In this blog post, Ananth Maheshwari Kini, a fourth-year student from Bharti Vidhyapeth, Pune and pursuing a Diploma in Entrepreneurship Administration and Business Laws by NUJS, discusses the implications of the Indo-Mauritius Tax Treaty on an MNC.

Introduction

The Indo-Mauritius Tax treaty or the Double Taxation Agreement between India and Mauritius is an agreement dealing with Taxation issues between the two Countries/states divided into 29 articles and signed on 6th December, 1983 (Notification F. No. 501/20/73-FTD dated 6-12-1983) which came into effect from 1st April, 1983 in India and from 1st July, 1983 in Mauritius.

It is to be noted that the present protocol is applicable only with respect to India and Mauritius. Other countries will not as such have a direct impact of this treaty, though indirect effect may be possible in some cases such as Lower tax rate in the one country may serve as an incentive for the Company to shift in that country rather than some other country.

Why This Change In The Tax Treaty?

Recently, on 10th May, 2016 the Government of India signed a protocol for amending the Tax treaty between India and Mauritius at Port Louis, Mauritius after a long period of 33 Years. This change has been made keeping in the mind “The long pending issues of treaty abuse and round tripping of funds attributed to the India-Mauritius treaty, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.”

Curbing Black money, increasing revenue for the Government of India, transparency in taxation system, drug smuggling and human trafficking are also some the other reason for this amendment. There have been many instances of taxes evasion in Mauritius that it has been referred as Tax Haven for Indian investors.

Impact of the Amendment

This amendment will have both positive and negative impact on the Indian economy, considering the fact that Mauritius ranks the 1st Country in terms of Foreign Direct Investment (FDI) inflows in India with over 33% of the total FDI in the last 10 years. Some of the foreign Companies in India that have been subject to heavy FDI include TMI Mauritius Ltd, Etisalat Mauritius Ltd. Vodafone Mauritius Ltd etc.

Article 4 of the Tax Treaty defines resident as ” resident of a Contracting State ” means any person who under the laws of that State, is liable to taxation therein by reason of his domicile, residence, place or management or any other criterion of similar nature. The terms ” resident of India ” and ” resident of Mauritius ” shall be construed accordingly”

Multinational Corporation (MNCs) are companies which have their area of operation in more than two or more Countries that is except for their Home Country for example if a

Company A is incorporated and has business activity in USA along with business activity in Country B & Country C, then Company A will be termed as a Multinational Corporation.

According to the Government of India official Press Release, there are mainly four key features of the Protocol, which are as follows –

1. Source-based taxation of capital gains on share
2. Limitation of Benefits (LOB)
3. Source-based taxation of interest income of banks
4. Exchange of Information Article

1. Source-based taxation of capital gains on share

With this new change, now India can tax on capital gains resulting for alienation of shares in a company resident in India by a Mauritian resident which have been acquired from 1st April 2017, the tax will levied at 50% of the domestic tax rate till31st March, 2019 after which no exemption will be given. Similar, provision also has been made with respect to investment in shares.

1. Limitation of Benefits (LOB)

The above mentioned tax rate at 50% of domestic tax rate will only be available to a Mauritius resident. In case of a Company, it will be deemed to be a resident of Mauritius if the expenditure on its operation is less than 27 Lakhs rupees in the preceding 12 months and has a bona fide business purpose test; that is it should not be a Shell Company.

1. Source-based taxation of interest income of banks

Mauritian resident banks will now have to pay an interest on 7.5 % on debt arising in India made after 31st March 2017. However, any debt or loan made before 31st March, 2017 will not be taxable in India.

1. Exchange of Information Article

Exchange of Information Article will be updated in accordance with international standards and provide for assistance in matters relating to taxation. Confidentiality with respect to exchange of information has been made mandatory but is however is subject to operation of law such as in Judicial proceeding, Taxation assessment etc.

Other major changes include levying taxes on Fees for Technical Service (FTS) (10% Tax on Fee) and Services of Permanent Establishments by Mauritius’s resident in India from 1st April 2017 which was earlier exempted from paying taxes.

Amit Maheshwari, Partner, Ashok Maheshwary & Associates, a CA firm, said that Singapore and Mauritius are the two most popular jurisdictions for routing investments, would lose their advantage. “This is expected to impact funds and companies from the US who used to come through Singapore/Mauritius to avoid double taxation.” Similarly viewed was also a shred by Manoj Purohit, Director, Grant Thornton Advisory Private Ltd, who said that “The amendment will have a greater impact on Foreign Direct Investment into India coming from Mauritius as well as Singapore.”

