In this article, Vijaylaxmi Charan discusses the provisions of MASUKA, a draft bill by the collective National Campaign Against Mob Lynching to curb the menace of mob-lynching.

The cases of lynching by mobs seem to be growing every day. Hafiz Junaid, DSP Ayub Pandit, Zafar Khan, Ravindra Kumar, and Pehlu khan this is sweeping list of victims of mob lynching in India since April 2017. Public condemnation as seen in the #NotInMyName protests, or even the occasional condemnation from the Prime Minister proved to be ineffective. The Executioners are unconcerned about the consequences of their actions because they wonder that laws of this country are not equipped to deal with this epidemic of mob lynching.

As a result, there is an augmenting movement to promote a new law, a Maanav Suraksha Kanoon (or MASUKA) to deal with the rash of mob lynching across the boundaries of this country. To make familiar with this new law called MASUKA, its background, its origin and effectiveness to be taken into consideration.

THE DIVULGENCE OF MASUKA

Unified and unitedly young leaders from different backgrounds and political affiliations launched the National Campaign against Mob Lynching on the day of 5th June, 2017. The core members of the group are activists including Tehseen Poonawalla, JNU Vice-President Shehla Rashid, Dalit Leader Jignesh Mewani, Former JNU President Kanhaiya Kumar and Samajwadi Party Spokesperson Pankhuri Pathak.

The linchpin of the campaign is a push for a new, consolidated law on mob lynchings in India. A proper drafting committee which comprised of people from a variety of backgrounds has been set up under the guidance and supervision of Senior Advocate of Supreme court of India Mr.Sanjay Hegde to draft the bill. This new law draft is being proposed to the central government which may be step towards limiting the frequent and heinous episodes of mob lynching.

CURRENT LAWS TO DEAL WITH MOB LYNCHINGS

Mob Lynching is killing of a targeted person by mob or masses and Murder in any form, whether by a lone killer or by furious mob falls within Section-302 of Indian Penal Code. Depending on the facts and surrounding circumstances, other charges and Sections can be attracted such as Section-307 (Attempt to Murder), Section-323 and Section-325 (Grievous Hurt or causing Hurt) or Section-304 (Culpable Homicide) can all apply to mob lynching cases.

The Existing laws also cover the special circumstances that relate to the lynchings-the involvement of mob, a common purpose, violence by the mob, and the influencing of the mob by a person or persons.

The Mob-Related Provisions are

Section-34 of IPC, in which all members of a group which was gathered for a common intention will be liable for any crime committed in furtherance of that intention, this could even be a different crime from the one originally intented, it not only covers pre-arranged plans but all those plans made on the spot, depending on the facts and circumstances.

Section-141 IPC which talks about “Unlawful Assembly “where the common objective of the persons in it is to commit an offence. Every member of an unlawful assembly is guilty of any crime committed pursuant to the common object of the assembly, or any crime they knew was likely to be committed for the common object.

Section-149 of the IPC – If any unlawful assembly commits any violence, the matter escalates into one of Rioting (Section-147 and 148 IPC). Along with above all provisions Section-120B IPC would be attached for all those involved in planning and instigating the mob may be spreading the word in person or with the help of Social Media accounts and Forums like Whatsapp.

WHY THEN MASUKA HAS BEEN PROPOSED?

According to Tehseen Poonawalla, the existing legal provisions do not deal specifically with lynching as an offence, and there is no provision for compensation, no provision for rehabilitation of the families, and most importantly there is nothing like speedy justice.
By preparing a separate draft law, all the various facets of a mob lynching can be punished without having to tie together to different provisions to build a case. It will also be able to tackle issues such as the Dissemination of False Rumors and Exhortation of Mobs. Senior Advocate Sanjay Hegde believes that the biggest shortcoming of the existing legal treatment of the mob-lynchings is that a key factor in how these lynchings takes place is not covered by it-the Police.MASUKA addressed this issue specifically.

PROS OF THIS NEW DRAFT LAW “MASUKA”

Rehabilitation and Compensation for Victim’s Families

It will include provisions for rehabilitation of victims’ families through mandatory payment of compensation by state governments and also the fines collected from those convicted will also be distributed to the families.

Special Courts for Speedy Justice

Establishment of designated special courts to hear lynching cases, just like those set up under POCSO Act, 2012 to ensure speedy justice and to demonstrate the intent of the law.

Addresses police inaction and complicity

Hegde’s point about countering police inaction is one that resonates and could prove to most eye-catching of the Campaign’s Proposals. The draft bill includes a provision that will hold the local SHO responsible for any lynchings which take place in their jurisdiction subject to a time –bound judicial probe to ascertain whether the events were truly out of their control. This provision will play a key role in preventing mob lynchings, as the Police will take extra care to nip such incidents in the bud, and will be more proactive in stopping them when they happen.

Witness Protection

A number of provisions to be included that will help ensure that witnesses to the lynchings are not to be afraid to speak out about the incidents, their identities are to be protected and punishments would be given upon leaking of this information.

Who will be covered under MASUKA?

The new draft law on mob lynching is undoubtedly drafted with proper care to ensure that it does not only apply to lynchings of victims belonging to a specific community, or for limited reasons like suspicions of cow slaughter. This will help to make it palatable even to those represent different Political interests from the Campaign, whether in government or on Twitter or in the village square. At the outset, there is severe difficulty in defining the limits of what this law will cover under its umbrella. The definition in the draft Bill included in it entirely new terms, which do not have established legal meanings which raise the potential of it being considered too ambiguous. This will lead to delaying proceedings and misuse of law as it might cause trouble for any gathering of people, even for lawful purposes.

There are also procedural issues to be considered. As this draft bill aims to criminalize the dissemination of false rumors and exhortations to the mob to gather and act. Much of the instigation of offences is being done through online platforms like Whatsapp which actually make it difficult for authorities to prove the offence and Identification of the mob participants, and it is difficult to see how this can be improved by MASUKA.

THE WAY AHEAD

MASUKA as a separate legislation will not be a wise option if it will not be able to remove the ambiguities and to lower down the sprouting graph of cases of mob lynching. The MASUKA movement might have some flaws in it but it opened up the conversation about a lesser discussed problem which is affecting the whole nation and all legal and political minds came to the common platform to find out the best possible solution which could save lives of many innocent people in the coming future.

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In this article, Ujjwal Ashok discusses the validity and enforceability of non-compete clauses under the Indian Law.

The law outlined in Section 27 of the Indian Contract Act declares all agreements which are in restraint of trade, occupation and business as void unless such an agreement relates to a restraint on carrying on the business of the company whose goodwill has been sold. Any other restraint not falling under this exception is considered as an unreasonable restraint of trade and unenforceable under Indian Law. The Indian law is rigid in this respect and invalidates all restraints, whether general or partial, and neither the test of reasonableness nor the restraint being partial shall apply to a case governed by Section 27 unless it falls within the exception of that Section.

1. Agreements held to be in restraint of trade

a) Agreements containing negative covenant post termination of contract

An agreement in restraint of trade has been defined as ‘ one in which a party(the covenantor) agrees with any other party (the covenantee) to restrict his liberty in the future to carry on trade with other persons not parties to the contract in such a manner as he chooses.[1]Restraint of trade appears to imply that a man contracts to give up some freedom which otherwise he would have had. A person buying or leasing land had no previous right to be there at all, let alone to trade there, and when he takes possession of that land subject to the negative restrictive covenant, he gives up no right or freedom which he previously had.[2] However a post covenant restraint contained in a contract of employment deprives the employee of his right to earn his livelihood and to make a living which is an inalienable right of every individual before he enters into a contract of employment and a restraint in this regarded is accordingly construed by Indian Courts as invalid and unenforceable under Section 27 as it is intended to stifle competition and secure freedom from competition and not to protect the legitimate interest of the covenantee. This principle and the underlying principle and object of Section 27 have been spelt out clearly in a catena of judgements which are as follows:

i. In Wipro Limited v. Beckman Coulter International S.A. [2006 (3) ARBLR 118 Delhi), the Delhi High Court has laid down the four basic commandments of restrictive covenants. These commandments are based on various judgments of the High Courts and the Supreme Court (1) restrictive covenants during the subsistence of a contract would not normally be regarded as being in restraint of trade, business or profession unless the same are unconscionable or wholly one-sided (2) post-termination restrictive covenants between employer and employee contracts restricting an employee’s right to seek employment and/or to do business in the same field as the employer would be in restraint of trade and therefore void (3) Courts take a stricter view in employer-employee contracts than in other contracts the reason being that in employer-employee contracts, the norm is that the employer has an advantage over the employee and (4) the question of reasonableness as also the question of whether the restraint is partial or complete is not required to be considered at all whenever an issue arises as to whether a particular term of a contract is or is not in restraint of trade, business or profession.In Krishan Murgai v.

ii. In Superintendence Company of India (AIR 1979 Del 232), the Delhi High Court deliberated over whether a contract of employment, entered into by the appellant with the respondent, which prohibited him from engaging in similar business as that of the respondent, during his employment, and for a further period of 2(two) years after the termination of his employment was violative of Section 27 of the Indian Contract Act,1872. The court held that Section 27 does not distinguish between reasonable or unreasonable restraint of trade and therefore any restraint imposed on the employee after the term of employment, would prima facie be void and unenforceable

iii. In TaproggeGesellschaft MBH v. IAEC India Ltd (AIR 1988 Bom 157), the Bombay High Court held that a restraint operating after termination of the contract to secure freedom from competition from a person, who no longer worked within the contract, was void. The court refused to enforce the negative covenant and held that, even if such a covenant was valid under German law, it could not be enforced in India.

iv. In Pepsi Foods Ltd. and Ors. Vs. Bharat Coca-Cola Holdings Pvt. Ltd. and Ors. [1999 SCC Online Del 530], it has been held that “post termination restraint on an employee is in violation of Section 27 of the Indian Contract Act, 1872. A contract containing such a clause is unenforceable, void and against public policy and since it is prohibited by law it cannot be allowed by the Courts injunction. If such injunction was to be granted, it would directly curtail the freedom of employees for improving their future prospects by changing their employment and such a right cannot be restricted by an injunction. It would almost be a situation of economic terrorism creating a situation alike to that of bonded labour“.

v. In Percept D’Mark (India) Pvt. Ltd. Vs.Zaheer Khan and Anr [(2006)4 SCC 227], the aggrieved respondent had agreed to a right of first refusal in favour of the appellant which extended beyond the term of the agreement, the apex court considered such a contract for personal services to be void and concluded that any restriction extending beyond the term of a contract is clearly hit by section 27 of the Contract Act, and is void. Accordingly the Supreme Court held that “Clause 31(b) contains a restrictive covenant in restraint of trade as it clearly restricts respondent No. 1 from his future liberty to deal with the persons he chooses for his endorsements, promotions, advertising or other affiliation and such a type of restriction extending beyond the tenure of the contract is clearly hit by Section 27 of the Contract Act and is void.“

Example

The employee shall not join any company carrying on a business similar to the business of the Company or carry on any business similar to the business of the Company during the contract of employment and for a further period of (●) years from the termination of the contract of employment.

The above example is a case of a non-compete clause which is unenforceable as it causes the restraint to operate after the termination of employment.

b) Foreign contracts incapable of being performed under Section 27

An agreement that has been made abroad but to be performed in India which is an agreement in restraint of trade under Section 27, shall be void and unenforceable in the Courts of India even if such an agreement is unobjectionable and valid by the lex loci contracts.[3] Thus where a contract of agency contains a restraint by which the agent company (Indian company) is restrained from dealing with other products for a period of 5 years after the termination of agency, the restraint being a negative covenant post termination of the contract, shall attract provisions of Section 27 and will be void and unenforceable under Indian Law even though the agreement was valid under German law. This rule which is applied by the Courts in India finds its origins in English Law.

c) Garden leave clause operating after cessation of employment

A garden leave clause is incorporated in contracts of employment to protect the employer’s latest trade, commercial secrets from being disclosed by the resigning employee or the employee whose contract is being terminated. It seeks to compensate the employee for the notice period, wherein the employee is not required to attend to the service of the employer. However, where a garden leave clause in a contract of employment, prohibits the employee to take up employment after the cessation of the employment it shall attract Section 27 and the clause shall be unenforceable against the employee. Payment of compensation to the employee for the period for which the restraint operates will not be construed by the Court as an extension of the contract as the clause is expressly stated to take effect only after the cessation of employment i.e. the employee serving his notice period and ceasing to be on the rolls of the company. This principle has been enunciated in the case of V.F.S. Global Services Private Limited vs. Suprit Roy [(2008)3 Mah LJ 266]

Example

Upon termination of the contract of employment, the employee agrees not to attend to the office of the employment or join any company carrying on a business similar to the business of the Company or carry on any business similar to the business of the Company for the entire duration of the notice period. The Employee shall continue to receive his entitled remuneration for the notice period. – Enforceable

Upon termination of the contract of employment, the employee agrees not to attend to the office of the employment or join any company carrying on a business similar to the business of the Company or carry on any business similar to the business of the Company for the entire duration of the notice period and for a further period of (·) years from the cessation of employment i.e. when the employee ceases to be on the payroll of the company. The Employee shall receive his remuneration on a __ (prorated basis) for the entire duration of the notice period and the further period of (·) years thereafter from the date of termination of employment. – Unenforceable

II. Agreements not held to be in restraint of trade

 The Supreme Court has held that a restraint on trade, whether general or partial, may be good if shown to be reasonably necessary for freedom of trade. A restraint reasonably necessary for the protection of the covenantee must prevail unless some specific ground of public policy can be clearly established against it. It has been further held by the Supreme Court that restrictions that are to operate only while the employee is contractually bound to serve his employer are never regarded as being in restraint of trade, at common law, or under Section 27. Therefore, where a clause imposes a partial restraint, prohibiting the employee from performing services in the same area of business, as that of the employer, during the stipulated period of the agreement, such restraint would not violate Section 27.A covenant in restraint of trade must be reasonable in reference to the parties concerned and in reference to the interest of the public.[4] Cases of agreements imposing restraints not being a restraint of trade under Section 27 are as follows:

a) Negative covenant during the subsistence of the contract

A negative covenant in a contract of employment which is operative for the term of the contract of employment will not attract the provisions of Section 27. The very purpose of a restraining the employee from joining a competing business, trade or profession during the contract is to ensure the employee’s performance and fulfilment of the terms of a legally binding contract entered into with the employer. In this regard, it is important to understand the difference in the intention of an employer incorporating a negative restraint operative during the term of the employment as opposed to the intention of the employer incorporating the negative covenant to be operative post termination of employment.

