Types of juvenile delinquency

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August 2, 2023

This article is written by Sai Shriya Potla, a student at the Pendekanti Law College affiliated with Osmania University, Hyderabad. This article elaborates on the various types of juvenile delinquency in India while highlighting the causes for the same and explaining the legislations enacted to deal with them.

It has been published by Rachit Garg.

Table of Contents

Introduction

“A brave, frank, clean-hearted, courageous, and aspiring youth is the only foundation on which the future nation can be built.” – Swami Vivekananda

The youth represents the future of the country. Their constant desire to learn new things and modern outlook towards science and technology will lead the country forward in new innovations and technological advancements. Young people are innocent brains, they can be shaped into effective leaders to serve the interests of the country. Hence, India gave much importance to the proper education of children in recent times. But the increasing delinquent behaviour among the children may cause difficulty in this process.

According to the reports of the National Crime Report Bureau (NCRB), 31,170 cases were reported against juveniles in 2021, a 4.7% rise from 29,768 cases reported in 2020, and 76% of these crimes were committed by juveniles between the age group of 16-18. The rapidly increasing juvenile delinquency cases have become a huge concern for the country. The following article provides comprehensive information about the issue of juvenile delinquency, various types, causes, consequences, relevant statutes and preventive measures taken by the government in regard to the problem.

What is juvenile delinquency

Juvenile delinquency refers to the involvement of minors below the age of 18 in illegal activities that can hamper the proper functioning of law and order in a country. A juvenile is an individual who has not attained the age of majority. The statutory age of majority is different in every nation. In India, the age of majority is eighteen.

A person is said to be a delinquent when he is not in accordance with societal norms and values. A juvenile delinquent is treated differently from an adult criminal. When a juvenile engages in any anti-social activities, it is presumed that he lacks the mental maturity to take proper decisions but this is not the case with an adult. An adult is fully aware of his actions and the consequences of them. Therefore, emphasis is laid on rehabilitation of juveniles rather than punishment.

Vandalism, theft of items from any store and initiating or involving in a fight that causes injury to the public are some of the common examples of juvenile delinquency.

Legislation dealing with juvenile delinquency

The juveniles are governed by separate legislation due to their limited mental and social development. However, India did not have a structured juvenile system from the start.

Juvenile rehabilitation system before independence

Before independence, juvenile crimes were governed by the existing customary laws. But with the increase in juvenile delinquency day by day, the necessity for special legislation for juveniles was felt by the government. In light of the issue, the British government passed the first juvenile legislation, the Apprentices Act, 1850. According to the Act, minors between the ages of ten and eighteen who commit petty offences shall be treated separately, and the convicted juveniles will be placed as apprentices in trade.

A few other laws passed prior to independence also had provisions related to juvenile delinquency. Section 82 of the Indian Penal Code, 1860, provides immunity to children under seven and exempts them from prosecution. This doctrine of “doli incapax” forms the basis for this Section, according to which the children do not possess the mental capacity to commit any crime on their own. Section 83 of the IPC provides that a child above the age of seven and below the age of twelve who has not reached sufficient maturity cannot be prosecuted.

The Reformatory School Act, 1876 was enacted to transform the attitude of juveniles and provide reformatory provisions relating to juvenile offenders. The Court can direct delinquents below the age of sixteen who have been sentenced to imprisonment to attend the reformatory school instead of sending them to prison. But the offender should be shifted to local prisons after attaining the age of eighteen. The Act provides provisions for the treatment and rehabilitation of juvenile offenders.

In British India, there was no uniform national juvenile legislation for regulating the actions of children. Nevertheless, a few provinces, like Bombay and Madras, have their own juvenile legislation.

After Independence

After independence, the Juvenile Justice system was reorganised. The Children’s Act was enacted in 1960 with the objective of providing care, protection, education, and rehabilitation for neglected or delinquent children. Article 15(3), 21A, 24, 39(e), 39(f), 45, and 47 of the Indian Constitution promote children’s welfare and secure their bright future.

Juvenile Justice Act, 1986

The government enacted the Children Act, 1960, to establish a structured juvenile justice system applicable to the whole of India, but there was no uniformity in the enforcement of the act. The Supreme Court in the case of Sheela Barse v. Union of India (1986), recommended the central government to replace the Children Act, 1960, with a uniform juvenile act for the trial of children below the age of sixteen years.

In accordance with the United Nations Standard Minimum Rules for the Administration of Juvenile Justice (Beijing Rules 1985), the government enacted the Juvenile Justice Act, 1986. The Juvenile Justice Act came into force on 1st December 1986. A few provisions of the Act are enacted based on the Children’s Act. The main object of the Act is to provide a comprehensive legal framework for delinquent and neglected juveniles.

The Act aims at the promotion of care, protection, welfare and the prevention of the occurrence of juvenile delinquency. The Act also aims at establishing Juvenile Homes, Children’s courts, and Juvenile Welfare Boards. The Act defines juveniles as boys below sixteen and girls below eighteen years of age.

Juvenile Justice (Care and Protection of Children) Act, 2000

The principal aim of the Juvenile Justice Act, 1986, is to bring the Indian juvenile justice system in compliance with the UN standard of 1985. However, this aim was not accomplished. The General Assembly of the United Nations adopted the Convention on Children’s Rights in 1989, and India ratified it in 1992, which led to the formulation of the Juvenile Justice (Care and Protection of Children) Act, 2000.

The most significant change made by the Act was to rephrase the definition of a juvenile as a minor who has not reached the age of eighteen years. This change raises the age of juveniles from sixteen years to eighteen years. The main purpose of this change is to treat juveniles differently from adults. The Act also substituted the phrase “juvenile delinquency” with “the child in conflict with the law” and “neglected child” with “the child in need of care and protection”.

The Act aims at the establishment of observation homes and juvenile welfare boards. In addition to that, the Act also aims to establish the Child Welfare Committee. Section 31(1) of the act confers the committee with final authority to dispose of the cases for the care, protection, and rehabilitation of children and provide them with a healthy environment to exercise their human rights.

The Act also aims for the creation of a juvenile police unit in every district. The child welfare officer at every police station is provided with adequate training to handle juveniles. The Act prohibits death sentences and life imprisonment for juveniles.

Juvenile Justice (Care and Protection of Children) Act, 2015

The infamous 2012 Delhi gang rape case, commonly known as the Nirbhaya rape case, had a significant influence on the enactment of the Juvenile Justice (Care and Protection of Children) Act, 2015. In this case, a 23-year-old woman was brutally raped by six men; one of them was a juvenile at the time.

This horrific incident led to widespread protests from the entire nation, and doubts were raised in regard to the efficiency of the Juvenile Justice Act of 2000. The government passed the Act with the view of clarifying all the concerns raised with regard to the competence of the existing law.

The Act continues the Children’s Welfare Board and Children’s Welfare Committee and revives the Juvenile Court for every district, which was omitted in the 2000 Act.

The most significant change brought about by the 2015 Amendment to the Juvenile Justice Act is the categorization of offences. The offences are classified into three categories:

Heinous Offences: Offences for which the minimum punishment under the Indian Penal Code or any other law is imprisonment for a period of seven years or more. (Section 2(33) of the Juvenile Justice Act).
Serious Offences: Offences for which the punishment under the Indian Penal Code or any other law is imprisonment for a period between three and seven years. (Section 2(54) of the Juvenile Justice Act)
Petty Offences: Offences for which the maximum punishment under the Indian Penal Code or any other law is imprisonment for a period that may extend up to three years (Section 2(45) of the Juvenile Justice Act).

Section 15 of the Act mentions that any juvenile in conflict with the law in the age group of 16 – 18 shall be tried as an adult if the crime falls within the category of heinous offences. However, a juvenile cannot be awarded life imprisonment or the death penalty, according to Section 18 of the Act.

The Juvenile Justice Board will conduct a preliminary assessment of the mental and physical capability of the juvenile before the child is tried as an adult. The board includes experienced psychologists and psycho-social workers to assess the behaviour of children.

The Supreme Court in the case of Barun Chandra Thakur v. Master Bholu (2022) stated that the juvenile who will be tried as an adult must have the ability to understand the future consequences of the act of which he was accused. The court further mentioned that the consequences are not only confined to the immediate consequences of the offence but also the consequences that the victim and his family would suffer, only then a juvenile can be tried as an adult.

In the case of Rajiv Kumar v. State of Bihar (2018), the Patna High Court held that the preliminary assessment cannot be conducted for any other offences that are not covered under the definition of “heinous crimes”.

Factors contributing to juvenile delinquency

There are many factors that lead to delinquent behaviour in children. The following factors are the primary causes of the development of anti-social behaviour in juveniles.

Social factors

The social life of an individual has a long-lasting effect on the individual. Family and peer groups are two major components of the social life. Among all other factors, the family has a vital role to play in the behaviour of a person. Children spend the majority of their time with the family, they observe parents’ actions and tend to imitate or repeat them in their day-to-day life.

Parent’s failure to express their feeling to their children and constant conflicts within the family will lead to the loneliness in the child. In this process, they may seek bad company. On the other side, strict parenting styles and extreme restrictions will make them rebel against the accepted norms and values. Children who suffer physical or mental violence at a young age are more likely to engage in crimes.

After family, children spend most of their time with their peer group. Peer groups are formed to provide companionship to each other. Generally, peer groups promote stability and generosity in an individual, but the same can have a negative impact on the juvenile if they are in a bad companionship.

Economic factors

Poverty is one of the major causes for juveniles to engage in delinquency. The greedy desire to become rich in a short span can influence individuals to participate in illegal activities. Every person aims to raise their economic status, but due to the storage of opportunities and resources in a legal way forces an individual to pursue their dreams in the illegal and anti-moral method.

Education will impart rational thinking skills, discipline, good behaviour and the difference between legal and illegal to the children. But many families due to their poverty are unable to send their children to schools and colleges, instead, they are asked to assist their family financially. In the process, they get addicted to alcohol and drugs. Due to the lack of formal education, these juveniles fail to distinguish between good and evil and eventually get attracted to criminal activities.

Psychological factors

The crime commission is not always influenced by external forces, at times, disturbances within the person also feed the anti-social mentality. Emotional disturbances can lead to distorted thinking, extreme behaviour and unusual mood swings among individuals.

A person with low self-esteem is more likely to indulge in deviant behaviour as compared to a person with higher self-esteem. A juvenile with low self-esteem has a negative perception of themselves and is constantly frustrated by it. Rejection and hostility by others can lead to extreme behaviour in low self-esteemed juveniles. Emotional disturbances in families and a lack of affection and support from parents and peer groups are the major reasons for young adults’ low self-esteem.

A few times, jealousy can manifest itself as interpersonal conflict and give rise to feelings of revenge. Adolescents tend to show more acts of jealousy than adults due to their limited mental maturity.

Children suffering from attention deficit hyperactivity disorder, oppositional disorder, or any other mental health disorder are prone to display extreme aggressive behaviour and engage in intentionally annoying behaviour.

Types of juvenile delinquency

Howard Becker broadly classified juvenile delinquency into four types, i.e., individual, group-supported, organised and situational, based on the way the delinquent behaviour is carried out and the underlying social context.

Individual delinquency

Individual delinquency is used to describe the behaviour of a child who engages in criminal activities on their own accord without any assistance from others. Psychiatrists have made major contributions towards the study of individual delinquency. According to them, individual delinquency arises from psychological problems.

According to Doctor Healy, the primary cause for the display of such behaviour is the feeblemindedness of the delinquent. The intellectual imparity of a child makes him unable to conform to moral norms set by society, which forces the child to adopt criminal behaviour.

Children adopt their behavioural patterns by visualising their immediate environment, making the family a significant factor in determining the child’s behaviour. Family environment, lifestyle, and relationship dynamics influence the child’s mental and intellectual development. A child risks developing an anti-social attitude if parents fail to provide the expected love, compassion, and support. Poverty, lack of education, drug usage, and the criminal background of the child’s family are the main forces that raise violent and anti-social behaviour among children.

Heredity is also one of the factors leading to delinquent behaviour in teenagers. Children inherit negative behavioural traits from their ancestors. However, a change in the environment of the child will reduce the development of those criminal traits.

In the Barun Chandra Thakur v. Master Bholu (2022) case, a 16-year-old killed a 7-year-old boy by slitting his throat in the toilet of Ryan International School. The case was transferred to the Juvenile Justice Board from the Central Bureau of Investigation in view of the age of the accused. According to the social investigation report of the accused, he was aggressive, short-tempered, less stable, and often consumed alcohol. The board, after conducting the preliminary assessment, was of the opinion that the accused has the mental capacity to commit an offence and can be tried as an adult. However, many appeals were filed against the order, and the Supreme Court held that the power to make a preliminary assessment lies with the Children’s Court and Juvenile Justice Board, and the Court cannot delve into this matter.

Group-supported delinquency

Group-supported delinquency refers to the behaviour of a child who engages in anti-social activities in companionship with others. Delinquents develop this behaviour under the influence of the culture prevailing in their immediate neighbourhood and social groups outside the family. According to the reports of the United Nations, two third of the total cases of juvenile delinquency are committed by teenagers who group themselves into gang-like organisations.

Frederick Thrasher, in his work “Gang’s Theory”, discusses group-supported delinquency. Each group has a unique behavioural pattern distinct from other groups, and the members incorporate it into their personalities. During this process, the groups generate animosity towards each other and disseminate criminal techniques to safeguard and promote their interests.

Peer associations are formed among same-aged people. Teenagers devote more time to peer groups than their families. Adolescents are prone to criminal tendencies because they lack adult mental and intellectual maturity at that age.

An individual is willing to take part in any immoral or unethical act that is against the norms of society to get accepted by the group. Parents fail to exercise their control as the child begins to consider the opinions of peers more highly than those of their parents.

Organised delinquency

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Organised delinquency is committed by a group of young people formally organised to engage in criminal activities. These organisations have a hierarchical structure and are guided by the established values and norms of the group. Albert Cohen was the first person to mention organised delinquency. In the book “Delinquent Boys: Culture of the Gang”, Albert Cohen developed the theory of subculture. According to Cohen, the delinquent subculture is the primary reason for juveniles’ involvement in crime.

Subcultures emerge as the result of existing socioeconomic disparities in society. The working-class individual who wants to achieve success and pursue their goals is constantly confronted with middle-class demands and expectations; they soon realise that the rigid social structure and low social rank prevent them from reaching their goals. Inequalities in society compel the individual to reject the existing societal norms and values and join a subgroup to achieve his goals.

Cloward and Ohlin, in their book “Delinquency and Opportunity” pointed out that youngsters who fail to adjust to their inability to achieve success through legitimate means adopt the illegitimate procedure. Juveniles blame the societal order for their failure rather than their inability. A group of individuals who have faced similar experiences and have a typical attitude of hatred towards the existing system will form a deviant subculture. These delinquent subcultures emerged in America in the 1950s. Drug trafficking among children is a prime example of organised delinquency in India. Juveniles are hired by these organised groups to deliver drugs and substances, and they are often paid in drugs.

Situational delinquency

In the types mentioned above of delinquencies, the causes for the commission of the crime by juveniles are deep-rooted. They are driven by psychological, social, or cultural factors. But situational delinquency is not deep-rooted; rather, the cause and means of control are relatively simple.

An individual who indulges in anti-social activities because of the limited impulse control or pressure caused by family and societal restraints. In comparison with other types of delinquency, situational delinquency is considerably easier to control.

David Matza referred to Situational Delinquency in his book “Delinquency and Drift”. According to Matza, every person has criminal tendencies that are suppressed in accordance with societal norms. A juvenile is caught between the delinquent world and the conventional world; despite having knowledge about the norms and values of society, the juvenile bends towards deviant behaviour due to his permissive temptations. Matza called this process “Drift”.

David Matza states that techniques of neutralization enable drift. Neutralization is the process through which youth justify their delinquent acts. However, the concept of situational delinquency is not developed and is not given much relevance to the problem of juvenile delinquency. This type of delinquency only finds its place in writing, not in reality.

Rehabilitation for juvenile offenders

The Juvenile Justice (Care and Protection of Children) Act, 2015, aims to adopt child-friendly methods for the disposal of petty cases while emphasising rehabilitation and reintegration of juvenile offenders. Rehabilitation is the process of reforming and restoring an individual back into society after engaging in delinquent behaviour.

The act stipulates that the observation homes and childcare institutions will serve as rehabilitation centres for children in conflict with the law and children in need of care and protection, respectively.

Juveniles between the ages of 16-18 years can be tried as adults for the commission of heinous crimes with the approval of the juvenile justice board and children’s court. But the act created special child care institutions for juveniles involved in delinquent behaviour for petty offences. These juveniles are not subjected to corporal punishment or humane treatment; instead, rehabilitation facilities are provided.

Juvenile rehabilitation is carried out with extreme care and the utmost diligence, given that they are still in the early stages of mental development. Delinquents are given compulsory education in compliance with Article 21A of the Indian Constitution and the Right of Children to Free and Compulsory Education Act, 2009.

Delinquents are given the opportunity to obtain new knowledge and enhance their skill sets. They are provided with the opportunity to participate in recreational activities such as sports, or practice skills such as music, art, dance, and cultural events. Every delinquent is provided with mental health care facilities and counselling in accordance with their needs. Childcare institutions provide referral services for de-addiction, vocational training, and disease treatment, whenever required for the personality development of the child.

The process of rehabilitation and reintegration is carried out according to the individual plan of the delinquent. The Act also involves foster care, sponsorship, and adoption in this process whenever deemed necessary.

Juveniles are placed under the protection of foster care to provide a healthy family environment and love and affection for the child. The foster families will be responsible for the health, nutrition, and education of the child.

The Act enables the state government to financially assist childcare institutions and families in the form of sponsorship to meet medical, educational, and other needs to improve the quality of the child. The Act also made provisions for adoption to restore the right to family for orphans and abandoned children.

Children leaving childcare institutions and special homes at the age of eighteen after their term of rehabilitation will be provided with financial support for the reintegration of juveniles back into society.

Prevention of juvenile delinquency

The future prosperity of a nation relies on the well-being and effectiveness of the youth, hence, it is essential to limit delinquent behaviour among juveniles to ensure the future of the country. Some of the preventive measures include the following

Education programme

Quality education has a positive impact on individuals, making them less likely to commit crimes. Schooling imparts knowledge and life skills, which make them self-reliant and keep juveniles from engaging in anti-social activities. Juveniles get knowledge of societal norms, values, civil rights, and duties, which discourages them from breaching the law. Government investment in imparting free and quality education plays a significant role in reducing delinquent behaviour among juveniles.

Healthy family environment

Parent-child relations, family relationship dynamics, and the approach to parenting have a long-lasting impact on the mental health of the child. Establishing strong communication between parents and children is crucial for the prevention of delinquent behaviour in children at an early stage.

Removal of inferiority complex

Fear, inferiority complex, and apprehension that someone might hurt him create a wrong impression on the juvenile and harm others out of this fear. Parents and other family members should create a solid foundation so that the children can feel secure and share any kind of uneasiness.

Recreational programmes

Recreational activities do not reduce the occurrence of anti-social activities but can play a major role in reducing delinquent values. Individuals with anti-social behaviour experience extreme anger, impulsive behaviour and a lack of self-control, while recreational activities provide relaxation and help juveniles to socialise with others. Juveniles discover their hidden talents like music, dance, drama, and art, and we encourage them to pursue them.

Publicity and awareness campaigns

Newspapers, magazines, media, radio, and social media can serve as important tools for creating awareness and imparting knowledge to the public. Government and non-governmental organisations can educate the public through awareness campaigns about the issue of juvenile delinquency.

Conclusion

It is crucial to protect the interests of juveniles and reduce the occurrence of juvenile delinquency in the best interest of future generations because they play a significant role in the progress and advancement of the nation. The Juvenile Justice (Care and Protection of Children) Act, 2015, is a progressive step in light of the issue but lacks proper implementation. Many juvenile homes established under the act do not have proper infrastructure and basic facilities like water, clean sanitation, and adequate staff. There is also a lack of awareness and confusion regarding the new amendments to the statute and the treatment of delinquents. The government should take stringent measures to ensure the proper implementation of the Act.

Due to the complexity of the issue, the government should also prioritise preventative measures in addition to enforcing existing laws. The government can launch awareness campaigns, special lectures, and various programmes in schools and colleges to educate people about juvenile delinquency.

Frequently Asked Questions (FAQs)

What are the types of juvenile delinquency?

American sociologist Howard Beckar classified juvenile delinquency into four major types: individual delinquency, group-supported delinquency, organised delinquency, and situational delinquency.

What are the main causes of juvenile delinquency?

The major causes of juvenile delinquency are divided into three categories: social, economic, and psychological. Social factors include the influence of family and peer groups. Economic factors include the exhibition of delinquent behaviour to obtain more money and a better standard of living, whereas psychological factors consist of the character traits within the individual that prompt them to participate in anti-social activities.

What are the changes brought about by the Juvenile Justice (Care and Protection of Children) Act, 2015?

