In this article, Shagun Bahl discusses the reasons why India’s Abortion Law is failing its women on so many fronts.

WHY IS INDIA’S ABORTION LAW FAILING ITS WOMEN

Abortion laws in India is the mirror image of the patriarchal social system in India which still continues to practice not only in Indian society but also on heart and minds of thousands of women in India who still are aborting their right to govern their life as they want like these abortion laws in our country wherein also they are aborting their right to terminate their pregnancy if they fail to meet the parameters as laid out in  Medical Termination Of Pregnancy Act, 1971 http://tcw.nic.in/Acts/MTP-Act-1971.pdf. They still, in 21st Century have to seek consent from the courts to abort their own child on terms and conditions laid out in an outdated piece of the act called The Medical Termination of Pregnancy Act, 1971.

The MEDICAL TERMINATION OF PREGNANCY ACT, 1971

The Medical Termination of Pregnancy bill was passed by both houses of Parliament and received the assent of President of India on 10th August, 1971. This law guarantees the Right of Indian women to terminate their unintended pregnancies by a registered medical practitioner in a hospital maintained or established by a Government or place recognised in the Act by the Government. The note to be taken here is that all pregnancies cannot be terminated. There is a qualification in the act mentioned in Section 3 of the Act which under extraordinary circumstances allow Indian women to abort their child.

IMPORTANT PROVISIONS OF MEDICAL TERMINATION OF PREGNANCY ACT, 1971

Section 3 – When Pregnancies may be terminated by registered medical practitioners.

The pregnancy may be terminated by a registered medical practitioner in following cases,-

(a) Where the length of the pregnancy does not exceed twelve weeks if such medical practitioner is,

or

(b) Where the length of the pregnancy exceeds twelve weeks but does not exceed twenty weeks, if not less than two registered medical practitioners

are of opinion, formed in good faith, that,-

(i) the continuance of the pregnancy would involve a risk to the life of the pregnant woman or of grave injury physical or mental health ; or

(ii) there is a substantial risk that if the child were born, it would suffer from such physical or mental abnormalities as to be seriously handicapped.

Section 4 – Place where pregnancy may be terminated

No termination of pregnancy shall be made in accordance with this Act at any place other than,-

1. A hospital established or maintained by Government, or
2. A place for the time being approved for the purpose of this Act by Government.

Section 5

Sections 3 and 4 when not to apply

1. The provisions of Sec.4 and so much of the provisions of subsection (2) of Section 3 as relate to the length of the pregnancy and the opinion of not less than two registered medical practitioner, shall not apply to the termination of a pregnancy by the registered medical practitioner in case where he is of opinion, formed in good faith, that the termination of such pregnancy is immediately necessary to save the life of the pregnant woman.
2. Notwithstanding anything contained in the Indian Penal Code (45 of 1860), the termination of a pregnancy by a person who is not a registered medical practitioner shall be an offence punishable under that Code, and that Code shall, to this extent, stand modified.

INEFFICIENCIES OF MEDICAL TERMINATION OF PREGNANCY ACT, 1971

This consent seeking practice of taking permissions from the Court to terminate their pregnancies only before 12-20 weeks on medical opinion from Medical Practitioners seems to have defeated the purpose for which it was laid originally in  Medical Termination Of Pregnancy Act, 1971. Ostensibly, the reason for the relatively low time frame to terminate the pregnancy was to safeguard the girl child by preventing sex-selective abortions or female feticide in this country but this law has contradicted the modern reality of today and the brunt of it is being faced by women who face some abnormalities during their pregnancies , rape survivors or simply any woman who wishes now to keep their child as she feels unprepared for it Lawmakers by making abortions as a qualified right are taking away right of women to have an autonomy on their own body and to decide whether they want to keep the child or not and leaving them with no option  than turning to  the doorsteps of court for seeking permissions to terminate their pregnancies, if they do not wish to keep the child.

It is provided in the act that a woman do has the say in aborting the child only if she is 18 years of age i.e. the age of attaining majority and not lunatic. Though the lawmakers have considered the situations where pregnancies constitute a grave impact on the mental health of the women or the pregnant woman’s life is at risk or where the pregnancy has been caused as an outcome of rape which is itself a big trauma for the women to cope with all her life and this act also realises that such unwanted pregnancy will only aggravate her misery. But in a holistic view , lawmakers have disregarded other facet of a woman’s life where she maybe by her free will do not want to carry the child as she is not ready for it or she does not feel financially or mentally fit to carry the responsibility of a  having a child. It seems as the lawmakers and courts only can guarantee women’s right to safe abortion only when she is in a miserable position in her life or facing predicament in her life .

The question here is when the woman is allowed to exercise her rights on their body? only in certain difficult junctures of life or always as a free citizen of this country?  

ABORTION LAW – REALITIES IN INDIA

The failure of abortion laws in this country in dispensing justice to the women for whom the law was made and how it stands can be understood by witnessing the plight faced by these underaged rape girls who are the biggest victims of this 20 week mark provided in the Medical Termination of Pregnancy Act, 1971 as the pregnancies in this act are discovered very late and the stigma attached to rape survivors in this country silences them in such a way that they are left with no option other than to plead before the court to seek permission to  terminate the unwanted or unintended pregnancy but in most cases they have to forcibly deliver the child as they are pregnant with the child for more than 20 weeks.

The qualified legal status of abortion in India questions the right Indian women possess on the reproductive life and the restrictive abortion laws in India attacks the very sanctity of gender neutrality which the constitution of this country guarantees to provide its women. The abortion laws of this country are failing its women in many fronts as we as a society has witnessed time and again that this restrictive abortion practices has only continued to jeopardizes women’s reproductive rights and played with their life and health and increasing to their plight the slow legal machinery of this country which makes the whole law futile as after hitting the 20 week mark of their pregnancy they are not allowed to medically abort the child and in some cases can also cost the life of mother due to unsafe deliveries in complicated cases.

It is worth mentioning here that a report published in case of a 35-year-old HIV+ woman from Bihar was forced to have a baby because her paperwork got stuck at a government hospital for 4 weeks and she crossed the 20-week mark. A long legal battle ensued, which ended with both Bihar’s high court and the Supreme Court rejected her abortion plea in.The reason cited by the court cast light on the failure of abortion laws in the country which are so rigid in law and fails to empathize with the sufferings of women.  She was already 26 weeks pregnant by then and due to this she was not permitted to abort her child as it seemed a risky proposition to the courts.

It is worth applauding that there has been change of heart in some cases by Supreme Courts where they have on humanitarian grounds permitted women and underaged rape girl child to abort pregnancies off the 20 week mark as provided in Medical Termination of Pregnancy Act, 1971. (MTP) Act.

But still we need in light of compelling circumstances, a stronger law which can empower its women rather than leaving them alone to be victimized by the hands of outdated MTP Act,1971.

ABORTION LAW AND RIGHT TO LIFE AND PERSONAL LIBERTY UNDER ARTICLE 21 OF CONSTITUTION OF INDIA

Abortion is act of terminating a child’s life before even its existence. The law has to strike a balance between a mother’s mental and physical state to bring the child to life and the life of child which is at stake. This is a big dilemma which Courts have to resolve within the four corners of law with a humanitarian approach to bring justice to both mother’s and child’s life. The Constitution of India recognizes right to life and personal liberty under Article 21 to every person which includes both man and woman.  Right to abortion is the fundamental right which every woman has among the various other rights she possesses as this right is directly a matter of privacy which very recently is accepted by our apex court as an integral part of fundamental right under Article 21 of the Indian Constitution. The bone of contention is to bridge the gap between right to life of pregnant women and right of life of an unborn child. The Medical Termination of Pregnancy Act, 1971, as if now, has not been able to solve the conflict of life of mother versus life of child effectively.

In the case of  R and anr v Haryana too, the petitioner was a minor. She was pregnant as a result of rape and was in the 24th week of her pregnancy. The amicus curiae in this case contended before the high court that the protection of the rights of an unborn child is an obligation cast upon the state under constitutional provisions, and in view of simple understanding of the provision of Section 5 of the MTP Act,, a conflict between the right to life of the pregnant woman and the right to life of an unborn child would yield in favour of the woman.

It is to be noted to force a woman to continue with a pregnancy that she does not want to have is an infringement on the right to privacy and dignity of the woman as well as an infringement of the right to a healthy and dignified life of the nascent life in her womb.Article 21 guarantees right to live a dignified life to every person and is a constitutional right which cannot be taken away from the victim in the present case.

Thus, the Courts in abortion case ought to examine the plea of abortions of pregnant women from two standpoints, firstly protecting the life of pregnant women and secondly the rights of unborn child whose life could be taken away by the said abortion.

ABORTION LAWS IN CASE OF JUVENILE RAPE VICTIMS

The juvenile rape victims are the victims of abortion law and facing the brunt of Section 3 of Medical Termination of Pregnancy Act, 1971 as mostly in cases of juvenile rapes, the pregnancy is detected at a very later stage adding to the misery is the social stigma attached to it which silences the juvenile rape victim to come out and speak about it. The provisions of Medical Termination of Pregnancy Act, 1971 leaves no recourse in case of juvenile rape victims also, they too have to seek consent from the Courts before aborting the child in their womb if their pregnancy exceeds 20 week. There is only little protection given in case of juvenile rape cases where they are allowed to abort their child if the anguish caused by the unwanted pregnancy constitute as a grave injury to the mental health of pregnant women or there is a danger to their life as provided in Section 5 of the Act.

But as in most unfortunate cases, the under-aged rape victims have to keep the unwanted pregnancies birthed out of rape and sexual assaults

The most recent case of rejection of plea of abortion of juvenile rape victim by District Court in Chandigarh which shocked our consciousness blatantly was “when  10-year-old rape survivor was denied permission to terminate the pregnancy resulting from the rape. The child was allegedly raped continuously over a period of time by her maternal uncle.The plea for abortion was rejected after it was confirmed that the minor was 26 weeks pregnant. According to the Medical Termination of Pregnancy (MTP) Act of 1971, the legal ceiling for abortions in India is 20 weeks. In more advanced pregnancies, exceptions are made by the courts if the foetus is proved to be genetically unviable or if the pregnancy poses a grave threat to the mother’s life.”