Implications of Indo-Mauritius Tax Treaty on Companies/MNCs

The Purpose of any Tax treaty between two countries is the elimination or reduction of Double Taxation and prevention of fiscal evasion, mutual trade and investment.

The Double Taxation Avoidance Agreement or DTAA will encourage both the Indian companies and MNCs to expand their business activity in other countries by way of investment by FDI due to the tax benefits under these agreements as in case of payment of dividends etc. However, the recent protocol has lamented tax exemption in Capital gains, Service of technical service and other income of Mauritius’s company resident in India which may discourage foreign investments.

The present India – Mauritius Tax treaty in addition to the above two objectives also seeks to regulate other considerations such as fixation of Director’s fee and similar other payment of Companies (Article 16), income from immovable property (Article 6), Business profit (Article 7), Royalties (Article 12) etc. of companies situated in either of the two country.

In most of the cases, the income of company or individual of the state is taxed in the Country where it is earned unless if the income is generated by permanent establishment or is given to resident of the other state by a company resident of the country where it is earned, in such a case the income is taxable in both the states.

In case of dividends by a resident country’s company to resident of another country the dividend is taxable in the other state subject to certain conditions.

Article 23 of the aforesaid convention specially deals with elimination Double Taxation, it states that in generally the income is taxable where it is earned for example If a Mauritius’s company is resident in India has a business activity in India then the income shall be taxable only as per Indian laws.

The Present Convention has a significant impact on Companies and MNCs situated in these two countries due to the fact the Tax is charged only once in most the cases which will encourage companies to expand their area of business activity, moreover the convention also regulates fixation of Director’s fees which plays a crucial role in the appointment of Directors. Also provisions regarding income of immovable properties, income from royalties, Capital gains etc. which play an important criterion for a company for expansion and investment selection due to tax obligations.

One of the recent key amendment in the protocol that is the introduction of interest on debt may hinder Mauritian resident Banking Companies in India to raise debts/loans within India due to the payment of interest on loan.

The Supreme Court of India in the Vodafone case has held that in taxes on investment shall be decided on the bases of the generation of wealth and employment by it in the legitimate business activity, and if the investment is dubious strict actions will be taken such as in form of NGOs, Companies etc.

In absence of a Tax Treaty or a DTAA between two countries, the company or individual resident of home country and working in the source country may have to pay heavy taxes due to double taxation in both the countries, an agreement of tax treaty helps in solving this problem mutually between the countries whereby the parties stand to have a win – win situation in terms of attracting more FDIs and revenue generation.

Thus , it can rightly concluded by saying that any change in Tax rate or amendment in the Tax treaty can have far reaching effect on the economy of the both the two states in terms of Gross Domestic Product (GDP), revenue, employment, foreign investment. However, it is too early to comment of the impact of this recent amendment as it may or may not result in lower FDIs from Mauritius.

In this blog post, Bhawana Tiwari, a BA LLB (Hons.) student from ILNU and pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the tax treatment given for the payment of brokerage fees to an offshore reinsurer.

Indian insurance sector is much neglected sector and to an extent wherein there are no clear provisions of law to tax the players in this sector. The problem in taxing this sector lies in the fact that the sector itself is a very complex web. The clearest aspect of taxation in this sector is that the policyholder gets exemption under section 80c of the Income Tax Act, 1961 and the insurer has to pay service tax accordingly.

In this article we will try to understand the position of tax treatment of brokerage fee paid to an offshore reinsurer. For this purpose there is a need to understand what reinsurance is. “Reinsurance is a transaction by which risk is transferred from an insurance company to a reinsurance company.” Generally the big risks like terror attacks, aircrafts, satellites etc are reinsured as the nature of the risk is huge and it might be impossible for an insurance company to provide the compensation when the need arises. A reinsurer is a big player in the market and virtually provides stability to the insurance market.

The reinsurance is the arrangement specifically between the insurer and the reinsurer and there is no role of the policyholder per se. Such an arrangement can be made between the insurer and reinsurer directly or through a broker company. For this transfer of risk the reinsurers are paid a premium by the insurer.

