of the plaintiff. 

Suppose Tetanus gives his gold jewellery to Vaccine, the most famous jeweller in the town, for repairing. Vaccine, while handing over the jewellery to Tetanus after repair informed that a mark has been made by mistake at the back of the jewellery. Tetanus didn’t mind that and took the jewellery happily with her. Later on if she brings a suit against Vaccine, she would be stopped under this principle as her suit would run counter to her earlier statement of forgiveness for the damages caused to her jewellery by mistake.

Estoppel by negligence

This principle allows one party to claim a right over the property of another party who might not be having the possession of it. This reflects that the person being estopped owes a duty to the other person whom he had led into wrong belief. 

In the case of Mercantile Bank of India v. The Central Bank of India Limited, a firm of merchants committed a series of fraud and until it came to the notice of the authorities, enjoyed high repute in the state of Madras. This firm was known for groundnuts-merchant and exporters. Both the plaintiff and defendant financed the consignments of ground-nuts purchased and each received a ‘railway receipt’ in respect of their consignment. 

The merchants needed a loan so what they did was, at first pledged the railway receipt from the Central Bank to obtain a loan and then again fraudulently pledged it to the Mercantile Bank also. The plaintiff, the Central Bank had filed a suit for conversion of the goods against Mercantile Bank. It was held that there was no negligence as Central Bank didn’t owe a duty to the Mercantile Bank and so Central Bank was not estopped from having a prior title as ‘pledgees’.

Estoppel by Benami Transaction

Badrinath, the owner of land, decides to hand over the apparent ownership of his property to Kaju Rastogi. Badrinath does so and acknowledges that Kaju has paid him the consideration for the promise. Now, Kaju Rastogi sells this land to Tripti Sanoon, a film actress, in good faith and for a good amount of money, as by gaining ownership over the property Kaju has also gained the right of disposition over that property. Badrinath hates Tripti Sanoon and asserts his title over the property. But he would be estopped from doing so under the given legal principle. And this is what benami transaction means.

In Li Tse Shi v. Pong Tse Ching, the husband died in the year 1925. His entire will was made in the name of his wife. In 1930 their son misrepresenting somebody else to be his father bought the property of his father from the same seller who had sold the land to the father. Later the grandson of the person who died, rented the land to a company and when the company stopped paying the rent and the grandson complaint, the wife or the mother claimed the title over the land as her husband had made the will in her name. But it was held that the principle of estoppel by benami transaction could be applied as she was already aware of the fraudulent selling and purchasing of land by her son. 

Estoppel on a point of law

The Doctrine of estoppel does not apply to statutes but only to the facts. Estoppel, if applied to the law, would go against public policy and general welfare of the society. The principle of estoppel can never be invoked for the purpose of defeating the provisions of law. 

For example, if a minor, representing himself to be a major, enters into an agreement with Mr Kanjilal for the sale of a plot of land, the agreement would be void. And nothing would stop the minor from taking the defence that the agreement was void ab initio, as it was true that at the time when he entered into the agreement he was a minor. 

In Jatindra Prasad Das v. State of Orissa & Ors., the High Court of Orissa laid down that estoppel cannot arise against statutes and statutory provisions. It was further said that statutory provi

sions cannot be disregarded in any case, not even on the grounds of precedent or previous administrative decision. 

In the case of Olga Tellis & Ors. v. Bombay Municipal Corporation & Ors., pavement dwellers who migrated to India, because of proximity to their place of work started living on the pavements in Bombay. Bombay Municipal Corporation (BMC) initially allowed them to stay as they constituted the major part of the population of Bombay.

Later on when the pavement dwellers were evacuated, Olga Tellis, a journalist raised questions against this action. It was upheld that no estoppel can arise against the Constitution of India or against the fundamental right, i.e. the right to life and livelihood in this case.

  • Estoppel and tax laws

In I.T. Commissioner v. Firm Muar, the court upheld that doctrine of estoppel would not hold in the case where a non-taxable income under Income-Tax Act, has been taxed. Also once it has been said that a tax would be collected then one cannot give up on it. Further, stating that the tax would not be collected would not bind the state government from collecting it, as decided in Mathura Prasad v. State of Punjab.

  • Unambiguous laws cannot be dodged

In Sales Tax Officer v. Kanhaiya Lal, it was formulated that the doctrine of estoppel would not arise in cases where the law clearly, without any ambiguity, states that the plaintiff should be given relief. When any law is absolute and has no exception clauses, than anybody acting against it would be acting beyond powers which would be void and the party getting affected by it can file suit claiming estoppel against it. Whereas if any exemption clause exists in the law then relaxation can be given based upon it. The party would not be said to be acting ultra vires and estoppel can be claimed as mentioned in the judgement of Delhi university v. Ashok Kumar.

  • Principles determining that there cannot be any estoppel against statute

Categories under which the doctrine of estoppel cannot be applied against the state:

  • By entering into bilateral agreement parties can contract himself out of the statutory provisions,
  • There must exist some provision in the statute which prevents the parties from entering into such types agreements which the parties would have entered into,
  • The provision should be such that it satisfies the interest of the public at large,
  • The provisions should not be such that only a particular category of people can avail its benefits, and,
  • Merging of the agreement between the parties into a court’s order where the parties have been discouraged from performing its obligation imposed on them by law, because of certain actions by the parties.

By saying that there can be no estoppel against the statute it is meant that where the converse of a provision mentioned in a statue exists, the party would not be estopped by his previous given statement(s).

In Jai Jai Ram Objector v. Srimati Laxhmi Devi, the court gave a verdict that what appears to be a law is actually a law or not is dependent on the truth of the facts and on the situation of the parties which keeps on changing. Whether what impersonates a law is really a law or not has to be decided by the courts.

In National Oxygen Ltd., Madras v. Tamil Nadu Electricity Board, relying on the Schedule mentioned in the Act a new industry was given concession on tax for the next five years from the days of its commencement. The state Government of Madras under a section of the Act had the power to bring amendments to the schedules of the Act. Pursuant to this, the State government brought an amendment to the above-mentioned schedule and made it a subject to certain conditions. This was done before the completion of 5 years of that industry. The industry in his suit pleaded estoppel to which the court said that no estoppel would arise against the government. 

Proprietary estoppel

We often see promises being made and later broken. While in some cases we can do nothing about it, but in certain circumstances, particularly in matters related to land or property, there is a possibility to bring a claim to enforce a broken promise. This is called proprietary estoppel. In Thorner v. Major, it was laid down that in order to claim a right under proprietary estoppel these things have to be proved:

  • That representation has been made.
  • That the party believed it to be true and acted upon it.
  • That the party suffered a loss as a result of such representation.

In James v. James, Allen and Sandra had two daughters and one son. The son worked for the major part of his life with his father eventually becoming a partner. When making the will, Allen gave some land to one of his daughters which created a dispute in the family leading to the dissolution of the partnership. Later Allen distributed his property amongst the three ladies of his house, cutting down the name of his son. Son brought a case of proprietary estoppel against the women and also challenged the validity of Allen’s will. It was held that nothing has been shown or said with clarity that Aleen would transfer his entire will to him. 

In Gyarsi Bai v. Dhansukh Lal, it was established that in case the first two conditions are met but the third one is not and hence the doctrine of estoppel cannot be evoked.

Estoppel by convention

In the case of the Republic of India v. India Steam Ship Company Limited, it was observed that estoppel by convention arises when parties to a transaction assume the facts or the law. This assumption might be made by both the parties or either of the parties. Under this principle, parties to an agreement could not deny to the assumed facts, because if the party or parties are allowed to go back on their assumptions, it would be unfair and lead to injustice. 

In a meeting between the landlord and the lesses, it was decided that the landlord would send demands at the end of the year and the receipt would be given to any one of the lessees. However, certification was not made a requirement for the recovery of the service charged under the agreement. The doctrine of estoppel by convention would apply whereby the landlord could recover the service charges which could not be challenged by the lessee as there was no certification. This was decided in the case of Clacy & Anor v. Sanchez & Others.

Estoppel by acquiescence

When one party, through a legitimate notice, informs the other party about the facts of a claim, and the other party fails to acknowledge it, that is, neither he/she challenges it nor does refute it within a reasonable period of time. The other party now would be estopped from challenging it or making any counterclaim in the future. The other party is said to have accepted the claim though reluctantly, that is, he/she has acquiesced it.

Contractual estoppel

Pappi Lahari from Bihar entered into a contract with Batman from Chennai whereby Pappi would supply 100 bales of cotton to Batman in exchange of 25,000 rupees. While signing the contract they agreed to the fact that in case of any dispute between them, the case would be filed in the court of in Tamil Nadu. Once agreed the parties cannot, later on, assert to change the jurisdiction in the particular case. They are bound by the principle of contractual estoppel. 

This principle would apply even when the original statement made by the parties is not true.

In Peekay Intermark Ltd. v. Australia and New Zealand Banking Group Ltd., it was laid down that when the parties to the contract gives consent to a fact, neither of them can deny the existence of such facts to which they have agreed, especially when considering those aspects of their relationship towards which the agreement had been directed. The contract would itself give rise to contractual estoppel

Conflict estoppel

When one person through his speech or conduct makes the other person believe in a particular thing and induces him to act upon it, he would be estopped from taking any conflicting or contrary or erratic position, which could cause loss to the other party. 

For example, Sattu in an agreement with Kabir says that he would not roam with his girlfriend if he offers him a ride on his bike every day until his birthday. Kabir follows his instructions. Sattu after few days says that the number of rides would be two per day and only then will he not chase Kabir’s girlfriend. After 2 months he asks that the bike ride be replaced with a ride in his car. Here Sattu cannot take conflicting positions. Once there has been an agreement to offer one ride everyday on the bike, he cannot contradict that and make other demands, he would be estopped from doing so.

Issue estoppel

Father of Neena had given words to his friend that Neena would get married only to his son, Thangabali when they become adults. When they grew up, Thangabali went for a court marriage with Neena. Just before the signing of the documents, Neena ran with her lover Rahul. Thangabali filed a case stating that Rahul has forcefully taken Neena with her and that there was an agreement whereby they were supposed to get married to each other only. But Neena confessed that her father and Thangabali were forcing this marriage on her and that she wanted to marry her childhood friend Rahul. The court said that the agreement is void and the matter was dismissed. 

After 5 years it was found that Rahul has filed a suit where he claims that Thangabali has been following him and his wife everywhere taking the plea that it was because of his work. It was found that Thangabali has been meeting Neena over a period of time. This case again raises the issue of whether Neena was forced by Rahul or Thangabali for marriage. Here issue estoppel would apply and re-litigation of the said issue would be not be allowed.

Doctrine of estoppel acting as a rule of evidence

The doctrine of estoppel is established on a maxim, allegans contraria non est audiendus, which means that a party giving a contradictory statement should not be heard, and is that sort of argumentum ad hominem, which means against that specific party, where the fact stated earlier by him is assumed to be true. Therefore, estoppel is not ‘conclusive evidence’, but acts as some piece of evidence that generates a strong ground in front of a tribunal that shows that the other party is denying a truth that he himself stated earlier.

Basic requirements of doctrine of estoppel

The basic requirements of the doctrine of estoppel are as follows-

  • Estoppel is something that needs to be mutual or reciprocal, which means that the doctrine must be binding on the parties to the contract.
  • The doctrine of estoppel is considered a rule that can be applied if the parties to an agreement are capable of entering into a contract. In short, the parties must have the competency to form a contract. It is an important requirement of this doctrine. The doctrine of estoppel can be used as a defence, stating that the formation of a contract requires an important factor, namely, an agreement must be made between parties who are competent to enter into an agreement. This doctrine is not capable of being applied in cases where one party is competent but another party is incompetent to form a contract.
  • Another requirement is that estoppel, which is an equity concept, cannot be used by one party to ask the Court to order or direct another party to act in any kind of unreasonable manner, so that the rule remains fair and just for both parties entering into a contract. 

Situations where doctrine of estoppel cannot be applied 

There are certain circumstances when estoppel cannot be applied, which are as follows-

Estoppel is not applicable in criminal cases

It can be seen that the doctrine of estoppel is not applicable in criminal cases. It is applied in civil cases only where a person has previously stated a fact to be true and later denies it. In those circumstances, it is almost useless to deny a fact and say something contrary to his own statement made earlier, as the rule of actions makes estoppel so cogent in civil proceedings. Therefore, it can be concluded that this doctrine of estoppel is only applicable in civil proceedings and has no application in criminal matters.

Estoppel is not applicable if it is not specifically pleaded at the earliest stage

When a case begins, it is necessary for a party to plead this doctrine at the earliest stage without delaying. It is only applicable in cases where it is specifically pleaded at the earliest stage and not at subsequent stages. Therefore, it is an important requirement that must be followed by the parties to a case whose proceedings have started. If, in any case, this doctrine is not pleaded in the beginning, the party will not be allowed to rely on it at subsequent stages. So in any matter where a party thinks that he would rely on this doctrine, must at the earliest plead for it without a second thought.

Estoppel is not applicable when pleaded as a representative of a person 

Another situation where the doctrine of estoppel is not applicable is when the pleading is done by a person as a representative of a person. If, in any case, a person himself, in his own individual character, does not plead it, and that pleading is done by someone else acting as a representative or an assignee of another person, then this doctrine has no applicability under such circumstances. For instance, if ‘B’ has said something to be true in the presence of ‘A’ and later denies it, then to make this doctrine of estoppel applicable, only ‘A’ can plead this doctrine and not any other person acting as his representative.

Estoppel is not applicable against a minor

The doctrine of estoppel is not applicable against any incompetent person, as stated in Section 11  of the Indian Contract Act, 1872. A minor or a person of unsound mind is considered an incompetent person. As per Section 3 of the Majority Act, 1875, a person is said to be a minor if they are under the age of 18 years. 

To understand this, let’s take a look at the Privy Council’s verdict In the case of Mohori Bibee v. Dharmodas Ghose (1903). In this case, a minor misrepresented his age to enter into an agreement with a moneylender to borrow a certain amount. 

However, the agent of the money lender was aware of the borrower’s minority at the time of the transaction. Later, the minor refused to pay back the secured amount, stating that he was a minor at the time of the agreement and that the said agreement was void ab initio. 

The money lender contended that the minor intentionally misrepresented his age to defraud him; therefore, the minor is barred by the principles of estoppel from taking the defence of minority at this stage. 

The Court held that the borrower was a minor at the time of the agreement, thereby making him incapable of entering into an agreement. Which means that the agreement was void ab initio. As such, estoppel has no application in this case since there was no agreement in the first place. 

Difference between issue estoppel and Res Judicata

Res judicata is the final decision made by the court. It prevents the parties from relitigation the issues that were or could have been raised in the specific case.

Whereas, the issue estoppel is a legal principle which says that even if the court has made a decision the relitigation of that issue would be prohibited on a different course of action involving either of the parties from the first case.

SL no.Estoppel Res judicata
1.Estoppel is that rule which prohibits a person from contradicting what was earlier said by him in a court of law.Res judicata is that principle which prohibits the other courts from deciding on the same matter, between the same parties which has already been decided by a competent court.
2.Estoppel is based upon the rule of equity which is the natural law of the land.Res judicata has been recognized by the law as a legal procedure. 
3.The rule of estoppel looks into the aspects of equity, justice and good conscience.Res judicata deals only with the aspect of public policy.
4.Estoppel arises from the words or the action or conduct of the party.Res judicata arises out of the decision taken by the court, that is the final decision of the court.
5.Estoppel bans a person from rebutting what has been once said by him before the court.In this case, the court is banned from hearing the cases which has already been decided by a competent court.
6.Estoppel prevents the parties from performing certain acts which is denying to what was earlier said by him.Res judicata prevents the court from performing certain action which is dealing with the same case which has already been decided by some other court.
7.The principle of estoppel has been incorporated from sections, 115 to 117 of the Indian Evidence Act, 1872.The principle of res judicata has been incorporated under section 11 of the Code of Civil procedure, 1908.
8.Estoppel is implied through the actions or the conduct of the parties.Based on previous decision given by a competent court, Res judicata is claimed by the parties.

Difference between estoppel and admissions

Sl no.          Estoppel         Admissions 
1.Estoppel means preventing or prohibiting a person from making a  contradictory statement who has previously said a different statement to be true.Admissions means any kind of statement that can either be oral or documentary and states any question of fact or relevant fact. This can be made by any of the parties in court under specific reasons or circumstances.
2.Estoppel acts as strong evidence for the court. Hence, it is  conclusive in nature.Admissions cannot be used as conclusive evidence.
3.When the doctrine of estoppel is applied in any case, no third party is affected by it in any way.When admission is made, sometimes it might bind strangers or a third party under specific circumstances. 
4.Estoppel acts as a strong evidence in comparison to admissions. Admissions are considered weak evidence.
5.In cases of estoppel, rules related to estoppel can be found under Section 115 to Section 117 of the Evidence Act, 1872.In the case of admissions, rules in relation to admissions can be found under Section 17 to Section 23 and Section 31 of the Evidence Act, 1872. 

