In the past 2 years, we have seen the outbreak of wars and rumours of wars. The past few decades have seen the evolution of war fought physically on the battlefield, often accompanied by attacks in cyberspace, where data is the primary target. Our lives and lifestyles have become so intertwined with technology that a breach of our personal information would be a breach of our privacy, too. Data can be used or misused by nations to protect their people or gain the upper hand in certain situations. Governments or individuals may employ skilled personnel to utilise data to their advantage during a crisis.
Experts in international humanitarian law (IHL) agree that breaches of civilian data could cause more destruction than those against physical property alone and have tried to manage data under the existing legal frameworks.
Meaning of data privacy
Data privacy can be understood as a right possessed by a person to protect and safeguard information concerning themselves or something of importance from being shared or exposed to the public or a third person.
Privacy, in data or otherwise, is a right that finds its root in the principle of ‘Human Dignity’, which every person must be offered universally. This right translates to personal information in the form of freedom against being viewed, watched or monitored through any device. The personal dignity of life can be honoured only by recognising the importance of data privacy and privacy in general.
“Data protection means keeping data safe from unauthorized access. Data privacy means empowering your users to make their own decisions about who can process their data and for what purpose.”
Therefore, data that is characterised as personal in nature bears a high level of importance with respect to its security and organisation. The nature of personal information that lies open without the defence of sufficient privacy laws or technology makes it a ripe target in the hands of the wrong person, especially in a time of crisis. Data manipulation and exploitation have seen an increase in the past few years, especially during times of war, as a form of attack against targets of interest.
What do rights mean in privacy
Privacy, as with any other right, stems from the natural need of a human being to be treated in a dignified manner. Although privacy is a need recognised in theory, acceptance of this need and assigning authority to it is what transforms a recognised right into an enforceable law.
At present, the General Data Protection Regulation (GDPR), which is applicable in the EU and its members, is the most popular and comprehensive set of regulations that provide a solid base for understanding and addressing many privacy related matters. It has evolved and adapted over time to recognise certain rights and obligations required by those who process data and those who are subject to it. Some of the popularly known rights that have been recognised and established are:
The right to be forgotten- which means a person may have the right to have certain information about themselves removed from cyberspace in certain situations. This right was born from the case of Google Spain vs. Maria Costa Gonzalez (2014), mentioned in Article 17, which prevents information that is derogatory and false from being accessible on the internet by having them removed or deleted permanently.
The right to access- as mentioned in Article 15, gives a person the right to know what information about themselves is made available to those who are processing their data. This further gives them the right to review and modify their data in accordance with request of the data controller.
The right to be informed- is the most relatable right, as we come across it on a daily basis when availing of services from various providers. Every data controller is required to inform its clients what personal data will be collected and processed by them. They are required to be fully transparent about the extent and reason for which they are collecting data, as mentioned in Articles 13 and 14.
These rights are not absolute; they have exceptions and can be restricted, as mentioned in Recital 73 of the regulation, such as for public interest but this is not the case during a cyber attack. As we will see in this article, personal data can be used without consent or manipulated so as to cause destruction by violating every one of these rules.
Data as a sword in battle
As the saying goes, “knowledge is power,” and data is knowledge that enables people in power to take actions based on it. It goes without saying that it has been used as a weapon to inflict loss, shame or strife on its victims. Without proper control and the imposition of well founded rules and regulations, the real victims of this cyber warfare are civilians, who face the aftermath of military action and terror.
Consider the war currently taking place in both Ukraine and Gaza, which utilises data from satellite imagery coupled with the attacks commenced by cyber militias against important government databases and the vast amount of user generated content spreading both news and misinformation concerning the situation on the ground. This ocean of data also raises the question of what is truly reliable information.
Different ways in which data is misused
Cyberattacks have evolved and multiplied over the past few years. With the rapid pace of technological development, the intensity at which cyber warfare could affect society has increased. But the question to be asked is, how do data and information cause harm?
While a breach of confidential data does not cause immediate physical harm to a civilian, it is certainly an encroachment on their privacy, as agreed by courts globally. Cyber operations carried out by opposing forces without adherence to a legal framework of operation will result in the misappropriation or leak of sensitive civilian data, which in turn could threaten and damage society in the long run through targeted attacks, extortions or blackmailing.
Attacks are usually targeted at facilities and data infrastructures of importance, such as emergency services, supply chains, resource production or telecommunication systems. For instance, a Russian hacking group called Sandworm was responsible for ransomware that disrupted transportation and related logistics industries.
Cyberattacks are also well known to disrupt the financial and business markets. The recession experienced due to the effects of these past wars still affects the global economy. This is because false data and rumours are spread with the intention of injecting fear in many, leading to a loss of confidence in the market.
Data can also be used to sabotage a facility, as reported in May 2020. An Iranian cyber attack was carried out to sabotage Israeli water utility services by slowing the systems that controlled the flow control and treatment of water. The intention was to disrupt and halt the supply of water to that area. Fortunately, the timely interception and diffusion of the attack saved the people from possible hardships that could have resulted from the strike.
Another form of data breach is when an attacking party infiltrates the database of a nation to steal and retain the information of individuals, as in the case of the US in Iraq for supposedly military purposes. The US continued to retain this information post operation claiming to maintain surveillance over certain persons of threat, which was viewed as a violation of international privacy standards by many NGOs.
Methods such as Denial of Service (DoS) attacks, digital blackmailing and false information are some of the many methods employed by cyber militias to wage war against individuals, organisations and nations themselves. The disadvantage of such offences is that non-kinetic attacks do not warrant a valid retaliation with physical force, as there is no direct destruction of ‘objects’ as laid down in the First Geneva Convention’s Article 50. This lacuna in the legal framework and rules has no power to explicitly condemn these newer cyber attacks, which do not conform to those obsolete definitions. This has raised the urgency for a new and well defined international policy along with better interpretation concerning data privacy and its protection.
Outlook on privacy during war
Data privacy and its protection in war are mainly concerned with the strengthening of data security, which depends on the rules laid down for it and not the commonly conceived notion of the protection of personal data alone. Although privacy of data is the ultimate aim, data protection is what should be considered. The term ‘data protection’ can be closely associated with data confidentiality and integrity, which require privacy to be established as more than a principle or guideline but rather in strict terms by which data is stored, encrypted and guarded and how easily it is accessed without tampering with or diminishing its accuracy when recorded.
There have been several efforts made on a national and international level to develop a functional and well-defined guideline for the management of data privacy and to establish rules under which they might operate.
International scenario
The international landscape is mainly constituted by the General Data Protection Regulation (GDPR) and the rules laid down by the International Human Rights Law (IHRL) and the International Humanitarian Laws (IHL), which broadly govern the matter of data privacy, along with resolutions in different conventions.
The GDPR, which is the most popular set of guidelines concerning data privacy, helps by differentiating and defining what personal data is and what aspects of a natural person can be considered as personal data. It further mentions the jurisdiction of the regulation with exceptions such as the processing of personal data outside of the Union “and the processing of personal data by the Member States when carrying out activities in relation to the common foreign and security policy of the Union.”
In Chapter 5 of the regulation, it speaks about “Transfers of personal data to third countries or international organisations” by providing the standards required by the country to which it is being transferred while also stating the exceptions to such a transfer in Article 49. The shortcoming of this wonderful legislation is that it is catered to the EU specific scenario and its members.
The IHL and HRL for that matter, have profoundly greater jurisdiction in comparison with the GDPR and have greater potential to serve the global need with a unified standard. Although both are different bodies, they have a complementary nature towards each other.
The laws of data protection laid down during peacetime are applicable in wartime as well. Rarely does personal data become the primary target during armed conflict; nevertheless, the laws laid down by the IHL concerning the unauthorised use of personal data greatly help in adding a layer of security. For instance, Rule 7 calls for the distinction between civilian and military objects, which can also be translated to civilian data such as medical and financial data; therefore, unauthorised use of this data will be deemed to be a war crime.
Article 52 of the 1977 Additional Protocol I to the Geneva Conventions reiterates that: “Civilian objects shall not be the object of attack or of reprisals” and that attacks shall be limited strictly to military objectives. So far, it offers a definite military advantage. Even if personal data was found to be of military advantage, the protocol calls for the protection of civilians while executing action.
There are several other bodies of law that have a hand in shaping the outlook on data privacy. The ICCPR and Universal Declaration of Human Rights have stated in Articles 17 and 12, respectively, that no person shall be subject to arbitrary interference with their privacy. The Charter of Fundamental Rights of the European Union provides under Article 8 that ‘everyone has the right to the protection of personal data concerning him or her’. 132 out of 194 countries under the UN Conference on Trade and Development (UNCTAD) have begun to process legislation catering to concerns about data privacy.
Conclusion
Data in terms of civilian personal data is not the first victim in armed conflict, but it is surely the one that suffers unjustly and the longest. Therefore, it is necessary on an international scale for a law governing the privacy and personal data of individuals with the aim of fortifying the rules by which protection to the information is given.
As we have seen, data is a powerful tool, and those in power must be able to recognise and classify what is conducive to a conflict without prying into a person’s personal information and disregarding human dignity, which makes one feel vulnerable and unsafe. Although IHL, HRL and GDPR provide definitive guidelines for the conduct and safeguarding of personal data, they do not instill a sense of security under which nations can find refuge on a global scale. Nevertheless, it provides the framework and direction for the birth of a unifying data privacy law in a world that is rapidly progressing in the fields of technology and cyberspace.
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Have you ever noticed why rich individuals and corporations end up paying heavy taxes and poor people pay no tax at all? We can also ask ourselves what the role of tax collection is. In simple terms, we can say that taxation is a method for wealth distribution. This means that tax that is collected by the government from wealthy individuals is used for the welfare of less fortunate individuals. We use a tool that is used by the government to reduce wealth inequality and ensure the distribution of opportunities and resources. This tool is known as wealth distribution.
In India, the main tool of wealth distribution is tax collection. The Government of India collects taxes and later uses them for the betterment of society, especially for the poor. This tax is imposed as per the Income Tax Act of 1961. This involves a pre-decided percentage of income, which a person has to submit to the government as tax. These taxes are later used for the sustainable development of society.
In this article, we will understand the role of taxes in wealth redistribution. We will also try to understand how India adopted wealth redistribution, which later benefited society. We will understand the strategies and challenges of taxation in wealth redistribution.
Understanding wealth inequality
Wealth equality in India is quite uneven. We use the Geni Coefficient to understand the growth in income inequality. In recent reports, we can see that the top 1% of Indian citizens, according to wealth, constitute more than half of the country’s wealth. This indicates that income inequality is very high in India.
Now, we will get to know and understand the reasons behind the income inequality in India, as we discussed above. These are the following reasons for income inequality in India-
India has been developing in recent years, and the main reason for that was the economic development of the country. This economic development distributed wealth unevenly among the citizens, thus causing income inequality.
High population growth in recent years has caused urbanisation in rural areas. So, these urban areas offer a high level of income in comparison to rural areas, which creates income inequality.
There has been caste-based discrimination since the formation of independent India, which has become a hindrance to education for lower castes. That further disables them from getting a good earning job and thus creates income inequality.
We have discussed the reasons behind the income inequality in India. Now, we will be discussing the consequences of income inequality as follows-
As income inequality increases in one country, it simply means that the money is concentrated among a particular number of people in the country. When wealth is in the hands of a handful of people, it can create a lack of resources for a large section of the population. This increases poverty in a country.
When there is an extreme condition of income inequality in a country, it affects the Human Development Index (HDI) of the respective country. The Human Development Index is an index of multiple factors. High levels of wealth inequality can lower a country’s HDI score.
Taxation and its types in India
We will discuss a strong way to share money more evenly in India, which is tax. Taxes are like a payment that the government collects from people and businesses. They take this money and use it for the better development of society. This creates a positive impact, which ensures that everyone has a fair share of money in our community. In India, there are different types of taxes. There are direct taxes such as income tax, corporate tax and wealth tax. Others are indirect taxes like goods and service tax, customs duty and excise duty. All these taxes work in different ways to move money into the country.
We will try to understand the different types of taxes that are imposed in India. These taxes are as follows-
Direct taxes are the main type of tax that is used in India. They are taxes that you pay directly to the government. Think of income tax—it’s deducted from your salary before you even receive it. Wealth tax, property tax, and capital gains tax are also examples of direct taxes.
The other type of tax that is used in India is indirect tax. Indirect taxes can be more difficult to understand because they are not paid directly to the government. Indirect taxes are collected by someone else, like a shopkeeper and then passed on to the government. You pay this tax when you buy things or use services.
Progressive and regressive taxes- taxes can also be categorised based on how they affect people. Progressive taxes are the taxes that take a larger percentage of income from the rich. India primarily uses a progressive tax system to promote fairness.
Central and state taxes in India- These are the taxes that can be levied by both the Central and state governments of India. Central taxes, like income tax and customs duty, apply nationwide. State taxes, such as the state sales tax, have differences from state to state.
Historical perspective of taxation and wealth redistribution
To gain a better understanding, we need to delve into the past of Indian history regarding the tax system. In India, looking at how taxes have been used to share wealth has a long history. From ancient times to the colonial period of British rule in India, the concept and practise of taxation have undergone many transformations.
India’s taxation history is marked by several key milestones.
The journey began with the introduction of income tax by James Wilson in 1860, during British rule. This was a significant step towards formalising the taxation system.
The Central Board of Revenue was created in 1924 to make collecting taxes and managing them easier.
After India gained independence, they made a new law called the Income Tax Act of 1961. This law still controls how people pay taxes in India today.
The introduction of the Goods and Services Tax Act of 2017 brought significant changes to the indirect taxation system of India. The objective behind this reform was to establish a market throughout the country.
Modern taxation system and wealth redistribution
The Government of India imposes two main kinds of taxes, i.e., direct and indirect taxes. These taxes generally range from 5% to 40%. Within this system, there are also opportunities for tax exemptions and deductions that could potentially lead to instances of tax evasion.
In India, the tax is enforced and carried out by authorities who face their share of challenges, including low compliance rates and corruption. It is worth noting that the tax system significantly impacts wealth redistribution in the country; it has the potential to either reduce or exacerbate existing inequalities and poverty levels.
The tax system in India is what makes everyone follow the principles of equity, efficiency, simplicity, transparency and accountability. This ensures that tax is not generated as a source of revenue but also contributes towards economic goals by promoting fairness in wealth distribution while being effective at achieving its objectives.
Overview of the current tax system
The Indian tax system is quite difficult to understand for common people.
Some people and industries get tax exemptions to promote certain activities.
How well the government enforces tax rules can vary, affecting who pays and who doesn’t. This complexity plays a big role in how wealth is shared in India.
Government’s role in wealth redistribution
The government is a key player in spreading wealth more evenly through taxation.
They use their financial policy to help make sure that money is shared fairly and that society’s well-being improves.
India has programmes like MGNREGA (guaranteeing rural jobs), PM-Kisan (aid to farmers), and PM-JAY (health insurance) to help those in need.
Conclusion
In India, taxes are used to share money more evenly and make things fair. A tiny group of super rich people have most of the country’s money. This makes life really tough for everyone else and makes poverty even worse.
To address this concern, the government employs taxes such as income tax and Goods and Services Tax (GST) to impose burdens on the affluent while assisting those who are less fortunate. Some individuals benefit from tax breaks, and not everyone fulfils their share of contributions.
Additionally, the government initiates programmes aimed at supporting populations by creating employment opportunities in areas and extending aid to farmers. This collection of taxes helps in decreasing poverty and enhances people’s quality of life.
In essence, taxes serve as a mechanism employed by the government to ensure the distribution of wealth. When executed appropriately, they can contribute towards establishing a society that’s both more egalitarian and prosperous.
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This article is written by K. Pallavi and further revamped by Nishka Kamath. It discusses all the details one should learn about while reading about the landmark judgement of Joseph Shine v. Union of India, passed by the Hon’ble Supreme Court in 2018. This judgement decriminalised adultery, thus making it a civil wrong and a ground for divorce only.
It has been published by Rachit Garg.
Table of Contents
Introduction
Adultery in India was based on the notion of patriarchy and male chauvinism. This offence makes a man criminally liable who has sexual relations with a woman, who is the wife of another man. And if the husband consents or connives to such an act it will no longer be adultery. There is no right to a woman in case her husband commits adultery. In ancient history, adultery was considered to be a sinful act either done by a married man or woman. Adultery in India does not treat a woman as a culprit but as a victim who has been seduced by a man to do such an act. This law is violative of our constitutional principles i.e. equality, non-discrimination, right to live with dignity and so on. Adultery has been struck down as an offence in as many as 60 countries including South Korea, South Africa, Uganda, Japan etc., on being gender discriminative and violating the right to privacy. Even Lord Macaulay, the creator of the penal code objected its presence in the penal code as an offence rather suggested that it should be better left as a civil wrong. The law evolves with the time and many recent judgements have increased the ambit of fundamental rights in conformity with changing societal values and increasing individual liberty. This judgement joins them in creating history by striking down 158-year-old law which has lost its relevance with changing social and moral conditions.
Facts
A writ petition was filed under Article 32 by Joseph Shine challenging the constitutionality of Section 497 of IPC read with Section 198 of Cr. P.C., being violative of Article 14, 15 and 21. This was at first a PIL filed against adultery. The petitioner claimed the provision for adultery to be arbitrary and discriminatory on the basis of gender. The petitioner claimed that such a law demolishes the dignity of a woman. The constitutional bench of 5 judges was set up to hear the petition.
Contentions
Petitioner
The counsel for the petitioner addressed several aspects of Section 497 that violated fundamental rights.
The counsel on behalf of the petitioner also pointed out the historical background of Section 497 and stated that the law was enacted during the British era and has no relevance whatsoever in modern times.
The counsel also asserted that Section 497 and Section 198(2) of the CrPC were against Article 14 of the Constitution, which talked about equality before the law. The counsel for the petitioner contended that the provision criminalises adultery based on classification based on gender alone, which has no rational nexus to object to being achieved. The consent of the wife is immaterial, thus it violates Article 14 of the Constitution.
The petitioner contended that the provision is based on the notion that a woman is the property of her husband. The provision says that if the husband gives his consent, then adultery is not committed.
The provision for adultery is discriminatory on the basis of gender as it provides only men with the right to prosecute against adultery, which is violative of Article 15. As per the law, a woman has no right whatsoever to lodge a complaint if she discovers that her husband had sexual intercourse with a woman outside the purview of the marriage.
The petitioner contended that the provision is unconstitutional as it undermines the dignity of a woman by not respecting her sexual autonomy and self-determination, hence violating Article 21. Further, the counsel claimed that the act of two parties engaging in sexual activity with each other comes under the Right to Privacy and that sharing such discreet information will be a violation of Article 21.
Further, the counsel argued that women were treated as mere objects under this provision or law, as the act was considered to be an offence depending on the husband’s consent or the lack thereof.
The counsel also contended that the provisions were against the fundamental rights guaranteed under Articles 14, 15 and 21 of the Constitution of India, considering their paternalistic and arbitrary nature.
The counsel also argued that as sexual intercourse was a reciprocal and consensual activity between both parties, both of them should be liable for a punishment.
The counsel further argued that every individual had the unfettered right, irrespective of their marital status or gender, to engage in sexual intercourse, be it outside the wedlock, in case he/she is married.
Respondents
The counsel for the respondents contended that adultery is an offence that breaks family relations and deterrence should be there to protect the institution of marriage.
The respondents claim that adultery affects the spouse, children and society as a whole. The counsel also stated that adultery as a crime is morally outrageous to society and all the perpetrators committing such a crime must be liable for a penalty. It is an offence committed by an outsider with full knowledge that destroys the sanctity of marriage and family.
The discrimination by the provision is saved by Article 15(3), which provides the state the right to make special laws for women and children.
The counsel for the respondent stated that such an act would outrage the morality of society and also cause harm to its members; thus, it should be punished and considered an offence.
Also, the counsel contended that the Right to Privacy and Personal Liberty under Article 21 of the Constitution of India was not an absolute right and that there were reasonable restrictions when public interest was at stake. The Right to Privacy provision does not provide protection of privacy to an individual who is engaging in sexual intercourse with another married person outside the purview of his/her marriage.
The counsel further argued that Section 497 was valid as a form of affirmative action that favoured women.
Section 497 is actually acting as a protector for society from such an immoral activity that will outrage the institution of marriage; hence, it should not be struck down.
The counsel for the respondentrequested that the court delete the portion found unconstitutional but retain the provision.
Issues raised
Whether the provision for adultery is arbitrary and discriminatory under Article 14?
Whether Section 497 of the IPC is unconstitutional?
Whether the provision for adultery encourages the stereotype of women being the property of men and discriminates on a gender basis under Article 15 as if the husband has consented to such an act, then such an act will no longer be considered an offence?
Whether the dignity of a woman is compromised by the denial of her sexual autonomy and right to self-determination?
Whether criminalising adultery is intrusion by law in the private realm of an individual?
Whether adultery laws should be made gender-neutral?As per Section 497, there is no legal provision claiming that a woman can lodge a complaint against her husband who has committed adultery; should that be amended?
Previous Judgments
Yusuf Abdul Aziz v. State of Bombay (1954) SCR 930
In this case, the constitutionality of Section 497 was challenged on the grounds that it violates Article 14 and Article 15 by saying a wife cannot be a culprit even as an abettor. The 3 judge bench upheld the validity of the said provision as it is a special provision created for women and is saved by Article 15(3). And Article 14 is a general provision that has to be read with other Articles and sex is just a classification, so by combining both, it is valid.
Sowmithri Vishnu v. Union of India & Anr. (1985) Supp SCC 137
In this case, a petition was filed under Article 32 challenging the validity of Section 497 of the IPC. The challenge was based on the fact that the said provision does not provide a woman with the right to prosecute the woman with whom her husband has committed adultery and hence is discriminatory. The 3 Judge Bench in this case also upheld the validity by stating that extending the ambit of offence should be done by the legislature and not by courts. The offence of breaking a family is no smaller than breaking a house, so the punishment is justified. The Court accepted that only men can commit such an offence.
V. Revathi v. Union of India (1988) 2 SCC 72
In this case, the court upheld the constitutional validity of Section 497, read with Section 198, by stating that this provision disables both wife and husband from punishing each other for adultery and is hence not discriminatory. It only punishes an outsider who tries to destroy the sanctity of marriage. And thus it is reverse discrimination in ‘favour’ of her rather than ‘against’ her.
W. Kalyani v. State through Inspector of Police and another (2012) 1 SC 358
The constitutionality of Section 497 did not arise in this case but it says that the mere fact that the appellant is a woman makes her completely immune to the charge of adultery and she cannot be proceeded against for that offence.
Recommendations
In the 42nd Law Commission report, it was recommended to include adulterous women liable for prosecution and reduce punishment from 5 years to 2 years. It was not given effect.
In the 152nd Law Commission report, it was recommended introducing equality between sexes in the provision for adultery and reflecting the societal change with regards to the status of a woman. But it was not accepted.
In 2003, the Malimath Committee on Reforms of Criminal Justice System was formed which recommended amending the provision as ‘whosoever has sexual intercourse with a spouse of any other is guilty of adultery’. The same is pending for consideration.
Court observations
Issue 1
The test of manifest arbitrariness should be applied to invalidate the legislation or any sub-legislation. Any law found to be arbitrary will be struck down. The Hon’ble Supreme Court cited two judgements here, namely:
The classification is found to be arbitrary in the sense that it treats only the husband as an aggrieved person given the right to prosecute for the offence, and no such right is provided to the wife. The provision is not based on equality.
The offence is based on the notion that women are the property of their husbands, and adultery is considered theft of his property because it says consent or connivance by the husband would not make it an offence.
The provision does not treat the wife as an offender and punishes only the third party.
Such classification is arbitrary and discriminatory and has no relevance in present times where women have their own identity and stand equal to men in every aspect of life. This provision clearly violates Article 14.
Issue 2
This provision discriminates between a married man and a married woman to her detriment on the grounds of sex. This provision is based on the stereotype that a man has control over his wife’s sexuality and she is his property. It perpetuates the notion that women are passive and incapable of exercising their sexual freedom.