The problem with respect to reinsurance in India is that there are no separate rules for tax treatment of reinsurance. Hence, the premiums ceded or claims received mostly follow the accounting treatment in the books of the insurer.

Also there is only one Indian company i.e. General Insurance Corporation of India (GIC Re) which works as reinsurer. The foreign reinsurers could not set up their office in India as reinsurers but only as service providers as insurance remained a largely closed sector, however now that the Insurance Laws (Amendment) Bill, 2015 has been passed foreign reinsurers are keen to mark their presence in Indian market. Now due to large absence of foreign players in the market there is no certainty in the taxation of the transactions done by the foreign reinsurers in India. The situation becomes complex as there are no set provisions for carrying on the reinsurance business in India by any foreign entity with respect to their regulation and taxation.

As of now, due to lack of any settled principles, the income tax authorities take the view that the reinsurance premium paid to the foreign reinsurer or the Non Resident Reinsurer (NRRI) is accrued or arise in India and therefore is chargeable to tax under section 5(2)(b) of the Act which reads as follows:

“(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which—

(b) accrues or arises or is deemed to accrue or arise to him in India during such year.”

However, the reinsurance industry claims that is this is not the correct interpretation. The Income Tax authorities are widening the aspect of the provision to bring foreign reinsurers under the taxation regime somehow.

Their contention is that there is no business operation that is being carried out in India by virtue of a reinsurance contract. The foreign reinsurer merely takes the risk and not the profit as such, also the reinsurer doesn’t have any direct contract or dealing with the policy holders. Hence, neither the income is accrued or arise in India nor can it be deemed to be accrued or arise in India.

Now where there is a Double Taxation Avoidance Agreement that India has entered into with the country of the foreign reinsurer in question. The DTAAs that India has entered into with other countries have common Articles 7 which put the foreign companies out of the ambit of taxation in India if they do not have any permanent establishment in India. Hence, to tax a non resident company in India it is important to prove that there is a Permanent Establishment of the entity in India. However, it is to be noted that only a few of the DTAAs actually enlist reinsurance in Article 5 as a permanent establishment.

Unfortunately the definite answer to the taxation of the foreign reinsurer cannot be found at any level. As a result there have been various cases filed.

In the case of DIT v/s Guy Carpenter & Co. Ltd. the assessee was an international reinsurance broker based in the United Kingdom. A contract was entered into by the Indian insurance company seeking the international broker’s services and the assessee. Brokerage fee was paid by the Indian insurance company to the taxpayer for its service. The Assessing Officer & Commissioner of Income Tax (Appeals) held that the payment received by the taxpayer was part of “fees for technical services” under section 9(1) (vii) of Income Tax Act, 1961 and Article 13(4) (c) of the Double Taxation Avoidance Agreement as the service rendered was consultancy in nature.

The issue that arose was whether the services rendered by taxpayer were part of “fees for technical services” and liable to be taxed according to the provisions of the Income Tax Act and the Tax treaty. The tribunal held that the taxpayer was paid as an intermediary and not as a consultancy for any financial service per se. The taxpayer was only an intermediary in the process of reinsurance.

The tribunal also made it clear that mere rendering of technical services is not enough to attract tax liability under the said provisions. Instead “the technical knowledge must remain with the payer, and he must be equipped to independently perform the technical function himself without the help of the service provider.”

Conclusion

India is developing at a fast pace and to achieve this we have shifted from closed to an open economy. The government is striving to attract global business to help the economy further. In this effort there is relaxations given in Foreign Direct Investment. With this relaxation being given in various sectors India is now opening up its Insurance sector as well. The insurance sector in India has remained underdeveloped, both in the financial and legal aspects. However, now that the Insurance Laws (Amendment) Bill, 2015 has been passed there is now more reasons to understand the legal implications for the reinsurers of foreign origin.

Reinsurance law demands more focus and specialisation. There is a need to come up with proper legislation to deal with various aspects of reinsurance, mainly taxation. The problem in the ambiguity of the taxation provisions with regard to reinsurance is that it leads to unnecessary litigation and also loss of revenue. There is a need to address cross border reinsurance in the new GST regime to address the issues of indirect taxes involved in the reinsurance sector and along with that the Income Tax Act,1961 should be amended accordingly to address the direct taxation in issues involved.

In this blog post, Sangam Sangroula, a Fifth-Year BA LLB student from Kathmandu School of Law analyses and describes laws related to clean air in India.

