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What Are The Grounds On Which The Corporate Veil Can Be Lifted

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corporate veil

In this blogpost, Harsha Jeswani, Student, National Law Institute University, Bhopal writes about the grounds on which the courts lifts the corporate veil

Introduction

The landmark judgment of Salomon v. Salomon and Co. Ltd. recognised the principle of separate legal entity of company which says that a company has a separate existence from its members. This concept thus protects the shareholders from being personally liable for the company’s wrong and its obligations. In other words, unlike a partnership, the liability of members of the company is limited to the extent of capital contributed by them. This means that whenever any wrong is committed by the company, then its members cannot be held liable for those wrongs. The Supreme Court in the case of Tata Engineering Locomotive Co. Ltd. v. State of Bihar and others held that the corporation is a natural person and has its own existence. The entity of member is entirely distinct from its members; has its own name and seal; It assets are separate from its members, and similarly the liability of its shareholders is limited to the amount of capital invested by them. However, the truth is that that being an artificial person, the company is not capable of doing any act itself. The business is always carried on by individuals. In such cases, the courts lift this corporate veil of the company to identify the individuals who are actually guilty. The reason behind it is that no individual can misuse the veil of the company to hide his own wrongs. This is known as the lifting of the corporate veil or piercing the corporate veil.

Meaning

Piercing the corporate veil is one of the most widely used concepts to determine when can the shareholders of the company be liable for the obligations of the corporations. This concept operates as a check on the principle where shareholders can be held liable only to the extent of capital contributed by them. Piercing the corporate veil means disregarding the corporate personality and looking for the real person who is in the control of the company. In other words, where the shareholders take the corporate personality of the company as a means to commit fraudulent acts, then the court will break through the corporate shell and apply the principle of “lifting or piercing through the corporate veil. In United States V. Milwaukee Refrigerator Co., it was observed that-

“A corporation is considered to have a separate legal entity as a general rule……but when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as an association of persons.”

In Life Insurance Corporation of India v. Escorts Limited and Others[1], the Supreme Court laid down two major instances when the corporate veil is lifted. These are –

  1. Statutory provisions
  2. Judicial grounds

STATUTORY PROVISIONS

Officer in Default (Section 5 of the Act) This Section talks about the liability of ‘officer in default’ that is those individuals who are involved in wrongful or illegal acts are liable in respect of the offences committed by them. Thus, this section talks about the joint and several liability of the members. The term ‘officer in default’ includes a managing director or a whole-time director.

Reduction of Membership (Section 45 of the Act) – A public company requires at least 7 members for its formation and a private company requires at least two members (Section 3 of the Act). However when a company has been formed without complying with this minimum requirement and continues to carry on its business, then each member who knows such fact is individually liable for any debts contracted by the company during that time.

Improper use of Name (Section 147 of the Act) Sub-section 4 of Section 147 of the Act provides the liability of  the officer who signs Bill of Exchange, Hundi, Promissory note, cheque under the improper name of the company. Such officer shall be to the holder of such Bill of Exchange, hundi, promissory note or cheque as the case may be; unless it is duly paid by the company.

Fraudulent conduct (Section 542 of the Act) If at the time of termination of the corporation, it is found that the activities of the company were carried to deceive the investors of the company then the individuals who had knowledge of such business would be personally liable for any loss caused to such investors as the court may direct.

Failure to refund application money (Section 69 of the Act) If the company fails to repay the application money to the applicants who were not allotted the shares within 130 days from the date of issue of the prospectus, then the directors of a company are jointly and severally liable to repay the application money with interest. However, this won’t in any effect the continuance of the company and its separate existence.

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JUDICIAL GROUNDS

Apart from the statutory provisions, the courts in India on its own discretion also lift the corporate veil on certain grounds. Some of the cases in respect of this are-

FRAUD OR IMPROPER CONDUCT– the most common ground when the courts lift the corporate veil is when the members of the company are indulged in fraudulent acts. The intention behind it is to find the real interests of the members. In such cases, the members cannot use Salomon principle to escape from the liability. In one of the leading cases of Shri Ambica Mills Ltd., Re[2] the court held that the corporate veil of the company can be lifted in cases of criminal acts of fraud by officers of a company. Similarly, the court pierced the corporate veil in the case of VTB Capital v. Nutritek[3]and held the directors personally liable for obtaining loan fraudulently.

Tax Evasion Sometimes, the corporate veil is used for the purpose of tax evasion or in order to avoid any kind of tax obligation. It is not possible for the legislature to fill all the gaps in the law and thus it is important for the judiciary to interfere. In such cases, the courts lift the veil of the company to find out the real state of affairs of the company. The leading case of Vodafone[4] was an example of the corporate structure formed to evade the taxes. The apex court in this case observed that – “Once the transaction is shown to be fraudulent, sham, circuitous or a device designed to defeat the interests of the shareholders, investors, parties to the contract and also for tax evasion, the Court can always lift the corporate veil and examine the substance of the transaction.” The Court, in this case, entitled the Income Tax Office to pierce the corporate veil of the company.

Company as an Agent In every case where a company is acting as an agent for its shareholders, in such cases the principle of vicarious liability is applied, and the shareholders will be responsible for the acts of the company. The court in such cases would look at the facts of the cases to determine whether the company is acting an agent for its members or not. This can be inferred either from the agreement where it has been expressly mentioned or can be implied from the circumstances of each case.