The purpose of the employer imposing a negative covenant after cessation of the employment is to secure freedom from competition from a person who no longer works within the contract. It is intended to prohibit the employee from profiting out of the skill acquired during the period of his employment with the employer. As opposed to this, the purpose of an employer imposing a negative covenant operating during the contract of employment is to ensure the employee’s performance and fulfilment of the terms of the contract. Thus, it is clear that when a direct link can be established between the purpose of the employer in imposing the restraint and the need to ensure the performance of the contract, the court considers the restraint valid. However where no direct link can be established between the purpose of the employer imposing the restraint and the contract entered into and where the sole intention of the employer appears to be to secure the freedom from competition, the restraint is regarded as unfair exercise of the employee’s bargaining power and held to be unreasonable, invalid and unenforceable under Section 27.

A negative covenant in a franchise agreement prohibiting the franchisee from dealing with competing goods during the subsistence of the contract is for the advancement of the trade and facilitating the distribution of the goods of the franchiser and not to secure freedom from competition and such a restraint is construed as valid and enforceable under Indian Law. In this regard, in Gujarat Bottling Company Ltd and Ors. v. Coca Cola Co. and Ors. 1995 (5) SCC 545 it has been held that “There is a growing trend to regulate the distribution of goods and services through franchise agreements providing for the grant of franchise by the franchiser on certain terms and conditions to the franchisee. Such agreements often incorporate a condition that the franchisee shall not deal with competing goods. Such a condition restricting the right of the franchisee to deal with competing goods is for facilitating the distribution of the goods of the franchiser and it cannot be regarded as in restraint of trade.”

Example

The employee shall not at any time during the contract of employment and prior to cessation of employment with the Company join any company which is carrying on a business similar to the business of the Company or carry on any independently any business which is similar to the business of the Company. – Enforceable

b) Negative covenant to protect the trade secrets and business connections

A clause prohibiting an employee from disclosing commercial and trade secrets is not in restraint of trade as the intention of the restraint is to afford protection to the legitimate interest of the covenantee in guarding the trade secrets, business connections in relation to the business of the company and does not restrain the employee from carrying on any lawful trade, occupation or business. Further in one case – V.F.S. Global Services Pvt. Ltd Vs Mr. Suprit Roy, 2008(2) Bom CR 446, the Bombay High court established the principle that a restraint on the use of trade secrets during or after the cessation of employment does not tantamount to a “restraint of trade” under Section 27 of the Act and therefore can be enforceable under certain circumstances.

c) Non-Compete Agreement to protect the goodwill of the business being sold (Ambit of Exception 1 to Section 27)

 Even as regards a sale of business between the vendor and purchaser of business, a non-compete agreement to not carry on the business of the company sold shall not be permitted where the sole intention of the restraint is to secure freedom from competition and not to protect the goodwill of the business sold. Where the business carried on by the buyer of the business has no connection with business of the seller, the non-compete agreement to restrain the seller of the business to not carry on similar business shall be construed as a restraint intended to limit competition and not to protect the goodwill of the business sold to the buyer and will be rendered invalid and unenforceable by the court.

This principle can be better explained by enunciating the principle laid down in the case of Vancouver Malt & Sake Brewing Co v Vancouver Breweries Ltd. A company licensed to manufacture beer and liquor confined its business to produce sake – Japanese liquor made from rice. Thereafter the company entered into an agreement wherein its business was sold to another wine and beer manufacturing company. The company was restrained from carrying on the business of manufacturing wine and beer for a period of 15 years. It is to be seen here that, the Company not having engaged in the business of manufacturing beer did not possess any goodwill to be sold and thereby protected by the buyer in the form any restrictive covenant. The goodwill of the company was only in regard to the Company’s business of manufacturing sake, which was expressly excluded from the terms of the sale. Therefore a restrictive covenant of this nature only intended to prevent any possible competition by the company in the manufacturing of beer and not to protect the goodwill of the seller.

To protect the goodwill of the business sold to the buyer, the seller can be restrained within certain territorial or geographical limits and the limits must be reasonable. Reasonableness of restrictions will depend upon many factors, for example, the area in which the goodwill is effectively enjoyed and the price paid for it.[5] In the case of Chandra Kanta Das v. Parasullah Mullick[6], it has been held that a covenant or running a ferry for only a few months in competition with the long-established business of the covenantee was held to possess goodwill for the purpose of restraining him from carrying on that business for three years.

Tax Implications on Non-Compete Fees paid for Business Acquisition

Under Section 27 of the Indian Contract Act, only in the instances of the sale of a business where the goodwill of the company is also being sold can a non-compete agreement be enforced against the seller of the business by the buyer for the protection of the goodwill of the business.  However, the restriction must appear to be reasonable to the Court as regards the local limits to which the restraint operates and the buyer or any person deriving title to the goodwill from him, must carry on a like business therein. Goodwill is an intangible asset, whose tangibility can be recognized in terms of its brand value and repute enjoyed in the market acquired through years of experience acquired in the concerned industry. Thus if the fair value of a company is Rs.100 Crores and the value of its assets is 50 Crores, the balance 50 Crores is attributable to goodwill accruing from the experience and reputation of the company in the industry. Hence the price paid by a prospective buyer over and above the value of the Company’s assets will constitute a payment towards the goodwill enjoyed by the Company. In this regard, on a business acquisition, the buyer also incurs a substantial expenditure in acquiring the goodwill enjoyed by the seller of the business and it is to protect this goodwill that a non-compete agreement is entered into between the buyer and seller of the business.

1. Tax Implications on the Seller of the Business

The tax treatment of non-compete fees received by the seller of the business can be understood better by the principle set out in the case below.

The ITAT, in Ramesh D. Tainwala’s case [7] had observed that if the agreement to refrain from indulging in competition is part and parcel of the agreement for transfer of a business and the transferor agrees not to indulge in competition, then it can be said that right to carry on same or similar business was transferred along with the business.

To fulfil this requirement is essential to attract the exception under Section 28(v) (a) of the Income Tax Act, 1961 which exempts any income tax from being paid on amounts received in lieu of the right to carry on business being transferred by the seller of the business. Further to attract Section 28(v) (a), the seller of the business must not merely sell its shareholding but also an ongoing business being carried on by the seller. It has been held by the Income Tax Appellate Tribunal in a judgment [8] that Section 28(v) (a) would be attracted where the assessee was carrying on a business and not merely had the right to conduct business.

2. Tax Implications on the Buyer of the business

Under the Indian tax regime, the buyer of the goodwill of a business is not accorded with any tax protection upon acquisition of a business. As held by the Delhi High Court in a judgment[9] dated November 5, 2012, the non-compete fees paid by the buyer to acquire the non-compete right (asset) is treated as a capital expenditure and not a revenue expenditure as by restraining the seller having a substantial market share in the business acquired from carrying on a similar business, the buyer stands to benefit by having a substantial market share in the business and acquires a commercial advantage for the period for which the non-compete operates. This is seen as a capital expense under the Indian tax regime. Further it has also been held that, the non-compete right being acquired by the buyer, cannot be regarded as an intangible asset as in the case of intellectual property rights such as patents, trademarks and copyright  as the intellectual property rights are enforceable against the whole world and not just against the seller of the goodwill of the business.

Trading Combinations

It has been held that an agreement between manufacturers not to sell their goods below a stated price, to pay profits into a common fund and to divide the profits in certain proportions, is not avoided by Section 27, and cannot be impeached as opposed to public policy under Section 23, even though it is likely to limit competition and keep up the prices.[10] Thus where associations of traders have entered into a combination where it was agreed to do business only with those who became members of the association and where fines would be imposed for any breach of conditions by the members, such a trade combination cannot be considered as a restraint of trade. The object of the association is to regulate competition and not to restrain competition wherein the members were not coerced into not doing business with anyone else. Every prospective member had the option to choose to become a member and subsequently comply with the conditions or enter into business with another trader and therefore any indirect damage caused to the trade rivals in the bargain will not be attributable to the trade combination being in restraint of trade.

Solus or Exclusive Dealing Agreements

Solus Agreements are in the nature of vertical agreements which take place between firms in different levels of the supply chain such as manufacturers and distributors, manufacturers and consumers, suppliers and retailers etc. Thus where a manufactures enters into an agreement to sell all of his salt or all of his goods to a consumer for a fixed period, such an agreement is an example of a solus agreement and will fall outside the scope of Section 27 of the Indian Contract Act, 1872. The negative stipulation in respect of the buyer in such an agreement is to not buy the goods from any other manufacturer during the subsistence of the contract, and such a negative stipulation is ancillary to the main object of the contract i.e. ensuring the manufacturer has a certain market for the product of his labour and therefore in advancement of the manufacturers trade. Therefore, the negative stipulation is not prejudicial to the legitimate interest of the parties concerned and ensures that there is no obstruction to the due course of trade.

Employment Bond

In the context of Indian Law, it is a settled position that non-compete agreements imposing restraints operating post termination of employment will not be enforced by Courts. However in certain situations by requiring the employee to enter into an employment bond with the employer, the employer can make the employee compensate the employer in the event of a breach of the employment bond i.e. when the employee after agreeing to serve the employer for an agreed period in return for the employer providing the employee with specialized training at the employer’s cost (provided the term is reasonable in the opinion of the court) has terminated the contract and not honored the terms of the bond. In such a case, the employer is entitled to a reasonable compensation for the costs incurred on training the employee not exceeding the amount of the bond. Although the employment bond cannot compel the employee to work with the employer it acts as a deterrent and protects the employer in the event of any breach. It also ensures the employee only terminates the employment as a last resort being aware of the consequences viz. need to pay the compensation. Thus the terms of the bond create a restraint which can cause the employee to think twice before terminating the employment due to the onus of having to pay compensation. The ultimate aim of the employer in this manner can be achieved without it being unenforceable, provided the terms of the bond are reasonable and the employee signs the agreement acting out of free will and consent. By resorting to an employment bond, the employer can achieve the following two objectives:

• Compensation for breaching the bond can cause the employee to honour the term of the bond and refrain from terminating his employment;
• Even where the employee commits a breach of the bond, the employer can be reasonably compensated by seeking civil remedies before the appropriate civil court

In the case of Sicpa India Limited V. Shri Manas Pratim Deb, the Plaintiff had entered into an employment bond with the Defendant, under which the Defendant had agreed to serve the plaintiff for a period of three years or make a payment of Rs. 2, 00,000. The Defendant left the services of the Plaintiff after serving for a period of 2 years and in the same period, the Plaintiff had incurred expenses on the Defendant amounting to Rs. 67,995. Upon giving due regard to duration of employment of the Defendant and the total costs incurred by the Plaintiff, the Court ordered the Defendant to pay a compensation of Rs. 22,532 to the Plaintiff, thus providing the Plaintiff what was in the opinion of the Court an adequate remedy

III. Rationale of the judiciary in interpreting Section 27

a) Courts take a stricter view of covenant between master and servant as compared to covenant placed in commercial contracts

Why do the Courts in construing whether a restraint is restraint of trade adopt a stricter approach in respect of employer-employee contracts as opposed to partnership contracts, collaboration contracts, franchise contracts, agency/distributorship contracts and commercial contracts? Essentially, because a contract of employment involves a master-servant relationship, wherein the employer has a stronger bargaining power over the employee whereas in the case of other commercial contracts both the parties are of equal strength and standing in the market.Moreso, a negative covenant after cessation of the employment is intended to secure freedom from competition and prohibit the employee from using the skills acquired during his employment for pursuing better economic prospects. As regards a contract between a vendor and purchaser of business both parties have an equal say at the time of negotiation and in the event of any disagreement at the time of negotiation, one of the parties may simply opt out and negotiate with another party on like terms. In the case of an employee who at most times will be required to sign standard form contracts, however prejudiced against him they may be, the employee has a job to lose by not signing on the dotted line. This disparity in the employer- employee relationship allows the employer to dictate terms to the employee and comply with unreasonable restraints in a contract. For this reason, a negative covenant in a contract of employment is interpreted much more strictly and in favour of the employee by the Indian judiciary to see to it that the bargaining power of the employer has not been unfairly exercised to the detriment of the employee’s interest.

However, the Court shall uphold restraints against the employee to protect the proprietary rights of the employer such as trade secrets, confidential information but where the restraint is to prevent the employee from joining a competing business at the risk of business loss caused by the exiting employees knowledge, skill and experience acquired during the course of the employment with the employer, the court shall invalidate such restraints as every employee shall be entitled to utilise the skill and expertise acquired during his employment  for his best interests and a denial of such right shall impinge on his to right to earn a livelihood and right to live a dignified life.

IV. Non-Compete Clause and the Securities Exchange Board of India Act, 1992

In the event of an acquisition of a company by another person/group of persons/company, it is understood that the acquirer takes over substantial control of the shares, business, and voting rights of the company being acquired. This makes it necessary and imperative for the acquirer to enter into a non-compete agreement with the company/person/group of persons whose shares and goodwill of the business it’s acquiring to prohibit them from carrying on a business similar to the business of being of the company being sold to the acquirer. To enforce the non-compete agreement, the Court shall ascertain it’s reasonableness in terms of the duration of the restraint, area in which the goodwill is effectively enjoyed and whether the territorial restriction in this regard is justified and whether price paid for protection of the goodwill is commensurate with loss that would be suffered by the seller of the business.

In carrying out such transactions involving acquisition and takeover of a business enterprise it must be kept in mind that the jurisdiction of Securities Exchange Board of India Act,1992 (“SEBI”) shall be triggered if the non-compete fees paid to the seller of the business is in excess of 25% of the offer price, offered to the public shareholders. According to Rule 20(8) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, where the non-compete fees shall be in excess 25% of the offer price, the non-compete fees shall be added to the offer price. This rule was adverted to and applied in a recent ruling [11]where Sebi had erred in taking jurisdiction involving an acquisition of a target company by another corporate body, where the non-compete fees did not exceed 25% of the offer price. The rationale behind introducing this rule was to disallow the acquirers from paying a token consideration amount for acquisition of shares and an excessive non-compete fees which actually constituted a major share of the actual consideration of the acquisition agreed to at the time of negotiation. By resorting to this approach, the acquirer got away with paying a token amount as consideration for the transaction to the promoters and public shareholders to whom it would be required to make an offer of the same kind in terms of price per share, made to the promoter. Thus with the introduction of Rule 20(8) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, SEBI has reduced the elbow room for the acquirers to resort to lowering the cost of acquisition by paying an excessive non-compete fees.

It has been held by the Supreme Court that in order to determine the eligibility of entities being paid a non- compete fees by the acquirer, the eligibilities of the entities are to be considered as a whole. Thus, where a few entities are not carrying on the business of the company sold and are not a possible competition to the acquirer, the non-compete agreement in its entirety shall be regarded as a sham and not only as regards the specific ineligible entities.

V. Non-Compete Clause and the Competition Act, 2002

In drafting a non- compete clause regard must be had that the clause does not have an appreciable adverse effect on competition within India. Section 3 of the Competition Act prohibits and makes void any anti-competitive agreement that in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, causes or is likely to cause an appreciable adverse effect on competition within India.