ABSTRACT

With development and industrialization, environmental preservation has become a serious concern. The rising power, India, has been facing the environmental pollution due to rapid development and lack of proper implementation of environmental pollution control standards. Environment is directly related with article 21 of Constitution of India which deals with right to life of individual. The two main laws that regulate air pollution in India:  The Air (Prevention and Control of Pollution) Act, 1981 (Air Act) and Environment (Protection) Act, 1986 (EPA). This article is primarily concerned with critical study of provisions under these two acts. Then the article moves towards some case laws relating to clean air. Thirdly, some recent updates about air pollution in India will be highlighted. Finally, the analysis and conclusion will be drawn.

Introduction

The term “clean air” means which is clean, unpolluted and neither harmful for humans nor harmful to surroundings where we live. To maintain this, various countries in the world have their own laws. A state cannot ignore environment and only concentrate on economic growth. India is having worst environment among 132 countries according to Environment Performance Index. It is necessary to maintain good air quality so that every citizen will have protected their fundamental right i.e. right to life.

There are several factors degrading air quality of India. Today, it has been challenging to maintain clean air to most developed countries like China, Qatar etc. Smog is seen in big cities. Hence, the cities have remained as a hell for people where large number of people stays with different objectives.

In article 48A of the Directive Principles of Constitution of India it has declared that the state endeavor to protect and improve the environment and to safeguard the forest and wildlife of the country whereas article 51A imposes similar fundamental duty to citizens as well. Hence, it is necessary to have good laws and mechanisms.

Brief Summary of Legislation Related to Clean Air

Air (Prevention and Control of Pollution) Act, 1981

The objective of the Air Act 1981 is to preservation of the quality of air and control of air pollution.

The chapter 3 of this act deals with powers and functions of boards. There are two boards. They are Central Board and State Boards. Some of their important functions are to improve the quality of air and to prevent, control or abate air pollution in the country, to advise the Government on any matter concerning the improvement of the quality of air and the prevention, control or abatement of air pollution, to plan and cause to be executed a  program for the prevention, control or abatement of air pollution, to collect, compile and publish technical and statistical data relating to air pollution and the measures devised for its effective prevention, control or abatement and prepare manuals, codes or guides relating to prevention, control or abatement of air pollution, to lay down standards for the quality of air, to inspect, at all reasonable times, any control equipment, industrial plant or manufacturing process and to give, by order, such directions to such persons as it may consider necessary to take steps for the prevention, control or abatement of air pollution, to inspect air pollution control areas at such intervals as it may think necessary, assess the quality of air therein and take steps for the prevention, control or abatement of air pollution in such areas.

The Central Board and State Board work in collaboration of each other. The Central works throughout the nation whereas State Boards work within its state.

Likewise, chapter four states about the prevention and control of air pollution. State Government after consultation with State Board can declare any area or areas within the State as air pollution control area or areas for the purposes of this Act, can alter any air pollution control area whether by way of extension or reduction, can declare a new air pollution control area in which may be merged one or more existing air pollution control areas or any part or parts thereof.

Environment Protection Act, 1986

The Environment Protection Act came in 1986. Prior to this act, there was Department of Environment which was established in 1980 in India. In 1985, it converted into Ministry of Environment and Forests. Similarly, The Air (Prevention and Control of Pollution) Act came before this act in 1981.

The objective of this act is to take appropriate steps for the protection and improvement of environment and prevention of hazards to human beings, other living creatures, plants and properties.

This act has defined “environment pollution” as the presence of any environmental pollutant in the environment and “environment pollutant” as any solid, liquid or gaseous substance present in such concentration as may be, or tend to be injurious to environment.

Similarly, chapter two deals with general power of Central government. Central Government shall have power to take all such steps it thinks necessary for the preserving and improving the quality of the environment and preventing and controlling environmental pollution, to prohibit and restrict on the handling of hazardous substance in different areas, to prohibit and restrict on the location of industries and the carrying on of the process and operations in different areas, to carry out and sponsor investigations and research relating to problems of environmental pollution, to safeguard for the prevention of accidents which may cause environmental pollution and for providing for remedial measures for such accidents etc.