The Act introduced the categorisation of offences. Juveniles between the ages of 16-18 years will be tried as adults if their actions qualify as “Heinous Offences” under the Act after conducting the mental assessment.

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Critical analysis of implementation of AI in CCTV cameras

By

Rachit Garg

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August 1, 2023

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This article has been written by Rushikesh Mahajan, pursuing a Diploma in International Contract Negotiation, Drafting and Enforcement, and has been edited by Oishika Banerji (Team Lawsikho).

It has been published by Rachit Garg.

Table of Contents

Introduction

What we know so far is that the three discussion papers pertaining to Artificial Intelligence released in February 2021 and August 2021 in two parts respectively, were a subsequent upgrade to the June 2018 document released by Niti Aayog, a public policy think tank responsible for highlighting the utility of responsible AI. The document of 2018 provided a comprehensive overview of artificial intelligence, including its definition, potential applications, challenges for implementation in India, strategies for integrating AI into the economy, goals for enhancing efficiency, and recommendations for governmental action. The 2021 documents placed emphasis on two key areas, namely, the Principles of Responsible AI, which is discussed in Part 1, and the Operationalizing Principles for Responsible AI, which is addressed in Part 2 of the article. We will use the information given in these documents, and narrow it down to explain whether the present technologies that are using AI are actually being implemented rightly. The Part 1 of this Article will focus on understanding the definition of Artificial Intelligence from a global perspective. Part 2 will explain the characteristics AI is used as an integrated part of CCTV surveillance. Part 3 will analyse the shortcomings of the AI integration process in facial recognition.

Understanding the definition of artificial intelligence

Professor Gary E. Marchant, in his paper published by International Association of Defense Counsel, defined AI in its easiest form as, “the development and use of computer programs that perform tasks that normally require human intelligence.”

Section 3(3) of the National Artificial Intelligence Initiative Act [NIAA], 2020, defines the term Artificial Intelligence as a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations or decisions influencing real or virtual environments. Artificial intelligence systems use machine and human-based inputs to-

perceive real and virtual environments;
abstract such perceptions into models through analysis in an automated manner; and
use model inference to formulate options for information or action.

Article 3(1) of the proposed Artificial Intelligence Act, 2021 states that the term “artificial intelligence system” means software that is developed with one or more of the techniques and approaches listed in Annex I and can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with;

From an Indian perspective as explained in the Appendix I of the discussion paper published in June 2018, it explains that “AI has been achieved when we apply machine learning to large data sets. Machine learning algorithms detect patterns and learn how to make predictions and recommendations by processing data and experiences, rather than by receiving explicit programming instruction. The algorithms also adapt in response to new data and experiences to improve efficacy over time.”

2019 Kumbh Mela : an example of implementation of AI in CCTV surveillance

Kumbh Mela is considered to be one of the largest religious gatherings on Earth and what we have seen so far is that artificial intelligence on every step of the way has somehow turned out to be useful especially in camera as a legal tool. The best example of implementation of AI can be seen in the Kumbh Mela that happened back in 2019 with a deployment of more than 1000 cameras on a whopping 3200 hectares area. Few of the key ingredients as explained in the 2021 article written by Biru Rajak, Sharabani Mallick and Kumar Gaurav was that the whole system was capable of CCTV security surveillance, facial recognition, automatic number plate recognition system, and red light violation system. The usage of cameras with the help of AI that could identify suspected “trouble-makers” was best demonstrated in the 2019 Kumbh Mela. This shows that AI’s usefulness has effects on both individuals and society as a whole.

The AI used here has a responsibility to identify the person by using facial detection algorithm, where it will go to the next step which will create a list of behavioural patterns that will fit the profile of potential criminal and then based on this information it will try to prevent a crime. It will eventually act as a Risk Assessment Tool. In a detailed article written by Emaneulla Halfeld, she has thoroughly explained the need of ethics and its involvement in assessing the individuals who are incarcerated by criticising the Risk Assessment Tool by the name of COMPASS- (Correctional Offender Management Profiling for Alternative Sanctions) on assignment of danger score, by unfortunate application of machine bias. It in fact showed the discriminatory tendency of AI with detailed images rendering it untrustworthy. The problem here is, the same behavioural pattern will prevail in India if the laws to regulate AI are not implemented.

Consequences of AI driven CCTV on individuals

How about we assess the situation by a few examples and questions? First, we can focus on the matter at hand relating to the personal impact of AI on an individual level, specifically in cases where the technology might erroneously identify an individual or falsely implicate an innocent person.

For example, if a decision is made by AI that a person ‘A’ is a said ‘Trouble-maker’ then the question that would be extremely difficult to prove in the court of law is how did that AI program arrive at the conclusion that the behaviour was suspicious?

What factors did AI cameras hold into account while deciding that claim and how easy would it be for the court to understand the process taken by AI to reach that conclusion, and whether the claim that is made by the AI regarding suspicion, does the court of law hold that claim as legitimate? The process where it is not possible to understand the decisions made by AI and their machine learning capability is known as Black Box Problem. In such instances, it remains unclear as to who bears responsibility for the error made by the AI. It appears that the government has unintentionally acquired an excessive amount of authority to intrude upon the personal lives of citizens.

The responsibility for the decision cannot be attributed to the police or administrative system, as it was made by an artificial intelligence system, thereby creating a loophole on where to put the accountability bias. A wrongly accused person can file a defamation suit for damages against a person. The non-attribution of responsibility to AI is due to its lack of personhood, rendering it outside the scope of the criminal system which exclusively pertains to human entities. In this case this person will not be able to do anything. Furthermore, for the loss caused to the individuals on a personal level, the question arises whether who will compensate the wrongly accused. Should we hold the developers of that AI system responsible? Or should we hold the government agency responsible? Or the private commercial company or entity or think tank tendered by the government as a consultant? Or the government employee who made the decision to call in the person for questioning? Before putting AI to work in the Indian economy, these questions will come up and need to be answered.

Consequences of AI driven CCTV on society

On the societal level, there are substantial implications of deploying AI into society as a solution. The problem here is that the entities investing in AI technologies will have the opportunity to design AI to cater to their needs which might influence their applicability on ground level. On a societal note, in an article written by Adam Schwartz, he criticised that the government using surveillance cameras and tools in Chicago’s Surveillance system was a troubling step towards the world explained in a dystopian novel 1984. His suggestion was to add a privacy safeguard to ensure protection of fundamental rights. One thing to note here is that the COMPAS tool which we had discussed previously was developed by a private company named equivalent.

Since AI works on probability and accuracy, there is a high possibility of AI surveillance cameras to tag the same person ‘A’ as a said ‘trouble-maker’ creating a bias known as machine bias, where AI itself will make unconscious decision with the help of machine learning, that since this person ‘A’ was flagged before and this person might show same behavioural pattern inadvertently, the AI will tag him/her again, which is a grave violation of several constitutional fundamental rights.

On the other hand there is a possibility of bias in AI, also known as Discriminating Artificial Intelligence, where individuals/ entities/ companies/ think tanks/ research centres who will design AI algorithms, will create a machine bias, meaning they will design it in a way which will cater to their own personal needs, ‘if I am a developer, I might feel like I need to design AI which will help my own community! Or worse, I will design it in a way that it will favour people from my hometown’ which will structurally violate Article 15.

Suggestions

The enforcement of artificial intelligence in camera was implemented without passing a suitable regulatory law, like the Artificial Intelligence Act of the European Union and National Artificial Intelligence Initiative Act [NIAA], 2020. The implementation of Artificial Intelligence prior to the establishment of regulatory laws may result in significant disruption, as evidenced by the experiences of both the United States and the European Union. The deployment of AI technology preceded the establishment of governing and regulatory laws. We need to be able to fill out the gaps by answering the questions raised by implementing laws first and then applying these technologies subsequent to them.

For example, according to the discussion paper published in June 2018 and the summarised article written by Professor V P. Gupta, facial recognition cameras come under Artificial Narrow Intelligence System, and based on that what we need to be able to do is to convert Artificial Narrow Intelligence System into Artificial General Intelligence System so that the inquiry pertains to the justification behind naming the person in question as a “Trouble-Maker”. The proposed measure is not only expected to have legal validity, but it is also anticipated to demonstrate a greater propensity towards furnishing rational justification.

Article 5 Point 1 of the Artificial Intelligence Act, 2021 outlines in great detail the activities that cannot be carried out while making use of artificial intelligence (AI), with the goal of preventing these issues from occurring. It should not be too difficult for our government to create new laws if they look to current laws from other countries for guidance and use that guidance as a starting point. A legislation, or at the very least, a strategy, to police AI should be passed by the legislative body so that it may be governed by being given boundaries.

In the same Act, Article 9 explains the detailed requirements that should be taken for formulating the Risk Assessment Tools. It is imperative to acknowledge the potential for employees tasked with overseeing AI Risk Assessment Tools to engage in privacy violations for personal gain. It is imperative to establish a mechanism within the government infrastructure, similar to the Right to Information Act of 2005, that would enable individuals to scrutinise or solicit an audit from the government in the event of any potential misuse of the CCTV surveillance system. It is imperative for the government to ensure complete transparency in elucidating any potential misuse of the Closed-Circuit Television (CCTV) system.

In addition to the implementation of the currently enforced CCTV system, it is recommended that the government establish a compulsory insurance scheme and enforce it such that in the event of an error by the AI, compensation is provided to the affected party on behalf of the AI by the insurance company, thereby ensuring accountability on its part.

Conclusion

It can be inferred that in light of the government’s implementation of AI tools for welfare, it is imperative that corresponding safety measures be enacted to safeguard citizens against potential misuse of the technology, particularly in the absence of regulatory frameworks to govern its operation.

References

Section 197 of the Companies Act, 2013

By

Rachit Garg

-

August 1, 2023

0

This article is written by Diksha Paliwal. It provides a comprehensive analysis of the provisions relating to managerial remuneration for directors and key managerial personnel. Before this, the article briefly explains the term “remuneration” and gives an idea about the meaning of the term “managerial remuneration”. It delves into the various aspects of remuneration given to key managerial personnel and directors like allowances, salary, commissions, profit-related commissions, etc. It further discusses the role of the board of directors and the stakeholders in evaluating managerial remuneration.

It has been published by Rachit Garg.

Table of Contents

Introduction

The increasing profits in the businesses are the result of the hard work of the people running them. Business yields greater profits due to the efforts of managers, directors, and other workers. Good pay to the managers and other directors attracts talented employees and also ensures that the ones already working stick to their jobs. Additionally, proper remuneration ensures that the challenging role of managing the entire affairs of the company is accomplished efficiently and with great éclat.

Undoubtedly, fixing up managerial remuneration is of utmost importance; nevertheless, one must keep in mind that while doing so, the perks like allowances and more, along with the pay given to them, do not go overboard. Maintaining proportionality while dealing with such matters is imperative. As far as the laws relating to this matter are concerned, the provisions are mentioned in the Companies Act, 2013 (hereinafter referred to as the Act of 2013). It keeps a balance between the unnecessary dissipation of profits by the company and ensuring reasonable and adequate remuneration for managerial personnel.

Section 197 of the Companies Act, 2013 deals with the provision of managerial remuneration for key managerial personnel and other directors of an Indian company. This article starts by giving a brief introduction to the term ‘remuneration’, followed by a comprehensive analysis of Section 197. It further deals with the impact of it on the company and its stakeholders. It also talks about the objective behind the enactment of the provision pertaining to managerial remuneration, along with the major factors and components that determine managerial remuneration.

The article also throws light on major principles of remuneration, namely, the financial capacity of a company, its position in the market, present standards of the industry, performance evaluation, etc. The article, in order to provide a background on certain important factors related to the present topic, i.e., Section 197, explains the role of managerial personnel and their appointment process as per the provision provided under the Companies Act, 2013. It also talks about the course of action relating to managerial remuneration when a company faces uncertainties like losses.

Meaning of managerial personnel and director

A “key managerial personnel” as enunciated under sub-section (51) of 2, in pursuance to the company is said to include:

the Chief Executive Officer or the managing director or the manager;
the company secretary;
the whole-time director;
the Chief Financial Officer; and
such other officers as may be prescribed for the time being.

According to the definition clause provided in the Act of 2013, the term director, as mentioned in Section 2(34), means a director appointed to the Board of a company.

To read more about the above terms in detail, refer to https://cleartax.in/s/key-managerial-personnel-kmp-under-companies-act-2013

Meaning of remuneration and managerial remuneration

Collins Dictionary defines the term ‘remuneration’ as the money that is paid to a person in return for the work that he or she has done. The term owes its origin to the Latin term ‘remuneratus’ which means ‘to reward’. It is a return that an employee receives for his or her contribution to the organisation or company. It relates to needs, motivation, and rewards. Put simply, it is the financial compensation that a person working in an organisation or a company is offered in return for his or her service. Remuneration often gains importance as it concerns the outflow of money from the company, analysing net profits, and gaining approval from its stakeholders and the board of directors.

The term “remuneration” is defined under Section 2(78) of the Companies Act, 2013. It defines the term as money or its equivalent provided or given to a person in return for the services provided by him. It also includes the perquisites, i.e., the benefits (defined under Section 17(2) of the Income-tax Act) enunciated under the Income-Tax Act, 1961. As per the above-stated section, the term “perquisites” includes;

Rent free accommodation;
Any concession in rental accommodation;
Payment made by the employer wherein the employee, on some earlier occasion, has paid for certain obligation;
Any benefit or amenity granted free of cost or at any concession in cases, namely, from the company to any employee who at that time is a director; by a company to an employee who has a certain substantial interest in the company; by company or employer to an employee other than the above two situations whose salary exceeds Rs. 50,000;
Any sum that is paid by the employer to affect the assurance on the life of the employee or to affect a contract of annuity;
Value of any other fringe benefit or amenity provided by the employer;
Any contribution made by the employer to the employee’s account;
Value of transfer of specified security or sweat equity shares by the employer to the employee or a former employee. This can be free of charge or at a concession rate, as the case may be.

Thus, any money given or paid, irrespective of the form in which it is paid, in return for the services rendered by that person constitutes remuneration. It also includes any amenity, benefit, or facility that a company provides to any person for his or her service, which amounts to remuneration. Also, the monetary equivalent of the above-referred things must be included in the remuneration of the person in pursuance of the services that are provided by him or her.

The term ‘managerial remuneration’ is nowhere defined in the Companies Act, 2013. It is used as a term that connotes the remuneration that is paid to managerial personnel. It is a very significant topic under corporate governance, which ensures fair pay to key managerial personnel and other directors. The central legislation pertaining to company matters, i.e., the Companies Act, 2013 entails provisions concerning managerial remuneration. It is embodied under Section 197 of the 2013 Act. Managerial Remuneration can be defined as the benefits and remuneration given to the top management of the company, like the CEO, managing director, board of directors, whole-time director, its manager, etc. in respect of any financial year. The computation of managerial remuneration that is to be given is decided according to the provisions of Section 198 of the Act of 2013.

Back then, it was a settled principle that directors had no claim to be paid certain remuneration by the company in pursuance of the services they provided. The rationale behind this principle was that they have a fiduciary relationship with the company. Thus, the directors cannot pay themselves or receive other benefits from the company’s assets. In this correspondence, Lord Lindley, in re George Newman & Co. (1895), opined that the directors possess no right to be paid for the services rendered by them. They are not authorised to pay themselves or each other or make any presents from the assets of the company unless expressly authorised by any law or instrument that regulates the company, or by the shareholders in a properly conducted meeting. The shareholders in a meeting organised for such purpose, in a properly regulated manner can decide to remunerate the directors.

Appointment of key managerial personnel

The appointment of key managerial personnel is mandated under Section 203 of the Companies Act, 2013. It mandates the appointment of key managerial personnel, which includes the managing director, CEO, or manager, and in their absence, a whole-time director, Company Secretary, and Chief Financial Officer. The appointment of the above-stated managerial personnel is essential for a listed company or every other public company having a paid-up share capital of Rs 10 crore or more.

As far as every whole-time manager is concerned, he must only be appointed by way of a board resolution, which contains the terms and conditions of appointment and remuneration.

Unless the articles of the company provide otherwise or the company possesses multiple businesses, the chairperson of the company, as well as the managing director or Chief Executive Officer shall not be appointed and reappointed at the same time.

Section 197: an overview

The above-stated provision talks about the remuneration that is to be paid to key managerial personnel and other directors of the company. Remuneration that a company pays to its directors is solely a matter of contract between the company and its directors, however, while doing so, the company must adhere to the provisions of Section 197 of the Companies Act, 2013.

Maximum remuneration limit

The first clause of the Section lays down the maximum remuneration payable by a public company. Section 197(1) states that for a financial year, the total managerial remuneration that is paid by a public company to the managerial personnel and other directors, including the managing director, whole-time director, and its director, shall not be more than 11 percent of the net profits of the company. This net profit is calculated as prescribed under Section 198 of the Act of 2013. Also, this remuneration is not deducted from the gross profits.

The proviso clause of Section 197(1) states that a company may exceed the limit of 11 percent and authorise the payment of remuneration exceeding 11 percent in a general meeting. However, it is important to note that the company must do so in compliance with Schedule V.

The proviso further states that the remuneration paid to any one managing director, whole-time managing director, or manager shall not exceed 5 % of the net profits of the company. Also, if there is more than one such director, then the exceeding limit for remuneration to all such directors and managers must not exceed 10% when taken together. In the case of remuneration that is paid to directors who are neither the managing directors nor the whole-time directors, the remuneration shall not exceed 1% of the net profits of the company, if there is a managing or whole-time director or manager. In any other case, it shall not exceed 3 percent.

In cases where there is any default in payment of dues by the company to any bank or other financial institution, prior approval is necessary before obtaining such approval for payment of remuneration in the general meeting.

Remuneration exclusive of any fees

Section 197(2) provides that the above-mentioned percentage limits are exclusive of any fees that are to be paid under sub-section (5).

Remuneration in cases of inadequate or no profit

Clause (3) of Section 197 provides for the course of action that is to be taken in the event a company suffers losses, makes no profit, or makes an inadequate profit. It states that in the above cases of loss or no profits, the company shall not pay to its directors, including any managing or whole-time director or manager or any other non-executive director, any remuneration that is exclusive of any fees that are payable to the director under Section 197(5), and this shall be done in compliance with the provisions of Schedule V.

Payment to directors in any other capacity

Section 197(4) states that the remuneration that is to be paid to the directors of a company, shall be computed in a manner that complies with Section 197. Also, this should be done either by the company’s articles of association, by a resolution, or by a special resolution if there exists a provision requiring the same in the AOA of the company. Also, the remuneration given to the director determined through the aforesaid procedure is inclusive of any other services rendered by him in any other capacity as well.

Remuneration paid for the purposes mentioned in the above paragraph, i.e., remuneration paid in any other capacity, shall not include the services rendered that are of a professional nature. Also, the remuneration for the work done in any other capacity shall not be included if the company is covered under Section 178(1) as per the opinion of the Nomination and Remuneration Committee or if the board of directors in other classes has the essential qualification for the practice of the profession.

Fees for attending meetings

Section 197(5) states that a director can also be paid remuneration by way of fees for attending board or committee meetings, based on the decisions taken by the board. The proviso of the sub-section states that the aforesaid fees shall not exceed the prescribed amount. It also states that the fees for different classes of companies and fees for independent directors may be as prescribed.

Procedure for payment of remuneration

Section 197(6) of the Act of 2013 provides for the way by which a director or a manager may be paid remuneration. The director or manager can either be paid monthly or at a specified percentage of the net profits of the company, or a combination of both, as the case may be.

Section 197(7): repealed

Sub-section 7 of the Companies Act 2013 was omitted by the Companies (Amendment) Act, 2019.

Computation of net profits

Section 197(8) of the Act provides that the net profits are to be computed in the manner laid down under Section 198.

Refund of remuneration in certain circumstances

Sub-section (9) and (10) of Section 197 were substituted by the Companies (Amendment) Act, 2017. The first subsection states that if a director draws or receives any amount of remuneration that exceeds the prescribed limit, without approval, he shall refund the sums to the company within two years or as directed by the company. Sub-section (10) states that the company is not allowed to waive the sum that is refundable unless the same is approved in a special resolution within two years from the date such sum becomes refundable. The proviso of this sub-section further states that such a waiver by the company can only be done with the prior approval of a concerned bank or any other financial institution, non-convertible debenture holders, other secured creditors, etc. if there is any default in payment of dues on the part of the company from such institutions.

Effect of Schedule V

Section 197(11) states that any increase or change in the amount of remuneration payable to the directors or managers in the event of no profits, inadequate profits, or any other case shall be in accordance with the provisions of Schedule V.

Disclosure Report

According to Section 197(12), the company is required to disclose in its board report the ratio of the amount of remuneration paid to each director to the median employee’s remuneration and such other necessary details as may be prescribed.