CONCLUSION

Thus, it is can be said the doctrine of the separate legal entity of company is not applicable in all case. There are instances where the court moves beyond this principle and lifts the corporate veil. However, the grounds for piercing the veil are not exhaustive. It depends on the facts and circumstances of each case. Apart from the statutory provisions, the Courts in India have time and again lifted this veil in cases of fraud, sham, tax evasion and other obligations to impute the liability to the shareholders.

However, the concept of piercing the veil, though used often, is still in its initial stage. Also the judicial pronouncements with respect to lifting the veil vary with each court’s views depending on facts of the case. Therefore, it is importance that the courts must remove this ambiguity by providing a comprehensive framework of instances where the corporate veil can be lifted.


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References:

[1] (1986) 1 SCC 264

[2] 1897 AC 22

[3] [2012] EWCA Civ 808

[4] Vodafone International Holdings B.V. v. Union of India & Anr. [S.L.P. (C) No. 26529 of 2010, dated 20 January 2012]

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What Are The Important Clauses In A Freelancing Agreement

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In this blogpost, Saumya Agarwal, Student, Amity Law School, Delhi writes about the important clauses a freelancing contract should contain.

Introduction

Freelancer is a person who is self-employed and not necessarily committed to a particular employer for a long-term. Sometimes, he also represents a company but does not necessarily have a particular employer. “Independent contractor” is also a term used for freelancing but freelancing is the term used more commonly by culture and creative industries.

Freelancing is abundance in the fields, professional and industries like music, journalism, publishing, screenwriting, filmmaking, app design, web design, website development, copy editing, etc.

Freelancers often handle their own accounts, market their own work, and draft their own agreements amongst other things they have to do for themselves. If they choose to pay the professionals they often end up working for long working hours which is more than the usual. Also, sometimes they do not have enough money to give for these works.

Drafting an agreement is not easy and without a professional at bay, it is quite a task. A good agreement will help both the freelancer and the client to have clarity as to what do they want from each other. This would avoid misunderstanding between the parties at a later stage. Here are some of the important clauses which the freelancer, as well as his clients, should keep in mind while drafting an agreement.

Important clauses

The most important thing to do is to use simple language to avoid confusion. A lawyer is not needed if you know how to draft a contract. Although, the advice of a legal expert should be taken before drafting an agreement.

  1. Basics
  • Names of the Parties
  • Addresses of the Parties
  • Names of the Organizations

While this information is probably well known to by both the parties but it is important to write it down so that both the parties are on the same page about their role and responsibilities while contracting the agreement.

  1. Scope of the Agreement

The Scope of the work is as to what both the parties will do for each other. What nature of their work will they provide for each other. A vague and incomplete answer will result in litigation later on. So in the scope of the agreement both the parties should know what to expect out of each other.

  1. Timing/Deadlines

There should be clarity in the deadlines for the work submission. If the project is divided into phases, deadlines should be assigned to each of the phases. If there is any change in the nature of the work, then the deadline should also be changed with it. Determining that time frame at the beginning and formalizing it in the terms and conditions of the contract will ensure that either party does not take advantage of each other.

If the terms of the agreement are not clear then that will give the other party more time and this will eventually result in disputes. Also, be sure to include the time frames on which the client needs to respond to submissions with their questions and concerns.

  1. Payment and Collection

It is important that the agreement should have clear financial statements. There should be no ambiguity in the consideration. For most design work, billing by the job, rather than by the hour, is easier. There might be agreement on financial matters, but they should be included in the contract anyway for good measure.

Also, it is very important that the parties agree to include a Cancellation clause in the pricing section of the agreement. It actually protects the clients, freelancer as in case either of them backs out then the agreement stands terminated before completion.

The freelancer can be paid by the hour, by the project or whatever agreement has been decided upon by the parties, but it should be clear.

  1. Payment Timing and Late Fees

‘When’ to be paid is as important as ‘how much.’ If a party expects to be paid when they deliver the work, then they should say so clearly. If the party expects to be paid something in advance, then they should say so as clearly as possible as to how much and when do they expect them from the other party.

  1. Jurisdiction/ Governing law

The parties should agree to a jurisdiction. The agreement should clearly state that in the case of any dispute between the parties, the parties should be governed by the particular countries’ law.

  1. Amendment

The parties should include a clause that states the procedure of amendment. It should also include a clause which allows the number of alterations and revisions in the agreement. Maximum limit of the number of amendments should also be agreed between the parties so that the privilege is not abused by either of the parties. Further, the parties should agree upon verbal or written changes in revising and altering the agreement. There should be clarity in wordings, and a mere commentary form of language should not be used. The parameter of work changes or if more work is required as compared to originally estimated, they can renegotiate the rate.

It should be kept in mind that professionalism should win at all times!

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General Overview Of The Law Related To Intellectual Property

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IPR

In this blogpost, Haridya Iyengar, Student, Jindal Global Law School, Haryana writes about legal protection available for the intellectual property covering copyright, patent, trademark and trade secrets.

This paper seeks to understand the types of legal protections available for the intellectual property.  It will do this by – First, exploring the history of legal protection given to intellectual works. Second, it will look at the legal protection offered presently for intellectual property.