Appreciable adverse effect on competition in India would mean acts, contracts, agreements or combinations which are prejudicial to public interest and unduly obstruct the due course of trade. In all such cases where a non-compete clause in agreements involving sale of business contain a restraint denying the public the fruits of labour and which are prejudicial to the interest of the public, the combination will not be allowed to take effect by the Competition Commission of India (“CCI”) in terms of powers enshrined to the CCI under Section 31 of the Competition Act. It is in this vein that CCI in its recent decision accepted modifications in relation to the non-compete obligations entered into between parties to the combination. In respect of the non-compete obligations entered into between the parties, CCI opined that the non-compete obligations in relation to the business transfer agreement constituting the combination must be reasonable. Reasonableness has to be ascertained in terms of i. the duration over which such restraint is enforceable and ii. the business activities, geographical areas and person(s) subject to such restraint, in order to ensure that such non-compete obligations do not result in an appreciable adverse effect on competition[12]

In this case, the non-compete clause imposed a restriction upon one of the parties and its promoter to not carry on the same business of the transferred entity for five years and eight years respectively. Additionally, the non-compete clause imposed a restriction upon the party from conducting research, development and testing of Penem (including Carbapenem) and Penicillin API’ (Active Pharmaceuticals Ingredients) for injectable formulations. In the opinion of the CCI, the restriction regards duration to not carry on business was unreasonable and to not carry on research and development of the product which was not existent worldwide would be prejudicial to public interest and obstruct due course of trade and therefore cause the appreciable adverse effect in competition within India. It was in line with CCI’s opinion that modifications were carried out, pursuant to which the proposed combination was approved by the CCI under Section 31(1) of the Competition Act.

VI. Contrasting Non-Compete under Indian law with law in the U.S.A. and U.K

a) Non-Compete Law in the U.S.A

The law as regards the enforceability of restrictive covenants in the United States of America varies from state to state and is not a matter of federal law. Unlike the law stated under Section 27 of the Indian Contract Act which regards all agreements in restraint of trade as void, the Courts in most of the American jurisdictions apply the test of reasonableness in determining the enforceability of non- compete agreements which are also similar to the law in England. This test of reasonableness takes into account three factors, them being:

1. Duration of the restriction
2. Geographic scope of the restriction
3. Substantive nature of the activity being restricted

The law on restrictive covenants in California differs on this count and follows the principle envisaged under Section 27 of the Indian Contract Act i.e. Restrictive covenants operating post termination of the employment are void and unenforceable except in the case where there is a sale of interest in the business or goodwill in order to protect the goodwill acquired by the buyer from the seller. Even where cases are covered under such an exception, the test of reasonableness explained above shall be applied in enforcing such a restrictive covenant. The law in the United States permits employers to protect the confidential information and trade secrets post termination provided that the employers can prove that the nature of information for which restriction is sought can indeed be classified as either a) confidential information or b) a trade secret.[13]

It is interesting to note that the Courts in the United States are more often than not inclined towards enforcing non-compete clauses even in cases where they do not meet the test of reasonableness by adopting these two approaches: a) Blue Pencil Doctrine and b) Rewriting the Offending terms.

For instance if the terms of the non-compete clause restrict the employee working in Seattle from engaging with any competing business situated within Seattle and the whole of U.S.A. post termination of employment, the Courts (such as in North Carolina) shall by adopting the blue pencil doctrine, delete the offending terms i.e. the “United States of America” and render the non-compete clause enforceable within Seattle. However, where the terms of the non-compete clause are such that its duration is considered unreasonable and excessive, the Courts (such as in Washington) do resort to a reformative approach whereby they rewrite the term of duration they find excessive e.g. 7 years and let the duration extend to two years so as to make the non-compete clause enforceable.

b) United Kingdom

The treatment of the non-compete law by the Courts in the United Kingdom is similar to the approach followed by the judiciary in the United States in that the Courts apply the test of reasonableness in determining whether the non-compete clause can be enforced or not. In enforcing a negative covenant, the Courts place importance on whether such a restraint is necessary to protect the legitimate business interest of the employer. In light of this, the UK Court of Appeal passed a judgment [14] dated February 2007, wherein it upheld a non-compete clause operating for a period of 12 months after the contract of employment. In this case, a non-compete clause operating for a period of 12 months was inserted by the insurance broker in relation to the contract of employment of its managing director. The managing director after terminating the employment with insurance broker instituted court proceedings in respect of the validity and enforceability of the non-compete clause. The Court of Appeal passed an eye-opening judgment and upheld the restraint by relying on the following principles:

• In cases where it is difficult to ascertain the confidential information covenantee exposed to the covenantee, a non-compete clause operates as the most satisfactory restraint in addition to a non-solicitation and confidentiality clause as the same are difficult to police and the covenantee might as well not solicit the clients directly but direct others to do so.
• Nature of the employment i.e.stature of the managing director naturally exposed him to information relating business strategy, business development, business operations and information which would amount to trade secrets and be of continuing interest to any competitor and merit satisfactory protection by way of a non-compete clause.

In drafting a non-compete clause in the U.K., a careful approach is a must as unlike some of the Courts in the USA, the UK Courts will not adopt the reformative approach in rewriting and making good the terms of the covenant they find unenforceable. If a covenant contains particular words or clauses that render it unenforceable, the court can delete them if the remaining words would still make sense i.e. the blue pencil doctrine, but it will not make substantive revisions.

However, in general, the Courts in the U.K. are not in favour of enforcing restrictive covenants operating beyond the termination of employment unless a clear case of the need to protect a legitimate interest can be shown by the covenantor. In this respect, the most hassle-free alternative to enforcing restrictive covenants in the U.K can be by incorporating a “garden leave” clause in the contract of employment. More so, as all employees in the UK have a notice period (and executives often have a 6 to 12 month notice period), a garden leave shall ensure the employees while remaining on the payroll of the Company do not attend the employment and gain access to any of the latest trade secrets, confidential information concerning the business and the clients of the covenantor. As such, it is easier to enforce the garden leave clause in the U.K (and thereby prevent the executive from working for a competitor) than enforcing a restrictive covenant

VII. Contrasting Non-Solicitation with Non-Compete

 Non-compete clauses are restrictive covenants which prohibit the employee from joining any other competing business during and/or after the contract of employment.

Non Solicitation clause is engrafted into a contract to bar the former employee from inducing the customers and employees of the former employer to his own benefit.

a) Why the Courts are more liberal in enforcing the non-solicitation clause

Non-Compete and Non- Solicitation clauses are enforceable during the subsistence of the contract and till the cessation of the contract of employment. However, where a non- compete clause cannot be enforced beyond the term of employment, the non-solicitation clause can be enforced under limited circumstances depending on the facts and circumstances of the case. The Court’s adopting a more liberal stance in enforcing non-solicitation clauses as opposed to non-compete clauses is because of two reasons mainly:

i. It poses no restriction on the former employee’s constitutional right to earn a livelihood by causing the former employee to surrender his economic mobility and does not prohibit the former employee from joining a competing business or organization in the advancement of polishing the skills acquired under the training of the former employee

ii. It does not prohibit the former employee from joining a competing business or organization in advancement of polishing the skills acquired under the training of the former employee

It is for this reason that it has been held that the non-solicitation clause does not amount to a restraint of trade, business or profession and would not be hit by Section 27 of the Indian Contract Act, 1872 as being void[15].

b) Judicial Pronouncements on enforceability of non-solicitation clause post termination of contract

i. The Madras High Court in this judgment[16] considered the enforceability of non-solicitation clause operating beyond the contract of employment. The court held that in order to enforce a non-solicitation clause it is imperative to show that the employee has solicited the customers of the former employer and the customers have gone on to place orders in furtherance of the employee’s act of soliciting the former employer’s customers. In the absence of evidence to show the same, no remedy/damages can be claimed by the former employer. In principle, the employee should have by his solicitation of the former employer’s customers, caused them to break the contract with the former employer and enter into contracts with the employee or his new employer.

ii. In a landmark judgement, [17]the Delhi High Court enforced a non-solicitation clause post termination of the contract entered into between a company and its Canvassing Representative/ Distributor. Under the terms of the non-solicitation clause envisaged in the contract, the contracting parties were restrained from soliciting and alluring the employees of the other party for a period of two years from the termination of the contract. The Respondent Company had pursuant to the termination of contract issued an advertisement stating their interest to recruit employees who have had previous experience of dealing with the company with whom the petitioners have had the experience of dealing with. The advertisement was clearly hinted to induce and lure the employees of the Petitioner Company to enter into a contract with the Respondent Company and the act was construed as an act of soliciting the employees of the Petitioner Company in violation of the non-solicitation clause. In enforcing the non-solicitation clause, the Court had specifically stated that the contract was not of an employer – employee and as such restraint was upon the contracting parties and not the employees.

iii. In another judgment[18], the Calcutta High Court held that an employee of the former employer shall not cause the customers of the former employer to break their contracts with the former employer or prevent the customers from entering into contracts with the former employer. It was held that in the absence of a non-solicitation clause, a solicitation by the employee which damages the business of the former employer shall still constitute a tort. In this case, the exiting employees had prior to terminating their employment with the employer, incorporated a company which they joined after terminating their contract of employment. This company incorporated by them carried on the same business as that of the former employer and the employees had access to information which would constitute trade secrets of the former employer. In view of the same, the Courts in order to protect the legitimate interest of the former employer ruled in favour of the restraint of non-solicitation.

iv. In another judgment[19], the Delhi Court by an order of injunction restrained the Defendant from soliciting the suppliers, customers and employees of the Plaintiff for a period of two years from the date of termination of the Agreement. In this case, the Defendant joined the Plaintiff Company as a sales manager and was as such privy to the information relating to the sales strategy, client lists, trade secrets which were for the exclusive knowledge of the Plaintiff and which would be of continuing interest to any competitor. As per the obligation agreement, the Defendant was restrained from associating with customers, suppliers and employees of the Plaintiff Company for a period of two years after termination of employment. In contradiction to this understanding, the Defendant joined a third party which was a direct competitor to the business carried on by the Plaintiff company i.e. sale and marketing of similar products. Therefore the Plaintiff company was at the risk of having its trade secrets  (in relation to sales strategy, technical know how) let out to its competitor as the same would be of continuing interest to the competitor to the detriment of the Plaintiff business. The court considered the same in ruling in favour of enforcing non-solicitation.

VIII. Contrasting Non-Disclosure with Non-Compete

Even in the absence of any non-confidentiality agreement or secrecy agreement entered into between the employer and the employee, the employee owes a duty of fidelity to his employer to not divulge confidential information to any third party during the contract of employment. Even post termination of employment, the judiciary has in several cases enforced secrecy agreements and non-confidentiality agreements operating beyond the termination of employment. In all such cases the nature of the confidential information which was sought to be protected was in the nature of trade secrets which would be of continuing interest to the direct competitor and as a result damage the business of the former employer. In enforcing non-confidentiality agreements post termination of employment, the Courts take into consideration whether the information for which protection is sought is information intended to belong exclusively to the knowledge of the former employer or whether such information/skill has been acquired by the employee through the employee’s own efforts and experience in the industry. To accord protection to information of the latter kind would be enforcing a restraint which is intended to stifle competition and not in the advancement of trade and would be hit by Section 27 of the Indian Contract Act. However unlike non-compete agreements intended to operate post termination of employment which are void under Indian Law, the Courts accord a more liberal construction to enforcing non-confidentiality agreements by taking into account the legitimacy of the business interest for which protection is sought and whether such information if divulged to a third party who is a direct competitor can be utilised to the former employer’s detriment.

a) Judicial Treatment of Non-Confidentiality Agreements

 In a judgment[20] passed by the Kolkata High Court, the Petitioner, an organizer of travel trade shows entered into a Non-Disclosure agreement with the Respondent for a period of 6 months in anticipation of entering into a joint venture agreement with the Respondent on a later date. As per the terms of the Non-Disclosure Agreement, the Respondents were restrained from disclosing the confidential information for a period of 2 years from the date of the termination of the Non-Disclosure Agreement. The nature of information for which the Petitioner was seeking protection related to 1) marketing strategy, 2) customer base, 3) costing and 4) profitability of organizing travel trade shows. Subsequently, when the parties failed to conclude the negotiations, the Petitioner prayed for an order of injunction from the court to prevent the Respondent from utilizing the confidential information for a period of 2 years from the date of termination of the Non-Disclosure Agreement. The High Court held that “Business information such as cost and pricing, projected capital investments, inventory, marketing strategies and customer lists may qualify as trade secrets” and passed an order of injunction restraining the Respondent from sharing any information concerning the marketing strategy and customer base received from the Petitioner for a period of 2 years from the date of termination of the NDA thereby enforcing the secrecy agreement post termination. In enforcing the NDA post termination, the Court also relied on the principle that “a person who has obtained confidential information cannot use it as a springboard for activities detrimental to the person who has made the confidential information”. In determining what shall constitute confidential information the court relied on the rule laid down in an English case [21]which states that an information can only be said to be confidential information when it has been made by the maker who has applied his brain and produced a result which cannot be produced by another without going through the same process.

In another judgment [22]passed by the same High Court, the respondents were injuncted from divulging the confidential information which was in the nature of trade secrets possessed from the Plaintiff Company. The Plaintiff Company was engaged in the manufacturing and sale of technologically advanced highly engineered products and equipment for power and process sector industries. The Respondents, ex-employees of the company held senior positions in the Plaintiff Company and were as such exposed to trade secrets in the nature of product pricing, technological database, clientele database, queries concerning specific client, needs and demands of clients in relation to specific projects and other confidential information which were in the nature of trade secrets. During the course of employment of the respondents, the Plaintiff amended the human resource policy by which the respondents were restrained from disclosing and divulging confidential information to any third parties. The Respondents pursuant to the termination of their employment formed a business competing directly with the business of the Plaintiff. The Respondents were further guilty of transferring the confidential information contained in the computer database of the Plaintiff during the course of employment and utilising the said confidential information containing client specific information in order to solicit and meet the needs and demands of the concerned client to entice and lure the client to break the contract with the Plaintiff and only transact business with the Respondents. The Court in order to prevent a genuine case of apprehended breach of confidentiality made by the Plaintiff and depriving the Plaintiff Company of their competitive advantage acquired over a period of time, directed the Respondents to restrain from divulging the details, confidential information to a third party and acting as a sales agent for the customer of the former employer. In passing this order the Court applied the following rationale- “A trade secret or a business secret may relate to financial arrangement, the customer list of a trader and some of the information in this regard would be of a highly confidential nature as being potentially damaging if a competitor obtained such information and utilized the same to the detriment of the giver of the information. Business information such as cost and pricing, projected capital investments, inventory marketing strategies and customer’s lists may qualify as his trade secrets. The Courts need to find out if the information that was acquired during the course of their employment are now being used as the spring board to enable the said respondents to exploit such database in the course of their business”

In concluding, it can be seen that non-compete agreements are, on the whole, not enforced by Indian Courts, except if they are brought within the exception to Section 27 of the Indian Contract Act. However, even here it is for the beneficiary of the non-compete to establish that the clause meets the test of reasonableness. On the other hand, there is a growing and genuine concern for employers wanting to enforce non-compete agreements to protect their proprietary data. Given the evolution of technology and the critical role it plays in modern business, the “blue pencil” approach followed by U.S. and U.K. courts would go a long way in meeting some of these concerns. It is in this regard that amendments can be made to the law enshrined in Section 27 of the Indian Contract Act, to allow reasonable restraints to operate post termination of employment.