This is the most heartbreaking reality come out of provisions of Medical Termination of Pregnancy Act, 1971 that how a 10 year old victim who already is devastated by the rape done by her maternal uncle will also now have to go through the unwanted pregnancy which will be detrimental for her well being and life of the child she will be forced to give birth to.

ABORTION LAW OF INDIA – STEP FORWARD

The liberalization of abortion laws is the only way forward to empower the Indian women to exercise their reproductive rights and the making informed decisions in giving birth to a new life in a safe, healthy and productive environment. The unsafe abortions are widely prevalent even after 46 years of the act coming into force and thus making it imperative for the legislators to amend the Medical Termination of Pregnancy Act, 1971 in order to remove the roadblocks of abortions not being legally permitted after the gestational age of 20 weeks of Pregnancy.

AMENDMENTS

DRAFT MEDICAL TERMINATION OF PREGNANCY AMENDMENT BILL,2014

• The draft Medical Termination of Pregnancy (Amendment) Bill, 2014 purports to amend Section 3 of The Medical Termination of Pregnancy Act, 1971 in order to remove the length of pregnancy clause in cases to be decided for aborting a foetus diagnosed with substantial foetal abnormalities as may be prescribed.
• The draft bills seek to increase the legal limit for abortion from 20 weeks to 24 weeks.
• The draft Bill to allow to a woman to take an independent decision in consultation with a registered health-care provider.

This draft bill on Medical Termination of Pregnancy Amendment Bill, 2014 has not seen light till day. But the amendments proposed by this bill when will come into force will definitely be a way forward in liberalizing abortion laws of this count and will strive to decrease the plight of many helpless Indian women who again will have an autonomy in making an informed choice for themselves to keep the child or to abort it by their free will and without any societal pressure and social stigma.

APPROACH TO BE

The MTPA in 1971 did not foresee the changes in the medical technological sphere which will make it possible in time to come to monitor the natal health of the child. The MTPA in 1971 also did not make itself conducive to the reproductive needs of women and their enterprising approach who do not wish to being regulated in four corners of laws for aborting their child. So the legality of for a revised limit for abortion needs to be checked by the apex court of the country and time and amend the provisions of Medical Termination of Pregnancy Act, 1971 in the light of emergent social prejudices faced by the women of our country.

In this article, Shagun Bahl discusses the Legal framework against Marital Rape in India.

MARITAL RAPE – THE WAY AHEAD

Marriage is a state of being united to a person of the opposite sex as husband or a wife in a consensual and contractual relationship recognised by law. It is considered as a sacred thread which binds two individuals in a lifetime of togetherness.

MARITAL RAPE

It is obnoxious to put something sacred as marriage and a heinous crime like rape in a single statement. But the reality seems to merge them together in form of marital rapes.

Marital rape is the act of forcible sexual intercourse by one spouse without the consent of the other spouse. Consent is the keyword which changes the marital intercourse to a marital rape. Marriage cannot be considered as the license to a spouse to have a forcible sexual intercourse with the other spouse without spouse consenting to it. The forceful sexual intercourse is an attack on the other spouse who do not wish to be a party of it and marital bonds cannot take away a spouse’s right to have autonomy on their bodies. It is definitely a form of sexual, domestic, psychological abuse on the partner in the marriage as the spouse committing marital rape is disregarding and disrespecting the other spouse’s identity and feelings attached to the forceful act being happened to them. In a marriage, there ought to be mutual respect, space and companionship among the couple and not the suffocation which is attached with forcibly giving absolute physical rights to the respective spouse in the marriage. Marriage should be an extension of a person’s identity and not shackles which forcibly traps them in a suffocated marriage.

MARITAL RAPE: THE ACT OF TRAUMA ON BODY AND MIND

As published in Marital rape – Wikipedia

Rape by a spouse, partner or ex-partner is more often associated with physical violence. A nine-nation study within the European Union found that current or ex-partners were the perpetrators of around 25% of all sexual assaults, and that violence was more common in assaults by ex-partners (50% of the time) and partners (40%) than in assaults by strangers or recent acquaintances (25%).

Rape in itself is such a traumatic experience and if faced by a spouse in a marriage, it can leave an everlasting scar on the spouse’s mind and can humiliate the spouse to such a core that the relationship cannot be fixed with the partner ever after that humiliating sexual experience.  Marital rape can be more traumatising experience than rape by a stranger as in a marital rape as the trust bond between the partners are broken blatantly which is beyond repair. It perpetuates feeling of mental agony, humiliation and hate and contempt against the partner.

It invokes feeling of emotional despair and victimization in a spouse which faces forced sexual intercourse with their spouse and it is not a one time experience which makes it impossible for the spouse to get rid of such feelings to feel normal ever after such experience.  

These kinds of rapes such as marital rape is different than other forms of rape and sexual abuse as the victims in these cases feels locked in a cage with their rapist, unlike other rapes in which the victim can separate themselves from their offender and gets time to heal themselves from such traumatic experience. This can prove to be destructive for the spouse mental and emotional state of mind and can aggravate her sufferings with no legal recourse available to her to come out these trappings.

The researchers Finkelhor and Yllö remarked in their 1985 metropolitan Boston area study summed it well for the spouse who faces marital rape.

“When a woman is raped by a stranger, she has to live with a frightening memory. When she is raped by her husband, she has to live with the rapist“.

EVIDENCE OF MARITAL RAPES

Behind the closed doors, it is hard to picture the dark reality of marriages in form of marital rapes. The real picture of marriages in society at large is more often seen to carry the burden of high moral expectations out of the married couple rather than addressing the hidden realities of their married life. For addressing these hidden realities behind closed doors, we would first have to ask this question to ourselves that how actually will one prove that he/she is being raped by his/her respective spouse. In order to to get justice in marital rape cases, it is paramount to established before the Courts that the intercourse was forced on the spouse and to substantiate the allegations on strong evidence produced for the same.

Under Section 102 of Indian Evidence Act, the burden of proof lies on that person who would fail if no evidence at all were given on either side. Therefore the burden of proof will lie on the spouse who will allege that he/she is a victim of marital rape. Proving a marital rape is most difficult as practically bringing out the dark reality of one’s married life is next to impossible for the simple reason as to how will anyone prove it the intercourse was so brutal tantamounting to “rape” in nature and will society accept it ?

To prove the brutality of intercourse or forced sex by one’s spouse, there are few evidences one can substantiate on –

• Physical injuries to vaginal and anal areas, lacerations, bruising.

• Cruel conduct in sexual intercourse e.g. battery, mental torture

• Evidences of damages to their genitals and rectum leads to the strong indicative proof that women are subjected to very violent rapes.

• Under the Indian Evidence Act (IEA), when alleged that a victim consented to the sexual act and it is denied, the court shall presume it to be.

• Nail marks, scratches and physical injuries around penis area in case of male victims

WHY INDIA IS NOT READY TO CRIMINALIZE MARITAL RAPE?

India is trapped in age-old traditions and the talks in India to criminalize marital rape have almost been stalled from past few decades as Indian mindset is still not ready to accept that marital rape is a crime and as we are so trapped and blind to save the sanctity of marriages that we do not realise those kinds of marriages are already broken and are beyond repair. We as a country are so behind to have this talk that can be deduced from the judgements laid by Honourable Supreme Court the judges who were unable to contemplate on LGBT issue. The answer is same for all these social issues as our Indian mindsets are so rigid in their approach to uphold the Indian tradition system and cultural values that they have shut their eyes and ears and not addressing the real contemporary issues faced by society.

The article published in:

https://bpr.berkeley.edu/2015/10/29/trapped-in-traditions-prison/

clears the picture on how as a nation we are failing to address marital rape as a crime. For the first time, the Criminal Law (Amendment) Bill of 2013, established a definition of rape within India’s legal code and declared a strict prison sentence to anyone who committed it. Despite its progressive nature, the bill did not criminalize marital rape or assault of any kind.

Section 375 of the Criminal Law (Amendment) Bill of 2013 states that “sexual intercourse or sexual acts by a man with his own wife, the wife not being under fifteen years of age, is not rape.”

Marital rape is among the leading offenses committed to women worldwide. While gathering definitive statistics about marital rape with a small margin of error is difficult, a study conducted by the World Health Organization reports that at least 10 percent but as many as 69 percents of women across the world admit to having been physically assaulted by an intimate male partner.

The rigidity of the Indian legislature and judiciary’s stance on marital rape stems from cultural expectations of the role of women, traditional beliefs about the purpose of sex, and existing laws that fail to acknowledge and criminalize marital rape.  

The Indian society has always tried to shun the voice of social activists , NGO’S, countless Indian women who seek justice from our courts leaving with no legal recourse and they are always showed their ways to address the marital rape under Domestic Violence Act, 2005 which is in itself is inadequate to address the marital rape as a crime.

Protection of Women from Domestic Violence Act, 2005 offers civil remedies for crimes against women including marital rape It is absolutely unreasonable to view marital rape as a civil wrong than as a criminal wrong. It is almost like crushing a women’s right in order to force her to live with her rapist.

Criminalizing marital rape or spousal rape seems far from the reality in India as neither the lawmakers of this country nor the Indian judicial systems are prepared to bridge the gap between marital rape and rape as they are both heinous crimes which could scar the victim for all their life.

LEGAL SOLUTION – CHANGES IN DIVORCE LAWS IN INDIA AND CRIMINALIZATION OF MARITAL RAPE

Marital bonds are considered sacrosanct in India and marriages in India do not thrive on sex. But is this the reality in modern context or just a camouflage in today’s society of marriages. These are some hard hitting realities of this contemporary world in which marital bond is not as sacred as it is considered to be.  There is a pressing need to criminalize marital rape as crime and amend divorce laws of the country by making marital rape as a legal ground to take divorce from an abusive marriage. The criminalization of marital rapes will also have a domino effect on divorce laws in the country as the “marital rape” could also become a ground for the couples to file for divorce like other grounds like cruelty, adultery etc.

The changes in divorce laws by making marital rape as ground for divorce will definitely be a great relief to all the victims of marital rape who now will legally be able to take an action against their respective spouse. The other relief which victims of marital rape is that through changes in divorce laws is that they can seek compensation from the competent court for the physical and mental torture they have gone through because of the marital rape is done by their spouse.