Apart from this, Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, lays down certain aspects or points that a disclosure report must include. These are, the ratio of remuneration paid to each of the directors to the remuneration of a median employee in any financial year; the percentage increase in the remuneration of each of the directors or other key managerial personnel in a financial year; the increase in the percentage of the median remuneration of employees in the financial year; the total number of permanent employees; the average increase in salaries of employees other than the key managerial personnel; and the statement that remuneration policy is in accordance with the provisions of Section 197.

Insurance premiums not to be included in remuneration

Clause (13) of the Section states that the premium paid by the company in cases where the company has taken any insurance on behalf of the CEO, Chief Financial Officer, or CS for indemnifying them in different scenarios like negligence, breach of trust or duty, misfeasance, etc. will not be termed as remuneration. However, if such a person is found guilty, the premium will be considered remuneration.

Provision pertaining to disqualification from remuneration

Section 197(14) states that any director who is in receipt of any commission from the company and who is managing director or whole-time managing director will not be disqualified from getting paid any remuneration or commission in pursuance to or subject to its disclosure in the board report.

Penalty

Section 197(15) provides for the consequences that will follow non-compliance of Section 197. It provides for a penalty of one lakh rupees if any of the directors or other key managerial personnel are found at fault, and if the non-compliance is done by the company, then a penalty of five lakh rupees will be levied.

Statement regarding compliance with Section 197

Section 197(16) of the Act makes it compulsory for the company’s auditor to make a statement in its report prepared under Section 143 of the Act of 2013 that the remuneration paid to the directors and managers is in accordance with Section 197.

Approval in accordance with Section 197

Clause (17) provides that after the commencement of the Amendment Act of 2017, any application addressed to the Central Government that is made under this provision and that is pending shall stand abated. The company, after such a period of one year, makes a fresh application and takes approval in accordance with this Section.

Thus, the remuneration that is to be paid to any director, including any managing or whole-time director of a company, is to be determined in accordance with Section 197 read with Section 198 (computation of net profits) and Schedule V of the Act of 2013. This must be done either by way of what is mentioned in the Articles of the company, by a resolution, or if the AOA so requires, by passing a special resolution in a company’s general meeting. The genuine professional fees that are paid to a director for rendering his professional services are not to be included in the remuneration. The Section also provides for the payment of remuneration to a director who is neither in full-time employment nor a managing director, which can be made either on a monthly basis or at a specified percentage of the net profits. It also provides that for directors who are not in full-time services, the remuneration that is paid to them does not require the Central Government’s approval, provided the same is within the prescribed limit.

Recovery of managerial remuneration

Section 199 of the Act of 2013 provides for the recovery of managerial remuneration from any managing director, whole-time director, manager, or Chief Executive Officer in case the remuneration is not paid in accordance with Section 197, if there is any non-compliance with the requirements mentioned in the Act of 2013, or if it is found to be in excess of what is shown or restated in the financial statements. This also includes stock options.

Criteria for consideration of remuneration

While computing remuneration that has to be paid to managerial personnel and other directors, the company is required to consider the following parameters, namely:

The company’s financial and operating performance in the last three preceding financial years.
The company’s relationship between performance and remuneration that is being rendered.
Does there exist any difference in the remuneration policy of the directors and other employees, and if so, the rationale behind the same?
The securities held by the directors, along with the options and details of the shares pledged at the end of the preceding final year.
The proportionality of remuneration among the directors and the directors of the board, along with other employees.

Fixation of payable remuneration limit by Central government or company

Section 200 of the Act of 2013, provides that in the event a company suffers a loss or makes inadequate or no profits, the central government or the company may fix the remuneration limit for the time being, in accordance with the limit specified in the Act. while fixing such a limit, the government or the company has to keep in mind certain parameters, namely;

Company’s financial position;
Remuneration or commission drawn from the company by that individual in any other capacity;
Remuneration or commission drawn by that individual from any other company;
Qualifications and professional qualities of the individual; and
Other parameters as may be prescribed.

Significant changes in remuneration after the passing of the Act of 2013

Directors will not be paid any remuneration in the absence of any provision for the same in the company’s articles of association (AOA), or otherwise, if such payment of remuneration is sanctioned by the company in a general meeting. In a situation where unauthorised remuneration is furnished, i.e., without there being an express provision in the articles of association or the general meeting, the remuneration can be claimed back. In the event that a company is wound up, such remuneration can be recovered from the directors by the liquidators.
The provision pertaining to the payment of remuneration to the directors of the company, including the CEO or managing director and other key managerial personnel, as mentioned in Section 2(51) is mentioned under Section 197 of the Act of 2013. It provides that the remuneration that is to be paid to the aforesaid persons must only be determined by the Articles of Association of a company, by a resolution, or if the AOA of the company requires it to be determined by passing a special resolution in the general meeting of a company.
The above-stated provision enumerates the overall maximum remuneration that is to be paid to the directors and other key managerial personnel by a public company or a subsidiary of a public company. As per this, the total managerial remuneration that is to be paid in a financial year must not exceed 11% of the net profits of the company.
The net profit is calculated in pursuance of the manner laid down in Section 198 of the Act of 2013. It is noteworthy that the remuneration payable to the directors is not to be deducted from the gross profits.
The set boundary of 11% is exclusive of the fees paid for attending the meetings of the board of directors.
The Act of 2013 entails that a company may also authorise, in its general meeting, remuneration exceeding the limit of 11 %, provided it is done in compliance with Schedule VI.
In cases when a company faces losses or makes no profits at all in a financial year, the company may pay a minimum remuneration of any sum, however, the same must be done in an authorised way.
The Central Government’s approval is not needed in the event of payment of remuneration in case the appointment of managing director or manager has been done in pursuance to the provisions and in accordance with Schedule V of the Companies Act, 2013.
In the event that it is proposed that the payment of remuneration shall be by way of commission, then no remuneration will be paid to the directors in case of loss.
Also, a director may get remuneration in terms of fees for attending the board or committee meetings. However, this fee paid shall not exceed the amount as may be prescribed.
The auditor is required to submit in his report whether the remuneration paid to the directors is in accordance with the provisions of the Companies Act, 2013.
The penalty is levied in the event of non-compliance with the provisions pertaining to the remuneration.
The listed companies are required to disclose in their board report, the ratio of remuneration paid to each of the directors to the remuneration of a median employee, and all the other details as may be prescribed.

Conclusion

In a corporate world largely driven by money and benefits, incentives and remuneration play a huge role in determining the success of the business as it motivates the directors and managers of the company to manage the company efficiently. Maximum remuneration payable to managerial personnel must be strictly in compliance with Section 197 of the Act of 2013. Since a company works through its board of directors, it is important that the remuneration paid to them for their services satisfy multifarious criteria, and to regulate this, the provision pertaining to managerial remuneration was enumerated. Having a well-balanced and regulated policy pertaining to the payment of remuneration significantly improves a corporation’s performance. Thus, Section 197 of the Act of 2013 lays down the maximum limits of remuneration that can be paid, individual limits for each director, provision for payment of remuneration in case of no profits or inadequate profits, penalty for no-compliance with this Section, the overriding effect of Schedule V, payment of remuneration to directors working in any other capacity, what to be included in remuneration and what not to be included, sitting fees for directors for not attending committee or board meetings, and disclosure in board reports.

FAQs

How does Schedule V have an overriding effect on the provisions of Section 197 of the Act of 2013?

Section 197(11) of the Act of 2013 states that in cases of inadequate or no profits, provisions pertaining to increase or change in the remuneration shall have no effect unless they are in accordance with Schedule V of the Companies Act, 2013 and hence this Schedule has an overriding effect over the Section in certain conditions. Even when there are express provisions for an increase in the company’s Memorandum of Association, special resolution, agreement, AOA or a general meeting, the provisions of Schedule V will have an overriding effect.

Are the term perquisites included in managerial remuneration?

No, the term prerequisites, i.e., in a layman’s can be connoted as benefits are not included in managerial remuneration as also discussed in the above paragraphs.

What are the permissible forms of remuneration?

A director can be paid either on a monthly basis or based on a specified percentage of the net profits of the company or partly in one way and partly in another.

Which provision in the Companies Act, 2013 deals with the disclosure of remuneration in the Board’s report?

According to Section 197(12) of the Act of 2013, every listed company is obligated to disclose the ratio of the remuneration that is being paid to each of its directors and the remuneration to the median employee, as well as other details as may be prescribed. The disclosure is to be made in the board report of the company.

What are some relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) concerning remuneration to the directors?

Regulation 17 of the above-mentioned SEBI Regulations deals with the provision for remuneration. Firstly, it states that it is mandatory that the shareholder’s approval be obtained prior to the payment of remuneration to the non-executive directors. Secondly, this requirement for approval does not apply when the non-executive directors are being paid the sitting fees for attending the board or committee meetings, provided the same is paid within the prescribed limits. Further, it provides that independent directors are not entitled to stock options, and the shareholders have to specify the maximum limit of stock options that can be granted to non-executive directors.

References

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Evaluating possible influence of artificial intelligence on Indian laws

By

Rachit Garg

-

July 31, 2023

0

This article has been written by Rushikesh Mahajan, pursuing a Diploma in International Contract Negotiation, Drafting and Enforcement, and has been edited by Oishika Banerji (Team Lawsikho).

Table of Contents

Introduction

The purpose of this article is to highlight the potential implications that artificial intelligence systems will have on Indian laws. In the 2018 paper published by Niti Aayog, the concept of emphasis was applied to a total of eight sectors, with one of them being specifically related to smart cities. It is important to consider whether the State (India in this case) has addressed the six barriers outlined here before deploying AI at scale. One can observe an example of this phenomenon being implemented in the 2019 Maha Kumbh. It is important to understand the potential for artificial intelligence systems to produce outcomes that may conflict with fundamental rights protected by Indian law. This article takes live examples of circumstances, cases laws from Indian and international perspectives and help us formulate certain precautionary steps such as

1. How will AI violate human rights?

2. Its effect on Indian laws.

3. Suggestions to lubricate the present scenario in parallel to the evolution of AI.

What we have seen before that back in 1983 in Germany, in the first senate on 15^thof December 1983, guiding principles were passed regarding the protection of the individuals against unlimited collection storage use and disclosure of his or her personal data and they were covered by the general right of personality under basic law for Federal Republic of Germany. Nonetheless, we can conclude that it is imperative to establish suitable safeguards within the information system to offset the gathering and handling of data.

Is the utility of AI in present scenario violating Article 15

Article 15 of the Indian Constitution clearly states that discrimination against any citizen based on their religion, race, caste, sex, or place of birth is strictly prohibited. According to the article, the State is prohibited from discriminating against any citizen based on certain criteria. Additionally, the State is authorized to create specific measures to support women and children, as well as to promote the progress of socially and educationally disadvantaged groups, including Scheduled Castes and Scheduled Tribes. The question we need to ask here is, whether the implementation of AI used today by the Indian Government is violating Article 15.

Recently, a proposal of a budget amounting to Rs 400 crore was submitted by the Prayagraj police for the procurement of equipment and other necessary arrangements pertaining to the upcoming Kumbh Mela 2025. This accomplishment was successfully attempted during the 2019 Maha Kumbh, in which ICT played a crucial role in a number of areas, including crowd control, security monitoring, rubbish management, lost and found, and transportation management system. Let us not forget the 2018 article where AI made by google was labeling black people as gorillas. On the other hand, in order to address the issue of racial bias in its algorithm, Google opted to eliminate gorillas altogether from their image labeling programme. The surprise still continues to this day that google still cannot fix this problem. The article published by New York Times in May 2023 still takes the cake by pointing out that even after 8 (eight) years the tech giants haven’t been able to rectify this issue and still fear repeating the mistake.

In a situation where the AI is supposed to be fair in terms of providing opportunities to both men and women, we cannot ignore historical bias inadvertently helmed by AI, in the article published by Australian Human Rights Commission, it showcased with an example that, in the event that the training data exhibits a greater incidence of qualified individuals in one demographic group compared to another, an artificial intelligence system that is trained on such data would exhibit a preference for candidates from the aforementioned group during the selection process. On the basis of the above mentioned example, the machine learning specialists at Amazon scrapped an AI recruiting tool which showed bias against women.

The root cause of the historical bias is due to the fact that the data utilized by the AI system had lost its precision and authenticity. One may describe it as data of inferior quality or data that has fallen out of fashion. The rationale behind this decision was that Amazon’s sophisticated computer algorithms were meticulously crafted to scrutinize job applicants by meticulously analyzing patterns in resumes that were submitted to the esteemed organization over a span of ten years. The lion’s share of the contributions were made by distinguished gentlemen, signifying the dominance of male hegemony within the opulent technology sector.

We are trying to provide our esteemed readers with an in-depth understanding of the manner in which the data exerts its influence on the output generated by our cutting-edge AI tool. We want to be able to demonstrate that artificial intelligence, which is a system developed by engineers, will be given outdated data on the basis of which it will make choices about the future, which is something that should not occur.

Subsequent to this, there is a study done by Professor Frederik Zuiderveen Borgesius from University of Amsterdam, which has presented a detailed postulation regarding the potential for artificial intelligence to result in discriminatory outcomes. The author has referenced the seminal paper authored by Barocas and Selbst in 2016 to explicate the six stages through which AI-driven discriminations may occur.

The issues pertain to the definition of the “target variable” and “class labels,” labeling of the training data, collection of the training data, feature selection, and proxies. Furthermore, it has been proved that AI systems have the potential to be intentionally utilized for discriminatory purposes.

In the event that the training data utilized to train artificial intelligence is biased, the resulting decisions made by the AI will be influenced by the biased training data. Consequently, the output generated by the AI based on the biased sample will lack legitimacy. We can see a live example in the conversation with AI below. In the conversation with ChatGPT, an artificial intelligence chatbot, a historical bias was inadvertently introduced when the topic of pride in one’s skin color was broached. ChatGPT’s response regarding whether one should take pride in being a person with white identity was nuanced. The prevailing view is that the concept of “white pride” has become linked with supremacist ideologies and movements that espouse racial hierarchy or discrimination. Throughout history, these ideologies have been accountable for the propagation of harm, inequality, and marginalization of individuals who are not of white ethnicity.

Conversely, when queried regarding the sentiment of pride in one’s black identity, the response was to the contrary, asserting that it is entirely legitimate to experience a sense of pride in one’s blackness. Acknowledging and valuing one’s racial or ethnic identity can serve as a means of fortitude, adaptability, and cultural legacy. Despite enduring historical and systemic inequalities, individuals of Black descent have made noteworthy contributions across a range of fields including the arts, sciences, literature, sports, and social activism.

This is a great illustration of bias inferred from labeled instances. Amazon also abandoned the employment board for the same reason. The current structure was modeled using historical data. One needs to take note that this technique of historical bias is also being used by the Government of India, and while doing this the government has not passed the legislation about regulating AI and the data it has access to.

If an AI-based data collection technique has been used in India, to flag potential criminals based on suspicion, its validity must be established before the case can be brought for the start of the investigation process. The AI should not be trained on biased data, hence the filtering process should take place at the ground level where the data that the AI has gathered is not biased because AI impacts might be compounded by predictions made by AI, it is obvious that we do not want AI to categorize the same people based on their prior criminal histories again and again.

If the case goes to court on the basis of “suspicion” made by AI, then on what basis will the suspicion be measured?

To understand this further, we can take account of the case of Sharad Bhirdi Chand Sarda v. State of Maharashtra (1984). Here, the entirety of the case relied on circumstantial evidence, specifically the need to establish a chain of command between the purported letters authored by the deceased and certain witnesses. One needs to understand that the chain of command needs to be validated based on measurable circumstances

The Division Bench of the Bombay High Court heard the appeal, Criminal Revision application, and allowed the appellant’s appeal in part regarding his conviction and sentence under Section 120B of the Indian Penal Code, 1860. but confirmed his conviction and death sentence under Section 302 of the Code allowed the appeal of accused 2 and 3 in full and acquitted them, and dismissed the Criminal Revision Application.

In the words of Justice Fazal Ali, “suspicion, however, great it may be, cannot take the place of legal proof. A moral conviction however, strong or genuine cannot amount to a legal conviction supportable in law.” The reason they were acquitted is that the five golden principles given by the Supreme Court in Hanumant v. The State of M.P (1952) was not satisfied. These five golden principles are as follows:

The circumstances from which the conclusion of guilt is to be drawn should be fully established;
The facts so established should be consistent with the hypothesis of guilt and the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty;
The circumstances should be of a conclusive nature and tendency;
They should exclude every possible hypothesis except the one to be proved; and
There must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused.

One issue with implementing artificial intelligence (AI) in cameras is that the data utilized by the AI to authenticate its findings and determine whether an individual being scanned is “likely to commit a crime based on their prior criminal history” or “is already guilty due to their past criminal record” (meaning the AI thinks that they are guilty anyway) does not constitute reasonable suspicion. This is because the datasets upon which the AI cameras operate are based on outdated information, which may result in the wrongful identification of individuals as potential suspects.

This was encouraged as a triumphant attempt in the 2018 article authored by Anand Murali which shed light on the pervasive misuse of biased formulations that rely on labeling instances, such as prior criminal records.

The inquiry that emerges pertains to the criteria by which individuals are categorized as criminals. This system is one bad day from becoming the big brother or maybe this situation has already come to pass, and we are not sufficiently motivated to prevent its worsening. People with criminal records are already preparing for the possibility that they could be identified by AI cameras. To serve the purpose further, in the paper written by Smriti Parsheera, she explored the questions in the context of the adoption and regulation of facial recognition technologies (FRTs) in India.

In addition to that she has also explained that FRTs encompass a range of technological tools that are capable of identifying or verifying individuals through the analysis of photographs, videos, or real-time footage. The CEO of FaceTagr, Vijay Gnanadesikan, demonstrated a positive reinforcement of intention with the goal of reuniting missing children and preventing human trafficking. This displays a strong commitment to effecting change but at what cost?

This should happen, but there has to be a kill switch to see that this prowess isn’t being abused either by the government officials in general or by private corporations that will act as shareholders, who have the ability to sway the Government into doing what they want instead of what needs to be done.

Our only hope to curb this is that the design of Standard Operating Procedure as mentioned by them for using the system is fool-proof which cannot happen. The entrepreneurs in question have asserted their acquisition of various forms of data, including images, speech, and text. However, it is pertinent to inquire why they have not yet provided explanations for errors committed by the artificial intelligence system. As an illustration, in the event that the AI system’s tagging yields a false positive outcome, what would be the implications?

Is AI system used in FRTs following the golden rule given in Hanumant v. the State of MP

It is likely that law enforcement agencies will observe a disproportionate representation of individuals with prior criminal records and their associates in police records if they focus their efforts on this demographic. The category of data that an organization chooses for its AI program’s feature selection. Barocas and Selbst argue that organizations are required to make decisions regarding the attributes they choose to observe and incorporate into their analyses.

Let’s pretend the government employs AI that has been educated on data from the last decade to identify repeat offenders living in this XX neighborhood of the city. There is no sensitive information, such as race, religion, or sexual orientation, in the training data. In order to forecast criminal activity, the AI learns that persons from XX region are more likely to commit crimes. Therefore, the system uses a supposedly objective criteria space in order to make predictions about criminal behavior. But let’s pretend that AI’s forecast has some kind of racial or religious bias. In this situation, innocent individuals from a certain group or religion would be harmed if law enforcement acted on the basis of this forecast and labeled them as prospective criminals residing in this XX region.

This clearly violates Section 7 of the proposed Data Protection Bill, 2022, and Article 15 (1) because the margin of consent is not even there. The photos and texts are being taken without their consent. It shows that the need for enforcement of the data protection act is more urgent than ever.

Suggestions

The employment of artificial intelligence in decision-making processes may result in inadvertent occurrences of indirect discrimination. In the case of indirect discrimination, legal emphasis is focused on the consequence of a specific practice rather than the motive behind the purportedly discriminatory conduct, which raises questions of ethics and privacy.

Data Protection Act, 1998 was passed by the United Kingdom and now it was superseded by Data Protection Act, 2018. The 1978 Act of the same name passed by France and it was amended recently. Legislative decree for the Italian Personal Data Protection Code was passed by the Italian Government on 30 June, 2003. which was superseded by GDPR. These nations’ have passed policies towards data security before the widespread use of technological solutions. If India has over 140 crore people, why hasn’t it passed a single legislation that safeguards their data in the last several years? We are at least 20 years behind, and that’s not even considering the 1978 Act.

It would be beneficial for the Government of India to consider enacting a separate law to address discrimination, both intentional and unintentional, that may arise from the use of Artificial Intelligence Systems. The definition of “Profiling” given under Section 4(2) in proposed Data Protection Bill, 2022 needs to be reworked compared to Article 4(4) of GDPR because even in the previous proposed bill the definition was still the same. Although, Article 22 of GDPR which talks about rights of an individual not to be a subject to a decision based solely on automated processing, including profiling. This provision doesn’t even exist.