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References

[1] Petrofina (Great Britain) Ltd. Vs. Martin, [1966] Ch 146 per Diplock LJ, at 180, [1966] 1 All ER 126, at 138, [1966]2 WLR 318

[2] Esso Petroleum Co. Ltd. Vs. Harper’s Garage (Stourpore) Ltd. supra; cited with approval in Cleveland Petroleum Co. Ltd. v. Dartstone Ltd., [1969]1 WLR 116, [1969]1 All ER 201, [1969] 1 WLR 116

[3] Taprogge Gesellschaft mbH v. IAEC India Ltd.

[4]Niranjan Shankar Golikari v. Century Spinning and Mfg. Co. Ltd.

[5] Damodar Laxman Lele v Kashinath Waman Lele,(1906)9 Bom LR 312

[6] (1921) 48 IA 508

[7] [2011] ITAT 9545

[8] Mrs Hami Aspi Balsara  Vs. ACIT, 126 ITD 100(Mum)

[9] Sharp Business System Vs. The Commissioner of Income Tax – III [ 2012 SCC OnLine Del 5639]

[10] SB Fraser & Co. v. Bombay Ice Manufacturing Co. Ltd., (1904) ILR 29 Bom 107

[11] I.P Holding Asia Singapore Private Limited & Anr. Vs. Securities and Exchange Board of India [(2015)2 SCC 68

[12] CCI order dated 21^st December 2012

[13] Page 48 to 56 of Mayer Brown – A global guide to restrictive covenants – Americas

[14] Thomas Vs. Farr Plc and Hanover Park Commercial Limited [2007] EWCA Civ 118, [2007] IRLR 419

[15] Wipro Limited v. Beckman Coulter International S.A. MANU/DE/2671/2006: 131(2006) DLT 681

[16]M/s. FLS midth Pvt. Ltd. v M/s. Secan Invescast [2013-1-L.W. 830]

[17] Wipro Limited Vs. Beckman Coulter International S.A.[2006 SCC OnLine Del 743]

[18] Embee Software Private Limited Vs. Samir Kumar Shaw & Ors.[2012 SCC OnLine Cal 3094]

[19] Desiccant Rotors International Private Limited Vs. Bappaditya Sarkar[ 2009 SCC OnLine Del 1913]

[20] Fairfest Media Ltd.Vs. ITE Group PLC[2015(2) CHN 704]

[21] Saltmen Engineering Co.Vs. Campbell Engineering Co. Ltd.[ 1963(3) All ER 413]

[22] Hi Tech Systems & Services Ltd. Vs. Suprabhat Ray & Ors. [ Air 2015 Cal 261 ]

In this article, Karan Singh of JGLS discusses On what grounds can International Olympic Committee (IOC) suspend a country from participating in Olympics.

“Like every other athlete, I always dreamt of playing at the Olympics, and it feels really good to see that dream materialize”– Mary Kom

Introduction

Olympics Games are the international sporting events. It features winter and summer sports and 100s of countries and athletes take part in this event. The Olympics games are held every 4 years.

History of Olympic is very interesting. Olympics games began in the year 776 BC where a cook from the nearby city of Elis won the stadion race, a foot race of 600 feet long. From 776 BC, the games were held in Olympia every four years for almost 12 centuries. The ancient Olympic Games were a part of a religious festival in honor of Zeus.^[1]

After ancient, the first Olympic was held in Athens, Greece, in 1896. A Frenchman named Baron Pierre de Coubertin was responsible for the rebirth of these games who presented the idea in 1894. Baron Pierre de Coubertin also introduced the International Olympic Committee (IOC) in 1894. IOC is responsible for the authority and structure of every Olympic games.

In 2016, a number of nations participated were 207 with 11,237 number of athletes were present for the total of 28 number of sports. 2016 Olympics were held in Rio, Brazil. This was the first South American city to host the summer Olympics.

The Olympics Movement contains organization, athletes, and another person who agree to be guided by the principles of the Olympic Charter. It comprises of 3 main committees: The IOC, The International Federation(IF), and The National Olympic Committee.

The International Federation (IF)

This committee purpose is to address to the IOC concerning the Olympic charter and the Olympic movement, Including the organization and holding of the Olympic Games. This committee gives their opinions concerning the candidatures for organizing the Olympic Games, collaborate in the preparation of the Olympic Congresses and participate in the activities of the IOC commissions.

National Olympic Committees

National Olympic Committees are developed by the IOC in every country. Their mission is to develop, promote and protect the Olympic Movement in their respective country. The NOCs are the only organizations that can select and designate the city which may apply to organize Olympic Games in their respective countries. In addition, they alone can send athletes to the Games.

International Olympic Committee

The IOC acts as the guardian of the Olympic Games.It is responsible for a number of key elements in the organization of the Olympics. Every question related to Olympics is answered by IOC. IOC also has the power to elect the host city following a rigorous bidding process. IOC contributes a significant amount for the games. IOC is the main part of the Olympic Games. this committee also has the power to decide if any country is disqualified from any games on any ground.^[2]

Known as the Supreme authority of the movement. This committee promotes sport and competitions through the intermediary of national and international sports institutions worldwide. It also provides advancements of women in sports at all levels and in all structures with a view to achieve equality between men and women. It also opposes to all forms of commercial exploitation of sport and athletes. It also fights against doping and discourages the use of it.  It also promotes awareness of environmental problems.^[3] IOC has the power to remove a country and even a sports from their list. Many sports like cricket, polo, baseball has already been removed from the list.

Thomas Bach was elected president of the IOC on 10 September 2013 at the 125th IOC Session.

List of sports that will be added in 2020 Olympics in Tokyo

• Baseball: Baseball began in Olympics in 1992, but was last played in 2008 in Beijing after which it was removed in 2012 London Olympics.
• Softball: Softball was introduced in 1996 and it was disbanded in 2008 Games.

After an appeal was lost in 2013, the two sports were voted back in unanimously on Wednesday, as were the other four, which will all be making their debut at the next Summer Olympics. That includes karate, which originated in Japan, where the 2020 games will take place.^[4]

List of sports that are removed from Olympics:^[5]

Unlike countries, IOC has the power to remove sports from its list. These sports are:

• Tug of War: This game was introduced in 1900 but till 1920 it was removed from the list. But due to some controversies, it was removed.
• Cricket: Cricket was introduced in Olympics in 1900 but things got off to a rough start when the Belgian and Dutch team withdrew it from the field leaving only British team and the French team. Teams didn’t know that they are participating in an Olympic game. Until the IOC sat down to make a comprehensive record of the Games in 1912 that the two squads received official recognition as gold and silver medalists in cricket. The sport never returned to the Games.
• Basque Pelota: Unlike cricket, only two teams showed up and sports were removed from the Olympic game due to lack of participants.
• Polo: The Olympic was not able to handle this sports as it came on and off throughout the 40 years of the modern game. Only British them was competing against each other. IOC removed it because the game was not consistent in all the Olympic games.
• Water Motorsports: Motorsports were introduced in 1900 games. IN this 3 teams competed but due to bad weather 2 teams boat filled with water and they suffered engine problems and had to quit. As a result, only 1 team finished the race. It was the first time Olympic water motorsports medals were handed to one team only. Because of this reason this sport was removed.

IOC has the Power to suspend a whole country

IOC has the power to suspend a country if they see any problem with the country. It can be related to politics, war or drug use. Many grounds are given in which countries got banned from the Games. A total of 9 countries has already been banned on different grounds. These grounds are mentioned below:

If the country is involved in the war:

If the country is involved in any type of activity which is related to War, then IOC can suspend that country from Olympics. In 1920’s Olympic held at Antwerp, five countries were banned due to their involvement in the First World War: Austria, Bulgaria, Turkey, Hungary, and Germany.

IN 1948 Olympic held in London. Germany and Japan were suspended for their participation in Second World War.

Discrimination or segregation on grounds of race

If the country is involved in discrimination on grounds of race through rioting, raising slogans, terrorism, etc then IOC can suspend a country on the basis of this ground. IN 1964 Olympic held at Tokyo, South Africa was banned by the IOC from taking part due to its oppressive apartheid regime. This ban lasted until 1992.

Discrimination on the ground of sex

IOC’s main mission is to end discrimination against women. due to which, IOC banned Afghanistan from 2000 Olympic held in Sydney. Afghanistan was banned from the Olympics due to its discrimination against women under Taliban rule as well as its prohibition of sports of any kind.

Doping

If any countries athletes are involved in any kind of doping or taking drugs that are banned. The IOC will suspend that country and all the athletes from the Olympics. IOC does not promote doping and discourages it. In 2016 Olympics held in Rio, many Russian competitors were banned following revelations of state-sponsored doping. All athletes from athletics, rowing, weightlifting, and canoeing were banned.

Government Interference

If any countries government interferes with the IOC working then that country can be suspended by the IOC from participating in the Olympics. In 2016 Rio Olympics, IOC suspended Kuwaiti Olympic Committee due to interference from the government.

IOC Board executive confirms that gender equality and more innovation will be there for Winter Youth Olympic Games Lausanne 2020.

Due to the IOC collaboration with the Winter International Federation and Lausanne 2020, the IOC has ensured that more youth, more women and more innovation content will be introduced at the Winter Youth Olympic Games. The IOC also confirmed that two wave stay of athletes will be introduced for Lausanne 2020 which will give more young athletes the opportunity to participate in Winter Youth Olympic Games.  The decision of including ski mountaineering as the 8th sport in the Winter Youth Olympic Games in the Olympic Capital will be proposed.

Conclusion

For athletes Olympic games are like a dream, they work hard, they play hard for this game. For Olympic Games, IOC is the main branch on which it works. Countries should understand the role of IOC and should follow the rules that are given by IOC. IOC does not promote any doping or discrimination but then also countries or athletes do it. If there are rules, it is for everyone. IOC has made the rules for the people and only after understanding the situation of every country. Gender discrimination is very common in countries like Afghanistan, Pakistan, Dubai etc. IOC understand it very well and to make the rules strict, IOC takes steps like suspending a country from a game. It is very important to give fair chance to everyone in these types of games. IOC’s aim is to promote games in every country and discourage the activities that are not good or unfair for the athletes.

References

^[1] https://www.penn.museum/sites/olympics/olympicorigins.shtml

^[2] https://www.olympic.org/news/roles-and-responsibilities-at-the-olympic-games

^[3] https://www.olympic.org/about-ioc-institution

^[4] http://www.foxsports.com/olympics/story/these-6-sports-have-been-added-for-the-2020-olympic-games-080316

^[5] http://mentalfloss.com/article/31300/10-sports-cut-olympics

In this article, Karan Singh of Jindal Global Law School discusses the punishment of attempted suicide.

Suicide is a permanent solution to a temporary problem- Phil Donahue

Introduction

Suicide is the act of putting end to one’s own life. Suicide is no crime under the Indian Penal Code. When one attempts to commit suicide and fails it, that is punishable under the Indian Penal Code. It means when a person fails to commit suicide because of any reason only then Section 309 of Indian Penal Code will apply.

This section interprets that State has a duty to save person lives as they are valuable to them. The state is under the obligation to protect them and prevent them from dying.

Attempt to commit suicide can be because of many reasons. An attempt under section 309 of Indian Penal Code implies a voluntary action towards suicide. An attempt should be intentional and voluntary. The main ingredient of Section 309 of IPC is that it should be a voluntary attempt of self-destruction. Thus, if a person falls in a well by mistake, or takes an overdose of medicine he or she can not be guilty under Section 309 of IPC.

In Emperor vs Dwarka Poonja, there is no evidence that the accused jumped into the well to commit suicide. His own version is that he jumped just to avoid and escape from the Police. The evidence shows that he came out of the well of his own accord. The Court, therefore, quashes the conviction.^[1] The accused did not jump in the well to commit suicide, so the accused can not be held guilty under Section 309 of IPC.

Depression is the No.1 occupational disease of the 21st century says WHO. Around 49% of people under stress suffer from nausea or stomach upset. 71% people cry regularly because of stress. And over 50% of the world’s children are brought up in stressful conditions says UNESCO. 72% of students in India are unaware of how to deal with stress and its ill effect.^[2] In 2015, the number of students suicides stood at 8934. In the 5 years leading to 2015, 39775 students killed themselves. India has one of the world’s highest suicide rates for youth aged 15 to 29, according to a 2012 Lancet report.^[3] For this, we have to understand the reasons for suicide among every group of people.

Reasons Of Suicide

In India, people attempt to suicide for many reasons. It can be anything like depression, mental illness, financial difficulties, bullying etc. But every reason leads to one thing that is depression. “If a person is sad for more than 2 weeks, then it can lead to depression”- said by Dr. Solanki. Depression is the leading cause of suicide^[4]. Suicide can be prevented easily if government works for the victim and the society.The government can effort treating the mental disorder by providing proper institutions for people who are depressed or who are mentally ill.

Attempt to commit suicide is a crime in India. Indian Penal Code states act of suicide as a crime. Section 309 of Indian Penal Code provided punishment if anyone attempts to commit suicide or does any act towards the commission of such offense. He or she shall be punished with simple imprisonment for a term which may extend to 1 year or with fine or with both.

Constitutional validity of Right to Die

The constitutional validity of Right to Die under Article 21 came before court many times. Article 21 of the Constitution of India states “No person shall be deprived of his life or personal liberty except according to procedure established by law.”

It gives right to life and liberty. But does article 21 includes right to die too? The question came first time before the Bombay High Court in State of Maharashtra v Maruti Shripati Dubal^[5]. In this case, the Bombay High Court held that under Article 21 which guarantees right to life does include right to die as well and laid down that section 309 unconstitutional.

Again in P Rathinam v Union Of India^[6] a Division Bench of Supreme Court supporting the decision of the High Court in State of Maharashtra v Maruti Shripati Dubal held Article 21 unconstitutional and held that right to life does include right to die as well.

However, this issue again raised before the Five-Judge Bench Supreme Court in Gian Kaur v State of Punjab^[7]. In this case, the supreme court overruled the decision of P. Rathinam case and held that Right to life does not include Right to die in Article 21 and hence Section 309 of IPC is constitutionally valid.

Supreme Court held that Right to life does not include Right to die as life and death are inconsistent with each other. Any aspect which dignifies the life may be included but not that which extinguishes it.

How Attempt to commit suicide is decriminalized

New mental health bill decriminalizes suicide. In 2013, Healthcare bill was introduced which seeks to decriminalize suicide.