Difference between estoppel and limitation

Sl no.        Estoppel           Limitation
1.The doctrine of estoppel falls under substantive law and not procedural law, as procedural law discusses the procedure that needs to be followed in a case. Limitation, on the other hand, falls under procedural law.
2.This doctrine of estoppel states that in a situation where a person says a statement to be true, later he is prohibited from making a contradictory statement to the said one or denying the truth of a statement that was said by him earlier.Limitation, on the other hand, prohibits a person from exercising his right to sue another person after the limitation period is over. For filing a case, a certain period is specified. If any person files a case beyond that limitation period, the court will dismiss that case unless the party can satisfy the court with appropriate reasons for his delay in filing the case.
3.When a case is filed in the court, this doctrine can be used by either party to the suit. There is no restriction for either of the parties to the suit.In cases of limitation, if a delay in filing suit occurs due to any of the actions of the defendant, the period of limitation will remain available to the plaintiff. This is because the actions of the defendant prevented the plaintiff from filing the petition on time.

Collateral estoppel

The doctrine of collateral estoppel safeguards a criminal from being prosecuted for the same issue as raised in the earlier trial in more than one criminal trial. 

In the case of Ashe v. Swenson six men who were playing poker when they were robbed by three or four men. They stole one of the victim’s cars and ran away. Next morning 3 men were found near the stolen car and Ashe was found at some distance. Ashe was put to trial and was found not guilty due to lack of evidence. Weeks later he was called for trial in case of robbery against the second victim. It was held that the second trial be dismissed as the prosecution of a crime arising out of the same course of events is not permissible by the law.

Judicial estoppel

It prevents a party from making conflicting or contradicting statements as to what was previously said in the court as this would adversely affect the court proceedings and also cause disrepute to the court. It was held in First National Bank of Jacksboro v. Lasater, a bankrupt person by not following the schedule and preventing from giving all the information of his property finally lead the estate to shut down due to bankruptcy. After this, he started claiming a title over the property on the ground that the trustee never took any action against it. It was held that the creditors were automatically entitled to the property and asserting title over the property in such manner is not permissible. 

Legal estoppel

It means that the assignor or the grantor, in the subject matter of assignment or grant, cannot in the latter stage deny the validity of title. In Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., the court reached a conclusion that the legal principle of estoppel by deed should apply to the patent right as well. Law clearly recognizes that the assignor of the patent for novelty or utility cannot say that a patent is void. 

He would be estopped by law from doing so. In such cases the court is allowed to view the art or work in order to understand what that thing was which was assigned and to decipher the primary and secondary character of the assigned patent. This would also assist them in determining the extent to which the doctrine of equivalents could be invoked against the one infringing it. It is believed that the court would not make any assumptions other than that the invention presented a sufficient degree of utility and novelty which would justify the issuing of the patent assignee.

Evolution of doctrine of estoppel

The study of the evolution of the doctrine of estoppel can be done by comparing its development in English law and Indian law.

Development in English Law

The foundation for this doctrine was first laid down in English Law, in the case of Hughes v. Metropolitan Railway Co. In the particular case, Hughes leased his land to Metropolitan Railway Company to carry out repair work. The defendants were required to complete it in 6 months time period, and if it failed the lease would stand forfeited. The parties to the agreement negotiated another agreement by which the railway company was to purchase the freehold of the land. 

Both the parties were under the delusion that transfer of property would take place and therefore the defendants didn’t carry out the repair work. He believed that sooner he would be having the freehold of the property and those repairs are of no use to him. But towards the end of the 6 months period, the negotiation dissolved and the plaintiff gave the notice to forfeit the lease. 

The court upheld that when negotiation was initiated there was an implied promise to forfeit the lease with respect to the limited time period. The Railway company acted upon this promise which proved to be detrimental to them. The doctrine of estoppel was thus applied and the railway company was given more time to complete the repair work. 

Even after this case, the doctrine of estoppel had not gained much attention until Lord Denning delivered his judgement in the case of Central London Property Trust Ltd. v. High Trees House Ltd. The defendants, High Trees, rented his flat to the plaintiff in return for a certain amount of money. Due to the outbreak of World War II this amount was reduced to half as his occupancy rate was decreasing. When the war ended the defendant continued to pay half of the amount of rent, claiming that the plaintiff had not mentioned any time period while entering into the agreement. Plaintiffs sued the defendant for payment of the full amount of rent. 

Applying the principle of estoppel laid down in the case of Hughes v. Metropolitan Railway Co. the court said that it was implied that the reduced rate is limited to the time till the war continues, and so the defendants are liable to pay the full rent. 

Development in Indian Law

The Doctrine of estoppel in general and promissory estoppel, in particular, was recognized in India from the case of Sourujmull And Ors. v. The Ganges Manufacturing Co., where the Calcutta High Court determined that this doctrine would also apply in other situations where a person can be estopped from performing certain acts or depending completely upon particular arguments or claim or contention. This implies, as laid down in the judgement, that the doctrine of estoppel is not limited to the law of evidence. 

Estoppel example – real estate

A real estate contract is the one where purchase and sale, or exchange, or transfer of the real estate, i.e. land, building, etc. takes place between the parties. The sale and purchase of the land(s) are governed by the laws of the state to which the particular land belongs. The essential elements required to bring such contract into force is similar to that required in contracts under the Indian Contract Act, 1872. 

Estoppel in a real estate contract only means that the estoppel letter issued by the association or its management company would be legally binding on the parties. Such letters would contain the dues, and other assessments and fees that the closing owner would be responsible to pay and the coming owner owes. 

Exceptions to doctrine of estoppel

Following are the exceptions to the doctrine of estoppel

  • This doctrine does not apply when both parties have the entire knowledge of the things in their matter.
  • Estoppel cannot be applied against statutes and regulations. It should not come in conflict with the statutes and regulations.
  • It would not apply to cases where one party has exceeded his power while acting or taking a decision.
  • It cannot be applied against the sovereign acts or the government. 

Difference between estoppel and promissory estoppel

The Doctrine of promissory estoppel binds a party by his promise made to the other party, having faith in which the other party has taken an action. The party cannot make contracting or conflicting statements later on, neither he can go back on his words. In Motilal Padampat Sugar Mills v. State of Uttar Pradesh And Ors. the state of Uttar Pradesh first promised to exempt the new industrial units from paying sales tax for an initial period of 3 years. 

Based on this the plaintiff took a huge amount of loan to set up a new industrial unit. Later on the government made a change in its promise and said that only partial concession would be allowed to which the plaintiff agreed. But the government yet again changed the policy and this time said that no concession would be given. 

The court said that the defendant made a representation to the plaintiff. Laying his trust in it, plaintiff took a large sum of money as a loan. So, now the government would have to exempt the plaintiff from paying taxes for an initial period of 3 years as per the principle of the doctrine of promissory estoppel.

SL no.EstoppelPromissory Estoppel
1.Representation is made to an existing fact.Representation of a future intention is made. 
2.It is supported by parties considerationIt is supported by parties future conduct and not a consideration.
3.Estoppel has been dealt in section 115 to 117 of the Indian Evidence Act, 1872.There exists no provision in the Indian Evidence Act, 1872 which defines promissory estoppel. 
4.It is only available as a defence.It can be used as a cause for action to obtain damages.
5.Estoppel has been dealt in tort law.Promissory estoppel has been dealt in the Indian Contract Act, 1872.

Difference between estoppel and waiver

A waiver is the deliberate or voluntary relinquishment or abandonment of a known right or privilege. For example, an insurance company in its policy has stated that the policy would stand cancelled in case of non-payment in 30 days after the notice for the same has been given. Mr. X failed on payment and requested the company to consider his application soliciting an extension of one week. The company considers Mr. X’s application and by doing so has waived the original deadline for payment.

The difference between estoppel and waiver was explained by the Supreme Court in the case of Provash Chandra Dalui and Ors. v. Biswanath Banerjee and Ors. The court held that the most important element in case of waiver is that there must be intentional relinquishment of a known right and should be willing done by the party. Where waiver asks for an involvement of intention by the party to surrender a right, in the doctrine of estoppel the element of intention is irrelevant. And what becomes important in estoppel is that the party must suffer loss as a result of the false representation made to him. In case of estoppel it is not required that the part give up on the right, the doctrine of estoppel would anyway arise. 

The Doctrine of estoppel prevents a person from denying his previous statement made in a court of law as it could cause injury or loss to the other party.

SL no.EstoppelWaiver
1.Estoppel cannot be the cause of action although it can facilitate or aid the enforcing of a cause of action by preventing the defendant from not denying what was earlier said by him.Since waiver is contractual, that is, it is an agreement to release somebody out of an agreement by waving the previous set policy or to assert a right. Therefore, a waiver can be a cause of action.
2.In this, the injured party will have to prove that injury, loss or harm occurred. No such requirement is there in the waiver.
3.It is not necessary for the parties to know the truth or have the knowledge of the reality.In the case of waiver the parties involved have the knowledge of the real facts and they know the truth. 
4.There might be situations where acquiescence would amount to estoppel.In case of waiver, along with acquiescence, some act or conduct is also necessary. 
5.Parties use the doctrine of estoppel as a defence in a court of law and not as a cause of action. Waiver can be used as a cause of action for claiming damages.
6.Illustration:In Dawsons Bank Limited v. Nippon Menkwa Kabushiki Kaisha, the principal gave the right to his agent to make an agreement on behalf of him. While making an agreement the agent waived the principal’s right. The principal now becomes bound by the contract.
In the same case, the principal would become bound by the contract and not estoppel as the agent actually had the powers to do so, i.e. he can waive the rights of the principal, by the previous contract made between them. 

No estoppel against minor

Section 3 of the Maturity Act, 1875 defines a minor to be a person who is under the age of 18 years and Section 11 of the Indian Contract Act, 1872 says that parties entering into a contract should be competent, i.e. should be a major, of sound mind and barred by no law to enter into a contract. A contract with a minor is void ab initio which means void from the very beginning. 

So when a minor misrepresenting himself to a major enters into a contract, then he cannot be made liable for it, not even on the grounds of estoppel. The minor can always plead that at the time of entering into the contract he was a minor. 

In the case of Ajudhia Prasad And Anr. v. Chandan Lal And Anr., two minors fraudulently entered into a mortgage deed by concealing the fact that they were minor as a guardian has been appointed for them under the Wards Act. The court held that no estoppel would arise in this case. 

Estoppel provisions and their cases

There are three sections under the Indian Evidence Act, 1872 which talks about the situations where the plea of estoppel can be taken and Section 115

It defines estoppel as a principle which prohibits a person from denying what was earlier said by him in the Court. The court in Pickard v. Sears [30] said that estoppel is where:

  • One party by his words or actions makes a representation
  • The other party believing in his words acts on that
  • Or alters his position
  • then the party would not be allowed to deny the things he previously said.

In the third clause, the altering of the position should be such that going back would be unjust or unfair in the eyes of law, as established in the case of Pratima Chowdhury v. Kalpana Mukherjee.

Necessary Elements of Representation

The representation made can be done in two ways:

  • By words
  • Through conduct which includes negligence

In Bhagwati Vanaspati Traders v. senior Superintendent of Post Offices, Meerut the plaintiff purchased one N.S.C. for which he paid only a certain amount and not the entire amount of money. The defendant closed the account of the plaintiff and refunded the amount without any interest on the ground that it was not opened in accordance with the rules and regulations. On the plea of estoppel, the court said that the plaintiff himself had purchased the N.S.C. and that no misrepresentation was made to him by the defendant.

Intention to deceive

The main requirement of estoppel is to bring the person into action based on the representations made to him. It is not important that the person making the representation has the knowledge or motive behind the representation being made. It is also not necessary that the representation being made is fraudulent in nature or that it has been made under a mistake or misapprehension.

Only the person to whom the representation is being made can act

The principle of estoppel would not apply to a person who got a piece of second hand information about the representation, unless the representation was intended to be made towards him or that it was a general representation where anybody could act upon it.

For example, Tarak Mehta, head of a telecom company, makes an announcement that upon a recharge of 200 rupees one would get unlimited talk time for one year. Mr. Atmaram, a vendor, seeing the add started working hard and collect the required amount. Now, acting upon it got the recharge done of the said amount. After 2 months he complained that the offer has stopped on his phone. Later on, he finds that the company has terminated its earlier policy and reduced the time limit to 1.5 months. The doctrine of estoppel would apply as he had relied on the representations made to him. 

Should be based on existing facts

In order to apply this doctrine, it has to be ensured that the representation made should be based upon the existing facts and must not be a representation relating to a future promise. 

For example, if Donkey Pandey promises to his friend Monkey Pandey that whenever he would be making his will, he would be signing it in his name. Later on, when Donkey makes his will, not even a part of his will was in the monkey’s name. Now, such promises have no legal consequences as it is a future promise. 

In Steel Authority of India Ltd. v. Union of India it was held that once the party has claimed that they are contractors and not employees of the company, although they were one, they cannot, later on, change the plea and say that they are the employees of the company. 

Party is required to plead estoppel

Since the doctrine of estoppel is a rule under the Indian Evidence Act, it is required that it should be pleaded. The party claiming the plea of estoppel must clearly mention in its pleading the facts which point that he had acted upon the representations made to him by the other party. In case the party does not mention this in its pleading the above said requirement, then it cannot claim the doctrine at a later stage.

Representation includes representation of law

Representation includes representation of facts as well as representation of the law. Suppose, the director of a company withdrew bills on the grounds that a private law gives them the power to do so. In this case, while the statement of facts is true there has been an error in the inference of the law. The person making the representation, i.e. the director, in this case, would not be estopped from denying that the inference of the law was not correctly made. However, in the particular case, the fraudulent representation made as to the legal effect of those bills and gained some advantages out of it would be estopped from retaining the advantages gained. 

Representation being made should not be debatable

The representation being made should be clear and bereft of any ambiguity. It might be that the representation has more than one interpretation but those interpretations should be such that the purpose for which the representation is being made should not be defeated, that is, the sense for which the representation contended should not be destroyed. 

Acting ultra vires is not permitted

If a party through representation succeeds at creating a state of things which he is otherwise barred from creating by the law then he would be stopped from acting beyond its powers. “Thus, a corporate or statutory body cannot be estopped from denying that it has entered into a contract which was ultra vires for it to make.”

If the Truth is known to both the parties

If the party to whom the representation was being made somehow recognizes that it was a false representation then he would not be entitled to the claim of the doctrine of estoppel as decided in the case of Permanand v. Champa Lal.

In Madhuri Patel v. Addl. Commissioner, Tribal development, the party who took admission in a school by fraud was not allowed to continue studying in that school upon the claim of estoppel.

Representation by the party seeking advantage

The plea of the doctrine of estoppel cannot be sought in a case where the representation has acted as a breach of duty on the part of that party who was to take advantage of such representation. If a party who was to make use of a representation conceals certain facts than the doctrine of estoppel won’t apply. 

Intention

If the party making the representation-

  • Has the intention to act upon it in the same manner in which it was represented to be acted upon
  • Has made it in such a way that any reasonable, prudent person would consider it as true, and makes the other person believe that he also has to act upon it in the same manner

In that case it would not be necessary that the representation be false to the knowledge of the party who is making it.

In B. Coleman & Co. v. P.P. Das Gupta it was observed that the doctrine of estoppel does not apply unless the representation being made amounts to the contract or license of the party who is making it.

The other party acted upon the representations made to him

It is an essential requirement for the claim of estoppel that the party to whom the representation was made acted upon it by having faith in it. The party must make a change in his position based on the representation made.

It has to be ensured that no other party or say, some third party takes advantage of representation being made to some party. For example, if A has made a false representation to B and planted his faith in it, B has acted upon the representation, then only he can claim the plea of the doctrine of estoppel. Some third party, suppose C cannot take advantage of the same. 

Also, it is not sufficient that the party to whom the representation was made has acted upon it by believing it to be true, it has to be proved that the representation has influenced him and based on that influence he has altered his position.

The party making the representation can also revoke it

The party making the representation can anytime withdraw it even if it has been acted upon by the party to whom it was made. After withdrawal the party can make the same representation to some other party, acting in a manner that it has never been previously made. 

Representation after alteration in position

It is important that the party to whom the representation was made had altered his position based on his belief in the representation made to him. Representation after alteration in position would not allow a party to seek the claim of estoppel. 

When an agent makes a representation

Representation made by the agent who was appointed by the principal to act on behalf of him will invite the pea of estoppel and it would be as much effectual as it would have been when made by the principal himself.

Party must act 

It is imperative that the party to whom the representation is being made acts upon it by having considered it to be true. The motive and knowledge of the subject on which the representation is being made may not be known to the party who is making it.

Representation by words

Cases of representation made through conduct or made negligently by the party are more common than that of those made through words or statements. In a case where the reversioner of the widow along with the widow fraudulently misrepresented that the widow was a major and competent to handle her deceased husband’s business. The plaintiff believing this to be true entered into a contract with the widow. In the suit filed, the defendant was estopped from claiming that at the time of entering into the contract, the widow was a minor. 