Section 8(8)(d) of the same proposed bill talks about ‘have given’ consent that was in public interest for ‘Credit Scoring’. The reason this needs to be explained thoroughly is because there will be a position where the AI system, on behalf of a bank’s documents will deny the credit automatically without even taking grounded factors into the account, grounding factors such as recession, or COVID-19 pandemic.

As suggested by Professor Borgesius, the Data Protection Bill has a lot of open and vague rules instead of hard-and-fast rules. Data security law must be based on open standards because its rules apply in both the private and public sectors to many different scenarios. This way of making rules, called an “omnibus” method, has many benefits. For example, open standards don’t have to be changed every time a new technology comes out. But one problem with open rules is that they can be hard to follow.

It is noteworthy that the legal framework for data protection may not furnish explicit directives pertaining to the employment of closed-circuit television (CCTV) or workplace surveillance. It is noteworthy that in the context of personal data, encompassing video images, the ambit of data protection legislation extends to the deployment of closed-circuit television (CCTV) and monitoring activities in the workplace.

Since it is not possible to define the decision made by an AI System because of the Black Box problem, the training approach used by the AI system should shift to Whitebox or Glassbox AI as defined in this article. The process of glass box modeling necessitates dependable training data that analysts can scrutinize, modify, and explicate to establish user confidence in the ethical decision-making procedure. White box AI applications are designed to make decisions that are relevant to humans. These algorithms undergo extensive testing to ensure their accuracy and can be explained in a transparent manner.

When an organization starts an AI project, it should perform risk assessment and risk mitigation. This entails:

Involving individuals from multiple disciplines, such as computer science and law, to define the risks of a project;
Recording both the assessment and mitigation processes;
Monitoring the implementation of a project; and
Often reporting outward in some way, either to the public or to an oversight body.

Conclusion

The proliferation of AI has engendered significant ethical and legal quandaries. Artificial Intelligence (AI) possesses the capability to enhance various facets of human existence. Moreover, the growing corpus of literature concerning the legal and human rights ramifications of artificial intelligence across diverse industries necessitates the adoption of a human rights-oriented methodology for regulating digital technologies. As the advancement of AI persists, it is imperative to prioritize the preservation of human values and safeguarding fairness and human rights in both its development and implementation.

This article provides a detailed analysis of the Indian government’s 2018 paper on the practical applications of artificial intelligence. The present study involved an analysis of the government’s implementation of AI in their surveillance cameras, specifically the employment of Facial Recognition technologies (FRT). Subsequently, we conducted a legal analysis to determine the legitimacy of their actions, with the assistance of relevant case law. Through this process, we were able to ascertain that mere suspicion does not constitute sufficient legal evidence.

However, it also poses considerable threats to essential human rights, including the right to be free from torture and inhumane or degrading treatment. The aforementioned method was employed to ascertain that the action in question was in contravention of basic human rights. According to the author’s perspective, it is imperative to establish an independent human rights law specifically for AI in order to regulate its development and use because extant literature pertaining to the ramifications of artificial intelligence (AI) on human rights underscores the pressing necessity for unambiguous regulatory and legal directives aimed at fostering a society that embodies the principles of ‘good AI.’

It is imperative to ensure that the development and application of AI technology aligns with the promotion of the common good, while simultaneously safeguarding against any potential infringement upon human dignity. This necessitates a conscientious approach that prioritizes the provision of care and respect for individuals. As emphasized in the cited sources, audits and interdisciplinary research initiatives are imperative in elucidating the opaque nature of AI and mitigating its mysticism.

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Section 120B IPC punishment

By

Rachit Garg

-

July 31, 2023

0

This article is written by Pujari Dharani, a B.A.LL.B. student at Pendekanti Law College, affiliated with Osmania University, Hyderabad. It explains the offence of criminal conspiracy and its punishment under Section 120B of the Indian Penal Code, 1860 in detail. The article further provides evidence rules and important case laws.

Introduction

Have you ever heard that a group of people are punished for a crime they themselves did not commit, but planned and agreed to commit? If it is not, then it is surprising for you to know that agreement to commit a crime is also an offence, known as “criminal conspiracy”. Now, you may think about a legal principle in criminal law that states that a mere intention to commit an offence is not punishable until he or she makes a physical act of such intention by some overt illegal act or omission. But criminal conspiracy is an exception to this legal principle. That is, in the presence of mens rea, which means guilty mind conspiring to commit an offence, even if there is no actus reus, i.e., a physical manifestation of the guilty mind, a case for criminal conspiracy can be established.

This article explains the offence of criminal conspiracy, its essential elements, nature, and most importantly, what kind of evidence is admissible by a court and how the offence is punished with the help of multiple case laws.

Section 120B of the IPC: criminal conspiracy

Section 120B of the Indian Penal Code, 1860 (hereinafter mentioned as “IPC”) deals with the punishment for the offence of ‘criminal conspiracy’, which is defined under Section 120A of the IPC. This offence was not included when the IPC was drafted in 1860. But, through the Indian Criminal Law (Amendment) Act, 1913, this offence was inserted into the Penal Code by creating a new chapter, i.e., Chapter V-A which exclusively dealt with criminal conspiracy.

Criminal conspiracy is different from other crimes described under the IPC because an offender will be convicted for this offence when intention alone exists. Whereas, for other crimes, there is a general principle that the mere presence of a mental element without any act or omission is not punishable.

Definition of criminal conspiracy

As defined under Section 120A of the IPC, the act of agreeing by two or more persons to commit or cause to commit an illegal activity or a legal activity, which is accomplished through an unlawful method, is regarded as a criminal conspiracy and parties involved in such agreement are known as conspirators.

By the above definition, we can understand that the mere intention to commit a crime by one person is not being punished, but it is punished as a criminal conspiracy when such a mental element takes the form of a physical act of an agreement between two or more persons.

Additionally, the proviso to Section 120A of the IPC accepts a bare agreement of the above-described nature until there is an act in furtherance of the agreement by any one or more parties. Such an act may not be the commission of the crime itself; it can be a preparatory act as well, like buying a weapon to commit a murder.

The Supreme Court, in the case of State of Tamil Nadu through the Superintendent of Police, CBI, SIT v. Nalini and 25 Others (1999), referred to the common law definition of criminal conspiracy stated by Lord Denman in King v. Jones (1832) as “a conspiracy consists not merely in the intention of two or more, but in the agreement of two or more, to do an unlawful act, or to do a lawful act by unlawful means. So long as such a design rests in intention only, it is not indictable. When two agree to carry it into effect, the very plot is an act in itself, and the act of each of the parties, promise against promise, actus contra actum, capable of being enforced, if lawful; and punishable if for a criminal object, or the use of criminal means.”

Important aspects to make the accused liable under Section 120B of the IPC

The following are important aspects to consider while construing the crime under Section 120A of the IPC, i.e., criminal conspiracy and, subsequently, punishing the parties of such conspiracy under Section 120B of the IPC.

Intention (or mens rea)

Most necessary is the intention of the accused persons involved in the alleged criminal conspiracy. If they do not intend to commit any unlawful act, then they are not punished under Section 120B of the IPC. It is said to be a conspiracy, only when two or more persons incorporate an intention to commit an offence in themselves. Therefore, the intention is a sine qua non to construe an act as a criminal conspiracy.

In addition to this, every member of the conspiracy will be punished for their common intention, even if only one or a few among them acted in furtherance of the common object of the criminal conspiracy, as stated by the Supreme Court in the State of Tamil Nadu through the Superintendent of Police, CBI, SIT v. Nalini and 25 Others (1999).

Overt act (or actus reus)

In general, actus reus is not essential to establish the offence of criminal conspiracy. Nevertheless, in cases where an agreement, whose object is not illegal, is alleged to be criminal conspiracy due to the adoption of illegal methods, an overt act by one or more conspirators will be an additional essential to prove by the prosecution before the court.

For those agreements where the object itself is unlawful, i.e., parties having intention and agreement to commit a crime which is prohibited by the Indian statutory enactments, making an agreement shall be considered as actus reus, not its implementation. Without the physical manifestation of the intentions, the criminal act cannot be proved as the major reason for its essentiality to punish those persons under Section 120 of the IPC.

The Delhi District Court indicated, in the case of State v. Anil Aggarwal and Anr. (2019), that physical manifestation of common intention is also one of the primary requisites to construe the offence of criminal conspiracy because the agreement to commit the crime among conspirators cannot be proved, especially if it is an implied agreement.

Essential elements of criminal conspiracy

The essential elements of the offence of criminal conspiracy, mentioned in Section 120A of the IPC, need to be fulfilled to make accused persons punishable under Section 120B of the IPC are as under:

Parties shall be two or more persons

The number of conspiring members involved in the criminal conspiracy shall be at least two members. If there is only one person, he or she cannot be guilty of criminal conspiracy because one cannot conspire with himself. On the other hand, if the co-conspirator did not commit the crime but had the intention to commit it, such a person will be liable under Section 120B of the IPC. The rationale is that because of one’s encouragement or support, such commission of illegal acts have occurred. If not supported by the co-conspirator, the crime may be impossible for the main accused. This rationale became a ground to punish the co-conspirators as well under Section 120B for their involvement or abetment.

Agreement to commit a crime

The existence of an agreement to commit an unlawful act or a legal act in an illegal manner between two or more persons is mandatory. The mere intention between members cannot constitute a criminal conspiracy unless they came forward and made an engagement and association among themselves to infringe on the law of the land. If their intentions and actions are the same but independent, they are not conspirators. Also, mere knowledge and conversation about a crime shall not be considered a criminal conspiracy, as decided by the Supreme Court in Sudhir Shantilal Mehta v. C.B.I (2009). Thus, a meeting of minds is essential to punish someone under Section 120B of the IPC because conspiracy arises from the completion of an agreement between accused persons.

Besides this, it is important to mention that Section 24 of the Indian Contract Act, 1872 makes agreements for illegal purposes void and unenforceable in a court of law. In this case, the parties to the civil suit are not punished for their agreement to act unlawfully, instead making that agreement null and void. On the other hand, if the illegal purpose is so gruesome that such acts are considered crimes under the IPC, then the parties of such an agreement will be made liable in the criminal courts.

To commit an illegal act

The object of such an agreement shall be either to commit or to cause an illegal act. If an act by the offender is not unlawful but committed through unlawful means as stipulated under Section 43 of the IPC, the act is still considered to be an illegal act. The commission of the crime doesn’t need to be the ultimate object of the agreement. Even if such commission is just incidental to the object of the agreement, It is enough to constitute the crime under Section 120B of the IPC.

Nature of offence under Section 120B IPC

The offence under Section 120B of the IPC i.e., criminal conspiracy, is recognised as a continuing offence by the Supreme Court in Ajay Agarwal v. Union of India and Ors. (1993). This offence is deemed to be continued till the moment when the commission of the offence to which they are planned is executed, when the members repudiate the agreement among them, or when the agreement is frustrated by choice or necessity. Till the point of execution, repudiation or frustration, the conspiracy is said to be continuing and, during this period, whoever is the party to it, will be convicted under Section 120B.

Besides this, as per the First Schedule of the Code of Criminal Procedure, 1973 (hereinafter mentioned as “CrPC”), in the case of criminal conspiracy to commit an offence whose punishment is death, life imprisonment or rigorous imprisonment for two years or more, the offence to which the accused persons conspired should be taken into account for determining whether such conspiracy is bailable or compoundable and which judge is appropriate to conduct the trial. In the case of another criminal conspiracy, except those mentioned above, is bailable, non-cognizable and triable by the Magistrate of the first class.

Types of evidence for proving criminal conspiracy and its admissibility

The crime of criminal conspiracy is very different from other crimes in the point that physical conduct is not an essential element to prove in court. It is also said that the agreement between conspirators need not be made expressly; the crime includes implied agreements too, as noted by the Supreme Court in Esher Singh v. State of Andhra Pradesh (2004). Obtaining evidence to prove the agreement, especially when made implicitly, is very difficult in most criminal conspiracies, as secrecy is maintained in almost all cases. Mostly, direct evidence will not be available. How, when and where the conspiracy took place and other aspects relating to it are just matters of inference, as that cannot happen in public or open areas. To demonstrate the conspiracy by parties, the prosecution has no choice but to prove surrounding circumstances, such as acts, statements and conduct of the parties, that occur before, during or after the alleged incident, from which the fact can be inferred. Such inference is possible only when those circumstances are not capable of reasonable explanation.

Also, in the case of Dr. Satyavir Singh v. State of Uttar Pradesh (2016), the Supreme Court ruled that mere inferences cannot prove criminal conspiracy; rather, those inferences must always be supported with some evidence as mere suspicion cannot make the conspiracy evident. On recognising this fact, the law allows the submission of any cogent evidence, either direct or circumstantial, in cases under Section 120A of the IPC. Therefore, the court will approve considering circumstantial evidence for the purpose of arriving at the finding as to whether the offence of criminal conspiracy has been committed or not. But the prosecution should prove such circumstances by which the court can conclude the criminal conspiracy among them and remove any doubts of innocence associated with them.

Besides this, another noteworthy legal rule is that the courts, while dealing with Section 120A and 120B cases, should take into consideration the cumulative effect of proven circumstances instead of an isolated approach. This means that the series of circumstances provided by the prosecution before the court should have a cumulative effect i.e., linked to one another rather than being isolated. Such circumstances provided by the prosecution shall be conscious and without ambiguity that those are in furtherance of the agreement among the alleged parties to the conspiracy. Additionally, each circumstance that was presented before the court should be proved beyond a reasonable doubt.

On the other hand, where the circumstantial evidence was lacking, incomplete or inaccurate, substantive evidence can be submitted to the court to prove the meeting of minds in the criminal conspiracy. This was stated by the Supreme Court in the case of Esher Singh v. State of Andhra Pradesh (2004).

The court requires the prosecution to prove that the intentions of one party regarding the commission of a crime have been transmitted or shared with another person or persons to punish the offender under Section 120B of the IPC. A similar stipulation was made out by the Supreme Court, in the Esher Singh case (2004), stating: “The evidence as to transmission of thoughts sharing the unlawful design may be sufficient.” In this case, it is also noted that evidence shall clearly establish that all the above-stated essential elements are closely connected. That is, the illegal means that the accused persons adopted and their illegal acts shall be in pursuance of the conspiracy they agreed upon. Only then the prosecution can successfully prove criminal conspiracy and punish the offenders under Section 120B of the IPC.

The doctrine of agency in a criminal conspiracy

It is said that the criminal conspiracy is a partnership in crime because every member involved is a joint and mutual agent to each other for the common purpose, i.e., execution of the conspired crime. By this doctrine of agency, the law contemplates that the act of one of the members in the conspiracy is deemed as the act by each of them, due to all members being equally liable. The said acts done by one person not only include those agreed by all members in the common plan but also include those which became incidental, collateral and necessary to add for the accomplishment of the common purpose.

Unlike other crimes under the IPC, criminal conspiracy can be proved by providing hearsay evidence, which means any judicial statements made by one of the conspirators against the other co-conspirators. Despite its reliability, it can be admissible in the conspiracy proceedings. In Van Riper v. United States (1926), Elucidating this rule, Judge Learned Hand stated: “Such declarations are admitted upon no doctrine of the law of evidence, but of the substantive law of crime. When men enter into an agreement for an unlawful end, they become ad hoc agents for one another, and have made a partnership in crime. What one does according to their common purpose, all do, and as declarations may be such acts, they are competent against all.” Therefore, all parties to a crime are punished under the theory of agency for the declarations and implementations made by their co-conspirators. But the liability of acts done by one conspirator is not imposed on other co-conspirators if the conspiracy is terminated by will of the parties, or frustrated by necessity or choice.

Moreover, there is a doctrine of innocent agency, where the offender is liable for the crime committed by his agent, who unintentionally and unknowingly committed it on instructions of his principal, although he/ she has not actively participated in the commission of the said crime. This doctrine is applicable in the case of criminal conspiracy, as the active participation of each member is not required to punish him/ her. The non-requirement of active participation is discussed clearly in the later part of the article.

Section 10 of the Indian Evidence Act, 1872

In India, Section 10 of the Indian Evidence Act, 1872 introduced the doctrine of agency and its various conditions that have to be fulfilled for proving criminal conspiracy. Those conditions are as follows:

The prosecution should submit prima facie evidence so that the court can make out that the members involved in the conspiracy are two or more persons.
After signifying an intention by a person among them, if he or any other members expressly stated, written, or impliedly acted concerning their common intention, then such expression or action shall be constituted as evidence against the other.
Such evidence shall only be used against a co-conspirator and not in his favour.

To learn more about the admissibility of statements of co-conspirators, click here.

Punishment for the offence of criminal conspiracy under Section 120B of the IPC

In 1862, when the IPC came into force, Sections 120A and 120B were not codified i.e., criminal conspiracy was not an offence per se under the IPC then, except Section 121A which deals with conspiracy to commit offences punishable under this Section of the IPC.

As previously mentioned, the punishment for criminal conspiracy is prescribed in Section 120B of the IPC. By reading this provision, we can infer that punishment for criminal conspiracy is the same punishment as for the act of abetting an offence. The severity of punishment changes depending on the nature of the offence. If the conspirators agree to commit an offence whose punishment is either death, life imprisonment, or rigorous imprisonment for a period of two years or more, then the punishment would be more severe. If the agreement in question is to commit an offence, which is less severe i.e., punishment for the offence is less than the aforementioned punishments, then the punishment awarded will be less.

The Supreme Court in State of Madhya Pradesh v. Sheetla Sahai and Ors. (2009) made a noteworthy statement that a conspiracy to commit an offence is altogether an independent offence and is punished separately. This means that, when the conspirators actually committed the offence which is punishable under the IPC as per their planning, they will be punished for both conspiracy as well as for the commission of the offence, according to the provisions of the IPC. Therefore, once the offence of criminal conspiracy has been proved in a court of law, all the parties to that conspiracy will be punished under Section 120B of the IPC, irrespective of their commission of the offence and conviction for the same. Similarly, even though he is acquitted of the charge of criminal conspiracy, a person can be convicted for the commission of a crime. Therefore, criminal conspiracy is a substantive offence.

Requirements for court cognizance

Section 120B of the IPC has to be read with Section 196(1A)(b) of the CrPC which mandates the previous sanction of either the Central Government, State Government or the District Magistrate for the court to take cognizance of the case of criminal conspiracy. In case of criminal conspiracy to commit an offence which is punishable with less than the period of two years, the court will take cognizance and initiate the proceedings in this regard only if the State Government or the District Magistrate formally expressed their consent for it in writing as stipulated under Section 196(2) of the CrPC. However, if the provision of Section 195 of the CrPC is applied, then consent by such authorities is not required.

Effect of acquittal of all accused persons except one

If three accused persons are involved in criminal conspiracy and two of them were acquitted of Section 120B charges, the remaining person cannot be punished for criminal conspiracy under Section 120B of the IPC because one cannot conspire with himself. Therefore, if all but one were acquitted of criminal conspiracy, then the charges against the left out person will also be removed by the court as parties in this crime shall be at least two persons. A similar observation was drawn in the case of Faguna Kanta Nath v. the State of Assam (1959).

If the complainant wants to punish someone but cannot prove any agreement between the main accused and other accused persons or the other persons obtained acquittal from the court, he or she can lodge a complaint under Section 34 of the IPC, which has no substantial difference with Section 120A. Section 34 deals with the acts done by several people in furtherance of common intention. The major difference between the said provisions is that, under Section 34, a single person can also be punished because each party will be liable for the others’ acts.

Effect of a lesser punishment on one of the convicts

If one of the convicts under Section 120B of the IPC is punished with a fine, not a jail term, then other convicts should also not be punished with imprisonment. The best example of this rule is in the case of Chandrakant Ratilal Mehta v. the State of Maharashtra (1993). In this case, the Trial Court imposed only a fine on the principal convict in the case of criminal conspiracy, whereas other convicts were sentenced to imprisonment. In the present case, the Bombay High Court held that the considerable award of imprisonment to other accused was unjustifiable. On this ground, they were removed from such a sentence and made liable to pay only a fine.

Communication and acquaintance with all conspirators are not necessary

To punish guilty persons under Section 120B, it is not important that all parties who are involved in a criminal conspiracy are known to each other and everyone has access to communication with any of them. Even the detailed stages of the execution of the conspiracy are not vital to be known to all members of the conspiracy. The same was asserted by the Supreme Court in Chaman Lal and Ors. v. State of Punjab and Anr. (2009). There may be a common leader who communicates or passes commands to succeed in the commission of a crime which they are planning. Thus, consensus among parties is important, not communication and acquaintance. For example, if a wife knows that her husband conspired to commit a crime with a few members and agreed to help him in the conspiracy, she will be guilty under Section 120B of the IPC, although the other conspirators except her husband are unknown to her.

Contrarily, if the accused does not know the main object or purpose of the conspiracy, then he or she is not liable under Section 120B of the IPC, as knowledge of the main object is one of the essential as held by the Supreme Court in Mohmed Amin @ Amin Choteli Rahim Miyan Shaikh & Anr. v. C.B.I through its Director (2008).