INTERNATIONAL STANDPOINT –  MARITAL RAPE

Internationally, many progressed nations have criminalized marital law as in civilized societies there is no place for sexual assaults on women whether inside or outside their wedlock. Marital rapes have been criminalized in these societies long ago simply because the marriage as an institution rests on mutual respect and companionship and any sort of forced sexual act on the spouse is great attack on one’s dignity and to the marriage’s union. It cannot be left to be practised in any civilized society with a legal stamp on it. The lawmakers in international countries realising the deterrent effect marital rape has on society decided to put an end to it and have criminalized marital rapes.

The article published in

https://thewire.in/36111/indian-exceptionalism-cannot-be-a-valid-excuse-for-india-not-to-criminalise-marital-rape/ submits the international standpoint on Marital rape internationally.

In the US, spousal rape is illegal throughout the country. The criminalisation of marital rape is fast becoming the norm in the world, with many Latin American, South East Asia, European Countries, and African Countries passing laws to this effect. A table with a list of countries with laws against marital rape can be found here. 2.6 billion women still live in countries where marital rape is not an offence, and spousal rape remains entirely legal in 35 countries.

JUDICIALLY AWAKENING –  WHAT IS THE WAY FORWARD FOR INDIA

The challenging question is “Can India criminalize marital rape”? Is there a road forward to criminalize marital rape ?

The only way forward to criminalize marital rape is to persuade the Courts with principled advocacy through writ petitions under Article 32 of the Indian constitution and Public Interest Litigations (P.I.L.) filed before them to judicially awaken them that the time has come for India to criminalize martial rapes in light of devastating effects it is having in the society and to push the Indian mindset forward while breaking the traditional chains as the other progressed nations have dealt with this social evil. Still, India is far away from criminalizing marital rape but there are hopes to turn this into a living reality by active judicial activism and with the sincere efforts of principled advocacy persuading Honourable Courts to depend on justice to innumerable victims of marital rape in India.

In this article, Abhijeet Singh discusses whether a real-estate agent can advertise for under-construction projects when its application is pending or not.

The Real Estate (Regulation and Development) Act, 2016 (“RERA”) has made it mandatory for promoters and real-estate agents to register with the RERA Authority in each state. As of now there are 22 States and Union Territories which have established these authorities and formulated rules in consonance with the RERA Act, as listed below:

Which projects are required to be registered?

As per Section 3 of the RERA, the following kinds of commercial and residential projects (w.e.f 1st May 2017) are required to be registered under this act:

• that are ongoing, defined as projects for which a completion certificate has not been obtained from the local competent authority (whereas completed projects are those which have been given a completion project by the competent authority) or,
• where the area of the proposed land (not carpet area as per Section 2(k) of the RERA Act) for construction exceeds 500 sq.mt. or,
• which have more than 8 apartments

This threshold limit can also be reduced by the individual states or Union Territories.

Advertisement of projects with pending application

The RERA Act strictly prohibits promoters to advertise, market, book, sell or offer for sale or invite persons to purchase any plot, apartment or building in projects which have not been registered vide Section 3 of the Act.

Registration of real-estate agents

The RERA Act has made the role of real-estate agents more definitive and accountable. This had been done to curb the common mis-selling practices by the agents. Section 9 of the RERA Act requires agents to get themselves registered in order to engage in sale or purchase of any plot, apartment or building. A registration number is provided by the Authority upon successful registration which is then required to be quoted in every transaction facilitated by him (see Section 9(5).

So can the real-estate agents advertise for ongoing project?

NO.

The registration of the project mandates the promoters to share details of the real-estate agents at the time of registration of the project which includes registration of the under-construction projects to share details of its real-estate agents under Section 4 clause (j). Therefore, without being registered with the project, the real-estate agent cannot even facilitate in sale or purchase related to project let alone advertise it.

Can additional real-estate agents be added to the project after the project is registered?

NOT as of now.

Real-estate agents are required to be registered with the project at the time of project registration. At present, there is no provision of adding on agents to the project.

However, before the project registration window closes; the Maharashtra RERA has allowed the promoters to edit typographical errors and name corrections till 31st July 2017. (If you need to update your details please click here.)

Does a broker or real estate agent need to be registered under RERA for dealing in secondary sales?

No, RERA requires registration of real-estate agents if they are involved in selling ongoing or new projects that are required to be registered under the Act. If you are operating in the secondary sale market, that is, selling property which is already owned by someone, then you are not required to be registered under RERA.

Does a broker or real estate agent need to be registered under RERA if he or she is dealing in property which is itself not required to be registered under RERA?

If a broker is dealing with a builder’s flat of a project which itself does not require registration, that is, it has a construction area of 500 sq.mt. or less, or 8 apartments or less, no registration is required for a broker.

Does a broker need to be registered for dealing in rentals?

The RERA Act will not affect the brokers who are dealing in rentals. They do not have to register with the Authority, nor do they need to quote their registration number in dealing with projects which are not registered under this Act.

In this article, Gaurav L. Deshpande, a practicing advocate at Aurangabad High Court discusses amendments to section 4 of the Payment of Gratuity Act.

The Payment of Gratuity Act, 1972 is for employees engaged in various establishment. The term Gratuity connotes a gift for the services rendered over a long period of time for an organisation.

This all exercises need to be done under social object i.e. to pay a particular amount as the gift for the whom, who has worked for an institution for a considerable period of time.

The act gives eligibility that, the person who worked for five or more years along with other requirements, are eligible under law for gratuity. Provisions of the Act are settled and there are catena of judgment covering various issues under the act.

The point of consideration or topic for present discussion is that employees claim gratuity ones they have received in full the retirement benefits along with gratuity as per their request, in view of the amendment in provisions of clause 3 to section 4. Section 4(3) of the act reads as,” The amount of gratuity payable to an employee shall not exceed. (Rs.3,50,000/-) which came to be amended (Rs.10,00,000/-). By the amending Act, 2010.

The issue arises is that, whether now once the employees, who have after retirement themselves filled in, FORM 1 and though themselves gave the calculation are now estopped from claiming the benefits in terms of amended provisions.

The peculiar circumstances in the present situations are that the employer bank is a co-operative society and is not in any manner supported or funded by the government. The bank has to run its business on its own funds raised. For those reasons from time to time the bank has insured itself with the Life Insurance Corporation for the payment of gratuity. It is also pertinent to note that, the employees joining the bank accepts the offer and in the appointment banks specifically mentions that, the employee has agreed to the benefits provided.

The retiring employees are/ can be categories into 3 classes VIZ.

1. The employees who have been retired in due course.
2. The employees who have been retired Under Voluntary Retirement Scheme.
3. The employees whose gratuity calculation comes below 5 lacks.

So far as the questions of all the employees in concern there is direct judgment of the Hon’ble Supreme Court of India in the case of State Government Pensioners Association and ors. V/s The State of Andhra Pradesh reported in AIR 1986 Supreme Court 1907, wherein there was the discussion as to applicability of the payment of gratuity act on revised rates before or after the amendment and the law has been laid down that, the employees cannot claim once they are paid with.

It is been specifically held that the case with regards to gratuity, which has already been paid to the petitioner, on the then prevailing basis as it has obtained at the time of their respective dates of retirement and it has already been paid to them on that footing the transaction is completed and closed this ratio decidendi covers the present issue.

In the present discussion, it is admitted position that all the employees, who are seeking the benefits are retired from 2013 which to January 2017 they all have themselves filled in the application more particularly in the manner, FORM 1 appended to the Payment of Gratuity Rules 1972. And Those forms bear their signature. Also, all the employees have accepted the calculation. In view the aforementioned Judgment of the Hon’ble Supreme Court and the principle of jurisprudence, principle of employer-employee relationship and the principles of contract would now operate Estoppel and more particularly in the words of the judgment of Hon’ble Apex Court referred supra, once the transaction is completed and closed there is no scope for up-word or down word revision. The employees who have been retired in due course are not entitled to claim for the reasons based on the judgment of Hon’ble Apex Court supra.

Now in relation to the categories mentioned above, the employees who have opted for Voluntary Retirement Scheme in the case of Manojbhai L.Shaah and others V/s Union of India decided on 07/01/2015 it has been held that the employees who retire under the scheme form a separate class of employees, are given many benefits, which are not given to the employees retiring in normal course. If they of form a separate class by any stretch of imagination, it cannot be said that, of those who retire under the scheme and those in normal course are similarly situated. Thus those employees, who are retired by VRS scheme can be put off different footing.

So far as the employees whose calculation is less than Rs.3,50,000/-. There is no question of them seeking any more amount.

Those employees, who are retired in due course in that regard the employer bank is shielded with the protection of doctrine of Estoppel.

When the employer is secured then the settled legal principle the interpretation of the provisions needs to be done because payment of gratuity act being a welfare legislation though receiving liberal interpretation but there are some difficulties still sustaining in the jurisprudential aspects. The Hon’ble Apex Court, in the case of Regional Director Employees, A State Insurance Cooperation V/s Ramanuja Match industries reported in 1985 AIR Supreme Court 278 has held that, though the beneficent legislation to receive liberal interpretation, however the court not to travel beyond the scheme statute and extend scope statute on pretext of extending statutory benefits to these not cover by the scheme of the statute.

The plane reading of section 4 of Payment of Gratuity Act, which head as ” Payment of Gratuity”, which in its first clause gives the employees, who become illegible for gratuity.

In its clause 2 provides for the calculation of gratuity, which is a formula and in its 3^rd clause which is negative in sense the upper limit to the payment of gratuity is embodied, intention of legislature behind inserting upper limit rather than lower limit which shows that, those provision needs slant weigh on the side of employer. If an exact interpretation of the section is to be done. The provisions need to look into the condition of service and embargo on the right of the employer to pay gratuity.

It is also to need to considered that while joining the service, the employer was made known the prevailing benefit which are incumbent for the service and after the service, those were very well known to the employees the gratuity his already secured with the insurance company by the bank and hence now the employees are not having any right to see the benefit.

The amended act of 2010 neither changes the entitlement nor it puts any burden on employer it only gives option. Thus employer, who are willing to pay more gratuity for them the ceiling extends from 3.5 to 10 lacks, which does not create any right in the employees more specifically when they have applied and has received gratuity for which transaction is closed and complete. in this view of the matter, I conclude, with my conclusion which is purely the opinion.

Those employees whose gratuity calculation is less than 3.5 lacks there is no question of them to seek enhancement. so far as the employees who are retired under voluntary Retirement scheme they cannot seek benefits of the amending provision and they stand on a different footing on the reasons /parameters Laid down in Manojbhais Judgment as they cannot equate themselves with those normally retiring and for those who retired in normal course for them the transaction is complete and closed this also bars those who retired voluntarily.