Representation through action or conduct

Representation under estoppel means that a party through his actions or conduct has intimated the other party that his actions is true and needs to be acted upon. The act should induce the other person to perform the act which he would otherwise have not done. 

In Mohammad Imdadullah v. Mt. Bishmillah, Mohammeden acquired a piece of land in order to construct a school. For many years he made others believe that he has been carrying out this work under the authority of some other school. When he wanted to transfer the school building to make it an orphanage, the court estopped him from doing so. 

In Mahboob Sahab v. Syed Ismail, the son of the Muslim father attested the deed in the sale of land by his father. The son at the time of attesting the deed raised no questions although he knew that it was not in his interest. So, later on when he filed a suit, he was estopped from challenging the sale. 

Who can take advantage

Under the doctrine of estoppel the party who is making the representation, to whom the representation was made or to whom it was intended to be made can seek advantage. In case the representation is general in nature then any party can take advantage.

Evidence as a rule of law

As laid down in the case of Maritime E. Co. v. General Dairies [44] that estoppel is only a rule of evidence which can bring the party to an action. It cannot give rise to a cause of action.

In Hard M.B. v. H. Electricity Supply Co., the court held that since estoppel is only a rule of evidence which can be pleaded under certain circumstances, it cannot be used to discharge a party from the legal obligation to obey a law.

Case laws

Estoppel when applied to Insurance Company

In Life Insurance Corporation v. O.P. Bhalla and Ors., the assured failed to pay the second installment and the policy lapsed. Later, the corporation accepted the 3rd and 4th installment and also the 2nd installment with an interest. This policy ultimately came to an end with the death of the assured. The nominee of the assured claimed the insured amount from the corporation. It was found that before entering into a contract with the corporation, the assured had undergone an operation about which he didn’t inform the insurer. The court said that the assured’s act of keeping the information with him would not allow him to take the plea of estoppel. The defence that disclosing it would not have made any difference if it was not accepted.

Estoppel when applied to Educational Institutions

In Sanatan Gauda v. Bharampur University, the student took admission in a law college and successfully completed his two years. In his final year university objected to release his result of the pre and intermediate examination on the ground that he is not eligible to do so. The Student had submitted all the required documents at the time of admission and also has obtained the card for writing his final examination. The court declared that the university would be estopped from doing so, i.e. declaring the result of that student. 

In Kumar Nilofar Insaf (Dr.) v. State of Madhya Pradesh, while taking the admission in the medical college, the college released a merit list for house-job. When the same merit list was released for the admission in the M.D. course, the plaintiff filed a suit. The court estopped the plaintiff since he had consented to the first merit list. 

Estoppel when applied to tenancy

In Dataram S. Victore v. Tukaram S. Victore [50], the tenants while filling the form for an agreement clearly stated that he would be living along with his brother and his wife and it was accepted. The court dismissed the order of eviction and estopped the landlord from terminating the tenancy on the ground of lease. 

Estoppel when applied to employers  

In Shiv Kumar Tiwari deceased represented by L.R. v. Jagat Narain Rai and Ors., the plaintiff was a lecturer in college. He was appointed on a temporary basis and was given approval on a yearly basis. After some years the college stopped giving approval to him and a new lecturer who is the defendant in the case was appointed by the education department. 

The plaintiff filed a suit against the college. The civil court decided in favour of the plaintiff and said that the plaintiff was a permanent lecturer. This decision was taken in the absence of the education department and the defendant. Subsequent to this, the Deputy Director of that locality, basing his decision on the judgement of the Civil court, declared that the plaintiff was the permanent lecturer of the college. 

The plaintiff’s plea of estoppel was not considered acceptable as the Deputy Director was not a party to the decision taken by the court and therefore he has no authority to make such decisions. Further, the judgement given by the civil court could be challenged under the Specific Relief Act. 

In Anil Bajaj (Dr.) v. Post Graduate Institute of Medical Education and Research, the plaintiff was allowed to go abroad on the condition that within 2 years he will have to resume office else his service would be terminated. He did not return within 2 years and as said he was terminated from the job. The plaintiff cannot rely on the doctrine of estoppel as he was aware of the consequences that would follow.

Estoppel when applied to employees 

In State of Maharashtra v. Anita, the court upheld that once the person has been appointed as an employee under a contract and has accepted all its terms and conditions, he would be estopped if in the later stage he challenges the term of the appointment. 

Estoppel when applied to the selection board

In Central Airman Selection Board v. Surendra Kumar Das, the apex court laid down that if the person himself has made false representation and induced the authority to act upon it then he could not challenge it on the grounds of promissory estoppel. The authority upon finding that it has been misled can cancel the agreement. 

Estoppel when applied to Development Authority

In H.V. Nirmala v. Karnataka State Financial Corporation, an inquiry officer was appointed with appellant’s consent. He participated in the inquiry proceeding and cross-examined a number of witnesses and still found nothing in favour of the appellant. The appellant could not question his appointment.

Section 116 of Indian Evidence Act

Section 116 states that during the continuance of the tenancy, the tenant of the immovable property or any person claiming through such tenancy can deny to the fact that at the beginning of the tenancy it was the landlord who had the title over the immovable property. Further, the Section also explains that a person who came upon an immovable property by the license cannot deny the fact that the person from whom he got the license, that is, in whose possession the immovable property, had the title at the time when he got his license. 

Tenant- landlord relationship

A relationship between a tenant and a landlord can be created either by written contract or verbal contract. The beginning of the tenancy can be marked by the taking of possession of the land, or by the payment of rent, or other circumstances. 

If X leases his land to Y and Y takes the possession and starts paying the rent and later on X sales the land to Z, then Y can make his payment to Z. Here, Y and Z have formed the tenant-landlord relationship. 

Scope of section 116

It is concerned with those estoppels which occurs between:

  • Tenant and his landlord
  • Licensor and licensee

Title of the landlord cannot be denied

Once a tenant enters into a relationship of landlord and tenant, receives the possession of the property and finally enters into the premise, during the period of such possession may deny things or course of action by the landlord which is against what was mentioned in the agreement. A tenant in no case claims that the landlord has no title over the property.  

In Moti Lal v. Yar Md, the judge said that the tenant cannot say that the landlord has no more interest in the property when the landlord filed a suit for default payment and ejectment. It is only after leaving the possession can the holding of title by the landlord be questioned as mentioned in Suraj Bali Ram v. Dhani Ram.

In Sri S.K. Sharma v. Mahesh Kumar Verma, where the defendant upon attaining a higher post was allotted a premise by the railway company. In the case, it was said that even when it was not known whether the land belonged to the railway company or not, the officer would have to evacuate the premises after retirement.

Can landlord plead estoppel

In the following situations, the landlord can plead estoppel:

  • When the tenancy itself stands disputed then the tenant can challenge the landlord’s title on the property. The tenant would not be estopped from doing so.
  • In cases where the tenancy has been moved by fraud, coercion, misrepresentation or mistake.

If no such circumstances occur then the tenants would be restricted by the doctrine of estoppel. However, the tenants are always at liberty to overturn the lease or change its status as a lessee. 

The Case is similar in the licensor- licensee relationship. 

In E. Parashuram v. V. Doraiswamy, the Bangalore Mahanagara Palike owned land which was leased to Mr. Dhanpal for the period of next 10 years. It was found that Mr. Dhanpal had decreed the land to Mr. Doraiswamy. A decree was passed in the name of Mr. Dhanpal whereby the vendors were directed to execute the reconveyance of deed in Dhanpal’s favour. Thereafter, pursuant to the orders, all the documents were to be kept in Dhanpal’s possession. Sooner it was found that the vendors were trying to claim ownership over the property. This was brought to the notice of the assignee, Mr. Doraiswamy, who filed a suit of eviction in court.

In the second instance regarding the purchasing of land by Mr. Doraiswamy, it was found that at the initial stage, the signature of Mr. Doraiswamy was also taken along with Mr. Dhanpal and when this mistake was rectified by the corporation by deleting the signature of Mr. Doraiswamy, he challenged it. 

The court in the first instance upheld that the landlord could not be denied the title to the land even though certain disputes still remain unresolved with the corporation. In the second instance, the court said that no jural relationship existed and thus exceptions under Section 116 of the Indian Evidence Act cannot be pleaded.

Estoppel applied when tenancy is in existence

In Udai Pratap v. Krishna Pradhan, the continuance of tenancy was defined as a period during which the tenant enjoys the possession of the property and is seeking benefits from it. 

The Tenant cannot deny the title to the landlord, neither at the beginning of the tenancy nor during its continuance. The Tenant would be estopped from denying the title of the landlord only when the tenancy is continuing. Once the tenancy ceases to exist, the tenant will have the right to deny title to the landlord. 

For example, HUM is the tenant of land which belongs to TUM. As soon as HUM takes possession of the property, the tenancy comes into existence and continues until it comes to an end. During this TUM cannot be denied title to the property by HUM. But once the tenancy lapses, HUM will have the right to question the interest of TUM in the property. 

Title at the beginning 

The tenant can not deny the title to the landlord at the beginning of the tenancy. However, tenants can exercise certain powers like:

  • He would not be estopped from claiming that on the death of the landlord the property would be transferred or the title would be delegated to the tenant and not to some third party. 
  • He can prove that till the day before signing the lease, the landlord had no title over it.
  • The tenant can prove that during the tenancy period the landlord lost his title over the property either through his acts or because he was barred by the law. [61]

Licensor- Licensee relationship

In the licensor- licensee relationship the same rule operates like that in the landlord-tenant relationship. When a licensee obtains the possession through licence cannot deny the title to the licensor unless the relationship ceases to exist. 

A allowed B to use the washroom in his backyard. B fraudulently made the duplicate keys of those washrooms and refused to vacate. In court A cannot in his suit for ejectment say that B holds no title over those washrooms as he was the one who gave him access to them. 

Estoppel in mortgagor- mortgagee relationship

When upon the contract of mortgage, a property has been mortgaged by one person to another and the person to whom it has been mortgaged, i.e. the mortgagee, has taken possession, then the parties to the contract cannot deny the right of each other under the contract as proposed in Arjun Singh v. Mahasaband.

In a situation where the mortgage is about the end and payment has to be made by the mortgagee, in that period if the mortgagee claims that the mortgagor seems to have no interest in the property, he would be estopped from doing so. The rule under mortgagor-mortgagee relationship gives rise to the doctrine of estoppel only when the claims under the suit filed are based on the contract of mortgage and in cases of repudiation of the mortgage. 

Section 117 of Indian Evidence Act

Section 117 states that the acceptor of the bills of exchange cannot deny the person who is supposed to draw the bills, from drawing it or endorsing it. Also no bailee or licensee can deny the fact that at the time when the bailment and license began, the bailor and the licensor had the authority to make bailment or to give license. 

  1. The person accepting the bills of exchange can deny that the bills of exchange were really drawn by the very person who showed to have drawn it.
  2. If the bailor mistakenly delivers the goods to some third party instead of the bailee, he can prove that a third party has the right over the goods bailed against the bailor.

Scope

This section demarcates that the person who accepts the bills of exchange cannot deny that the person drawing the bills has the authority to draw or to endorse it but can deny that the bills were actually drawn by the person by whom it appeared to have been drawn. 

The bailee or the licensor cannot deny the fact that at the beginning of bailment or grant, the bailor or the licensor had the authority to perform it. But a bailee can prove that the third party to whom the goods were delivered instead of the bailor had the right against the bailee. 

Judicial precedents surrounding doctrine of estoppel

Harsh Ajay Singh v. Union of India (2023)

Facts of the case

One of the recent cases on the doctrine of estoppel is the Agnipath scheme case that was filed in the Delhi High Court. In this case, the petitioners were those whose names were shortlisted for their recruitment in the Indian Air Force. They filed the suit because they were not recruited into the department  despite their names appearing on the provisional list. They were just notified that their recruitment has been cancelled under a scheme known as the Agnipath scheme. In the opinion of the Delhi High Court, the scheme has been made with the objective of maintaining national security. In short, the scheme was prepared keeping in mind the national interest, and aiming to protect all the citizens of the State. So according to the Court’s view, this Agnipath scheme was made for a bigger interest and the court upheld it. After getting this verdict from the Delhi High Court, a few petitioners were not happy with the decision of the Court and filed an appeal petition in the Supreme Court against the decree of the Delhi High Court. The application was submitted on the basis of the doctrine of promissory estoppel.

Issue

Whether the doctrine of promissory estoppel can be applied in this case?

Judgement of the case

After receiving the application, the Supreme Court of India dismissed the petition of the applicants, who requested the Court direct the Indian Air Force to complete the recruitment process. The Apex Court affirmed the decision of the Delhi High Court. This judgement was given by a bench that was led by Chief Justice of India D.Y. Chandrachud. It was contended that the promissory estoppel doctrine could be invoked if there exists a contractual relationship between the Indian Air Force and the applicants on the provisional list. But in this case, neither the doctrine of promissory estoppel can be invoked nor can the candidates get compensation due to the absence of a contract between them. So the award given by the Delhi High Court was held to be a correct and fair decree. It was stated that this doctrine prohibits the promisor from backing out of any contract that has taken place where no consideration is involved. But in this case, the Agnipath scheme is not a matter of contract. It was purely for public employment purposes, where the doctrine of promissory estoppel cannot be applied under any circumstances. In this scheme, no contract was executed between the parties. Therefore, it was observed that the Agnipath scheme was not at all arbitrary in nature, and this doctrine will not be applicable  in those cases where a large public interest will be present.

Promissory estoppel in the USA

The doctrine of promissory estoppel also has its application in the United States of America (USA). Like in India, estoppel in the USA is an equitable estoppel that prohibits one from contradicting his own statement that was made earlier. In the USA, too, if one party says something contradictory to the previous one, the other party can go to court and file a petition against it. It is a legal theory that states that when a party makes a promise, the other party may make a recovery based on that promise. In short, it means that the party making the claim for recovery has relied on that promise on reasonable grounds, and the party attempting to recover has detrimentally relied on that promise. So the agreement made between the parties is considered valid and has the same binding effect as a valid contract. Therefore, if it is seen that a breach of contract has taken place, the party is allowed to receive either reliance damages or expectation damages from the court. In short, the effect of the breach of promissory estoppel will be similar to the effect of a breach of contract. So in the United States Patent and Trademark Office (USPTO), when a person says something and takes a position, he is later not allowed by the court to defend his patent by saying any term that seems entirely different or the way a certain invention works.

In the case of Cohen v. Cowles Media Co., 501 US 663 (1991), the Supreme Court of the United States has upheld an important observation in this case. The meaning of promissory estoppel was given by the court as the legal duties that are enforceable under state law doctrine even in those situations where they are never formally adopted by the parties to the contract.

Conclusion

The Doctrine of estoppel is an important principle which protects people against fraud or misrepresentation. There are several instances where an innocent person becomes a prey to false representations made to them by some party. Sometimes the case may be such that the plaintiff suffered huge losses. This doctrine avoids such situations and charges the person for his wrongful conduct.

This legal principle gives an incentive to every one of those people who tries to make false representations to others and induces them to act upon it by planting their faith in them, and incur losses as a result of such false representations, by not performing such acts, else they would be held liable.

Frequently asked questions (FAQs)

How does this doctrine of estoppel operate in countries other than India?

This doctrine of estoppel has applicability not only in India but also in other foreign countries. This doctrine is developed from Common Law, which is neither formed by legislation nor by statutes but is obtained from precedents and judicial awards. The legal system of the United States is based on English Common Law. In other words, the common law is the origin of the laws of the United States, the United Kingdom, Canada, and many others. The doctrines that are derived from this Common Law are almost the same in all the foreign countries. Therefore, this estoppel doctrine also operates in a similar manner in all these countries, like the way it works in India, by preventing a person from contradicting his claims or opposing his previously made statements or actions. 

When does the doctrine of estoppel arise?

A doctrine of estoppel arises when one party in a dispute makes any representation by his words or conduct, emphasising and acknowledging something to be true. In such a situation, that party who makes such a representation is stopped from denying it or stating something that is contrary to the original statement made by him, which means he is not allowed to go against his own statements. In short, he is stopped from changing his position or contending that the opposite position is true.

Does estoppel alone initiate any title or cause of action?

This doctrine of estoppel neither alone acts as a cause of action nor does it give rise to any title or cause of action. Sometimes, this doctrine becomes the reason for establishing or disproving a matter in a court of law. It is done by one party against the other through its application. This doctrine in no way destroys or extinguishes a person’s rights in court. It just acts as an instrument that bars or prevents a person from filing a suit in court under such circumstances where he contradicts or denies those facts or statements made by him earlier. This doctrine discusses only the facts related to questions and not the question of right. In other words, it can be said that this doctrine is not used to stop or prevent a person from asserting his or her rights or titles against the world. It will never prohibit a party from claiming his right to property from another party if that party is proven to be the real owner of the property. In situations where this doctrine is applied, no one else gets involved. In short, no third party is affected by it in any way. Therefore, it can be concluded that the doctrine of estoppel alone does not initiate any title or cause of action.

On whom is the burden of proof vested?