Active participation is not required

The Supreme Court, in K. R. Purushothaman v. State of Kerala (2006), mentioned that, to punish someone under Section 120B of the IPC, such a person need not take part from the beginning to the end of the whole plan that was conspired by them. Some of the parties may even give up the risk in the middle. If a few conspirators did not actively indulge in the commission of the offence or do a legal act with illegal methods but tacitly agreed to the central conspiracy and did not give up the risk by quitting, they will obtain a conviction from the court and be punished under Section 120B of the IPC. As already stated, the rationale behind this legal principle is to punish those who support or abet someone to commit conspiratorial acts but do not actively participate, as their encouragement leads to the crime commission.

An exception to the criminal conspiracy

We understood the essential elements that constitute the offence of criminal conspiracy. In case of overt acts by all parties to the conspiracy, there is a clear case and it is easy to prove the criminal conspiracy among them. However, such overt acts must be done to achieve the object for which the convicts conspired.

Here comes an important question, what if a person helps a conspirator after the commission of the crime which is the main purpose of their conspiracy? Such a person may give shelter to the conspirator or absconder after the purpose is accomplished with or without knowing it. In these scenarios. At first, they look like wrongdoers as they are giving some kind of assistance to them. However, the law does not punish such people under Section 120B of the IPC because any subsequent act by a person done after the commission of a conspired crime in time, no matter how unlawful it is, will not be said to be a part to such criminal conspiracy.

Important case laws

State of Tamil Nadu v. Nalini (1999)

In the case of the State of Tamil Nadu through the Superintendent of Police, CBI, SIT v. Nalini and 25 Others (1999), the conspirators of the assassination of Rajiv Gandhi were convicted under Section 120B read with Section 302 of the IPC. However, Robert Payas, one of the accused persons, has been acquitted as there is no proof of his agreement with the main object of the conspiracy. He was suspected to have a strong association with the members of the said conspiracy. In this way, the Supreme Court of India gave paramount importance to the existence of an agreement, mere suspicion, however strong it may be, is not enough to convict an accused. In this case, the Court also provided the broad principles of Sections 120A and 120B.

Subramanian Swamy v. A. Raja (2012)

In the case, Subramanian Swamy v. A. Raja (2012), popularly known as the “2G Spectrum case”, the Supreme Court of India stated that the wrong decisions or improper approach or management by the government, including ministers or the Prime Minister, shall not be a criminal conspiracy. Thus, the Court set aside the complaint stating a lack of conclusive proof of criminal conspiracy.

State of Karnataka v. Selvi J. Jayalalitha and Ors. (2017)

In the case of State of Karnataka v. Selvi J Jayalalitha and Ors. (2017), the practice of corruption by a few politically influential persons is also regarded as criminal conspiracy. Here, one of the accused persons, Selvi J. Jayalalitha (A1), who was the then Chief Minister of Tamil Nadu, acquired properties worth Rs. 66.65 crores during her first tenure, i.e., 1991-1996. The Court observed that the free flow of money from one account to another is a clear establishment of the presence of criminal conspiracy between accused persons. Besides this, there are various other pieces of evidence, such as firms on those names the assets are registered are incorporated on a single day, and all other members of the conspiracy cohabited in the house of A1, among other evidence, proved beyond reasonable doubt that the accused persons committed the offence under Section 120A of the IPC.

Raju Manjhi v. the State of Bihar (2018)

In this case, Raju Manjhi v. the State of Bihar (2018), the prosecution provided the Court with the confessional statements of the co-accused before the police officer as the sole evidence to convict Munna Manjhi. As a general rule, such confessions made by the accused are not admissible in the court and have no evidentiary value. But, the prosecution requested the court to examine the confession in light of Section 27 of the Indian Evidence Act, 1872 by virtue of which the confessions are admissible in the court if the received information is satisfied with a subsequent recovery. The Supreme Court took Section 27 into consideration and examined all the recoveries and findings provided by the prosecution. By these findings, it was proved beyond reasonable doubt that the accused is guilty of criminal conspiracy and be punished under Section 120B of the IPC.

Parveen @ Sonu v. the State of Haryana (2021)

The facts of the case, Parveen @ Sonu v. the State of Haryana (2021), are four young boys conspiring to help the four accused persons who are in the custody of police and travelling in a train to appear before the court. While executing the plan, it was alleged that one of them fired upon a police officer and another person threw chilli powder on his eyes. The Sessions Court convicted all the accused persons. The High Court of Punjab and Haryana also upheld the conviction of the Trial Court, which relied solely on medical reports and rejected the appeal. The present case before the Supreme Court dealt only with the validity of the conviction of the third accused, Parveen @ Sonu. The prosecution contended that, except for vague statements made by the witnesses, there is no valid evidence that the appellant is a member of the said conspiracy. In its judgement, the Supreme Court noted that the confessional statements of co-accused would not be valid evidence, unless there is corroborative evidence and acquitted the appellant.

Recommendations by the Law Commission of India

The 42nd report of the Law Commission of India recommended a few corrections to Section 120B of the IPC. More specifically, it found that provision, Section 120B(1) of the IPC, is creating confusion as it said the punishment for criminal conspiracy to commit an offence, which is punishable with death, life imprisonment or rigorous imprisonment for two years or more, is the same as that of abetment for commission of such agreed offence. Because of such wordings, the court should refer to the provisions of abetment and its punishment to determine the amount of punishment in case of criminal conspiracy. This creates confusion due to the complex procedure of the determination of punishment. Recognising this complicity, the Law Commission of India advised the legislature of India to amend this provision in such a way that the punishment is fixed in Section 120B(1) itself, without referring to another section.

Furthermore, the Law Commission suggested amending the whole of Section 120B. The changes it recommended are:

If the parties to the criminal conspiracies agree to commit an offence and even act in furtherance of it, such offenders shall be punished with the same punishment prescribed for the offence they agreed to commit.
If the parties to the criminal conspiracies agree to commit an offence but do not do any act in furtherance of the intended crime, such conspirators shall be punished up to half of the maximum punishment or fine prescribed for the offence they agreed to commit. The court can also punish with both imprisonment and fine.

Conclusion

Criminal conspiracy is a serious crime and is severely punished accordingly. There are many essential requirements to establish a case of criminal conspiracy in a court of law. But, as it is hatched secretly, there is a relaxation in submitting evidence to prove the case in a court of law. The prosecution is allowed to present circumstantial evidence to establish the offence of criminal conspiracy and based on this, the court can punish accused persons under Section 120B of the IPC.

Also, every party involved in the criminal conspiracy is treated equally in terms of the sentence awarded, irrespective of their intensity of motives, how much work they undertook, or knowledge about the whole plan, among other things. However, merely helping or giving opinions without any idea of a conspiracy will not make someone a conspirator and held liable under this provision. Thus, the court should take all possible measures while examining the evidence presented by the prosecution to avoid any unfairness and injustice to the accused persons, especially those who are innocent.

Frequently Asked Questions (FAQs)

What are the differences between criminal conspiracy and abetment?

There are a lot of differences between the offences of criminal conspiracy and abetment, even if those look similar at first. The following are the differences between them.

Criminal conspiracy is defined under Section 120A and punished under Section 120B of the IPC, while abetment of an illegal act is defined under Section 107 and punished under a range of provisions, namely Sections 107, 108, 109, 110, 111, 112, 113, 114, 115, 116 and 117 based on the severity and nature of the offence to which the offender abetted.
The offence of abetment can be constituted if there is an element of conspiracy in the act of the offender, according to the second clause of Section 107. Thus, conspiracy may be one of the ingredients of the offence of abetment. Whereas, an act of abetment is not one of the essential elements to constitute criminal conspiracy.
To make someone guilty under Section 120B for the commission of the offence of criminal conspiracy, an intentional agreement to commit an illegal act is enough. But, in abetment, the commission of some illegal act or omission as per their conspiracy is required.
Conspiracy is a more severe and broader offence than abetment. Due to this, we can see the variance in the punishment as well.

Nevertheless, there is little overlap between the offences of criminal conspiracy and abetment. However, the legislature felt not necessary to amend the provisions relating to abetment, at the time of the insertion of Chapter V-A in 1913.

To know more about the difference between abetment and criminal conspiracy, click here.

How is abetment by conspiracy affected after Chapter V-A is inserted?

Practically, abetment of an offence by conspiracy is of little use after Chapter V-A dealing with the offence of criminal conspiracy, is added to the Indian Penal Code, 1860. Hence, the abetment by conspiracy is no longer treated as a criminal law concept.

In addition to this, in English common law, the element of conspiracy is not at all an integral part of the crime of abetment, unlike the Indian Penal Code. Based on its findings on the practical scenario of abetment by conspiracy, the Law Commission of India in its 42nd report recommended removing the second clause of Section 107, which explains the offence of abetment by way of conspiring, and all other such references made in relation to this offence. It further provided reasoning that such co-existence of two similar wrongs in the same Penal Code will lead to ambiguity while interpreting and applying by courts.

Can a company be liable under Section 120B of the IPC?

A company registered under the Companies Act, 2013 is treated as an individual and, hence, can be punished for any offence, either under IPC or any other statutory enactments, once proven that it was committed. Although the company is an artificial person, still it can be made liable for its commission of crimes which includes the element of mens rea. The imputation of a guilty mind by the company is done based on the principle of the ‘alter ego’ of the company.

A company is convicted for the criminal acts done by a person or body of persons only when such affairs are in relation to the business of the company, otherwise, the company escapes criminal liability. Thus, the liability of the company under Section 120B of the IPC is determined by ascertaining the extent of control of the person or body of persons. If the degree of their control is so powerful that it is apparent the company is functioning and acting through them, then the company is made liable for the criminal conspiracy of the person or body of persons. The famous authority in this regard is Iridium India Telecom Ltd. v. Motorola Incorporated and Ors. (2010).

Can a person who joined the conspiracy much later be punished under Section 120B of the IPC?

Not all accused persons need to be present from the very beginning when they held the first meeting and conspired. If a person became a part of the conspiracy at a later point in time, it would also be sufficient to treat him or her as one of the conspirators and charge with Section 120A of the IPC. If the criminal conspiracy takes place among all of them and the new person’s guilt of willingly agreeing to their common purpose is proved in court, he or she shall be punished under Section 120B of the IPC.

But the additional requisite to make the new person liable is he or she should join the conspiracy before the commission of the offence they planned for, not after. Furthermore, just because he or she joined the conspiracy in the middle of the execution of the agreed plan will neither result in the formation of a new conspiracy nor alter the current position of other conspirators.

Whether agreement to commit corruption is punishable under Section 120B of the IPC?

To make a group of persons punishable under Section 120B of the IPC, they should have committed an unlawful act. As the practice of corruption by the public servant is an unlawful act as per the Prevention of Corruption Act, 1988, the accused persons will be punished as the agreement to an unlawful act such as corruption is a criminal conspiracy, provided all other essential elements should be proved before the court by the Central Bureau of Investigation (CBI) or complainant, as the case may be. However, one among the accused persons must be a public servant. The Supreme Court also held, in the State by S.P. through the SPE CBI v. Uttamchand Bohra (2021), that a person, who is not a public servant cannot be charged with Section 13 of the Prevention of Corruption Act, 1988 and acquitted the respondent of this case from Section 120B charges.

References

“The Indian Penal Code” authored by Ratanlal and Dhirajlal, 36th Edition, 2022.
https://heinonline.org/HOL/LandingPage?handle=hein.journals/supami26&div=23&id=&page=

Role of TRIPS agreement and its scope in India

By

Rachit Garg

-

July 29, 2023

0

This article has been written by Jasmeet Kaur, pursuing a Diploma in Technology Law, Fintech Regulations and Technology Contracts and has been edited by Oishika Banerji (Team Lawsikho).

It has been published by Rachit Garg.

Table of Contents

Introduction

Whenever any area starts advancing, it comes with a need for its laws because as much as it will be used in a bona fide way people will have mala fide intentions for the same. Similar to how the need for civil laws arose when civil disputes first occurred and how specific laws were created to address crimes against women, technology laws also emerged in response to the boom in technology. The same is true of intellectual property rights (IPR), whose necessity arose as intellectual innovations advanced and led to the 1995 implementation of Trade Related Aspects of Intellectual Property Rights (TRIPS) In this article, the author deals with what exactly is intellectual property, how it all started, it’s position in the world, role, and impact in India.

An insight into the TRIPS Agreement

TRIPS was introduced in the last round (8th round) known as the Uruguay Round of The General Agreement on Tariffs and Trade (GATT). It was after GATT, that WTO was established. In this session, discussions were held for the 1st time related to intellectual property rights, services, and agriculture.

World Trade Organization (WTO)

WTO deals with the rules and functioning between nations and makes sure that the functioning is smooth, predictable, and ethical. Countries or individuals are prohibited to steal information from others and WTO also ensures that various agreements that have been formulated are implemented and resolves disputes, if any. The most effective agreement to date is TRIPS.

So, the role of WTO is,

Formulation,
Negotiation and,
Implementation of new trade agreements

TRIPS is an agreement by the World Trade Organization (WTO) whose members are 164 countries, which means around 90% of the countries of the world. It is covered in Annex 1C, which is divided into 7 parts from General to Final Provisions enlisted from Articles 1- 73. It desires to reduce impediments and distortions in International trade and to make sure that intellectual property rights are adequately protected.

Role of the TRIPS Agreement

TRIPS plays a very important role in safeguarding intellectual property rights which are given from Part II to Part V of Annex 1C.

Part II undertakes standards, scope, and usage of the following intellectual properties-

Copyright and Related Rights [Section 1, Article 9-14]: Copyright extends to literary works, cinematography, music composition, and software development to protect the interest of people related to these fields. With the Berne Convention, only expressions are protected and not procedures, ideas, or methods. The term of Protection of a person is 50 years or till natural life.
Trademarks [Section 2, Article 15-21]: Any sign or symbol which distinguishes a product or service is protected by trademarks. For instance, the Logos of Nike and Adidas differentiate both products. So, no other company can use the symbol which is already trademarked by another company because that becomes his/her intellectual property which they formed by using their intellect and deserve to receive monetary benefits from the same. The term of protection should be at least 7 years with no bar on renewal.
Geographical Indication [Section 3, Article 22- 24]: We all have heard the words like Banarasi Saree, Darjeeling Tea, and Alphonso Mango, but ever wondered why are these known by their geographical area, do they have some special rights? Can anyone from any state name their tea Darjeeling Tea? The answer is no. These are known by their geographical area because they have a special GI Tag (Geographical Indication Tag) which prevents any other member from selling their goods by the name of that territory.
Industrial Designs [Section 4, Article 25-26]: Protection is also given to Industrial Designs which are original and new (sometimes not owing to some conditions) which bars any other member from copying, making, or selling such articles, especially for commerce. For instance, no one can copy the design of Honda City without prior permission from Honda. The protection is given for 10 years.
Patents [Section 5, Article 27-34]: Patents are a form of protection given to scientific or technological inventions as these are intellectual properties and their monetary benefits should be given to the members making innovation.

Layout-Designs (Topographies) of Integrated Circuits [Section 6, Article 35- 38]: With 10-15 years of protection, it renders unlawful the selling, importing, or distribution of layout design which is protected.
Protection of Undisclosed Information[Section 7, Article 39]: With the increase in competition, Unfair Trade Practices are also increasing, so it becomes the duty of members to prevent the information from getting disclosed. It not only applies to private entities but also to government or government agencies.
Control of Anti-Competitive Practices in Contractual Licenses [Section 8, Article 40]: Some license practices are such that the conditions imposed upon them restrict the dissemination and transfer of technology relating to intellectual property.

Part III deals with the enforcement of civil, criminal, and special matters related to intellectual property. These rights are provided to prevent infringement and thereby conduct fair trade. Although unnecessary restrictions are to be avoided. Injunctions can also be imposed on the deterrent party. Part IV relates to acquisition and maintenance, and Part V to the prevention and settlement of disputes.

Scope of TRIPS agreement in India

TRIPS agreement plays a significant role in IP laws globally, especially in patents. TRIPS poses protection to intellectual property for a specified period and makes it difficult to obtain patents. Although the laws were simple with patents in India and some like developing countries before the introduction of TRIPS, scenarios changed after its advent. The scope of TRIPS can be studied in the Indian Pharmaceutical sector with its impact on the health of the public.

There is an emerging need for the pharmaceutical sector in India due to its growing population. As per the provisions of The Patents Act, 1970, the production of generic drugs and importation of patented drugs were allowed at lower prices which were later amended with the introduction of the TRIPS agreement to The Patents Act, 2005. As per the amended act, inventors are obliged to share complete details of their inventions which restrict others from making, selling, or importing them for 20 years.

In the case of Roche vs. Cipla 92012), a dispute arose between the healthcare company of Swiss and an Indian Pharmaceutical company over a drug named ‘Erlotinib’ which was used for treating Lung Cancer and was patented by Roche and was selling it by the name ‘Tarseva’. Justice Bhatt of Delhi High decided this case and rejected a temporary injunction filed by Roche against Cipla for manufacturing the same drug even though it was patented because,

Roche’s drug was thrice more expensive
It was against public policy

Impact on pharmaceutical sector

As already discussed, TRIPS poses several restrictions on patenting of generic drugs by giving protection to the innovator as it is believed that the innovator should be the person to enjoy benefits arising from it and if everyone will be copying that idea, the benefit won’t be available to the innovator. It is evident that affordable medicine is one of the major concerns in India whose substantial population lives under the poverty line and prices of medicines are such that are not affordable by them, so to assure absolute access to health services, the following implementations have been made by India:

TRIPS flexibility
Effective utilization of Compulsory Licensing.

Furthermore, the Indian judiciary is attempting to strike a balance between-

Rights of Patentee and,
Fundamental Right of Health

Impact on access to medicines

As Sec 3(d) is removed, it is now easier to obtain patents relating to modifications of drugs, or incremental innovations of known substances but according to the decision of the Supreme Court in the case of Novartis Ag vs Union Of India & Ors (2013) commonly known as the Novartis case, the manufacturing or production of the cheaper version of generic drugs which are patented are now harder. The companies try to get their medicines patented forever by making minor changes that do not have any increase in therapeutic efficacy as well. This concept of forever patenting, i.e., extending the patent life of a drug again by additional 20 years is known as ‘patent evergreening’ which needs to be regulated.

This decision was taken into account by the Novartis Case itself in which an application was filed by the International Pharmaceutical Company, Novartis AG before the Madras Patent Office for grant of patenting a drug named ‘Glivec’ (an Anticancer drug). But the application was rejected by Madras Patent Officer on the grounds that it lacked novelty as the patent for another drug by the name of ‘Zimmerman’ already existed and its therapeutic efficacy is not more than the original drug. Although 2 writ petitions were filed in Madras High Court and by Special Leave Petition in Supreme Court respectively, the application was rejected to avoid the evergreening of patents.

Impact on innovation

There is a mixed impact on Innovation in India. On one hand, more patent applications are being filed due to the introduction of the product patent and on the other hand, removing Section 3 (d) led to compulsory licensing which authorizes a third party for making, using, or selling of patented drugs without the consent of the patent owner.

The conditions under which a compulsory license can be granted have been given under Section 84 of the Indian Patents Act, 1970. These are:

Public requirements have not been satisfied
The price of patented invention is not reasonable
The patented invention has not been used in India

One of the leading cases here is Natco Pharma Ltd. vs. Bayer Corporation (2013) in which the Pharmaceutical Company, Bayer contended that it has patented rights on the ingredient used to treat kidney and liver cancer known as ‘Nexavar’. But Natco Corporation applied for its compulsory license as per Section 84 of the Indian Patents Act, 1970 that Bayer Corporation failed to meet public demand for supply of medicine.

The controller observed that the price of drug is Rs.2,80,000 per month which is not affordable by every individual, so Bayer could not cope with the affordability of the drug thereby being unable to fulfill the public demand. The controller further observed that, since Bayer was not manufacturing drugs in India even after 4 years, thereby fulfilling the conditions of Section 84. So, compulsory license was granted to Natco Pharma Ltd.

Conclusion

TRIPS agreement has transformed the regulation and implementation of IP laws in India as well as across the world. There is no doubt that no previous agreement has shown the result that TRIPS had. Further, this agreement is important because it gives members their rights and prohibits others from using their innovations and ideas thereby protecting their monetary interests. Also, it plays a major role in India which has been discussed above.

References

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Breach of privilege

By

Rachit Garg

-

July 29, 2023

0

License+Infringement+Breach+of+License — Image Source- https://bit.ly/2YgWwhP

This article is written by Sakshi Singh, from Amity Law School, Lucknow. This article provides a detailed analysis of the breach of privilege, its legality, and punishment provisions for breach of privilege. It also contains recent landmark judgements related to the topic.

It has been published by Rachit Garg.