BIBLIOGRAPHY

The payment of gratuity act, 1972- bare act

Commentary on The payment of gratuity act, 1972 by Kharbanda

The payment of gratuity rules 1972 bare act.

Authorities Cited

1. Manojbhai Shah V/s Union of India Hon’ble  Supreme Court of India on 07/01/2015.
2. AIR 1986 S.C. 1907 State Government Pensioners Association V/s State of Andhra Pradesh
3. 1985 S.C. 278 Regional Director Employees A State Insurance Corporation V/s Ramanuja Match Industries.

In this article, Ajay Sharma from NUALS, Kochi discusses acid attack sentencing and legislation in India.

Introduction

The incident of acid attack has been increasing phenomena in India and the most of the victim of the offence is especially women. While these attacks can be attributed to various factors such as the social; weakness of women and the existence of male-dominated society.

Which raised the question of the Indian society as well as the laws which are not able to deal with the problem? Acid is easily and inexpensively available weapon which makes it an ideal tool for the perpetrator. Acid is easily accessible at any shop near to your house anyone can buy it there is no restriction despite the Supreme Court has been passed the guidelines for the regulation of the acid but the problem is an implementation of those guidelines.

There is no specific and stringent legislation which deal with this problem because the acid attack is not like other offences in this the victim will have to survive with disfigured face whole life in which the victim has to face the ostracized not only from the society but some time from the family also. In India, there is no stringent law which can deal with this problem. This crime is mainly committed in four countries in the world namely, Bangladesh, Pakistan, India and Cambodia.

All the other countries have engaged in paving the way to an effective remedy for the survivors of the victims. Our neighbour, Bangladesh introduced a legislation for curbing the incidents of acid attacks in 2002. The legislation paased by Bangladesh is juresprudentially much stable when compared to the Indian law on the subject.Indian law neither effectively address the gravity of acid attack nor does it adequately help the acid attack survivors.

The Compensation is an important part of this crime but in India, there is no Criminal Injuries compensation Board yes we had heard much time that central government notify all states that form a compensation board but there is no single board which worked on it.

In Laxmi Vs. Union of India [1] the minimum compensation of 3, 00,000 peracid attack victim as not been fixed in some of the states. Let’s take an example of Bihar case in which 2 girls were attacked by acid in which the girls had caused several injuries and the state government gave them 25,000 and girls were already expended 5,00,000. This is a compensation processor scheme in India.

What is acid? According to the Black law dictionary, acid means “A solution with a Ph. below 7. It has a sour taste, releases hydroxyl, and makes litmus papers red. Strong acids are corrosive and weak ones are practically harmless. AKA mineral, inorganic, natural, and organic acids” unfortunately Indian Penal Code does not explain what is acid.

Laws in India

In India, there is no specific law which deals with the acid attack. Section 326A and 326B have been added in the Code Vide Criminal law (Amendment) Act 13 of 2013 with the object of making specific provisions for punishment in case of causing grievous hurt by use of acid etc. or voluntarily throwing or attempting to throw acid causing permanent or partial damage, or deformity to, or burns or maims or disfigures or disable any part of the body of that person.

Section 326 A of Indian penal Code says that – Whoever causes permanent or partial damage or deformity to, or bums or maims or disfigures or disables, any part or parts of the body of a person or causes grievous hurt by throwing acid on or by administering acid to that person, or by using any other means with the intention of causing or with the knowledge that he is likely to cause such injury or hurt, shall be punished with imprisonment of either description for a term which shall not be less than ten years but which may extend to imprisonment for life, and with fine;

Provided that such fine shall be just and reasonable to meet the medical expenses of the treatment of the victim.

Provided further that any fine imposed under this section shall be paid to the victim.

Section 326B of Indian Penal Code says that- Whoever throws or attempt to throw acid on any person or attempt to administer acid to any person, or attempt to use any other means, with the intention of causing permanent or partial damage or deformity or burns or maiming or disfigurement or disability or grievous hurt to that person, shall be punished with the imprisonment of either description for a term which shall not be less than five years but which may extend seven years, and shall also liable to fine.

Compensation

Section 357B the compensation payable by the State Government under Section 357A shall be in addition to the payment of fine to the victim under section 326A of the Indian Penal Code.

357C. All hospitals, public or private, whether run by the Central Government, the State Government, local bodies or any other person, shall immediately, provide the first-aid or medical treatment, free of cost, to the victims of any offence covered under section 326A, 376, 376A, 376B, 376C, 376D or section 376E of the Indian Penal Code, and shall immediately inform the police of such incident.”.

These sections inserted after the recommendation of the Justice J.S.Verma Committee and it was also a proposal of 226^th Report of Law Commission of India which dealt particularly with acid attack.

Though acid attack is a crime which can be committed against any man or woman, it has a specific gender dimension in India. Most of the reported acid attacks have been committed on women, particularly young women for spurning suitors, for rejecting the proposal of marriage, for denying dowry etc. The attacker cannot bear the fact that he has been rejected as seek to destroy the body of the women who have dared to stand up to him[2]

As we know that before the amendment there was no specific section or law which deals with this particular crime. Traditionally the offence is dealt with under Section 326 of the IPC which deals with ‘Voluntarily causing grievous hurt by dangerous weapons or means’. This provision also deals with causing grievous hurt using ‘corrosive substances’ which include acids.

Some cases before the inclusion of the section 326A of IPC

In Marepally Venkata Sree Nagesh Vs. State of A.P [3], the accused was suspicious about the character of his wife and inserted mercuric chloride into her vagina, she died due to renal failure. The accused was charged and convicted under Section 302 and 307 IPC.

In Devanand Vs. The State[4] a man threw acid on his estranged wife because she refused to cohabit with him. The wife suffered permanent disfigurement and loss of one eye. The accused was convicted under Section 307 and was imprisoned for 7 years.

State of Karnataka by Jalahalli Police Station vs. Jospeh Rodrigues[5] it is one of the most famous cases involving acid attack. The accused threw acid on a girl, Hasina, for refusing his job offer. This deeply scarred her physical appearance changed the colour and appearance of her face and left her blind. The accused was convicted under Section 307 of IPC and sentenced to imprisonment for life. Compensation of Rs. 2, 00,000/- in addition to the Trial Court fine of Rs 3, 00,000 was to be paid by the accused to Hasina’s parents.

Landmark cases related to the Acid Attack

Laxmi v. Union of India[6] This is a landmark case, in this case, the petition filed by the Laxmi (Acid Victim). In this case, Apex Court issued the direction for the regulation of acid to the State and UT. The court also addressed the problem of compensation. The Apex Court held that Section 357A[7]this section provides for the preparation of a scheme for providing funds for the purpose of compensation to the victim or his dependents who have suffered loss or injury as a result of crime and who require rehabilitation. The Apex Court direct that the acid attacks victims shall be paid compensation of at least Rs. 3 Lakh by the concerned State Government/UT as the aftercare and rehabilitation cost.

But in reality, no state has set victim compensation scheme and the compensation ranging is from 25,000 to 3Lakh depend upon the state to state which is not sufficient for the victim because the acid attack victim will have to go through several plastic injuries in a whole life.

Parivartan Kendra Vs. Union of India[8] I this case the PIL filed the petition for the plight of acid attack victims like free medical care, rehabilitative service or adequate compensation under Survivor Compensation Schemes- Highlighted plight of two Dalit girls – Acid attack victims. In this case, court also took a consideration that despite orders and directions of the same court in the Laxmi case, acid still readily available to most of the population in India. In this landmark judgment Supreme Court issued a direction that the State Governments/ UT should seriously discuss and take up the matter with all the private hospitals in their respective State/ UT to the effect that the private hospitals should not refuse treatment to victims of acid attack and that full treatment should be provided to such victims including medicines, food, bedding and reconstructive surgeries. The Apex Court said that there is no need to set up a separate Criminal Injuries Compensation Board and the Court also clarified that the State Government/UT concerned can give even more amount of compensation more than Rs. 3Lakh.

The Court also said that the State Government/ UT should take a stringent action be taken against those erring persons supplying acid without proper authorization and also the concerned authorities be made responsible for failure to keep a check on the distribution of the acid.

(Preeti Rathi Case) State of Maharashtra v. Ankrur Panwar[9] in the first such order in an acid attack in Maharashtra a special women’s Court here sentenced Ankur Panwar to death. The accused was convicted of the charge of throwing acid on Preeti Rathi at Bandra station in 2013 after she chose to pursue her nursing career, declining his proposal for marriage. Special Judge Anju S. Shende said “According to the mitigating and aggravating circumstances, the facts of the case and the recent acid attack judgments by the Supreme Court, the accused to death.

Laws in other countries

Bangladesh

 In 2002, the Bangladeshi Government passed two Acts, the Acid control Act 2002 and the Acid Crime Prevention Act 2002. The Acts address punishment of those involved in the acid attack itself and restrict import and sale of acid in open markets.

Some important feature of the laws include

• Establishment of a National Acid Control Council Fund
• Establishment of a Rehabilitation Center for victims of acid crimes
• Treatment for victims of acid crimes
• Provision of Legal Aid for victims of acid crimes, etc.

Cambodia

In Cambodia, the Cambodian Law on Regulating Concentrate Acid passed in November 2011.This law criminalizes acid violence provides regulation and controls for all forms of concentrated acid. The law provides an extensive definition of the term “concentrate acid” with an ability to supplements the list by sub-decree in the future. In addition, regulates the import, transport, distribution, retail, and storage of acid by requiring a license or permission letter issued by the relevant Ministry allowing such uses.

The acid attack still burning India

The sections (326A, 326B) have been added in the penal code by the Criminal (Amendment) Act 2013 would not be able to stop or decrease the crime but the crime rates still the same. The latest data released Ministry of Home Affair was that the years 2011,2012 and 2013 witnessed 83,85 and 66 cases being reported respectively, but this number shot up to 309 in 2014- almost four times the average number of acid attack cases in preceding years. The majority of acid attack was in the Uttar Pradesh (185), Madhya Pradesh (53).[10]

Conclusion and Suggestion

The height of brutality in acid attacks is more than that in the cases of rape. Rape is considered as destroying the very soul of the victim, but even then if she is kept at a safe place she can stay without disclosing her identity; but in the case of an acid attack, they [the victims] have to move around with their bodies. In the I would like to suggest making a particular legislation which deals with the acid attack and the problem of the acid victim because the acid victims will have to face problem in their whole life.