The burden of proof is entirely vested in the party who raises the defence. It means that the burden of proving the statement to be true is completely on the party who files estoppel as his defence, and it requires a high standard of proof. 

References

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Tamil Nadu Government Servants (Conditions of Service) Act, 2016

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This article is written by Pruthvi Ramakanta Hegde. This article emphasises the scope, object, purpose, important provisions, and court interpretation of the Tamil Nadu Government Servants (Condition of Service) Act 2016.

This article has been published by Shashwat Kaushik.

Introduction

Mahatma Gandhi once said, ‘The best way to find yourself is to lose yourself in the services of others’. In this way, government services play a crucial role in shaping the functioning of a state, and the quality of these services directly impacts the lives of its citizens. Government servants play a prominent role in bringing about changes in society by taking necessary decisions. In the state of Tamil Nadu, the Tamil Nadu Government Servants (Conditions of Service) Act 2016 is significant legislation. This enactment serves as the bedrock for governing the terms and conditions of employment for government servants in the state, ensuring transparency and accountability in their recruitment, conditions of service, disciplinary matters, and retirement benefits. It plays a prominent role in upholding the principles of good governance and providing a well structured framework for the efficient functioning of government employees in the state of Tamil Nadu.

Scope and purpose of Tamil Nadu Government Servants (Conditions of Service) Act, 2016

In order to govern and regulate the government’s service in the state of Tamil Nadu, the Act establishes different provisions and rules. The main purpose of the Act is to regulate the service conditions of government servants employed by the Tamil Nadu state government. It covers a wide range of matters regarding their employment, including recruitment, promotions, terms and conditions of service, disciplinary actions, retirement benefits, and some others.

The major purpose of this Act is:

  • To create a systematically organised, well structured, and transparent framework for the recruitment and service conditions of government events by ensuring consistency and fairness in their employment terms.
  • To instil accountability among government employees through the establishment of clear guidelines for their conduct, performance, and disciplinary procedures in cases of misconduct.
  • To protect and safeguard the welfare of government servants by encompassing their entitlements, including salaries, allowances, leave, retirement benefits, and any associate pensions.
  • To facilitate the efficient functioning of government departments and services by providing a legal framework that governs the service conditions and conduct of government employees.

Establishment and application of Tamil Nadu Government Servants (Conditions of Service) Act, 2016

The Tamil Nadu Government Servants (Conditions of Service) Act, 2016 was established on September 14, 2016, following its assent by the Governor. This Act was passed by the Legislative Assembly of the State of Tamil Nadu in the sixty-seventh year of the Republic of India. This Act applies to all holders of government posts, whether they are in temporary or permanent positions, across various state and subordinate services in Tamil Nadu, provided with exceptions in cases where different regulations are provided by other existing laws or when a contract or agreement between the government and a government’s servant specifies different terms. 

Important definitions of Tamil Nadu Government Servants (Conditions of Service) Act, 2016

Member of a service

According to Section 3(m) of the Act, a “member of a service” is someone who has been given a job in a specific government department. They haven’t quit their job, retired, been removed, or been moved to a different department. It also includes people who are still in their training period or have completed their training and are now full-fledged members of that government department. So it essentially refers to someone actively working in a government job without any major interruptions or charges.

Reserve list

As per Section 3(u) of the Act, a “reserved list” is a special list that includes at least 25 percent of candidates from various reservation groups, including the general category. This loss is used until a new, regular list is prepared later. Essentially, it ensures that a portion of candidates from reserved categories is included in the initial selection, and the regular list will be created after considering these reserved candidates.

Recruitment agency

As per Section 3(t) of the Act, a “recruitment agency” refers to official organisations responsible for selecting candidates to fill government positions in Tamil Nadu. These organisations include well-known bodies such as the Tamil Nadu Public Service Commission, the Teachers Recruitment Board, the Tamil Nadu Uniformed Service Recruitment Board, and the Tamil Nadu Medical Services Recruitment Board. Additionally, the government may establish similar bodies to oversee the selection of candidates for various government services. These agencies play a pivotal role in the recruitment process for government positions in the state.

Probationer in a service

According to Section 2(p) of the Act, a “probationer in a service” is an individual who is part of a specific government service and is currently in a probationary period as outlined in the special rules relevant to their position. This person has not yet finished or completed their probation, which is typically a specified trial or training period that they must undergo before becoming a full member of that service.

Promotion

As per Section 3(q) of the Act, “promotion” refers to the process of giving a government employee a higher position within their current job category or class. It means they are moving up to a better category or grade within the same area of work they are already in.

Ex-serviceman

As per Section 3(j) of the Act, “ex-serviceman” means a person who has previously served in the Armed Forces of the Union. The person can be considered an ex-serviceman if they meet certain criteria:

  • Must have served in the Armed Forces and was released on or before June 30, 1968, without being dismissed or discharged for misconduct or inefficiency.
  • Must have served in the Armed Forces for a continuous period of at least six months after their attestation and were released between July 1, 1968, and June 30, 1979, without being dismissed or discharged for misconduct or inefficiency.
  • For a continuous period of at least six months after their attestation, and were released between July 1, 1979, and June 30, 1987, for reasons other than their request and not due to dismissal or discharge for misconduct or inefficiency. Alternatively, they could have requested release after serving for a minimum of five years. 
  • They served in the Armed Forces and retired or were released on or after July 1, 1987. This might be due to their request after earning a pension, on medical grounds related to military service or beyond their control, as a result of a reduction in an establishment, or after completing a specific period of engagement. They should also have been given a gratuity.
  • They were part of the Territorial Army in specific categories, such as pension holders for continuous embodied service, individuals with disabilities attributable to military service, and gallantry award winners who retired on or after November 15, 1986.
  • They were part of the Army Postal Service and retired on or after July 19, 1989, without reversion to the Postal and Telegraph Department, either due to medical grounds attributable to military service or circumstances beyond their control, and received a medical or disability pension.
  • They were discharged on or after July 1987 under Army Rule 1954, Section 13(3)III(V) because their service was no longer required, and they received a pension.

Overview of Tamil Nadu Government Servants (Conditions of Service) Act, 2016

The Act delineates the rules and regulations that govern the service conditions of government employees in Tamil Nadu. The Act provides a well structured and comprehensive framework for the following key aspects:

Application fee

As per Section 8 of the Act, candidates applying through the Tamil Nadu Public Service Commission (TNPSC) for government service positions in Tamil Nadu are generally required to pay an application fee to the government. Most candidates need to pay a fee when applying for government jobs in Tamil Nadu. The exact fee amount may change over time and is determined by the state government. However, there are some other exemptions and special provisions for certain categories of candidates with regards to application fees, which include:

  • Candidates belonging to the backward classes who acquire a degree do not have to pay the application fee, regardless of the specific job they are applying for.
  • Candidates belonging to the Scheduled Castes or Scheduled Tribes are exempt from paying the application fee for any government job in Tamil Nadu.
  • Candidates who have completed their service may be eligible to apply for government jobs without paying the application fee. 
  • Certain groups are exempted from the application fees, including members of the Operation Subordinate Service, the work-charged establishment of the Electricity Department, or the work-charged establishment under the Electrical Engineer (General) applying for specific posts.
  • Candidates can apply for multiple services within a group using one application, but if they are applying for services in different groups, they should submit separate applications, each with its own fee.
  • Ex-servicemen are exempt from the application fee, with a limit on the number of free chances.
  • Candidates with disabilities are exempt from the application fee.
  • Destitute widows, as defined in the Act, are also exempt from the application fee.

Recruitment method

Section 9 of the Act outlines the method of recruitment for government services in Tamil Nadu when it involves a combination of both direct recruitment and recruitment by transfer, despite what the Special Rules for different State and Subordinate Services might specify. The specified proportion or order of filling vacancies by way of direct recruitment and recruitment by transfer, as specified in the special rules, applies only to vacancies in the permanent cadre. Direct recruitment is permitted only for those vacancies in the permanent cadre as per the special rules. These vacancies must be designated for direct recruitment. Additionally, the Section considers any temporary posts that have existed for more than five years as equivalent to permanent posts for recruitment purposes.

Qualifications for the appointment of government services in Tamil Nadu 

Sections 20 to 24 of the Act state various qualifications and criteria for the appointment of government services in Tamil Nadu. These rules are very significant in ensuring that candidates meet the necessary essentials for different posts in the state’s government services.

Qualifications

Section 20 of the Act specifies the minimum general educational qualification that is required for candidates applying for government service posts. It specifies the minimum general educational qualification, which is specified in Schedule III of the Act. 

Linguistic qualification

Section 21 of the Act states the knowledge of Tamil as the official language of the state. The Section mandates that candidates must have adequate knowledge of the Tamil language in order to apply for most government service posts. However, some provisions allow candidates to apply even if they lack adequate knowledge about Tamil, subject to passing a language test within two years of their appointment. Section 22 specifies the language test, which is a prerequisite for candidates who lack adequate Tamil knowledge. It includes:

  • An oral test for candidates with educational qualifications below the VIII Standard.  
  • A written test for candidates with educational qualifications below the VIII Standard.
  • A written test for candidates with VIII Standard and above qualifications but without adequate Tamil knowledge.

Provisions relating to certain degrees

Section 23 states the procedure for evaluating candidates who possess special qualifications. It means that if a person holds an equivalent degree or qualification to what’s required for a specific government service post, they are deemed to meet the special qualifications criteria.

Exemptions from special qualification

Section 24 provides significant relief to probationers who have already obtained certain special qualifications or passed specific tests mandated by the special rules.

Compassionate appointment age limit

Section 15 of the Act prescribes the age limit for compassionate appointments. In compassionate appointments (where a family member is considered for a government job after the death or medical retirement of the government servant), the age limits differ from the regular rules. The maximum age limit for sons or unmarried daughters is 35 years. For the wife or husband of the deceased government servant, the maximum age limit is 50 years. The age limit calculation is based on the date of the government servant’s death or the date of medical retirement before reaching 53 years. The term “sons and daughters” includes widowed daughters, divorced daughters, legally adopted children (with specified effective dates for adoption criteria), and married daughters living with the family of the deceased government servant. The widowed daughter, divorced daughter, or married daughter deserted by her husband and living with the family of the deceased government servant can only avail of this concession if they are nominated in writing by the widow or widower of the deceased government servant.

Appointment by agreement

Section 19 of the Act allows the government to make appointments to specific posts outside the usual rules and agreements if special provisions are deemed necessary. The government can enter into agreements with appointees to address specific conditions of service, pay, allowance, pension, discipline, and conduct for such posts. However, any matters not covered by the agreement will be subject to the provisions of the Act or related rules. Individuals appointed under this Section won’t be considered members of the respective service and won’t have preferential claims for other appointments in that service or any other service.

Temporary appointments

Section 17 allows for special situations where normal rules for appointing people to government jobs can be temporarily relaxed. This happens when there’s an emergency, and filling a job right away is important. In such cases, the usual qualifications for the job may not be strictly required. Instead, the person chosen should be the best fit for the job, considering the emergency. The Section further says that if there’s an investigation going on against a government officer for something like corruption, they can still be given a job temporarily until the investigation is completed, as long as no criminal charges have been filed. The person selected in such cases does not become a permanent employee, and their appointment can be ended at any time. 

Appointment of women

Section 26 of the Act focuses upon the appointment of women in dedicated institutions, stating that women alone shall be appointed, with men considered only if suitable women are unavailable. The provisions also mandate a minimum of 30% of vacancies in direct recruitment to be reserved for women, regardless of the application of reservation rules. For posts with a grade pay not exceeding rupees two thousand and eight hundred, 10% of vacancies from the 30% reserved for women are specifically set aside for destitute widows. In case qualified women are unavailable, appointments will be made within the respective categories of male candidates. The Section emphasises the reservation of positions for destitute widows and outlines the selection process in a specified rotation order. If a qualified woman is not found, the turn is passed to the next eligible male candidate for posts without reservation rules.

Posting and transfer

Section 48 of the Act outlines the rules regarding the placement and transfer of government employees within a particular service or class:

  • Members of a specific service or class may be assigned to work in any position within that service or class for which they are qualified.
  • The authority responsible for appointments also has the authority to make decisions about the placement and transfer of such employees. If this authority is not the government itself, any administrative superior to the appointing authority has the power to manage postings and transfers within their respective areas. 
  • Even if there are specific rules or regulations in place, the government has the right to refer a government employee from one revenue district to another within the state. These transfers are carried out for administrative reasons and can override other rules or special regulations.

Resignation

Consequences of resignation 

Section 49 states the consequences of a member of a government service resigning from their position, including: 

  • If a member of a government service resigns, they not only forfeit the service in the specific post they held at the time of resignation but also lose all their previous government service under the government. 
  • If such a person is reappointed to any government service, it is treated as if they are being appointed for the first time through direct recruitment. All the rules and provisions governing such an appointment apply.
  • Additionally, if a member of a government service resigns and later participates in elections as a party candidate or an independent candidate for Parliament, the State Legislature, or local bodies, they are not eligible for reappointment to any government service.

Acceptance of Resignation

Section 50 provides the implications and acceptance of the resignation of the employee, including:

  • A government servant can resign by giving written notice to the appointing authority, with a copy sent to their immediate superior officer. The notice must be given at least three months before the intended date of resignation. 
  • The government servant can withdraw his resignation before it is officially accepted by the appointing authority. Once the resignation is accepted, withdrawal is not allowed.
  • The appointing authority must issue orders on the notice of resignation before the end of the notice period. The order can either accept the resignation, with a resignation date no later than the notice’s expiration, or reject it, providing reasons for rejection. If no order is issued, the resignation is deemed to have been accepted at the end of the notice period.
  • The resignation notice given by the government servant will be accepted by the appointing authority, subject to specific conditions, including:
  1. There are no ongoing or contemplated disciplinary proceedings under certain rules.
  2. Confirmation from the Director of Vigilance and Anti-Corruption that no investigation is pending against the government servant. 
  3. There are no outstanding dues owed to the government by the government servant.
  4. There are no contractual obligations, including obligations to serve the government during the resignation period.
  • In exceptional cases where a government servant is under suspension or facing disciplinary, criminal, or vigilance investigations and wishes to resign, the appointing authority must assess the gravity of the case. If the case does not warrant the rejection of the resignation notice, it may be accepted.

Military duty to count for pension

Service members deputed for military duty, under Section 51 of the Act, can count that period towards their pension, similar to their civil service tenure. However, this doesn’t apply to those holding temporary posts under the Madras Armed Reserve Police Service Rules of 1941 who hadn’t been part of any state or subordinate services previously. Members in the Army Reserve follow rules in Appendix ‘A’ to the India Reserve of Officers, 1939, for pension related matters during their service.

Overriding effect of special rules

As per Section 68, if there’s a conflict between the rules in this Act and the specific rules that apply to a particular government service, the specific rules take precedence or are more important when it comes to that specified service. So, in case of any inconsistency, the special rules for those services are the ones that matter the most.

Appeal or Review

Section 66 states the process of appealing or seeking a review of certain orders when there are no specific provisions for appeal or review in the law or special rules. If there’s an order that someone disagrees with and there’s no clear way to appeal or review it in the law or special rules, they can still appeal or request a review. They should do this with the authority that handles appeals against dismissal orders. To make an appeal or request a review, it should be done within 2 months from when the person receives the order they’re unhappy with. The authority in charge of appeals or reviews should handle these cases within 4 months from the date they receive the appeal or review request. In some circumstances, the appellate or reviewing authority can give temporary directions to prevent any significant harm or administrative issues while the appeal or review is ongoing.

Committees on Appeal

Section 67 discusses the establishment and role of a committee on appeals. This committee is made up of important individuals, including the Vigilance Commissioner and the Secretary to the Government for Personnel and Administrative Reforms. The main functions of the committee include giving advice and supporting various matters, like seniority revisions, appeals, and reviews, where the government possesses decision-making authority. The Committee on Appeals handles certain issues like changes in job ranking, adjustments to the list of approved candidates, and appeals or reviews. The Committee consists of different members, including the chairperson, who is the vigilance commissioner and commissioner for administrative reforms, and the convenor, who is the secretary to the government in the personnel and administrative departments. When someone wants to change their seniority by modifying the list of approved candidates or appealing a decision, that case needs to be sent by the relevant government to the Committee on Appeals. The government takes the final decision after getting advice from the Committee on Appeals. 

Interpretation of Section 27(f) of Tamil Nadu Government Servants (Conditions of Service) Act, 2016

In State of Tamil Nadu v. K Shobna (2021), the case is about the appointment of postgraduate assistants in chemistry departments in the state of Tamil Nadu. The issue was that the allocation of high-scoring candidates was put in the Most Backward Class (MBC) category instead of the General category, which affected the selection of other candidates. In 2019, applications for postgraduate assistants in chemistry were invited by the Graduate Teachers Recruitment Board in Tamil Nadu. The issue arose when candidates, including the respondents, weren’t selected. They contended that MBC candidates were placed in the MBC quota without giving the general category a selection chance. The Court, while interpreting Section 27(f) of the Act, held that the Section deals with reserving vacancies that are not filled, but that doesn’t mean filling these vacancies with MBC candidates regardless of their merit. The Court further held that candidates should be placed in the general category when they are high-scoring and only after backlog vacancies need to be filled. Finally, the Court held that increasing MBC candidates will not amount to violations of reservations or provisions of the Constitution. This case decision does not affect the reservations exceeding 50 percent in Tamil Nadu.