Upon considering the recommendation of the Law Commission Government of India passed the new healthcare bill that was introduced in 2013 seeks to decriminalize suicide and make access to affordable mental health institution a right for all. This was introduced in Rajya Sabha which states that the acts of suicide will not be criminalized and those attempting suicide would be treated as mentally ill. This Bill seeks to provide better health care facilities for the people who suffer from depression or mental disorder and also who tries to commit suicide. Section 124 of the Medical Health Care Bill states “Notwithstanding anything contained in Section 309 of the IPC, any person who attempts suicide shall be presumed, unless proved otherwise, to be suffering from mental illness at the time of the bid and shall not be liable to punishment under the said section”. The presumption is raised by the court now that if a person has attempted to take his own life then he must be under some mental stress or depression unless the contrary is proved.

Before this bill, attempt to commit suicide was punishable under Section 309 of IPC but after the health care bill only counseling and help is the remedial procedure and the punishment has been done away with because a person already under stress would be fearful of the punishment. He will have to undergo the remedy if in case he gets saved in his attempt to commit suicide.

This bill decriminalizing suicide and prohibiting electroconvulsive therapy: This section effectively decriminalizes suicide attempts i.e Section 309 of IPC by making it non-punishable. Electro Convulsion Therapy will be allowed only with the use of anesthesia and is not allowed for minors.

However, in 210th Law Commission Report on Humanization and Decriminalization of Attempt to Suicide, stated that attempt to suicide is because of a mental disease that deserves treatment and cares rather than punishment for that offense.

In Aruna Ramchandra Shanbaug v. Union of India & Ors^[8], Supreme Court stated that although 309 of IPC has been held constitutionally valid in Gian Kaur’s case. After the Aruna Shanbaug’s case, Parliament introduced this bill. But in the year 2016 section 309 was deleted by the parliament. A person attempts suicide in a depression need help rather than punishment.

Present Situation Of Section 309 of IPC

Presently, the punishment is waived off and Section 309 of IPC has been decriminalized. This does not mean to promote suicide, it is to help the people who are suffering from depression or mental disorder. It’s a decade-long argument about the right to die should be constitutional or not. Arguments that favor of decriminalization of section 309 was that it is a monstrous act to inflict further suffering of a man who is already in depression that he decides to end his life. It is unjust to inflict punishment on such a person. This act of decriminalization of the offense is not an invitation or encouragement to attempt to commit suicide. It is to treat them with care and not punish them further.

Does Hunger strikes comes under suicide

Hunger strikes are mainly to force the authorities to fulfill his or her demands. But it is very difficult to make out from the strike if it is to kill himself or just to force the authorities to fulfill the demands. If the intention of the person on hunger strike is to kill himself then he is likely to be guilty under Section 309 of IPC. But If it is just to force the authority and have no intention to kill himself, then he can not be prosecuted for committing suicide.

The case of Irom Sharmila Chanu. In the state of Manipur in northeast India, a young poet named Irom Sharmila Chanu began to fast in November 2000. She is on hunger strike for more than 14 years but still, she doesn’t want to eat anything. This can be a case of suicide. Even after her released, she continued her fast which forced the court to arrest her again. The court order also came at the time when the government was seeking for decriminalizing suicide attempt. The only solution would be to give her to her relatives. She needed help rather than punishment. Her strike was for some cause and not to kill herself. The government should give her medical attention rather than jail.^[9]

Conclusion

From the above discussion, the Indian Penal Code should be amended timely to make it clear so that it can work properly in modern criminal code. amendments and repeals are necessary to bring the provisions of the Indian Penal Code in tune with the current scenario. Thus, the aim of the legislature should be to evolve the provision with the time. Section 309 was inserted in IPC long back but now the situation of suicide is turned and legislature have rightly decriminalized it. Thus in no case, does punishment serve the purpose, it only makes it worst for the person who is suffering already. Hence, punishment for an attempt to commit suicide is removed by the legislature.

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References

^[1] Emperor vs Dwarka Poonja, (1912) 14 BOMLR 146

^[2] http://www.aasra.info/articlesandstatistics.html

^[3]http://www.hindustantimes.com/health-and-fitness/every-hour-one-student-commits-suicide-in-india/story-7UFFhSs6h1HNgrNO60FZ2O.html

^[4]http://timesofindia.indiatimes.com/city/jaipur/depression-is-leading-cause-for-suicide/articleshow/58073608.cms

^[5] Maruti Shripati Dubal vs State Of Maharashtra on 25 September, 1986, 1987 (1) BomCR 499, (1986) 88      BOMLR 589

^[6] P.Rathinam vs Union Of India on 26 April 1994, AIR 1844, 1994 SCC (3) 394

^[7] Smt. Gian Kaur vs The State Of Punjab on 21 March 1996, AIR 946, 1996 SCC (2) 648

^[8] [(2011) 4 SCC 454]

^[9]https://www.bostonglobe.com/opinion/2014/09/08/suicide-protest-hunger-strike-rivets-india/AsY7oQUD70EkIObJYFHJiL/story.html

In this article, Ashwini Gehlot of Institute of Law, Nirma University, Ahmedabad discusses how to file an effective complaint before the vigilance department against a corrupt Government officer.

The Vigilance Bureau has been empowered to inquire into allegations against all public servants, as defined under the Prevention of Corruption Act, 1988.

In the present scenario, the decision-making power on behalf of the public is with the government officials. Which simply means that most of the decisions regarding the welfare of the society are taken by the government officials on behalf of the people and that’s why they are holding a very responsible position in most of the situation.

The objective of the vigilance is to make sure that decisions are taken by the officers and workers to the best advantage/interest and without being unduly affected by personal supports or fears and different considerations.

Further, effectively tending to open public corruption is fundamental for the reasonable acknowledgment of economic and social rights.

The productivity of vigilance department/office can be ideally utilized only if an aggrieved individual or person possessing substantial information of corruption knows, how to access the department/agencies in a prescribed way.

The detailed methods of accessing the departments/agencies have been depicted in Central Vigilance Act 2003 and connected manually at the central level and different subservient state legislation/office notice for state-level associations.

Central Vigilance Commission

The Central Vigilance Commission was set up by the GOI by its Declaration/resolution dated 11.2.1964 following the suggestion made by the Committee on Prevention of Corruption (prominently known as the Santhanam Committee). The Commission goes about as the pinnacle body for practicing general superintendence and control over vigilance matters in administration and honesty in public life.

In compliance with the judgment of the Hon’ble Supreme Court of India in Vineet Narain and others Vs. Union of India, the Commission was accorded statutory status with effect from 25.8.1998 through “The Central Vigilance Commission Ordinance, 1998”^[1].

Since the CVC Bill was passed by the House of the People and was pending before the Council of States and since the CVC Ordinance, 1999 was to expire on 5th April 1999, the Government of India (Department of Personnel & Training) passed a Resolution (dated 4th April 1999) to continue the Commission beyond 5th April 1999. Thus, the Commission would continue to discharge its duties and exercise its powers under this Resolution.^[2]

Functioning Of Vigilance Department

At Central level, the CVC Act mandates the appointment of CVO (Chief Vigilance Officers) in the secretariat department and vigilance officers in the directorates, public undertakings and autonomous bodies to play an extremely crucial part in the task assigned to the Commission.

Further, essential duty regarding maintenance of integrity, purity and productivity/efficiency in the association vests in the Secretary of the service/ministry or the leader of the department or the CEO of the PSE (public sector enterprises)

Such authority, in any case, is availed by an officer called the Chief Vigilance Officer (CVO) in the discharge of his vigilance functions. The CVO works as a special subordinate (supporter)/assistant/consultant to the CEO and reports specifically to him on all issues related to vigilance. He heads the vigilance department of the association concerned and gives a connection between his association and the central vigilance commissioner and his association and the Central Bureau of Investigation.

Furthermore, it has been given that enormous divisions/organization ought to have a full-time CVO, i.e. he should not be loaded with other duty.

In the event that it is viewed as that the CVO does not have full-time vigilance work, he might be endowed with such functions that fill in as input to vigilance activity e.g. review and inspections.

The work connected with security and vigilance, ought not to be given to the CVO as all things considered, the CVO would discover almost no time for efficient performance of vigilance function.

Besides, with a specific end goal to be effective, he should ordinarily be an outsider designated for a fixed tenure on nomination terms and should not be permitted to get retained in the association either during the currency of delegation period or on its expiry.

Hence, it can be said that the CVC functions as an organization for practicing control and general superintendence over, vigilance matters in organization and integrity in public life to the extent government servants working at the disposal of the central government or representative of central PSU are concerned.

At the state level, the state government has made different enactment/passed government memos for the establishment of the vigilance foundation basing on the central model and appropriately suiting the necessities of state governments for the public servant incorporating those working in PSUs of the state government.

The hierarchical setups and working modalities in state level vigilance foundation are pretty much same as in CVC, the legal power and working modalities differ.

What Is A Vigilance Angle?

The Chief Vigilance Officers (CVOs) in the associations have been appointed to decide upon the presence of a vigilance angle in any case, at the time of enlistment of the complaint. Once a complaint has been enrolled as a vigilance case, it should be dealt as such till its conclusion, regardless of the result of the investigation. Despite the fact that detailing of an exact definition is impractical, for the most part, such an angle could be perceptible in cases described by:

 (i) commission of criminal offenses like acceptance and demand of unlawful satisfaction, fraud, possession of disproportionate assets, cheating, forgery, abuse of official position with a view to getting the financial advantage for self or for some other individual; or

 (ii) inconsistencies reflecting adversely on the honesty/integrity of the public servant; or

(iii) lapses including any of the following;

(a) gross carelessness/negligence;

• recklessness;
• The cause of undue loss or a collateral gain to a person or a set of individuals/a party or parties;
• failure to report to competent authorities, an exercise of powers/discretion without or in the abundance of powers/jurisdiction; and
• flagrant infringement of systems and procedures.

Filing Complaint In Vigilance Department

There are different ways to file a complaint in vigilance department, before going into this discussion it is important to understand that the right of a private individual to register a complaint against a corrupt public servant is a crucial and vital right. And when a private citizen in respect to this particular issue approaches a vigilance department, the main question is not just a vindication of individual grievance of that citizen, but also the question of delivering regularity in the society.

In India, you can file corruption complaints with at least three government-established bodies. Two of these three—the Central Vigilance Commission and the Central Bureau of Investigation—work in tandem.^[3]

First, there is the Central Vigilance Commission (CVC). Established in 1964, this is a central level body.^[4] it is the ‘Designated Agency’ which receive written complaints about revealing any allegation of corruption or misuse of office and suggest suitable action.

The jurisdiction of the Commission in this matter is restricted to any employee of the Central Government or of any firm/corporation established by or under any Central Act, societies or local authorities owned or controlled by the Central Government or government companies. Organization or employee employed by the State Governments and actions of the State Governments or its organization/Corporations etc. will not come under the ambit of the Commission.

In such manner, the Commission, which will acknowledge/accept such complaints, has the duty of keeping the identity of the complainant concealed. Henceforth, it is informed to the public that any complaint, which is to be made under this declaration ought to conform to the below-mentioned perspectives.

1. The complaint made by the complainant ought to be in a closed and secured ^[5]
2. And it should be addressed to Secretary, CVC and should be superscribed “Complaint under The Public Interest Disclosure”. If the envelope is not in the form as prescribed above, then the Commission will become helpless in protecting the complainant under the above resolution and then the complaint will be dealt as per the normal complaint policy of the Commission. The complainant in the beginning or in the end of the complaint have to give his/her name and address or in an attached letter.^[6]
3. The Commission will not entertain anonymous/pseudonymous complaints.^[7]
4. The text of the complaint should be cautiously drafted so as not to give any details or clue as to his/her identity. But, the details should be verifiable and specific.^[8]

The commission in its full capacity will try to protect the identity of the person but in case of any clarification the commission will get in touch with the complainant.

The Commission can accept complaints against the following employees:

• Central government PSUs.
• Insurance companies and Nationalised Banks
• Central government departments and ministries.
• Centrally administered territories
• Independent organizations created through an Act of the Parliament or under the supervisory/administrative control of GOI, like Port Trusts, All India Institute of Medical Sciences,  and Delhi Development Authority.
• local authorities and societies controlled or owned by the Indian government

People can file a complaint through mail or letter and can also register it online.

Secondly, in the next stage, CVC conduct its investigation through Central Bureau of Investigation (CBI). and CBI can also take complaints independently.

People can file a complaint through e-mail, post, fax or by a phone call and even on CBI website.

And last but not the least there is the state level  Anti-Corruption Bureau (ACB). Every state has their own ACB and has their jurisdiction restricted to their respective states and they only register or we can say accepts complaints against employees of state government. To avoid taking actions against central government and also to avoid copying/duplication of work. The bureau register complaints in disproportionate possession/assets case. It also lays traps to catch bribe-takers red-handed.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

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References

^[1]  Vineet Narain vs. Union of India, CWP 340-343 Of 1993

^[2] Cvc.nic.in. (2017). VIGILANCE MANAGEMENT IN PUBLIC SECTOR ENTERPRISES AND THE ROLE AND FUNCTIONS OF THECVC. [online] Available at: http://www.cvc.nic.in/sppse.htm [Accessed 8 Jul. 2017].

^[3]How to file a complaint against the corrupt,DNA,Aug,28,http://www.dnaindia.com/india/report-how-to-file-a-complaint-against-the-corrupt-1881149

^[4] ibid.

^[5] Useful Miscellania. (2017). How To Complain Against Corruption: CVC Circular. [online] Available at: http://www.itatonline.org/info/how-to-complain-against-corruption-cvc-circular/ [Accessed 8 Jul. 2017].

^[6] Anon, (2017). [online] Available at: http://cvc.nic.in/PubNot14022012.pdf [Accessed 8 Jul. 2017].

^[7] ibid.

^[8] ibid.

In this article, Ashwini Gehlot of Institute of Law Nirma University, Ahmedabad discusses the grounds on which the Court can Reject The Right To Abort An Unborn Child In India.

‘‘The right of a woman to choose to be a mother or not emerges from her human right to live with dignity which, falls within Article 21 of the Constitution.’’

Medical Termination Of Pregnancy Act, 1971

Before the Medical Termination of Pregnancy Act, 1971, a pregnancy could not be terminated in India without attracting penal sanctions under the IPC (Indian Penal Code, 1860). In 1971, the MTP Act was passed which gives a provision for termination of certain pregnancies by registered medical practitioners (RMP’s). In a way, the MTPA, 1971 weakened the rigours of the prevalent law, though abortion was not allowed for in all cases of pregnancy but rather just in particular cases.