Section 497 protects women from being punished as abettors. It is enunciated that this provision is beneficial for women, which is saved by Article 15(3). Article 15(3) was inserted to protect women from patriarchy and pull them out of suppression. This Article was aimed to bring them equal to men. But Section 497 is not protective discrimination but grounded in patriarchy and paternalism. The Hon’ble Supreme Court cited two judgements here, namely:
Thus, the said provision violates Article 15(1) of the Constitution because it is discriminatory on the basis of gender and perpetuates the stereotype of controlling a wife’s sexual autonomy.
Issue 3
The dignity of an individual and sexual privacy is protected by the Constitution under Article 21. A woman has an equal right to privacy as a man. The autonomy of an individual is the ability to make decisions on vital matters of life. The Hon’ble Supreme Court cited two judgements here, namely:
The provision allows adultery if the husband’s consent or connivance, which gives a man control over her sexual autonomy. This makes her a puppet of the husband and takes away all her individuality.
When the Penal Code was drafted the societal thinking regarding women was backward and she was treated as a chattel but after 158 years the status of women is equal to that of men. Her dignity is of utmost importance and cannot be undermined by a provision which perpetuates such gender stereotypes. Treating women as victims also demeans their individuality and questions their identity without their husbands. The enforcement of forced fidelity by curtailing sexual autonomy is an affront to the fundamental right to dignity and equality provided under Article 21.
Issue 4
A crime is defined as an offence that affects society as a whole. Adultery, on the other hand, is an offence that tantamounts to entering the private realm. Adultery may be committed by two consenting adults, making it a victimless crime. This provision aims to protect the sanctity of marriage but we have to admit that because of a pre-existing disruption of marital ties, adultery is committed.
The other offences related to matrimonial realms, such as Section 304-B, 306, 494, and 498-A, of the IPC, or any violation of the Protection of Women from Domestic Violence Act, 2005, or violation of Section 125 of the CrPC, are related to the extinction of the life of a married woman and punish her husband and relatives.
In adultery, a third party is punished for a criminal offence with a maximum of 5 years imprisonment. This is not required, in the opinion of the Hon’ble Supreme Court.
This provision makes a husband an aggrieved person and a woman a victim. Even if the law changes and provides equal rights to women against adultery, it is totally a private matter.
Adultery is better left as a ground for divorce and not a crime. Section 497 of the IPC is struck down and adultery can be grounds for any civil wrong, including the dissolution of marriage.
An overview of the judgement
The Hon’ble Supreme Court struck down Section 497 in this landmark case and held it unconstitutional and violative of Articles 14, 15 and 21 of the Constitution of India. It also asserted that Section 198(2) of the CrPC was unconstitutional to the extent as and when it is applied to Section 497 of the IPC. This decision has revoked a lot of prior judgements that criminalised adultery.
The Apex Court stated that Section 497 was old and constitutionally invalid as it robbed a woman of her autonomy, dignity and privacy. The Court was of the opinion that such a Section violated a woman’s right to life and personal liberty by accepting the idea that marriage subverted true equality by applying penal sanctions to a gender-based approach to the relationship between a man and a woman. The Court also stated that focusing on obtaining consent from the husband translated to subordination of the woman. The Court reaffirmed sexual privacy as a natural right under the Constitution. The Court further declared that Section 497 overlooked substantive equality, as it stated that women were not equal partners in a marriage and that they were incapable of consenting to any sexual activity. The Court also pointed out the legal system where women were treated as the sexual property of their husbands. Thus, this Section was an infringement of Article 14. The Bench further stated that this Section was biased as it focused on one gender specifically and was against the principles of Article 15. Further, the Court claimed that Article 21 denied women the constitutional guarantees and fundamental rights of dignity, liberty, privacy and sexual autonomy.
Moreover, the Court asserted that adultery remained a civil wrong and one of the elements for grounds for divorce, even though it was decriminalised now. The Court also said that criminal offences were committed against society as a whole, whereas adultery fell under the umbrella of personal issues and was not a crime against society. While considering adultery as a crime, the Court held that the state must not interfere with the personal lives of people and that the husband and wife should be permitted to make a unanimous decision based on their personal preferences and choices.
Justice D. Mishra (for himself and Justice A.M. Khanwilkar) opined that considering adultery as an offence was an infringement of the extreme privacy of the matrimonial sphere. He said that adultery is different from other matrimonial issues like demanding dowry, domestic violence, sending someone to jail for non-grant of maintenance or filing a suit for a second marriage, as the latter set of offences is meant to sub-serve various other purposes relating to a matrimonial relationship. In his opinion, criminalising adultery violated two aspects of Article 21, namely:
The dignity of the husband is attached to the wife, and
The privacy that is attached to a couple when in a married relationship.
Further, Justice D.Y. Chandrachud highlighted the ways in which adultery impacted the right to privacy by drawing attention to the jurisprudence of the US Supreme Court. He stressed that misogyny and patriarchal beliefs about the sexual control of a woman found no place in our constitutional order, which respects dignity and autonomy as inherent to an individual. Referring to the case of Navtej Singh Johar v. Union of India (AIR 2018 SC 4321), he discussed the significance of sexual autonomy as an aspect of individual liberty, to highlight the indignity suffered by an individual when “acts within their personal sphere” were criminalised on the basis of regressive social attitudes, and to emphasise that, the right to sexual privacy was a natural right, which was crucial to liberty and dignity. Furthermore, Justice D.Y. Chandrachud mentioned the case of K.S. Puttaswamy v. Union of India ((2017) 10 SCC 1) and emphasised that the provision must reflect the status of women as equal parties in the institution of marriage, entitled to constitutional guarantees of privacy and dignity and that a life of dignity entailed that the “inner recesses of the human personality” be secured from “unwanted intrusion”. His judgement focused on the significance of sexual autonomy as a value that is important to life and personal liberty under Article 21. His judgement highlighted that Section 497 deprived women of their sexual freedom, autonomy, dignity, and privacy.
Moreover, Justice Indu Malhotra was of the opinion that adultery should be a civil wrong, as the freedom to engage in consensual sexual activity outside the purview of marriage does not actually guarantee protection under Article 21. However, in accordance with her opinion, the autonomy of a person to make their choices with respect to their sexuality in the most intimate spaces of life should be safeguarded from public censure through criminal sanction. Hence, she concluded that Section 497 did not meet the three-fold requirement for invasion of privacy under Article 21 as established in the Puttuswamy case.
Critical analysis
Infidelity is more common in larger cities where people are moving towards westernization. This decision has been widely criticized on the ground that it paved a way for people to commit adultery without any fear. There has been an increase in adultery since its decriminalization. Males have claimed that now there is no way to ensure the purity of bloodline. Many claims that recommendations from Law Commissions should have been accepted by the parliament in order to punish men and women both equally for adultery. The Supreme Court has also been criticized that they should have let parliament take decisions on adultery according to the changing social environment.
Recommendations
In the 42nd Law Commission Report, it was recommended to include adulterous women liable for prosecution and reduce punishment from 5 years to 2 years. It was not given effect.
In the 152nd Law Commission report, it was recommended to introduce equality between sexes in the provision for adultery and reflect societal change with regard to the status of a woman. But it was not accepted.
In 2003, the Malimath Committee on Reforms of the Criminal Justice System was formed, which recommended amending the provision as “whosoever has sexual intercourse with a spouse of any other is guilty of adultery”. The same is pending for consideration.
Reasoning and ratio given by the Court and critical analysis of the judgement
The Hon’ble Supreme Court, in this landmark judgement, struck down Section 497 of the Indian Penal Code, held that this Section is violative of Articles 14, 15 and 21 of the Indian Constitution and declared that it is unconstitutional. The Court further stated that Section 198(2) of the CrPC is also unconstitutional when it comes to reading with Section 497 of the IPC. The Court went on overruling all the previous judgements that were passed in favour of adultery as an offence and also explained that every individual has the full right to make decisions when it comes to their sexual lives. Any wrong (like criminal sanctions) should be a public wrong but when it comes to cases of adultery, it is a private wrong. The right to dignity says that a person should be penalised only when it is necessary to do so and proper analysis and inquiry should be carried out before deciding to punish them. Further, no one should treat a woman as a chattel or some property.
Such a law is quite archaic and was created when there was no Constitution enacted, so it has to be amended or stuck down because patriarchal laws do not hold much significance in this era. Even though the act of sexual infidelity is morally wrong, there are no sufficient conditions to criminalise it. The harm principle needs 3 elements to be fulfilled, without which the act cannot be classified as a criminal offence, they are as follows:
Harm,
A wrongdoing,
Public element.
Thus, the Hon’ble Supreme Court, in its judgement, rightly pointed out that such a law is highly discriminatory and does not go hand in hand with modern times and thus, declared it to be unconstitutional. After this landmark judgement, adultery is now only used as one of the grounds for seeking divorce and a person engaging in sexual activity with a person other than his/her spouse will not be punished.
The new way forward
This recent landmark judgement given by the Apex Court sheds light on the applicability of adultery laws and highlights the need for a clear nexus between an adulterous act and the right to privacy. With this judgement, even though adultery is now decriminalised, it is to date considered a moral wrong and a ground to seek divorce. The new laws, if any are to be enacted, must ensure that an individual’s personal choice and private space are respected.
Conclusion
From the above information, we can certainly conclude the following points:
What was struck down?
The Hon’ble Supreme Court struck down the archaic provision of the IPC- Section 497, that considered adultery an offence.
What was the issue?
The main problem with the Section was that it treated women as victims of an offence and like the property of their husbands. As per Section 497, it was not an offence if a man engaged in sexual relations with a woman after obtaining consent from her husband.
What happened after the judgement?
The judgement decriminalised adultery. After this judgement was passed, adultery was one of the grounds for divorce but no longer a criminal offence that attracted a punishment of up to 5 years of imprisonment.
What was the problem with the Government?
In the affidavit before the Apex Court, it was said that it would be against the sanctity of marriage to dilute the offence of adultery.
What should one keep in mind while following this judgement? Or what is that one thing an individual or a lawyer or a law student must take note of when it comes to reading such a case?
Even though Section 497 is no longer considered an offence per se, if any aggrieved spouse commits suicide because of adultery, then such an act will be treated as abatement to suicide and the person may be punished for committing such a crime.
Last but not least, please remember, “adultery may take you to court, not to jail”.
Hope this article has helped you understand the basic details of the landmark judgment. Happy reading! 🙂
Frequently Asked Questions (FAQs)
What was the landmark case of Joseph Shine v. Union of India all about?
The landmark case of Joseph Shine v. Union of India challenged the constitutional validity of Section 497 of the IPC, read with Section 198(2) of the CrPC. The petitioner (Joseph Shine) and his lawyer argued that such a law was against the fundamental rights that are guaranteed to all the citizens of India, like the Right to Equality and Privacy.
What was the decision of the Apex Court in the famous Joseph Shine case?
The Apex Court in this landmark case struck down Section 497, claiming that it was unconstitutional. The Court opined that such a Section was biased and treated women as objects and wives as the property of their husbands, thus infringing the Right to equality.
Why did the Hon’ble Supreme Court strike down Section 497?
The Apex Court’s Bench considered Section 497 to be unconstitutional, arbitrary and biassed as it only penalised men for engaging in sexual activities outside the purview of marriage and not women; in fact, it stated that if the husband gives his assent to his wife to engage in sexual activity with another man, then it is not a crime. All these matters infringed Articles 14, 15 and 21 of the Constitution of India.
Did the discrimination against adultery affect Indian society?
The landmark judgement declared that adultery was no longer an offence, thus recognising the right to equality and privacy equally for both men and women. This marks a significant shift towards recognising individual autonomy in personal relationships.
Did the discrimination based on adultery have any impact on laws related to marital relations?
Even though the judgement decriminalised adultery, it did not have any explicit impact on laws related to marriage or divorce directly. However, such a move might have influenced matrimonial cases by changing societal perceptions of engaging in extramarital affairs as a crime.
Is Section 497 of the Indian Penal Code cancelled?
Yes, the Hon’ble Supreme Court in the landmark case of Joseph Shine v. Union of India cancelled or struck down Section 497 and decriminalised adultery.
Before Section 497 was struck down, what was the punishment for committing adultery?
Before Section 497 was struck down, adultery was a criminal offence and attracted a punishment of imprisonment of up to 5 years, a fine, and at times, both.
Was the Joseph Shine judgement criticised or opposed by anyone?
There were several debates on whether decriminalising adultery would weaken the sanctity of marriage and family values. Some individuals opined that such a move may have adverse effects on matrimonial harmony. The one in favour of such a judgement states that this move strengthened the rights of an individual.
Are there any new laws enacted to replace Section 497 after it was decriminalised in 2018?
No, after the law that contended adultery was an offence was struck down, no new legislation has been enacted. However, the decriminalisation led to adultery being considered a civil matter (and one of the grounds to seek divorce) rather than a criminal wrong.
Was there a global impact caused by the judgement?
Yes, the judgement gained international attention and was seen as a stepping stone towards recognising the rights of an individual in personal matters. It contributed to discussions on similar laws in other countries and their alignment with human rights principles.
What were the major arguments against Section 497 by the petitioner?
The counsel for the petitioner was of the notion that Section 497 violated several aspects of fundamental rights (Articles 14, 15 and 21) and that it was an old law that was enacted when there was no Constitution, which has no relevance in the modern era.
What were the major arguments in support of Section 497 by the respondent?
The counsel for the respondent stated that Section 497 is an offence that may even break the institution of marriage, which is why such an act has to be penalised. The counsel further contended that adultery is morally outrageous and that all the perpetrators committing such a wrong should be prosecuted. The council also affirmed that Article 21 of the Constitution was not an absolute right and that there should be reasonable restrictions imposed, especially in cases where public interest is at stake.
What was the significance of passing such a judgement?
This landmark judgement strengthened the aspect of personal autonomy and privacy rights, thus reaching the inference that the state has no right to interfere in an individual’s personal life or relationships unless it is a civil dispute.
Can I sue my wife for committing adultery in India?
In 2018, the law that considered adultery an offence was decriminalised, and thus, adultery is no longer an offence. Which is why a spouse cannot sue or file a complaint against his/her spouse for committing adultery. However, he/she can claim it for divorce, as it is still one of the grounds for seeking divorce and a civil wrong thereof.
Can I divorce my spouse for committing adultery?
Yes, one can file for divorce in case his/her spouse has committed adultery, as it is one of the grounds for seeking divorce and a civil wrong.
Did the discrimination in Section 497 lead to an increase in extramarital affairs?
There is no straight-jacket way to answer this question nor is there any survey conducted that demonstrated such an upsurge. Decriminalisation of such a Section or activity recognised individual autonomy and equality rather than promoting extramarital affairs.
This article is written by Diksha Paliwal. The article discusses in detail the legal framework and jurisprudence as enunciated in the Indian Criminal Law for the punishment of rape. It provides a comprehensive analysis of the relevant provisions pertaining to rape and the crucial factors to be taken into consideration while awarding the punishment for rape. Further, it deals with the recent legislative amendments and the lacunas that are acting as a hindrance in the delivery of justice to the victims of rape. In the end, it deals with certain suggestive measures to increase the effectiveness and implementation of the laws relating to rape in criminal jurisprudence.
It has been published by Rachit Garg.
Table of Contents
Introduction
As said by Justice Krishna Iyer and I quote, “When a woman is ravished what is inflicted is not merely physical injury, but ‘the deep sense of some deathless shame.” While there has been an increase in celebration of the rights of women in all spheres in this modern world, the concern for protecting her dignity and honour appears to be waning. Rape is not just a crime that inflicts physical injury but rather completely shatters women from the inside, leaving a wound that can never be healed and a void that no one will ever be able to fill.
As written in the book titled ‘The Philosophy of Criminal Conduct’ by Donald A. Andres & James Bonta, “Rape, as it is generally defined, is an untoward, unwanted and non-consensual sexual act or behaviour of a man towards a woman or another man.” An act of gross violation of the autonomy of one’s body is what the heinous crime of rape is. The rising crime rates against women substantiate the poor condition of the safety of women in India. There has been a consistent rise in crime against women in the past few years. Around 4.38 lakh cases of crime were registered in the year 2021, reflecting a horrifying and disconcerting escalation of a 15.3% increase in cases as compared to 2021.
It is pertinent to note here that the author in no way indicates that women are the only victims of the heinous offence of rape. In the past few years, cases of rape against men have also been registered, and a number of women have been found guilty of violating the sexual autonomy of men. In a survey, it was found that around 14% of the reported victims of rape are male. However, the prevalent laws in our country are still not gender-neutral. Undoubtedly, equal protection must be provided to the victims, irrespective of their gender.
To read more about the laws pertaining to male victims of rape and the approach of courts towards such offenses, click here.
Offence of rape
In India, the offence of rape was criminalised for the first time by the Indian Penal Code, 1860 (hereinafter referred to as the IPC). Under the chairmanship of Lord Macaulay, the very first law commission of our country was formulated, which ultimately led to the enactment of the IPC.
It took long years of struggle to criminalise such a crime of such a heinous and barbarous nature. The laws relating to rape have been significantly developed; however, back in the early days, getting justice and proving the accused guilty was on the victim. There was always an assumption that women were lying about the charges and the happening of such a crime. In the seventeenth century, a quote by a renowned jurist, Sir Mathew Hale, reflects the prejudiced and discriminatory thinking of the courts of British India on rape; it said that “an accusation easily to be made and hard to be proved, and harder to be defended by the party accused, though never so innocent”. However, over time, there have been several developments in our criminal justice system, and the laws pertaining to rape have also evolved drastically. The anti-rape laws have become stringent, especially after some of the horrific and disturbing incidents that have occurred in the past few years.
Rape is an act of extreme physical and mental torture, a deplorable crime that devastatingly affects the victim. It is not just an act of physical violence; but it also destroys the victim’s mental and psychological well being completely. Having a stringent criminal justice administration system that deals with such crimes sternly and punishes the offenders strictly is very important.
The offence of rape is defined under Section 375 of the IPC. It states as under:
A man is said to have committed the offence of rape, under the following circumstances;
Clause (a) – If he inserts his penis, to any extent, in a woman’s vagina, mouth, anus, or urethra, or if he in any way forces or makes a woman to do any such thing with him or any other person; or
Clause (b) – If he inserts any object or a part of his body (not being the penis), to any extent, in the vagina, anus, or urethra, or forces a woman to do so with him or any other person; or
Clause (c) – If any man manipulates in any manner any part of a woman’s body, to cause such penetration, in the vagina, anus, or urethra, or forces a woman to do so with him or any other person; or
Clause (d) – applies or forces his mouth to the vagina, anus, or urethra of a woman, or forces a woman to do so with him or any other person,
For the act to be regarded as an offence of rape under this Section, the aforesaid acts by a man should fall under any of the below-mentioned descriptions:
Firstly – against the will of the woman
In the case of Deelip Singh v. State of Bihar (2005), the victim stated that the first time the accused had sexual intercourse with her, it was done despite her resisting the same; however, subsequently, she became a consenting party. The reason behind her consent was stated by the girl that it was given because of the false promises of marriage by the accused. It was held that the version that the girl is stating or her testimonies cannot be relied on, and thus the charges against the man cannot be sustained. (It must be noted that this case was decided prior to the Criminal Amendment Act of 2013).
Secondly – in the absence of the woman’s consent
In the case of Sohan Singh v. State of Rajasthan (1998), the Rajasthan High Court held that in a case of custodial rape, if the victim has stated that she did not give her consent to the act, then the court is supposed to consider the same and shall presume that consent was not given by the victim.
Thirdly- obtaining the consent of the woman by putting or any other person related to her in danger or by threatening her or a person she is interested in fear of death.
In the case of Harishankar v. State of Maharashtra, (1997) 11 SCC 191, the conviction of the accused appellant was upheld by the Supreme Court, wherein the court stated that in the circumstances in which the prosecutrix was stuck, it was not possible for her to raise the alarm of fear, and hence the defence by the accused that the prosecutrix did not shout is unsustainable. It was very evident from the statements taken that the prosecutrix was made to sit on the cycle bar and that she was given a tight slap on her mouth for making any movement or noise. Further, there were other circumstances in which it was difficult for the prosecutrix to raise any alarm.
Fourthly – by impersonating the woman’s lawfully wedded husband, or if the man takes the consent of the woman by making her believe that he is her husband.
In the case of Deepak Gulati v. State of Haryana (2013), the Supreme Court emphasised the fact that it is important that the courts look carefully into whether the accused really wanted to marry the victim or whether there were any malafide intentions of the accused behind his promise to marry with the victim.
Fifthly- by taking her consent when she is not capable of giving such consent, i.e., either she is intoxicated or of unsound mind, or she is not in a position to understand the nature and consequence of such an act.
In the case of Azeez Usman Shaikh. v. State of Maharashtra (1999), the Bombay High Court, while giving due consideration to the aforesaid clause of Section 375, convicted a person of rape. In the present case, the victim was of an unsound mind.
Sixthly- if the woman giving consent is under 18 years of age (the fact that the woman has given her consent or not is immaterial).
In the case of Amirul Gazi v. State of West Bengal (2022), the Calcutta High Court convicted a man for the offence of rape, stating that consent given by a girl under the age of 16 is immaterial and will definitely not be considered valid consent for the act of sexual intercourse.
Seventhly- in a situation where she is unable to give her consent.
The Section further provides two explanations, so as to remove any ambiguity that might come in the way while interpreting the provision.
Explanation 1 provides that the term ‘vagina’ will also include labia majora.
Explanation 2 provides a clear understanding of the term consent in the context of this Section. It is said to be a clear and unequivocal voluntary agreement by the woman to enter into any sexual act, which may be presented or communicated through words, gestures or any other form of verbal or non-verbal communication.
The above explanation further provides a proviso, that is, if, under a situation where no act of resistance is shown by the victim, it doesn’t mean that the act of forceful sexual intercourse will not amount to an offence of rape as provided in the Indian Penal Code.
Furthermore, the Section provides for two exceptions, namely, medical examination and sexual intercourse by a man with his wife will not fall under the offence of rape, respectively.
To read and understand a detailed explanation of the clauses in Section 375, refer to this article.
In the case of Bhupinder Sharma v. State of Himachal Pradesh (2003), the Apex Court has held that “the offence of rape in its simplest term is “the ravishment of a woman, without her consent, by force, fear or fraud” or “the carnal knowledge of a woman by force against her will”. “Rape” or “raptus” is when a man hath carnal knowledge of a woman by force and against her will; or, as expressed more fully, “rape is the carnal knowledge of any woman, above the age of particular years, against her will; or of a woman child, under that age, with or against her will”. The essential words in an indictment for rape are rapuit and carnaliter cognovit; but carnaliter cognovit, nor any other circumlocution without the word rapuit, are not sufficient in a legal sense to express rape. In the crime of rape, “carnal knowledge” means the penetration to the slightest degree of the organ alleged to have been carnally known by the male organ of generation. It is a violation with violence of the private person of a woman—an outrage by all means. By the very nature of the offence it is an obnoxious act of the highest order.”
Punishment for rape in India
Rape is the most heinous crime an individual can commit and the most egregious violation of the law that a person can perpetrate. It is a crime that entirely disrupts the being of the victim, as also stated by the courts in various cases. Rape is an unfortunate and sordid reality in not just India but the entire world. The act in itself reflects the horrifying reality of how women are being treated and are considered inferior to men. The trauma that a victim of sexual assault faces shatters her completely—a situation or a circumstance that is both unendurable and disgraceful.
As opined in the case of Jennison v. Baker, (1972) 2 QB 52 and further quoted by the Committee on Reforms of the Criminal Justice System, Ministry of Home Affairs, “Law should not sit limply; while those who defy it go free and those who seek its protection lose hope”. Under certain circumstances and situations, punishment for those who defy the law becomes very important. The legislature has enacted various laws and provisions that protect the victim against such inhumane acts and also provide for punishments that will be imposed on an individual if he commits the offence of rape. Let’s have a detailed analysis of the provisions that provide for the punishment of rape in India.
Section 376 IPC
The very first provision that deals with the punishment provided for the offence of rape is Section 376 of the IPC. Section 376(1) provides that any person who commits the offence of rape is liable to be punished with a period of imprisonment, which shall not be less than 10 years; however, the same may exceed a punishment of life imprisonment. Also, it must be noted that the type of imprisonment provided under this Section for the offence of rape is rigorous imprisonment. Further, it provides that this shall not apply to the cases provided under sub-section 2 of Section 376.
In Section 376(2), punishment for a period which shall not be less than 10 years and which may extend to life imprisonment is imposed on any person who falls under the below-mentioned category and commits the offence of rape under the below-mentioned circumstances.