Suggestion

• To make specific legislation this would deal with the regulation of the acid.
• Insert a section 114B: Presumption as to acid attack in the Indian Evidence Act, 1872 which was recommended by the Justice J.S. Verma committee.
• Center Government and State Government both would come forward and make a separate fund which deals with compensation payable to acid victims.
• The victim, who cannot work, should get a pension.

References

[1] Laxmi Vs. Union of India 2014 4 SCC 427

[2] Proposal for the inclusion of acid attacks as specific offences in the Indian Penal Code and a law for compensation for victims of crimes, Law Commission of India,2008 at p.3

[3]Marepally Venkata Sree Nagesh  Vs.  State of A.P, 2002 CriLJ 3625

[4] Devanand Vs. The State  1987 (1) Crimes 314

[5] State of Karnataka by Jalahalli Police Station vs. Jospeh Rodrigues  Decided in the Hon’ble High Court of Kerala on 22/8/2006

[6] Laxmi v. Union of India  2014 4 SCC 427

[7] Inserted in the Code of Criminal Procedure,1973 by Act 5 of 2009

[8] Parivartan Kendra Vs. Union of India  2015 (13) SCALE 325

[9] State of Maharashtra v. Ankrur Panwar  Decided in September 2016

[10] The data submitted by the Ministry of Home Affair to the Supreme Court in the ( Laxmi V. Union Of India )

In this article, Abhijeet Singh discusses how can Indians invest in US Stocks and Securities.

Can Indian Individuals invest in US Stocks and Securities?

Yes. Let’s find out how…

In 2004, the Reserve Bank of India introduced the Liberalised Remittance Scheme (LRS) to facilitate current and capital account transactions for individuals. Capital account transaction includes transferring or issuing of any foreign security by a person resident in India(section 6(3), Foreign Exchange Management Act, 1999). The current limit per resident individual per financial year is capped at $2,50,000 which subsumes private visits, gifts and education expenses. Although, exceptions are provided in cases of medical treatment. The permissible capital transactions includes a provision of making investments abroad vide section 6(iii) of the LRS. Acquisition and holding of both listed and unlisted shares, mutual funds, qualification shares, unrated debt securities, shares issued as remuneration for services rendered are all permitted under this scheme. Infact, reinvestment of the income earned on investment is allowed for (section 16, LRS).

Indian individuals can take these 2 routes to invest in the US Stock and Securities

Invest in a Global Mutual Fund or an Exchange Traded Fund (ETF) through your demat account Broker (eg. ICICI Securities, SBI Securities or Kotak Securities). Incase you do not have a demat account you can approach an Asset Management Company (AMC) to directly purchase a mutual fund of your choice, on paper without the need of a demat account.

OR   

Open a demat A/C with any Indian brokerage house which has a tie-up with a US brokerage firm and a banking account with an Indian bank listed as an authorized person of LRS (most of the major brokerage houses run by the banks listed under Authorized Dealer Category I, are authorized persons under the LRS)

If you simply wish to invest in a Global Mutual Fund or an ETF you need not bother yourself with the LRS or FEMA. These regulations will not apply to you in this case, if you are taking the first option. However, if you want your own portfolio of equities like Google, Facebook or Apple and you do not want your money to be wasted on AMC’s increasing tax liabilities due to GST (read more on this here), then considering the second option will be worth you time and money.    

(Note: I personally recommend using ICICI Securities as a broker as it is one of the leading brokerage houses in India. It also has a tie up with a US brokerage firm which enables its customers to trade in foreign equities. It also seamlessly integrates its banking facilities with its demat services and it is an Authorized Dealer Category I bank which makes the whole process a lot more easier. There are other players in the market offering similar facilities, feel free to choose and see which one suits your needs the best.)

Steps to follow for creating your own foreign equity portfolio

1. Open a demat account with your broker in India (who has a tie-up with a US brokerage house) or with a broker in the United States.
2. Fill out the Form A2 and send it to your bank(in India); this is an application for drawal of foreign exchange and a declaration required by the FEMA from the individuals to be submitted to their bank.
3. Voilà! Get ready to be the wolf of wall street…

Now before you go on to take your quaaludes*, keep in mind the following tax liabilities and rules for trading in foreign security.

Taxes

Income from sale of foreign securities is taxable in India.

Sale of shares by an Indian Individual, amounts to “[t]ransfer” of “Capital Asset” and is taxable as per the provisions of Section 45 of the Income Tax Act, 1961(IT Act) and will be taxable under the head “Income from Capital Gains.”

EXCEPTION

Holding domestic equities for over a year falls under long term capital gains and for domestic equities there is no tax levied on it while short term capital gains attract tax. However, holding foreign equity for long term will not entitle you to such benefits. It is liable to be taxed.

Taxes on dividends

Section 5 of the IT Act, 1961 provides a “[s]cope of total income” as elucidated under;

“All income received from all sources is, which received or is deemed to receive in India, accrues or arises or is deemed to accrue or arise in India or accrues or arising outside India, is taxable in India.”

Thus, dividends are liable to be taxed whether foreign or domestic. The earlier position under the IT Act, exempted profits earned from dividend pay-outs from any kind of taxes(section 10(34), IT Act). Now this section has been amended and dividends exceeding 10 lakhs will be be taxed at a rate of 10 percent u/s section 10(34) and 115BBDA of the IT Act.

EXCEPTION

The aforementioned exception provided for dividend pay-outs from domestic securities is not extended to the foreign securities. Therefore, the dividend generated from foreign equity is taxable under the head “Income from other sources” under the IT Act.

Will you be taxed in India and in the US as well?

No, thanks to the Double Taxation Avoidance Treaty between the two countries. The US-INDIA GTAA allows the tax on dividend to be deducted at source. In your case, if you’re investing in a US Security, you will have to pay between 15 to 25 percent tax at the source, i.e., in the United States of America.

Should you worry?

No. You are eligible for Tax Credits in India. Consult your Chartered Accountant for the same before filing your taxes. (For more information click here.)

Short selling US securities

Brokerage houses need what is called a margin account to be setup for an investor to enable short selling of stocks. Margin calls are essentially a form of collateral which the investor needs to provide in order to short stocks. However, section 5 of the LRS which reads as follows;

“[a]ll other transactions which are otherwise not permissible under FEMA and those in the nature of remittance for margins or margin calls to overseas exchanges/ overseas counterparty are not allowed under the Scheme” bars Indian individuals to set up margin calls. Thereby preventing short selling of foreign equity.  

Seems you can’t short Steve Madden like Wolfie after all!

[*DISCLAIMER: “quaaludes” is given as one of the references to the movie, ‘The Wolf of Wall Street’ throughout this article, the author does not, in any manner whatsoever, intend to promote, support or encourage the use of any narcotic substances or scheduled drugs banned by the Ministry of Health and Family Welfare in India under the Narcotic Drugs and Psychotropic Substances Act, 1985.]  

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In this article, Vincent Omwenga Kofi pursuing M.A, in Business Law from NUJS, Kolkata discusses Code of Ethics for Advocates.

Introduction

In the context of the Indian law, an advocate is a subset of a lawyer. In other words, while all advocates are lawyers, not every lawyer is an advocate. The legal practice of advocates is established in the Advocates Act, 1961. Based on the Act, only advocates—and not any other subset of a lawyer—are permissible to practice in courts and plead on behalf of others, but only after obtaining the required license. An advocate transacts business under authority that is governed and restricted by power of attorney granted by the principal. An Advocate has to be registered with the State Bar Council as described under the Advocates Act, 1961. In Galanter and Robinson’s (2013) views, as experts, advocates analyze client’s legal problems carefully to provide exhaustively researched legal counsel. In addition, they represent clients before other deciding bodies, including tribunals, arbitrations, and professional disciplinary committees. Accordingly, they are expected to be very ethical.

The word ethics is a combination of two words, ethos (Greek for character) and more’s (Latin for customs). The combination defines how people choose to interact with each other. Philosophically, ethics outlines what is good for a person and for the whole society, as well as the duties individuals owe themselves and each other. In its application in philosophy and law, therefore, Gillers (2014) informs that ethics encompasses learning what is correct and incorrect, and then choosing to do the correct thing. The most ethical or right decisions have various alternatives and have far reaching consequences. According to Gillers (2014), such decisions may also have mixed outcomes, including indefinite consequences. The most ethical decisions also have personal consequences. In most, if not all jurisdictions, Code of Ethics for Advocates explains the demands of professional conduct for advocates. In Hazard, Hodes, and Jarvis’s (2014) understanding, and as will be demonstrated in the remaining section of this article, the determination of such requirements is to warrant that advocates do not act viciously or carelessly or in a manner distasteful to the decorum, dignity, or integrity of their occupation, or in such a manner as would utterly affect the trust bestowed on them.

Nobility of Advocates

It is commonly said that legal profession is noble—and it is indeed true. It should be noted, however, that the profession’s nobility is anchored in the observance and compliance of established professional standards by the people working in the legal industry, especially lawyers (Hazard, Hodes, & Jarvis, 2014). The standards are known as the ethics of the legal profession, or simply, legal ethics, or specifically in this article, Code of Ethics for Advocates. The most important scope of the legal ethics is to uphold the dignity and order of the law profession; to establish moral and fair transactions of the advocates with their clients, witnesses, and opponents; to maintain a spirit of friendly collaboration between the bar and bench in the furtherance of highest standard of justice; and to demonstrate a spirit of fraternity with bar.

Besides being professionals, advocates are court officers who play a critical part in the administration of justice. Therefore, advocates have the twofold responsibility of keeping the client’s’ interests confidently, while handling themselves as court officers. For these reasons, advocates are expected to follow the highest standards of integrity and honor. The conduct of advocates ought to reflect their honored position in society, which originates from the profession’s nobility (Bagust, 2013).  In fewer words, the services of advocates to their clients should be graced with compassion, morality, and law. In India, generally, advocates shall adopt the standards of professional conduct and etiquette outlined in Chapter II, Part IV of the Bar Council of India (BCI) Rules, as a guide for transacting matters associated with law. The advocates should also be guided by the Advocate Act, 1961.