Besides, third chapter posits about the ways of prevention, control and abatement environmental control. It prohibits any person to carry on any industry operation or process shall discharge or emit or permit to be discharged or emitted any environmental pollutant in excess of such standards as may be prescribed and to handle or cause to be handled any hazardous substance expert in accordance with such procedure and after complying with such safeguards may be prescribed.  Whoever fails to comply or contravenes will be punished five years imprisonment or with fine which may extend to one lakh rupees, or with both, and in the case of failure or contravention continues, with additional fine which may extend to five thousand rupees for every day during which such failure or contravention continues after the conviction for the first such failure or contravention. Finally, if it continues more than a year from the date of conviction shall be punishable with imprisonment for the term which may extend to seven years.

Again, if a company commits any offense under this act, every person such as director, manager secretary or other officer of the company who at the time offence was committed, was directly in charge of and was responsible to the company for the conduct of the business of the company, as well as company shall be deemed to guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Brief Summary of Some Landmark Cases

Bhopal Disaster Case

On December 3 1984, the worst industrial accident in history occurred. Around 40 tons of Methyl Isocyanate (MIC) gas mixed with other poisonous gasses from a chemical plant which is owned and operated by Union Carbide (India) Limited. At least 3,800 people were killed and several were injured in this incident. This incident caused victims throats and eyes to burn, induced nausea because the gases remained low to the ground. Those who were exposed to such toxic gas gave birth to physically and mentally disabled baby even after 30 years.

The Union Carbide Corporation paid a sum of U.S. Dollars 470 millions for full settlement of all claims, rights and liabilities related to and arising out of the Bhopal Gas disaster to the Union of India. The principle of absolute liability was used by the Supreme Court made the Union Carbide Corporation pay compensation.It is relatively small in comparison to the offence which has long term effect in the human existence of that place.

Even after this great disaster, there has been rapid industrialization in India. While some affirmative changes in policy of government and conducts of a few industries have taken place, there still remain major threats to the environment from rapid and poorly regulated industrial growth. Due to widespread environmental degradation, adverse effect in human health consequences continues to happen all over India.

MC Mehta ( Taj Trapezium Matter) V. Union of India

Huge numbers of industries were around Taj Mahal. The main responsible factors for polluting the ambient air around Taj Mahal are industrial/refinery emissions, brick-kilns, vehicular traffic and generator-sets. The petition states that the color of marble has converted from whitish to yellowish and blackish. On 30th of December 1996 and the bench consisted of Justice Kuldip Singh and Justice Faizan Uddin gave the final verdict in this case. Taj Mahal, which is one of the world heritage sites as declared by UNESCO, has been source of revenue to the country because it has capacity to attract tourist throughout the world. The court was of the view that The Taj Mahal is a masterpiece and has international reputation. It is also an important source of revenue to the country because of the huge tourist attraction it commanded. So, there won’t be compromise regarding its beauty. The industries were supposed to relocate far from Taj Trapezium.

Principles laid down in this case are:

Sustainable development– Development of industry is essential for economy but at the same time environment has to be protected. Hence, the object behind this litigation is to stop the pollution.

Precautionary principle– the pollution created as an outcome of development so the state must anticipate, prevent and attack the harm caused to the environment.

Polluter pays principle– the court interpreted the principle in order to mean that the absolute liability to harm the environment is not only to compensate the victims of pollution but also for restoring the cost of environmental degradation.

Government Officials Announces Delhi Air Pollution an Emergency in India

The Indian Government has announced emergency situation and temporarily shut down construction sites, schools and a coal-fired power station due to severe levels of toxic air pollutant in Delhi.

A Delhi-based NGO “The Centre for Science and Environment” has said the Indian capital had seen the worst air quality in 17 years.

Similarly, Delhi Government has told farmers not to burn agricultural wastages. Depending on the last digit of their registration numbers The Delhi government is preparing to reintroduce a temporary scheme to only allow cars to drive on odd or even days.

The patient suffering from respiratory diseases have increased in the hospitals in the city. According to World Health Organization’s report of 2012 out of 100,000, 159 died with respiratory disease which shows India has the highest rate in the world.

Analysis and Conclusion

The concept of sustainable development came up with challenging the concept of rapid development. For example if any one cuts a tree then he/she has to plant two or more trees. The notion of sustainable development rose up with the idea of preservation of environment. The development should be done in such a way that it will last for a long time and the future generation won’t get into problems. But the situation is contrary in the case of India. The pace of development is very fast. But it is failing to maintain clean air.