If a police officer commits the offence of rape on the premises of the police station or on a woman who is in custody;
If a public servant on his duty commits rape with a woman who is in the custody of such public servant or in the custody of any of his sub-ordinate;
If a person in the armed forces commits rape in the area where he is deployed;
If a person who is in the management of a jail, remand home, any women’s institution commits the offence of rape on any woman (who is an inmate of any such aforesaid place) by taking advantage of his post;
If a person working in a hospital, commits rape in that hospital where he is working;
If a person, who is a relative, guardian, or teacher of a woman, or is in a position of trust or authority towards her, perpetrates an act of rape on her.
If a person commits the offence of rape with a woman during communal or sectarian violence;
If a person commits rape on a pregnant woman (in spite of having knowledge about her pregnancy);
If a person commits rape with a woman who is capable of providing her consent;
If a person commits rape on a woman with whom he has a position of control or dominance;
If a person commits rape with a woman who is mentally or physically unwell;
If a person severely injures or grievously hurts, maims, disfigures or endangers a woman’s life while committing the offence of rape;
If a person repeatedly rapes the same woman.
Also, it is pertinent to note that the convicted person is punished with rigorous imprisonment, and further, the term ‘life imprisonment’ will include a sentence for the rest of the convicted person’s life.
The Section further provides an explanation for sub-section 2 of Section 376 for certain terms used in the aforesaid sub-section, wherein, it defines the terms ‘armed forces’, ‘hospital’, ‘police officer’, and ‘women’s or children’s institution’.
Section 376(3) (added by the Criminal Law (Amendment) Act, 2018) provides punishment to the accused who has committed the heinous offence of rape with a woman who is under the age of 16 years. It states that the accused person shall be punished with rigorous imprisonment for a period not less than 20 years, which can extend up to imprisonment for life (the remaining period of the accused’s life). Further, the person shall also be liable to pay the fine amount as imposed on him, which shall be just and reasonable to meet the medical expenses and rehabilitation expenses of the victim.
For a detailed understanding of Section 376, refer to this article on Section 376 Punishment.
Section 376A IPC
The aforesaid Section (amendment done in the year 2013, effective from 03.02.2013- Act 13 of 2013) provides punishment for a person who has committed the offence of rape as laid down under Section 376(1) and (2), wherein the aforesaid acts of the person lead to the death of the victim or which leaves the victim in a persistent vegetative state. It provides that the accused person shall be punished with rigorous imprisonment for a period not less than 20 years, which can extend up to imprisonment for life (the remaining period of the accused’s life).
Section 376AB IPC
The aforesaid Section provides punishment to the accused who has committed the heinous offence of rape with a woman who is under the age of 12 years. It states that the accused person shall be punished with rigorous imprisonment for a period not less than 20 years, which can extend up to imprisonment for life (the remaining period of the accused’s life). Further, the person shall also be liable to pay the fine amount as imposed on him, which shall be just and reasonable to meet the medical expenses and rehabilitation expenses of the victim.
Section 376B IPC
Even though marital rape has not been criminalised in India yet, the aforesaid provision provides punishment to a husband who forces himself on his wife or who forces his wife to have sexual intercourse with him. However, one must note that this provision is for cases wherein the wife is living separately (be it under a decree of separation or otherwise, in the absence of the wife’s consent) and shall be punished with imprisonment not less than 2 years but can extend up to 7 years, along with a fine.
Section 376C IPC
This Section provides punishment for a person having sexual intercourse with a woman by abusing his position of authority. If a person with authority seduces a woman to have sexual intercourse with him, then this is a punishable offence under this Section. If a person of authority, a person having a fiduciary relationship, or a public servant, or a superintendent or manager in jail, remand home or any other such institution, or any person in hospital management or staff of the hospital abuses his position, thereby making a woman have sexual intercourse with him, then he shall be punished with rigorous imprisonment for a period not less than 5 years but which may extend to 10 years, along with a fine.
Note: It is pertinent to note that this act of sexual intercourse by a man will not amount to rape and will not fall in the category of the definition provided by Section 375 of the IPC.
Section 376 D IPC
The aforesaid Section provides punishment for the offence of gang rape. It provides that if the offence of rape is committed against a woman by one or more persons acting as a collective group or having a common intention, then under such a situation, every person involved in that act will be deemed to have committed the act of rape. Further, it provides that every such person shall be punished with rigorous imprisonment for a period not less than 20 years, which can extend up to imprisonment for life (the remaining period of the accused’s life). Further, the person shall also be liable to pay the fine amount as imposed on him, which shall be just and reasonable to meet the medical expenses and rehabilitation expenses of the victim.
Section 376 DA and Section 376 DB IPC
Section 376 DA provides punishment to the persons accused of the offence of gang rape with a woman who is under the age of 16 years, whereas Section 376 DB provides punishment to the persons accused of the offence of gang rape with a woman who is under the age of 12 years. Both sections provide punishment for life imprisonment (rigorous in nature) along with a fine. Also, it is to be noted that such a fine shall be just and reasonable to meet the medical expenses and rehabilitation expenses of the victim.
Section 376 E IPC
This Section provides punishment for repeat offenders who have been convicted of offences punishable under Sections 376 or 376A or 376AB or 376D or 376DA or Section 376 DB, and after that, the person is again convicted under any of the aforesaid sections. It provides punishment for imprisonment of life (for the remaining period of a person’s life).
POCSO Act, 2012 IPC
In the long and chequered history of the criminal justice system of India, the passing of the Protection of Children from Sexual Offences Act, 2012 (POCSO Act) embarks on a remarkable day. The POCSO Act addresses the issue of sexual violence against children and provides penal provisions for persons committing such offences.
Firstly, the punishment for penetrative sexual assault (as defined under Section 3) is provided under Section 4. It punishes the offender with imprisonment for a minimum of ten years, which may extend up to imprisonment for life, along with a fine. If a person commits the aforesaid offence with a child less than 16 years of age, then he shall be punished with a minimum imprisonment of 20 years, which may extend up to imprisonment for life (for the remaining period of the offender’s life) along with a fine. Further, the imposed fine should be just and reasonable to meet the expenses.
Sexual assault as defined under Section 7 is punishable under Section 8 with a period of imprisonment not less than 3 years, which may extend to 5 years, along with a fine.
Aggravated sexual assault, as defined under Section 9, is punishable under Section 10. It provides punishment for a period of imprisonment not less than 5 years, which may extend to 7 years, along with a fine.
For a detailed reading of the rape laws in India and the historical development of the laws, refer to this article – Rape Laws in India.
Importance case laws
A recent survey conducted by the National Crime Records Bureau (NCRB) revealed horrifying and depressing data relating to sexual violence that in 2021, there were 1,49,404 registered instances of crimes against children. Of these, 53,874 cases, which constitute 36.05% of the total, fell under the jurisdiction of the POCSO Act.
Let’s have a look at a few cases dealing with the offences under the aforesaid Act.
State of West Bengal v Basudeb @ Basu Mondal & Ors (2021)
In the present case, four persons gang raped a minor girl aged 16 and blackmailed her with a video that they made with one of their mobile phones while they were sexually assaulting the minor. The accused were threatening the girl and were repeatedly warning her that if she dared to reveal the details of the crime, they would leak her video. However, the video was eventually leaked, and the girl gathered courage, and ultimately the FIR was lodged. The charges against the accused person were under Sections 6, 14 and 15 of the POCSO Act, read with Sections 376DA, 506, and 34 of the IPC and Section 67B of the Information Technology Act, 2000.
The defence contended that they had not committed any of the alleged crimes and that they were completely innocent. After hearing the parties, the two issues before the Additional Sessions Judge, First, Lalbagh, Murshidabad, were whether the accused persons had committed the offences as enumerated and, if yes, what would be the quantum of punishment as per the offences made out.
While mentioning the principle of Jusitia Et Liberate Prior (Justice holds the highest position and comes before liberty), he observed that the victim fell prey to her lover’s lust and the other friends of her lover. They mercilessly and brutally raped her while simultaneously making a video of her. While stating that the mitigating circumstances are far less and the aggravating circumstances are many, the court convicted all the accused persons under the aforementioned offences of the POCSO Act and gang rape under the IPC and IT Act and sentenced them to imprisonment for life along with a fine of Rs 2 lakhs for each accused. The court further directed the state to grant a compensation of Rs 4 lakhs to the victim.
Shantanu v. State (2023)
In the present case, the appellant was found guilty by the trial court of the offences punishable under Section 376 of the IPC and Section 6 of the POCSO Act. For the aforesaid offences, the accused was sent to jail for a term of 10 years and was also asked to pay a fine of Rs. 5000/- to the victim. Further, he was not sentenced under Section 376 of the IPC after taking into consideration Section 42 of the POCSO Act.
The appellant challenged the aforesaid conviction before the High Court of Delhi. The appellant submitted that there were many discrepancies in the material evidence as submitted by the prosecution, and further, there were also improvements in the testimonies or statements given by the victim. The High Court, while giving due consideration to the victim’s minor age of six years, stated that chances may be that due to the victim’s innocence, there may have been a few changes in the statement; however, the improvements in the statement cannot be overlooked.
The Court further observed that since in the present incident, there were no independent witnesses or any other medical evidence, it is crucial that the testimony given by the victim be of sterling quality because the only thing that will be examined here is the prosecutrix’s testimony alone. It further stated that “A perusal of Section 3(c) of the POCSO Act shows that for an act to be a penetrative sexual assault, the accused has to manipulate any part of the body of the child so as to cause penetration. There is nothing in the present case to show that there was any manipulation on any part of the body of the victim so as to cause penetration.”
Thus, the Delhi High Court held that he cannot be convicted under Section 3(c) of the POCSO Act and that in the present case, no evidence can be shown that proves that there was any sort of manipulation on any part of the victim’s body to cause penetration. Further, it was also clarified that a simple touch will not amount to manipulation for penetrative sexual assault under the POCSO Act.
Attorney General for India v. Satish and another (2023)
In the present case, a judgement delivered by the Bombay High Court in the case of Satish Ragde v. the State of Maharashtra (2021), was overruled by the Apex Court. The High Court acquitted the appellant under Section 8 of the POCSO Act and convicted him under Section 354 of IPC, thereby sentencing him to undergo rigorous imprisonment for one year.
In this case, the Supreme Court, while relying on the principle of “mischief rule” of the Interpretation of Statutes, held that law must be interpreted in a way that curbs harm and promotes remedy. It further stated that Section 7 of the POCSO Act covers both direct and indirect touch.
Marital rape
In simple words, the term ‘marital rape’ connotes forceful sexual intercourse between husband and wife in the absence of consent from either of the parties. Under the exception 2 provided in Section 375, the act of marital rape is defined. The exception provided under the section clarifies that if the age of the wife is above 15 years, then this will not amount to rape. Now, the legal age for marriage in India for girls is 18 years, so under no circumstances, the age of a wife in marital rape will be less than 15 years. Hence, marital rape in India, as per the prevalent laws, is not criminalised. Thus, as per Section 375 of the IPC, there is no punishment for marital rape in India.
As per a recent survey conducted by the National Family Health Survey (NFHS), around 1 out of 3 (18- 49 years of age) women have been victims of spousal abuse, and 6% of women have suffered sexual violence. Activists fighting for women’s rights and other support groups for women have been demanding the criminalisation of marital rape for the past few years. Unfortunately, marital rape still remains taboo in India, discussed rarely and ignored easily. In India, the concept of implied consent in marriage is widely followed, and hence marital rape is not a crime.
Case laws
From the above discussion, it is clear that the offence of marital rape is not criminalised in India; however, there were a few cases in which the issue of marital rape was dealt with. Let’s have a look at them.
Independent Thought v. Union of India (2013)
In the landmark decision by the Apex Court in the case of Independent Thought v. Union of India (2013), it recognised the bodily autonomy of a girl and criminalised the act of rape in child marriage or marriage of underage girls by their husbands.
Anuja Kapur v. Union of India (2019)
In this case, the present petitioner filed a Public Interest Litigation under Article 32 of the Constitution, wherein the petitioners prayed for the issuance of a writ of mandamus to the respondents for framing guidelines, by-rules, and appropriate rules for including marital rape as a ground of divorce and for punishment for violation of the framed laws. The Court, while dismissing the petition, stated that the formulation of laws is the function of the legislature and not of the courts.
Challenge to Exception II of Section 375
In the case of Hrishikesh Sahoo v. State of Karnataka (2018) (judgement pronounced in March 2022), the Karnataka High Court held that the exception II of Section 375 (marital rape does not amount to rape) is not absolute and is contrary to the principle of equality. It stated that this exception is regressive and thus dismissed the arguments put forth by the husband, stating that the charges cannot be framed against the husband as the exception provides for it. The husband has moved against his conviction before the Apex Court and has presently obtained a stay against the conviction in his favour. Interestingly, the Karnataka government has also supported the prosecution of the husband in the present case.
Presently, the case is pending adjudication before the Supreme Court.
To learn more regarding the reasons that support the challenging of the exception clause of Section 375, please refer to this article.
Suggestive provisions for marital rape in India: author’s opinion
Formulating women-centric laws in nature will definitely have a great impact on society; for instance, women may use it as a tool for blackmailing their husbands, or proof of innocence under such circumstances will be very difficult. This may even lead to an increase in the divorce rate, which will disturb the sacred institution of marriage. Further, this will also be a clear violation of the fundamental right of equality enshrined in Article 14 of the Constitution of India, 1949.
Hence, as per the author’s analysis, certain points mentioned below are important to keep in mind while making any law or separate provisions for the criminalisation of marital rape and punishment for the same.
Gender-neutral– It is of crucial importance that the laws, if any, are enacted in the future to eradicate this evil of marital rape; they must be made gender-neutral.
Evidence pertaining to proving the allegations or for the accused to prove innocence– It is important that the law provide certain criteria as to what will be the essentials to prove the offence of marital rape or how the accused will prove his innocence.
Keeping in mind the personal laws– Up till now, our country has not enacted the Uniform Civil Code, we still have personal laws governing marriage, maintenance, succession, etc. Hence, it is important that whatever laws are framed, they be made after ensuring that they are not in violation of personal laws.
Separate provision for divorce and maintenance– The formulated laws should have a separate provision for divorce and maintenance in order to maintain equality between the spouses.
Punishment for women for false allegations– The formulated Act should necessarily have special provisions for punishing the women who are misusing the law and making false allegations.
Maintenance– There should be a separate provision for maintenance for a wife if she is not able to earn for herself if she falls victim to the offence of marital rape.
Provision for the custody of the child– There must be separate provisions as to how the custody of the child is decided if the spouses choose to live separately and the procedure for the transfer of custody to the child.
Special courts– There must be a special court for speedy trial and delivery of justice in such crucial matters.
Specific period for inquiry– There must be special provisions that set up a specific time for completing the inquiry in a limited period of time.
A spouse has a right to say ‘no’, marriage is not a licence to have forceful sexual intercourse. There is an urgent need for criminalisation of marital rape. It is evident from the existing and repealed laws that, since time immemorial, marital rape has been excluded from any legal prohibitions against rape. Sir Matthew Hale, in 1600 CE, opined that, in any marriage, any sexual act is consensual, as the act of marriage or the willingness of the wife itself reflects the consent of the women for sexual intercourse. He further said that the consent given after marriage is irrevocable. This ideology was not just opined by him; it was justified and widely accepted all over the world. However, with time, there have been reforms regarding the criminalising of marital rape. Presently, only 36 countries in the world have not criminalised the offence of marital rape, including India.
Anticipatory bail in the cases of rape
In the case of the offence of rape, be it under the POCSO Act or the CrPC, there is no such absolute bar on the grant of anticipatory bail to the accused. Let’s understand the perspective of the courts of India through various cases wherein the accused has sought anticipatory bail in the cases of rape.
Deepak Prakash Singh @ Deepak Singh v. State of U.P. and Another (2023)
In the present case, an FIR was registered against the accused under Sections 354, 376 IPC, Section 7/8 of the POCSO Act, and Section 3(2)(Va) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989, before the Jafrabad, Police Station, District Jaunpur. The accused moved a plea seeking a grant of anticipatory bail before the Sessions Court, Jaunpur, which was rejected. Further, he moved against the dismissal of his anticipatory bail plea before the Allahabad High Court. The accused, who was a teacher by profession, was accused of raping a minor girl aged about 14 years. The worst part was that the girl was mentally retarded. From the state, it was argued that the application for grant of anticipatory bail is not maintainable, as an offence under the SC/ST Act is also registered against the accused, and there is no provision for grant of anticipatory bail under the offences of the SC/ST Act.
The Allahabad High Court observed that when a person is charged under the SC/ST Act and the POCSO Act, a Special Court under the POCSO Act would have the authority to decide on the bail plea. Therefore, the Court dismissed the state’s objection to the maintainability of the present anticipatory bail application.
The court, however, emphasised the position that a teacher holds in society, and further, while taking into account the facts and circumstances of the present case, it remarked that “In our society, a teacher plays a very important role in shaping the future of their students, and such conduct by the teacher would certainly create an atmosphere of fear in the minds of people in society, and such perpetrators should not go unpunished and should get just punishment from the Courts of law to curb such incidents in the future.”
After giving due consideration to the facts and circumstances of the case and the severity and nature of the allegations against the accused, the medical report, and the statements under Sections 161 and 164 CrPC, respectively, the High Court observed that no case is made out for the grant of anticipatory bail or for exercising its discretionary power under Section 438 CrPC.
It was alleged that the petitioner used to unlawfully enter the victim’s residence and repeatedly committed rape with her between March 2022 and October 2022. The accused moved before the Sessions Courts for the grant of anticipatory bail; however, the same was dismissed. He then moved to the High Court of Kerala, seeking the grant of anticipatory bail.
It was contended by the petitioner that, at the time of the incident, he was only 18 years old. Further, it was also submitted by his counsel that the fact of the victim’s late registration of the FIR is doubtful. The first time the victim was raped was in March; however, the FIR was registered in October. Also, it was submitted since the medical examination of the accused has been done, he is no longer required in custody.
It was observed by the Ernakulam bench of the Kerala High Court, that merely because the accused was 18 years old at the time of the commission of an offence, he cannot be granted anticipatory bail. The Court opined that looking into the seriousness of the nature of the offence this fact alone cannot serve as a basis for granting anticipatory bail. While acknowledging the fact that the petitioner and the victim reside in neighbouring houses and that the victim, who is said to be disabled, has unequivocally identified the petitioner as the one who committed the crime, the court refused to exercise its power to grant bail to the accused.
XXXX v. State of Kerala (2023)
In the present case, the accused was the stepfather of the victim, who was a minor. This application for seeking anticipatory bail was filed by the victim’s mother (the second accused). An FIR was registered against the stepfather and the mother under the offences punishable under Sections 376 (2)(n), 376(3) of the IPC, Section 4 read with 3(a), 6 read with Sections 5 (l) (m) and (p), 11 (i) (ii) & (iv) read with 12 and 16 read with 17 of the POCSO Act and Section 75 of the Juvenile Justice Act, 2015. The mother of the victim was accused of facilitating the offence of rape and sexual assault.
Justice P. Gopinath, of the Kerala High Court, while rejecting the plea of the accused mother, opined that, if the allegations made against the mother were confirmed, it would be a disgrace to motherhood. It was further observed that since the applicant’s mother is listed as the victim’s biological mother, she could potentially influence or intimidate the minor child into providing evidence in favour of both her stepfather and her mother.
Lowering the age of consent
As per the prevailing laws of the country, the age of consent is 18 years. Before the enactment of the POCSO Act, the age of consent was 16 years. It was the aforesaid Act that raised the age of consent from 16 to 18 years. The age of consent, i.e., the age at which one can legally give consent to sexual activities, is of significant importance, the reason being that it fundamentally shapes the understanding of the relationship involved. Thus, sexual intercourse with a child below the age of 18 years, even if consensual, is a penal offence (as discussed in the above paragraphs).
The POCSO Act, 2012, was established with a view to protect minors from sexual abuse and exploitation, thereby, imposing strict penalties on any person found guilty of committing such offenses against children as given in the aforesaid Act. As per Section 2(d) of the POCSO Act, a ‘child’ is any individual aged below 18 years. Thus, consent given by a child for any sexual activity is deemed irrelevant, and consensual sexual activity involving or between adolescents is equated with rape.
However, in recent years, there has been debate going on about lowering the age of consent, as provided by the legislature. The main reason behind this is a high spike in the cases of sexual offences in the age group of 16 to 18 years. It has been argued by many experts that the reason behind this spike is mainly due to the fact that 18 years of age is very high and that this law fails to consider the complexities of adolescent relationships. Most of the cases are being filed by the families of the girl involved in a sexual relationship with a boy just to punish him. Even the courts of India have expressed the need to lower the age of consent and have thus asked the legislature to reconsider and amend the age of consent as per the present scenario of the society. Recently, Justice Bharati Dangre of the Bombay High Court said that it’s high time that the legislature takes note of the global scenario and reconsiders the age of consent under the POCSO Act.
In most of the cases registered under the POCSO Act, it has been found that it is not the victim who registers a case against the accused, but the families of the girl involved in such romantic relationships. Often, the accused gets convicted even after the girl confesses the fact that she gave her consent, only because of the age barrier provided under the POCSO Act.
In the present case, the applicant was booked under Sections 342, 354, 363, and 376(2)(n) of the Indian Penal Code and Sections 5(l), 6, 7, and 8 of the POCSO Act. The applicant (aged about 18 years) in the present case was in a relationship with the victim (aged about 17 years) for almost two years. The victim and the accused met on Instagram and were in a romantic relationship with each other. As per the prosecution story, it was stated that the accused kidnapped the girl and then had forceful sexual intercourse with her. However, the court, after giving due consideration to the victim’s statements and other evidence, found that the girl willingly went with the accused to his friend’s house.
The Kerala High Court, after giving due consideration to the facts and circumstances of the case, granted anticipatory bail to the accused, aged about 18 years, due to the fact that the victim and the accused were in a consensual relationship with each other.
Probhat Purkait @ Provat v. the State of West Bengal (2023)
In the present case, the Calcutta High Court quashed all the cases against the accused, who were booked under Sections 363 and 366 of the IPC and Section 6 of the POCSO Act. The lower court had convicted the accused under the aforesaid Sections, against which the applicant moved before the Calcutta High Court. All the evidence and the statements were considered by the court, and it was observed by the court that the girl and the accused were both in a consensual relationship.
The Calcutta High Court further observed that “The victim stated before us that she and her husband belongs to a rural area and they do not have knowledge that their relationship and marriage constitute an offence. By equating consensual and non-exploitative sexual acts with rape and (aggravated) penetrative sexual assault, the law undermines the bodily integrity and dignity of adolescents. While the ostensible objective may be to protect all children below 18 years from sexual exploitation, the law’s unintended effect has been the deprivation of liberty of young people in consensual relationships. The POCSO Act lumps all persons below 18 years together without consideration for their developing sexuality, evolving capacity, and the impact of such criminalisation on their best interests.”
Law Commission’s 283rd Report
The Law Commission of India, in its 283rd Report had declined the observations made by the various courts for lowering the age of consent from 18 years to 16 years. The commission was asked to give its report on the aforesaid subject of reducing the age of consent after the views given by various High Courts of India. It was asked by the courts that there is a need to reconsider the age of consent due to the increase in cases relating to minor girls aged about 16 years and above. However, the report stated that the POCSO Act definitely requires certain necessary amendments to combat the issue of an increase in the cases of false rape allegations or cases of consensual sexual relationships between the age groups of 16-18 years.
One of the reasons given by the Law Commission for not lowering the age of consent was the probability that it might result in an increase in child marriages. In the report, it was stated that “Any decrease in the age of consent would negatively impact the age-old fight against child marriage by providing parents an opportunity to marry off minor girls. PCMA is silent on age of consent and sexual relations with a minor, with the POCSO Act filling this void. especially after Exception 2 to Section 375 of the IPC was read down by the Supreme Court in 2017. The Parliament is already considering increasing the age of marriage for girls to 21 years, at par with boys, and thus any decrease in the age of consent would be against the tide of rational change”.
The report further stated that in the discussion that took place in Parliament and the observations made by the Supreme Court that were opined after the introduction of the POCSO Bill in 2011, it was crystal clear that the law would have strict application and the consent of a child is immaterial and has no role to play, whatsoever may be the reason behind the consent. The report made it abundantly clear that the victim’s consent in a situation where she is a child is meaningless.