History of Intellectual Property

The first instance of legal protection for intellectual property was seen during Roman times. While there was no notable law about intellectual property in Roman law, jurists often discussed the rights associated with the ownership of intellectual work. There are three notable cases refer to by Bruce Bugbee in his work “The Genesis of American Patent and Copyright law”. One of these cases was Vitruvius exposing intellectual property theft during a literary contest in Alexandria. Vitruvius exposed a false poet for stealing words and phrases while serving as a judge in the contest. However, the Romans did not actually recognize intellectual rights, the person who committed intellectual property theft was merely disgraced.

The first law on intellectual property was issued by the republic of Florence. The statute not only recognized intellectual property rights of the authors and inventors but, also built in an incentive mechanism, a compensation system for infringement and a term limit on those rights was imposed[1].

The first modern copyright statute was the Statute of Anne of 1710 which, gave protection to authors by granting them a 14-year copyright and a renewal of 14 years was possible if the author was still alive.

The Domain of Intellectual Property

 The subject matter of intellectual property is largely codified in copyright, patent, trademark and continental doctrines. However, this is just starting point it does not map out the entire landscape. This paper will try to explain all the domains of intellectual property.

Copyright

Copyright is the protection of original work in any fixed tangible medium of expression. Works that come under copyright protection include music, computer software, literary works, artistic works, photographic works, architectural and cinematographic works. Copyright protection can only be given to original works it may not be given to anything that was produced due to a result of copying. Furthermore, the product must be “non-utilitarian” or “non-functional” in nature. Finally, only actual expression are protected and not abstract ideas.

There are five major rights enjoyed by the owner of copyrights – the right to reproduce the work, the right to adapt it or derive works from it, the right to perform it publicly, the right to distribute copies of the work and the right to display works publicly.

Copyleft and Creative Common License

The Copyleft ideology is a build on the copyright system which is already in place. There are four major freedoms which cause a distinction between the two – the freedom to use the software anyway one wishes, the freedom to modify the software any way one wishes, the freedom to distribute the software and the freedom to distribute the modifications made to the software. However, any software which has been modified through the Copyleft system must be similarly accessible and usable[2].

The creative commons licence is very similar to the Copyleft system. However, it is more flexible than the Copyleft system. It allows the author or creator of the work to set the level of restriction on his creation. There are different constraints that can be set under the creative common licence but, all of them share one attribute which is an acknowledgement of the author of the work[3].

Patents

Patent laws protect the inventions and discovery of new and useful machinery, processes, articles of manufacture, or composition of matter. There are three types of patent laws – utility patents, design patents and plant patents. Utility patents protect any new and useful machinery, processes, articles of manufacture, and composition of matter. This also includes improvements made on the creations. Design patents protect any new and original designs made on articles of manufacture. Plant patents protect a new variety of plants. The term of a patent in India lasts for 20 years from the date of filing the patent application.

The patent holder is granted the right to make, sell and authorize others to sell the patented item. However, unlike copyright protection others who independently invent the same process or machine may patent or market their invention.

Trade Secret

Trade secrets typically rely on private measures to be protected rather than state action. A trade secret is any information that helps make the operation and functioning of a business or any other enterprise smoother. The secret may be a formula, process of manufacturing, list of customers or a pattern of machines. An intellectual work is not a trade secret if it is generally known within the industry, published in journals, books, etc.
Businesses and enterprises usually ask new employees to sign a contract to safeguard their trade secrets before letting them join. However, an employee can always request a non-disclosure clause to be added to a contract whereby, he is not told any of the company’s trade secrets.

Trademark

A trademark is a symbol, name, word, device or any combination which is adopted by a company to distinguish their products from the rest. However, a trademark is restricted by whether or not the symbol or word is used in everyday language. For instance, a common word such as aspirin or water may not be trademarked.

Moral Rights

A moral right is the right to protect the personal and reputational value of something rather than the economic value. Moral rights signify the connection between the creator and his or her creation. The distinction between moral rights and copyright, patents or trademarks is that moral right are non-transferable.

Conclusion

In conclusion, the domain of the intellectual property is decided based not only on the utility of intellectual property but, also based on the thought process of the creator.

[1]  Colin Humphreys (1997). Review of Terence Kealey ‘The Economic Laws of Scientific Research’ European Review, 5, pp 443-445. doi:10.1002/(SICI)1234-981X(199710)5:4<443::AID-EURO204>3.0.CO;2-1.

[2] http://www.gnu.org/philosophy/pragmatic.en.html

[3] https://creativecommons.org/licenses/

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What Is Cybersquatting And It’s Position In India

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In this blogpost, Vernita Jain, Student, National Law Institute University, Bhopal writes about what is cybersquatting, categories of cybersquatting, legal scenario of cybersquatting and its position in India

Domain names are the biggest trend in the internet world nowadays. Having a domain name is a general practice that a company undertakes so that their company can be easily identified due to their trademarks. There are a number of companies that a consumer wants to have a connection with, but such is not possible physically. The domain names make it possible for the consumer to identify and contact the company. Trademarks and domain names are interrelated.

A domain name holder gets paid by the way of pay-per-click advertising on a website. The only thing that he has to do is sit back and let the money roll in when any of the Internet users click on those ads. A domain name holder can earn hundreds of rupees in a day.

What is Cyber Squatting?

CYBERSQUATTING: MEANING AND ISSUES

By relying on the definition given in the case of Delhi High Court in Manish Vij v. Indra Chugh[1], the Indian courts have defined ‘cybersquatting’ as  “an act of obtaining fraudulent registration with an intent to sell the domain name to the lawful owner of the name at a premium”.