Conclusion

The Tamil Nadu Government Servants (Conditions of Service) Act, 2016 plays a significant role in governing the different aspects of government service in the state of Tamil Nadu. The said Act establishes different issues related to reservations, transfers, promotions, application fees, probation periods, and others. The Act provides a determined framework for the candidates’ selection based on their merit and reserves certain percentages for different categories, like scheduled castes, scheduled tribes, backward classes, and women. The Act comprises a diverse and inclusive work environment in government services. The Act establishes measures like reserving a minimum of theory percent of all vacancies for women candidates during their direct recruitment. In this way, the Act gives equal importance to each gender while giving more importance to women empowerment. The Act provides accuracy and transparency by allowing any changes or amendments to established rules and notifications issued under the Act to be subject to review and approval by the Legislative Assembly as required. Thus, this Act provides fairness and equity by regulating the conditions of service for government employees in the state of Tamil Nadu.

Frequently Asked Questions (FAQs)

What is the purpose of the Act?

The Act is state legislation in Tamil Nadu that regulates the conditions of service for government servants in the state of Tamil Nadu.

What are the rules under this Act when recruitment involves both direct and transfer methods, and how does it distinguish between permanent cadre and temporary posts?

The Act consists of rules that include both direct and transfer methods. In cases where recruitment involves both direct and transfer methods, special rules apply only to permanent cadre vacancies. Direct recruitment occurs for eligible permanent cadre vacancies, while recruitment by transfer is for all other vacancies, with temporary posts exercising five years considered permanent for this purpose.  

Are there any provisions for women’s representation in government services?

Section 26 of the Act provides provisions for the appointment of women in government services, with specific guidelines for reservations. It establishes specific provisions that regulate and govern the selection of women by ensuring equal representation. The Section also intends to foster gender diversity within the public sector by providing comprehensive provisions for the recruitment of women into government service in the state of Tamil Nadu.

References


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Board composition, quality, and turnover : an insight

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This article has been written by Bhaskar Pandey pursuing a Diploma in US Corporate Law and Paralegal Studies course from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Introduction

It is essential for a company, whether it is an organisation, not-for-profit, or government body. It shapes the direction, strategy, and eventual success of a company. Governance in any educational institution begins with the combination of the board of administrators. Generally, there are boards made up of people who monitor how the organisation should make decisions, stick to their objectives, and ensure that the company’s interests are represented. These include a good proportion of members, high quality, and turnovers on the board, which are important for good governance. Through this total exploration, we can go deep into the problems of board composition, how important a high-quality board is, and the difficulties associated with board rotations.

Board composition

The qualifications, diversity, and expertise that the people on a firm’s board bring to the table constitute the composition of an organization’s board of directors. The composition of the board is a measure of an organization’s willingness to embrace diversity and ability to respond to evolving business environment parameters. The board needs to be well-rounded, which may include different perspectives, ethnicities and specialised knowledge. In most cases, this diversity could include a number of things. For instance, it ranges from gender, age, and ethnic groups, as well as knowledge about different enterprises. This is because a diverse board has fresh views on issues, enlivens decision making and represents the interests of different stakeholders in the company.

Top attributes of an effective board composition

Diversity and inclusion

The composition of boards has undergone a radical change in recent years towards increased diversity. They have been composed of people who have similar attributes. For instance, they are older males who have been in the senior management of the organisation. Nonetheless, the need for differentiation has become a normal practise nowadays.

Expertise and skills

Apart from considering demography, the composition of the board must also consider skills and expertise. There should be a number of competencies among the members of the board of directors, including financial, legal, technical, marketing and specific industries. This is done to make sure that the board provides sound stewardship and direction in all facets of operation.

Similarly, it is necessary that the experiences and educational background of the directors be consistent with the organisational tactic. For instance, technology company directors need expertise in software development, whereas directors for pharmaceutical institutions should come from healthcare practise and compliance areas. 

Independence

The first stage of proper corporate governance should revolve around independence. These independent directors are not employees of the company and, therefore, are free from any financial or emotional bias. Therefore, they need to act in line with the needs and expectations of shareholders.

The independent directors assist in the oversight of corporate governance by keeping a check on powers. These include auditing of performance of executive management and ensuring that management complies with the laws. Another factor that would be significant is the independence of the directors, particularly in light of issues surrounding any possible conflicts of interest or misconduct.

Board size

The effectiveness of boards also depends on factors such as the size of the board. They involve such huge problems that they may even undermine any meaningful action. But small boards are sometimes without sufficient variety of perspectives. Yet, at the same time, such a delicate balance needs to be maintained.

However, it is essential to note that an optimal member count for a board may vary based on the size, complexity, or sector of the firm. It is associated with board size versus company performance, suggesting not a single patterned response in the literature. However, companies should evaluate their position on an objective basis in their quest for what is suitable for them.

Board effectiveness

It’s true that not all qualities define the fines of a board, but also its efficiency in performing its functions. Robust leadership, enterprise comprehension and effective governance are inherent in high-class boards. The board directors must be able to lead and support the management team, take part in strategy formulation, and ensure risk prevention and ethical conduct in the company. By extension, board quality directly correlates with an organization’s ability to flourish in competitive business environments.

‘The effectiveness of a board is a crucial aspect of its satisfaction.’ Boards comprised of effective members have been shown to make good decisions, provide guidance on governance and add worthiness on behalf of the employer. Several factors contribute to board effectiveness, consisting of:

  • Constructive board dynamics: They encourage the development of environments of trust, respect, and constructive arguments, which helps them make better decisions. Such a culture supports open dialogue as well as diverse views that may help produce more resilient oversight.
  • Strategic focus: Boards should participate actively in strategic planning to ensure that it is aligned with the organization’s vision and long-term objectives. Strategy-oriented boards are more likely to contribute to the success of the company.
  • Performance evaluation: Regular evaluation of the board’s performance, as well as that of each director, is essential for the sake of gradual improvement.  These evaluations assist in identifying areas for improvement, thereby facilitating better decision-making.

Board turnover

The departure and recruitment of administrators have this cost in their hands. However, there must be an appropriate balance between consistency and pure vision. A turnover can fight for an extended-term vision of the board, while static tends to be stubborn towards trades and innovations. Good chaos is healthy for the company as it brings in new ideas, checks the powers of different parties within the board and makes sure the board continues to represent the evolution of the organisation itself in relation to the changing missions.

Planned succession

Planned board turnover is a proactive way to make sure the board remains efficient and relevant. The process involves systematically identifying and recruiting new board members who possess the desired skills and expertise to replace retiring or departing members. Through planned succession, companies are able to eliminate instances of sudden voids in leadership and strike an appropriate board balance.

It should be clear that the board has outlined a succession plan where the selection criteria of the new directors, their process of nomination and appointment and the timescale for their replacement have been laid down. Board turnovers are actively organised to facilitate the seamless succession of leadership within the governance structure.

Reasons for turnover

The turnover of a board may take place as a result of either planned or unplanned reasons. Some common factors contributing to turnover include:

  • At the end of their terms or when they decide to step down, planned replacements ought to be in place so that they take over their vacated positions.
  • Term limits: To enforce fresh perspectives and avoid entrenchment, many organisations impose term limits on directors.
  • Performance issues: Directors who continuously do not meet their duties or do not contribute effectively to the Board might be asked to leave the Board.
  • Conflict of interest: The derision may include the resignation; other removal of personal derision may include the resignation; other removal of personal derision may include the resignation other removal of personal derision may include the resignation other removal of personal derision
  • Company performance: The process of board turnover can be triggered by the decline in a company’s financial performance and reputation; for example, shareholders strive to change leadership due to poor corporate results.

Challenges and benefits

However, board turnover comes with some challenges. These may lead to disruption of board dynamics and the decision-making process since newly appointed directors would require a period in which they familiarise themselves with their roles. However, when managed effectively, board turnover can bring several benefits, including:

  • Fresh perspectives: New executives can introduce new ideas and fresh perspectives, aiding in the change of market situations and evolving trends in the respective industry.
  • Expertise: Board turnover helps to address expertise gaps as well as realign the makeup of the board with the strategic needs of the company.
  • Enhanced diversity: Planned turnover can be a very effective approach for improving board diversification by actively recruiting people from underrepresented groups.
  • Improved governance: Routine rotational management would keep things moving and encourage an accounting culture with more transparency.

Best practices in board turn-over

To ensure that board turnover is a positive and constructive process, companies should adhere to best practices, which may include:

  • Regular assessments: Carry out perennial assessments of the board’s performance, pinpointing areas where improvement is required and determining whether individual directors still satisfy the requirements necessary for the company.
  • Ongoing recruitment: conduct a reservoir of potential director candidates and consistently evaluate their credentials and fitness for board service.
  • Succession planning: Develop a strong succession plan with a schedule of transition dates, criteria for selecting new directors, and a process of induction and mentorship for new directors.
  • Open communication: Provide transparent reasons for decisions made on board turnover and engage with shareholders in an open culture of communication about their concerns.

Conclusion

It is directly linked to board composition, quality, and turnover, which are essential for effective corporate governance and long-term business success. Such a well-comprised board, which values diversity, independence, and expertise, is better placed to provide guidance and oversight and make informed decisions. Quality boards exemplify effective governance practices, promote lifelong learning, and foster development that ensures strategic focus. While board turnovers may pose challenges, it is vital to ensure that boards are agile, responsive, and aligned with the organization’s direction. This planned turnover, guided by best practices, can introduce fresh perspectives, expertise, and diversity to the board, ultimately strengthening organizational governance and performance. Boards that ensure composition, quality and turnover will be far better as they navigate through difficulties, capture opportunities and support sustainable advancement.

References

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Contracts and the Doctrine of Restitution : an overview

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Revision

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

Introduction

On September 1, 1872, the Indian Contract Act came into force. The word ‘contract’ has been interpreted from the Latin word ‘constructus’ which means ‘to bring together’. The contract law is based on the principle of ‘Pacta Sunt Servanda’ which means ‘agreements must be kept’.

 This article has been edited and published by Shashwat Kaushik.

The law of contracts is a civil law that regulates contractual obligations between parties. This Act is based on English Common Law, consisting of judicial precedents. It is not exhaustive, as it does not concern all the branches of the law of contracts. It is a substantive and codified law. The parties are referred to in the contract as the defendant and claimant. The person proposing is called the “promisor,” and the person accepting the proposal is called the “promisee.”

History of contracts

In primitive societies, the concept of contract was not developed. Primitive society follows the barter system, which means the exchange of goods. For ex- a farmer may exchange a tonne of rice for a pair of shoes from a shoemaker. The barter system is based on “quid pro quo,’’ meaning something for something. The principle of contract is derived from different origins of Hindu law, namely the Vedas, the Dharma Shastra, the Smritis, and the Shrutis, which give descriptions of the law similar to contracts.

At the time of Muslim rule in India, all concepts belonging to contracts were commanded under the Mohammedan Law of Contracts. The word contract in Arabic is called “Aqd,” which means conjunction. It indicates the conjunction of proposal, which is called “Ijab,” and acceptance, which is called Qabul. In a contract, there should be two parties; one party should make a proposal and the other accept it, and the minds of both parties/meetings of minds, agree on the same matter in the same sense.

Slowly, society developed, and division of labour took place due to the increase in the needs of people and changes in lifestyle. With the increase in industrialization, commercialization, modernisation, and globalisation, people started to enter into contracts, breaches of contracts took place and disputes arose. To overcome this problem, we needed a set of rules. In this way, the formation of the Indian Contracts Act took place.  

Meaning of contract under the Indian Contract Act, 1872

Section 2(h) deals with a contract; an agreement enforceable by law is a contract. A contract is an agreement that lays down the rights and liabilities towards parties. When two people agree upon something in the same sense and in the same manner, it is called a contract.

Illustration: Person A agrees to sell his house to Person B for 50 lakhs, and B agrees to buy A’s house for 50 lakhs. A formed a contract with B

An agreement that is defined under Section 2(e) of the Indian Contract Act 1872. Every promise and every set of promises forming consideration for each other is an agreement. Section 10 of the ICA deals with what agreements are contracts.

All agreements are contracts if they were made for: 

  • Free consent of parties (Section 13-22 ICA 1872)
  • Competent to contract (Section 11-12 ICA 1872)
  • For lawful consideration and (Section 2(d), 23 -25 ICA 1872)
  • With a lawful object and not expressly declared to be void under Indian Contract Act 1872 or any other law. (Section 26-30 ICA 1872)
  • Parties having legal Intention

Differences between an agreement and a contract

AgreementContract
MeaningWhen a proposal is given by one party and accepted by another party with lawful consideration, an agreement is formed.An agreement that is enforceable by law is a contract.
EssentialsProposal and acceptance.Enforceable by law is a contract (Section 10 gives essentials for enforceability of the Indian Contract Act of 1872).
Defined inSection 2(e)Section 2(h)
Legal obligationThere is no legal obligation in the agreement.There is a legal obligation.
ScopeWideNarrow

All contracts are agreements, but all agreements are not contracts   

This was quoted by Anson, “all contracts are agreements but all agreements are not contracts.” This means that in order for an agreement to be considered a contract, it must meet all of the essential elements of a contract. These elements are:

  1. Offer and acceptance: There must be an offer made by one party and an acceptance of that offer by the other party.
  2. Consideration: Each party must give something of value in exchange for the other party’s promise.
  3. Intent to create a legal obligation: Both parties must intend for their agreement to be legally binding.
  4. Capacity to contract: Both parties must be legally capable of entering into a contract.
  5. Legality: The subject matter of the contract must be legal.

If an agreement does not meet all of these elements, it is not considered a contract. For example, if someone offers to sell you their car for $100, but you do not accept the offer, there is no contract. Similarly, if you agree to give someone $100 for their car but they do not intend for the agreement to be legally binding, there is no contract.

This principle can be compared to the statement, “all cats are animals but all animals are not cats.” Just as not all animals are cats, not all agreements are contracts. However, all contracts are agreements.

Types of contracts

  • Valid contract – When all the ingredients of Section 10 of ICA 1872 are fulfilled, it is called a valid contract and it is enforceable by law.
  • Void contract or agreement- Section 2(j) of the ICA 1872 Act deals with a void contract as “a contract which is not to be enforceable by law becomes void contract or agreement when it stops to be enforceable.”  
  • Voidable contract- As defined in Section 2(i) of the ICA 1872, “an agreement which is enforceable by law at the option of one or more parties, but not at the option of the other parties, is a voidable contract.” When one party has the option to get it declared void by a court of law or otherwise.
  • Void agreement- Void ab initio. It means it never becomes a contract. Void from the beginning (contract with a minor).

The doctrine of restitution in Indian law

Meaning of restitution

The word restitution means to restore the benefits that a person has obtained.

According to the Merriam Dictionary: A legal action serves to cause the restoration of a previous state.

According to the Black Law Dictionary: Unjust enrichment means money obtained that is not a gift that the beneficiary needs restitution for. Thus, restitution means restoring the benefits that a person has obtained 

Object of restitution

  • To restore the plaintiff’s position in the contract to the original position that he enjoyed before entering into the contract.
  • To prevent the unjust enrichment of the defendant and stop him from making wrongful gains from the contract, which he is not entitled to as per the law.

Illustration- A gives Rs 1,000 to B in consideration of B’s promise to marry C, A’s daughter. C was dead at the time of the promise. The contract is void, but B has to pay A Rs 1,000.

The doctrine of restitution in Indian law

The doctrine of restitution is conferred under Section 65 of the ICA 1872. It conferred the obligation upon the person who had received some benefits under a void agreement. This section starts with the words ‘When an agreement is discovered to be void, or when a contract becomes void’, the doctrine of restitution comes into the picture. The doctrine is based on the rule of consideration, which means that if a person pays something at the beginning of an agreement and the contract later becomes void, then the paid money should be returned to the plaintiff (the party who pays the money). The contract is void ab initio—void from the very beginning.

Section 65 of the Indian Contract Act 1872

As per Section 65 of the Indian Contract Act 1872, there is an obligation on a person who has received an advantage under a void agreement or contract that becomes void. When an agreement is declared to be void, or when a contract becomes void, any person who has received any advantage/benefits under such an agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it.

Essentials of doctrine of restitution

  • One party must enter into a contract with another party with lawful consideration.
  • There must be some lawful consideration.
  • Both parties must be competent to contract, as per Section 11 of the Indian Contract Act.
  • One party was unsuccessful in performing his part of the contract obligation or the contract became void due to unforeseen conditions.
  • The party that has paid any consideration as an advance before the contract becomes void to another party is entitled to receive an unfair advantage over it.