Table of Contents

Introduction

Recently, Rahul Gandhi, Member of Parliament from Wayanad, has been facing breach of privilege notice and demands of termination of his membership of the House because of his objectionable remarks on Prime Minister Narendra Modi. Notably, he is already a disqualified member of Parliament after his conviction for criminal defamation by the Sessions Court in Surat for defaming the “Modi” title. His appeal in the High Court against this conviction was also dismissed recently.

Seeing a recent bunch of cases of breach of privileges, It becomes crucial to understand the source of these privileges and who all are entitled to claim these privileges and immunities. Article 105 and Article 194 of the Constitution of India, 1949, guarantee privilege, power, and immunities to the elected members and committees so constituted in both houses of Parliament and state legislatures respectively. These articles provide the lawmakers with the freedom of speech inside in Houses and also no charges, civil or criminal, shall be levied against them for anything said or voted by them in the course of the proceedings of the House.

Parliamentary privileges serve the purpose of providing an authoritative position, a sense of honour and dignified status to elected representatives. The privileges and powers mentioned thereunder are to enable lawmakers to function Independently without any interference or obstruction and not to place the elected members above the law of the land. However, over time these privileges have been used to target any particular member of the House and also to violate the fundamental rights of the citizens by forbidding them to exercise their rights of freedom of speech and expression. In short, these privileges are often misused by the lawmakers to have an upper hand in disregarding the due process of law. For instance, in 2021 Kerala legislative assembly demanded the withdrawal of criminal charges for vandalism from 6 of its MLAs. They claimed that it is a breach of privilege to admit the case which happened inside the assembly as it can be construed as legislative proceedings.

Amid widespread misuse of the legislative privilege exponentiated by the lack of specific statutes governing these privileges and immunities, it becomes crucial to note the validity of the breach of privilege proceedings. Thus, After giving a brief description of what are the legislative privileges and breaches of these privileges and laws governing the same, this article will enunciate how the judiciary can intervene in the breach of privilege proceedings along with some leading and recent case laws subjected to the topic.

What is breach of privilege

Breach of privilege is the violation of respective rights or immunities of the members of either House of Parliament or the State Assembly. When any member of the House or any stranger tries to devalue the power, privilege and immunity granted to members of the Houses as well as constituted committees, it is said that they are committing an offence of breach of privilege. Parliament and State assembly formulate their own regulation pertaining to rules on the procedure for privilege motion as well as a possible punishment for the said offence.

Privileges and immunity are granted either to individual members of the parliament of state legislators or collective privileges and immunity. Breach of privileges is a punishable offence. The form of punishment is decided as per the severity of the breach in accordance with the general law of Parliament.

Examples of breach of privilege

Speaking or writing gross about the character of members

Anything said by word or gesture which disgraces the character of any member of the House is considered a breach of privilege.

Publication of secret sessions

Strangers are not allowed to roam around in the parliament building during the secret sitting, even people present there are prohibited to take note of or record the proceedings of secret settings. Any contravention to the said regulation is considered a gross breach of legislative privilege.

Character assassination of the speaker or chairman

Anything said or written which is of derogatory nature and questions the duties performed by the speaker or chairman is considered a breach of privilege. Terming him impartial and favourable to some is also defamatory which in turn makes it an offence of breach of privilege.

Disseminating manipulative reports of House- proceedings

If a person publishes a report of proceedings in Parliament or state legislatures which is falsified or distorted, such conduct of publishing is considered a breach of privilege.

Breach of privileges for disorderly conduct

Misconduct or disorderly conduct includes, persistently and willfully obstructing the business of the house, disregarding the authority of the chair etc. Showing continuous non-cooperation in conducting peaceful parliamentary sessions and obstructing the daily business of the House is a breach of privilege and a punishable offence.

In the case of Raj Narain Singh vs. Atmaram Govind And Anr. (1953), Raj Narain (Member of Parliament) was made to withdraw from his membership by the speaker for ‘disorderly conduct’. To this, he has not objected. The court has held that no matter how brief the period of withdrawal was, it constituted a breach of privilege or contempt of the house because important debates and voting could have taken place in that period, which required his presence to represent the people of his constituency through his participation in them.

Essentials of breach of privilege

Accountability for breach of privilege

Any member of the House, organisation, authority, or even any stranger can be held accountable for a breach of privilege if their actions contravene the immunity provided in Article 105 and Article 194.

Attendance in sessions of the House

To establish a good case of breach of privilege, or, to say, in order to claim legislative privilege and immunities, attendance in the session of the House is necessary. If any member of the House wants to claim the privilege, it shall be a necessary condition that he/ she be present at the session of the House when the alleged breach took place. This essential was put into practise, as it was believed that a person who cannot perform his duties properly is also not entitled to claim the rights.

Proximity

It is an essential condition for establishing a breach of privilege that a member’s action is directly connected with his assigned role, duties, or functions as a legislator; only then can a breach of privilege be established.

Laws related to breach of privilege

Though Clause 3 of Article 105 and Article 194 state that parliament and state legislation, respectively, may from time to time enact a law to define and regulate powers, privileges, and immunity. However, as of now, no such enactment is passed either by parliament or state legislation. Therefore, as per Article 105(3) in the event that no law is enacted for enunciating the legislative privileges, the Republic of India shall follow the regulation persisting before Section 15 of the 44th Constitutional Amendment Act, 1978, came into force.

Notably, Section 15 of the 44th Constitutional Amendment Act brought some substitution to Article 105 of the Indian Constitution. The present wording of the Article was substituted in place of “shall be those of the House of Commons of the Parliament of the United Kingdom, and of its members and committees, at the commencement of this Constitution”.

Thus, it can be interpreted that India still derives the rules, regulations, and interpretation of legislative privilege in accordance with those of the House of Commons in England.

Privileges under the Constitution of India

Parliament is one of the four pillars of democracy and contains members representing different regions of the country who have the responsibility to put up the voice of the people in their regions freely in the House. There are certain exemptions from the liabilities, or, to say, immunities and privileges, granted to these elected representatives to serve the purpose, for which they were elected, without any prejudice. The constitution has specifically mentioned privileges and immunity under Article 105 and Article 194 of the Indian Constitution, which are enjoyed by legislators in Parliament and State assemblies respectively. These privileges, powers, and immunities are given to MPs and MLAs not to put their status above law and order but to conveniently and fearlessly discharge their duties bestowed on them by the Constitution of India.

Specifically, the Indian Constitution bestows only two broad privileges to the Parliamentarians and state legislators namely, Freedom of speech and; Right to publication of proceedings under Article 105 and Article 194. In addition, there are some privileges added through judicial interpretations and continued practises.

Freedom of speech

Legislators have absolute immunity during the course of proceedings of the House or its committees to express their views on the matter and raise a question about it. If any person or authority disobeys the legitimate order or the rights and immunity of any particular member of the house in a collective sense, it would be held punishable as contempt of the House. It should be noted that this privilege is only applicable to the extent that the words were uttered inside the boundary wall of the parliament or legislature.

In the case of Kausal Kishor vs. State of Uttar Pradesh & Ors. (2023), Azam Khan, the then Minister in the Uttar Pradesh Government, was accused of going beyond the right to freedom of Speech. He termed the Bulandshahar rape case a ‘politically motivated conspiracy incident’. A writ petition was filed by the survivor under Article 32 of the Indian Constitution with the question of whether further restrictions can be imposed on public officials while exercising their right to freedom of speech.

The Supreme Court, in this case, has held that it is up to the will of Parliament to enact a “law to restrain citizens or to say public functionaries, in particular, from making disparaging or vitriolic remarks against fellow citizens, having regard to the strict parameters of Article 19(2) and bearing in mind the freedom under Article 19(1) (a) of the Constitution of India.” The court has further held that an opinionated statement made by a political leader can’t be actionable and the government cannot be legally held responsible for the same. However, pecuniary damage may be claimed in an appropriate forum. This statement, however, was not recorded inside the Uttar Pradesh legislative assembly; therefore, the privileges of Section 194(1) cannot be claimed.

Right of Publication of its proceedings

The right of Parliament or state legislative bodies to publish their own proceedings is specifically provided for under Article 105 and Article 194 of the Constitution. Legislators are immune from court proceedings, either civil or criminal, regarding anything said, any reports published, or votes given by them in the Parliament or in committees. But the publication should not be made with malicious intentions. However, if the publication of a parliamentary report is done without the explicit authorization of the House, it would amount to a breach of privilege, which is a punishable deed.

In the case of Shri Surendra Mohanty vs. Naba Krishna Choudhary (1958), the editor of a newspaper was called to show cause for an alleged breach of privilege. It was said that an extract of the speech, which was made by the then-Chief Minister of Orissa (Respondent) was published in his daily Newspaper. The speech was about how High Courts, on several instances, have abused their powers, and the Supreme Court has corrected its mistakes committed out of novelty. In this case, the court held the Editor accountable for breach of privilege, in the meantime, the Court has also pointed out contempt of Court by the Chief Minister.

Other privileges

Apart from the right to freedom of speech and the right to allow the publication of its own proceedings, lawmakers are also entitled to a few other rights, though not specifically mentioned specifically in either Article 105 or Article 194, granted in interpreting these privileges with a wide lens and after giving due consideration to conduct of House of Commons in this regard. These specially granted rights and immunities include-

Freedom from arrest

In order to maintain the dignity of the positions held by MPs and MLAs across the country, immunity from the procedure of arrest is given to these elected members. Until they are members of Parliament, State Councils or part of the legislative committees of a state or Central Government, they are immune to arrests in any kind of civil or criminal matters.

Right to exclude strangers from its proceedings and hold secret sessions

Sometimes, to discuss highly qualified matters of national or international importance, the House of Parliament has to conduct a ‘secret session’ from which outsiders are completely forbidden to enter. In such a case, outsiders cannot claim the right to watch the proceedings of the House, as it is their privilege to hold secret sessions.

Right to ban the publication of its proceedings and reports

Law-making bodies have all rights reserved for the publication of proceedings as per the 2nd part of clause (2) of Article 105 and Article 194. On the same line, they also got the reverse privilege to even ban the publication of its reports, and proceedings in any external source.

Right to regulate internal proceedings

Parliament and state legislatures have their own set of rules incorporated to manage the day-to-day affairs of the Houses. It is a privilege that the way of proceedings in the House is regulated by the House itself rather than being decided by some outsiders.

Right to punish members or outsiders for contempt

There is no use in defining an offence if the provision for punishment is not incorporated alongside it. There are numerous privileges and immunities granted to lawmakers. Upon any breach or violation of these privileges, the right to punish such offenders also goes to the lawmakers. It can be said that the right to punish members or outsiders for contempt of the House or breach of privilege is, in itself, a privilege.

Rule governing breach of privilege

For the commencement of proceedings upon breach of privileges in either house of Parliament, a set of rules is formulated from Rule 222 to Rule 228 of the Rules of Procedure and Conduct of Business in Lok Sabha (“Lok Sabha Rules”) for Lok Sabha. And correspondingly, Rule 187 to Rule 203 of the Rules of Procedure and Conduct of Business in the Council of States (“Rajya Sabha Rules”) describe the procedure to be followed after a breach of privilege in Rajya Sabha. As far as state legislatures are concerned, they have their own set of rules regarding the conduct of proceedings on breach of privileges, which are more or less similar to the rules of Parliament.

The procedure of breach of privilege proceedings in the Lok Sabha and Rajya Sabha are almost similar. Following the steps by step procedure of breach of privilege proceedings.

Question of privileges

The first step to initiating breach of privilege proceedings is to raise a question of privilege in front of the Speaker of the Lok Sabha or Chairman of the Rajya Sabha, as the case may be. Rules on procedure and conduct of the business of the Parliament Houses lay down the procedure for raising the question of breach of privileges in Chapter XX of the Lok Sabha Rules, which consist of a total of 8 Rules. On the other hand, for the Council of States, Chapter XVI of the Rajya Sabha Rules, consisting of a total of 17 Rules, depicts the procedure for the proceedings for breach of privilege.

Consent of the speaker

Each member of Parliament is entitled to raise a question on the breach of privileges. However, such rights can be exercised only with the consent of the speaker in Lok Sabha and the chairman in Rajya Sabha.

The right of members to raise questions of breach of privilege is subject to certain conditions given under Rule 224 of Lok Sabha Rules and Rule 189 of the Rajya Sabha Rules-

(i) Only one such question can be raised in one sitting of the House;

(ii) Breach of privilege question must be associated with recent event; and

(iii) Such an event requires the immediate intervention of the House.

Notice to the secretary general

Rule 223 and Rule 188 of the Lok Sabha and Rajya Sabha Rules, respectively, make provision for serving one-day advance notice for initiative privilege motions. A member who wishes to raise a question of privilege has to serve a written notice to the secretary general, apart from getting the consent of the Speaker or Chairman, as the case may be. That notice has to be served a day before the commencement of the proceedings of the House in which the question of privilege is proposed to be raised. In addition, the above mentioned notice should be clubbed with the document, if any, on the basis of which the question of privilege has to be raised.

Examination of questions by the committee

Once a question on breach of privilege is raised by a member, the Speaker of the Lok Sabha or Chairman of the Rajya Sabha, as the case may be, shall either decide the matter himself or refer it to the Committee of Privileges for examination, investigation, or report. The committee shall also be responsible for ascertaining the facts and determining the following questions-

(i) whether there is any breach of privilege;

(ii) if yes, then what is the nature of the breach; and

(iii) what were the circumstances which led to such a breach;

Further, the committee also has the responsibility to recommend the House as it may deem fit.

Legality of breach of privilege

Instances of conflict arose between the House and the Court about decisive rights on the question of the validity of breach of parliamentary privileges because members of the Houses started misusing the immunities and power granted to them to perform their functions as representatives. There have been clashes between fundamental rights granted to citizens under Part- III of the Constitution and immunities given to MPs and MLAs under Article 105 and Article 194.

For example- recently, a man was arrested for making a video mimicking the speech delivered by MLA and former CM of Maharastra Devendra Fadanvis. He was accused of breaching legislative privilege. In this case, a person’s right to freedom of expression clashes with the immunity and privilege granted to MPs and MLAs.

Notably, Article 122 and Article 212 state that “the validity of any proceedings in Parliament/ Legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure”. Claiming that Article 122 & Article 212 of the Constitution provide protection from any judicial intervention on the ground of alleged irregular proceedings Parliamentarians argue that the judiciary can’t have decisive rights over the legality of breach of privilege. On the other hand, proponents of citizens’ rights argue that everyone has the freedom of speech and expression guaranteed under Article 19 (1)(a) of the Constitution. Parliamentary privileges cannot be considered above the fundamental rights granted to citizens. Though there are reasonable restrictions on the fundamental right under Article 19 (2), privileges cannot be considered to impose a reasonable restriction on the basic freedom of speech and expression.

Judicial review of breach of privileges

Though Article 122(1) and 212(1) of the Indian Constitution prohibit the court’s inquiry into matters related to irregularities in the observance of procedures before the legislature. However, in relation to proceedings for breach of privilege, the court can inquire, especially when the matter is related to the Violation of fundamental rights or other constitutional rights, whether these proceedings are culminated by substantive, gross, unconstitutional, or illegality.

It is an established principle that the Courts are empowered to scrutinise the exercise of legislative privileges, which also include the power of the house of parliament/ state assembly to punish for contempt. Acts of Parliament are prone to judicial review; however, their views must be seen with deference. Actions of Parliament that are considered grossly illegal or unconstitutional are subject to judicial review. The court has, now and then, formulated the parameters for judicial review in relation to the exercise of parliamentary privileges.

As held in the case of Amarinder Singh vs. Special Committee, Punjab Vidhan Sabha (2011), Captain Amarinder Singh was expelled from the remaining term of the 13th Vidhan Sabha for ‘criminal misconduct, corruption, conspiracy to cause wrongful loss, and abuse of public office’ committed during his tenure as Chief Minister of Punjab in the 12th Vidhan Sabha. This criminal misconduct included unduly favouring one private party by exempting his land from land acquisition.

The Supreme Court ruling in favour of the appellant has held that for any misconduct committed by the appellant, a proper mechanism mentioned under the Code of Criminal Procedure, 1973, should have been followed. It is beyond the power of the House to expel a member on the ground of a breach of privilege, which is non-existent. In this case, the act of exemption of the land has in no way obstructed the sessions or threatened the integrity of the House. The exercise of the legislative privilege to expel a member by passing a resolution was constitutionally invalid; therefore, an order was made to restore the membership of the appellant in the House. The court stayed the resolution passed to that effect.

Privileges are subject to rules

In the case of the State of Kerala vs. K Ajith (2021), the Kerala State Assembly has claimed the privilege and immunities granted under Article 194 of the Constitution so as to withdraw criminal cases against Members of the Legislative Assembly for vandalising the assembly.

The Supreme Court, while deciding the legality of a claimed breach of privilege, has held that no constitutional immunity of privilege is granted to protect the Members of the House from committing improper acts of Vandalism inside the House. Privileges can be claimed when elected MLAs perform their functions in good faith for the welfare of the public. The court has further held that, though the MLAs had a form of speech and they can’t be charged for anything said inside the House, the act of vandalism can, in no way, be construed as an exercise of the right to freedom of speech and expression.

Punishment for breach of privileges

Whenever any breach of privilege is committed, Parliament has the power to punish any such breach by moving a privilege motion. Rule 222- 228 of the Lok Sabha Rules and Rule 187 of the Rajya Sabha Rules contain the provisions for privilege motions in the Lok Sabha and Rajya Sabha, respectively. These rules state that all members of the House are empowered to move a question of privilege or privilege motion subject to the consent of the Speaker or Chairman, as the case may be.

There are several sanctions that a House can impose in cases of misconduct, unethical behaviour, or any disregard for the rules and regulations of the House, which also include breach of privilege. In this regard, Rule 297 of the Rajya Sabha Rules empowers the House to impose sanctions such as censure, reprimand, suspension for a definite period, or any other sanction that the committee considers to be appropriate.

Suspension or expulsion from the House

A suspension is a form of punishment that is inflicted upon a person for misconduct or disorderly behaviour, along with a breach of privilege. There have been several instances where an MP and MLA have been suspended or expelled for the rest of the session or a certain period of time.
Provision for suspension of members is given in Rule 374 and Rule 374A of the Lok Sabha Rules for Lok Sabha and Rule 256 of the Rajya Sabha Rules for Rajya Sabha. The Speaker or Chairman, as the case may be, may name any member to be suspended in case of wilful disregard for the rules of the House or causing disruption in conducting sessions. After naming, a motion to that effect is moved, and that member is suspended for a period not exceeding the remaining days of that session.

Though there are similar rules regarding the suspension of members in both the Houses, however, in Lok Sabha, there is an additional rule of automatic suspension. According to Rule 374A of the Lok Sabha Rules, in the event of grave disorder on the part of that member or persistent and willful disregard for the rules of the House and thereby disrupting the business of the House, it may result in the automatic suspension of the member without any motion to that effect. It should be noted that, unlike regular suspension, the automatic suspension lasts until 5 consecutive sittings of the House or the remaining days of the session, whichever is less.

Example- The most recent expulsion was made in 2006, and MP Swami Sakshi Maharaj was expelled for gross violation of the code of conduct. The expulsion was made upon the recommendation of the Ethics Committee of the Rajya Sabha.

Imprisonment

Imprisonment is a form of punishment that a House can inflict upon any breach of privilege by members of the House or any stranger. Provisions related to imprisonment are given under Rule 229 of the Lok Sabha Rules and Rule 222A of the Rajya Sabha Rules for Lok Sabha and Rajya Sabha, respectively.

In the case of A.M. Paulraj vs. The Speaker, Tamil Nadu (1985), the editor of a Tamil Monthly magazine was arrested for breach of privileges because he published an article vehemently criticising the members of the legislative assembly. He was later sentenced to 2 weeks of imprisonment upon the recommendation of the privilege committee and the unanimous resolution passed in the assembly. A writ of mandamus is filed in the High Court of Tamil Nadu to restrain the speaker from giving effect to the decision of the Legislative Assembly on the ground that the breach of privilege proceedings have been stretched from the 7th to the 8th legislative assembly. However, The court has held that the petitioner is disentitled to the writ of mandamus. It reasoned out that “it was not open to the petitioner to contend that de novo proceedings should have been taken against him.”

Important case laws

Ajit Mohan v. Delhi Legislative Assembly, 2021

Facts of the case

In the case of Ajit Mohan vs. Delhi Legislative Assembly (2021), a petition was filed by the Vice President/ Director of Facebook India against a summons issued to him by a committee constituted by the Delhi Legislative Assembly to consider the factors and potential for the eruption of violence in North-east Delhi because of CAA-NRC protests. Thousands of complaints were received against the Facebook platform for the spread of hate speech and disharmony. The Director of Facebook India refused to appear before the committee, stating that the regulation of intermediaries like Facebook falls under the domain of Parliament only.
The issue raised here was whether non-attendance to summons leads to a breach of privilege of the legislative assembly even if the summons was issued to a non-member and investigates subject matters for which it lacks the power to enact law.