It is to be noted that the Law Commission has clarified that it has presented its report after consulting with the National Commission for Protection of Child Rights (NCPCR), former judges, attorneys, child rights activists, NGOs, and academic experts in the field. The Commission also requested essential data from the High Courts (the pending and adjudicated cases relating to the offences under the POCSO Act) and the National Crime Records Bureau. In its report, the Commission has presented several arguments and a detailed analysis of the prevalent situations relating to this matter, and only after giving due consideration has it presented in its report that the age of consent under the POCSO Act cannot be tinkered with.
The report provided that the POCSO Act serves as a crucial tool in combating the evils of child trafficking and child prostitution. Altering or amending the definition of “child” under the aforesaid Act could potentially undermine its effectiveness.
Lastly, the report stated that the POCSO Act was never enacted to penalise romantic consensual relationships among minors. However, it was strongly pointed out that the fact that there exist romantic relationships between minors cannot be the sole reason to potentially expose children to exploitation by diminishing the protections provided under the Act. The stricter provisions of the Act were meant to protect thousands of children from child trafficking and other related inhumane crimes, and lowering the age will pave the way for criminals to openly abuse innocent children by taking the defence of consent from minors.
Important cases
Deepak Gulati v. State of Haryana (2013)
In the present case, the appellant filed an appeal against the order passed by the Additional Sessions Judge, which was affirmed by the Punjab and Haryana High Court, wherein the appellant was convicted under Sections 365 and 376. The victim in this case is a girl of 19 years old, and the appellant used to contact her with the intention of trying to have physical relations with her. One day, the accused asked her to marry him and then took him away from their native place, wherein, on the way to Kurukshetra, he raped her against her will.
In this case, firstly, the meaning of the term sexual intercourse without consent was interpreted in a way to include the consent given under a misconception of fact. Put simply, the Apex Court held that if a person obtains consent from a woman under a misconception of facts and then has sexual intercourse with her, such an act will constitute rape. It opined that the facts should necessarily have immediate relevance. As far as the facts and circumstances of this case were concerned, it was held that consent obtained under the false promise of marrying the girl amounts to consent given under a misconception of facts. The Court further stressed the need to differentiate between the accused not keeping a dishonest promise and a simple breach of promise due to certain unforeseeable circumstances.
It is pertinent to note that in the present case, the conviction and sentence of the accused were set aside.
Nipun Saxena and ors. v. Union of India (2019)
In the present case, the facts of the case were that the accused raped a woman and then killed her. He was then granted capital punishment by the High Court of Bombay. Thereafter, the news reached the media, and they published it without hiding the identity of the victim.
Thus, the issues before the Supreme Court were as under;
In what manner should the courts protect the identity of the victim?
Under what circumstances can the identity of the victim be revealed?
Whether such circumstances are applicable to the POCSO Act as well?
What protective measures can be taken so as to reduce the hardships faced by the rape victims during reporting and investigation?
While giving answers to the aforesaid issues, the Apex Court formulated certain guidelines, as mentioned below.
The identity of the victim is not to be disclosed to the public at large by any means.
In cases where the victim is not of sound mind, minor, or dead, under such circumstances, the identity of the victim is not to be disclosed even after taking any sort of authorisation from her guardian.
FIR lodged under any of these sections, namely, Sections 376, 376A, 376AB, 376B, 376C, 376D, 376DA, 376 DB or 376E of 39 IPC and offences under the POCSO Act, shall not be disclosed in the public domain.
If an appeal is filed by the accused under Section 372 of the CrPC, then it is not necessary for the victim’s identity to be disclosed.
The documents pertaining to the victim’s identity and all the other relevant documents are to be kept under sealed cover by the police officials.
Every authority that receives the victim’s name from the investigative agency or the court is obligated to maintain the confidentiality of the victim’s name and identity. They should not reveal it in any way, except in a report that should be sent exclusively in a sealed envelope to the investigative agency or the court.
In cases of offences under the POCSO Act, the disclosure of the victim’s identity can only be permitted by the special court, and only if such disclosure is in the interest of the child.
A request from the guardians or any other close relative to permit the disclosure of the identity of the deceased or mentally unstable victim’ under Section 228A(2)(c), IPC, should be exclusively submitted to the concerned Sessions Judge. This should be the case until the Government, under Section 228A(1), establishes certain criteria or guidelines as per the instructions provided in this case for identifying appropriate social welfare institutions or organisations.
Nafe Singh v. State of Haryana (1971)
In the present case, the Apex Court held that resignation and no resistance by the victim in rape cases in the face of inevitable incidences will not be considered a mitigating circumstance. In the present case, the accused was convicted under Sections 366 and 376 of the IPC and was sent to jail for a period of 7 years (rigorous imprisonment).
Bilkis Bano case
The present case relates to a horrific incident that happened on the day of 2nd March 2002, when a girl of 21 years was gang raped in the Dahod district of Gujrat during the post-Godhra Gujarat riots. After a long battle of approximately 6 years, all the accused were convicted under the offences mentioned in Sections 302 and 376(2)(e)(g), read with Section 149 of the Indian Penal Code, 1860. Further, they were sentenced to life imprisonment by the Sessions Court of Maharashtra. The same punishment was upheld by the Bombay High Court for the 11 convicts of the case.
After the passing of around 15 years, one of the convicts approached the Gujarat High Court seeking remission of his sentence. However, the plea for the same was dismissed by the Gujarat High Court, stating the reason was a lack of jurisdiction. The court stated that the jurisdiction for the same lies with the Maharashtra government. The matter then travelled to the Supreme Court, wherein it was held that the power and the jurisdiction for the remission of sentence lie with the Gujarat Government, even if the matter was transferred to another state for adjudication, for whatever reason it may be.
In accordance with the prevailing remission policy that was active during their sentencing, the convicts in the Bilkis Bano case were set free by the State Government of Gujarat in the year 2022. This decision sparked a wave of public indignation and demonstrations. It also resulted in a series of petitions being submitted before the Apex Court, challenging the early release of the convicts by the Gujarat government.
Presently, the decision for the same has been heard by the Apex Court and has been reserved for judgement.
To read and get a comprehensive analysis of the case and the events related to it, refer to this article- Bilkis Bano case
Conclusion
In conclusion, it is clear that sexual intercourse in the absence of consent, or consent obtained by fraud, deception, or fear, amounts to rape. Despite there being multiple penal laws punishing the accused for the offence of rape and other anti-rape laws, our criminal justice system still fails to address the issue properly and has utterly failed to provide safety and protection to the victims who fall prey to this barbarous offence. Some debated issues, like the criminalisation of marital rape, gender neutral laws, etc., are yet to be addressed properly by the legislature. Due to the evident ambiguity in the present laws, even the judgements of the courts seem apparently ambiguous and inconsistent. Presently, the substantive rape laws of our country are ill equipped to cater to the various issues that are being faced, like conviction of a spouse in the offence of rape, gender neutrality of rape laws, punishment for women filing false rape cases, etc. There is an urgent need for reforms in rape laws that clear this ambiguity and bring some certainty, along with stricter punishments to curb this evil.
Frequently Asked Questions (FAQs)
Can a woman facilitating gang rape be prosecuted under Section 376 D of the Indian Penal Code?
Yes, in the case of Suneeta Pandey v. State of U.P. and Another (2023), the Allahabad High Court held that a woman who is facilitating the commission of the heinous offence of gang rape, in any way, may be prosecuted under the provision of gang rape provided in the Indian Penal Code, 1860 (Section 376 D).
Whether the allegations made against a person under the offences of the POCSO Act will be quashed if the accused marries the victims?
In the case of Ranjeet Kumar v. State of HP (2023), the aforesaid issue came before the High Court of Himachal Pradesh, and the same has been referred to a larger bench of the same court. Thus, presently, this issue is pending adjudication.
Whether anticipatory bail plea maintainable if the accused is charged under both the SC ST Act and the POCSO Act?
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Termination of employment refers to the end of an employee’s work with the company. It can be voluntary when the employee leaves of his own will. Involuntary termination occurs when a company downsizes, makes layoffs, or fires an employee. While terminating an employee, the employer should consider certain safeguards to avoid litigation in the future. There should be a valid reason for such a termination. Employees are to be given advance notice and a chance to appeal such a decision. Employers should ensure that all benefits and severance pay are paid to the employee as per Indian law.
What are employment contracts
Employment contracts are signed agreements between the employer and employee specifying the core terms of employment. It can be negotiated before or after hiring. They may be written or oral, but written agreements are preferred by law. Once the agreement is signed, it is legally binding on both parties, and in the event of any breach, the concerned party can be held liable. The contents of the employment agreement can differ as per the needs of a specific business.
Essential clauses of employment contracts
The employment agreement includes numerous essential clauses, such as:
Job title- The employee’s job title and the job description.
Remuneration- Specifies the wage, salary, benefits or commission that the employer and employee agree upon.
Term- specifies the period or length of employment. It can be for a specific period or on a project basis, depending on the employer.
Confidentiality/non-disclosure clause- To prevent the employee from disclosing any proprietary information about the company to a third party.
Dispute resolution- Specifies the methods, governing law, appeals mechanism and place for resolving disputes between the employer and the employee.
Termination- Defines actions and events that are grounds for termination under the agreement.
Non-compete- Prevents the employee from working with the competing or rival company for a certain period.
Severance- Specifies the benefits and financial amounts accorded to the employee when they vacate their position.
In addition to these core terms, an employment contract may also include other provisions, such as intellectual property ownership agreements, vacations and sick leaves.
Employment contracts are important documents that protect the rights of both employers and employees. They should be carefully reviewed and negotiated before being signed.
What is termination and who can terminate an employment contract
Employment contracts play a critical role in establishing and maintaining professional relationships. However, it can come to an end due to the end of the term, misconduct, immoral behaviour, poor performance or force majeure. Contract termination refers to the formal process of legally ending a contractual agreement between parties.
An employee or employer can decide to end (‘terminate’) an employment contract. This may be done by:
an employee resigning, or
an employer dismissing an employee.
Grounds for termination of employment contracts
The employment contract can be terminated on fair and reasonable grounds only. Termination can occur with or without cause in the following circumstances:
Termination with cause
Incompetence
An employment contract can be terminated due to the poor performance of the employee. If the employee is not meeting the standards or not performing as per job expectations, then the employer can terminate the contract. This is usually after a period of warning and/or probation where the employee has failed to improve.
Misconduct
The employee can be terminated on account of misconduct on his part. Misconduct includes the following:
Theft
Bullying
Criminal behaviour
Lying
Fraud
Spying for a competitor
Bribery
Using company resources for personal benefit
Employees can have a personal business venture that they can explore outside non-office hours. If the employee uses official time and resources for a personal business venture, this can lead to termination. Employees are allowed to have personal business ventures, as long as they are conducted outside of work hours and do not use company resources. If an employee is caught using company time or resources for their personal business, they may be subject to disciplinary action, up to and including termination.
First, it is important to maintain a separation between an employee’s personal and professional lives. When an employee is working on their personal business during work hours, they may be distracted and less productive. This can impact the quality of their work and the overall productivity of the company. For example, an employee may use their company computer to access confidential information for their personal business. This could put the company at risk of data breaches or other security issues. Other employees may feel that they are being taken advantage of if they are working hard while their colleagues are using company time to work on their own businesses. This can create a negative work environment and lead to resentment.
Gross insubordination
Insubordination refers to events when the employee shows unreasonable disrespect towards the employer. Insubordination is considered a serious offence in most workplaces, and it can result in disciplinary action, up to and including termination of employment.
Minor insubordination may include:
Refusing to follow a supervisor’s instructions.
Making rude or disrespectful comments to a supervisor.
Tardiness or absenteeism without a valid excuse.
Using profanity or making threats in the workplace.
Severe insubordination may include:
Physically assaulting a supervisor or coworker.
Stealing from the employer.
Destroying property.
Insubordination that endangers the safety of others.
Insubordination is often a symptom of a larger problem in the workplace, such as a lack of communication, poor management, or a toxic work environment. If an employee is repeatedly insubordinate, it may be a sign that they are not a good fit for the company. In some cases, insubordination may be grounds for termination of employment.
Breach of confidentiality
The employee is under an obligation to protect the organisation’s confidential information during the term of the employment and failure to do so results in a breach of confidentiality. This includes any information that is not publicly known and that has been designated as confidential by the organisation. The employee must not disclose confidential information to any third party, including family, friends, or colleagues. The employee must also take reasonable steps to protect confidential information from being accessed or disclosed by unauthorised persons. Failure to do so may result in a breach of confidentiality, which can have serious consequences for the employee, including termination of employment and legal liability.
In addition to the obligations set out above, the employee may also be subject to other confidentiality obligations, such as those imposed by a non-disclosure agreement (NDA). An NDA is a legally binding contract that prohibits the employee from disclosing confidential information to any third party. NDAs are often used in situations where the employee has access to sensitive information, such as trade secrets or financial data.
It is important for employees to be aware of their confidentiality obligations and to take steps to protect confidential information. By doing so, they can help to protect the organisation’s interests and avoid potential legal liability.
Termination without cause
Resignation
Employees can choose to terminate the employment contract by offering their resignation. This can be done by giving notice to the employer according to the terms of the employment contract.
Redundancy
Redundancy happens when an employer wants to reduce the workforce due to economic reasons or the position is no longer needed by the company. This can happen due to a slowdown in business or automation, for which a smaller number of staff is required. Employees are selected for redundancy based on their skill set, experience and length of service. This usually involves a selection process, and employees with the least time at the company or in their role are usually selected first.
Mutual agreement
The employment contract ends automatically after the end of a certain period or on completion of a specific project or job. The parties may choose to renew the contract after the end of such contracts. The period at which such termination will occur is pre-determined in the employment contract.
Wrongful termination of employment contracts
Wrongful termination occurs when an employer terminates, dismisses or removes an employee from employment without any valid grounds. When a company or employer fails to furnish the grounds for termination, it is known as illegal termination. If the employee is not given the opportunity to be heard, it infringes on the fundamental principle of Audi Alteram Partem. Wrongful termination happens in the following circumstances:
Breach of contract
A breach of contract occurs when a company or employer violates a written contract or acts in a way that contradicts the employee handbook.
Discrimination
If an employee is terminated due to his race, religion, gender, age or other protected characteristic, then it amounts to discrimination, and such dismissal contravenes anti-discrimination laws. Employment discrimination includes verbal or written discriminatory practises and may include actions as well.
Retaliation
This occurs when the employer terminates the employee in response to reporting illegal behaviour or discrimination, cooperating with investigations or demonstrating legal rights. It often coincides with discrimination and harassment in the workplace.
Harassment
Harassment occurs when there is a hostile work environment. It can include negative or insulting comments about gender, race, religion, age, disability or sexual orientation. Unwelcome sexual advances or retaliation for rejected advances are also types of harassment.
Whistleblowing
Employees who report illegal work practises in the company to the authorities are termed whistleblowers. They can notify the authorities of discriminatory practises or present evidence for the same. If they are terminated due to whistleblowing, then it is a wrongful termination. Employees should be terminated without cause and on reasonable grounds only. Not giving valid grounds can amount to wrongful termination.
What is a notice period
A notice period can be defined as the time period between the date of the formal resignation of the employee and the last working day of the employee. It is usually specified in the contract. The term of the notice period ideally ranges from 15 (fifteen) days to 90 (ninety) days, subject to the type of employment, size of the organization, requirements under the local employment laws, contractual agreement, employee’s position in the organization, etc.
The termination of any employee needs to comply with the applicable central or state law, as the case may be, since these laws supersede contract provisions. Therefore, contract provisions need to be compatible with the law.
InChairman and Managing Director, India Airlines vs. Binod Kumar Sinha and Ors. (2001), an employee who joins service is subject to certain terms and conditions of service and he cannot quit the employment without giving requisite notice to the employer. But what should be the duration of reasonable notice in such circumstances is a matter to be decided in each case depending upon the exigencies, needs or necessities and the essentiality of the service concerned.
Termination without notice
Providing a notice before termination of employment is a norm but in certain cases, employment can be terminated without giving a notice. These include gross misconduct, breach of contract, redundancy, probationary period and health or safety concerns.
Severance pay
It is the compensation or benefits provided to the employee whose employment is terminated due to the end of the contractual term, a layoff, restructuring or downsizing. It is calculated based on the employee’s length of service, employment contract, company policy, and local labour laws. Typically, one month’s salary should be paid to the employee if he has worked for one year or more.
Dispute resolution
Arbitration for resolving disputes has gained widespread popularity in recent times but in India, the question of the arbitrability of labour disputes is still undecided. Factors such as privacy, flexibility, cost and time effectiveness of arbitration are key reasons for its preference over traditional dispute redressal mechanisms. However, Indian law does place a restriction on arbitrating ‘certain disputes’ on account of public policy considerations. In the case of Kingfisher Airlines vs. Captain Prithvi Malhotra and Ors. (2012). Kingfisher Airlines’ application for reference to arbitration was denied and the Labour Court retained jurisdiction over the proceedings.
Conclusion
An employment contract is an essential document that establishes an employment relationship. It contains various aspects such as scope, term, remuneration, severance and termination of employment. Therefore, employees must show diligence while signing the same. Employees should be terminated without cause and on reasonable grounds only. Not giving a valid ground can amount to wrongful termination of employment. The employer should serve a notice to the employee as per relevant laws or according to the contractual terms. Therefore, due process should be followed while terminating an employee and failure to do so can have legal implications for the employer.
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This article is written by Priyanka Kumar. This article explores the principle differences between mediation and conciliation by making comparisons on various grounds. With the increasing popularity of both these procedures, it is important to understand the distinction between the two, to select the right option accordingly.
It has been published by Rachit Garg.
Table of Contents
Introduction
The mechanism of Alternate Dispute Resolution (ADR) stands on the three pillars of arbitration, mediation and conciliation. While arbitration is an understood concept, wherein parties appoint a third neutral party as arbitrator, who adjudicates upon the disputes and delivers an award which is equivalent to the order/ judgement of a court, the concept of mediation and conciliation remains a blur. In other words, mediation as well as conciliation are two distinct concepts yet they are often seen in a similar light. The difference between the two concepts are not quite known or understood, especially in comparison to arbitration. This is perhaps due to the larger use and acceptance of arbitration as compared to mediation and conciliation. Moreover, the concept of mediation and conciliation were accepted by the legislation much later than arbitration. Therefore, while the concept of arbitration is well-known, mediation and conciliation remain to be seen as clubbed together, on the other side.
Arbitration, mediation and conciliation are all private proceedings. However, the outcome of mediation and conciliation is rather informal as compared to that of arbitration. This is the reason why it is often misunderstood that mediation and conciliation are the same. There are, in fact, many factors differentiating the two dispute resolution mechanisms of mediation and conciliation. This article covers the difference between mediation and conciliation, in terms of their meanings, process of dispute resolution, practical requirements and outcomes as provided in the Indian legislation. The article concludes by making a comparison as to which method has become more prevalent in recent times and why.
Difference between mediation and conciliation
Meaning
Mediation
Mediation is a dispute resolution process in which the disputing parties select one or more neutral persons, who can bring them together to discuss and deliberate on the dispute and reach an agreement. In the case of mediation, the neutral person is called the “mediator” and he merely acts as a medium of facilitating the mediation process between the parties.
The intention behind mediation is to amicably settle the dispute by cordial negotiations between the parties themselves. Here, the mediator does not have any active role to play in persuading the parties to settle or resolve their disputes. The mediator merely acts as a facilitator and makes sure all procedural aspects are met and all the aspects that may enable a successful mediation are brought out. The decision-making power to resolve the disputes is entirely with the parties. Upon successful conclusion, the mediator, with the help and suggestion of the parties, draws an ‘agreement’ or a ‘mediated settlement agreement’ and this agreement becomes final and binding on the parties. On the other hand, if the parties are not able to reach a settlement, then the mediation process is said to have failed. In any case, the mediator is required to give a report. This entire procedure is called mediation.
a process comprising one or more sessions in which one or more mediators assist the parties to a dispute to do all or any of the following with a view to facilitating the resolution of the whole or part of the dispute:
whether referred to by the term mediation, conciliation or an expression of similar import, whereby parties request a third person or persons (“the mediator”) to assist them in their attempt to reach an amicable settlement of their dispute. The mediator shall not have the authority to impose upon the parties a solution to the dispute.
the process, whether referred to by the expression mediation, pre-litigation mediation, online mediation, community mediation, conciliation or an expression of similar import, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person referred to as mediator, who does not have the authority to impose a settlement upon the parties to the dispute.
Conciliation
Conciliation is that private mode of settlement of disputes, wherein the parties appoint a neutral third party called the “conciliator”, who not only facilitates the dispute but also actively participates in the process and assists the parties in reaching a middle ground. In other words, conciliation is a way to resolve disputes by deriving a compromise between the parties. Here, the parties are free to appoint more than one conciliator.
Conciliation is one step more than mediation. In conciliation, the conciliator is duty-bound to act in a just and impartial manner and give both parties a fair hearing. If, at any point in time, the conciliator thinks there is a possibility of settlement of disputes, the conciliator can make the proposal for settlement to the parties. Based on the parties suggestions, the conciliator prepares a settlement agreement which becomes binding on the parties and enforceable in a court of law as a ‘settlement agreement’. This entire process is called conciliation.
Mediation gives an opportunity for the disputing parties to come together and make an attempt to bring their respective terms to the table and negotiate. By opting for mediation, the parties save their disagreements from turning into disputes and going to court. Thus, mediation is essentially required for enabling long-term relations between parties and upholding the confidentiality of sensitive cases. Sometimes, when huge sums of money is involved in a dispute between parties, an attempt at mediation first can restrain the parties from taking the dispute to court or arbitration and affecting the goodwill of the parties. Thus, even when the goodwill and reputation of parties are at stake, mediation becomes a requirement.
For example, in the Indian legislative set-up, it can be seen that under Section 12A of the Commercial Courts Act, 2015, in disputes over Rs. 3 lakhs, the parties are required to first go for a mediation proceeding, and only if such mediation fails, the parties can continue the case before the court. Many times, in litigations and arbitrations, the judges and arbitrators respectively, also refer the disputes to mediation, to give a chance to parties to settle their disputes. This is done in order to help the parties maintain long-term relations, prevent litigation and protect the confidentiality of such corporate disputes.
When is conciliation required
The requirement of conciliation comes through when the demand or disagreement involves a considerably high number of people on one side and a few, but powerful people on the other side. The agenda behind conciliation is for the demands or claims of the party having less bargaining power to be heard and to be met with. Conciliation is also an informal and flexible process, but since here the conciliator makes an effort to make sure a settlement is reached, it can be understood that conciliation is required in cases or scenarios where a settlement is essential to continue with contractual relations.
For example, it can be seen through the Indian legislation that in order to settle mass demands of trade union workers against the company, the legislature has mandatorily provided the recourse of conciliation, which can be brought by the trade union workers before the Regional Labour Commissioner (RLC) of the respective state (in case the company is under the central government), or before the Labour Court (in case the company is under the state government). This recourse is laid down under Section 4 of the Industrial Disputes Act, 1947.
Who should opt for mediation
A very important aspect of mediation is that parties negotiate among themselves and strive to reach a settlement. It is, thus, a mechanism adopted by parties upon mutual agreement, for the best interest of a long-term relationship between them, such that the disputes get resolved and the parties can continue their future obligations towards each other. Therefore, parties interested in maintaining long-term relationships, or parties having heavy amounts at stake, like in commercial disputes, can opt for mediation, such that, if any disagreements or disputes arise between business relations, the same can be cordially resolved and the parties can continue like before. In addition to this, since the confidentiality of mediation proceedings are very well intact, it is a method which can be used for disputes like family disputes, matrimonial disputes and employer-employee disputes.
Under certain circumstances, court can also exercise the power to refer disputes to mediation, and such power of the court can be exercised either mandatory or directory. Due to the large acceptance and high effectiveness of mediation, mediation has become a compulsory pre-requisite for parties initiating commercial suits, over Rs. 3 lakhs, as seen earlier. While the former was an example of directory exercise of the power of courts, the latter is an example of mandatory exercise of the power of courts.