Difference between restitution and compensation

CompensationRestitution
Compensation is the amount for a loss or injury suffered by the plaintiff during the business defendant’s actions. Thus, Compensation is the amount the innocent party lostRestitution is the amount that the defendant gained under a void agreement or contract that becomes void. When an agreement is declared to be void, or when a contract becomes void
Compensation refers to the act of compensating a person who is unable to perform his part of the contract.Restitution refers to the act of restoring a person to his/her former position and/or returning something to its rightful owner.
Section 2(d) defines compensation under the Indian Contract Act 1872The concept of restitution refers to Section 65 of the Indian Contract Act 1872.

The doctrine of restitution in England 

The doctrine of restitution was first developed in court during the 17th century as a contractual obligation. Later on, the concept migrated to the courts of the United States and slowly expanded throughout the country. Today, the Court applied restitution in the areas of maritime, criminal law, and tort.

In Halsbury’s Laws of England, Miles stated, “Any civilised device of regulation is sure to offer treatments for cases of what has been referred to as unjust enrichment or unjust advantage, that is, to prevent a person from retaining the money of, or some benefit derived from, every other which it’s miles against conscience that he has to hold.”

In law, the term restitution is used in three ways: 

  • Return of some specific thing to its rightful owner.
  • Compensation for the loss caused to another.
  • Compensation for the benefit derived from a wrong done to another.

Exceptions to doctrine of restitution

Exceptions to doctrine of restitution are:

  • The doctrine will not be applied in cases where an agreement is void for example, when an agreement is made for an illegal act. For example, if A will pay B 10,000 if B gives a slap to Z and A gives 500 as an advance to B, it is impossible to perform, and A can’t recover even his Rs 500.  
  • If a contract is entered into by an incompetent person who is suffering from intoxication or insanity, then this doctrine does not apply. For example, when there is an agreement between the minors, the doctrine of restitution will not be applied.
  • If the contract is void ab initio, then Section 65 is not applicable.  
  • When there is no agreement or contract between the parties, the doctrine of restitution will not be applied.

Case laws

Mohini Bibee vs. Dhurmoda Ghose (1903)

In the present case, Dharmodas Ghose, a minor, entered into an agreement with Brahmodutt, who is a moneylender, to secure a mortgage of Rs 20,000. At the time of the whole transaction, the attorney, who acted on behalf of the moneylender, was aware of the fact that Dharmodas was a minor. Later on, a minor brought an action against the defendant, stating that he was a minor when the mortgage was done between Dharmodas Ghose and Brahmodutt, and, therefore, the mortgage became void and inoperative because he was a minor while making the contract. The plea was filed by way of Brahmodutt’s executors and they contended that the minor represented his age fraudulently; therefore, the law of estoppel should apply.

After considering the facts of the case, the Privy Council found that the contract with the minor was void from the outset, that is, invalid. The court also sustained the defendant’s arguments that first estoppel did not apply as Brahmadatta’s counsel, Dharmodasa, knew minority facts and secondly, Sections 64 and 65 of the Indian Charter did not apply as there was no contract in the first instance.

Thus, the prior construction of the minor’s contract is invalid and void ab initio in the present case

S.M. Deshmukh vs. Ganesh Krishnaji Khare (1973)

In this case, it was held  by the Bomaby High Court that the doctrine of restoration is based on the principle that courts should be careful that the action of the court does not cause any injury or injustice to the suitors. The duty or power of the court to grant restitution lies within the full discretion of the courts to act fairly and equitably in the circumstances of all the parties.

Conclusion

The doctrine of restitution is a legal principle that restores the injured party to their original position before entering into a contract. This can be done by requiring the other party to return any benefits they received under the contract or by compensating the injured party for their losses.

There are a number of different situations in which the doctrine of restitution may be applied. For example, if one party to a contract makes a misrepresentation, the other party may be entitled to restitution if they relied on the misrepresentation and suffered a loss as a result. Similarly, if one party to a contract breaches the contract, the other party may be entitled to restitution for any losses they incur as a result of the breach.

The doctrine of restitution is based on the principle of unjust enrichment. This principle holds that a person who has been enriched at the expense of another person is required to make restitution to the other person. In the context of contracts, the doctrine of restitution prevents one party from benefiting from a contract that was entered into as a result of fraud or misrepresentation.

The doctrine of restitution is a powerful tool that can be used to protect injured parties. It can help to ensure that those who have been wronged are made whole and that those who have been unjustly enriched are required to give back what they have taken.

References

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Legal aspects of nursing

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This article is written by Shivani. A. It provides a detailed analysis of the legal aspects of nursing. The article discusses the history of nursing and the offences related to nursing in torts as well as in the Indian Penal Code, 1860. The article also provides insights with respect to the consequences of the offences committed by nurses and also the defences which are available to nurses under various provisions of the Indian Penal Code, 1860. Further, it contains various judicial pronouncements pertaining to the negligence of medical practitioners and frequently asked questions related to the topic.

It has been published by Rachit Garg.

Table of Contents

Introduction

Medical professionals and caregivers indeed have one of the most important jobs in the world. Nurses play a crucial role in ensuring the health and well-being of their patients. As quoted by Florence Nightingale, “Nursing is an art: and if it to be made an art, it requires an exclusive devotion as hard a preparation as any painter’s or sculptor’s work.” The profession of nursing is such that nurses must abide by the standard duty of care which is expected to be followed by them, else, they might be subject to legal action against them. Since the profession in itself is so important, the nurses sometimes have to make decisions and perform tasks that might result in legal action being instituted against them. Hence, in order to prevent such circumstances, it is pertinent to ensure that the nurses are educated and aware of the laws and statutes which are directly related to the nature of the job that they perform. It is also vital for them to follow certain legal and ethical standards for maintaining the safety, trust and dignity of the patients. This article therefore provides a comprehensive analysis of the legal aspects of nursing, various kinds of liability of nurses and the remedies available to the patients. For this, the article has analysed provisions mentioned in the Indian Penal Code, 1860, the Indian Nursing Council Act, 1947,  the Consumer Protection Act, 2019, the Mental Health Act, 1987, Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, etc. The article also analyses various case laws pertaining to the topic.

History of nursing

The profession of nursing gained significance in 1854 during the period of the Second World War. This was a period during which Florence Nightingale was asked to go to the main theatre of war as there was the death of around fifty percent of the wounded soldiers due to the absence of servers, lack of supplies, food and absence of nursing facilities. After she and her team reached the place, they made sure that they brought significant improvement and brought down the death rate of the soldiers to 2.2 percent.

Florence Nightingale always advocated for the training of nurses and was of the view that the nursing services should always consist of nurses who have undergone special training. Some of the concepts preached by her are as follows:

  • There should always be a professional relationship between doctors and nurses.
  • The nurses should be trained in such a manner that they are capable of nursing the patients in hospitals as well as taking care of sick people in homes.
  • The nurses should also be able to teach good health practices to their patients.
  • A substantial amount of knowledge pertaining to nursing should be taught to the nurses during their training.

The increase in the role of nurses after the Second World War and also the increase in the number of legislations pertaining to the profession made the people realise that even nursing had its own independent identity as a profession and is not merely adjunct to the profession of a physician or a surgeon. A famous Canadian doctor, Sir William Osler, expressed his view that the profession of nursing is equally important to that of a physician and a surgeon and is in no way inferior to them. He also claimed that nursing is one of the greatest blessings for humankind.

Legal scenario of nursing

It is pertinent to note that like law relating to many other subjects, the law related to nursing also cannot be found in a single enactment and many sources need to be referred to have a clear understanding of the same. In order to understand the intricacies of the law related to nursing, one must refer to the following sources:

  • The central enactment on the subject
  • The state laws

The Central Act

The only central legislation pertaining to nursing in India is the Indian Nursing Council Act, 1947. However, this Act doesn’t provide any details regarding the rights and responsibilities of nurses. Instead, it mainly focuses on the education, training and examination of nurses. Section 12 of the Act deals with the training and examination of nurses. It states that any authority in any state which is qualified to grant recognized qualification will furnish the information related to the qualifications which must be obtained by nurses, the courses which must be studied by the nurses, the examinations which must be passed by the nurses to fulfil the qualifications whenever the council required the authority to do so. 

Section 15A of this Act provides details regarding the Indian Nurses Register and provisions of this Act are only limited to the formalities of registration and do not extend beyond the same. Section 15B of the Act states that all the state councils should submit 20 printed copies of the state register to the national council before the 1st of April each year. The state council should also keep updating the state register regarding all the additions and other amendments from time to time.

They do not deal with disciplinary proceedings for misconduct. The main object of this Act is to provide nurses with appropriate education and aims to create a council to achieve this objective. Also, it doesn’t have provisions to prohibit the practice of nursing by unregistered persons, nor does it lay down any code of ethics which has to be followed by the nurses. The Act was amended in 1957, however, the amendment failed to expand the scope of the Act. 

State Acts

In India, the legislation enacted by the individual states is considered to be very important for the professional conduct of nurses. The legislatures of many states have enacted their own laws on nursing which are applicable only in that particular state.

For example, The Bengal Nurses Act, 1934 is the law made by the Legislative Assembly of Bengal. This Act contains all provisions related to the aspects of nursing like the establishment of the State Nursing Council, registration of nurses, removal of names of nurses from the register, procedure for conducting disciplinary proceedings against the nurses, etc. The Maharashtra Nurses Act, 1964 and the Karnataka Nurses, Midwives Health Visitors Act, 1961 are a few other similar Acts of other states. 

Liability in common law

The study of uncodified law also plays an important role in understanding the law related to nursing in India. It helps a person understand how a nurse becomes liable for professional negligence under torts or civil wrongs. In common law, the liability of the nurses arises out of a breach of duty of care which makes them liable to pay compensation to the victim. 

Also, as per common law, this duty of care does not arise out of a contract between the nurse and the patient. Rather, it is based on the general principles of the law of torts. The amount of duty of care which should be exercised by the nurse can be determined by observing the duty of care a reasonable man would exercise under similar circumstances. If the standard of care exercised by the nurse is the same as that of a reasonable man under similar circumstances, the nurse will not be held liable. Else, the nurse will be liable to pay compensation to the patient.

It was held in the case of Michael Hyde & Associate v. J.D. Williams & Co. Ltd. (2001) that, “Whenever there is a conflict as to what is the acceptable standard of conduct, then, the competence of the defendant has to be judged based on what would be considered as the lowest standard that would be considered as acceptable.”

According to Halsbury, these general principles are not only applicable to surgeons and physicians but also to all other people who give medical advice or treatment like dentists, nurses, midwives, etc.

Offences in tort vis-a-vis nursing

A tort refers to a civil wrong, whose commission or omission leads to a person being liable to pay damages or monetary compensation rather than imprisonment. Torts can be classified into two kinds:

  • Intentional torts
  • Negligent torts

Intentional torts

Though generally, the intention of a person is irrelevant in deciding the liability of a person in torts, there are some torts for which the intention of a person is considered. In these types of torts, it is believed by the court that the person committing the tort is aware that the act committed by him will result in some kind of injury to others. Hence, these torts are called intentional torts. Some of the intentional torts are as follows:

Assault and battery

Assault is said to occur when a person intentionally puts another person in a reasonable apprehension of being subjected to imminent and harmful contact. Battery is said to occur when a person engages in intentional physical contact with another person which is harmful and without the consent of the person being subjected to such contact. 

Illustration: A patient can refuse medication or treatment which is administered to him. If a nurse forcefully makes the patient undergo the treatment or medication, without the consent of the patient, it can be considered assault or battery. However, if the treatment is provided by the nurse in good faith, in an emergency situation to protect the patient’s life, it will not be considered assault even if the treatment is administered to the patient without his consent.

In the case of Ram Bihari Lal v Dr. J. N. Srivastava (1985), a patient was suspected to have appendicitis and was thus operated on by the doctor after obtaining the consent of the patient. However, during the operation, it was discovered by the doctor that the patient did not have appendicitis, rather, he had some problem with his gall bladder and thus removed it in the interest of the patient. Later, it was observed that the kidney of the patient was damaged due to the operation. It was held by the High Court of Madhya Pradesh that the doctor was liable as the first priority must be given to the autonomy of the patient and the doctor had acted without obtaining the consent of the patient. When he proceeded to remove her gall bladder, he was acting sans valid consent, which was an extreme case of professional paternalism and gross disobedience to the right of the patient’s autonomy.

False imprisonment

False imprisonment is said to be committed when a person wrongfully restrains another person in such a manner that the person is wrongfully confined within a bounded area. It does not require the usage of physical force by the wrongdoer. It is sufficient if the person being confined has no reasonable means to escape and if he is being confined without his consent. Also, the time for which a person is confined is irrelevant.

The restraints which are imposed on a person can be physical, chemical or verbal. Nurses must ensure that they follow the policies of the agency pertaining to the restraints which can be imposed on a patient and should also carefully monitor the patients who are restrained. Chemical restraints include administering any kind of drugs which restrains the patient from any kind of movement. Usage of Pro re nata (PRN) medication comes under the ambit of chemical restraint and must be supported by clear documentation permitting the usage of such medicines. The term ‘Pro re nata’  is a Latin word which literally means ‘as needed’. It refers to those medicines which should be taken only under certain circumstances and should not be used regularly. Such medicines are generally administered to treat symptoms that occur every now and then like pain, insomnia, etc. Verbal threats against a patient to ensure that he stays under the supervision of the nurses also amount to false imprisonment and must be avoided.

Generally, most of the cases pertaining to false imprisonment can be observed against patients who have psychological conditions or those patients who are unable to pay their bills post treatment. Even such patients are entitled to file a suit of false imprisonment. However, if a hospital or any of its employees detains a patient in the hospital due to reason that he is suffering from a contagious disease, it cannot be considered as false imprisonment. Also, if the doctors feel that a patient undergoing a psychological issue might cause any sort of harm to himself or to any other person if he leaves the hospital, he can be forced to remain within the hospital. Additional information pertaining to the use of restraints is mentioned here.

Privacy and confidentiality

Confidentiality is the right of an individual which entitles him to protect the information about his health and keep it private. Invasion of privacy refers to the intrusion into the personal life of another person without any reasonable and just cause. Whenever such a situation occurs, it entitles a person whose privacy has been violated to bring a lawsuit against the person who violated his right.

The Medical Council of India’s Code of Ethics Regulations protects patient confidentiality by stating that the physician shall not disclose the secrets of a patient that have been learnt by him in the exercise of his or her profession. However, a medical practitioner may disclose the same in the following circumstances:

  • In a court of law under orders of the presiding judge, 
  • in circumstances where there is a serious and identified risk to a specific person or community or,
  • in case of notifiable diseases.

The right to privacy of a person helps him to be free from unwanted publicity and also advocates for the right of a person to live his life without publishing any intricate details of his life against his will. Hence, this imposes a duty on hospitals, physicians as well as nurses to refrain from divulging information about patients from medical records to improper sources. If any hospital or any staff of a hospital divulges the information of any patient, they will be liable for invasion of privacy. 

However, there are certain circumstances like a patient suffering from communicable diseases, child abuse, elder abuse, gunshot wounds, etc, in which the hospital has to disclose the information of a patient and they will not be liable for breach of privacy. Section 13 of the Mental Health Act, 1987 states the circumstances in which there is no breach of privacy when a patient is made to disclose his private information. It provides that an Inspecting Officer may require any psychiatric hospital or nursing home to produce any records of a patient and may also conduct a private interview of the patient if the Officer feels that the patient is not provided with proper care and treatment or when the patient has complained that he is not receiving pepper treatment. The Inspecting Officer may report the matter to the licensing authority if he is satisfied that any patient is not receiving proper care in the hospital and this will not amount to breach of privacy of the patient.

In the case of Mr. X v. Hospital Z (1998), the appellant was diagnosed to be positive for Human Immunodeficiency Virus (HIV) when he attempted to donate blood at the respondent hospital. The hospital disclosed this information to the Appellant’s fiance which led to his marriage being called off. The appellant contended that the disclosure of such information amounted to a breach of privacy and was against Article 21 of the Constitution. The Supreme Court held that the right to privacy and confidentiality of the appellant was not enforceable in the instant case as the disclosure of information was to avoid the spreading of the disease to the appellant’s fiance and was only done to save her from being infected with a dreadful disease.

For more information pertaining to privacy and confidentiality, click here.

Defamation 

Defamation is said to occur when a person makes any false communication, shaming or ridiculing another person in such a manner that it causes the person being ridiculed to suffer damage to reputation. Even though a person is entitled to the right to freedom of speech and expression under Article 19(1)(a) of the Constitution, he does not have the right to defame a person as defamation is a reasonable restriction under Article 19(2)

Defamation can be classified into two types: slander and libel. Whenever a person defames another person by spoken words, it is called slander. Whenever a person defames another in writing or visual representation, it is termed as libel. To make a person liable for slander, the plaintiff must prove actual damages. However, with libel, no actual proof of damages is required to prove the liability of the defendant. The court will presume the liability of the defendant in libel. Also, no proof of actual harm to the reputation of the plaintiff is required when the statement made by the defendant is such that it affects the profession or business of the plaintiff. 