The Advocate Act, 1961, under Section 49 (1) (c), authorizes the BCI to create rules meant to propose the standards of professional conduct and etiquette that need to be adhered to by advocates within the jurisdiction. Under this legal provision, BCI has successfully created many different rules related to the code of ethics of advocates. For instance, Chapter II of Part VI of the BCI Rules demands that practicing lawyers, who include advocates, shall have the social obligation and dignity of the legal occupation and high standard of veracity and effective service to their clients, as well as for other advocates, their opponents, and the public. Broadly, therefore, the responsibility of a lawyer is to make the law functional in terms of fairness and justice as much as possible. In that respect, a lawyer needs to act as a guard or law, as well as an advocate of a legal system against clients. While acting and presenting their cases before courts, advocates should act with self-respect. At all times, they should conduct themselves with dignity. Nevertheless, if there is proper reason for grave grievance against an officer of the judiciary, the advocate has a right and obligation to submit his or her complaint to relevant authorities.

Conduct in Court

Advocates should respect the courts always and be mindful that the dignity and reverence upheld towards courts are critical for the existence of a free community. As outlined under BCI Rule 3, 1961, advocates are not allowed to influence courts’ decisions illegally or improperly. The illegal and improper means include bribery and coercion.  Furthermore, Rule 3 prohibits advocates from communicating directly with judges in connection with pending cases. Advocates also have the responsibility of restraining and preventing their clients, based on BCI Rule 4, 1961, from falling back to sharp or unjust practice. Under BCI Rule 46, 1961, all advocates shall, while practicing law, be mindful that any person who honestly needs an advocate is ennobled with legal assistance even if he or she cannot pay for the legal services entirely or sufficiently.

Advocates should be aware of their social obligation of ensuring the oppressed and needy are entitled to free legal assistance. However, in determining where to practice that obligation, advocates are allowed to turn down requests to represent clients insisting on using unfair or indecorous means. In other words, advocates shall exercise their personal judgments in such matters, avoiding to blindly following the clients’ instructions. While corresponding and arguing in courts, advocates are expected to use ethical and dignified language (Gillers, 2014). That language need not be unparliamentary, and during pleadings, they should be careful to avoid damaging the reputation of other parties scandalously on delusive grounds. The BCI Rules prescribe how advocates should dress in court—they should be presentable all the time. However, outside court, particularly in other public places than on ceremonial occasions and as prescribed by the BCI and the court, advocates must not wear gowns or bands.

Conflict of Interests

Advocates must not act, or must stop acting further, in cases of conflict of interests between two current or potential clients; the advocate and the client or potential client; and a current client, a potential client or between potential clients (Folberg & Golann, 2016). Accordingly, advocates must turn down the opportunity to act where they or their partners, spouses, employers, employees, descendants, or ascendants directly hold some appointment or office, which may result in a conflict of interests. By extension, an advocate should not welcome invitations to serve as an advocate for clients if it is apparent the advocate or his or her associate or firm will be required to witness, unless the advocate’s evidence is strictly formal. Advocates shall neither create an impression that they are able to make use of any connection for the clients’ advantage. According to Folberg and Golann (2016), advocates should also avoid acting or pleading in matters in which they have financial interests. For example, they should avoid acting in bankruptcy litigation when they are also creditors of the bankrupt.

Advocates should avoid appearing in or before all judicial authorities for or against any establishment if they are members of the establishment’s management (Wilkins, Khanna, & Trubek, D2017).However; this ethical principle is inapplicable to members appearing as amicus curiae or without a fee on behalf of the BCI, Bar Association, or Incorporated Law Society. It is unethical for an advocate to accept invitation to acting in a matter where another advocate is representing the client regarding the same matter, except when he or she is certain that the first advocate has compensated lawfully on close of the brief. Withal this scenario, the second advocate may act in pressing special circumstances where the client’s interests would otherwise be extremely prejudiced, in which case he must notify the first advocate. In either case, the Chamber of Advocates may find it proper to authorize the second lawyer to act (Galliott, 2016).However, advocates must avoid accepting instructions being aware that a third party has conditioned that the advocates must act.

Service Fees

Advocates are obliged to accept any legal briefs in the tribunals, courts, or before any other authority, before or in which he offers to practice. They are required to charge fees that are equal with the fees charged by fellow advocates of the same rank at the Bar and a similar kind of the case (Lacity, Burgess, & Willcocks, 2014). Under special circumstances, Shapiro (2002) rejoins, it is justifiable for the advocates to turn down invitations to particular briefs. Advocates should also refuse calls to stand as surety, or attest the level-headedness of sureties that their client requires for the proceedings. In such cases where advocates receive instructions from other parties other than members in the legal occupation claiming to represent their clients, advocates should immediately and directly communicate with the clients to confirm whether that is true. If it is still doubtful, the advocates shall communicate with the clients or do anything necessary to confirm the third-party instructions soonest possible.

When charging for services, advocates should not set the amount depending on the triumph of the matter pursued. Neither should they set the amount as a per centum of the property or amount received after the victory of the matter. In other words, Code of Ethics for Advocates does not allow lawyers to set a fee contingent on the outcome of litigation or seek to share the incomes thereof (Curtis & Resnik, 1997). Clearer, advocates should not buy or deal in or stipulate for or offer to get any interest or share in any actionable claim. However, nothing in this rule in Code of Ethics for Advocates shall be applicable to shares, debentures, and stock of government securities, or to any instruments that are, for the moment, by law or tradition, negotiable or to any mercenary document of title to goods. The rule extends to forbidding an advocate from using proxies to directly or indirectly buy or bid for any property vended in the execution of an order in any case, prayer, or other proceeding in which he was professionally involved in any way. However, this forbiddance does not keep advocates from tendering for or buying for their clients any property that their clients may themselves legally tender for or buy, provided the advocates are clearly authorized in writing by the clients.

The Code of Ethics for Advocates does not allow advocates to adjust fee payable to them by their clients against the advocate’s’ own personal liabilities to the clients, which do not arise during the representation. In addition, advocates should not in any way take advantage of the clients’ trust and confidence (Kao, 2003). In effect, they are required to always keep accounts of the monies clients entrust to them. The accounts in question must indicate the amounts obtained from the clients or in the clients’ behalf. The accounts need to clearly indicate expenses and deductions with their respective dates, including all other essential particulars. In other words, according to Barrett and Herwitz, (2015), the bill of costs the advocate prepares should contain enough information to identify the item and matter to which it relates and when he or she rendered the services. In addition, the accounts should show whether the funds the advocate received from the client during the counsel or proceedings are on account of fees or expenses. This, therefore, forbids advocates from diverting part of the money received for expenditures as fees without clients so instructing in writing(Barrett & Hurwitz, 2015). Code of Ethics for Advocates forbids advocates from lending money to their clients for the purpose of any activity or legal proceedings in which clients involve such advocates. However, no advocate can be held guilty for a violation of this rule, if in the course of an incomplete suit, and without any agreement with the client regarding the same, the advocate feels obliged by reason of the Court’s rule to pay the Court on the client’s account for the continuation of the suit.

Disclosure and Withdrawal

Where advocates choose to accept clients’ instructions from third-parties, they are obliged to execute those instructions diligently, carefully, and skillfully. While doing that or anything in the interest of clients, advocates must keep their clients’ business and affairs private (Wood Jr., Hogan, Bhadha, & Dadrewala, 2008). Under normal circumstances, advocates should not withdraw from serving clients after agreeing to serve them. They can, however, withdraw only if they have compelling reasons and by rationally and sufficiently notifying clients. Upon withdrawal, they are required to refund fees not yet accrued to the clients. On terminating the brief, advocates should, in accordance with any prerogative and/or right of withholding, submit to their clients all papers and belongings to which the clients are entitled, as well as account for all the clients’ funds then in the advocates’ custody. Advocates should be careful not to accept briefs or appear in cases in which they are themselves witnesses. Further, if they reasonably believe they will be required to be witnesses at some point, they should discontinue appearing for the clients in question. However, when retiring from such cases, they should do so respectfully and without jeopardizing their clients’ interests.

At the beginning of their engagements and during the engagements thereof, advocates should fully disclose to their clients their connections to other parties and their interest in or about the matter as are likely to influence their clients ‘judgment in either engaging them or keeping the engagement(Wood Jr., Hogan, Bhadha, & Dadrewala, 2008). Advocates should uphold their clients’ interests fairly, honorably, and fearlessly. They should undertake the duty without fear of any hostile consequences to themselves. Accordingly, advocates shall defend clients accused of a crime notwithstanding the advocates’ personal opinions on the guilt of the accused. They should always keep in mind that they need to be loyal to law, which demands that no one ought to be chastised without compelling evidence. Advocates should not, directly or indirectly, divulge the communications between themselves and clients, including the clients’ advice. However, if the communications or advice breach Section 126 of the Indian Evidence Act, 1872, the advocates are liable to divulge.

When appearing for criminal prosecution, advocates should conduct the transactions in a way that it does not result in sentence of the innocent. Advocates should not, therefore, directly or indirectly, violate the obligations under Section 126 of the Indian Evidence Act. For instance, advocates shall not in any way bottle up any material or evidence that is meant to establish the innocence of the defendants. Advocates should be careful not to agitate or prompt litigation. One of the ways of avoiding this is to not act on any person’s instructions other than the clients’ or the clients ‘authorized agents. When clients make occasional sensible requests for information related to the brief, advocates should dutifully comply. In case an advocate terminates the relationship with his or her client, he or she should first issue sensible notification in the circumstances.

Social Conduct

In relation to society, whether in their individual or professional capacity, advocates should not act towards anyone in a manner that is evidently deceitful, fraudulent, or generally conflicting the appropriate exercise of professing as lawyers. They must not also use their positions and privileges as advocates to unfairly take advantage of the members of the public for themselves or anyone else. In upholding the nobility of the profession, if an advocate determines that an unqualified individual (for instance, posing as an advocate) is representing another party, the advocate should stop communicating with the unqualified individual, but without prejudicing his or her client’s interests. Advocates must also relate with other advocates in good faith, frankly, courteously, and consistent with their principal duties to their clients (Cooley, 2000).If this does not happen, especially from other advocates, in Malta, Jersey, and Seychelles, advocates are obliged to report any such serious violations to the Chamber of Advocates. If he or she finds it necessary, the advocate may obtain his or her client’s permission thereto (Donlan, Marrani, Twomey, & Zammit, 2017).