In cases which an individual or a company registers a domain name, and such domain name is identical or similar to a trademark of any other party and maliciously tries to sell the same for a profit. This is known as “Cybersquatting.”

Due to the fall in the prices of the domain names and increased in many  top level domains (.biz, .cn, .mob and lately .in), it has resulted in the cybersquatters making a lot of illegitimate profits.

In order to make illegitimate money, cyber squatter’s then sell the domain to the person or company who owns a trademark that has been used in the domain name  which may be said as a sort of ransom. As that particular domain name has already been registered by someone else, that particular domain name cannot be registered again in the name of the trademark owner.

In this manner, a cybersquatter infringes the fundamental rights of the owner of the trademark to use its trademark.

Categories of CyberSquatting

Cybersquatting is possible in many ways. However, typosquatting is the most popular form of cybersquatting.

It relies on the fact that, people using the internet are bound to make typographical errors while entering domain names into the browsers. Some common examples are:

If a person omits “dot” while entering the domain name: wwwexample.com;

A misspelled name of the intended site: exemple.com

A differently phrased domain name: examples.com

Any other top-level domain: example.org

The other fact that a cybersquatter relies on is that in the case when the holders of the trademark himself own the domain name he often forgets to re-register his domain names. The registration of the domain name is not for a fixed period, and if this domain name is not re-registered prior to its expiry, then the domain name can be purchased by anybody. In such cases, the cybersquatters register that particular domain name in their name. This process is called as “renewal snatching.”

LEGAL SCENARIO IN CASE OF CYBERSQUATTING:

U.S. Anti-cyber squatting Consumer Protection Act (ACPA) of 1999-

This act was introduced with the intention of providing protection to the trademark owners of distinctive trademark names against cybersquatters. The victim has two options:

  1. to sue the cyber squander under the provisions of the Anti-cybersquatting Consumer Protection Act (ACPA), or
  2. use of the International system of arbitration by the Internet Corporation of Assigned Names and Numbers (ICANN).

The jurisdiction is always the matter of problem in the case of courts. According to the courts, the seat of the trial should be the place of the plaintiff, the defendant or the place of the service provider through which the name is registered.

The World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre has taken a step to provide an Internet system for administration of commercial disputes involving intellectual property. This is a unique form of dispute solving mechanism that it is introduced to be used both for filling of evidence and for document exchange. It is an efficient and inexpensive service. In such a mechanism the arbitration takes place online.

Internationally, the United Nations copyright agency WIPO (World Intellectual Property Organization) provided an arbitration system wherein a trademark holder can attempt to claim a squatted site. In 2006, there were 1823 complaints filed with WIPO, which was a 25% increase over the 2005 rate. In 2007, it was stated that 84% of claims made since 1999 were decided in the complaining party’s favor. It is an agency which is specialized to form a balanced system that is easily accessible.

POSITION IN INDIA

In India victims of cybersquatting have been provided with a number of ways to deal with it, such as:

  • Sending cease-and-desist letters to the cybersquatter.
  • Opting for arbitration under ICANN’s rules,
  • Going for a trial to a state or federal court.

In order to bring the case on a fast track form of resolution, a case could be filed with the registry handled by National Internet Exchange of India (NiXI).

 In India, the Information Technology Act contains no provisions to punish cyber-squatters. The  IT Act does not provide for any legal compensation but, the registry has taken steps to provide compensation to companies  who are the victims and to discourage the squatters from further stealing domains.

SOME INDIAN CYBER-SQUATTING CASES

#Yahoo! Inc. v. Akash Arora

It is the first case that was reported in India regarding cybersquatting. In this case, plaintiff was a registered owner of the domain name “yahoo.com”. He obtained an interim order which  restrained the defendants  from dealing  the name “yahooindia.com” or any other trademark similar to the trademark of the plaintiff.

#Tata Sons Ltd Vs. Ramadasoft

In this case, the defendant had a domain name registered in the name of Tata. It was held in this case that domain names not only involves addresses but also the trademarks of the companies.

The domain names in this case,  were similar to the plaintiff’s trademark and that the defendant had used the names with mala Fide intention

These facts entitled the defendant to transfer the domain names in the favor of the plaintiff.

#Sbicards.com vs. Domain Active Property Ltd.

The administrative panel,  in this case, said that defendant an Australian entity had a registered domain name which was registered with the mala Fide intention and it could have attracted attention from the public because of its affiliation to SBI Cards products and services.

Conclusion:

Strict laws are required in this field to punish squatters and avoid these crimes in future.  Legal remedies should be given to service mark and  the trademark owners to protect them against Defendants who obtain domain name with mala Fide intentions. The plaintiffs should have an option of obtaining statutory damages this will act as an important tool for the trademark holders in protecting their intellectual property in the online world.

[1] Manish Vij v. Indra Chugh, AIR 2002 Del 243.

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A Final Year Law Student Pursuing CS, On How The NUJS Online Diploma Is Enhancing Her Skills And Helping In Her Studies

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Apoorva Sharma has interned with prestigious law firms as well as successful lawyers; in the field of litigation, taxation and corporate Law. She has her work published in many Law journals and is currently pursuing Law from NIRMA University Institute of Law, Ahmadabad and also pursuing CS from ICSI.