The medical profession is based on the trust and confidence of the patients in their doctors and nurses. Therefore, whenever a patient discloses any personal information about his condition to the doctor, and the doctor releases such information to any third party only to warn the third party about the condition of the patient, there have been instances in which the patients have claimed that such revelations made by the doctors amounted to defamation. However, this is not defamation unless the information disclosed by the doctor is not true. 

For example, in the case of Mr. X v. Hospital Z, the communication made by the doctor to the fiance of Mr. X cannot be considered as defamatory as it was made by the doctor in good faith to prevent the spreading of the HIV disease to his fiance and the doctor had no ill will towards the patient.

Therefore, there are certain defences which can be claimed by the medical practitioners to avoid liability under defamation. If the medical practitioner proves that the statement made by him is true, he will not be liable for defamation. A privileged communication is also outside the scope of defamation. Also, in both defences, the statement must be made by the medical practitioner in good faith and in the absence of malice or ill will towards the patient. 

Misrepresentation and Fraud: 

Fraud or misrepresentation can occur when a patient is deceived by a nurse for personal gain. A nurse may be charged with fraud when he or she documents procedures which were not performed on the patient at all or when he or she alters the documentation of a patient to conceal any sort of errors which were committed on the patient during the procedure. A nurse can be liable for civil as well as criminal charges for committing fraud. The hospital might also be liable along with the nurse for committing such an act.

In the case of Susan Meek. V. Southern Baptist Hospital of Florida, Inc. (2003), the patient was admitted to the hospital for a hysterectomy and started bleeding after surgery. The physician told the nurses to perform frequent leg examinations on the patient. However, the patient claimed that the examinations were not performed as a result of which the patient suffered nerve damage. There was no information as to whether the examination was performed by the nurses as there was no documentation supporting the same. Hence, in this case, the hospital was held liable and had to pay her $1.5 million in damages.

Negligent torts and nursing

Negligence

The term negligence refers to failure to exercise a duty of care which would have been exercised by a reasonable person under similar circumstances. A person is considered to be negligent when he does something that a reasonable person would believe to be an unreasonable risk to a person or property without any intention to do so. In nursing, the liability of nurses for negligence is very vast and is somewhat an uncharted topic. The standard of care required by nurses is abstract and it varies according to the facts and circumstances of a case. 

A nurse is generally liable for the negligent acts committed by her. A hospital or nursing home is also responsible for the negligence committed by the nurse when the act is done in the course of employment. Whenever a nurse is supplied to a hospital by an organisation and the nurse commits a negligent act, the liability of the organisation will depend upon the terms of the contract between the organisation and the nurse. However, a nurse will not be liable if the act which was considered to be negligent was committed by the nurse as per the instructions of a surgeon, physician or anaesthetist concerned.

Illustration: If a nurse fails to monitor a patient’s vital signs properly because of which the patient goes into cardiac arrest, the nurse will be liable for negligence even if the nurse followed all of the standards of care.

In the case of Laxman Balkrishna Joshi v. Trimbak Bapu Godbole And Anr (1968), the Respondent’s son, suffered a fracture in his leg and was moved to the Appellant’s hospital for treatment. The Appellant instructed his assistant to give his patient two doses of an injection, but only one dose was administered which led to the death of the patient. A suit was filed against the Appellant. The Supreme Court held that if the doctor does not act with due care, he will be liable even if he has acted with the consent of the patient. 

Malpractice and nursing

The tort of malpractice is very similar to negligence. Malpractice is said to occur when a medical practitioner fails to comply with the standards required by his or her profession resulting in harm to a patient. The term ‘malpractice’ includes four elements:

  • Duty of care
  • Breach of duty
  • Injury
  • Proximate cause

The first element which must be proved by the plaintiff to claim damages under malpractice is the standard of duty of care. This is the easiest element to prove. This is because the duty of care can be ascertained by simply establishing the relationship between the patient and the nurse at the time of occurrence of the injury. This relationship is presumed to exist by merely having a patient on a unit.

Illustration: If a nurse walks past a room and a patient who is not assigned to the nurse asks the nurse for help and the nurse thereby helps him, a relationship gets established simultaneously. However, if the nurse denies help to the patient and the patient suffers harm because of such denial, the nurse will be held liable and the defence that the patient was not assigned to the nurse cannot be claimed by the nurse. This is because a patient has the right to rely on the nursing staff to protect his interests at all times.

The second element which must be proved by the patient is that there was a breach of duty by the nurse. Once the patient has established that there was a duty of care which had to be exercised by the nurse, it is necessary for the patient to demonstrate that there was a breach in the duty of care exercised by him and that the nurse had deviated from the acceptable standards of practice. The patient must prove that the nurse did something that a reasonable nurse would not have done and failed to do something which a reasonable nurse would have done under similar circumstances. 

Injury is the third element to constitute the tort of malpractice. The term injury refers to bodily injury. If no injury is caused to the patient, the nurses will not be liable for the tort and the patient will not be entitled to claim for compensation or damages. To receive damages, the plaintiff must prove that some kind of harm was suffered by him due to the negligent act of the nurse.

The fourth element to constitute a tort of malpractice is proximal cause which is also called causation. There must be a logical link or foreseeability between the act of the nurse and the injury suffered by the patient. ‘But for’ test can be used to ascertain whether there is a proximate link between the act of the nurse and the injury suffered by the patient. This test states that ‘but for the act of the nurse, the injury would not have occured’. Mere departure from the procedure which must be followed doesn’t lead to liability of a nurse if there is no proximate cause.

As per this test, the act of the nurse should be the cause of the injury sustained by the patient and there should be no intervening cause between the act of the nurse and the injury sustained by the nurse. However, even in the presence of an intervening cause, if the act committed by the nurse is the main cause for the injuries of the patient, then, the nurse will be held liable.

In the case of Barnett v. Chelsea & Kensington Hospital (1969), Mr. Barnett visited the hospital as he was suffering from severe stomach pains, vomiting, and diarrhoea. The doctor prescribed him some pain killers believing that he was only suffering from a stomach bug. The same night, Barnett died due to arsenic poisoning. A case was filed against the hospital for medical negligence. 

The court applied the ‘But for’ test in this case. The court asked: “But for the doctor’s negligent conduct, would Mr. Barnett have died?” The evidence in the present case showed that even if the doctor had diagnosed arsenic poisoning and had prescribed him some medicines, the condition of Mr. Barnett was so severe that he would have still died. Hence, the court held that the doctor was not liable for medical negligence as the ‘But for’ test was not satisfied.

Offences in the Indian Penal Code vis-a-vis nursing

The entire criminal jurisprudence is based on the maxim, ‘Actus non facit reum nisi mens sit rea’ which literally means that an act cannot be considered as an offence under criminal law unless it is done with ‘Mens rea’ or a ‘guilty mind’. Hence, the main element that distinguishes an act of a medical practitioner under torts from that of a criminal act is the presence of a guilty mind or intention of the person at the time of commission of the act.

There are various provisions under the IPC which deal with criminal acts committed by medical practitioners. The concept of medical negligence has been provided under the following sections of the IPC:

Section 304A IPC

Criminal litigation

This section deals with the cases in which death is caused due to a negligent act. It is also known as medical negligence or criminal negligence. It states that if a person commits a rash or negligent act towards a person in such a manner that it amounts to culpable homicide, then, the person who commits the act will be liable for imprisonment for a term which may extend to two years or fine or both.

In the field of medical practitioners, if a nurse commits a rash or negligent act towards a patient in such a manner that it amounts to culpable homicide, then, the nurse will be liable for medical negligence under this Section. Professionals such as medical practitioners are expected to profess certain special skills. Whenever such a professional violates the duty of care which had to be exercised by him with respect to such special skill, then, he is considered to be liable for professional negligence. However, it is not necessary that the professional should be an expert in the branch that he practises.

However, it was held in the case of Kurban Hussein Mohomedalli Rangawalla v. State of Maharashtra (1965) that, “For a person to be liable under Section 304A of IPC, it is necessary to prove that the death of the person should be a direct result of the act committed by the accused and it should be the proximate cause of the death without any intervening cause. It must be causa causans; it is not enough that it may have been the causa sine qua non.”

In Samira Kohli v. Dr. Prabha Manchanda & Anr. (2008), a 44-year-old patient was complaining of menstrual bleeding for 9 days and underwent an ultrasound test. She was advised to take a laparoscopy test under general anaesthesia. The patient, while under general anaesthesia, was subjected to a laparoscopic examination. The doctor then took the consent of her mother who was waiting outside the operation theatre and removed the uterus, ovaries and fallopian tubes of the patient. It was held by the court that when the consent of the patient has been obtained for a particular operation, the doctor cannot consider the same as consent for additional unauthorised procedures like the removal of an organ even though it is beneficial for the patient if there is no imminent threat on the life of the patient.

Section 337 IPC

This section deals with the causing of hurt to a person. It states that if a person commits an act in a negligent or a rash manner such that it endangers the life of a person, then, the person committing the act will be liable for imprisonment for a term which may extend to six months or for a maximum fine of Rs. 500 or both. The term ‘hurt’ is defined under Section 319 of the IPC. It states that a person is said to cause hurt when that person causes bodily pain, disease or infirmary to another person.

Therefore, if a nurse performs any of his or her functions in a negligent or a rash manner such that it endangers the life of the patient by causing bodily injury, disease or infirmary to the patient, the nurse will be liable for causing hurt to the patient under this section.

Illustration: If a nurse, who is authorised to provide injection to a patient, performs the act negligently and thereby uses a contaminated syringe which causes the patient to develop some kind of a disease, the nurse will be liable for hurt under Section 337.

Section 338 IPC

This section deals with the causing of grievous hurt to a person. It states that if a person causes grievous hurt to another person by committing an act in a rash or negligent manner such that it endangers the life of the person, the person committing the act will be liable for imprisonment for a term which may extend to two years or with a fine of maximum Rs. 1000 or with both.

The term ‘grievous hurt’ is defined under Section 320 of the IPC. It states that, only the following acts can be considered as grievous hurt: 

  • Emasculation
  • Permanent privation of the sight of either eye.
  • Permanent privation of the hearing of either ear,
  • Privation of any member or joint.
  • Destruction or permanent impairment of any member or joint.
  • Permanent disfiguration of the head or face.
  • Fracture or dislocation of a bone or tooth.
  • Any hurt which endangers life or which causes the sufferer to be during the space of twenty days in severe bodily pain, or unable to follow his ordinary pursuits.

Therefore, if a nurse commits any of the acts mentioned in Section 320 in a rash and negligent manner thereby endangering the life of the patient, he will be liable under Section 338 of the IPC.

Defences to criminal liability of nurses under the Indian Penal Code

Section 80 IPC

This section deals with cases in which a person commits a wrongful act accidentally while doing a lawful act. It states that whenever a person does an act which is lawful in a lawful manner and with proper care and caution, however, another person gets injured in the process by an accident or misfortune, without any criminal intention on the part of the person committing the act, then, the person will not be liable for negligence.

This section protects nurses and other medical practitioners from being punished for medical negligence under the IPC and helps them in carrying out their duty without the fear of conviction under the Code. 

Illustration: A doctor administers a drug to a patient, unaware that the patient is allergic to it, resulting in an adverse reaction. However, as long as the doctor acted in good faith and exercised due diligence, Section 80 IPC can be applied to shield the doctor from legal repercussions.

Section 81 IPC

This section provides for the defence of necessity. It states that if a person does any act in good faith and without any criminal intention and does the act to prevent greater harm to any other person, then, the person committing the act will not be liable even if the other person suffers any harm due to the act.

Therefore, if a nurse or any medical practitioner commits an act knowing that it will cause some harm to the patient but only to prevent the patient from suffering greater harm, the nurse or the medical practitioner will not be liable for the act committed by them.

Illustration: If a doctor removes a patient from life support, even with the knowledge that it might lead to the death of the patient, it would not be a criminal act. However, it is considered an exception under Section 81 only when it is believed by the doctor that the futile intervention of the life support would cause other more intolerable harm to the patient. Therefore, the existence of knowledge of consequences alone cannot render life support removal a criminal act. The circumstances of the act in this section would protect the physician.

Section 88 IPC

This section deals with situations in which a person does an act in good faith and without intention to cause the death of another person. It states that an act is done by a person with consent, in good faith and not with an intention to cause the death of the person and for the benefit of the other person. not intended to cause death, done by consent in good faith for a person’s benefit.

In nursing, a nurse is not liable for committing an act when the act is done:

  • in good faith and for the benefit of the patient, 
  • without intending to cause the death of the patient,
  • without knowing that the act is likely to cause death,
  • when the patient has consented either in an express or an implied manner to suffer the harm caused or to take risk of that harm.

Illustration: A surgeon ‘X’ knows that a particular operation will likely cause the death of his patient ‘Z’ but performs the operation in good faith, without intending to cause the death of ‘Z’ and also after obtaining Z’s consent to perform the operation. In this case, X has committed no offence. 

Section 92 IPC

This section states the conditions in which a person will not be liable for the harm caused to another person when he or she performs an act for the benefit of another person without his consent. It states that whenever it is impossible for a person to obtain the consent of the other person and perform an act for the benefit of the other person, he will not be liable if he causes hurt to the other person in the process.

However, this section does not protect a person who intentionally causes hurt to the other person or even attempts or abets the causing of hurt to the other person. 

The general norm is that the consent of the patient is a must before treating or even providing medication to patients. If the nurse provides treatment without consent, he or she will be liable. However, the nurse will not be liable even if he or she provides treatment without the consent of the patient in the following circumstances:

  • when the act is done by the nurse in good faith and for the benefit of the patient,
  • the circumstances are such that it is impossible for the patient to grant consent,
  • if the patient is incapable of giving consent,
  • the guardian of the patient or any other person from whom consent can be lawfully obtained is not present at the time of the commission of the act by the nurse.

However, the immunity granted under this section cannot be utilised by a nurse to cause the death or grievous hurt of a patient or even to commit an act that is likely to cause the death or grievous hurt to the patient.

Illustration: A, a surgeon, sees a child suffer an accident which is likely to prove fatal unless an operation is immediately performed. There is no time to apply to the child’s guardian. A performs the operation in spite of the entreaties of the child, intending, in good faith, the child’s benefit. A has committed no offence.

Consequences of wrongful acts of nurses

Consequences under the Indian Medical Council Act, 1956 

The Indian Medical Council Act, 1956 regulates the profession of medicine in India. It is the supreme Act in the country which has absolute control over medical practitioners in the country. Section 19A of the Act states that the Indian Medical Council has the jurisdiction to prescribe the qualifications of all medical practitioners. Also, Section 23 of the Act states that all medical practitioners must register with the council to carry out their practice. The Council also prescribes a standard code of ethics which is to be followed by all the medical practitioners and the violation of the same is actionable.

Some of the instances in which a medical practitioner can be held liable for negligence are as follows:

  • Negligence of a medical professional while making professional reports or in maintaining professional records.
  • Conduct of a medical practitioner towards the patient is improper.
  • When a medical practitioner performs an illegal act or associates himself with the commission of an unlawful act.
  • When a medical practitioner does any which is in contravention to any law such as the Drugs and Cosmetics Act, 1940.
  • When a medical practitioner has been found receiving or giving commission.
  • When a medical practitioner advertises for business.
  • When a medical practitioner refuses to treat patients on any extraneous grounds such as race, gender, social class, age, religion, sexual orientation, appearance, or disability.

However, it is pertinent to note that the Indian Medical Council or any of the state councils do not have the power to award compensation. They can only debar a person permanently if it is proved that the person is guilty of the alleged offence.

Proceedings under civil court

One of the oldest remedies available to a person aggrieved by the act of a medical practitioner is to file a suit for compensation in a civil court. Whenever a medical practitioner commits a tort against a patient, the patient so aggrieved may file a suit against the medical practitioner in a civil court and may thereby claim for damages or compensation from the medical practitioner for the negligent or tortious act committed by him.

Liability under the Indian Penal Code, 1860

The law pertaining to criminal negligence has been expressed under various provisions of IPC which have already been covered above. It was held by the Supreme Court in the case of Martin F. D’Souza v. Mohd. Ishfaq (2009) that, “For an act to be considered as criminal negligence, the degree of negligence should be higher than the negligence which constitutes a civil liability. Thus, in a civil liability, it is enough for a patient to prove that the doctor did not exercise due care, however, to constitute an offence under criminal negligence, the patient must prove that the doctor was reckless in addition to being negligent.”

Writ Jurisdiction of the High Court and the Supreme Court

Any citizen aggrieved by any act of a medical practitioner has the right to approach the High Court or the Supreme Court under Article 226 and Article 32 of the Constitution respectively. However, a remedy under the following Articles is only available when the concerned court has the jurisdiction to hear the case. When a case is filed against a medical practitioner who has failed to exercise reasonable care towards their patients, the court may order the medical practitioner to pay compensation to the patient.

In the case of Sarwat Ali Khan v. Prof. R. Gogi (2007), the government organised a medical camp for cataract surgery and as a result, all the people who got their cataract removed suffered became blind due to the negligence of the doctors during the surgery. In this case, the Supreme Court or High Court will have the jurisdiction to hear the case under Article 32 and Article 226 of the Constitution.