In relation to finding work, Code of Ethics for Advocates forbids advocates from soliciting work or advertising as they wish, but as prescribed legally (Burton, 1992). For instance, advocates should not promote themselves in interviews, circulars, personal communication except through personal relations, comments in dailies, advertisements, and photographs associated with cases in which they have been contracted or interested (Rossi & Marti, 2015). Advocates should not allow anyone to use their names or professional services to promote or start any unlicensed practice of law. To further protect individual integrity of lawyers, an advocate should not represent a client in any matter in which another lawyer has filed a memo for the same client. Nevertheless, with the other advocate’s consent, the advocate can appear for the same client. If it is impossible for the advocate to get consent of the other advocate who has filed a memo to represent a client, the advocate can make an application to the court for permission to appear. In such application, the advocate should provide the reason or reasons it was impossible to get such consent from the advocate who filed the memo first. Code of Ethics for Advocates only allows the advocate to appear following the court’s approval of the application.

References

Bagust, J. (2013). The Legal Profession and the Business of Law. Sydney L. Rev., 35, 27.

Bar Council of India Rules

Barrett, M. J., & Herwitz, D. R. (2015). Accounting for Lawyers. Foundation Press, West Academic.

Burton, G. E. (1992). Attitudes toward the Advertising by Lawyers, Doctors, and          CPA’s. Journal of Professional Services Marketing, 8(1), 115-128.

Cooley, J. W. (2000). Mediator & advocate ethics. Dispute Resolution Journal, 55(1), 73.

Curtis, D. E., & Resnik, J. (1997). Contingency Fees in Mass Torts: Access, Risk, and the          Provision of Legal Services When Layers of Lawyers Work for Individuals and        Collectives of Clients. DePaul L. Rev., 47, 425.

Donlan, S. P., Marrani, D., Twomey, M., & Zammit, D. E. (2017). Legal Education and the       Profession in Three Mixed/Micro Jurisdictions: Malta, Jersey, and Seychelles. In Small States in a Legal World (pp. 191-212). Springer International Publishing.

Folberg, J., & Golann, D. (2016). Lawyer Negotiation: Theory, Practice, and Law. Wolters Kluwer Law & Business.

Galanter, M., & Robinson, N. (2013). India’s Grand Advocates: A Legal Elite Flourishing in the Era of Globalization. International Journal of the Legal Profession, 20(3), 241-265.

Galliott, J. (2016). Commercial Space Exploration: Ethics, Policy and Governance. Routledge.

Gillers, S. (2014). Regulation of Lawyers: Problems of Law and Ethics. Wolters Kluwer Law & Business.

Hazard, G. C., Hodes, W. W., & Jarvis, P. R. (2014). Law of Lawyering. Wolters Kluwer Law & Business.

Indian Evidence Act. (1872). Indian Penal Code (1860). Criminal Procedure Code.

Kao, M. (2003). Calculating Lawyers’ Fees: Theory and Reality. UCLA L. Rev., 51, 825.

Lacity, M., Burgess, A., & Willcocks, L. (2014). The Rise of Legal Services Outsourcing: Risk   and Opportunity. A&C Black.

Rossi, J., & Weighner Marti, M. (2015). An Empirical Examination of the Iowa Bar’s Approach   to Regulating Lawyer Advertising.

Shapiro, S. P. (2002). Tangled Loyalties: Conflict of Interest in Legal Practice. University of Michigan Press.

Veeraraghavan, A. N. (1972). Legal Profession and the Advocates Act, 1961. Journal of the Indian Law Institute, 14(2), 228-262.

Wilkins, D. B., Khanna, V. S., & Trubek, D. M. (Eds.). (2017). The Indian Legal Profession in the Age of Globalization: The Rise of the Corporate Legal Sector and its Impact on   Lawyers and Society. Cambridge University Press.

Wood Jr., L. R., Hogan, E. M., Bhadha, C., & Dadrewala, J. (2008). Trade Secret Law and Protection in India. Intellectual Property & Technology Law Journal, 20(10), 25.

In this article, Parth Sarthy Kaushik discusses Financial Creditors vs. Operational Creditors and gives reasons on who is better off and why.

The Insolvency and Bankruptcy Code, 2016 (IBC) which has replaced the earlier ‘debtor in possession’ insolvency regime with a more expedient ‘creditor in control’ regime provides that in case of default of debt or interest payment by the corporate debtor, any financial or operational creditor (or corporate debtor) can make an application to the adjudicating authority (i.e. National Company Law Tribunal for companies, limited liability partnerships and other body corporates) under the Code for commencing the Insolvency Resolution Programme.

Once such an application is admitted by the NCLT, an interim resolution professional will be appointed and the authority will declare a moratorium period during which all pending and future legal actions against company will remain in suspension. During the moratorium period, the resolution professional is required to constitute a committee of creditors (excluding the related parties) which would include both financial creditors and operational creditors. The main purpose of the committee is to create a resolution plan within the stipulated time frame, in order to revive the corporate debtor. For this purpose, IBC provides that such a plan must have the approval of at least 75% of the creditors and a failure to approve resolution plan would by default lead to the initiation of liquidation proceedings.

For the purpose of proceedings under the Code, a distinction has been created between ‘Financial Creditors’ and ‘Operational Creditors’. It is pertinent to note that the Companies Act, 2013 does not create any such classification and only uses the term ‘creditor’. Further, this classification under IBC has been used to put the creditors on different pedestals at every stage of the proceedings whether they pertain to maintainability of applications, approval of resolution plan or distribution of assets (in case of liquidation). Therefore, with a view to secure their interests, it is imperative for creditors to be completely aware of the range of options/rights available to them under IBC.

Classification of creditors

Who is a Financial Creditor?

Section 5(7) of the Code defines a financial creditor as – “a person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred“.

The term financial debt has been defined under Section 5(8) as – “a debt along with interest, if any, which is disbursed against the consideration for time value of money and includes:

1. Money borrowed against payment of interest;
2. Any amount raised by acceptance under any acceptance credit facility or its de-materialized equivalent;
3. Any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
4. The amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed;
5. Receivable sold or discounted other than any receivable sold on non-recourse basis;
6. Any amount raised under any other transaction, including, any forward sale or purchase agreement, having the commercial effect of borrowing;
7. Any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution;
8. The amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause“

Thus, all lenders who have extended any kind of loans, guarantees or financial credit are covered within its ambit.

Who is an Operational Creditor?

Section 5(20) of IBC defines an Operational Creditor as – “any person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred“.

The term operational debt has been defined under Section 5(21) as – “a claim in respect of the provisions of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority”.

Thus, operational creditor refers to anyone who has provided goods or services and the payment for same is due from the corporate debtor. In the course of business, several transactions are entered into on credit terms customarily in different industries.

Thus, IBC creates the distinction between a financial and operational creditor based on the nature of transaction (i.e. purely financial transactions or transactions related to day to day operations) a creditor enters in with the corporate debtor.

Ability to start insolvency proceedings

Financial creditors can start insolvency proceedings even for disputed debts but operational creditors cannot

Based on whether the creditor is a Financial or Operational creditor, the Insolvency and Bankruptcy Code provides for different schemes of admission for insolvency petition which will initiate the resolution process.

Section 7 of IBC provides that a financial creditor can directly approach the adjudicating authority and the only condition that needs to be satisfied is that the creditor must show that the corporate debtor has defaulted in the payment of a due debt.

On the other hand, Section 8 of IBC lays down that for an operational creditor to succeed in initiating the resolution process, it must satisfy the adjudicating authority by demonstrating that:

1. It has served a demand notice to the corporate debtor stating that the debtor has committed a default in debt; and
2. No dispute exists between the parties in relation to the payment of debt.

The Hon’ble Supreme Court in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd while interpreting the term ‘dispute’ as defined under Section 5 (6) and appearing in Section 8 (2) held that, the adjudicating authority is only required to see if there is a bona fide dispute in existence and it is not allowed to examine the merits such dispute. It is to be noted that this holds true even if the dispute notice has been served after the acceptance of demand notice by the corporate debtor.

Therefore, under the scheme of the Code, if a debt is not admitted by the organization (a corporate debtor) and is disputed within the meaning of Section 5 (6) or Section 8 (2), it is a sufficient ground to reject the insolvency application made by an operational creditor (i.e even if there are no pending proceedings between the parties, the corporate debtor can scuttle the insolvency proceedings). On the other hand, a financial creditor is allowed to initiate the resolution process even in case the debt is disputed by the corporate debtor.

Insolvency Resolution Process

Once the insolvency petition has been admitted by the adjudicating authority, Section 14 of the Code provides that a moratorium will be imposed on all judicial proceedings (both future and pending) against the corporate debtor until the approval of a resolution plan under section 31.

During the moratorium period, the Resolution Professional is required to constitute a committee of creditors which is tasked with the preparation of a Resolution Plan. This committee plays the most vital role in the insolvency resolution process as any resolution plan prepared and approved by it would be equally applicable on all the creditors. Thus, while the insolvency process can be initiated by any individual creditor, once the moratorium is imposed and Interim Resolution Professional appointed, the whole process becomes collective in nature, requiring a consensus among all the creditors for its success.

Operational creditors not permitted to be part of the Committee of Creditors

Section  21  (2) provides that the committee of creditors shall consist solely of financial creditors. The Code also lays down that each creditor shall vote in accordance with voting share assigned and the resolution plan can be implemented only if it has been approved by 75% of creditors. Further, Section 24 (3) (c) provides that only operational creditors having aggregate dues of at least 10% of the total debt shall be given the notice of the meeting. It is to be noted that, an operational creditor (irrespective of the claim size) is not allowed to be a member of the committee. Thus, IBC limits the right of an operational creditor to only attending the meeting of CoC subject to the abovementioned threshold.

Therefore, the Insolvency and Bankruptcy Code effectively confers only three rights on an operational creditor:

• To initiate insolvency resolution process.
• To receive notice of meeting of committee of creditors.
• To attend the meeting of committee of creditors.

It is to be noted that a resolution plan can be proposed by any category of creditors. However, it must be stressed that the same needs to be approved by the committee which is controlled by financial creditors. Therefore, unlike financial creditors, the rights conferred on the operational creditors are subject to certain conditions which resultantly gives more weightage to the concerns of financial creditors by giving them total monopoly over the entire resolution process.