Who should opt for conciliation
The disputes, whether litigation or arbitration, which seem to show possibilities of settlement, can be referred to as conciliation. Here too, the idea of keeping long-term relations intact is given prime importance. Employers opting for conciliation for disputes that arise between the employer and employees is an apt representation of who should opt for conciliation. Another example is a pending litigation, of whatever nature, wherein the courts feel that a settlement can be derived and it is best to refer it to a conciliation commission to fasten the process as well as lessen the burden of the courts.
Conduct of proceedings
Mediation
The Mediation Act, 2023, has prescribed the rules and procedures towards the conduct of a mediation proceeding, thereby making the people aware, as well as, bringing uniformity in the manner of conducting a mediation proceeding as mediation is a fairly new legislation for India.
Mediation can be effectively of two kinds, first, which the parties voluntarily agree to in their contracts or agreements or in the course of their business, and second, which the courts initiate by referring a dispute to mediation, either before starting the litigation proceedings or in the middle of it. In the former, the parties can agree to refer the disputes to an institution for facilitating the mediation process or mediation can be conducted ad hoc. In the latter, where the court refers the dispute to mediation, the same usually goes to the mediation service centre of the court or a mediation service provider empanelled with the court. In any case, the procedure to be followed for conducting the mediation proceedings is provided under Chapter V of the Mediation Act, 2023. The procedure can be classified into – commencement of mediation, conduct of mediation and mediated settlement agreement.
Commencement of mediation: Mediation proceedings commence from the date on which the party receives notice of mediation from the party initiating mediation. In court initiated medications, the proceedings begin from the day on which the mediator is appointed.
Conduct of mediation: There is no specific manner or procedure laid down under the 2023 Act for conducting mediation. This means that the parties are free to decide on the procedure they want to follow and can convey the same to the mediator.
Mediated Settlement Agreement: Under the 2023 Act, the mediation proceedings should be completed within 120 days from the date of its commencement, failing which an extension will have to be sought. The outcome of a mediation shall be the mediated settlement agreement which will be in the form of an agreement between the parties having terms resulting from the mediation between the parties. This agreement shall be in writing and shall bear the signature of the parties as well as the mediator.
Conciliation
First and foremost, parties to a conciliation proceeding are not bound by any legislation, unless they choose one specifically. Parties can opt to follow the conciliation rules of a particular institution too. Either way, even though the parties have the freedom to follow their own agreed procedure for conciliation, the same is required to be in consonance with the conciliation legislature of that country, so that the outcome of the conciliation can be enforced in the Indian courts, as legal and valid.
Initiation of conciliation: Usually, in the process of conciliation, one of the parties shall send, in writing, an ‘invitation to conciliate’ to the other party. If the other party accepts the same, then the parties mutually appoint one or more third parties, as conciliators.
Hearings and evidence: The conciliator(s) shall then arrange hearings and provide their input to enable the parties to reach a settlement. If required, the conciliator may even require the parties to the dispute to produce their evidence. During the course of hearings, the parties shall comply with the request of the conciliator(s) if they are asked to provide any documents or materials. The very concept of conciliation provides that conciliator(s) shall make all efforts to convince the parties and actively make suggestions to bring the parties to a middle ground. Thus, at any stage of the hearing, the conciliator(s) may make a proposal for settlement of the dispute, if sufficient grounds are found.
Settlement agreement: Under the Indian Arbitration and Conciliation Act, 1996, after the entire hearing process, each party may be allowed to make their suggestions, on which the conciliator(s) shall form the terms of settlement. Once the conciliator authenticates the settlement agreement and the parties sign it, the settlement agreement becomes final and binding between the parties. Under Section 74 of the 1996 Act, the settlement agreement shall be enforced in a court of law as an arbitral award.
Outcome
Medication
Usually, a successful mediation results in an agreement drawn between the parties, listing the negotiated or renegotiated terms and settling the disagreements. However, under the Indian Mediation Act, 2023, the result of a successful mediation is a mediated settlement agreement. Whereas, a failed mediation results in a failure report which is made by the mediator.
As per Section 27(2) of the said Act, a mediated settlement agreement holds the same value, in terms of enforcement, as a decree or judgment passed by a civil court. This implies that, if a mediated settlement agreement is breached or violated by any of the parties bound by it, the same shall be treated as a breach of a decree or judgement.
Conciliation
The outcome of a successful conciliation is a written settlement agreement. The settlement agreement is prepared by the conciliator, anytime during the proceedings, when he thinks that the possibility for settlement has arisen. According to the Arbitration and Conciliation Act, 1996, once the conciliator makes the settlement agreement, he can then submit the same to the parties for their observations. If the parties make any suggestion which requires the conciliator to reformulate the terms of the settlement agreement, then the conciliator reformulates the terms of the settlement agreement, as per the suggestion of the parties. This settlement agreement contains an authentication made by the conciliator that stands final and binding on the parties.
Under the Arbitration and Conciliation Act, 1996, a settlement agreement is recognised as enforceable in a court of law just as an arbitral award. This means that if the terms of the settlement agreement are violated in the future, the parties can challenge such violation in the same manner as an arbitral award is challenged.
Strictness of procedure
Mediation
Mediation is said to be a rather less formal mechanism of dispute resolution as compared to conciliation. The reason is that there is no strict procedure that the mediator is required to follow or imposition of the mediator on the parties. It always remains an agreement between the parties. Likewise, if the mutual negotiations do not lead to any agreement, the mediation fails, however, there is a possibility of the parties initiating mediation proceedings again in the future, on the same dispute. In doing so, no strict procedure of re judicata applies.
Conciliation
On the other hand, conciliation is a stricter procedure in comparison to mediation. Since the conciliator is required to persuade the parties to reach an agreement and also prepare a detailed settlement agreement that is final and binding on the parties, conciliation is stricter, in its procedure and in its outcome. Additionally, the procedure of mediation also involves parties providing evidence and expert witnesses in order to put their case, which is stricter in comparison to mediation.
Summary of differences between mediation and conciliation
Point of difference
Mediation
Conciliation
Definition
It is a process wherein the disputing parties appoint a third neutral party, called the mediator, to help them negotiate and settle the dispute amicably.
It is a process wherein the disputing parties appoint a third neutral party, called the conciliator, to help them negotiate and provide a settlement solution.
Role of third neutral party
The mediator merely brings the disputing parties together, thereafter, it is on the parties to talk and negotiate by themselves.
The conciliator has to bring the parties together as well as make an active effort to settle the disputes between the parties.
Nature of procedure
It is a less formal mode of dispute resolution.
It is more formal than mediation but less formal than arbitration
Governing legislations
It is governed under the Mediation Act, 2023.
It is governed under the Arbitration and Conciliation Act, 1996.
Objective
The objective is to enable the parties to talk about their differences and come to a middle ground.
The objective is to attempt to settle the disputes amicably, through the suggestions of a neutral third party, i.e., the conciliator.
Conclusion
Having made a comparative study between the process of mediation and conciliation, it is quite settled that both procedures form a part of the alternate dispute resolution mechanism and are adopted by parties as a convenient, flexible, voluntary and private form of dispute resolution. It is also settled that both these procedures are slightly informal as compared to the process of arbitration. However, between mediation and conciliation, the main aspect of difference is that while in mediation, the mediator is required to merely act as a facilitator and not provide individual inputs, whereas, in conciliation, the conciliator is required to provide his individual input and make all attempts and persuade the parties to come to a settlement. Thus, mediation is different from conciliation with respect to the powers and functions of the mediator and conciliator.
With this clear point of difference between mediation and conciliation, it also becomes notable to see which procedure is more preferable, when pitted against the other. Conciliation was the first, out of the two procedures, to be codified into legislation in India. However, over the years, it can be seen that the practice of mediation has taken precedence over conciliation. Many ADR institutions have also introduced the concept of arb-med-arb, meaning, the reference of an ongoing arbitration to mediation to explore the possibility of negotiations and settlement between the parties. This is so because mediation is taken as a more flexible and cordial means of dispute resolution. It is also seen that many arbitration clauses have a prerequisite of referring disputes to mediation first and then to arbitration. Over the years, the practice of mediation has fetched great results in resolving disputes and preventing them from coming to court. This way, mediation has found more popularity than conciliation, in practical use, so much so that it is likely to even become a mandatory pre-requisite for all civil and commercial disputes.
Frequently Asked Questions (FAQs)
Can both, conciliation and mediation be used to resolve a dispute?
Usually, out of the two, only one is taken to be a preferred mode of dispute resolution because once the procedure is done and the final outcome is achieved, it becomes binding on the parties and enforceable in a court of law.
How is mediation different from arbitration?
In mediation, the disputing parties appoint a neutral third party to facilitate the dispute resolution, informally, and give the final settlement agreement or failure report. However, in arbitration, the disputing parties appoint a neutral third party, formally, by sending a notice, and once the hearing starts, the parties produce evidence and arguments based on which the arbitrator passes an award. In mediation, the mediator facilitates the proceedings while in arbitration, the arbitrator adjudicates the entire dispute.
How is conciliation different from arbitration?
In conciliation, the disputing parties appoint a neutral third party to facilitate and actively suggest settlement to parties, as and when he sees grounds for settlement. Whereas, in arbitration, the arbitrator necessarily adjudicates over the dispute and provides an outcome which could favour only one party, and not be a settlement.
Do mediation and conciliation cases get reported?
Usually, mediation or conciliation proceedings happen inside closed doors of a conference room. They seldom result in settlement. This is why these cases are unreported on public platforms. However, if after coming up with a settlement the parties refer more disputes to arbitration or the courts, then it has a likelihood of being reported.
Can the parties refer disputes to mediation after signing a contract?
Yes, the parties can refer any dispute to mediation at any point of time, through mutual agreement. If the contract has already been signed, the parties can include mediation by way of amendment or even through an email exchange. Even if the dispute is at the stage of trial, the parties can make a request to the court to refer the disputes to mediation.
Can a mediator/ conciliator be a known person to the disputing parties?
A mediator/ conciliator can be a known person to the parties, however, he should not have a direct or indirect interest in any of the parties. Usually, such a person is chosen as a mediator or conciliator who is unknown to the parties, such that, impartiality and unbiased conduct are assured from his side.
Why is mediation more popular than conciliation?
Mediation is looked at as a very friendly and flexible form of dispute settlement, where the mediator does not force his opinion or suggestions on the parties. As against this, in conciliation, the moment the conciliator finds an aspect or aspects for settlement, he makes those suggestions in a manner which is more formal and compellable to the parties. Moreover, in practice, it has been seen that mediation has been very successful in resolving disputes and preventing them from going to court. This is why mediation has become more popular.
Who can be the third neutral party in mediation and conciliation?
In both proceedings, the third neutral party can be any person, not having any direct interest in the dispute or either of the disputing parties. The main objective of the mediator and conciliator is that they should be unbiased and independent while performing their roles as mediator and conciliator respectively.
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Manpower constitutes the highest percentage of expenditure, but unlike other resources, it is never exhibited in the books of account of any organisation under the capital or revenue head. As per accounting practise, the benefit of certain expenditures, which remain for years, is reflected in accounts as “Capital =Investment” and can be amortised each year proportionately. Let us suppose that one organisation incurred some Rs.1,00,000/- towards the training of manpower, the benefit of which, as per record, is five years and so Rs.20,000/- per year is to be charged to revenue (deferred revenue expenditure) till the capital expenditure is nullified. But unfortunately, no organisation resorts to this practise. A manpower audit is a new concept for judging the expenditure incurred in searching, recruiting, training, maintaining, managing and discarding the manpower for any organisation. An audit of man-power assesses systematically the strengths, limitations and developmental needs of the existing manpower in the context of organisational performance.
Steps involved in a man power audit
The following steps are generally adopted to conduct such an audit, though no specific guidelines are there.
Know the auditee organisation
First, know the function of the organisation and of the individual functionaries working in the organisation. Record all details of the norms of assignment for individual positions. Analyse all details to judge the sufficiency or otherwise of the availability of manpower. This is the motto of an audit.
Examine the targets and achievements
Before proceeding with this audit, audit personnel should have all the details of the targets and achievements of that organisation. Total man-days available in a year, man-days utilised, man-days short utilised with the cause of short utilisation, and percentage of performance with utilisation of man-days may be analysed.
Survey personnel
All key management personnel of the auditee are to be interviewed or talked to personally to know the managerial philosophies/cultures of the organisation. A discussion with the Union/ or association representatives, if possible, may be made to assess the available strength of manpower, anticipated manpower and the shortfall of manpower. Of course, these data are available with ease while examining the manpower of any government organisation. So far as private organisations are concerned, these data may not be available on record. These organisations create positions at any time and the management/highest boss orders at whim. There is no regularity for the creation or destruction of any function in most of the private entities. So the comment on this audit differs in form between private and public entities.
Conducting interviews
On most occasions, audits can’t be conclusive without knowing all the pros and cons of any assignment (those that are not usually available on record). And eliciting information from interviews is perhaps the most acceptable means to achieve this. Now the question arises how can the interview be conducted? What are the questions that need to be asked to aid in the audit exercise? Audit intends to know the duty allocation of individual employees. In fact, it is mention-worthy here to indicate that in many organisations, this “Duty Allocation Register” is not being maintained holistically, which is definitely not a good practise. The questionnaire should cover various aspects of how employees are treated in an organisation, such as their upgradation modes, their annual performance appraisals, training and development techniques, management succession planning, staff compensation, inter-relationships between supervisors and subordinates, motivational practises, etc. Once this information is collected, it can be linked with the documents of the organisation, and the audit may have a clear-cut view to point out in the manpower audit report. The questionnaire method of interviewing, in any case, is the direct method, which is unbiased as the auditor for the sake of conducting an effective audit, will never wish to misinterpret any information so obtained.
After the collection of the base data, the audit commences with an examination of the following issues.
Check payroll
During an audit, it is important to check the records of sanctioned staff strength vis-a-vis personnel in position. This data in government organisations indicates the excess personnel in positions, and the pay and allowances drawn by the excess personnel should be commented on as excess avoidable expenditure due to manpower in excess of the requirement in an audit. Similarly, personnel who are less in position compared to the sanctioned strength indicate that work is managed with fewer personnel without any hassles and so the audit may comment on this as a higher sanction with a recommendation to curtail the position of sanction. In private concerns, an audit may rely on the assignment position periodically to judge the actual staff need and hence can comment on the right footing.
Check idle man-hours/days
Cases of power failures, breakdowns of machinery, strikes and lockouts, excess deployed personnel remaining idle due to no other assignment, cases of suspended employees, etc. are indicative of the idle man-hours. An audit should investigate how these idle man-days/hours get curbed or checked. Any recorded failure may be analysed in an audit to compute the monetary loss due to idle days. In any organisation, say there is availability of three drivers against one vehicle in operation, it means that, at any point in time, the other two will remain idle unless their services are utilised otherwise. This is an exemplary case for many organisations. The duty of the audit is to check all such cases of idle man-days, for which huge expenditures are incurred in terms of remuneration and other ancillary benefits. Such comments may often take a common nomenclature, alleging nugatory expenses due to management inaction in assigning tasks.
Check expenditure on training and development
Building the right teams is an important function of management. A good team comprises trained personnel or experienced ones to make the team always lively with their knowledge, seniority and experience from certain specific backgrounds. Expenditure incurred on training and development should supplement the organisation with developing results. Since a person is born in one establishment, it is the organisation that provides all training and may be on the job or off the job as per the needs of that newly recruited person. The result of the training or the endeavour of the organisation may not be immediate, but slowly it will take its turn. Audit, hence, needs to assume that development is there. So while taking up the audit, data on the incurring of expenditures for at least the last three years may be obtained, and an easy comparison may be made on the outturn position. The audit may have some conclusion on the matter, with a general comment that it incurs huge expenditure on training and development with no impact on the outcome. Further, it may be seen in the audit that some people are given training on some specific topic. But after the completion of training, they are given some other assignment than the one in which they were trained. This may be reflected as a clear violation of training guidelines, with comments that such expenditures are unfruitful due to the utilisation of the trained manpower in a different area. This comment may make the management liable for lapses in the provision of inappropriate assignments.
Examine the selection methodology for new Recruitment
The audit needs to examine the adopted principle of new recruitment. Any new recruitment is based on the recorded need in the case of private entities and, in the case of government run organisations, on the order of government staff sanctions. Circumstances warranting such sanction or need may be reviewed in the audit to conclude the sanctity of the need. Next, an audit should check the methodology of advertising, indicating the details of the academic, professional and experience details, etc., and should check that the short-listing of candidates exclusively matches the advertised conditions. Any deviation at any point may be objected to for justifying a process of recruitment based on transparency and accountability. The audit should see that any final appointment for any position should be there only after the need has arisen and never before that. The audit may object under the head of deficiencies in recruitment to report.
Check the methodology of planning for succession
As per Drucker, a management scientist, “the real task of top management is to identify the bread winners of tomorrow.” So one way to plan for succession is to prepare to make the next in command the in-charge during the absence of the chief executive. To have a person from in-cadre is definitely more cost effective rather than to hire a person from the open market. Steps taken by the organisation to prepare for making some worthy to be in succession should be analysed in the audit. The audit should see if failure is noticed in this regard and find out the audit observation on monetary involvement to find a new hand in the absence of any in line with succession.
Review suspension cases
While someone is put on suspension in government organisations, in particular, the person gets a subsistence allowance commencing from the next day of suspension, equivalent to 50 percent of the last full month’s pay. The government gets no out-turn from such persons and instead incurs expenditures regularly. So, all such cases need to be finalised at the earliest in the interest of the government. It may be seen that in many organisations, suspension cases are continuing for years without any appropriate action to finalise the charge sheet or the case. Of course, in private organisations, such cases can be seldom found. Audit, as a sacred duty, reviews all suspension cases to point out the deficiencies in action and comment that such payments of subsistence allowances are wasteful.
Examine all cases of transfer
The frequency of the transfer of an employee from one station to another or from one position to another should be checked in an audit. One person should not be allowed to hold a position for years for no valid reason and that creates a scope for doing/performing out of the way at times. The audit should see the cost incurred for transferring an employee out of station and record the purpose holistically satisfied by such a change in position. Routinely, this should not be the practise in any government organisation. Often, it may be noticed that people are allowed to work on deputation at a different station with payments of remuneration from their previous stations. If this happens, it is a proven case that the position of manpower at the so called leftover station is sufficient, and the audit may comment under the heading of sanction in excess of the requisite manpower with the recommendation to curtail the staff strength. Of course, this position will never be available to private entities.
Review all payments of compensation
Financial incentives in any form enhance productivity. Payment of overtime or honorarium for any activity like clearance of arrears or otherwise in any government organisation should catch the attention of audits to judge the veracity of such payments. If it is noticed that such payments are there as a regular measure, the audit should comment on the payment as unwanted and without any reason.
Reporting
Next comes the phase of reporting. The task of a report is to present the case in a persuasive, decisive and action-oriented manner. The report should be balanced with a specific purpose to aid management in making timely decisions to recruit and manage the manpower in the best interest of the management. The report broadly covers the following issues:
Decision making involves the acquisition, development and allocation of manpower.
Monitoring and evaluating the degree to which the management has effectively and efficiently utilised the resources.
Achieving capacity utilisation of manpower is much closer to 100 percent.
The report, after being made ready with the initial draft, should be discussed with the management and the points of disagreement on any issue with their reasons should be exhibited in the report. Simultaneously, rebuttals in the audit should be reflected in each observation.
Conclusion
Building a team is a stupendous task. Manpower planning from a proper perspective is required to form a team to storm them with appropriate and need-based work assignments. Finally, organisation management is to fix the norm as per which the assignment can be accomplished. A manpower audit thus covers every aspect of forming, storming and norming, along with keeping in check the performance of a team. This audit involves identifying issues and finding solutions to them before they become unmanageable. Any deficiency at any stage will result in low productivity, and hence, steps need to be taken to make manpower audits mandatory for all organisations.
References
Audit your Human Resources Department; by Mcconnell John
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This article is written by Surabhi Singh and Richa Goel. This article is further updated by Upasana Sarkar. This article deals with IPR and Competition Law, which provides a detailed understanding of their concept, origin, application, importance, and relationship with one another.
It has been published by Rachit Garg.
Table of Contents
Introduction
In recent years, it has been seen that the connection between competition law and Intellectual Property Rights (IPR) is a contemporary issue. Competition law deals with an efficient mechanism to counter anti-competitive agreements, regulate mergers and acquisitions, restrict the use of dominant positions, etc. On the contrary, Intellectual Property Rights try to strike a balance between the rights of the owner and social interests. It helps the owner of the intangible property get exclusive rights and commercial value for his intellectual creation.
It is indicated from the above paragraph that a tassel exists between IPR and competition law. IPR gives exclusive rights and a monopoly, with which competition policy disagrees. On the one hand, it is important to boost the spirits of the inventor, and on the other hand, competitiveness in the market should also be controlled. However, they are also complementary in certain areas. IPR provides a chance for technological innovation, which in turn creates more products and results in the dynamic growth of the product, which is considered one of the aims of the competition policy.
Mainly the market is regulated through different systems or mechanisms, i.e., free market operation and regulated market operation. Let us study this mechanism in detail in the latter part of the article.
Two mechanisms of market regulation
The economic operation of a country is operated through two mechanisms, i.e., free market and the regulated market. The reason behind adopting the two different mechanisms is for the better working of the country’s market.
Free market system
In this system, the manufacturer identifies how much product should be produced and what will be the capital invested for invention or innovation. The free market system helps in inventing new products as well as determining their price. The government has no role in it. It rejects the monopolistic behaviour of the producers.
In this, there is a direct relationship between the service provider, producer, or manufacturer and the consumer. Through this system, the manufacturer takes unfair advantage of the consumer easily for profit and the untamed competing interest. This results in an unbalanced country’s economy or market.
Regulated market system
In this system, trade and businesses (buying and selling) are governed through different regulatory bodies, and they are controlled by the state. It is done to prevent unfair trade practices and monopolies. There is a check and balance for monitoring the activities of the suppliers through different legislation. It also compels the manufacturer to produce various products that are essential for the livelihood of the public at large and for improving the economy of the nation.
Criticism of the regulated market system
When an excessive restriction is imposed on the economy, it will prejudice the economy as rigid, as there will be no or minimum flexibility in operation. Where there will be less flexibility, there will be less invention or innovation. As a result of this, the consumer is actually failing to get what they want.
Analysis- It can be said by analysing both mechanisms that the countries require a regulated market as well as a free market, since both of them have their advantages and disadvantages. Furthermore, prices need to be stable in order for the suppliers to meet the demands of the buyers. An open economy with regulatory organisations is preferable to one that is inflexible for both the Competition Law and IP Laws. A market without any regulating bodies will cause an unbalanced situation, and once it goes out of control, it is difficult to restore.
Concept of IPR and Competition Law
The concepts of Intellectual Property Rights (IPR) and competition law were regarded as two separate areas in earlier times. The IPR law acts as a facilitator that is used to strike a balance between the owners’ rights and social interests in the trade and economy of every nation. It protects intangible properties like trademarks, patents, inventions, and creative works from any unauthorised use by any other person without the owner’s permission. The Competition Law deals with the laws and regulations relating to market competition by efficiently countering various anti-competitive agreements, discouraging monopoly, restricting unauthorised trade practices, regulating managers and acquisitions, etc. In recent times, this perspective has changed, and both of them are used to govern the market mechanism by promoting the welfare of consumers and transferring technologies. They play a crucial role in maintaining a dynamic and competitive market.
Intellectual Property Rights (IPR)
IPR deals with the rights of the owners of various creative inventions. When a person makes an innovation, all the rights regarding that innovation are vested in him. The Intellectual Property (IP) motivates these people to make more innovative creations, differentiates them from the creations of other people, and grants consumers more choices regarding goods and services.
IPR safeguards the legal rights of these creative owners who create different designs, symbols, images, etc., that are used for commerce and trade purposes. The right to use these creations is conferred upon the sole owners of those creations.
Intellectual Property Rights are granted to two different categories, which include industrial properties and copyrights. Industrial properties include patents for industrial designs, service marks, trademarks and others, and copyrights deal with subjects that include artistic and literary works. It lays down provisions for protecting the rights of the owners of novels, poems, musical works, plays, films, and all other works dealing with literature and Artistic works that consist of drawings, paintings, architectural designs, sculptures, photographs, etc.
Competition Law
Competition law deals with those laws that are involved in regulating market mechanisms. It promotes competition in the market and prevents unauthorised monopolies. It safeguards trade and business policies by preventing the anti-competitive conduct of various companies. It monitors the policies and regulations of the market system to ensure that no unfair marketing strategy is used and that the producers are in a position to carry out the businesses in a fair way. Consumers are also capable of choosing products and services freely.