Proceedings under the Consumer Protection Act, 2019

After the Consumer Protection Act, 2019 was enacted, almost all the cases relating to medical negligence are covered under this Act and a person who suffers injury can claim compensation through this Act. Section 2(7) of this Act provides that any person who avails any service for consideration including beneficiary service will be considered as a consumer. In case a consumer suffers from any sort of deficiency in the services availed by him, he may file a suit under this Act.

The procedure for filing a suit under this Act is very simple, hence, it has developed into a potent tool in the hands of the consumers who are dissatisfied with the goods and services availed by them. Therefore, cases of medical malpractice are mostly dealt with under the Consumer Protection Act, 2019.

In the landmark judgement of Indian Medical Association vs. V. P. Shantha (1995), the issue before the Supreme Court was whether the service rendered by a medical practitioner be considered as service under Section 2 of the Consumer Protection Act, 1986. The Supreme Court held the answer to this question to be affirmative and brought the medical profession within the ambit of the aforesaid Act. 

Disciplinary action against nurses

The provisions stating the punishments and disciplinary action for medical negligence are provided under Chapter 8 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 which was formulated under the Indian Medical Council Act, 1956.

If the Medical Council of a state finds that a medical practitioner is liable for misconduct, he will be punished by the Medical Council. Some of the punishments are as follows:

  • Removal of the name of the medical practitioner from the register of medical practitioners either for a specific time period or permanently.
  • The Council may restrain the medical practitioner from practising when the complaint filed against him is still pending.
  • The Council may also publish the removal of a medical practitioner through local press and other sorts of publications in different medical associations or bodies.

Cases related to nursing

Spring Meadows Hospital and Anr. v. K.S. Ahluwalia and Anr. (1998)

Facts of the case

In this case, a child was suffering from a fever and was admitted to a nursing home by his parents. The doctor diagnosed him with typhoid and prescribed medicines for the same. A nurse administered an injection named Lariago to the patient due to which he immediately collapsed. The doctor after examination of the patient testified that the child suffered cardiac arrest due to the injection administered to him. The National Commission also held that the cause of death was the injection which was administered at a very high dosage.

Issues of the case

Whether the nurse was liable for criminal negligence.

Judgement of the case

It was held by the Supreme Court that the doctor was liable as he should have administered the injection himself instead of asking the nurse to do the same. Further, it was also held that the nurse was liable as there was a breach of duty on her part and also because it was found that she was not registered with the medical council of any state. Hence, the doctor, nurse as well as the hospital was liable and was made to pay a compensation of Rs. 12.5 lakhs to the parents of the child. 

Jasbir Kaur v. State of Punjab (1995) 

Facts of the case

In this case, a newborn child was found missing from his bed in the hospital and was found bleeding near the wash basin of the bathroom. The hospital authorities claimed that the child was taken away by a cat as a result of which the child sustained injuries.

Issues of the case

Whether the hospital authorities are liable for negligence. 

Judgement of the case

It was held by the Punjab-Haryana High Court that the hospital authorities were liable for negligence as they failed to exercise due care and precaution. Further, the hospital was also held liable to pay a compensation of Rs. 1 lakh to the family of the child.

Bolam v. Friern Hospital Management Committee (1957)

Facts of the case

In this case, the plaintiff, Hector Bolam was a psychiatric patient who went as a voluntary patient to Friern Hospital for issues related to recurrent depression. After diagnosis, the doctors decided to treat him with Electroconvulsive Therapy (ECT) and Bolam consented for the same.

Bolam was given an unmodified ECT in which the patient was not given anaesthesia and he was not even restrained during the procedure. This was done 7 to 10 times a day each session. Even though his depression was reduced, he developed a fracture as he was not administered with any muscle relaxant or anaesthesia. When he came to know about this, he filed a suit against the hospital. 

Issues of the case

Whether the doctors did not follow the duty of care and did not act as a reasonable person.

Judgement of the case

The High Court in this case laid down the test to determine whether the hospital should be held liable for medical negligence or not. It was held that a doctor will not be guilty of negligence if he has acted in such a manner that the act committed by him is considered to be proper by a responsible body of medical professionals who are skilled in that particular art. If a doctor has exercised the standard of care that a responsible body of medical professionals deem to be enough, then he is not liable under negligence.

Arjesh Kumar Madhok v. Centre for Fingerprinting & Diagnostics (CDFD), Ministry of Science and Technology, Hyderabad (2007)

In this case, the Central Information Commission (CIC) upheld that the disclosure of information related to the purpose and results of medical testing was exempted under the Right to Information Act 2005. It was held that such disclosure would lead to an unwarranted invasion of privacy of the individual. However, the information can only be withheld if the disclosure of the same has no relationship to any public activity or interest. 

It was further held by the CIC that information made available during the fiduciary relationship of doctor-patient shall also be exempted from public disclosure. In this case, the party seeking the test result was the patient’s parent. Therefore, the judgement of CIC provides little guidance in deciding what would constitute a relevant and overriding public interest.

Conclusion

To conclude, there is indeed no doubt that nurses have a duty to take reasonable care of their patients. The life of every person is very precious and should not be dealt with in a negligent or a careless manner. Hence, the nurses must abide by the standard of care which has to be exercised by them as per the facts and circumstances of the case. They should also follow the ethics laid down by the Medical Council to avoid any sort of liability or disciplinary proceedings against them. Further, if a nurse is found guilty of malpractice or negligence, action against her can be initiated by means of a civil proceeding through torts or the Consumer Protection Act, 2019 or a criminal proceeding under the Indian Penal Code, 1860.

Frequently Asked Questions(FAQs)

What is the difference between medical negligence under torts and medical negligence under criminal law?

To constitute negligence under torts, it is enough to establish that a nurse was negligent or breached the standard of duty of care which was necessary while performing the act towards a patient. However, to make a nurse liable for medical negligence under criminal law, the breach of duty should be coupled with recklessness or the act committed by the nurse must amount to gross negligence. Click here to learn more about the differences between medical negligence in torts and criminal law.

Who is considered to be a registered nurse?

A nurse is considered a registered nurse when he or she completes a diploma in nursing or is a graduate in nursing. Further, the nurses should also pass the National Council Licensure Examination-Registered Nurse (NCLEX-RN) exam which is conducted by the National Council of State Boards of Nursing (NCSBN). Also, to be a registered nurse, it is necessary for the nurses to comply with all the eligibility criteria and licensing requirements specified by the respective state boards of nursing.

Is registration mandatory to become a nurse?

Yes, it is mandatory for a nurse to register before practising. There is no national board or forum for the registration of a nurse. However, all the nurses should be registered under the State Nursing Council of the respective states in which they intend to practise. The Nurses National Registration and Tracking System is a new system of registration of nurses introduced by the Indian Nursing Council.

What is the Indian Nursing Council?

The Indian Nursing Council is an autonomous body which was established by the Ministry of Health and Family Welfare under the Government of India. It was established as per Section 3(1) of the Indian Nursing Council Act, 1947 to establish a uniform standard of training for nurses, midwives and health visitors. Click here to know more about the Indian Nursing Council.

References


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Audit of estimates and tips for tender documents

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This article has been written by Golock Chandra Sahoo pursuing a Training program on Using AI for Business Growth from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

The auditor of civil works and projects needs certain special expertise and checking estimates and tendering of the work are the basics in an audit to proceed further. If the estimate is on the higher side, it gives an undue advantage to the contractor to claim more than necessary. Therefore, it is essential on the part of the auditor to check the authenticity of the prepared estimates. Similarly, an audit attempts to check all tender documents with reference to the supplied estimate. Tendering becomes fair in cost and quantity with the correct estimation. Now, the preparation of estimates may be detailed as follows.

Checking tender documents 

Checking tender documents in an audit needs expertise and judgement in scrutinising the estimate and tenders. The tender conditions should not be to the advantage of the civil works contractor. Estimates should be as accurate as possible with the available specifications of rate and cost. The agreement should also include the liability of the contractor to bear the cost of substandard work if noticed during the defect liability period after completion of the work. Work order conditions should match the conditions of the tender. An audit is to have all information on the Indian Road Congress specification as well as the Ministry of Road Transport and Highways specification. This handout contains all the techniques to be applied to check the tenders and estimates. Mostly, certain points are the independent opinion of the author, who has many years of experience in audit under the Indian Audit & Accounts Department.   

Preparation of estimate

One of the prerequisites to estimating the cost is to refer to the government approved Schedule of Rates (SoR) and the approved booklet of Analysis of Rates for all government civil works/projects. There are no specific guidelines for privately executed works. In  government projects, an engineer works as an estimator. Before the work of estimation commences, the work/project is administratively approved. After the completion of administrative approval only, the estimation is done based on the SoR, analysis of the rate and other government directives. The estimate is prepared in duplicate and sent to the next higher authority, the estimating officer for approval. The approving authority keeps the first copy with him after entry in a register and the second copy is handed over to the estimator. So far as estimating by private entities is concerned, they never resort to any specific guidelines. Rather, they find their own means of estimating, tendering, awarding and executing.

Tips for auditing the estimate

While auditing the estimates, the audit team usually gets a copy of the estimate from the estimator. That means the copy is the second copy and not the original one. It is possible that this copy may get manipulated with quantity or cost, and hence, the auditor needs to check the original one retained with the approving authority. If the same is not produced in the audit, the issue may be kept under objection.

Next, the audit is to check the estimate with reference to the SoR. Item wise check is necessary to certify that the estimate has been prepared with accuracy. Where an item is not in the SoR, the audit is to check some other base records or past year data and, by their best judgement,  arrive at the cost. While applying best judgement, it is the duty of the auditor to disclose the logic behind this decision to adopt some value for some item/items included in the estimate. The audited entity and get their consent on the adoption of the cost of that particular item.

The auditor should examine the estimate, quantity- wise, with the final bill to see the quantum of deviations. Certain public work codes in some states or even the Central Public Works Accounts Code specify the principles for dealing with deviations. If the deviation is 10 percent or more, the work needs to be re-estimated before the final payment of the bill, and that should be during the execution of the work. If the re-estimate is not approved, final payment to the contractor can’t be made. All deviations may be pointed out in the audit.

Similarly, an auditor may see that, in some cases, the quantity and cost included in the estimate match pie- to- pie with the final bill. These are, of course, cases of fraud, as at no point in time will the executed items match. In such cases, audits should adopt some different means. The audit may examine the date of commencement of execution and the date of measurement to decide and conclude. The register of check measurement may be verified in an audit, from which the auditor can know who measured the work and who checked and measured the work. The dates may yield some results for the audit to conclude as regards the fraudulent execution. Even items of executed quantity can be matched with the estimate to see if the execution is done correctly or not and even an audit may link the execution with the government specification to find the difference.

Tendering-tips to audit

Tip 1

So far as checking tender documents is concerned, the audit has some specific guidelines regarding how to check the tenders. Tenders, in many cases, are meant for the transparent selection of contractors. But it deviates at most points. Tenders are normally received in a sealed envelope and should be invited in the most open, transparent and public manner by advertisement in the local newspaper or with some out of state published papers. The value for which tendering is to be done has been fixed by various governments to their advantage and mostly it is for Rs 50,000/ or more. Somehow, the auditor faces a lot of difficulties in checking the tender documents. Tender fixing at many points results in a single tenderer, otherwise called tender fixing, being awarded the work. The tips for this audit may be selectively indicated as under.

Tip 2

Firstly, the audit needs to start from the requisition or demand based upon which government administration approved the civil work or purchase to be effected on a tender basis. This is the basic document and keeping that in mind, the auditor should call for an estimate to scrutinise the item and cost included in the estimate as per the prescribed schedule of the government. For checking the tenders of any private entity, the auditor may not stick to these formalities. One issue comes up for strict scrutiny in the audit. Say for example, that two villages are in different places and need a bridge for easy transportation. Of the two villages, let us suppose that one village has 15 households, including the house of a minister and a second village has 50 households. Of these two, the administration should approve the construction offer for the second one.  However, the auditor may notice that approval has been given for the first one because of the influence of the minister. The auditor should diligently and sincerely comment on such cases, calculating the cost benefit to the masses.

The  auditor then checks the conditions of the tender. It may be verified that the contractor furnishes all details/documents as per the terms of the tender along with the Earnest Money Deposit (EMD), which is normally one percent of the tendered cost. It is a common mistake that the auditor makes in the case of a copy of PAN. The name indicated in PAN should tally with the name of the contractor. But, in some cases, the contractor furnishes the PAN of some other agencies. Such cases are liable to be rejected in the tendering stage. The contractor should furnish a copy of the licence, and at times it may be caught in the audit that a certain blacklisted contractor also participates in the tender. The auditor should check all orders of the state government issued on black listing at least in the two years preceding the date of tender. Any case of a blacklisted contractor participating in the tender process may be carefully rejected.

Tip 3

Tender fixing is one of the iniquitous actions that results in the filing of one tender by a single person. It may be understood that single tender cases are influence oriented acts of intimidation. One contractor threatens all in line for not participating in the tender process to have a favour to get the work. Certain rules are framed in this respect by the governments of different states. Somewhere, it is the case to reject the single tender and to go for re-tendering and in the case of re-tendering, the same contractor appears; there is no excuse to disallow that contractor. Negotiations with the contractor typically start to show when the tendered cost is higher than 5% of the estimated cost. However, regardless of the percentage over the estimate, this repeated single bid contractor needs to be addressed for negotiation in order to save money, and it is possible that a contractor will be chosen. The auditor may check to see if all such cases are in line with the economy and effective perspectives that such awards to the single bid are approved by the next higher authority of the tender floating executive.

Tip 4

The land on which the project or work is to be executed must be owned by the public/private or private executing agency. The logic behind this is that the estimation of execution must be done on our own land, or else the land is to be acquired beforehand. It has been observed in many cases that even without acquiring land, tendering for execution is done and legal complications are there in many cases to complete the execution. For constructing a bridge, say, approach roads are needed, in the absence of which bridges may not operate. Land for approach roads is to be acquired before going for the construction of the bridge. Expenditure on the construction of the bridge may be commented as unfruitful in audit in the absence of the approach road leading to this valued objection.

Any tender is valid for 90 days from the last date of receipt of the tender. The period may, however, be revalidated with the consent of the tenderer. These 90 days may be utilised for the processing and final award of the tender in some specific manner. Executive Engineer may take 20 days, Superintending Engineer 15 days, Chief Engineer 20 days and for all cases of government tenders, 20 days have been earmarked for finalisation of the selection. A balance of 15 days may be utilised by the executive engineer to finalise the agreement for the issue of a work order to the contractor. In certain cases, the auditor may see that tenders are not finalised within the 90 prescribed days and even a cost increase may be claimed by the contractor. Such cases may be commented on in an audit, including excess costs to the exchequer due to delayed finalisation of the tender award.

The audit may check comparative statements in all cases to locate the awards in favour of the lowest quoting contractor. In some cases, it may be seen that L1 (the lowest one) has not been issued with a work order for some recorded reason. The reason for rejecting L1 may be reviewed in an audit to determine the factual position. An award to the contractor is required to be issued to the selected contractor after the recovery of security money equal to one percent of the awarded cost of the tender.  

Tip 5

The auditor may watch the penal provisions of the agreement entered into with the contractor. If the contractor does not complete the work as per the agreed timeline, a penalty may be imposed on the contractor, subject to a maximum of 10 percent of the value of the work. This provision is again described as discretionary under various legal provisions, but in any case, if the penalty is awarded, it should match the agreed percentage. The audit may find that, in some cases, a token penalty is irregularly imposed on the contractor. These cases may be suitably pointed out in the report. On abandoning the works by one contractor, any excess cost incurred due to retendering should be dealt with in an audit, verifying that 20 percent of the remaining excess cost of the work is realisable from the first contractor as a penalty. Suppose the awarded cost of the work is Rs 1 lakh and the cost executed is 60,000/ after which the contractor left the work. The balance cost of the work was retendered, say for Rs 80,000/-. The total cost of the work now amounts to Rs 1.4 lakh. The excess cost then is Rs 0.4 lakh, and so 20 percent of Rs 0.20 lakh, i.e., four thousand, may be imposed on the first contractor as a penalty.

While auditing tenders, the auditor should call for all finalised tender files to be checked at 100 percent. Audit should not miss checking the cases of execution where tenders have not been made because the value of the work is less than Rs 50,000/-.These cases are the moot points to grab institution funds illegally but in a legal manner. The Register of Security Deposit and Register of EMD, along with all refunds to the unsuccessful bidders, may be checked in the audit. In no case should the EMDs of all bidders be accounted for in the cash book on the date of receipt. The EMD of the selected bidder may be taken into account along with the security deposit after the work is finally awarded to the contractor.

Conclusion

An audit of civil works is partial if the audit does not certify the validity of the cost estimate and the tender papers. So, to conclude in any such audit assignment, the auditor should check all tit-bits of the tender and the details of drawing the estimate for the tender. “More the inflating estimate, more the assurance to the contractor to have the undue advantage.” This may be borne in mind throughout the duration of the audit.

References

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