Order of the Court

Three judge bench of the Supreme Court, while rejecting the petition, has held that committees as well as the Delhi Legislative Assembly have a wider function than just enacting laws. Therefore, the court has justified the committee’s conduct of an inquisition and summoning of the executive of Facebook. Further, the bench added that members, as well as non-members, can be equally summoned to appear before the committee, and the non-appearance of the director of Facebook may lead to a breach of privilege notice.

Kalpana Mehta v. Union of India (2018)

Facts of the case

In the case of Kalpana Mehta vs. Union of India (2018), a pharmaceutical company along with ICMR and a US-based NGO PATH conducted the human trial of a vaccine named Gardasil that aimed to prevent cervical cancer. Since the trial of the vaccine was conducted on minor girls without their parent’s or guardian’s consent, and a few girls died in the process, it attracted the attention of women’s rights organisations. Post that, the Parliamentary Standing Committee (PSC, Department of Health Research) took the issue in hand and reported some discrepancies from the side of the government and ICMR.

The respondent has claimed to use the said report in the proceeding before the court; however, the state has argued that reports of Parliament can’t be considered in court because of the separation of power and parliamentary privileges granted under Article 105 of the constitution.

Order of the Court

Parliamentary material, including acts and records, is public material within the meaning of Section 74 of the Indian Evidence Act, 1872. Therefore, accepting the report of the PSC is not a breach of legislative privilege. As per Section 57 of the Evidence Act, reports of the parliamentary committee are admissible as evidence, and the court may take judicial notice of the same.

Keshav Singh v. Speaker, Legislative Assembly, 1965

Facts of the case

In the case of Keshav Singh vs. Speaker, Legislative Assembly U. P. (1965), Keshav Singh and his 2 companions were accused of violating the dignity and privileges of Congress MLA, Narsing Narin Pandey. They printed and distributed defamatory pamphlets against him in areas nearby Lucknow Legislative Assembly. He was arrested on a warrant issued by the speaker and produced before the assembly. A writ of Habeas Corpus was filed by Keshav Singh after he was sent to the district jail for 7 days.

Order of the Court

In this case, Allahabad High Court has dismissed the petition and directed that there was no error on the part of the assembly while inflicting imprisonment terms on the petitioner; therefore, he will serve out the remaining days of imprisonment.

Conclusion

Article 105 and Article 194 of the Indian Constitution deal with privileges, powers, and immunities for Parliamentarians and state legislators, respectively. Violation of any of these powers and immunities is known as a breach of privilege. There are two categories of privileges and immunities that are granted to parliamentarians or state legislators and their committees.

Firstly, Individual privileges: these privileges and immunities are granted to all the members of Parliament (MPs) and members of the Legislative Assembly (MLAs). Individual privileges include-

Freedom of speech. Members are immune to any proceedings in the court of law for anything said or voted upon, and
MPs and MLAs are immune to arrest in any civil or criminal case during the sessions of the House. Along with this, arrests cannot be made 40 days before and after the start and end of the sessions.

On the other hand, collective privilege includes- the privilege of Inquiries; disciplinary powers over members; freedom from jury services; privacy of debate; publication of proceedings under parliamentary authority; and the power to punish for breach.

We do not have a codified system of law on parliamentary privileges, though the Indian Constitution specifically mentions the power of the parliament to formulate the law in this regard. We still rely on common law principles for parliamentary privileges. Seeing the numerous privilege motions and misuse of immunity granted to parliamentarians, it is high time that the law-making agency considers formulating legislation on this subject.

Frequently Asked Questions (FAQs)

What is the difference between breach of privileges and contempt of the house?

Though these terms are often used interchangeably, they do not convey the same meaning. While breach of privileges is defined as any disregard for power and immunities granted to parliamentarians under Article 105 and to state legislatures under Article 194, contempt of house is any action that is against the dignity and authority of parliamentarians or members of the legislative assembly.

Is it a breach of privilege to publish a parliamentary report?

Section 8(1)(c) of the Right To Information Act, 2005 states that information, the disclosure of which would cause a breach of the privilege of Parliament or the State Legislature, can’t be disclosed. However, the 5 judge bench of the Supreme Court in Kalpana Mehta vs. UOI (2018), has unanimously held that it is not a breach of privilege to publish parliamentary reports if it is in the interest of the general public, who has the right to know about the said report as a step towards the governance of the country.

What are some recent instances of breach of privileges?

(i) In March 2023, a privilege notice was given against Prime Minister Narendra Modi. Congress MP KC Venugopal moved a question of privilege before the Chairman of Rajya Sabha (Jagdeep Dhankhar) over the remarks made by PM Modi about “Nehru’s surname: why the former PM’s family does not use the Nehru title”.

Note- This privilege notice is given under Rule 188 of the Rajya Sabha Rules.

(ii) In February 2023, a breach of privilege notice was given to Shiv Sena MLA- Sanjay Raut over his comment on terming the legislative assembly as ‘chor mandal- a group of thieves’.

(ii) In March 2023, Congress MP Rahul Gandhi was subjected to privilege notice by Lok Sabha MP Nishikant Dubey for “unsubstantiated”, “defamatory,” and “unparliamentary” language used in the motion of thanks on the President’s address.

What is the possible punishment for the offence of breach of privilege?

A house is authorised to sentence any member or committee associated with the House to punishment for misconduct, disorderly behaviour, a proven breach of privilege, or contempt of the House. Certain types of punishment which are given upon breach of privilege are –

Imprisonment,
Suspension,
Expulsion, and
Reprimand.

Can an offence of breach of privilege go unpunished?

A person liable for a breach of privilege may also be forgiven or left on warning based upon the discretion of the Speaker or Chairman. For example, shouting slogans from visitors’ galleries might go unpunished, and the person may be allowed to go upon warning if the matter is trivial.

References

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Brief on implicit autonomy in choice theory of contracts

By

Rachit Garg

-

July 28, 2023

0

This article has been written by Akhil Ganatra pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution at LawSikho, and edited by Shashwat Kaushik.

It has been published by Rachit Garg.

Table of Contents

Introduction

The principle of choice of law in contracts has evolved due to the increasing number of international transactions between parties from different countries, where it is difficult to determine which law should be applied to resolve a dispute. Such difficulties may arise due to many factors, such as different jurisdictions, place of execution of contract, place where parties are residing, etc. This freedom of choice under the proper law is not absolute and is subject to certain limitations. In this article, we will explore different types of options that the parties have in determining the proper law governing the contract as we dive deeper into the article.

Autonomy of choice in contracts

Usually, there are two criteria for determining the law that should be applied in cases of conflict between the parties, and those are place of contracting and place of performance. Parties have the freedom of choice, either expressly or impliedly, in determining the law that will apply to them. However, this does not solve the problem entirely between the parties, as it may happen that the law of one country is not adequate to deal with the issues of the parties or that the law itself is ambiguous. In such cases, it is up to the courts and other judicial authorities to decide the application of moral law to the issues between the parties. So basically, there are two types of choices that parties have in determining the law:

Express choice
Implied choice

Express choice

When the parties to a contract decide to include a specific provision that specifies the law under which they are to be governed in case of any dispute, such a law is considered an express choice. In these cases, there is no ambiguity as to the applicability of the law or the jurisdiction of the courts or forums. The only requirement highlighted in Vita Food Product Inc. vs. Unus Shipping Co. Ltd. (1938), was that the choice of law should be bona fide, legal, and not contrary to public policy. It is advisable for the parties entering into international contracts to include a specific provision in the contract to avoid any ambiguity in determining the proper law in case of a dispute.

Implied choice

The word ‘implied’ means something suggested but not directly expressed or something that can reasonably be inferred from the conduct of the parties. When the contract contains no express provision as to the choice of proper law, according to the case of Bonython v. Commonwealth of Australia, Lord Simonds held that the system of law by reference to which the contract was made or that with which the transaction has its closest and most real connection. The most common example of implied choice by the parties to a contract is the inclusion of a forum clause, i.e., in case of a dispute, this clause determines whether the court of a particular country will have jurisdiction or not. Another example commonly seen in commercial international contracts is the inclusion clause, which provides that any dispute between the parties will be referred to arbitration. In both of the above mentioned examples, the parties have intended that the law of a particular country will govern the dispute, and the courts or arbitrators will apply such law in determining the issues between the parties.

Another example of implied choice is the use of form, terminology, or concepts relating to a particular law. In these situations, it can be assumed that the parties wanted the relevant law to apply. In Amin Rasheed Shipping Corp. vs. Kuwait Insurance Co. (1983), the insurance policy in question was based on Lloyed’s form set out in the schedule of the English Marine Insurance Act of 1906, so the House of Lords held that English law rather than Kuwait law was the proper law. Another factor was that, at the time of the contract, Kuwait did not have any laws on marine insurance. Such circumstances help determine the parties’ intentions as to the choice of proper law in the event of a dispute.

Limitations on freedom of choice of law

The freedom of choice of proper law by the parties gives a feeling of certainty as to the applicability of law in case of any dispute. However, there are certain limitations to this freedom of choice, which are mentioned as follows:

Mandatory rules of domestic law

Irrespective of whether parties enter into a domestic or international contract, they are required to observe certain mandatory rules of domestic law. These rules are applicable irrespective of any agreement between the parties and can be considered one of the limitations on freedom of choice of the proper law by parties. These rules can be in any form, such as grounds of public policy, exemption clauses to protect a weaker class, the public interest, or the interests of a particular class. The basic requirement, which has also been indicated in the Vita Foods case, is that the choice of law must be bona fide and legal.

The law of the country with which the contract is most closely connected

It is applied when there is no express or implied choice by the parties and when the courts have held that the proper law is the law of the country with which the contract is most closely connected on the ground that it is the law that reasonable parties would have chosen in case of any dispute. The courts have also considered certain elements in this regard, such as the place of execution of the contract, the place of performance of a contract, the connection of parties with the countries, the immovable property which is the subject matter of the contract, the currency of consideration due under contract, etc.

Centre of gravity

When an international contract is entered into between parties residing in two or more countries, the elements in the contract that connect with two or more countries are considered the basis of proper law. These elements are found in the country in which they are most closely grouped and constitute the centre of the contract because it is the country in which elements are most closely grouped and whose interests and policies are most likely to be affected by the contract. This theory comes into play when there is no clear sign of connection with the country and the weight of different elements is to be assessed.

Convenience and business efficiency

We have talked about how the elements of a contract, such as the place of performance, the place of execution of the contract, etc., play an important role in determining the proper law to govern the disputes between the parties. However, in this theory, the relationship of parties with countries is given more importance than other factors because it is more convenient for the parties that the governing law be their law. This also reflects the implied choice of the parties, where the interests of the parties are considered rather than the countries and other factors in terms of business efficiency and convenience.

All the concepts discussed above are not expressly mentioned anywhere in the judgements of the courts or a system of law. Whenever any difficulty arises as to the determination of proper law, the difficulty is faced by the judges in deciding whether to apply the centre of gravity approach or the convenience approach.

Conclusion

Based on the above, it is now clear that the parties to a contract have the freedom to choose a proper law that governs their disputes either through express or implied autonomy, but this principle of autonomy is also subject to certain limitations, as discussed above. The courts have also played an important role by resolving the ambiguities in the application of these fundamental principles in international contracts through their judgements and by ensuring that the parties do not circumvent the mandatory operation of law, which is applicable irrespective of the choice of the parties or its non-inclusion in the contract.

References

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

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

https://t.me/lawyerscommunity

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.

Punishment for fake experience certificate in India

By

Rachit Garg

-

July 28, 2023

0

This article is written by Srushti Khule, a student at NALSAR, University of Law, Hyderabad. It discusses the provisions of the IPC applicable to fake experience certificates and their punishments. Recent case laws concerning fundamentals are further discussed in the article.

It has been published by Rachit Garg.

Table of Contents

Introduction

Can you imagine paragliding with a pilot who does not know how to handle an emergency exit if any unfortunate event happens? The imagination itself would be daunting. Recently, there have been many fatal paragliding incidents in Kullu. The investigation found that an agent had issued nearly 70 fake pilot experience certificates for licences. These fatal incidents might have led to serious injuries and deaths.

You may have seen people talking about theft, robbery, or even murder that happened last night in your neighbourhood. But have you ever caught people talking about tax evasion, money laundering, corporate fraud, or bribery? The answer would possibly be no, because these crimes, known as white-collar crimes, have become part of our daily lives that we will either ignore or accept. These are generally hidden behind the facade of public interest. These crimes are growing at a rapid pace in today’s world. Everywhere we look, we see corruption ingrained in our system. We are forced to become part of this system at some point.

Producing fake experience certificates is one such wrong found in every sector, whether education, health, or employment. The above example shows how fatal this can prove to innocent lives. Thus, the force of the law is needed to prevent such crimes. If offenders are not punished, these crimes may grow immensely and cause havoc in today’s corporate world. No specific provision is mentioned in Indian law, but it can be covered under various other law provisions. This article aims to delve into the punishments associated with fake experience certificates in India, providing readers with a comprehensive understanding of the legal consequences.

What is an experience certificate

An experience certificate is a document an employee receives after employment. It gives us details about past job experiences and associated information. It may include achievements, skills or knowledge acquired, job title, and period of employment. It is generally asked to produce it before the following organisation as proof of previous jobs. It may significantly impact the selection process and overall growth of the organisation that has hired employees.

Who makes/signs an experience certificate

Employers issue an experience certificate to the employee after completion of employment. Generally, it is issued by the company’s human resources (HR) department. The HR department supervises employee recruitment, training, development, relations, performance management, and workspace safety. It is one of the essential documents that an employee requires while leaving and is issued with the utmost care and caution.

Understanding the problem of fake experience certificates

Definition and forms of fake experience certificates

A fake experience certificate, as the name suggests, is a sham document an employee submits to an employer showing his false past work experience and associated information. It may be in various forms, such as inflated job titles, flaunted fake skills or knowledge, fabricated work experience, a pirated seal and signature of the mentioned organisation, a fictitious employment period, and a false position or designation of the employee in the mentioned organisation. These are only visible forms, but various other ways of fabricating the experience certificate may exist. This crime has risen so much that many organisations have started issuing fake certificates as a business. One can even make use of several applications to edit information in documents.

Reasons behind the prevalence of fake experience certificates

There may be many reasons for issuing fake experience certificates. Some individuals use it to advance their career opportunities through promotions or high-paying jobs. Some seek respect from others because having a prestigious job title or work experience may enhance their social status. The competitive job market may force them to resort to this method to reduce the risk of losing their job. The “myth of meritocracy” can be used to explain some reasons. For example, specific industries provide only merit-based, skill, and experience-based jobs. But everyone has no equal opportunity to acquire this merit, and there is inadequate skill development in their lives. Thus, some individuals may use fake experience certificates to fulfil those requirements. Thus, those with gap years use experience certificates to become qualified for such positions.

These are only a few of the many different reasons. Though a few reasons come from compulsion, one must never forget that this is a serious offence. Using fake certificates is not how to combat such situations because choosing this path may lead to severe consequences.

Impact of fake experience certificates on employers and the job market

It may compromise employment productivity and quality of work as individuals may not possess the necessary skills or experience for the job. As a result, the company may incur financial losses. The clients may become dissatisfied with the employee’s performance, and the company may even lose such clients. It can also damage a company’s reputation if it becomes known that it failed to conduct proper background checks. It can undermine the trust and credibility of the company in the eyes of clients, partners, and the public.

It erodes trust and confidence in the job market. Employers may become more sceptical about the hiring process, which can make the process difficult for genuine candidates. Legitimate candidates may face high competition from those who issue fake experience certificates. It can skew competition because it may become difficult for desired candidates to secure job opportunities. It may lead to distortions in the assessment of skills and qualifications.

How to identify genuine certificates

There is no definite formula to identify genuine certificates because fake certificates can be produced in various forms. You may always use some of the ways suggested below.

Design and language

The design and language of an original document can be used to distinguish it from a fake document. Check the verification code, if any, on the document. Nowadays, most documents have hologram watermarks that can be seen in the light. You may cross-check the language, font size, or writing style with another certificate from the same organisation or institution. You may also look for spelling mistakes in the certificate.

Use mentioned references

You may contact the company or organisation whose name is on the certificate. Seeking the details and type of job an employer did from that organisation can help immensely. You can do a background check on the employer through this. You may even check the location of the organisation by sending a postcard; this tells you whether the claimed organisation is in existence or not.

Ask for a blank email

This may be one of the easiest ways to check if a certificate is genuine. You may ask an employer to send a blank email from his company’s id. The one who has genuinely worked at that organisation will be able to do it, but this may become a trap for those who have forged the document.

Ask for more details in the interview

The person who is producing the fake certificate may not be able to answer all the detailed questions about his fake certificate; thus, seeking as much information as possible is one of the options. You may ask about his previous projects, experience in the job, name of supervisor, etc.

Provisions of the IPC that deal with fake experience certificates

There is no specific provision for defining fake experience certificates or prescribing punishment. But it can come under various provisions of the Indian Penal Code-

Section 463- Forgery

According to Section 463 of the IPC, forgery is committed when any false document, electronic record, or part of it is made to cause damage to others, support any claim or title, or cause another person to part with property or enter into a contract with the intent to commit fraud. While producing fake experience certificates, an employee is committing fraud on the employer by presenting himself as possessing skills or qualifications that he actually does not possess. In his false document, an employer may support the claim of a false job title, period of employment, skills or qualifications, and past experience in any organisation.

The motive behind making such fake documents could be to illicitly gain the desired position. It may be done to apply for promotions or high-paying jobs in the company. Sometimes employees forge documents to prove themselves better and more competitive among other employees. If caught, the consequences could be fatal. For instance, recently, Accenture India, one of the top consulting firms in India, fired many employees who had joined using fake experience certificates. It is an issue of dishonesty and a breach of trust. It needs the force of law to regulate it because the employee receives illicit advantages from a position he does not deserve. He prevents the company’s growth and other desirable candidates from securing that position.

Section 415- Cheating

According to Section 415 of the IPC, a person is said to cheat when he has the dishonest and fraudulent intention to deceive any person, either by making him deliver any property to any person or by giving consent to retain any property, or by making him do or omit to do anything that he would not have done or omitted if not deceived. This act or omission must cause or be likely to cause injury to the body, mind, reputation, and property of that person. For instance, if an employee counterfeits the seal or signature of any organisation for whom he has not worked but does this with a fraudulent intent to induce the employer to believe the counterfeited stamped certificate and hire him on the job, then he can be made liable for the offence of cheating.

The explanation under this Section says that dishonest concealment of facts is considered a deception. Fake experience certificates can be covered under dishonest concealment of facts regarding job title, tenure of employment, skills, etc, and considered deception.

Section 416- Cheating by personation

According to Section 416 of the IPC, if a person intentionally misrepresents himself as some other person, substitutes one person with another with full knowledge, or intentionally represents himself or any other person as someone that he or the other person is not in real life, it will be constituted as cheating by personation. The explanation under this Section says that it does not matter if the individual personified is fictitious or real. Fake experience certificates can come under this provision; for instance, if A cheats by pretending to be an employee with a specific job title or designation in some prestigious organisation, he is said to have committed an act of cheating by personation.

Section 468- Forgery for purpose of cheating

According to Section 468 of the IPC, a person is said to have committed this offence if he commits forgery with the intention of using those forged documents for cheating. This can be helped by the following illustration-

Suppose a man needs a loan from the bank but does not fulfil the requirements for applying for it. He makes a forged letter, counterfeiting the signature of the company’s HR department, mentioning that he has a high-paying job and is thus eligible for the loan. He submits that certificate with the aim of deception. He is liable for the offence of forgery for the purpose of cheating.

Section 470 – Forged document or electronic record

According to Section 470 of the IPC, a forged document is a document that contains false information through the act of forgery. The definition of electronic record is given under Section 29A of the IPC. It means any data generated or recorded, such as an image or sound, that is received, stored, or sent in electronic form. A fake experience certificate would be a forged document because it is a false document made wholly or partially by the act of forgery.

Section 471- Using as genuine a forged document or electronic record

According to Section 471 of the IPC, it is an offence if anyone represents and uses a forged document or electronic record as genuine. As per Section 29A of the IPC, electronic record refers to “data, record or data generated, image or sound stored, received, or sent in an electronic form, microfilm, or computer generated micro fiche”. An offender must have reason to believe or know it is a forged document or electronic record.

For example, suppose a man is involved in a property dispute. To strengthen his claim in court, he uses a forged sale deed as evidence. He knows the sale deed is not genuine but intends to present it as a valid and authentic document. He is liable for an offence under Section 471. Similarly, if an employer produces a fake experience certificate and is aware that the certificate is forged but still uses it as a genuine document, he can be made liable under Section 471 IPC.

Punishment under different legal provisions for forging an experience certificate

Recently, the Delhi High Court ruled that the submission of fake documents should be viewed strictly and severely. The employee who submitted the forged document is unfit for employment. One should show no sympathy or compassion towards such employees.