This law prohibits unethical practices by any business group, be it a smaller group or a larger one. Everyone has to follow the provisions of the Competition Law so that nobody faces any difficulty while doing business. There are various anti-competitive practices that are being prohibited by various countries, which include- price fixing, bid rigging, predatory pricing, and dumping.
Origin of IPR and Competition Law
Intellectual Property Rights (IPR)
In the 19th century, the industrial revolution took place in Europe. It was termed as the era of scientific inventions as it led to many new inventions by the people. When people started making new creative and innovative works, a few other people started copying those works and declaring them as the owners of that particular creation. In this way, it was being misused for some time. To protect the rights of the owners of those creations, the term ‘IPR’ started being used. This took almost a century to become a law in the majority of countries. In the 20th century, these IPR laws were given to the holders of creative works.
IPR was first used in Paris for protecting industrial property on 20th March 1883, through the Paris Convention that took place in Paris. Again, in 1886, it was used in Berne, Switzerland, when the Berne Convention was held for the Protection of Literary and Artistic Works. These were the first two efforts that gave rise to IPR laws. They were named the ‘Magna Carta of IPRs’. This led to the establishment of Trade Related Aspects of Intellectual Property Rights (TRIPS), which came into effect in 1995, and the World Intellectual Property Organization (WIPO), which was created in 1967, to protect the intellectual property rights of the people. Therefore, the IPR laws are being used at the national as well as international levels.
Competition Law
The Competition Law came into existence in 1890 when the Sherman Anti-Trust Act, 1890, was enacted in the United States. This Act was enacted to protect the small group against the powers acquired by the large trusts that were formed at the time of the Industrial Revolution. This was done to help the small group use their assets properly by controlling their business in the market with other competitors. It was then considered a key pillar of the market economy. After that, this “Competition Law” was enacted in most of the developed as well as developing countries across the world.
In India, this Competition Law evolved from Article 38 and Article 39 of the Indian Constitution, 1949, where it is stated that the State has been entrusted with the responsibility of securing and protecting a social order. These Articles lay down the provisions for safeguarding social, political and economic justice and ensuring that the ownership and control of material resources in a community are distributed in such a manner that best serves the common good. It is also the State’s duty to ensure that the market economy does not result in the concentration of wealth. The Competition Act was formulated to equitably distribute wealth among all without an unreasonable monopoly.
Objectives of IPR and Competition Law
One of the important objectives is to promote competition among prospective innovators by encouraging them to invent new things. It is generally seen that IPR and competition law have conflicting objectives. The reason behind this is to ascertain a certain limit within which competitors can exercise exclusive legal rights (monopolies) over their inventions. This is generally against static market access and competition rules, specifically restricting the horizontal and vertical limits, or the abuse of monopoly position.
The word ‘competition’ is used in a different sense by IPR and Competition law.
The connotations of ‘competition’ in both IPR and competition law are different. The main objective of permitting licences in IPR is to encourage competition among prospective innovators and concurrently restrict the competition in several ways. It is given to owners for a specific time period. After that, the rights are not conferred on that individual but go into the public domain, ending the competition. The primary objective of competition law is to stop abusive practices in the market, stipulate and encourage competition in the market, and make sure that customers get a variety of products to choose from at an affordable price with improved quality.
Importance of IPR and Competition Law
Some of the important purposes served by the IPR are as follows-
It protects the intellectual creativity of a person by safeguarding the creation of the creator from being infringed by other people.
It acts as an incentive to motivate the creators, which in turn promotes invention.
It gives exclusive rights to the holders of the creations, encouraging them to innovate new things.
It also encourages competitive intent by securing the investment of the intellectual property holders by enforcing their legal rights.
Some of the important purposes served by the Competition Law are as follows-
It encourages anti-competitive policies and prohibits price fixing, bid rigging, predatory pricing, and dumping.
It encourages competition among innovative producers.
It prevents unhealthy competition, abusive market practices, discourages monopoly, etc.
It promotes economic growth in society and looks after the welfare of consumers.
It encourages the highest quality of goods and services at the lowest price for consumers.
It promotes wider choices for consumers as well.
Interface between IPR and Competition Law
In the beginning, while studying IPR and competition law, we will find that their objectives are not similar. They may seem to be irreconcilable and are in conflict with one another. Though their principles may seem to overlap, their ultimate goals remain the same. Their aim is to look into the welfare of consumers by providing them with improved goods and services and encouraging new innovations in the market economy.It gives benefits to the holder of the right to make exclusive use of his product for a particular period. During that time, the patent owners have all the rights to use and monopolise it. Such dominance will not lead to an infringement of antitrust law. To understand the problem arising while applying IPR and competition law, it is necessary to look into the Indian laws to know about competition and how it has been structured to eliminate such problems.
IPR under the Competition Act, 2002
There are some Sections of the Indian Competition Act, 2002, that deal with the relationship between IPR and competition law, which are mentioned below.
Prohibition of tying agreement
Section 3(4) of the Indian Competition Act, 2002, was included to prohibit tying agreements. Tying agreements are those where a useful or desirable product or service is sold by the seller on the condition that the buyer will also buy another product, which is less desirable, from the seller. This provision was enacted to encourage innovation, which is the main objective of IPR, and also promote competition in the market economy.
Protection of IP right-holder
Section 3(5) was included to protect the rights of an IPR holder. It states that competition law does not affect IPR rights. But if we study Section 3(5) with Section 4, then we find that it also restrains the IP holders from abusing their dominant position, and if they misuse their dominant position, then competition law will come into the picture. From this, we can conclude that they are complementary to each other rather than contradicting each other.
In the case of Valle Peruman and others v. Godfrey Phillips India Limited, (2005), a trademark owner misuses the trademark by manipulating/ distorting it. It will amount to unfair trade practices for trademarks. The Supreme Court, while taking into consideration the competition policy of India, held that “all kinds of intellectual property have the potential to infringe the competition.” The court further observed that a trademark owner has the right to use his trademark reasonably and subject to the conditions imposed at the time of granting a patent.
In the case of Aamir Khan Production Private Limited v. The Director-General (2010), the Bombay High Court stated that the Competition Commission of India has jurisdiction to look into the matter of competition and IPR. This stance of the court has been further carried forward by the Competition Appellate Tribunal in the case ofKingfisher v. Competition Commission of India (2012). In this case, it was held that Section 3(5) does not limit the right of the holder of IP rights to sue for infringement of copyright, trademark, patent, etc. The Competition Commission of India has conferred the power to deal with all the cases that come before the Copyright Board. Thus, competition law does put a bar on the application of other laws.
Prohibiting Abuse of dominant position
Section 4 of the Indian Competition Act, 2002, intends toprohibit abuse of dominant positions. However, it does not mean that the existence of a dominant position is prohibited. It means that an exception has been made for IPRs under this Section. This is due to the following reasons-
IPRs given to the holder may not always lead to monopolies in the market.
If the IPRs grant a dominant position, then it also does not mean that they are abusing market power. The abuse of the dominant position needs to be proven.
Sub-section (2) of this Section deals with the way an enterprise should be treated if an action taken by them seems to be abusive. This Section is also applicable equally to IPR holders. Sub-section (3) of this Section is applicable for restraining any infringement of or imposition of conditions so as to safeguard one’s Intellectual Property Rights that are granted by IPR Laws. The IPR Acts that confer such rights are as follows-
Therefore, it can be said that both IPR and competition law can co-exist with one another. Their goals are complementary and supplementary to each other. Both their functioning and operations are kept independent, without unnecessary interference in each other’s domains.
Competition and Patent Law
Patent law is an adjunct to competition policy which helps to establish fair market behaviour through preventing the unauthorized making and selling of patented products, which is the main objective of competition policy. Competition concern arises only when the patent owner uses their innovation in a manner that undermines the purposes of the patent rights.
Granting a right to the owner of the patent will not amount to the infringement of antitrust, but abuse of the rights will amount to a violation of antitrust policies. Patent rights are given only for a particular duration of time, i.e. twenty years from the date of filing. If such rights are given for an unlimited period, then it results in misuse of monopoly power, and it will clog the competition by restricting the invention or innovation of products. A competition law comes into the picture when the exclusive rights to exclude others are given to the patent owner from entering into the market. It comes into the picture to thwart disagreeable market conditions.
Penalty provisions
It is the duty of the Commission (CCI) to see that, while making an IPR agreement, no unreasonable conditions are present in the agreement that is mentioned under Section 3(5) of the Competition Act, 2002. He is empowered to penalise any right holder, business group or enterprise that included such clauses in the agreement. The penalty must not be greater than ten percent of the average turnover for the last three preceding financial years. If an enterprise is a ‘company’, then the directors will be held liable for including such provisions in it. The guilty will be penalised and punished for such acts. The Commission also has permission to use the following powers-
CCI has the power to direct the parties to an agreement to discontinue the agreement and order them never to re-enter into such agreements.
It has the power to order the party who included such unreasonable clauses to modify the agreements.
It has the power to direct the enterprises concerned to follow the orders that are being passed by the Commission. They must act in accordance with the directions, which include payment of costs and others, if any.
He has the power to pass such orders or give directions as he may think fit.
The Commission also has the power to direct the division of an enterprise if it finds any case of abuse of dominant position by an enterprise under Section 4 of the Indian Competition Act, 2002, as mentioned earlier. In other words, it can be said that IPRs and Competition Law work hand-in-hand. The Competition Laws show that consumers do not face any problems due to the imposition of unreasonable conditions while IP rights are being exercised.
Difference between IPR and Competition Law
Intellectual Property Rights (IPR) and Competition Law are being used to implement new policies in the market economy. But there are a few points of differences that can be seen while implementing anti-competitive practices, which are presented in a tabular form-
SL no.
Basis of difference
Intellectual Property Rights (IPR)
Competition Law
1.
Nature
IPR ensures that the inventors or creators of work get awards for their innovations, which in a way encourages monopolies in the market.
It encourages competition among the people in the market economy, which will in turn result in economic growth for the country.
2.
Scope
It tries to eliminate competition by securing the rights of the IP holders.
Competition law, on the other hand, tries to eliminate the monopoly system in the market by encouraging competition.
3.
Protection/ Restrictions
The IPR laws safeguard the rights of the inventors from competitive exploitation of their products.
Competition Law sees that unreasonable restrictions are not imposed upon market competition.
4.
Application
IPR is concerned with the benefits to consumers. It encourages the innovators to make new and improved goods and services for the consumers.
Competition Law, on the other hand, implements policies for anti-competitiveness, unfair trade practices, fair pricing, prohibits tying agreements, closing market gaps, and many more.
5.
Responsibility
The responsibility of IPR is to grant and look into the functioning of property rights.
The responsibility of Competition Law is to see the manner in which these rights are exercised in the market and their effect.
Licensing of IPR and Competition Law
IPR and competition law promotes inventions by protecting the rights of the owners of intellectual property, which in turn motivates people to make new innovations, leading to a healthy and competitive market. They play an important role in economic activity as well as market competition. With increasing digitalisation and rising intangible assets in the economy, the application of these IPR and competition laws has also increased in day-to-day life. So, for better protection of these intellectual properties, licensing of IPR and competition law has taken place. Licensing helps the IP owners with their innovations, as it acts as an incentive for them to invent new things and invest in new innovations.
Article 31 of the TRIPS Agreement provides for the grant of compulsory licenses, under the following situations:-
In the interest of public health
In case of a national emergency
Anti-competitive practices
There are many inferences regarding the inter-link between competition policy and IPR that require it to be taken into account. Authorities regulating competition policy should consider each case relating to IPRs with a reasoned approach. However, abuse of dominance laws could be applied to IPRs and suitable remedies must be granted.
Changing relation of IPR Law and Competition Law in India
In earlier times, it was seen that IPR law and competition law were contradictory. However, due to new developments in recent times, a change in the relationship between the IPR and competition law is evident. While IPR aims at safeguarding the rights of the creators, the Competition Law aims at maintaining efficiency in market competition by preventing any misuse of dominant positions, unfair trade practices, and anti-competitiveness acts. The legislature, while making the IPR laws, made an effort to protect the inventors’ rights and compensate the innovators in case of infringement of their rights. The provisions of the Competition law are made in such a way that they offer better market access to society. With the changing laws and recent judicial pronouncements, these two laws are being harmonised. The objective of IPR changed from preserving the rights of innovators to promoting new thoughts and ideas. Thus, IPR now acts as an element of Competition law policy.
The Competition (Amendment) Bill, 2020
In this new Amendment Bill, the following two major changes were made-
The application and ambit of Section 3(4) were expanded, and
It includes instances where there were dominant positions in the IPR Safe Harbour.
This Bill aimed to expand the scope of anti-competitive agreements by incorporating the term ‘any other agreement’. This clause was set forth in Section 3(4) of the Competition Act, 2002 and its ambit was expanded by amending Section 3(4), where it was decided to incorporate the term ‘any other agreement’. It was introduced to broaden the application of anti-competitive practice in various situations.
The IPR safe harbour provision that was included under this new Amendment Act was applicable only in India, where these anti-competitive activities are involved. The safe harbour provision helps safeguard the inherent security granted to intermediaries against the imposition of any kind of liability for the activities done by third parties. To further expand the ambit of this IPR Safe Harbour provision, Section 4A was added to the Competition Act, 2002. This Section was included to grant better protection to the IPR holders and strengthen their rights.
Interlink between IPR and Competition Law
To ensure competitiveness in commercial markets
With new developments and changes in the commercial environment, an interlink is created between intellectual property rights and competition law. IPR ensures that owners of the intangible assets are given exclusive rights over their innovations regarding trade secrets, trademarks, patents, creative business works, etc. The Competition Law that protects commercial markets from anti-competitiveness ensures that consumers are able to make a conscious choice while consuming goods or availing services from any brands present in the market. Distinctiveness in the trademarks and designs of the products helps the consumers differentiate one product from the other. This uniqueness is guaranteed by the Intellectual Property Rights Laws. It prevents other individuals from copying the trademark of a particular brand as all the exclusive rights are given to the trademark holder. Therefore, both IPR and competition law work together to ensure fair competition without any unhealthy practices by any individual or business group.
Issues faced by IPR and Competition Law
IPR and competition law also face some difficulties and issues. When the laws of intellectual property are implemented on brands’ non-differentiating features like business or trade secrets or any other aspects of a business that add to the uniqueness or distinctiveness of a particular business, IP laws cannot safeguard rights in that situation. If it is permitted, then it would mean granting a monopoly over them. However, the rules of the Competition Law oppose the Intellectual Property Laws’ unduly extension and imposition on the facets of a business. Therefore, the situation becomes a little bit complicated, as not enforcing IP laws will create a lot of problems in commercial environments. It may lead to non-competitiveness among the members of the business groups. Under those circumstances, the IP laws would be unable to protect the distinctiveness of a business, which would eventually lead to imitation and duplicating of that business’s products by other businesses. If this happens, then the competition among the businesses will eventually decrease, leading to an imbalance between IP and Competition Law. So the enforcement of IP Laws is very necessary for balancing the interests of producers and creating new things that facilitate adequate competition in commercial environments.
Ways to resolve conflicts between IPR and Competition Law
Intellectual property pights and competition law must work in balance with one another. To do that, certain conditions must be followed to resolve the issue. The following steps can help in harmonising both the laws-
The authorities of intellectual property rights and competition laws must work in coordination with each other to maintain a balance in the market economy. IPRs and competition law must work in a way so as to safeguard the rights of the IP holders, support them in making new innovations, and increase the competitive spirit.
Different programmes must be organised by the members, developing and explaining the connection between IP and competition law and their policies.
A review should be done regularly to prevent unfair competition.
In any case of refusal to deal, there must be a policy of granting compulsory licenses.
The inventors and creators of the products must be given enough protection as well as benefits for their research and development purposes.
Some reasonable conditions must be imposed on them, but that should not be beyond a certain point, which will cause an adverse effect on the exercise of the IPRs creating problems in the proper implementation of Competition Law.
Shamsher Kataria v. Honda Siel Cars Ltd. (2011)
Facts of the case
In the case of Shamsher Kataria v. Honda Siel Cars Ltd. (2011), the petitioner filed a suit in the Competition Commission of India (CCI) against the defendant, stating that Honda, Volkswagen, and Fiat are misusing their dominant position in the market economy by entering into a contract that violates Section 3(5) of the Indian Competition Act, 2002, which states that the only reasonable conditions imposed by the IPR holder will be safeguarded by this Section and in case of imposition of any unreasonable conditions by them, they will be dealt with by Competition law. They were practising anti-competitiveness by controlling the operations of their services and workshops that were selling spare parts for automobiles. They were trying to monopolise the market by not supplying the spare parts of the Original Equipment Manufacturers (OEMs) in the open market. They were charging a higher price from the consumers for those parts and for maintenance services. The respondent argued that their agreements are within the ambit of Section 3(5).
Issue of the case
Whether the defendants are abusing their dominant position?
Judgement of the case
The Delhi High Court stated that the defendant failed to prove the statements that they made regarding Section 3(5). Therefore, they are liable to face the penalty for violating Sections 3(4) (b), 3(4) (c), 3(4) (d), 4(2) (a) (i), 4(2) (c) and 4(2) (e) of the Competition Act. He was punished by imposing a penalty of 2% of the total turnover on the OEMs and cannot claim protection under the said Section. It was held that they could not claim protection as they violated Section 4(2)(c) of the Competition Act, 2002, by indulging automobile repairers in market access.
HT Media Ltd v. Super Cassettes Industries Ltd. (2011)
Facts of the case
In the case of HT Media Ltd v. Super Cassettes Industries Ltd. (2011), the petitioner filed the suit against the defendant, accusing him of not following the provisions of Section 3 and Section 4 of the Indian Competition Act, 2002. According to the petitioner, the defendant was engaged in manufacturing, producing and publication of music and videos in India. They were granted ‘sale of rights of Bollywood music to private FM radio in the territories of India where Bollywood music is prevalent’. It gives its collection of music to radio stations, television stations, and mobile companies not only in India but also in other countries. It was contended that the defendant was abusing his dominant position by controlling more than seventy percent of the recent Bollywood music, which is not in accordance with Section 4 provisions. It was proved by showing that they were charging a huge amount while granting the rights for the broadcast of music from the opposite party; they paid minimum commitment charges (‘MCC’) to the opposite party and made them accept the license fees and MCC.
Issue of the case
Whether the defendant is abusing his dominant position by controlling more than seventy percent of the recent Bollywood music.
Judgement of the case
The Competition Commission of India (CCI) imposed a penalty of Rs. 2.83 crore on the defendant for misusing the dominant position. The defendant was charged under Section 4(2)(a)(i) by the CCI. It was held that the holder’s right to perform and communicate with the public, or to make adaptations, may be considered as different markets individually.
FICCI Multiplex Association of India v. United Producers Distribution Forum, 2011
Facts of the case
In this particular case, the petitioner filed a suit against the respondent, stating that a group of members of the United Producers/Distributors Forum are trying to monopolise the market by prohibiting competition. They produce and distribute almost all Hindi films. They are trying to take control of the Indian film industry. Furthermore, they also instructed their producers not to release those films for exhibition purposes in the multiplexes, which led to a conflict between the petitioner and respondent. The revenue-sharing ratio was also a reason that caused problems between them.
Issue of the case
Whether the competition in the market affect the rights of the copyright holder?
Judgement of the case
The CCI stated that the IP laws do not have any absolute overriding effect on Competition law. The court observed in the above case that the right granted to the copyright holder is not an absolute right, but it’s a statutory right under the Copyright Act, 1957. The wording used in Section 3(5) of the Act proves the above statement true. From this, it is evident that the scope of this Section is not absolute. It only shields the holder of rights from infringement by exempting him from the restrictive conditions of the Competition Law. The European Courts of Justice also held that the objective of IPR is to encourage innovation in all areas and further provide commercial gain.
Mahyco Monsanto Biotech (India) v. Competition Commission Of India (2018)
Facts of the case
In the case of Mahyco Monsanto Biotech (India) v. Competition Commission Of India (2018), it was stated that the petitioner was abusing its dominant position by charging unreasonably high trait fees for Bt. Cotton Seeds in the Market. MMBI has been producing Bt. Cotton Seeds for a long time and got Intellectual Property Rights for Bt. Cotton Seeds. It involved growing and commercialising these deeds by genetically modifying them. The Competition Commission of India (CCI) investigated the office bearers of Monsanto, the officials of the regulator and the directors of Mahyco Monsanto Biotech to find out whether they are misusing the company’s dominant position in India in Bt. cotton business or not.
Issue of the case
Whether the appellant is misusing dominant position by charging unreasonably high trait fees for Bt. Cotton Seeds in the Market.
Judgement of the case
An appeal was filed stating that CCI has no jurisdiction to investigate the case and pass an order regarding the exercise of rights that have been given by the Patents Act, 1970, as the Patent Controller has the necessary jurisdiction.
So a complaint was submitted to the Delhi High Court, where the plea was dismissed. After the investigation, it was proven that the dominant position was misused by the appellant. The appellant has imposed unfair and discriminatory conditions in the sub-licensing agreements for the manufacturing of Bt. Cotton Seeds in India. Not only that, they also made exclusive supply agreements and refused to make any deal with the seed manufacturers of India. They retained the right to fix the price of seeds in specific situations, eventually limiting any technological or scientific development in regard to the Bt. cotton technology and Bt. cotton seeds. Hence, the appellant has violated Section 3 and Section 4 of the Indian Competition Act, 2002, by participating in anti-competitiveness and abusing its dominant position in the market economy.
Conclusion
From the above information, it can be concluded that IPR provides for a right, whereas competition law provides a regulating body that makes the regulations regarding the production, supply, distribution, and storage of goods, and states the rules required to be performed by the enterprise while operating the market. IPR grants benefits to the creator of an innovative product or author of any script to make exclusive use of it for a specified period.
It appears that both laws are contradictory in nature, but they are not, as we find from the above study that both laws are supplementary to each other and one comes into the picture when one is misused. Competition law tries to offer wide varieties to the customer, and it brings the balance between the rights of the manufacturer and the customers by maximising profit with a quality product at affordable prices. IPR also allows the manufacturer to get the reward for the sole creation of the product, which in turn will help the public at large. The monopoly position offered by the IPR is prima facie not violating the competition policies, but misuse of the position can be violating the policies.
Frequently Asked Questions (FAQs)
What does Competition Policy deal with?
Competition Policy deals with the set of policies that encourages competition in the local as well as national markets. This eventually helps in liberalising trade policy, deregulation in the economy, and allowing foreign investments.
What does Section 4A of the Competition (Amendment) Bill, 2020 deal with?
Section 4A of the Competition (Amendment) Bill, 2020, protects the IPR holders by the provision of IPR Safe Harbour when a dominant position is misused.
What was the observation of the Raghavan Committee?
The Raghavan Committee observed that the innovations made by the people always help in developing the economic conditions. With more innovative creations, there is a rapid rise in competition at micro and macroeconomic levels. So the Intellectual Property Law has played an important role in safeguarding inventions from any exploitation. Therefore, it was concluded that innovation, as well as competition, are essential tools for the development of the market economy and the improvement of goods and services for the welfare of the consumers.
What do you mean by refusal to license?
Refusal to license means that the Intellectual Property holders of the exclusive rights may prohibit others from abusing or exploiting their legally granted limited period rights, but they are not permitted to prevent its development. The IP holders cannot impose unreasonable conditions for licensing as it would amount to a refusal to license. This refusal to license is considered as anti-competitiveness.
This article is written by Abha Singhal. In this article, the author has tried to explain the origin and evolution of the doctrine of pious obligation. Moving forward, the author has tried to explain its relevance in the present times and has further elucidated the concept with the help of landmark judgments.
Introduction
In the Hindu legal system and mythology, it is considered essential to repay all debts before the death, and if the deceased was not able to do so before his/her death, the responsibility of the same, as per the Hindu law, lies on the son to pay off the debts so as to provide a way to heaven to the deceased. As per Brihaspati, if a person dies without repaying his debts, then he will be born as a servant or slave or woman or quadruped in the house of the creditor. The doctrine of pious obligation has originated from the ancient texts, customs and usages of Hindu law, which emphasizes that the son has a responsibility to free the soul from indebtedness and to discharge it to the heavenly forces. The doctrine of pious obligation covers those debts that are incurred for legal and moral purposes, and not for something which is considered illegal and immoral in the eyes of law and society at large. After the amendment in the Hindu Succession (Amendment) Act of 2005, daughters were given equal rights in the ancestral property as that of the son, which questioned the relevancy and applicability of the doctrine of pious obligation in the post-2005 scenario.