Apart from her career she is passionate about social causes and has volunteered with Arushi; an NGO working towards the education and rehabilitation of blind children. She lends her voice to record textbooks and other books for the blind children here.

 She completed the NUJS diploma in Entrepreneurship Administration and Business laws in 2015. Over here she talks about her experience with the NUJS diploma course, and how it is helping her studies and enhancing her skills. Over to Apoorva.

I joined the NUJS diploma in Entrepreneurship Administration and Business Laws while I was in the 3rd year of my law school. I came to know about this course through few of my friends and college seniors. After listening to all the positive reviews from them, I did an online search for the NUJS diploma course and found the course structure and syllabus to be very informative.

The course syllabus was such that it would help me in my law studies as well as for my CS preparation. The modules were very in-depth and informative. So I decided to join the course. I’m very much satisfied with the course and my expectations from the course are totally fulfilled.

I especially found the modules on taxation to be very informative. The drafting exercise in the course helped me develop my drafting skills. I recently participated in a drafting competition and it was made possible by the knowledge and skills acquired by doing the NUJS diploma course.

I have even mentioned this diploma in my CV and my LinkedIn profile. Although I have not had questions around this diploma course for my internship interviews. I’m sure my employers would have considered this and the knowledge I have gained through it.

I plan to have a corporate law career and I feel this course would help me in achieving it. The practical knowledge gained through this diploma course would help me in my interviews and once I land a job, it would help me perform better at my job.

I have recommended the NUJS diploma in Entrepreneurship Administration and Business Laws to my friends and juniors and few of them have already joined the course. I would recommend this course to anyone who wants to pursue a corporate law career and to people pursuing CS.

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How Judiciary Interprets ‘Consent’ In Rape Cases

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In this blogpost, Sudhi Ranjan Bagri, Student, National Law Institute University, Bhopal writes about how judiciary interprets consent in rape cases

Present provisions regarding rape

The law traditionally has defined the crime of forcible rape to be an act of sexual intercourse accomplished by a man with a woman not his wife, by force and against her will. The central substantive element of rape is non-consent.

Rape is not a unique crime requiring non-consent. But it is unique in the definition given to consent. As it has been understood, the consent standard denies female autonomy; indeed, it even denies that women are capable of making decisions about sex, let alone articulating them. Yet consent, if properly understood, has the potential to give women greater power in sexual relations and to expand our understandings of the crime of rape. That is, perhaps, why so many efforts have been made to define the concept.[1]

Unfortunately, the legal community has not yet developed a principled standard of effective non-consent in rape. Instead, courts and legislatures have tried to manipulate evidence and other rules around an undefined issue, usually guided by questionable assumptions about rape complainants and rapists they have lost sight of and failed to protect interests served by criminalization of rape

Questionable assumptions of rape assert that women who wear provocative clothes, smoke, go out after dark or travel alone not only invite rape but desire intercourse and, therefore, consent is presumed. It is the combination of this presumption with judicial interpretation of the non-consent element that is problematic.

How consent is assessed in rape trials-

Section 90 of the Indian Penal Code defines consent as free and intelligent consent, given without fear or fraud, and with a full understanding of the act to which the consent is being given. Whether the consent was freely and intelligently given, is a fact, which is not proved by the woman’s outward behavior and conduct alone. But in deciding rape cases, the Courts seems to rely upon that alone and do not seem to look for any further proof of her consent.[2]Another fundamental problem is that the law provides no clear, working definition of rape. This rather conspicuous gap in the law of rape presents substantial questions of fair warning for the men, which the law not so handily resolves by imposing the burden of warning them on women.[3]

The history of women’s Consent through judicial decisions traces how a judicial precedent represses the violence that underlines. Judicial interpretations have structured the women’s consent by declaring that;

  • Women’s consent and her character are made interdependent[4],
  • Women’s consent is presumed if she is unchaste.[5]
  • Her bad character and her consent are regarded as proved if she shows no outward signs of struggle resis­tance screams or absence of injury[6],
  • Immediate abortion amounts to no consent[7]

In Pratap Mishra’s case[8]  the court observed that:

“the prosecutrix was a fully grown up lady and habituated to sexual intercourse The opinion of medical experts shows that it is very difficult for any person to rape single handed a grown up and an experienced woman without meeting any stiffest possible resistance from her. There were no injury marks on the bodies or the sexual organs of the accused.”

Resistance often invites violence. Pregnant women who resist rape may be subjected to such violence as may cause her to miscarry even if she prevents the rape. It is conceivable that she may surrender and submit to save her baby.[9]

A similar phenomenon was noticed in the infamous Rape case of Mathura[10] a young tribal girl who was raped by police personnel. The Sessions Court held that sex between her and the constable was consensual. In the judicial discourse, frequent reference was made to terms such as ‘a woman habituated to sexual intercourse’, ‘shocking liar’, ‘felt the need to appear virtuous’. On appeal before the Supreme Court, it was held that[11]:“ it couldn’t be inferred that the girl was under any fear or was subjected to any compulsion, and thus this could not justify the inference of any “passive submission.” As pointed out earlier, no marks of injury were found on the body of the girl, and their absence goes a long way to indicate that the alleged intercourse was with her consent and that the story of a stiff resistance having been put up by the girl is all false.”