Section 465- Punishment for forgery

According to Section 465 of the IPC, forgery is punishable by imprisonment, which may extend to a sentence of two years, a fine, or both. It is a non-cognizable and bailable offence, meaning police can arrest a person without a warrant or prior court permission. It is a non-compoundable offence, meaning the violation is such that a trial must be conducted, and no compromise can be entered between the victim and the accused.

The punishment could only be provided when a ‘false document’ is made. A false document is defined under Section 464 of the IPC, 1860. The false document is divided into three categories-

A document made or executed claiming to be someone else or authorised by someone else; or
A document unlawfully or fraudulently altered; or
A document obtained by practising deception, such as knowing the reason for the unsoundness or intoxication or unawareness regarding a false document of another person.

Producing fake experience certificates may be punished under forgery because a person is making false documents to support the claim that he is well deserving of a position he otherwise is not deserving of. With his certificate, he is claiming to be someone he is not.

Section 417 – Punishment for cheating

According to Section 417 of the IPC, ‘cheating’ is a cognizable, non-bailable, and compoundable offence. It is punished with an imprisonment term, which may extend to one year, a fine, or both. Producing the fake experience certificate may be punishable by cheating because the employee is intentionally causing his new employer to hire him, which he otherwise would not have done. This act may cause harm to the organisation, which is the employer’s property, and thus constitute the offence of cheating.

Trust is fundamental to the survival of any relationship. In cheating, on the one hand, the victim places his utmost trust and confidence in the offender, and on the other hand, the offender has a dishonest intention of breaking that trust and causing wrongful loss to the victim. It may negatively impact the victim’s mind, resulting in low self-esteem and scepticism. It may even damage his reputation and lead to financial losses. Thus, punishing the offender becomes necessary.

The Section uses ‘fraudulently’ and ‘dishonestly’ separated by ‘or.’ Fraudulently means having the intention to deceive someone, and dishonestly means causing wrongful gain to one person and wrongful loss to another. Either of these two elements must be fulfilled to make them liable for punishment under Section 417.

Section 468- Punishment of forgery for purpose of cheating

According to Section 468, a forgery for the purpose of cheating is a cognizable, non-compoundable, and non-bailable offence. A person is punished with an imprisonment term extending to seven years and a fine if he commits forgery with the intention of cheating. It is considered one of the most specific and aggravated forms of forgery. It is graver than a single act of forgery or cheating. This has a more severe punishment than the other two. Intention is a necessary element to constitute an offence. The intention to use forged documents for cheating is essential. This Section should be seen in the light of the sections mentioning specific offences of forgery and cheating for a comprehensive understanding.

Section 471- using a forged document or electronic record as genuine

According to Section 471 of the IPC, if the person has used a forged document or electronic record as genuine, he is liable to be punished in the same manner as if he had forged a document, with an imprisonment term extending up to two years, a fine, or both. The intention to deceive or cause wrongful gain to one person and wrongful loss to another is essential to constituting an offence. If the person is unaware of the inauthenticity of any document or electronic record and uses it as valid and authentic, then he is not liable under Section 471.

Punishment under Information Technology Act, 2000

The Information Technology Act, 2000, was enacted by the legislature to legally recognise transactions through electronic means and combat cybercrimes. One may issue fake experience certificates through electronic means, such as by using an electronic signature, editing, stealing information, etc.; thus, the IT Act may apply to combat these crimes. The following sections may include fake experience certificates-

Section 66 C- Punishment for identity theft

According to Section 66 C of the IT Act, if a person uses an electronic signature, password, or any other unique identification of another person, then he commits an offence of theft of personation. An essential element is the presence of an intention to deceive or cause wrongful gain to one and wrongful loss to another. He can be punished with an imprisonment term extending up to three years and a fine extending up to Rs. 1 lakh.

Section 66 D- Punishment for cheating by personation by using computer resource

According to Section 66 D of the IT Act, if a person misrepresents or pretends to be someone else he is actually not, through the means of any communication device or computer resource, he is said to have committed the offence under Section 66 D. He can be punished with an imprisonment term extending up to three years and a fine extending up to Rs. 1 lakh.

Punishment under the Companies Act, 2013

The Companies Act, 2013, was enacted by the legislature to consolidate and amend the laws relating to companies, such as appointment and qualification of directors, audits and auditors, frauds committed against companies, etc. Issuing fake experience certificates in employment may be covered under the Companies Act, 2013, through the following sections.

Section 447 – Punishment for fraud

According to Section 447 of the Companies Act, 2013, if any person commits fraud or conceals any facts concerning the affairs of the company, they are punishable with a minimum imprisonment of six months that can be extended up to ten years and liable to a fine not less than the fraud amount; the maximum fine may be extended up to three times the amount of fraud. There must be intent to deceive or injure any company or other person.

Section 448- Punishment for false statement

According to Section 448 of the Companies Act, 2013, if any person makes a statement in the form of a document, report, certificate, financial statement, or prospectus that he knows to be false, he is liable to be punished under Section 447. If he omits the material fact with the knowledge that it is material, he is also liable under the Section.

Judicial pronouncements

Manju Devi v State of U.P ( 2015)

In this case, Allahabad HC held that some notice or opportunity to explain the act of forging the document should be given. Here, the petitioner was terminated from the post because she submitted a fake document for a past teaching experience. But the recovery proceedings initiated and the FIR filed were held as non-sustainable by the Court because she was not given any opportunity for an explanation.

Commissioner, Navodaya Vidyalaya Samiti & Ors. v. Damodar Singh Gunawat (2023)

In this case, the petitioner was a cook whose employment was terminated on the allegation that he produced a forged experience certificate showing five years of cooking experience. The disciplinary inquiry conducted went against him, and he was removed. The Rajasthan High Court, upholding the tribunal’s ruling in favour of the accused, said that no order of punishment could be passed because the order was passed solely on documentary evidence and no witnesses were examined to prove it.

The High Court of Rajasthan relied on the Supreme Court decision in the case of L.I.C. of India v. Ram Pal Singh Bisen (2010), wherein it was held that an order of punishment could not be sustained, which is given solely based on documentary evidence and no witnesses examined.

Managing Committee, Goswami Ganesh Dutt Sanatan Dharam College, Palwal v. Sabir Hussain (2022)

In this case, an employee of the school was accused of forging a document regarding the benefits of the NCC and sports certificates. He was thus terminated from employment as a punishment. The Punjab and Haryana High Court upheld it and stated that employment obtained by fraud could not be valid in the eyes of the law. It is a reasonable punishment, and no protection against the dispensation of services could be sought.

Gaurav Malik v. CBI (2022)

In this case, the appellant had submitted a forged experience certificate, without which he was not even eligible to apply for the post. The charges were filed against him. An appeal was made in the Delhi High Court, which dismissed it and kept the charges under the above sections by stating that failure to produce an original document does not become a reason to dismiss the charges.

Indian Oil Corporation Ltd. v. Rajendra D. Harmalkar (2022)

In this case, the accused was dismissed from service by the disciplinary authority for producing a forged certificate of educational qualification. It was argued by the accused that no age limit or educational qualification was used to secure a job or promotion. The intention to submit forged documents was only to maintain records. The High Court of Bombay acknowledged this argument and declared the action of the disciplinary authority as disproportionate. Conversely, the Supreme Court observed that the question is not one of intention or mens rea but one of trust. It questioned how an employee who produced a fake certificate at the initial stage of an appointment would be trusted by an employer. This is grave misconduct, and it is immaterial whether the certificate has any bearing on employment. It accordingly quashed the Bombay High Court and upheld the decision of the disciplinary authority of dismissal from service as justified.

Recent events

Vidya K. Maniyanodi v. State of Kerala

Here, the accused is alleged to have produced a fake experience certificate. She is charged with the offences under Section 465 (punishment for forgery), Section 468 (forgery for the purposes of cheating), and Section 471 (punishment for using a forged document as genuine) of the IPC. She has recently moved the Kerala High Court for anticipatory bail on the basis that offences under Sections 465 and 471 are bailable and Section 468 does not apply to her case.

Twelve government employees terminated

In this recent incident, which occurred in October 2022, the Metropolitan Transport Corporation (MTC) terminated the employment of 12 government bus drivers, conductors, and engineers after they were found guilty of submitting fake experience certificates during the recruitment process.

Pune PCMC lost Rs. 1.02 crore

In this incident, Pimpri Chinchwad Municipal Corporation recently filed a case against a contractor for submitting a fake work experience certificate to receive a contract for water supply. The contractor had submitted a fake letter from the company, won the tender, and got Rs. 1 crore for completing the project.

Conclusion

We saw that there is no specific provision under the IPC, the Information Technology Act, 2000, or the Companies Act, 2013, for producing a fake experience certificate. Thus, the analysis of various judicial opinions should be considered to understand the fundamentals. One may apply different provisions of the law to punish offenders for issuing fake experience certificates. It is important to understand that one should prevent oneself and others from issuing any type of fake document or fake experience certificate. Today, everyone is economically interdependent; thus, building and sustaining trust is essential. Producing fake documents may lead to losing trust and credibility. It may harm one’s employment opportunities in the future. It is against ethical behaviour and may permanently damage one’s reputation. Apart from these moral and ethical reasons, it is a serious crime that engulfs every individual at some stage. These little wrongs constitute a significant crime against the country and hamper its growth and development. Thus, more steps are needed to prevent this offence.

Frequently Asked Questions (FAQs)

Which provision of IPC includes producing fake experience certificates?

There is no specific offence defined under the IPC relating to a fake experience certificate. However, it can be included under some provisions such as forgery, cheating, forgery for the purpose of cheating, and other similar provisions.

What is the role of mens rea in producing fake experience certificates?

An intention to deceive is necessary for committing such a wrong. An individual cannot be held liable without having the malafide intention to cause wrongful gain to one and wrongful loss to another.

Is the offence of producing a fake experience certificate cognizable or non-cognizable, and compoundable or non-compoundable?

It is not provided under any specific provision of the IPC. It may depend on the facts and circumstances and the charges under which the case is filed. For instance, if charges are filed under cheating, they will be cognizable, and if they are filed under forgery, they will be non-cognizable.

How can employers detect fake experience certificates?

Employers can employ various methods to detect fake experience certificates, including verifying the authenticity of the issuing organisation, contacting the claimed employers directly for verification, conducting thorough background checks, and scrutinising the details provided on the certificate for any inconsistencies.

Are there any legitimate ways to enhance one’s experience without resorting to fake certificates?

Several legitimate ways exist to enhance one’s experience without resorting to fake certificates. These include pursuing internships, volunteering, taking relevant courses or certifications, freelancing, participating in industry projects, and actively seeking opportunities to gain practical experience in the desired field.

References

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

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Direct vs indirect workplace discrimination

By

Rachit Garg

-

July 25, 2023

0

This article is written by Krishnendu Ganguly, pursuing a Diploma in Labour, Employment and Industrial Laws for HR Managers from LawSikho. This article deals with the different kinds of discrimination encountered by workers at their workplace.

It has been published by Rachit Garg.

Table of Contents

Introduction

Discrimination in the workplace is an unfortunate reality that all organisations and employees have to deal with. In simple terms, discrimination means to favour someone else over others in a way that goes beyond the person’s knowledge, skill, and ability to do the job.

There are many kinds of workplace discrimination, and in this article, we will focus on Direct and Indirect Discrimination at the workplace for Indian employees. We would look at some of the key legal frameworks prevalent in India and the impacts discrimination has on employees and the organisation. We would explore ways of addressing and minimising discrimination in Indian employment.

Definitions and examples of direct and indirect discrimination

Before going through details, lets understand some basic definitions

Protected characteristics

As per Article 15 in the Constitution of India, discrimination should not be done against any citizen based on religion, race, caste, sex, or place of birth.

Direct discrimination

These are scenarios when an individual or a group of individuals at the workplace face discrimination directly based on protected characteristics. Discrimination can take many forms, like not getting selected at interviews, not being allowed certain services, or not getting opportunities or promotions.

Calling out some scenarios and examples:

A Hospital hires only female nurses , with the bias that male employees cannot be as caring as females. This discrimination is based on sex.
A female employee getting less challenging assignments at work post-marriage, since the employer assumes females post marriage will not be fully dedicated to work. The same doesn’t hold true for male employees.
Employers refusing to give employment or firing someone based on caste, religious, or political beliefs.
Employees from the LGBTQ community face discrimination owing to their sexual orientation.

Indirect discrimination

These are scenarios where laws are apparently the same for everyone, but in practicality, they seem to put certain segments at a disadvantage. This is a little more complex than direct, as employers might not be aware of some scenarios that might put certain sections at a disadvantage. Essentially, the concept of the same law applying to all can sometimes be a disadvantage for some. It’s like the “One Size does not fit all” verbiage. Some scenarios below can make this easy to visualise:

Employers are mandating some days as working days for employees. This can impact workers of some religions if the day clashes with holidays of their sects. Also imagine a scenario where, based on management directions, a section of employees is mandated to attend a training program that falls on some religious holidays.
Designing Job descriptions for certain roles where some criteria like weight, height, English fluency, etc. are not really necessary qualifications.
A retail outlet that has designed steps to get inside is basically discriminating against disabled and elderly customers and will not go well with that customer segment. While no written law states any restriction, a segment is impacted.
A company cafeteria that serves only a certain type of food can put some segments at disadvantage and does not cater to diversity. For example, an office in North India serving only North Indian food will cause folks from South India to suffer, and vice versa.

Legal framework in India

Owing to many challenges, the legal framework in India still needs to be robust in dealing with all scenarios of Direct and Indirect discrimination. There are certain laws that protect Indian employees. Acts around these are still evolving. I am highlighting some of them.

Constitution of India

Article 14 guarantees “Equality before law.”
Article 15 – Discrimination not allowed based on religion, race, caste, sex or place of birth
In the case of any discrimination based on Article 15, it can be taken up with the courts legally by filing a writ or a PIL (Public Interest Litigation).

These laws mostly protect cases of direct discrimination.

Equal Remuneration Act, 1976

Wages (Section 4)

Ensures fair payment of equal remuneration to both men and women employees for work of similar nature (concerning skill, knowledge, and responsibility).

Recruitment (Section 5)

It protects against recruitment biases for men and women. This extends to scenarios of promotions and transfers, where employers must treat men and women equally.

The ground reality is quite different as you progress to subsequent sections. Despite these laws, women in India continue to face direct and indirect discrimination against men.

Industrial Disputes Act (IDA)

This law prohibits unfair labour practices that include discrimination at the workplace. The fifth schedule of the Act calls out all unfair labour practices on the part of employers and trade unions of employers.

PWD Act, 1995 (Persons with Disabilities Act)

This Act protects the rights of people with disabilities at the workplace.

The Maternity Benefits Act 1961

This Act protects the rights of women who are taking maternity leave in an organisation. The law protects the employee from being terminated on maternity grounds by the organisation. The law was recently amended in 2017 to increase some of the benefits for women.

The Sexual Harassment of Women at Workplace (POSH Act of 2013)

Sexual Harassment is the worst form of discrimination against female employees. Offences under this Act fall under criminal acts and are punishable by law.

Some states, like Maharashtra, protect Women against discrimination in matters of recruitment, training, transfers, promotions, and wages in various Acts like Shops and Establishment Act.

Impacts of discrimination

On individual

The impact on an employee who is a victim of discrimination can range from mild to severe. In mild cases, it may lead to temporary uneasiness at the workplace, which does not have a profound effect. In severe cases, employees might suffer from:

Lower Energy Levels at Work- Employees will feel disengaged at work and unable to show their full productivity as per their potential. This will translate to the overall performance of employees and can have a cascading effect depending on the criticality of the role. Employees can start feeling resentful towards peers, managers, and management.
Health Concerns – Increased stress levels can eventually lead to health issues that can translate to absenteeism at work. Absenteeism, in turn, costs the company and reduces employee morale.
Inclusivity – Employees start feeling they need to work in an inclusive environment. They have a negative view of fairness and equity in their companies. It has the potential to create a hostile work environment.
Reduced Career Opportunities – Employees who face issues with pay hikes, promotions, etc. owing to discrimination would start to feel the impact on their careers and would eventually end up quitting the organisation.

On organization

Discrimination can have some adverse impacts on the bottom line of companies. The impacts can range from financial implications to adversely impacting the brand image of the company.

Liability to the Company – Addressing and resolving discrimination charges costs company time and money. For severe cases where companies do not have in-house experts to deal with the same, it would mean taking external help to resolve issues. Eventually, a company with a discriminatory culture will have an impact on its bottom line.
Lack of Employee Morale and Low engagement – In instances where it’s evident that promotions, hikes, and perks are given based on discrimination, it will directly impact the ones who feel discriminated against and indirectly the employees who are not. This would eventually lead to high percentages of attrition and absenteeism in the company, impacting the financials of the company negatively.
Brand Image of the company – In the modern age of social media , it doesn’t take long to spread the negativity within a company to the outside world. The brand of the company will take a severe hit, and it will eventually lose out to competitors. Recruitment efforts will take a hit. Nowadays, employees do research on the company before applying, and the discriminatory culture becomes quite evident.

Statistical data on discrimination in India

Sharing some highlights from the “India Discrimination Report 2022,” which was released by Oxfam India. As per the report, women in the Indian labour market continue to face lower salaries than men owing to 67% discrimination and 33 percent due to qualifications. Oxfam India is urging the Government of India to protect equal rights and wages for women workers.

These reports are based on data on labour and employment provided by the Government from 2004 to 2020.

Employment Discrimination in Urban Areas
1. Caste based discrimination in Regular/Salaried and Self Employed

As per the PLFS (Periodic Labour Force Survey), during 2019-20, 37.5% of the SC/ST population were engaged in Regular / Self Employment (R/SE) jobs, in comparison to 41.3 % of non SC/ST. The difference is not very high. Caste-based discrimination has decreased from 2004-05 to 2019-20.

Religion-based discrimination in Regular or Salaried employees

As per PLFS Data, in 2019-20 15.6% of the years plus population of Muslims are engaged in regular jobs, and the corresponding figure is 23.3% for non-Muslims. 68% of this gap is due to discrimination. In 2004, discrimination accounted for only 59%, which has increased by 9%.

Gender based discrimination in Regular/Salaried and Self Employed

Gender-based discrimination in favour of men accounts for 98% of the employment gap in urban areas, which has hardly changed in the period spanning 2004 to 2020.

Wage / Earning Discrimination in Urban Areas (for Regular/Salaried Employment)
1. Caste based discrimination

As per PLFS Data for the year 2019-20 mean income of SC/ST is Rs 15,312 as against Rs 20,346 for general categories. The difference is, however, not due to discrimination but to the legal system of our country. The difference is due to non-discriminatory reasons like endowment, education, and age.

Religion based discrimination

As per PLFS Data for 2019-20, the average earning of Non Muslims is Rs 20,346, which is significantly higher than that of Muslims, who are at Rs 13,672. However, discrimination accounts for only 6.9 % of the difference in pay, again proving that the statute around equal pay has been effective in our Country.

Gender based discrimination

The average earnings for men are Rs 19,779, compared to Rs 15,578 for women. Discrimination is accountable for 67% of this difference, which decreases to 54% when the age group of 25 and above is considered. This shows younger women face much more discrimination, as they tend to cause more disruption at work due to marriages, pregnancy, etc.

Addressing and preventing discrimination in Indian employment

Both as employers and employees, we can look at means of addressing and preventing discrimination. While it cannot be stopped completely, efforts can be made to minimise it.

As an employee, have a clear idea of the relevant company policies, and try to have a clear idea of what their role is towards themselves and towards others. Getting into a mindset of asking oneself if their actions and decisions are discriminatory towards others

Example, If you are a team manager, have regular introspection if you are unfair to someone in your team in your decisions that are based on unconscious or conscious bias and end up being discriminatory.

Similarly, as an employee, be aware if any decisions made against you are discriminatory.

It’s also important to know as an employee how to address and report discrimination, who the immediate POCs are, and what forum the instances can be voiced out and recorded in.

Both managers and employees should try to lead by example in their awareness and the way they respond to discrimination.

As an employer,
1. You should have robust and detailed policies and procedures, and efforts should be made to make employees aware of these policies.
2. Efforts should be made to check if any policy has the possibility of infusing indirect discrimination.
3. Ensure that employees know how to raise incidents related to discrimination in the correct forums.
4. Ensure rule handbooks are regularly updated to match the current regulations to minimise the chance of discrimination.
5. Have regular training and awareness programs with employees on workplace discrimination.

Conclusion

The legal system in India has evolved over the years to handle discrimination. With the kind of data analysis we saw, we see cases of prevalent discrimination, especially for women. The Government of India should look to incentivise the participation of women workers in the Indian job market to reduce gender discrimination. When comparing the discrimination heads of gender, caste, and religion, it’s gender-based discrimination that needs attention compared to the other two. Caste and Religion based discrimination are much less common compared to what women in India face against men.

References

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

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

https://t.me/lawyerscommunity

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.