There are acts, case laws, regulatory bodies and so on but still the situation of air is getting worse and worse. Lots of people are dying due to respiratory diseases and lung cancer. Especially in the city, where there is large population and where people from different rural parts of India come to seek facilities, are highly polluted. The life expectancy of people in India might go below then it is today.

Even there are legislations like The Environment Protection Act 1986 and The Air Prevention and Control Act 1981 which have mentioned about preventive measures, regulatory board, punishment and compensation and the precedent established in the Bhopal Disaster Case and MC Meheta V Union of India, air pollution hasn’t been reduced but has increased which has been proved by air pollution faced by capital city Delhi recently.  

It has already been three decades of these above laws which have come into existence but there is no improvement seen in the air and environment as a whole. From this point, it is clear that either there is problem in law itself or in the part of implementation. And the problem is in both laws and implementation. Laws overwhelmingly give discretion to make plans, investigate and research to the boards. It specifically does not address issues like removal of old vehicles, plantation of trees side by the road, dust management, stoppage of burning wastages etc. Therefore, the officials are silent and passive. They do not conduct any research, make plan and investigate to the issues. If the laws were clear regarding the respective issues then they would have been compelled to take action against such activities.

Similarly, if the officials had made planned to establish industrial area far from human residence, world heritage sites and cities then there won’t be problem. Due to lack of plan, at first the industry pollutes the environment, latter the case is filed and the court deliver verdict to relocate the industries in the case like MC Meheta V Union of India. Here seems problem in the implementation part.

Hence, Right to life of citizens will be violated at large if air is not clean.

In this blog post, Rishabh Pandey, a student of Guru Gobind Singh Indraprastha University, New Delhi and pursuing the Company Secretary Course by ICSI analyses and describes laws related to minority protection in India.

India has always embraced diversity, becoming a vast ocean of cultures, religions, ethnicities, beliefs and practices. With such diversity, it becomes necessary to give each community their due, without inciting any conflicts. This plethora of diversity in our democratic nation makes the minority communities at times vulnerable, calling for sturdy laws to protect their rights. Moreover, it becomes the duty of the state to ensure that human rights are available to all citizens, irrespective of caste, colour, or creed.[1] The Constitution of India strives to achieve a harmony between all the communities by ensuring “justice, social, economic or political” to all citizens and declaring itself to be a secular state.[2] While certain laws are applicable to all Indian citizens, there are personal laws that apply to certain communities only, preserving their customs and beliefs.  Minority rights protection in India has always been in limelight with political parties garnering votes of various communities through triggering their emotions upon their minority status.

The term “minority”, in general context, is used to refer to non-Hindu communities in India, though there are various other implications of this term.[3] Minorities can be classified according to their religion as well as language spoken, caste, tribal status and so forth.[4] But the minority communities as recognised by the government of India are – Muslims, Christians, Sikhs, Buddhists, Zoroastrians and Jains as under Section 2(c) of the National Commission for Minorities (NCM) Act, 1992.[5] But the term “minority” has neither been defined in the act nor the Constitution, and there is no widely accepted definition of the term globally. Population and religion have been the factors which have decided the scope of the minority status in India.[6]

Minority Rights Under The Indian Constitution

Under the Constitution of India, there are various provisions to safeguard the rights of minorities.[7] Preamble of the Constitution declares India to be a secular state.[8] Article 15 prohibits any sort of discrimination on the grounds of race, religion, caste, sex, descent, place of birth or residence.[9] Article 16 also prohibits any sort of discrimination when it comes to public employment, on the basis of religion, caste, language, race and so on.[10] This guarantees equal employment opportunities to all the Indian citizens in case of government offices.

The right to profess, practice and propagate any religion has been guaranteed to every person as a fundamental right under Article 25 of the Indian Constitution. This article allows the minority communities to follow their beliefs and practices without any hindrance as long as it does not hamper public order, morality and health of any person.[11] But the State can regulate the secular activities related to religious practices such as financial, political, economic activities.[12] Article 26 gives the freedom to the religious denominations or any such sections to manage their own religious affairs including managing institutions for religious and charitable purposes; owning, acquiring and administering movable and immovable property.[13] Again, this right is subject to public order, morality and health. Article 27 prohibits any compulsion on citizens to pay taxes, proceeds of which are to be appropriated in promotion of any particular religion.[14] Article 28 prohibits state funded educational institutions from providing religious instructions unless there is a requirement in the terms of the endowment or trust, by which the institution has been established, regarding imparting such religious instruction.[15] It also gives the person attending any educational institution the right to not participate in any religious instruction imparted by the institute.[16]