The patriarchal bias among the judges might be the cause of such interpretation. In 1996, Sakshi, an NGO, released a study called ‘Gender and Judges’ in which it analyzed the views of 119 judges from all over India along with the experience of female lawyers, complainants and observation of courtroom trials. To date, it is the only comprehensive research done on the judiciary’s perception of violence against women. Some of its findings illustrated the deeply entrenched patriarchal notions of those who interpret the Indian laws. Most Judges found it impossible to believe that violence against women can be the exclusive responsibility of the perpetrator. Judges were of the view that penetration of a woman is physiologically impossible without her consent and that in any case women are partially to blame for such abuse.[12]

The rape law underwent many changes by the Criminal Law Amendment Act of 1983. Section 114 –A was added to the Evidence Act. This section enables a court to raise a presumption that the woman who was the victim of rape had not consented and that the offense was committed against her will. However, this is a rebuttable presumption.

The Supreme Court observed in the case of Bodhisattwa v. Shubhra[13] held that:

“That the situation has hardly improved, and conviction rates for rapes are still lower than any other major crime. The woman continues to argue that in rape cases it is the victimized women rather than the rapist who is put on trial. A large number of women still fail to report rape cases to the police because of fear, embarrassment and insensitive treatment given by the doctors and law enforcement machinery.”

It is time to reconstruct some other parameters to infer free and voluntary consent. If presumption, is dropped law will have to search for real proof of ‘no consent.’

Taking into consideration past sexual history of the victim –

Admission of past sexual history of the rape survivor has historically been one of the most degrading and discriminatory evidentiary provision in legal history. In India, the past sexual history clause was enshrined in Section 155(4) Indian Evidence Act which held that when a man is prosecuted for rape or an attempt to rape or attempt to ravish it may be shown that the prosecutrix was of generally immoral character. This was not repealed in 1983 despite the insistent demand by women’s groups. After twenty years of protest the Indian Evidence Act (Amendment )Act 2002, omitted this clause with effect from 31 December 2003.Even after the deletion of such clause, past sexual history of the victim has continued to turn the situation against the victims and not in favor of them.

After the amendment, though generally such sexual history of the victim cannot be taken into consideration, however, it can be alleged so if the medico-legal certificates specifically mention such sexual history of the victim. So such medico-legal certificates can be said to have provided a backdoor in rape trials, for the accused to take the defense to bring in the past sexual history of the victim. Such certificates form the basis of defense as to the denial of the presumption of lack of consent.

This phenomenon is marked in the case of The Public Prosecutor v Yejjala [14]; wherein the accused was acquitted. The accused raped a pregnant midwife in her home, in the medico-legal certificate, it was recorded that the vagina admitted two fingers, and also confirmed the presence of the spermatozoa and certified that the victims was five months pregnant at that time. The certificate stated that the victim was habituated to sexual intercourse. The court held that the medical evidence does not show any injuries either on the private parts or notable injuries worth mentioning on the person of the victim to suggest the offering of resistance in any way during the alleged act of having sexual intercourse. The court upheld the judgment in the case of Tukaram v State of Maharashtra and Pratap Mishra v State of Orissa, and relied its judgment on them to uphold that there should have been marks of injury if the women did not consent.

The court surprisingly enough held that the accused need not take a specific stand of consent and consent may be inferred from the facts and circumstances of the case also. This suggests that medico-legal certificate are read to characterize the pregnant women as a habitué and therefore consenting subject, but further it is also not incumbent on the accused to make the plea that it was consensual sex, not rape. Instead, the court reads the medico-legal certificate as providing evidence of consent even if the accused isn’t specifically taking such a stand.

The case cited herein shows that the reversal of the burden of proof is successfully subverted since the manner in which medico-legal certificates are written provide ground for the accused to establish consensual sex and not rape.

Thus, it is clear that the past sexual history of the victims plays an important role in deciding the consent of the victims and that it is so arbitrary and illogical, but despite being so, the courts have relied on that so as to consider the actions of victims as her consent for such intercourse.

Conclusion

The interpretation by the legal system has failed to fulfill the real intent which was intended to be served by criminalizing rape. Much of this failure can be attributed to the legal rules that determine how a charge of rape is tried and punished. As has been shown that how courts take into account the past sexual history and that, in my view, leads to great injustice. Thus such tendency by the courts needs to be changed so as to properly decide the rape cases, and to eradicate the arbitrary ad unreasonable procedures and practices applied by the courts.

[1] Patricia Smith (ed),Feminist Jurisprudence ,Oxford University Press,2003, p.162

[2] Vasudha Dhagamwar, Law, Power and Justice, The protection of personal rights in the Indian Penal Code,

(Sage Publications, 1992), p. 147

[3] Ibid

[4] Laiq Singh v State of UP, AIR 1970 SC 658

[5] Ibid

[6] Tukaram v State of Maharashtra, AIR 1979 SC185

[7] Pratap Mishra v State of Orissa, AIR 1977 SC1307

[8] Ibid

[9] Supra 3

[10] Supra 5

[11] Supra 6

[12] ShubangiSwaroop, “ The Many perceptions of Rape’ available at http://www.openthe magazine.com/article/nation/themany-perceptions-of-rape

[13] AIR 1996 SC 922

[14] MANU/AP/0964/2004

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Rights Of The Husband If The Wife Files A False Complaint

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false complaint

In this blogpost, Harsha Jeswani, Student, National Law Institute University, Bhopal, writes about how a false complaint by a wife entitles the husband the right to seek divorce.