Relevant Provisions Reproduced Verbatim

Section 3: When pregnancies might be terminated by (RMP’s):

1. Despite anything contained in the Indian Penal Code 1860, a RMP shall not be liable for any offense under that Code or under any other law for the time being in force, if any pregnancy is terminated by him as per the provisions of this (i.e. MTPA, 1971) Act.
2. Subject to the proviso of sub-section, a pregnancy may be terminated by a RMP.
3. where the length of the pregnancy does not surpass 12 weeks if such medical practitioner is, or
4. where the length of the pregnancy surpasses 12 weeks but does not surpass 20 weeks, if at least 2 registered medical practitioner is, of opinion, formed in common decency or good faith, that
   1. the continuation of the pregnancy would include a risk to the life of the PW or of grave injury to her physical or mental well-being; or
   2. there is a considerable risk that if the child were conceived, it would suffer from such physical or mental abnormalities to be genuinely disabled.

Explanation 1: Where the pregnancy to PW is occurred due to rape, the torment caused by such pregnancy shall be believed to result in grave injury to the mental well-being of the PW.

Explanation 2: Where any pregnancy happens because of the failure of any device or method utilized by any married woman or her husband with the end goal of restricting the number of children, the anguish caused by such undesirable/unwanted pregnancy might be continued to constitute a grave injury to the mental well-being of the PW.

3. In deciding whether the continuance of a pregnancy would include such risk of injury to the health as is specified in subsection (2), the account may be taken of the pregnant woman’s real or reasonably predictable environment.
4. (a) the pregnancy of a pregnant woman who is below 18 years or who is above 18 years but is a lunatic, shall be terminated only when the consent in writing of her guardian is taken.

(b)Save as otherwise proviso in clause (a), no pregnancy shall be terminated but with the consent of the PW.

Section 5: Sections 3 and 4 when not to apply:

1. The provisions of section 4, and of section 3 as identify with the length of the pregnancy and the opinion of at least 2 RMP, shall not apply to the termination of a pregnancy by a RMP in a situation where he is of opinion, framed in good faith, that the termination of such pregnancy is promptly important to save the life of the PW.
2. Despite anything contained in the IPC, if the pregnancy is terminated by an individual who is not an RMP then it will be considered as an offense punishable under that Code, and that Code shall, to this degree, stand modified.

It is clear from the above clauses that in India, termination of pregnancy was intended by the Legislature only in specific cases as a circumscribed activity. Regardless of this, innumerable abortions are done each year in India and a significant number are unlawfully induced. The figure for reported abortions in India amid 2010-11 was around 6, 20,472 while the unreported number is approximately 10 times this figure. The culprits escape punishment easily which reflects that the MTPA, 1971 is taken after more in the breach than the observance.

The MTP (Amendment) Bill, 2014

The Bill of 2014 proposes to supplant ‘registered medical practitioners’ with ‘registered healthcare providers’. All the more vitally, it aims to broaden the permissible period for an abortion to 24 weeks from 20 weeks if the healthcare provider believes that the pregnancy involves a considerable risk to the mother or the child. If considerable fetal abnormalities are identified, the amendment also permits an exception to the time limit for pregnancies to be terminated.

Supreme Court And High Court On Abortion

Consent

Suchita Srivastava and v. Krishnanan, 2009

The Supreme Court and the High Court of Madras have respectively affirmed women’s rights to choose in the context of continuing a pregnancy. In Suchita Srivastava, the Supreme Court clearly held that the state has an obligation to ensure a woman’s reproductive rights as a component of her Article 21 rights to personal liberty, dignity, and privacy.

Spousal consent

Samar Ghosh v. Jaya Ghosh, 2011

Held- “If the wife undergoes vasectomy (sic) or abortion without medical reason or without the consent or knowledge of her husband, such an act may lead to mental cruelty.” Here, this case added confusion to consent requirements by determining that when a wife terminates a pregnancy without her husband’s knowledge or consent, it may amount to mental cruelty, which is a ground for divorce. While this ruling does not change the consent required to perform an abortion, it does assume spousal “stake” in a woman’s reproductive health.

‘‘Spousal consent requirements reflect patriarchal norms that rob women of bodily autonomy and equality.’’

Analysis- While this decision does not change the requirements in Section 3 of the MTPAct, it does chip away at a woman’s autonomy by upholding a spousal interest in a woman’s decisions regarding her body.

Dr. Mangla Dogra & Others v. Anil Kumar Malhotra & Others, 2011

Held-  Section 3(4)(b) of the MTP Act requires consent from just one person: the woman undergoing a medical termination of pregnancy. A husband cannot force his wife to continue a pregnancy.

‘‘Courts in India have confirmed that providers only require consent from an adult woman for an abortion. Husbands, boyfriends, brothers, parents, and in-laws, have no right to consent to termination or to refuse to consent to an abortion.’’

“It is the right of a woman to give birth to a child, but it is not the right of a husband to compel his wife to give birth to a child for the husband. A woman is not a machine in which raw material is put and a finished product comes out. She should be mentally prepared to conceive, continue the same and give birth to a child. The unwanted pregnancy would naturally affect the mental health of the pregnant women.”

Minors

Section 3(4)(a) of the MTP Act requires a guardian’s consent where someone under 18 years requests a medical termination of pregnancy. The chapter on rape includes a variety of judgments where parents requested a termination on behalf of their minor daughter in the wake of a rape.

V. Krishnan v. Rajan Alias Madipu Rajan & Another, 1993 (Madras High Court)

Issue- Does a minor rape survivor have the right to continue her pregnancy against her parent’s wishes?

Held- A minor rape survivor has the right to decide whether to continue a pregnancy or not.

“We cannot force a victim of violent rape/forced sex to give birth to a child of a rapist.”

D. Rajeswari v. State of Tamil Nadu & Others, 1996 (Madras High Court)

Issue- Can a minor rape survivor obtain a medical termination of pregnancy?

Held- A minor rape survivor who satisfies the requirements of Section 3 of the MTP Act can obtain a termination.

Minor rape survivors with 20+ week pregnancies

Chandrakant Jayantilal Suthar & Another v. State of Gujarat, 2015 (Supreme Court of India)

Issue- Can a minor rape survivor who is 24 weeks’ pregnant access medical termination of pregnancy

Held- The Supreme Court reviewed the medical opinion and allowed for termination if the girl consented. However, the Court noted that this was a particularly difficult decision because “Whatever be the circumstances in which the child was conceived, whatever the trauma of the young mother, the fact remains that the child is also not to blame for being conceived.”

“A rape victim shall not be further traumatized by putting through a needless process of approaching courts for taking permission.’’

Rape

Bhavikaben v. The State of Gujarat, 2016 (High Court of Gujarat)

Issue- Can an adult rape survivor undergo medical termination of pregnancy when she is more than 20 weeks pregnant?

Held- Yes. Applying the survivor’s best interests test in Chandrakant, the Court finds that where medical experts agree that the woman’s mental or physical health will be severely impacted by the pregnancy, she has a right to terminate.

Women in judicial custody

Halo Bi v. State of Madhya Pradesh & Ors., 2013, (High Court of Madhya Pradesh)

Issue- Does an incarcerated woman require consent from jail authorities to obtain a medical termination of pregnancy?

Held- An incarcerated woman does not have to seek consent from jail authorities to terminate her pregnancy.

Women in medical custody/ “wards of the state” –

Suchita Srivastava & Another v. Chandigarh Administration, 2009 (Supreme Court of India)

Issue- Can the state consent to a termination as a guardian for a “mentally ill” woman who was raped in her state-run facility.

Held- The Court must examine the facts. Where a woman is not a minor and has a “mild” mental illness, the Court has to ensure her reproductive rights, including the right to continue a pregnancy.

Anand Manharlal Brahmbhatt v. The State of Gujarat, 2015 (High Court of Gujarat)

Issue- Can the state consent to termination on behalf of a mentally disabled woman who cannot care for herself?

Held- Yes. Where a medical expert determines that a woman cannot make decisions for herself or understand that she is pregnant, the state may consent to termination.

Medical practitioner-

Dr. Jacob George v. The State of Kerala, 1994 (Supreme Court of India)

Issue- Can a homeopathic doctor who negligently performs a termination resulting in death be charged and sentenced under IPC Section 314?

Held- Yes, where a doctor is not trained in medical termination of pregnancy conducts the surgery, he or she can be charged under IPC Section 314.

Dr. Raj Rokaria v. Medical Council of India & Another, 2010 (Delhi High Court)

Issue- Is a doctor negligent if she performs a medical termination post-20 weeks when there is not an urgent risk to the woman’s life?

Held –Failure to complete MTP Act paperwork is enough to demonstrate negligence.

A woman could terminate her pregnancy at 24 weeks where there is a danger to the health of the mother.

Ms. X v. Union of India & Others, 2016 (Supreme Court of India)

Issue- Can a woman terminate her pregnancy post-20 weeks where the fetus has severe abnormalities?

Held- Based on the medical board’s determination that continuing the pregnancy would pose a grave threat to the woman’s mental and physical health, the woman may undergo termination under Section 5 of the MTP Act.

No Abortion On Demand Or Request

The MTP Act, 1971 does not confer or recognize any right of any person to perform an abortion or terminate a pregnancy. A PW can get her pregnancy terminated only under the circumstances mentioned in the Act as stated above.

Not A Tool For Birth Control

It has been held by the Madras (now Chennai) High Court that, ‘sec.3 of the Act is only an enabling provision to save the RMP’s from the purview of the IPC, 1860. Termination of pregnancy under the provision of the Act is not the rule and it is only an exception.

References

1. http://shodhganga.inflibnet.ac.in. (n.d.). Criminal Law and Unborn: Indian Scenario. [online] Available at: http://shodhganga.inflibnet.ac.in/bitstream/10603/26532/12/12_chapter%206.pdf [Accessed 27 Jul. 2017].
2. Sheikh, S. (2017). India’s Abortion Laws Need to Change and in the Pro-Choice Direction. [online] The Wire. Available at: https://thewire.in/134182/abortion-pregnancy-law-india/ [Accessed 27 Jul. 2017].
3. Anon, (2016). ABORTION LAWS IN INDIA: A REVIEW OF COURT CASES. [online] Available at: http://file:///C:/Users/computer%20gallery/Downloads/1201702010854.pdf [Accessed 27 Jul. 2017].
4. Mangla Dogra & Others v. Anil Kumar Malhotra & Others, 29 November 2011 (CR No. 6337/2011)
5. Suchita Srivastava & Anr vs Chandigarh Administration on 28 August, 2009, CIVIL APPEAL NO.5845 OF 2009 (Arising out of S.L.P. (C) No. 17985 of 2009)
6. Samar Ghosh v. Jaya Ghosh, Supreme Court, 26 March 2011 (Appeal (C) 151/2004)
7. Krishnan v. Rajan Alias Madipu Rajan & Another, Madras High Court, 2 December 1993
8. Rajeswari v. State of Tamil Nadu & Others, 24 May 1996 (Crl.O.P. No. 1862/1996):
9. Chandrakant Jayantilal Suthar & Another v. State of Gujarat (Special Leave Crm. 6013/2015):
10. Bhavikaben v. State of Gujarat, 3 and 19 February 2016 (Special Crim App 1155/2016)
11. Halo Bi v. State of Madhya Pradesh &Ors.,16 January 2013, WP(C) 7032/2012: –
12. Suchita Srivastava & Another v. Chandigarh Administration, 28 August 2009, SLP(C) 5845/2009:
13. Anand Manharlal Brahmbhatt v. State of Gujarat, 28 July 2015 (Special Crim. App. No. 4204/2015)
14. Dr Jacob George v. State of Kerala, 13 April 1994 (SCC (3) 430)
15. Raj Rokaria v. Medical Council of India & Another, 25 November 2010 (WP(C) 7905/2010)
16. X v. Union of India & Others, 25 July 2016 (WP(C) 593/2016)

In this article, Aklovya Panwar of INLU discusses top ways for start-ups to get angel funding.

“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.”  –Nolan Bushnell, Entrepreneur

INTRODUCTION

After Independence, the Indian economy has gone through various ups and down. Since we have faced economic reforms to change the shape of our Indian economy and the ways in which business has been done. In this phenomenon, the shift to individual start-ups has arisen significantly and woo the interest of various business tycoons. The investment in these startups or entrepreneurship has elevated in the past 3-4 years.

 List of Schemes of the Start-ups initiated by the government can be found on (https://inc42.com/startup-101/startup-scheme-indian-government-startups/)

This phenomenon of small enterprise businesses is still trying to discover its shape in the Indian economy and the main source of their funding are the angel investors or the angel funding. According to a report proposed by the venture debt fund InnoVen Capital, the angel groups in India has grown considerably in 2016.There is an increment from Rs.70.3 Crores(across 47 companies) to Rs. 113.7 Crores(across 69 companies) in one year.

Prof Thillai Rajan, Department of Management Studies, IIT Madras say “the angel network which was absent four to five years ago is strengthening now. Several new investment avenues and platforms are opening up for entrepreneurs who need help converting their ideas into businesses.”

An angel investor/business angel/informal investor/angel funder/private investor/seed investor is a person who provides a certain amount of fund for initiating a start-up in exchange for debt or equity in the ownership. He is the person who can convert a business from a piece of paper to a proof of concept.

Angel investors (not venture capital firms) are the most likely candidates to get your businesses from a piece of paper to a proof-of-concept.

Where to find these angels?

These angel investors can be found in 3 groups:

1. Within family and friends

These investors can be there within our families and among our friends but they have their own positives and negatives aspects. The positive aspects are that these people know us the best and if they know our abilities they will surely invest the start up without hesitation. The negative aspect is also there and it is pretty major, as it is very difficult to mix the personal and professional relationship and if at any chance the start-up got unsuccessful there will be a condition of discomfort and personal relations comes at stake. So, this road is risky with no coming back, but, if the idea is brilliant and have more chance of success then it is also the easiest way to find investors.

2.  By the help of an Individual Angel Investors

Individual angel investors are the anonymous helpers waiting for the most innovative and creative ideas. As finding them is not like shooting a fish in the barrel because they are not aware of the new businessmen, neither personally nor professionally. So, they need something extraordinary and promising for their money. Another problem with them is that if they don’t have the first-hand experience in the field with which startup is related, it is not easy to satisfy them, after all, it is about the money he is going to invest. That is why a person must know his investor beforehand. If they have experience in the area of your business, and they think they can aid you to hurry your efforts, it is easier for them to get above the investment barrier. If he denies from investing then there is an option to have references from him about other contacts he knows about.

There are some investors in India who are bringing the concept of angel investing to a whole new level:

More details of these angel investors can be found on:

https://angel.co/india/investors

3.  Angel Investor Networks (AIN)

This is one of the best possible ways to get investment for a start-up. It networks accumulating angel investors. In this, the investors set aside funds for the purpose of investment in new start-ups. It is maintained by a professional team who source the deal for the network. They invest as a group in a particular start up.