Historical background and meaning of the doctrine of pious obligation
The doctrine of pious obligation is based on the idea of piety and religion under the Hindu Law. As per the scriptures, it is considered holy that the son, a grandson, and a great-grandson pay off his father’s debts, and this religious obligation comes from the fact that they are all coparceners in the family property.
As per the Hindu tradition, if a Hindu dies without paying off all his debts, they may have to face negative consequences of the same in the afterlife and the said act will be considered a sin that anyone who dies without paying off all the debts cannot go to heaven. In this regard, the ancient scholar Brihaspati said that whoever after receiving a sum of money or property fails to repay it to the owner shall be born in the creditor’s house as a slave, a servant, a woman, or a quadruped. It is to be kept in mind that the purpose of this doctrine is not to punish the deceased, or to benefit the creditor, but to ensure the well-being of the deceased in the afterlife.
In the case of Anthonyswamy v. M.R. Chinnaswami (1969), the notion of pious responsibility was thought to be a counterbalance to the son’s claim on the property, rather than a free requirement. It is so because the doctrine of pious obligation which is based on the ideas of justice, equity, and good conscience, is not just a religious doctrine but now it has passed into the realm of law. To elucidate the same, the doctrine of pious obligation has become an integral part of the Mitakshara School of Hindu Law wherein a son, along with his father, gets the right to the family property the moment he is born.
Debt repayment is critical, according to the Dharmashastra. If a man must pay both his own and his father’s debts, the latter must be paid first. Furthermore, the grandfather’s debts should be paid first, followed by the father’s debts. This demonstrates that debt repayment is not merely a religious responsibility, but also a societal obligation recognised in Indian legal literature for centuries.
Meaning of pious obligation
The pious means something religious and devout. Obligation here implies a duty or karma of a Hindu person. Pious obligation essentially implies an obligation a Hindu person has towards the god so as to ensure the spiritual salvation of the ancestors. The doctrine of pious obligation means a moral and religious duty that is imposed on the son to repay the debts of his deceased and debt-ridden father, grandfather, or great-grandfather.
The term ‘pious’ means something sacred and religious, and ‘obligation’ implies a duty. The doctrine of Pious Obligation is a fundamental concept under the Hindu law that can be traced back to the ancient Hindu scriptures according to which, the debts of an individual, be it moral or/and financial, must be repaid. The doctrine of pious obligation explains the long-standing tradition of religious nature, wherein the son is held liable to pay off his father’s debts. The debts here only refer to Vyavaharika debts, i.e., the debts which are only for legal purposes and which exclude Avyavaharika debts which are the debts taken for unethical and immoral purposes. It is based on the belief that when a debt contracted by the father has not been repaid during his lifetime, then it must be restored, after his death, by his own son.
In the case of Sat Narain v Rai Bahadur Sri Kishan Das (1936), it was observed that the idea of pious responsibility is founded on the sons’ pious obligation to pay off their father’s obligations, rather than on the necessity to safeguard third parties.
Scope of liability in the doctrine of pious obligation
Son’s liability to pay debts
The liability under the doctrine of pious obligation is not personal in nature, as it is restricted to the amount of share obtained in ancestral property. As per the Mitakshara school of thought, the son, grandson, and great-grandson have a right to the family property after their birth, which is essentially known as the Mitakshara coparcenery which is made up of three generations who are eligible to take part in the ancestral property. Thus, these three generations of male descendants are liable under the doctrine of pious obligation. Moreover, the liability to pay off father’s, grandfather’s, or great-grandfather’s is restricted to the principal amount only and not the interest on it. Before the British Era, the son and grandson had a personal duty to pay the debt, whereas the great-grandson’s liability was restricted to his portion of the joint family inheritance. During the British Empire, a son, grandson, or great-grandson’s responsibility was restricted to his portion of the joint family estate. As a result, even if the son has some personal property, he is not obligated to repay the father’s debts.
Why sons are preferred for the doctrine of pious obligation?
In traditional Hindu societies, no obligation was faced by female descendants to discharge or repay the debts of their forefathers. It is so because women were often perceived as incapable of taking on such responsibilities and were considered extensions of a man’s property or estate. This shows the patriarchal mindset and stereotypes that existed in society at that point in time. Because of such unjust notions and convictions, sons or male descendants were considered worthy to have a share in the ancestral property and the liability to repay or discharge the debts of the forefathers is a corollary to the right they get in the ancestral property. The father’s superior interest in the property over the son converts the pious duty of the son into a legal one for the son who succeeds in such property in the future.
Liability is limited to religious debts
Moreover, It is to be noted that this doctrine is only applicable to those debts that are considered religious in nature. Debts that are irreligious do not fall under this doctrine. There are two reasons for not considering irreligious debts to be paid by the son. Firstly, just as we have religious authorities that impose this obligation on the son to pay off his father’s debts which are of a religious nature, similarly, we also have authorities that absolve the son from paying off the debts of his father which are irreligious or immoral. Secondly, if the son pays off his father’s irreligious debts, then it is believed that he is contributing to his father’s irreligious acts.
Type of debts under doctrine of pious obligation
While discussing this doctrine of pious obligation, it is important to note that there are two types of debts: Vyavaharika debts and Avyavaharika debts. The doctrine of pious obligation only applies to the Vyavaharika debts, which are the debts taken for a legal purpose. On the other hand, Avyavaharika debts are those debts not justified by religious tenets and hence are not binding upon the sons.
In the case of Vyavaharika obligations, a father must alienate family lands to pay off just obligations or just debts, but his sons are not. The term just obligations or just debts implies those debts that are incurred but are not immoral, illegal, or in violation of the rule of law or public policy. Debts incurred for the sake of defending oneself in a lawsuit, conducting business, or other permissible reasons are binding upon the son. Sons are not bound by debts contracted foolishly, for luxury, or for criminal pleasure. However, there are instances when a son is required to pay and times when he is not. A son is bound to pay his father’s responsibilities if the debt was contracted before partition. Still, repayment arose after partition or if the debt was contracted before partition, but repayment emerged after partition. A son, on the other hand, is not compelled to pay if the debt was contracted by the father after the division of the joint family property, because the son would have separated and seized his share, which is now his personal property and is thus not obligated to pay off his father’s debts.
Under Avyavaharika debts, a son is not liable to pay his father’s, grandfather’s, or great-grandfather’s debts since these debts are not according to the religious tenets or for a legal purpose. Moreover, such debts are not spiritual in nature. It is to be noted that initially, the sons were able to easily evade their responsibility to pay off debts by saying that the debt was Avyavaharika, and this resulted in an undue loss to the creditors. Consequently, the burden of proof was shifted onto sons to show that the debts incurred from the creditor are Avyavaharika in nature. As per the case of Luhar Amrit v. Doshi, the doctrine of pious obligation explains that the debts of the father must be repaid by the son in order to give salvation to the deceased father. For the same, the debts must be for legal and moral purposes, and for something illegal and immoral in nature. If the debts are avyavaharik meaning illegal and immoral, then the doctrine of pious obligation cannot be invoked. The expression avyavaharik is based on the text of Usanas, which has been quoted by Mitakshara school in the text of Yajvavalkya smriti. According to Usanas, If the debt is not vyavaharik, then it is not to be paid by the son.
Doctrine of pious obligation : a modern perspective
It is believed that the doctrine of pious obligation reflects a patriarchal mindset and gender bias, and is considered an obligation that creates inequality in society. In old Hindu society, female descendants were not obligated to repay their forefathers’ debts. Moreover, women were frequently viewed as incapable of shouldering such tasks as paying debts and were viewed as extensions of a man’s property and estate.
Eminent Hindu jurists such as Narada and Katayayana stated that when a man dies without a son or inheritance, his wife becomes his “sole property,” and the guy who “enjoys the wife” is liable to pay up the obligation. Daughters or other female offspring had no obligation to repay their forefathers’ debts, according to Hindu literature. Feminist movements of the 20th century played an important role in challenging the discriminatory status quo in a variety of professions. Feminist activists and researchers have advocated in the legal arena for the eradication of gender-based prejudices in the legal system, particularly in property and inheritance rules.
Abolition of doctrine of pious obligation
After the commencement of the Hindu Succession Act of 2005, the requirement of solely focusing on the sons was abolished as the daughters were granted an equal right in the ancestral property. To elaborate on this, it was questioned that since daughters now have a right in the ancestral property too, why only the sons should be held responsible for repaying the debts of their forefathers, and not daughters? Section 6 of this legislation provides for the devolution of interest in the coparcenary property, explaining that a daughter shall, by birth, become a coparcener in her own right as of the start of the Hindu Succession legislation of 2005. The daughter shall have the same entitlement to the property as if she were the family’s son. Under Section 6(4) of this legislation, no court shall recognize any right against a son, grandson, or great-grandson for the recovery or repayment of the debt solely on the grounds of the doctrine of pious obligation under Hindu law. However, if the debt was incurred before the year 2005, then they will be held liable under the doctrine of pious obligation.
Judicial interpretation of the doctrine of pious obligation
Luhar Amrit Lal Nagji v. Doshi Jayantilal Jethalal (1960)
Facts
In this case, the petitioner suffered significant losses as a result of his investing in gold and silver, and he attempted to repay the obligation by taking out a mortgage loan. The mortgagee obtained a decree from the court and sought to execute it by sale of the property mortgaged. After the death of the petitioner, the sons and wife sued the mortgagee for the execution of the decree and said that the decree was not binding since the debt was immoral and illegal in nature, and hence would not come under the doctrine of pious obligation. The trial court found the case to be in petitioner’s favour, and the same was affirmed by the district court by way of an appeal. However, on a second appeal, when this case went on to the High Court which favoured the respondents the Supreme Court affirmed the same.
Issue
Whether the son of the petitioner be held liable to pay off this debt?
Held
The trial court ordered in Sons and Wife’s favour that the debt was immoral in nature, and on appeal, the district judge affirmed its decision. Moreover, on the second appeal, the former Saurashtra High Court held that it was for the plaintiffs to prove that the debt incurred was immoral (Avyavaharika) but since they had no evidence to prove the same, they were held not entitled to this decree. Since they had no evidence to discharge that onus, they were not entitled to a decree. The Hon’ble Supreme Court upheld this view and the appeal was declared dismissed
Venkatesh Dhonddev Deshpande v. Sou. Kusum Dattatraya Kulkarni (1978)
Facts
In this case, Dattatraya Kulkarni, the husband of Plaintiff 1 and father of Plaintiff 2 had borrowed a tagai loan for the construction of wells. A piece of land was given as security for the loan. The loan was advanced, but the borrower failed to repay the time as per the terms and conditions. A revenue recovery proceeding began, and an auction for sale was issued, consequently, it was purchased by the defendant and the sale was confirmed. Then a suit was filed for recovery of possession of the land contending that the sale was illegal since the land was not liable for Tagai loan as it is not a debt which comes under the Hindu law, and hence the respondents were not bound to pay their father’s debts.
Issue
The main issue before the Hon’ble Supreme Court was whether the doctrine of pious obligation applied to the Tagai loan.
Held
The Hon’ble Supreme Court held that the doctrine of pious obligation did not apply to the Tagai loan because this doctrine was the principle of Hindu law and was only applicable to debts contracted by a Hindu father for his own benefit and not for any illegal or immoral purpose. Moreover, the court also held that the Tagai loan was not a debt under Hindu law, but a statutory liability arising from a contract between the respondent and the government, which is governed by the provisions of the Land Improvement Loans Act 1883, hence it won’t be applicable.
Keshav Nandan Sahay v. Bank of Bihar (1976)
Facts
In this case, The Bank of Bihar obtained two money decrees against Deonandan Sahay, who had died in the year 1962. The Bank of Bihar filed execution cases against his legal heirs, which also include his wife, sons, and daughters. Then the sons filed petitions under Sections 47 and 60 of the Civil Procedure Code, and under Sections 14 and 15 of the Bihar Money-lenders Act, challenging the execution of the said decrees against their ancestral property on the ground of the doctrine of pious obligation.
Issue
The issue is whether the sons of Deonandan Sahay were to be held liable to pay off the debts of their father under the doctrine of pious obligation, and also, whether the ancestral property which is in their hands to be attached and sold for the execution and satisfaction of the decrees.
Facts
In this case, the Hon’ble Patna High Court held that the sons of Deonandan Sahay were to be held liable to pay off the debts under the doctrine of pious obligation because the debts incurred were not for any immoral or illegal purposes, and were incurred before the enactment of the Hindu Succession (Amendment) Act, 2005. Additionally, the Hon’ble court also held that the ancestral property in their hands was liable to be attached and sold for the execution and satisfaction of the decrees, as the doctrine of pious obligation was not abolished by the Bihar Money-Lenders Act. However, the Hon’ble Court also held that the doctrine of pious obligation did not apply to female heirs of Deonandan Sahay, and they were not to be held liable to pay off their father’s debts or to have their shares in the ancestral property.
Conclusion
The doctrine of pious obligation is a traditional concept that has been practised under Hindu law for years. This doctrine is essentially based on the moral and religious duty of a son, grandson, or great-grandson to repay the debts of their deceased and debt-ridden father, grandfather, or great-grandfather unless the debt that has been incurred is for an immoral or illegal purpose. Moreover, the doctrine reflects the patriarchal notions that are prevailing in the society at that point in time, and which has contributed a great deal towards the gender bias and inequality issue in the society. The doctrine also implies that it is the son’s liability to pay off his father’s debts which is linked to the ancestral property, by virtue of him being born with rights to have a share in the property.
However, due to constant evolution, the doctrine of pious obligation has undergone significant challenges and changes in the modern era. The Hindu Succession (Amendment) Act, 2005 has abolished the doctrine of pious obligation by providing that no son shall be held liable to pay any debt of their father solely by reason of him being the heir of the deceased. Additionally, this amendment has essentially lifted the liability of the son alone to pay off the debts of the father by giving these same rights to daughters to pay off the debts and to have an equal share in the ancestral property. This has also helped remove gender discrimination in the society. The abolition of the doctrine of pious obligation is a progressive concept toward achieving gender equality and social justice in Indian society.
Frequently Asked Questions (FAQs)
What is the origin of the doctrine of pious obligation?
The doctrine of pious obligation is based on the concepts of piety and religion. According to the Hindu religion, when a Hindu dies and his soul is left indebted, the deceased may have to face evil consequences. The doctrine of pious obligation has originated from the customs and ancient texts under the Hindu law, which recognises the son’s, the grandson’s, or great-grandson’s responsibility to free the soul of his father from the debt and depart the soul for heaven.
What is an Avyavaharika debt?
An Anyavaharika debt is a debt incurred for immoral or illegal purposes that cannot be recovered under the doctrine of pious religion, as this doctrine only deals with debts that are moral and legal in nature.
What is the effect of partition of the joint property on the liability under the doctrine of pious obligation?
The liability under the doctrine of pious obligation is not affected by the partition of the joint family property.
What is the scope of the doctrine of pious obligation under Hindu law?
The doctrine of pious obligation is applicable to the son, the grandson, and the great-grandson in a family, by virtue of their being the coparceners by birth in a Hindu undivided family. Under this doctrine, the liability of the son is only limited to the principal amount of the debt and not the debt which occurs on it. Additionally, under this doctrine of pious obligation, the liability of the son is also limited to his share in the joint family property only. It is to be noted that the doctrine of pious obligation does not apply to the daughter, the daughter’s son, or the widow.
What are the kinds of debts that are covered under the doctrine of pious obligation?
There are two types of debts that are covered under the doctrine of pious obligation, namely vyavaharika, and avyavaharika. Vyavaharika debts are those debts that are incurred for legal and moral purposes. On the other hand, avyavaharika debts are not covered under the doctrine of pious obligation and it covers those debts that are incurred for immoral or illegal purposes such as prostitution, gambling, and many more.
What are the exceptions to the doctrine of pious obligation under Hindu law?
The doctrine of pious obligation does not apply to the following situations and circumstances:
If the debt is incurred before the birth of the son, the son is not liable to pay the same unless the debt has to be incurred for the benefit of the family.
If the father of the son is alive and not insolvent, then the son is not liable to pay off the debts under the doctrine of pious obligation.
If the laws of limitation bar the debt incurred, then the son is not liable to pay the same, unless the son has acknowledged the debt or paid interest on it,
If the debt has been incurred after the partition of the family property, the son cannot be held liable to pay the same, unless he was a party to the partition of the said joint family property.
What is the legal status or validity of the doctrine of pious obligation under Hindu law?
The doctrine of pious obligation, although recognised and accepted by the courts of various judgments, it is still not a codified law. However, this doctrine of pious obligation has been abolished and deemed illegal by the Hindu Succession Act of 2005, which explains that no court of law shall take cognizance of or recognise that the son, the grandson, or the great-grandson shall be held liable to pay off the debts of the joint family property solely on the ground of pious obligation under the Hindu law. The doctrine of pious obligation I prospective in nature, and does not affect the debts that were incurred before the year 2005.
This article is written by Shriya Singh. It seeks to discuss in detail the various types of directors the Companies Act of 2013 provides a corporate entity with. It describes the functions and duties of various directors, along with their disqualification criteria, as well as discusses how the vacancy in the office could be filled. The article also provides for case laws pertaining to such directors and their appointments.
Introduction
A director is an individual who is a member of the board of directors of a company and has diverse skill sets and experience to effectively guide and govern the corporate organisation. He participates in the important decision-making of a company, which affects its overall growth and development, both in terms of its financial and long-term success.
They are under the obligation of meeting both the regulatory and legal requirements for the company under the various laws and guidelines. They also play a very prominent role in maintaining good corporate governance practices for the company, as they monitor performance, set policies, and comply with the ethical standards provided within the organisation.
As important as the individual seems, so are his duties, appointments, removal, or resignation, as well as welfare. If he works right with full dedication, the company does nothing but shine. However, if he runs south, the company sees a downfall.
Who is a director
The Companies Act of 2013 does not define the term director, but Section 2(34) of the Companies Act of 2013 provides that a director means a director that is appointed to the board of directors of the company. The role of the directors of a company is very crucial in nature, as they are directly responsible for its success or failure.
Bowen, L J., described that directors act as agents, sometimes as trustees, and sometimes even as managing directors.
A company cannot act through itself. It can only act through persons, and the persons it acts through are known as directors. Thus, embarking on a relationship of principal and agent between the company and those persons. The above-mentioned relationship has also been held up in a number of judicial pronouncements such as Himachal Pradesh State Electricity Board v. Shivalik Casting Pvt. Ltd (2004).
And as a lot of provisions of the memorandum of association and articles of association give vast powers of management to the directors, they act as the supreme decision-making body, which is why they fit right into the spheres of managing partners.
What is the role/ function of directors in a company
Section 166 of the same Act, 2013 provides for the duties to be carried out by all the directors, given as below:
He must always act in accordance with the articles of association of the company.
He shall always act in good faith and must promote the objectives of the company according to the interest of the company, benefiting its members, employees, shareholders, and community, and also in light of the protection of the environment.
He must never be careless in exercising his duty with due diligence, reasonable care, skill, and independent, prudent judgement.
He must refrain from indulging in a situation in which he might have a direct or indirect interest, as it may conflict with the interest of the company in one way or another.
He must never intend to achieve any undue gain or advantage and must never even attempt to achieve the same, for himself, for his relatives, or for his partners or associates. On being found guilty, he shall be punished with the penalty amount, which equals to that gain to the company.
He is not allowed to assign his office, and if he ever does so, that shall be held void.
If any director of the company contravenes this particular section, then he shall be punishable with a fine which will not be less than Rs. 1 lakh and may extend up to Rs. 5 lakh.
Director Identification Number
To be a director in a company, there is one prerequisite of the Director Identification Number (DIN) as per Section 153 of the Act, 2013, without the allotment of which no person shall be appointed as a director of any company, and one can apply for DIN at https://www.mca.gov.in/MinistryV2/applyfordin.html.
In a company, there can be various directors based on their roles, responsibilities, and functions within the corporate organisation.
Some of the types of directors are listed below:
First directors
First directors are the directors whose names are expressly provided in the articles of association of a company. If the article of association of a company is silent, then the promoters will appoint the first directors of the company and if the promoters do not appoint them, then the individual subscribers to the memorandum of association are deemed to be the first directors of the company.
The first directors enjoy the term of being so until the directors are finally appointed by the company.
Executive directors
Executive directors are directors who operate for the firm on a full-time basis and take an active role in its ongoing day-to-day management and operations. They actively participate in decision-making, the execution of strategies, and the management of several affairs within the company. Operations, finances, and administration are frequently handled by executive directors. In addition to their usual fixed income, they may also get bonuses and other incentive payments based on performance. The financial statements of the company include information pertaining to their remuneration.
Non-executive directors
Non-executive directors are the individuals who serve on the board of directors of a company but aren’t actively participating in the everyday affairs or management of the organisation as a whole. In order to offer unbiased and objective opinions on the issues of a company, some independent non-executive directors are appointed. They have the potential to enhance corporate governance and add an impartial viewpoint to the board’s deliberations. Independent and non-executive directors commonly serve as expert consultants to the board and management of the company. They might contribute to strategy remarks, attend board meetings, and offer advice based on their expertise. They are in charge of regulating the executive directors and the company’s management’s operations. They are essential in making sure that rules, laws, and moral guidelines are followed within the company. The remuneration for non-executive directors’ services tends to be determined by the stockholders of the company.
Rotational directors
Section 152(6) of the Companies Act 2013 states that a company must have a minimum of two-thirds of its total directors as rotational directors. However, the articles of association of the company can provide for a much higher limit for the same.
Also, here, total directors do not include independent directors and nominee directors if appointed by financial institutions under any special Act.
Out of the two-thirds of such rotational directors, one-third must compulsorily retire by rotation in the annual general meeting of the company.
The term for the rotational directors is not fixed.
The retirement would be based on which director was for the longest time in the office. If the directors were appointed on the same day, then they could mutually decide who would retire, and if they couldn’t come to a decision, then the lot system would come to the rescue.
There are three ways in which the vacancy that arises from the retirement of such directors at every annual general meeting can be dealt with:
The retired director could be reappointed or
The vacancy could be fully filled by making a new appointment of a director, or
A resolution could be passed to keep such a vacancy alive.
If the company cannot do the above-mentioned things, then the meeting shall be adjourned, and in the subsequent meeting, it would be expected that the vacancy would be filled by using the chosen method from the above 3 categories. If no appointment happens at the subsequent meeting, then there will be an automatic reappointment of the retired director.
But such an automatic reappointment would not happen if
The director shows his unwillingness to be appointed again.
He becomes disqualified to be a director of the company.
A resolution has been put up with the company for his re-appointment, but it was not successful.
The articles of association of the company state that resolution would be required for such re-appointment of the director retiring at the annual general meeting.
Exemption
The provision of rotational directors does not apply to
Private company
Unlisted government company or its subsidiary company
Non-rotational directors
Section 152(7) of the Companies Act of 2013 states that the names of the non-rotational directors would be provided under the article of association of the company. The term for such non-rotational directors would be fixed, and they should be a maximum of one-third of the total directors of the company.
Like rotational directors, here too, total directors do not include independent directors and nominee directors if appointed by financial institutions under any special Act.
Exemption
The provision for non-rotational directors does not apply to
Private company
Unlisted government company or its subsidiary company
Additional directors
Section 161 of the Companies Act of 2013 states that if the articles of association of a company provide for the clause of additional directors, then the board of directors can appoint them just by passing a board resolution.
The term for an additional director is either till the conclusion of the annual general meeting or, in cases where the same is delayed, the last date of the annual general meeting, or if the postponement of the annual general meeting has been in accordance with the permission of the registrar of the company, then on a such date.
A director would not be eligible to become an additional director if his appointment had been rejected at the general meeting.
Alternate directors
For the appointment of an alternate director, the first requirement is authorisation by the article of association of the company.
It is only then that an alternate director can be appointed if the original director has gone outside India for a time period of 3 months or more.
The power to appoint alternate directors vests with the board of directors of a company. The existing directors of a company cannot be the alternate directors of the same company.