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Analysis Of The Lokpal and the Lokayuktas Act, 2013

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In this blogpost, Rajnandini Mahajan, Student, RGNUL, Punjab writes about the history, composition, appointment, eligibility, jurisdiction, working and the loopholes in the institution of Lokpal

History

The idea of an ombudsman to investigate the matters of corruption was first introduced in 1968 in the fourth Lok Sabha. After that efforts were made to make this abstract idea a reality in 1971, 1977, 1985, 1989, 1996, 1998 and 2001. However, this endeavors remained largely unsuccessful owing to lack of political will. In 2010-11, these efforts reached its pinnacle when a social worker Anna Hazare went on a fast until death in order to enact the Act regarding the establishment of the institution of Lokpal. The public support that Anna Hazare had made the government succumb and a joint committee consisting of representatives of government and civil society were formed to draft the bill. However no consensus could be achieved, and the government moved its version of the bill in the Lok Sabha. The bill was reviewed by the Parliamentary Standing Committee on Law and Justice and passed by the Lok Sabha. The bill was referred to the Select Committee in the upper house and amended on the basis of its recommendations. As a result of this, the Lokpal and the Lokayuktas Act, 2013 was enacted. The important provisions of the Act are discussed here.

Composition

The institution of Lokpal shall consist of eight members along with a chairperson. The members are further classified into judicial and non-judicial members. The judicial members should have higher judicial experience and the non-judicial should have experience in public administration, finance, insurance and banking laws, anti-corruption and vigilance. Half of the members should be from among the SC/ST/OBC/ minority and women.

Appointment

The Chairman is to be appointed by a Selection Committee consisting of Prime Minister, Leader of the Opposition, Speaker of the Lok Sabha, an eminent jurist nominated by the President on the basis of the recommendation of the Selection Committee and Chief Justice of India or any other sitting judge of Supreme Court nominated by the Chief Justice. The chairperson or member can be removed from his office by President on grounds of misbehavior after a Presidential reference to Supreme Court on a petition signed by 100 MPs.

Eligibility

The Chairman has to be either the former Chief Justice of the Supreme Court or the former judge of the Supreme Court. An eminent person of impeccable integrity and outstanding ability, having special knowledge and expertise of minimum 25 years in the matters relating to anti-corruption policy, public administration, vigilance, finance including insurance and banking, law and management can also be appointed as a chairperson.

The judicial members should be a former judge of the Supreme Court or a former Chief Justice of a High Court. As far as the non-judicial members are concerned, he should be an eminent person with impeccable integrity and outstanding ability, having special knowledge and expertise of minimum 25 years in the matters relating to anti-corruption policy, public administration, vigilance, finance including insurance and banking, law and management. Every member of the Lokpal has to declare its assets before taking up the office.

Jurisdiction

The jurisdiction of the Lokpal extends to cover the Prime Minister, Union Ministers, Members of Parliament (except for the matters relating to Article 105), class A,B,C and D officials, any person who is or has been in-charge (director / manager/ secretary) of anybody / society set up by central act or any other body financed / controlled by central government, any other person involved in act of abetting, bribe giving or bribe taking.

The inquiry against Prime Minister can only be initiated if the full bench of the Lokpal considers the initiation and two-third of the members approve of it.

Working of the Lokpal

The Lokpal has three officials under him- Secretary to Lokpal, Director of Inquiry and Prosecution. After receiving the complaint, the Lokpal will decide whether the inquiry is to be conducted or not. The inquiry wing is headed by the Director of Inquiry, and the function of the inquiry wing is to conduct a preliminary inquiry into the offenses alleged to have been committed by the public servants. The inquiry needs to be completed within 90 days. The Lokpal can also conduct the inquiry through CBI. The report made by the inquiry wing or CBI would be placed before the Lokpal bench with at least 3 members. Right to be heard will be given to the alleged officer. If he is found guilty, then the prosecution wing/ CBI would be directed to file the charge sheet against him. Departmental inquiry can also be initiated. If the officer is found to be innocent, then a closure report can be filed and proceed against the complainant for a false complaint. If the complaint is against an A to D officer, then the complaint is to be referred to the CVC, who will inquire and submit the report to the Lokpal in the case of group A and B officers. As far as group C and D officers are concerned, the matter will be further dealt by the CVC only. The Lokpal has powers of superintendence, ordering search and seizure, confiscation and attachment of property, recommending transfer or suspension of the accused public servant. It can also recommend constitution of Special Courts to try the cases of corruption. The inquiry wing of the Lokpal will have the powers of a civil court.

The salary of the Lokpal will be charged on the consolidated funds of India. However, the Lokpal is required to prepare its budget for every financial year. A Lokpal cannot conduct an inquiry against itself.

Lokayuktas

A Lokayukta is a state counterpart of the Lokpal. Prior to the enactment of the Act, it was left to the respective states to institute Lokayukta or not. The Act provided for appointment of Lokayuktas within a year in every state. Presently only states of Maharashtra, Orissa, Rajasthan, Bihar, Uttar Pradesh, Karnataka, Madhya Pradesh, Andhra Pradesh, Gujarat have Lokayuktas. Different states have different acts which impart different powers to the Lokayukta accordingly.