Examples of AIN in India and their contact details:

1. Anil Godhwani- He is the Co-Founder India Community Center, CA and Simply Hired.com Avendus Advisors Investor, Avendus

Address- Avendus Advisors IL&FS Financial Centre, West Quadrant – 2nd Floor, Bandra-Kurla Complex, Bandra (East) Mumbai – 400 051

Phone: 91-22-6648-0050

Fax: 91-22-6648-0040

[email protected]

Focus-Indian Companies with strategic growth advantage; IT Services, IT Enabled Services, Pharmaceuticals and Healthcare, Media and Consumer Products and Services.

2. Arun Seth- He is the Chairman, British Telecom Advisor, Seed Fund

Address- BT Limited 70 Nehru Place New Delhi 110019

Website-www.bt.com

Phone: +91 11 5211 9900

Fax: +91 11 5211 9901

[email protected]

***For details of other AIN one can visit (http://www.tcoe.in/?q=content/indian-angel-investors)

How to woo the angels?

Be creative.

Before approaching the investor, the entrepreneur must work on his term sheet as it is the way to provide them an investment. This sheet discloses what your business is and what the aspiration with an investor in the partnership is. This is the reason it should be unique and simple to deliver your ideas and not a mere copy from the internet. Angels want to sure that they are protected, they will go through the term sheet very carefully to ensure everything you have said or presented.

Include all the numbers.

A start up must be good in planning and should keep in mind every aspect of the economic terms that makes sense for you as well as your investor rather than just round numbers. There is more to a term sheet than meets the eye. The term sheet should include all the variables including an interest rate variable, a discount variable, and a time variable. A start up should understand that how these variables work together and what are they impact on each other.

Do scenario planning.

With a brilliant idea, you must also the ability of risk taking and in-pressure working skills. The investors will surely look into your ideas but with that, they will check your determination towards the idea, whether you can embrace the situations if things get into the wrong direction. That is why you must prepare yourself with multiple scenarios. Think through the options, even if far reaching, and spell it out. And be sure to follow up on any unanswered questions; it’s a great way to establish a relationship.

It’s a team sport.

This is the important scenario to keep in mind before going to an angel for funding. The

Angel investors tend to be a cross-section of domain and industry expertise. At the time of group reviewing each angel who has invested in the startup will come up with a different set of queries and expectations. Example an economist will play on the round numbers and variables while a lawyer will be envisaging perfect legal scenario so that in the end there will be no barrier from legal authorities. The best start-ups take advantage of the “multiplier effect”. That is why your term sheet describes everything you want so there should be no bluffing or misrepresentation in that, it will be disclosed through the angel investor group’s dialogue about the opportunity you are presenting to it.

Do not rush into decision-making.

The new businessmen should not get into the misconception that as soon they reach the market they will find an angel. Don’t try to close your deal quickly, you may find an investor early but he may be not of your space of interest. So, educate yourself on how long it takes to fundraise, and plan your timing and deadline accordingly. Because there are innumerable small businesses and the organizations are very less in number.

So, don’t rush into decision-making process, be patient and search for the better opportunities rather than a low-hanging start.

Research the investors.

This is an important point many start-ups oversight. Instead of finding “any” angel investor find the “right one” who is a person of your space of interest and understand your idea. Before, approaching an angel research on that investor very carefully like his past investments, his work field experience, his area of interest and his hobbies as well. Because if your idea is able to connect with the investor personally then there will be more chances of his investing in the work.

Treat your initial interactions as the first step in a long-term relationship.

Before going to an investor think that he is going to be your mentor and it’s going to be a partnership almost like a marriage. So, be transparent in sharing your idea and try to interact with him because even if he will not invest, he can surely give some future tip as well as contacts to some other investors. Your unpretentiousness will act as a catalyst in providing investors and wooing angels.

What about your long-term plans?

This is the one thing investors want in the start-ups i.e., the sight of seeing beyond. There is a possibility that in the starting the business will run well and your startup raises money but what after that? This question needs to be kept in mind before going for searching an investor. You must be clear with your focus that where you want to take up this start up. “You’re focusing on the fact that ‘I need that half-million dollar.’ But that’s not the most important thing,” Think about what you’re going to do after you have the money and focus on executing that multi-year plan.

CONCLUSION

Today, start ups are on a rise and the main source of the investment in these startups is angel investing or angel funding.In the financial year of 2015-16, the highest number of deals has taken place in comparison to previous years. “According to the Innoven report, demographically, Delhi-NCR had emerged as the preferred destination for entrepreneurs, attracting 36% of angel deals, followed by Bengaluru (20%) and Mumbai (10%)”.

The main failure why one startup didn’t get the investment while other one gets it is because they miss certain things which are necessary for wooing the angels. By keeping these points in mind the chance for investment raises for the start ups.

References

http://trak.in/india-startup-funding-investment-2015/

http://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/grant_thornton-startups_report.pdf

https://data.gov.in/events

https://www.forbes.com/sites/krnkashyap/2016/09/29/the-8-most-prominent-angel-investors-in-india/2/#5ff443e67a91

http://guides.wsj.com/small-business/funding/how-to-get-funding-from-angel-investors/

https://www.inc.com/patricia-fletcher/how-to-land-an-angel-investor.html

https://www.wsj.com/articles/SB118530808497176497

In this article, Aklovya Panward of INLU discusses Regulations needed if India legalizes sports betting.

Introduction

The apex court recently decided to ponder upon the legalization of betting and gambling in sports which is at the present time prohibited and punishable under law. The reason for this decision is the losses occurred to the country due to unregulated betting. It has been estimated that the legalization of betting would be beneficial for the country as it will generate a revenue of around rupees 12000 crores. This amount will be both from gambling and bet altogether.

The government is envisaging positive outcomes behind these decisions. There is a speculation that legalizing betting and gambling will help the government to distinguish between harmless batting and corrupt activities like match fixing. It will also provide credibility to the game because now the government will have more control over the sport. It will also provide credibility to the game because the government will have more control over the unwanted elements which are existing in the betting business. Now due to un-regulation various shady transactions are taking place whether it be by huge crime syndicates or by the Mafia who are controlling this business. Law Commission of India is already going through the issue and it has issued a public notice inviting suggestion from stakeholder and the general public, the main question which law commission of India has put is whether gambling and betting should be legalized or not.

Due to ethical and moral reasons, gambling and betting are banned in most of the countries. Even after getting banned, it is already happening through the internet and that is why there is a need of prior regulation and an updated law. Legalization of betting could regulate an informal industry of rupees 300,000 Crores.

One such example of immense betting in sports is of cricket, it is always surrounded by scandals of spot fixing.

Before legalizing betting and gambling there is amendment required in certain provisions and laws. Example: Indian Contract act-It treats an agreement based on a wager as void.

Multiple problems that arises from criminalisation of unregulated sports betting

Due to unregulated gambling and betting market, there is a lack of information about this industry and it gives rise to black marketing. There is no record of the people who are gambling whether they are minor or gambling addict due to which this threat cannot be combat. Not only this, the flow of money also can’t check whether it is being used for other illegal services. This also leads to match fixing because the betting pattern cannot be understood till the time it is running in the underground market.  It is estimated that Govt. can earn Rs. 12,000-Rs. 20,000 Crores as taxes which now going in vain. Regulating betting provides the framework to address all of these problems.

SCENARIO IN OTHER COUNTRIES

There are 3 parts in which countries can be divided:

1. Complete Ban- the Middle East and South East Asia, they consider gambling and betting as sinful due to religious influences.
2. Partial Ban-Most of the countries remain between 2 extremes these states neither tight the grip nor lose it. In these countries, the Government pursues a framework which legalises gambling but also seeks to regulate and control gambling with an idea of generating revenues and taxes. They use this revenue for the purpose of a social issues like the funding of the industry itself, sports or cultural and charitable causes. States which license gambling include the UK, many European states, Australia, and a number of States in the USA.
3. Liberal from the ban- The US State of Nevada, the Island of Macau and some small island states where online gambling is licensed. As they consider it as an export industry from where trade and revenue can be dug out.

Most countries, however, operate somewhere between these two extremes.

REGULATORY SYSTEM IN OTHER COUNTRIES

Common characteristics of the regulatory system of the countries:

1. Statutory regulatory bodies or gambling commissions created by the states- They distribute licenses.
2. The national regulatory-

• It can regulate disputes in a condition where there will be breach involving at more than one state’s jurisdiction.
• It can formulate frameworks for the common people for dispensing information about betting, the places of betting and the events of the betting.
• The regulator authorizes by the center can keep a check on the operator’s activity and can go for inspection at the operator’s premises to have cooperation from him.
• It also provides information related to remedies, warnings, and penalties related to the issue. They can also suspend licenses and initiate criminal prosecution.

THE LAWS RELATED TO BETTING IN INDIA

The State of Sikkim has amended the “Sikkim Online Gaming (Regulation) Rules 2009”.It Legalises sports betting in the state with the provision of license.

Some of other State laws are: “The West Bengal Gambling and Prize Competitions Act, 1957, the Bombay Prevention of Gambling Act, 1887, the Madhya Bharat Gambling Acts, 1949, the Punjab Public Gambling Act, 1961, the UP Public Gambling Act, 1867, the Kerala Gambling Act, 1960, the Karnataka Gambling Law/Act, Goa, Daman and Diu Public Gambling Act, 1976, Sikkim Online Gaming (Regulation) Act, 2008, Madras City Police Act, 1888 to name a few.”

REGULATORY REGIMES NEEDED FOR SPORTS BETTING.

Regulatory regime consists of two aspects: One being the “regulatory scope” and other is the “regulatory stringency”. First, will be defined as the area covered by the regulation while the latter one characterizes the degree to which the organization’s behavior is constrained by the regulation. It is measured by the power of the regulator.

Regulatory scope

Establishment of Regulatory Environment

Before making any regulation there is a need to understand the object of regulation. Once the objective is been set then the environment of regulation will be easy to develop. Establishing a regulatory environment requires that one first defines the specific object to be regulated. Within the wider ambit of gambling and betting in sports, the core issue is to determine whether a game is a “game of chance” or “game of skills”. It is important to note that the Public Gambling Act, 1867 provides that the provisions of the Act shall not be applied to any games of skill. The Hon’ble Supreme Court in the case of Dr. K.R Lakshmanan vs. State of Tamil Nadu (AIR 1996 SC 1153) regarded horse racing as a game of skill and observed as follows: “Betting on horse racing or athletic contests involves the assessment of a contestant’s physical capacity and the use of other evaluative skills. Horse racing is an organized institution. There is nothing illegal in horse racing: it is a Lawful sport. We have no hesitation in reaching the conclusion that the horse-racing is a sport which primarily depends on the special ability acquired by training. It is the speed and stamina of the horse, acquired by training, which matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better-trained jockey can touch the winning-post. In view of the discussion and the authorities referred to by us, we hold that the horse-racing is a game where the winning depends substantially and preponderantly on skill.”

In the case of State of Andhra Pradesh vs. K. Satya Narayana (AIR 1968 SC 825), the Hon’ble Supreme Court held that “The “three cards” game which goes under different names such as “flush”, “brag” etc., is a game of pure chance. Rummy, on the other hand, is mainly and preponderantly a game of skill.”

These case has provided the framework that what should be the object of the regulation of betting and gambling in India. As B.S. Chauhan the appointed chairperson of Law Commission of India said in a seminar.

“Development of gambling industry in India requires a three-pronged strategy reforming the existing gambling (lottery, horse racing) market and legalizing the present illegal market (introducing new products) while introducing stringent and overarching regulations,” he had said at a seminar.

The determining principle that what is the game of chance or of skill should be left to the government to define. If the principle is that the game of skill should be out of the ambit of the law then there must be a classification of games on this basis. As the game of chance can be arbitrary according to the international perspective. In this matter, some states of the U.S., France, Switzerland, or Italy, attempt to assess the detailed levels of both chance and skill to determine whether a particular activity should be regulated or not by the gambling laws.

Understanding the types of Sports betting

The state should decide that what forms of sports betting they are willing to allow. In India, there should be a detailed regulation on what forms of betting or gambling can take place.It depends on the ability of the government to maintain the records and data of a particular event taking place. As, in Switzerland, live betting and exchange betting are prohibited, however in the United Kingdom, all forms of betting can be found.

Gambling and betting on particular events have various forms

Traditional betting-It refers to betting with probabilities on the winner of a specific match,

Spread betting-In this form of betting odds are on the difference of the final results between two teams or players.

Pari-mutuel bet-In this betting the probabilities initially set as equal across the various contestants and then altered according to the accrual of bets from numerous actors.

Live betting is made when the game is in live form and teams are playing and the odds are therefore altered in the real time according to progress in the match.

Exchange betting-In this betting nobody is officially setting the odds, but it is the punters themselves who agrees or discard the offers of odds proposed by other players.

Which betting mode can be obtainable to customers differs from nation to nation.

Access to the market

One important thing government have to keep in mind before making the regulation for legalizing betting and gambling is the access to the market. In sports betting there are various types in which market access can occur. It can be-

1. An exclusive right attributed to one organization– In Switzerland, two publically owned organizations have the right to offer sports betting.In France, the Pari Mutuel Urbain (PMU) offers to bet on horse races while the national lottery organization, Française des Jeux (FDJ), offers sports betting.
2. Establishing a monopoly– In Germany, Oddset is a state monopoly founded by the sixteen Länder to operate sport betting games throughout the country.
3. License system that allows a limited or unlimited number of sport betting operators– In the UK, and Austria. In contrast, French online sports betting market is based on an open number license system.

It depends on the Indian Government whether they want to monopolize it or want to form an organization for the same.

Profit to the public

Before making any regulation there must be some provisions for public benefit. As In Switzerland, the profits produced by the Loterie Romande and Swisslos out of sports betting are allocated to the professional and amateur sport.Similarly, In Germany, Oddset is allocating the revenue generated in each Land to the regional authority that uses it for different ends such as social projects, the state budget or the sport. In France, the FDJ allocates a share of the revenues to the state budget which can then be used for sport, whereas the revenues of the PMU are mostly the revenues to the state budget which can then be used for sport, whereas the revenues of the PMU are mostly attributed to the equine industry. In the UK and Austria profits are not used for a public end directly.

Regulatory Stringency

Power of the regulators

In other countries the national regulatory have the following power:

The national regulatory-

• It can regulate disputes in a condition where there will be breach involving at more than one state’s jurisdiction.
• It can formulate frameworks for the common people for dispensing information about betting, the places of betting and the events of the betting.
• The regulator authorizes by the center can keep a check on the operator’s activity and can go for inspection at the operator’s premises to have cooperation from him.
• It also provides information related to remedies, warnings, and penalties related to the issue. They can also suspend licenses and initiate criminal prosecution.

In the UK, the Gambling Commission, an independent body controlling and monitoring the gambling sector (at the exception of the National Lottery).