Liquidation and Asset Distribution

Unsecured Financial Creditors and Operational Creditors are on Par, But Secured Financial Creditors Have a Priority

In case the committee of creditors fails to approve a resolution plan within the stipulated time period or demands liquidation, the adjudicating authority will pass an order for liquidation of the corporate debtor. The official liquidator appointed by the CoC is then required to sell the assets of the corporate debtor and distribute the proceeds among all the creditors. Section 53 provides that the order of priority for the distribution of assets shall be:

While a financial creditor can be either a secured or unsecured creditor, an operational creditor always falls in the category of unsecured creditors. Therefore, even in the case of liquidation and asset distribution, financial creditors are prioritised over operational creditors (excluding workmen and employees, who are operational creditors but are specified to be treated equally with secured financial creditors).

Conclusion

The rationale behind this imbalance in the rights assigned to financial and operational creditors under IBC has been explained by the Banking Law Reforms Committee in its report, which states that:

“….members of the creditors committee have to be creditors both with the capability to assess viability, as well as to be willing to modify terms of existing liabilities in negotiations. Typically, operational creditors are neither able to decide on matters regarding the insolvency of the entity, nor willing to take the risk of postponing payments for better future prospects for the entity. The Committee concluded that, for the process to be rapid and efficient, the Code will provide that the creditors committee should be restricted to only the financial creditors.”

Therefore it is clear from the above position that framers of the Code created this classification with the aim to protect the rights of all stakeholders by providing a mechanism which primarily focuses on resolution and re-structuring of the debt by treating the corporate debtor as a going concern and provides for liquidation only when all the attempts towards such a resolution ultimately fail.

This approach is certainly much more rational than giving the reigns of the resolution process in the hands of Operational Creditors who are more than often not interested in the revival scheme and look for the obvious solution of liquidation to recover their dues which would defeat one of the main objects of the Code that is, to allow an honest but unfortunate corporate debtor to obtain a discharge from his debts subject to reasonable conditions.

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Open source licenses are a grant of permission by the owner of the open source software (OSS) to exercise the exclusive rights held by the owner. The rights range from copying and creating derivatives of the product to its distribution. These licences are akin to unilateral contracts and you are only bound by it, should you choose to accept them. They appear similar to the EULA in paid software. The licensing terms are broadly categorized under two different types: Copyleft and Non-Copyleft or Permissive.

Copyleft and Permissive License

A Copyleft Licence is an agreement whereby the source code of the OSS is allowed to be modified and freely used for distribution subject to the end product being bound by the same licensing conditions. This ensures a higher control over the distribution of the OSS and its usage because of this reciprocal nature of the licensing terms. While the Permissive Licenses allows the user to re-license the subsequent work created by modifying the source code under a different license.

What are the most common open source software licenses?

The first open source license was envisaged by University of California, Berkeley in an attempt to further its educational and research initiatives. It was known as BSD. In the present scenario, the three most popular and prevalent open source software licenses are: GPU License(GPL), Apache and MIT. These Licenses are have different owners. However, they all have the approval of the Open Source Initiative. You can find more such approved licenses here.

Which is the best open source license for your business and and why – Apache, MIT or GPL?

GPU General Public User License

Owned by the Free Software Foundation, the GPL is available in two variants; the General Public User License(GPL) and the Lesser General Public User License(LGPL). These licenses are copyleft licenses. The difference being that the GPL is a strong copyleft whereas the LGPL is a weak copyleft. In a strong copyleft license, if any changes are made to the source code (to read more on what a source code is, click here)  the resulting modified software is subject to the license terms of the original software. This means that often the modified software will also have to be made freely available. The weak copyleft license, however, allows for modifications to the binary files or DLLs  (to read more on what a DLL is, click here) without subjecting the derived product to the same license term. It is important to note that, merely using an OSS with a GPL or LGPL license does NOT amount to acceptance of its terms, unless and until the source code is modified.

Apache License

It has a patent license (See para11, GPLv3.0) grant without the reciprocity found in the GPL. This means that you can use your own proprietary code and modify the source code and the resultant derived product becomes your own intellectual property. You can now distribute the derived software on your own licensing terms which is forbidden in the case of GPL.

Apache OSS source code + Your proprietary code = Derived software

Further, according to the Apache Contributor License Agreement(CLA) terms you are not required to share the modified software which makes it commercially friendly. This

MIT License

The MIT license has all the traits of the Apache License besides remaining silent on the Contributor License Agreement(CLA) about sharing the modified software.

Here are 2 clauses from the GPL V3.0 that we discussed above which distinguishes it from the other licenses:

“9. Acceptance Not Required for Having Copies.

You are not required to accept this License in order to receive or run a copy of the Program.  Ancillary propagation of a covered work occurring solely as a consequence of using peer-to-peer transmission to receive a copy likewise does not require acceptance.  However, nothing other than this License grants you permission to propagate or modify any covered work.  These actions infringe copyright if you do not accept this License.  Therefore, by modifying or propagating a covered work, you indicate your acceptance of this License to do so.

 10. Automatic Licensing of Downstream Recipients.

Each time you convey a covered work, the recipient automatically receives a license from the original licensors, to run, modify and propagate that work, subject to this License.  You are not responsible for enforcing compliance by third parties with this License.”

Here are some key pointers to keep in mind:

1. Any modifications to the object code, i.e., the non source code in not modification to the OSS.
2. Free redistribution is of the OSS and not the content. As content (music, video or text) + OSS = Product.
3. The product is not liable to be distributed freely as its contents have a copyright of the person uploading it on the platform.

Whether the purpose of your project determines which license you would use?

If software in not what you’re selling and it is the content

The concept of OSS emerged in order to cater to the needs of educational institutions to further their outreach to impart education and share their knowledge resources. Moodle is one such open source initiative distributed under the GPL license which is used by several universities across the globe to provide online education.

When selling an app

Now, if we look at the booming market of mobile applications we will find several applications which use the Apache Cordova OSS and jQuery distributed under a MIT license. It enables developers to package their HTML or JavaScript codes to create native apps for mobile devices. This saves the developers time and costs by enabling them to use the programming language they are comfortable in, rather than working on an alien platform. The Apache license enables the developers to use external code to modify and add on to the source code to make custom changes to their applications without having to redistribute it on the same license. This helps them tailor the application to cater to the needs of their potential customers without compromising on its profitability. They can further re-license it on their own terms when selling it on the Google PlayStore.

Thus, from the two examples above it is clear that the choice of license is determined by the object of the project. However, it does not mean that the GPL cannot be commercially exploited, as long as the source code of the OSS remains unaltered, GPL can be used to harness profits without being charged a cut for the same.

What makes a software open source?

The Open Source Initiative is the parent body which grants approval to the open source licenses. In order to be identified as an OSS, the software should be licensed under one of the licenses approved by the Open Source Initiative. It lays down the following criteria for classifying softwares as an OSS:

1. It should have a free redistribution, i.e. it should not require a royalty or any other fee.
2. The source code must be made available (often found on a global repository of OSS called GitHub or the developer’s website.)
3. Modification and derived works should be allowed.
4. Integrity of the author’s work should be maintained, i.e., any modification of the code should be traceable to the user making such modifications.
5. It shouldn’t discriminate against any person or group.
6. Neither should it be negatively biased towards any fields of endeavour.
7. The rights attached to the program must apply to all the end-users without the need for executing additional licenses upon redistribution.
8. Its license should not be limited to a specific product.
9. Use of other software in consonance with the OSS should not be restricted.
10. Its license should be technically neutral, i.e., it should not be centred around a specific technology or interface.

Are open source licenses recognized under Indian laws?

Free usage does not necessarily mean that the software is in the Public Domain, i.e., they are not covered under copyright laws. A copyright comes into existence as soon as the software is created. In Tata Consultancy Services v. State of Andhra Pradesh 271 ITR 401, the Supreme Court of India held a software to be an Intellectual Property. It is covered vide section 29(o) of the Indian Copyright Act, 1957 (“Copyright Act”) under “literary works” which includes computer programs. Section 14(b)(ii) of the Act gives right to sell or to give the software on commercial rent.  

Here comes the catch, the creator of the OSS is not entitled to receive a royalty from it sale. How do you then freely distribute the OSS whilst retaining a copyright to the same in the Indian context? In India the neither the Information Technology Act, 2002, the Copyright Act or the Indian Patents Act, 1970 explicitly recognize the OSS.

However, if we take a look at section 14 of the Copyright Act. Sub-Clauses (b)(i) and 14(a)(ii) allows the copyright owner of a computer programme “to issue copies of the work to the public not being copies already in circulation.”  This allows the OSS developers to license and re-distribute their original software for free as the section 14 cll a(ii) is silent on whether the copies being distributed to the public should be free or not. Section 30 of the Copyright Act confers upon the owner of the copyright, the right to license “any interest” in his work. Such rights acquired by the licensee are the same as that of the assignee of the copyright. The mode of assignment is elucidate under section 19 and the clause 3 of this section expressly provides an option to the licensor to license it for free. Now, the clause 2 of section 19 requires the licensor to specify the rights licensed, along with the duration and its extent. Thus, the open source licenses discussed above fit well within the legal provisions laid down in India.

Should you use open source software or go for a customized for building a product for a startup?

A lot depends on the kind of startup you wish to enter into. If you are a technology startup which aims to provide a new technology to its user such as Uber but it is harnessed using a known medium or platform, your safest bet will be a customised software. If you still choose to go for an OSS ensure that you are using something with an Apache or MIT license, so that you can freely add your customization and further sell it on your terms.

Now, if you are planning on a startup which had more to do with innovative content than a revolutionary technology then you can even use an OSS with a GPL license.

Here is a quick checklist to help you decide which software you should go for –

Open source softwares have a huge community of developers which easily beats the compact R&D teams of protected/copyright softwares. Often they have a Contributor License Agreement(CLA) with the developers which helps them innovate their product and have multiple plugins to communicate with other software. Google has effectively utilized their Android developer community to include customizations to their mobile software in their newer versions. Besides this model tech companies also use the dual licensing model. RedHat, a linux based software company provides both open source and EULA license for support or add-on features.

Watch – Linus Torvalds, the mind behind linux on his concept behind open source software and how it changed the tech world.