Loopholes and Lacunae

The institution of Lokpal is yet to see the light of the day. No new state has implemented the Lokayukta yet. Parliamentary Standing Committee on personnel, public grievances, law, and justice, in its report tabled in Parliament in April 2015 has slammed the government for the non-implementation of the Act. The lack of political will is to be blamed.

Even if the Act is implemented, it will only add to the already complex and complicated bureaucratic system which only defeats its own purpose. Further, it is not free from political influence as the appointing committee itself consist of parliamentarians. There is no criteria to decide who is an ‘eminent jurist’ or ‘a person of integrity.’ Thus, this appointment can easily be manipulated.

Further, the act provides no immunity to the whistleblowers. The provision for initiation of inquiry against the complainant if the accused is found innocent will only discourage people from complaining. Also, there is no foolproof way to determine whether the person who is appointed as the Lokpal will remain honest throughout.

The biggest lacuna is the exclusion of judiciary from the ambit of the Lokpal. The Lokpal is also not given a constitutional backing. There are no adequate provisions for appeal against the Lokpal. The powers, composition and scope of Lokayuktas do not find any mention of the act. There is a long way to go to ensure transparency and crusade against corruption are still on and yet to reach its destination.

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What is the role of Corporate Governance in the buy back of Shares

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role of corporate governance in the buy back of shares

In this blog post, Vrinda Saraf, a student at Mumbai University and pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the role of corporate governance in the buy back of shares.                                                                                 

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Important Laws On The Protection Of Environment

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In this blogpost, Haridya Iyenger, Student, Jindal Global Law School, Haryana, writes about laws on the environment in India and suggests steps which can be taken by individuals to combat climate change.

In recent years, the biggest problems faced by human beings is the rapidly changing climate. It is one of the biggest environmental, social and economic threats facing the planet. This paper seeks to analyse the existing laws and suggests a day to day implementations to reduce the change in climate.

Important Climate Change Laws in India

The Environmental Protection Act of 1986 is the most important legislation with respect to climate changes in India. The Act confers power on the Central and State government for the purpose of – First, protecting and improving the quality of the environment. Second, preventing and abating environmental pollution.

The Air Prevention and Control of Pollution Act of 1981 is an innovative legislation which lets the State regulate the standard for emission of air pollutants. The Act empowers the State to inspect any factory and check any control equipment and manufacturing process. It further allows the State to take necessary steps for the control of air pollution. No industry can operate without meeting the requirements mentioned in this act.

The National Green Tribunal Act of 2010 was enacted to govern the National Green Tribunal. These Tribunals were established to ensure the fast and effective disposal of cases which relate to the protection of the environment. These tribunals also have jurisdiction over cases where a substantial question relating to the environment arises.

 

To know more about the scope of constitutional provisions for environmental protection in India in brief, please refer to the video below:

The Energy Conservation Act of 2001 was enacted to provide a legal framework for the efficient use of energy. It does this by ensuring that only energy efficient equipment is provided to consumers and by providing a comprehensive framework for power development.

The Forest Conservation Act of 1980 was enacted to conserve and protect the existing forests in India. After the enactment of this act all forests became the reserved property of the government. The act also provides a compensatory measure to be taken when any reserved forest is directed to non- forest purposes.

The Water Prevention and Control of Pollution Act of 1977 was enacted to prevent pollution of water through agricultural, industrial and household waste. The act also regulates the cess paid on consumption of water.

The Wildlife Protection Act of 2002 was enacted to protect wildlife within the borders of India. The act has three main objectives – First, to establish a uniform legislation for wildlife. Second, to establish a network of national parks and wildlife sanctuaries. Third, to regulate the illicit trade of wildlife and its products.

The Biological Diversity Act of 2002 was enacted for the conservation and sustainable use of biodiversity in the country. This act helps bring India one step closer to the objective of realising equitable sharing of its biodiversity.

Steps that can be taken by Individuals to Combat Climate Change

While the country has a good framework to  fight against climate change, individuals need to actively participate in helping make a big difference. Our day – to – day activities play a major role in slowing down climate change. By following the steps below, we can help make a big difference in the world.

1)    Energy Efficiency

Reports indicate that energy sector emits almost 40% of the total carbon emission in India[1]. Small steps such as changing light bulbs to LED or fluorescent bulbs, hand drying clothes instead of using the dryer and buying appliances with energy STAR make big changes.

2)    Improving transportation method

Reports indicate that the transport sector emits over 142.04 million tons of carbon dioxide a year[2]. So it is important to walk, cycle or use public transport whenever possible. When this is not possible, try carpooling to the location.
Another way to reduce emission in this sector is by switching to eco-friendly cars.

3)    Control on Food we eat

While meat is tasty, a huge portion of the greenhouse gases is emitted from meat and dairy production. It is also important to eat organic food rather than processed items.

4)    Recycle

A huge step in reducing carbon emission is by recycling plastics, paper, metal and glass. This is practiced by most developed foreign countries. However, it is yet to pick up in India.

5)    Switch to Renewable Power

Many appliances can be run by renewable sources of energy rather than electricity. This not only helps reduce carbon emission but, also helps reduce the electricity bill.

Conclusion

To reduce the effects of climate change, it is not only important to stay informed but, also actively participate.

[1] http://www.moef.nic.in/downloads/public-information/Report_INCCA.pdf

[2] http://www.moef.nic.in/downloads/public-information/Report_INCCA.pdf

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