In Italy, the “Amministrazione Autonoma dei monopoli di Stato” (AAMS).In Switzerland, the Comlot, the independent commission established on the cantonal level, is responsible for licensing new games and monitoring the sports betting sector, but cannot license operators. In Germany, the regulators are established on the level of the Länder and take various forms. In Bavaria, for example, the monitoring body is the Staatliche Lotterieverwaltung which is part of the State’s administration.

References

• Amit Anand Chaudhary,Can betting in sports be legalised? SC agrees to examine issue – Times of India, The Times of India (2017),http://timesofindia.indiatimes.com/sports/cricket/news/can-betting-in-sports-be-legalised-sc-agrees-to-examine-issue/articleshow/58421201.cms.
• Jatin Gandhi, Casinos, sports betting to be legalised in India? Law panel examining the issue, http://www.hindustantimes.com/(2017),http://www.hindustantimes.com/india-news/casinos-sports-betting-to-be-legalised-in-india-law-panel-examining-the-issue/story-RUrXc21Q94LTQKhrHJlxTO.html .
• REGULATING SPORTS BETTING IN INDIA,FREQUENTLY ASKED QUESTIONS, 1-4, http://ficci.in/sector/37/add_Docs/ficci-faq-on-sports-betting.pdf (last visited Jul 14, 2017).
• Lea Meyer & Jean Patrick Villeneuve, What are the odds? National gambling regulation and the globalised betting industry org(2017),http://www.irsv.org/index.php?option=com_content&view=article&id=146%3Awhat-are-the-odds-national-gambling-regulation-and-the-globalised-betting-industry&catid=73%3Anumero-7–controler-et-punir&lang=en (last visited Jul 14, 2017).
• Heena Chheda & Mirat Patel,Gambling And Betting Laws In India, 2, http://www.hariani.co.in/newsletters/31207_August_7_2013.pdf (last visited Jul 14, 2017).

In this article, Karan Singh of Jindal Global Law School discusses whether a company or person can claim to have a copyright for a color pattern or shade or not.

Color branding and trademark right

An individual cannot just own a color. The color of a brand is totally different from a color trademark. A company cannot register a color in its own name. But A company can own a certain pattern of a particular color like McDonald does not own the red color but it does own the pattern or the shape in that red color and hence no one can copy it at all.

The TM mark and ® marks mean that the company has claimed rights to the image (the symbol or word or combination of both) that represents the company. The TM mark can be used on any design that you wish to designate as a trademark. The registered trademark symbol (®) is a symbol that provides notice that the preceding word or symbol is a trademark or service mark that has been registered with a national trademark office. Copyright (the © mark) is different. Copyright is for the original author or creator of any creative work like writing, images, music, software, etc and the creator have the sole right to distribute, publish, sell or copy that work for a set period of time. All the images and articles in the color matters website are protected by copyright.

Section 10 of the Trade Marks Act states that a trademark can be limited to a particular color or combinations of colors. However, such limitation as to color will only be allowed in determining the distinctive character of the mark. However, if no color has been specifically claimed, then it shall be deemed to be registered for all colors.

Distinctive character cases in India

If a mark is being applied for registration for a combination of colors and that is the distinctive feature of the mark, then this should be mentioned at the time of the filing. However, when a particular color is claimed, an applicant is required to submit evidence to show that the said color combination or color that has been claimed is solely associated with the applicant or exclusively designates their goods. If the color that is applied is common to trade then it might be difficult to claim distinctiveness over the color. For example, Red as a trademark for a drink may be distinctive but when the color red is claimed for packaging of those bottles would be non-distinctive.

Cadbury was successful in stalking its claim against Nestle to register its color purple on the whole of the surface of the chocolate bar, eating chocolate and drinking chocolate. The ruling stated that the color had acquired a distinctive character and people associate the color with Cadbury chocolates. Evidence, in the form of a public survey, proved that the public associated the color with Cadbury chocolate.

How color matters?

Colour matters a lot in day to day lives. As color can make your brands value more or less. Brands and color are linked together as color offers a distinct method of conveying the message to people. It Offers people to remember the company by its color as colors are easy to remember. Colors should be used in one’s mark so that people can easily remember it. Colour does matter when it comes to branding and marketing.

Some companies have trademarked color on the basis of the function that they serve to the society. And even courts have admitted that certain colors are trademarked only if they serve some purpose. Conor does matter to companies and if their competition tries to copy it, legally it can be stopped. For example, if a red colored M is taken by a third person for the company, MacDonald can stop that person legally as it is likely to cause confusion in the mind of people. Generally speaking, it is very important to keep in mind that the trademark should not cause confusion in the mind of the public. It should be different and the color should not match the existing trademark. Some examples are given below:

Case study – Tiffany & Co.

Colour trademark is different when the color itself is a brand. Like a well-known company Tiffany & Co. Where the owner of the company Charles Lewis Tiffany chose the color for the cover of Blue Book. Colour Tiffany Blue was later used on everything from shopping bags and jewelry boxes to any advertising for the company. Colour Trademarks can only be available for certain pattern and shapes or for certain purpose. Like in the case of Tiffany, the color is only protected for the bags, boxes or advertisement from other jewelers.

It’s important to understand that they only own that blue in situations where it could be confused with their products. Tiffany only owns “robin’s egg blue” for its boxes and bags. Robin’s egg blue can be used by anyone and anywhere. An individual can use this color on his walls legally. This color for Tiffany is only protected from the other jewelers where confusion can be created by others on a brand.

In another case of Cadbury. When you see a chocolate candy in the purple wrapper, you know its Cadbury. By seeing if customers are able to identify the product, then the product’s color matters for its reputation. Cadbury Purple is protected by trademark only for chocolate products. If any other company makes a chocolate with the purple wrapper, then Cadbury can stop that company from making it legal. It is very important to understand the role of color in one’s company.

Deere & companies have a distinct color trademark. Its trademark consists of leaping deer symbol, name and yellow and green color scheme. This company provides outdoor power equipment. The company owns the rights to all three of these and it prohibits any other such machinery maker from using them separately or combined. The color yellow and green cannot be used together by any other machinery maker.^[1]

Caterpillar Yellow

The Company CAT prohibits from using its distinct Caterpillar Yellow without its permission. However, Yellow is a functional color for road construction, so Cat cannot prevent other companies from manufacturing yellow colored equipment.

Post-Its

Manufacturing giant 3M has trademarked the color canary yellow used on its famous Post-It Notes. They even sued Microsoft for infringement when it created a digital version of a sticky note product in the same color.

Red soled shoes

Christian Louboutin shoes are all known for red sole. They are popular for only one this and are not cheap. Recently, Dispute arose when Yves St. Laurent began selling shoes with red soles. Louboutin sues Yves in 2008 who had already trademarked the red sole. The court held that Louboutin’s red sole should not be doubted as it fulfilled the fundamental purpose of trademark and the colored soles have been used successfully as the trademark. The color can be trademarked only if they serve a purpose to identify the source of a product. But can red sole serve any other function than the source of a product? This question was put up in the case. Louboutin’s stated that red serves ‘energy’ and was ‘sexy’ and ‘engaging’. So while the court reasoning, in this case, makes some sense- a color for shoe soles is not going to foster a competitive marketplace- It tends to encourage greater use of visible trademarks.

Registration Of Colour Trademark in India

In order to obtain a color trademark in India, it is important that the color or combination of color distinguish the good and services of one party from the other party. Also, the color or combination of color should be used in a certain pattern or it should serve some basic purpose. For example, if the color pattern is associated with the packaging and it is known to the society that the color pattern is associated with the respected company, then the color trademark can be obtained.

But if the color is not used in any pattern or does not serve a purpose, then it is difficult to obtain the trademark as it is likely to cause confusion. It is likely to be rejected by the examining officer. Colour trademark can be of two type single color or combination of colors trademark.

A single color trademark can be obtained only if the color is unusual or different and is recognized by the customers. It should serve some reputation in the society and it should be well known for that class of goods or services. However, single color marks can be obtained if the owner can prove its existence in the society or proves that it is a well-known mark. But the mark can be rejected if the mark does not stand as a well-known mark or have an unusual pattern in it.

The combination of color can be registered if they are unique in nature and the mark is used to distinguish the goods and services from others. If a company have a color pattern which makes it distinct from the competition it can be registered.  It is difficult to obtain trademark if the combination of color applied is simply from the certain purpose and the color combination is not recognized in the society. For example, a combination of color like white and yellow can not be registered by any toothpaste company as every toothpaste company uses these colors.

Conclusion

Section 10 of the Trade Marks Act states that a trademark can be limited to a particular color or combinations of colors. If a mark is well known and the color plays a vital role in that company then it can be registered. If the mark is recognized by the people by that color and the value of the mark is zero without that color then it can be registered under section 10 of Trademarks Acts.

Reference

^[1] http://www.businessinsider.com/colors-that-are-trademarked-2012-9?IR=T#green-and-yellow-color-scheme-8

Why do VCs refrain from investing in LLP?

VCs stands for Venture Capitalists and LLP stands for Limited Liability Partnership. These two terms are very important in the business field. As the business market boost up, the scope of these two also raises up with recent advancement of doing business. With the era of globalization, now we are in the world of global business methods, that helps the foreign investors as well as the native investors to invest in the different startups in order to earn and generate huge revenue.

I will first discuss the meaning of the terms ‘ Venture capital’ and ‘LLP’ in order to give a clear picture of these kinds of business.

VENTURE CAPITAL

It is a private or institutional investment made into early-stage / startup companies (new ventures). As defined, ventures involve risk (having uncertain outcome) in the expectation of a sizeable gain. Venture Capital is money invested in businesses that are small; or exist only as an initiative, but have huge potential to grow. The people who invest this money are called venture capitalists (VCs). The venture capital investment is made when a venture capitalist buys shares of such a company and becomes a financial partner in the business.

Venture Capital is the most suitable option for funding a costly capital source for companies and most for businesses having large up-front capital requirements which have no other cheap

Alternatives. Software and other intellectual property are generally the most common cases whose value is unproven. That is why; Venture capital funding is most widespread in the fast-growing technology and biotechnology fields.

FEATURES OF VENTURE CAPITAL

• High Risk
• Lack of liquidity
• Long term horizon
• Equity Participation and capital gains
• Venture Capital investments are made in innovative projects
• Supplier of venture capital participate in the management of the company.

ADVANTAGES OF VENTURE CAPITAL

• They bring wealth and expertise to the company
• Large sum of equity finance can be provided
• The business does not stand for the obligation to repay the money

DISADVANTAGES OF VENTURE CAPITAL

• It is a lengthy and complex process
• It is a uncertain form of finance
• As the investors become owners, the autonomy of the founders is lost^[1]

LIMITED LIABILITY PARTNERSHIP

Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act, 2008. A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner’s misconduct or negligence, this is an important difference from that of a unlimited partnership. In an LLP, all partners have a form of limited liability for each individual’s protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly.An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP’s employees or other agents.

Limited Liability Partnership is managed as per the LLP Agreement, however in the absence of such agreement the LLP would be governed by the framework provided in Schedule 1 of Limited Liability Partnership Act, 2008 which describes the matters relating to mutual rights and duties of partners of the LLP and of the limited liability partnership and its partners.

LLP has a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful business decisions or misconduct.

Limited Liability Partnership Act, 2008 came into effect by way of notification dated 31st March 2009.

ADVANTAGES OF LLP

• Low cost of formation
• Easy to establish
• LLP & its partners are distinct from each other
• No requirement of any minimum capital contribution
• Partners are not liable for the acts of partners
• Less complication level
• Less government interference
• Easy to dissolve and wind up.

DISADVANTAGES OF LLP

• Any act of the partner without the anither partner may bind the LLP
• Under some cases, the liability can also be extend to the personal assets of the partners
• Cannot raise money from Public.^[2]
• Inability to raise VC funding.

Why VCs are unwilling to invest in LLP

Now the question comes that after having so many advantages of LLP, why the Venture capitalists are unwilling to invest in it? The answer for this is because all ‘shareholders’ in an LLP must be partners,which have certain responsibilities towards the entity. No VC wants any of these responsibilities and would therefore invest in a private limited company instead. The other points to mention as to why LLP is not a good option for VCs are as follows:-

Limitations on starting an LLP

To form a LLP there is minimum requirement of members. Atleast 2 members have to be there in order to start it. LLP cannot be formed by the single person. Any NRI/Foreign national who want to form a LLP in India at least need one national resident. Two foreign residents cannot form it without having any national resident along with them.

It takes more days to form as it needs all partners signature for each and every document which is then need to attached to required e-forms. Therefore, self attestation of each partner on documents is more as to compare than formation of any pvt. Company.

Assets of LLP

Partners undertake to contribute some amount towards LLP firm which they contribute in the form of cash or assets while executing the LLP agreement. Once cash or assets are contributed to LLP, it cannot be returned to the partners of an LLP unless there is any specific provision mentioned in LLP agreement.

Difficulty in Transfer of Ownership

Transfer of Ownership is not easy as it can only be transferred after the consent of all the partners. The resolution to be passed by majority in numbers of the partners in some of these mentioned cases:- increase or decrease in contribution, increase or decrease of designated partners, alteration of working partners, amalgamations, shifting of the registered office of firm, opening or closing of bank account.

Offences and Penalties

LLP has its own Act and contains provisions for offences and penalties. Some provisions of the Act are:

1. For default and non/compliance on procedural matters such as delay in filing of e-forms, one has to pay default fee on daily basis for which the default continues,
2. Such default fee is payable at the rate of rupee one hundred per day after the expiry of the date of filing up to a period of three hundred days.
3. The offences can result in either:- paying fine or imprisonment with fine of the offender.

Permission of FDI in LLP

Foreign company or individual can invest in LLP in India but it requires prior government approval. As per FDI Policy, FDI in LLP is allowed only through Government route, FDI in LLP under automatic route is not permissible. Further FDI in LLP through Government route is allowed to only those sectors where 100% FDI is allowed under automatic route under the FDI policy.

Limitation in External Commercial Borrowing (ECB)

LLP is not allowed to raise External Commercial Borrowing (ECB). Thus LLP cannot take commercial loans from its foreign partners. FII’s (Financial Institutional Investors), banks from outside India, any financial institution outside India or any other entity outside India.

CONCLUSION

Though LLP is one of the best business startup option for any investor but it has some major demerits which give a hurdle to many. Venture capitalists refrain themselves to invest in LLP simply because of its complex formation and also of its sharing responsibilities of being a partner. They simply opt for private companies rather than LLP due to less responsibilities and liabilities.

The unwillingness of VCs can be clearly seen through the demerits of LLP which are discussed above. If they have a choice of having lesser complexities and flexible legal formalities, they would definitely choose Pvt. company over LLP.

References:

• http://www.llponline.in/what_is_llp.php
• http://www.marketexpress.in/2013/04/limitations-disadvantages-llp.html
• http://www.edupristine.com/blog/venture-capital
• https://www.vcexperts.com/buzz_articles/297

^[1] http://www.edupristine.com/blog/venture-capital

^[2] http://www.llponline.in/what_is_llp.php