Article 29 of the Constitution provides the citizens with the right to conserve their language, script and culture; as well as guarantees that they would not be denied admission into any educational institution based on their race, language, religion or caste.[17] This right is provided to any section of the society, whether it has been recognised as a minority by the State or not.[18]

Article 30 is pivotal to the protection of minority rights in India. It provides the minorities the right to establish and administer educational institutions and the State has been prohibited from any discrimination in matters of granting aids to such institutions.[19] But these educational institutions can be regulated by the State. Although this article uses the term “minorities”, it has not been given any definition by the Indian Constitution. The judiciary has tried to dwell upon this matter in various cases.

In the judgment of In re Kerala Education Bill[20], the Supreme Court held that the meaning of the term minority can be construed to a “community which is less than 50% of the total population” in a defined area.[21] In D.A.V. College v. State of Punjab[22], it was held that Hindus even though they are majority in the nation, can be treated as a minority in State of Punjab for the purpose of conserving their language under Article 29 of the Constitution. Hence, religious or linguistic minority status should be construed in relation to the legislation which is sought to be impugned, in case of state legislature, according to the state population.[23] In A.S.E. Trust v. Director, Education, Delhi Administration, it was held that only those religions such as Muslims, Christians, Jains, Buddhists, Sikhs etc., which have kept their identities separated from the majority, i.e., Hindus, can only be considered to be “minority” based on religion.[24] Not every section of the Hindu religion can be considered to be minority.

TMA Pai foundation Case also upheld that the minority status of any community has to be decided based on state population.[25] It also established that Article 30(1) confers both linguistic and religious minorities the right to establish and administer educational institutions of their choice, albeit the right to administer is not absolute. The Judges also held that aided minority institutions need to admit a certain number of non-minority students so as to maintain a balance between minorities’ right under Article 30(1) and citizen’s rights against discrimination under Article 29(2).

The National Commission for Minority Educational Institution Act, 2004, amended in 2006 and 2010, was promulgated with an objective to safeguard the minorities’ educational rights as mentioned in Article 30(1).

Minority Protection Through Enforcement Of Personal Laws

Before the colonial rule in India, Personal laws were widely applied in India, including Hindu laws, Muslim Laws, and Jewish Laws.[26] The British also used the policy of non-interference with these personal laws.[27] In the contemporary India also, the matters related to marriage, divorce, succession and family affairs are mostly governed by the personal laws specific to the certain communities.

Marriage and divorce of the people from the Christian community are governed by Indian Christian Marriage Act, 1872 and Section 10 of the Indian Divorce Act, 1869, respectively.[28] Matrimonial aspects of the Parsis (Zoroastrians) are dealt by the Parsi Marriage and Divorce Act, 1936 which was amended in 1988 and 2001. The Hindu Marriage Act applies to the Buddhist, Sikhs and Jains and every other community which is not Muslim, Christian, Parsi or Jew.[29] In case of Muslim community, the marriages, divorces and adoption are governed as per the Mohammedan Law. The Jews follow their own customs which are uncodified and also follow the general laws applicable to all communities in general.

The Muslim community in India is governed by the Classic Muslim law as well as various legislations including –  the Shariat Application Act, the Dissolution of Muslim Marriages Act, the Massalman Wakf Validating Act, the Wakf Act, the Muslim Women (Protection of Rights on Divorce) Act.[30]

A major debate has been going on in the country regarding the enactment of Uniform Civil Code which will abolish all the personal laws and bring uniformity in the nation. The judgement of Mohammad Ahmed Khan v. Shah Bano Begum[31] came to be seen as major bone of contention between various Muslim Organizations and other sects advocating for women’s rights. In this case, it was held that Section 125 of the Criminal Procedure Code will supersede the Muslim Law. Due to fervent protests, the government passed the Muslim Women (Protection of Rights on Divorce) Bill, preventing Muslim Women from obtaining any relief under Section 125 of the Criminal Procedure Code.[32]

National Commission for Minorities

The National Commission for Minorities was established by the National Commission for Minorities Act, 1992 to protect minority rights in the country. The commission consists of one chairperson and six members representing the six minor communities – Muslims, Sikhs, Buddhists, Christians, Parsis and Jains. The Commission performs various functions including evaluating the development of minority communities under Union and States, ensuring the safeguard of minority rights as per the Constitutional laws and other legislations, conducting studies and researches on the matters related to minorities and suggesting measures to Government on these aspects.