It is pertinent to note that one person can be an alternate director for only one director in one company. For different companies, the same person can be an alternate director.
For example, A is a director of X Ltd. as well as Y Ltd. For the treatment of his family members, he is required to stay outside India for roughly four or five months. At the same time, B, a director of X Ltd., also had to go outside India for personal reasons for 3 months. When the alternate director is appointed it would be in such a manner that Section 161 of the Companies Act of 2023 is not compromised. Suppose C is appointed as an alternate director in place of A at X Ltd., Now, C cannot be appointed as an alternate director for B in X Ltd but C can be appointed as an alternate director for A in Y Ltd.
An alternate director also has to fulfil all the conditions of an independent director if the original director whose place he would be taking is an independent director.
The term for an alternate director is limited to when the original director comes back or at the expiration of the term of the original director, whichever event occurs earlier.
Casual vacancy directors
In the event of the death of a director appointed by shareholders, his resignation, his removal, or his disqualification, a casual vacancy director can be appointed in place by the board of directors of a company as per Section 161 of the Companies Act of 2013. To nominate a casual vacancy director, a board meeting has to be taken up to pass board resolution as such an appointment cannot be made by circulation. In the subsequent general meeting, the ordinary resolution to the effect is also a necessity for the appointment of a casual vacancy director.
Resident directors
A resident director is a director who has stayed for 182 days or more in India in the past one year. And if the company so incorporated has not surpassed 1 year since its commencement, then the requirement would be seen proportionately.
For example, if only 9 months have passed for the company to be in existence, then the requirement for resident directors would be seen for 141 days (182 x 9/12).
Independent director
Section 149(6) of the Companies Act of 2013 states that an independent director means a director other than a managing director, a whole-time director, or a nominee director with regard to a company. The Securities Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015 adds to it by stating that an independent director is a non-executive director, which in simple terms means that he would not have the power to make executive decisions but would act like a watchdog.
It states that the company and independent directors must abide by the provisions of the code of conduct that is provided in Schedule IV.
The schedule acts as a guide for conduct to be carried out by independent directors. It lays down the required standards to be followed in regard to professional conduct, roles and functions, duties, manner of appointment, re-appointment, meetings, resignation, and removal.
Requirement of independent directors
Section 149(2) of the Companies Act of 2013 states that every listed company must have one-third of its total directors as independent directors. For this purpose, any fraction contained in such a one-third number must be rounded off as one.
It further states that the Central Government may prescribe a minimum number of independent directors for any class or class of public companies.
In addition, it must be noted that every unlisted company having paid-up share capital of Rs.10 crore or more, turnover of Rs.100 crore or more, or outstanding loans, debentures or deposits of Rs.50 crore. or more, must have two of its directors as independent directors.
SEBI (LODR) Regulations, 2015 also has its own limits in this regard, to be read in consonance. It states that for every listed company coming under SEBI (LODR), 2015, the limits stand as given under
If the chairman of the company is an executive director, then at least 50% must be independent directors.
If the chairman is a non-executive director, then the independent directors must be one-third of the total directors.
If the chairman is a non-independent director but is related to a promoter or promoter group, then the independent directors must constitute 50%.
If the chairman has outstanding superior voting rights shares, then there must be at least 50% independent directors out of the total directors.
Required qualifications of an independent director
He must be a person of integrity and avoid irrelevant expertise and experiences.
He must not be the promoter of the company, even of its holding, subsidiary or associate company.
He must not be related to the promoters or directors in the company, even of its holding, subsidiary, or associate company.
He must only be interested in his remuneration as a director and must neither possess nor possess any pecuniary relationship in the company, even in its holding, subsidiary, or associate company, during the current financial year and during the two immediately preceding financial years. Such kind of transactions with such companies amounting to 10% of his total income is allowed.
(Note: relatives will include mother-father, brother-sister, son-daughter, son’s wife, daughter’s husband, stepmother-father-brother, and spouse.)
However, they’re allowed to hold the lower of the two:
2% of the paid-up share capital, or
Face value of Rs. 50 lakh
(i). During the two immediately preceding financial years or in the current financial year, none of his relatives cumulatively or individually should be a security holder of the company even of its holding, subsidiary, or associate company.
(ii). The relatives must not be indicated to the company and to even its holding, subsidiary, or associate company, even to its promoters or directors, in excess of Rs. 50 lakh, during the two immediately preceding financial years or in the current financial year.
(iii). The relative is not a guarantee for the loan given to a third party by the company in excess of Rs. 50 lakh during the two immediately preceding financial years or in the current financial year.
(iv). No relative shall have a unary relationship with the company, its holding, subsidiary or associate company, equivalent to 2% or more of the gross turnover or total income, either solely or in combination with other aforementioned points.
Neither he nor his relative should hold opposition to key managerial personnel or have been an employee in the current year or previous three years of the company it’s holding, its associate, or its subsidiary company. However, if the relative is an employee, the restriction for the previous three years would not apply.
If a firm of practising chartered accountants, practising company secretaries, practising cost accountants gives service to the company, and in that firm either he or his relative are partner, proprietor, or employee, then he or she cannot be an independent director in the company.
Similarly, for a legal or consultancy firm whose 10% of gross turnover is from any company, subsidiary company, or associate company in which he or his relative is a partner, proprietor or employee, then he cannot be an independent director in the company such a firm gives its services to.
If he himself or his relatives hold a maximum of 2% or more of the voting rights of a company, he can’t be an independent director there.
If he or his relative is a chief executive of any NGO, either in which more than or equal to 25% of the donation is done by the company or the NGO holds more than or equal to 2% of voting rights in such a company, he or she can’t be an independent director in such a company.
Data bank
The Ministry of Corporate Affairs launched the Independent Directors’ Data Bank in order to keep up with good corporate governance. The database preserves the data of all the independent directors who are willing to take a post as such in a company. It is a great help in the selection process, as it acts as an aid to the company. It is available online on the website of the Indian Institute of Corporate Affairs, which has been authorised by the central government for the creation and maintenance of the data bank of independent directors.
details of the limited liability partnership of which he is a part
details of the company of which he is a part
The institute is required to provide data upon the payment of the prescribed fees by the company. Also, the institute would be immune from any responsibility for the lack of accuracy of any information, as it is the responsibility of the company to conduct its due diligence on whoever it goes ahead and appoints as its independent director.
Duties
The duties of an independent director, as provided, are under:
He must keep on evolving and updating his skills and knowledge, along with the similarities with the company.
Appropriate clarification about information, and whenever it is necessary he must seek professional advice from outside experts at the expense of the company.
He must be sincere enough to attend all meetings of the board of directors and of the board committee of which he serves as a member.
In each and every committee of the board, he is a member or chairperson; he must be actively participating in it and be constructive throughout.
He must keep himself updated about the external environment the company is functioning in.
He must maintain confidentiality and not disclose any such information, including commercial secrets for advertising and sales promotion plans or even any information that is unpublished, unless such closure is expressly provided by the board or law.
He must always assist to protect the interests of the company, its shareholders, and its employees.
He must be attentive enough to report concerns regarding unethical behaviour, suspected fraud, or a violation of the code of conduct or ethics of the company.
He must ensure his sufficient attention whenever the related party transactions are approved and must be assured that the same has been done in the interest of the company.
Section 149(12) of the Companies Act of 2013 gives immunity to the independent director, not being promoter or key managerial personnel, as it states that they shall be held liable only and only where the acts of omission or commission by a company occur to be in his knowledge or by his consent or where he has not exercised his due diligence properly.
Woman director
In light of the promotion of both women empowerment and gender equality, there is a requirement of at least one compulsory women director, by virtue of the second proviso to Section 149(1) of the Companies Act of 2013, in
Every listed company, and
Every unlisted company either has a paid-up share capital of 100 crores or more or, a turnover of 300 crores or more.
If the vacancy of a woman director is created, then it has to be filled within 3 months or by the next board meeting; whichever event occurs later would be the limiting period.
Furthermore, in the top 1000 companies, one independent director is required to be a woman.
Nominee directors
In a company, a nominee director can be appointed by the board of directors, and you can also be nominated by either the financial institution or bank, etc., if it has been expressed in agreement between the company and such institution.
The nominee director who is nominated by the bank or financial institution would protect the interests of such a financial institution, and the board of directors cannot reject such a nomination.
Even a third party can appoint a nominee director if there is any agreement in the same light with such a company.
Small shareholder directors
Every company that is listed on the recognised stock exchange is required to have one small shareholder director whose whole and sole intention would be to protect the interests of small shareholders.
A small shareholder director can be appointed in two ways
A company can suo-moto appoint such a director, or
A small shareholders director can be appointed on account of an application by 1000 small shareholders or one-tenth of total small shareholders, whichever is lower between the two.
A notice has to be sent to the company before 14 days, along with a declaration that the potential small shareholder director is not disqualified and his director identification number.
He is required to be, in terms of qualification, eligible to become an independent director of a company.
His term is 3 years, and there is a restriction imposed on him that once the three years come to an end for the subsequent 3 years, he won’t be allowed to be associated with that specific company, obliging to the cooling period requirement.
A small shareholder director can be appointed to a maximum of two companies, provided that the second company is not in any sort of competition with the first one.
A small shareholder director ceases to be such a director in circumstances where he gets disqualified or removed or has unfortunately become of unsound mind, and also when the company no longer has small shareholders.
Directorship
Although a person can be a director of one company or more, there are certain restrictions for different forms of companies in the name of regulation and fair practice.
The requirement is stated under Section 165(1) of the Companies Act, 2013. They are:
For a one-person company, there can be a minimum of one director and a maximum of 15 directors.
For a private company, there can be a minimum of two directors and a maximum of 15 directors.
For a public company, the minimum requirement of the director is 3, which can be extended to a maximum of 15.
However, more than 15 directors can be appointed to a company if a special resolution is passed in this regard.
One person can be a director of 20 companies.
Among these 20 companies, there can be a maximum of 10 public companies, which includes private companies that are held by public companies as well and out of these 10 public companies, a maximum number of seven companies can be listed.
These 20 companies exclude:
Formation of companies with charitable objects, etc. as mentioned in Section 8, and
Dormant companies
Appointment of new directors
Section 160 of the Companies Act of 2013 provides for the appointment of new directors.
The provision states that if a person intends to be a director of any company, he will have to serve a notice to that company at least 14 days before the meeting. Along with it, he is required to give a deposit of Rs. 100,000 and his consent in the prescribed form to act as a director of the company. An independent director or the director who has been recommended by the nomination and remuneration committee or the board of directors would not be required to give any such deposit.
Upon receipt of such notice, the company will send a notice to all its members at least 7 days before the meeting, either individually or by advertisement in two newspapers.
Then the company will hold a meeting and decide upon such an appointment by passing an ordinary resolution for the appointed directors.
If the director gets appointed or secures more than 25% of the votes in the meeting, then the deposit he submitted would be refunded to him.
Non-applicability
The provisions of Section 160 of the Companies Act 2013 do not apply to
The private companies
The Section 8 companies
100% government companies and their subsidiary companies
Disqualification of directors
A director in a company will always be an individual. It is such a person’s responsibility to make strategic decisions in a company. A director must have his director identification number, it is even compulsory for a person of foreign national but if the government allows such a person’s national identification card number to be acceptable in place of it, then there would be no compulsory requirement of director identification number for any foreign national intending to be a director in any company. Section 164 of the Companies Act, 2013 under subsections 1 and 2 envisages the circumstances where a director becomes disqualified to be one, in a company.
Disqualification due to the director’s fault
Section 164(1) of the Companies Act of 2013 lays down the disqualification of an individual from being a director of a company. The provided disqualifications are mentioned below:
When a director becomes a person of unsound mind, he becomes disqualified to be a director of a company.
When a director is undischarged and insolvent, he ceases his qualification as a director of a company.
When a director has applied to be declared insolvent and his application is pending, his qualification to stand as a director ends.
If he is convicted of imprisonment for up to 6 months or more by the court for offences involving moral turpitude, then, up to 5 years from the expiry of his sentence, he is disqualified to be a director in any company. After the completion of 5 years, he becomes eligible for his appointment as a director of a company. If the director has been convicted with imprisonment of 7 years or for a lifetime, he cannot be the director of any company, and even if he files an appeal, during that period it would be considered that his default continues.
When a director fails to pay the call money for 6 months from the due date or has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, in any company, he is disqualified to be a director in a company.
Most importantly, if the director does not have a director identification number, which is valid for a lifetime until it is cancelled or surrendered, then he is not qualified to be a director in any company.
If a director is disqualified by the National Company Law Tribunal, the court or by any other order in force, he would not be qualified to be a director in any company. This qualification would continue even for the period in which he has applied for an appeal against such disqualification.
If, during the last 5 years, a director is convicted under Section 188 of the Companies Act, 2013 for related party transactions, even then his qualification of being a director in a company comes to an end, and such disqualification continues even if he files an appeal against it.
Also, as per Section 152(3) of the Companies Act, 2013, a person is not eligible to serve as a director of a company without having first obtained a Director Identification Number under Section 154 or another identification number that may be prescribed under Section 153.
If a director has not complied with the provisions of Section 165(1) of the Companies Act, 2013, he does not qualify to be one.
Disqualification due to the company’s default
Section 164 (2) of the Companies Act 2013 gives circumstances where all the directors of a company become disqualified due to the default made by the company itself.
Such cases of disqualification are given below:
If the company has failed to file its audit report, financial statement or both for a continuous period of 3 years, then all the directors of such a company would be disqualified.
When a company fails to pay declared dividends or interest on debentures or has failed to repay the accepted deposits or interest thereon, the directors of the company become disqualified, for 5 years from the expiry of the sentence, to be a directors in the company if such failure continues for one year or more.
Such directors disqualified would not be appointed as directors in any new company. shall be qualified to serve as a director of that company thereafter or to serve in the same capacity in another company for a duration of five years commencing from the date that the said company fails to do so.
There would be no reappointments of directors in the company that has defaulted. However, the disqualified directors of such a defaulting company continue to be the directors of the very same company, and if any new director of such a company is taken in, he would stay qualified for 6 months because it is believed that he would try to reverse the default of such a company as he is new and was not at all linked to the company when the default happened. But it is also believed that 6 months are enough for him to show his interest in rectifying the defaults of the company; if he does not do so within the given time period, he would also become a disqualified director of such a defaulting company.
Exception
If the company is a government company and it has filed its financial statements and audit report on time, the disqualification provided under Section 164 of the Companies Act of 2013 will not apply.
Vacation of the director’s office
Section 167(1) of the Companies Act of 2013 lays down the grounds on which the director’s office in the company gets vacated. They are listed below:
If the director becomes disqualified under Section 164 of the Companies Act then his office is said to have become vacant. In the event that he loses his eligibility under Section 164(2), the director role at all companies other than the company that is in default under that section shall become vacant.
If the director has been absent from all the board meetings for the past 12 months then his office is said to be vacant in the company.
If the director has defaulted in disclosing his interest as per Section 184 of the Companies Act, even then his office is said to have been vacated.
Also, when a director contravenes the provisions of Section 184 of the Companies Act 2013, his office becomes vacant.
Whenever the director is disqualified by the court or tribunal, his office ceases to exist.
It also happens when a director is convicted for an offence that involves moral turpitude or otherwise and has been convicted for six months or more of imprisonment.
Provided that for the above points, if the director has within 30 days appealed against such disqualification by the court or tribunal or such conviction, then his office would continue till further order, and if the higher authority also disqualifies him, then he gets seven days to appeal. Once his appeal has begun until the order comes, the office of the director cannot be made vacant. However, if he does not appeal against it, then once the time frame that is provided for an aggrieved person to appeal expires, the office of such director would become vacant.
Also, the director’s office becomes vacant if he is removed under Section 169 of the Companies Act 2013.
If a director ceases to be a director of the holding company, he immediately ceases to be a director of any other company.
Removal of directors
Section 169 of the Companies Act, 2013 talks about the removal of directors. It states that all the members having one percent of voting powers in the company or 5 lakh paid-up share capital can send a special notice to the company 14 days prior to the date of the meeting in which they intend to remove the director.
The company would then forward the notice to the concerned director so that he gets a fair opportunity to represent himself. Upon receiving such concerned directors’ representation, the company sends a notice along with the representation to the members before 7 days of the meeting, and if the representation comes on such a day that the seven-days prior notice becomes impossible, then the same representation must be read out in the meeting.
Then the company shall hold its meeting, and if the ordinary resolution is passed, then the director is removed, but if the resolution is not passed, then the director would continue his term in the company.
If the independent director is being removed, then, for his removal in his first term, an ordinary resolution is required, but for his removal in his second term, a special resolution becomes a requirement.
Resignation of directors
If a director wishes to resign from his office in the company, he has to give notice in writing according to Section 168 of the Companies Act of 2013.
Then the director has to inform the registrars of the company within 30 days about such a resignation along with his reason for it. Even the companies are required to inform the registrars of the company within 30 days about such notice.
The effective date of resignation would be either of the later dates;
The date on which the notice was served, or
The date that is mentioned by the director resigning in his notice
However, the liabilities of the resigning director do not end with his resignation. Even after the director has resigned, he will continue to be liable for all the misdeeds prior to his resignation.
Landmark case laws
Raj Shekhar Agrawal and Anr. v. Union of India and Anr. (2015)
Facts of the case
In this case, the petitioners sought direction from the registrar of companies for uploading the digital signatures to the website.
Such upload of digital signatures on the website would have enabled them to file and upload the annual returns in the financial statements of the concerned company for the financial year 2014-15.
Issues raised
In the case, it was argued that the three directors of the concerned company had ceased to be legitimate directors under Section 164 of the Companies Act of 2013 as they had failed to file the statutory requirements of the company for the past three consecutive financial years.
Also, when these appointments of directors were made under Section 167 of the Companies Act of 2013, the petitioner, who was the promoter of the company and held 23.1% shares, found it competent under the provision to do so.
Judgement by the court
The honourable Court held that Section 167 of the Companies Act 2013 is not provided as a mode of appointment of director, in contrast with the provisions provided anywhere else in the same Companies Act 2013. Therefore, the court disposed of the petition.
Raghunath Swarup Mathur v. Dr. Raghuraj Bahadur Mathur (1966)
Facts of the case
In the concerned case, an appeal was made against the acquittal of the respondents who were sentenced by the magistrate to pay a fine under Section 629A of the Companies Act of 1956, which is regarding the breach of provisions of the act when more remedies are available in other provisions.
Issues raised
The issue in the case was that there was a contravention of Section 263(1) of the act as there was a proposal for the names of four persons to be read and elected as directors of the company under a single resolution.
Judgement by the court
The honourable court held that the contravention that was alleged of the provisions of the Companies Act was of a technical nature, which is why the benefit of the doubt must be given to the accused. So, the court dismissed the appeal against acquittal and stated that the matter involved breach and contravention of the concerned provision, which was highly controversial in giving the benefit to the accused.
Mother Care (India) Ltd. v. Prof. Ramaswamy P. Aiyar (2003)
Facts of the case
In this case, several applications were filed under the old Companies Act of 1956. The applications were filed against three directors of the company which was under liquidation for non-compliance with the provisions of the said Act.
One of the respondents, namely, Professor Ramaswamy P. Aiyar sought deletion of his name from the application and also asked to drop all proceedings that were initiated against him.
Issues raised
The issue that came up was that the concerned respondent had resigned from the company before the winding-up order had come, due to which he was not obligated to comply with the statutory requirements.
Judgement by the court
The honourable Karnataka High Court held that once a letter of resignation is submitted to the board of the company, the date on which the intention to relinquish is communicated to the board becomes the date from which the director ceases to be the director of the company. The court held that since the respondent had resigned before the winding-up order had come, he was not a director of the company, which is why he was not required to comply with any statutory requirements. The court ordered that the name of the respondent be deleted from the applications and it posted this responsibility on the official liquidator of the company.
Tristar Consultants v. Vcustomer Services India Pvt. Ltd. (2007)
Facts of the case
It is a case in which a suit was filed alleging breach of contract by the company, and its director, Dinesh Mirchandani, was the defendant.
Issues raised
The issue in the case that was argued by the petitioner was that every director acted as an agent of the company, which is why he should be personally liable if he acted on behalf of the company.
Judgement by the court
The Honourable Delhi High Court held that the directors of a company cannot be treated as acting as agents of the company in the conventional sense of an agent with respect to a third party. Relying on the Indian Contract Act of 1872, the court stated that unless an agent personally binds himself, he cannot be personally liable for contracts entered into by him on behalf of his principal, in the present case being the company.
The court further held that the directors of a company are bound by no fiduciary or contractual duties to the third party who deals with the company.
Finding no merit in the claims of the petitioners, the court dismissed the suit.
M/S. Daewoo Motors India Ltd. v. Wg Cdr (Retd.) H.D. Talwani (2012)
Facts of the case
In this case, the petitioner, M/S Daewoo Motors India Ltd., had filed an application to seek discharge in a complaint that was filed against Ms. Radhika S. Minocha, who was summoned under Section 454 of the old Companies Act 1956 for not filing her statement of affairs.
Ms. Radhika S. Minocha was an employee of ICICI Bank Ltd., and she had been appointed as a nominee director on the Board of M/S Daewoo Motors India Ltd.
Issues raised
The issue raised was that Ms. Radhika S. Minocha contended that she had resigned from the company in 1999 and had migrated to the United States of America. She claimed that since then she was not the director of the relevant company and had no access to its records, which is why no criminal liability could be imposed on her.
Judgement by the court
The honourable court stated that the statements of affairs are a very important document for the official liquidator in order to ascertain the assets and liabilities of any company. The court held that being a nominee director does not automatically absolve the applicant from all liability. The Court considered the argument that the applicant had no knowledge of the company’s affairs and had left the company a long time ago and held that since the applicant had no access to the records of the company and had not signed any documents on behalf of the company, therefore, the court allowed her prayer for discharge.
Conclusion
Since directors have the responsibility of directing and supervising the organisation’s operations, strategy, and governance, they play a vital role in a firm. They are essential in determining the present and future of the organisation. By providing the public and shareholders with pertinent information, they encourage openness and transparency. The company gains credibility and trust as a result of this transparency. They additionally play the role of promoting a collaborative environment within the company at large. They make choices to encourage development and competitiveness by allocating resources, establishing priorities, and implementing actions.
The responsibility of ensuring a company’s expansion, sustainability, and ethical conduct relies on directors, who act as the guardians of its success. Their decisions and actions have far-reaching impacts on those who work, shareholders, communities, and the whole economy. Directors are crucial in order to deal with the complex challenges of today’s corporate environment and lead organisations towards profitability while maintaining the highest standards of governance and ethics.
Frequently Asked Questions (FAQs)
Can the director identification number be cancelled?
The north regional director has the whole and sole power to cancel the director identification number if:
It is obtained by a director in a wrongful manner.
It is found to be a duplicate identification number of a director,
Events such as death, insanity, insolvency, etc., of a director.
What happens when all the directors of a company have vacated their offices?
In the case of all the directors being vacated from their offices in a company, the promoter of the company shall appoint new directors for such a company.
In cases where there are no promoters, then the central government would appoint the new directors, and such directors would continue their offices until the new directors were eventually appointed at the general meeting of the company.
What is the online proficiency self-assessment test?
The online proficiency self-assessment test is an examination that has to be cleared in order to have one’s name added to the data bank, which is prepared by the Indian Institute of Corporate Affairs, a department of the Ministry of Corporate Affairs, and which lists out the eligible directors to be appointed as independent directors.
At least 60% of marks have to be scored in such a test in order to have one’s name listed in the Data Bank of Independent Directors.
Who are the directors that cannot be removed?
Some directors are out of the purview of Section 169 of the Companies Act 2013, which provides for the removal of directors.
The directors that can’t be removed under the said section are:
The directors that are appointed by the National Company Law Tribunal,
The directors that are appointed by the principal of proportional representation, and
The nominee directors that are appointed on the nomination of the financial institution that is established under any special act
What is the Vigil Mechanism?
A vigil mechanism in a company is a department that solves the problems of the company. It is a place where complaints against the members, directors, etc., of the company are welcomed. Information regarding the vigil mechanism of a company should be mentioned on its website.
References
G.K. Kapoor and Sanjay Dhamija, Company Law- A Comprehensive Text Book on Companies Act 2012 331(Taxmann Publications(P.)Ltd, Haryana India, 22nd edition, August 2019)
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