The commission also acts grievance redress forum for persons belonging to minority communities. The commission calls for reports from concerned authorities after taking cognizance of complaints. These reports are studied and then recommendations are made by the commission. These recommendations are not legally binding upon the authorities but State takes them seriously and implements them. This Commission functions as a civil court in the matters concerning summoning of witnesses, discovery and production of documents; it receives evidence of affidavits, requisitions public records and copies, issues commission for examination of witnesses and documents, and any other prescribed matter in manner same as the civil courts.

Apart from these, the linguistic minorities can take up their grievances to the Commissioner for Linguistic Minorities that was established in 1957 to comply Article 350 B of the Constitution. The office of Commissioner submits annual report to the government.

Conclusion

India might be called a “melting pot” of cultures, but there are times when the pot gets too hot and starts brimming with the danger of communal riots. From Gujarat riots in 2002 to the Muzzafarnagar riots in 2013, India seems to have somewhat stagnated when it comes to communal tension. Though the law provides adequate measures for the protection of the minority rights, but the minority communities still face a lot of difficulty in climbing the ladders of success and development as there is no proper enforcement and implementation of these laws. Nevertheless, looking at the population of this great nation, it is not surprising that there are conflicts within the communities. But, what is surprising is the fact that India, being diverse at each and every step, has brought together so many different communities and the minorities have not lost their voice in conundrum.

The secularism of the nation needs to be protected and the rights of minority should not pale beside the rights of majority. Protection of minority can be achieved through proper enforcement of the laws related to minority communities, keeping the spirit of democracy alive as well as balancing it with Individual’s rights. The minorities, linguistic or religious, can resort to the various constitutional and legislative provisions available to them to protect their rights in an efficient manner.

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References:

[1] M.K. Sinha, Implementation of Basic Human Rights, Manak Publications(1999), P.100-182.

[2] Vijay Jaiswal, Rights of Minorities in Indian Constitution, ImportantIndia, available at http://www.importantindia.com/2182/rights-of-minorities-in-indian-constitution/

[3] Raju M.P., Minority Rights Myth or Reality, Media House(2002).

[4] M.N. Srinivas, Caste in Modern India and Other Essays, Asia Publishing House(1962).

[5] Profile of National Commission for Minorities, Government of India, available at http://ncm.nic.in/Profile_of_NCM.html.

[6] Annual Report(2015-2016), Ministry of Social Justice and Empowerment Government of India, available at http://socialjustice.nic.in/writereaddata/UploadFile/SOCIAL%20JUSTICE%20ENGLISH%2015_16.pdf

[7] Manoj Kumar Sinha, Minority Rights:A Case Study of India, International Journal on Minority and Group Rights, Vol. 12, Pg. 355-374.  

[8] Preamble, Constitution of India.

[9] Article 15, Constitution of India.

[10] Article 16, Constitution of India.

[11] Article 25, Constitution of India.

[12] Ibid.

[13] Article 26, Constitution of India.

[14] Article 27, Constitution of India.

[15] Article 28, Constitution of India.

[16] Ibid.

[17] Article 29, Constitution of India.

[18] Vijay Jaiswal, Rights of Minorities in Indian Constitution, ImportantIndia, available at http://www.importantindia.com/2182/rights-of-minorities-in-indian-constitution/

[19] Article 30, Constitution of India.

[20] Re Kerala Education Bill, 1957, 1959 SCR 595.

[21] Supra note 7.

[22] 1971 AIR 1737.

[23] Varun Shivhare, Minority Rights – The Judicial Approach, Legal Services India, available at http://www.legalservicesindia.com/articles/judi.htm.

[24] AIR 1976 Del 207.

[25] AIR 2003 SC 355.

[26] Christa Rautenbach, Phenomenon of Personal Laws in India: Some Lessons for South Africa, The Comparative and International Law Journal of Southrn Africa, Vol.39( July 2006), Pg. 241-264.

[27] Ibid.

[28] Infra note 27.

[29] Hindu Marriage Act, 1955.

[30] Personal Law, National Portal Content Management Team, available at http://www.archive.india.gov.in/citizen/lawnorder.php?id=16.

[31] AIR 1995 SC 1537.

[32] Supra note 7.