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Juvenile delinquency

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This article is written by Amandeep Kaur, a student of Symbiosis Law School, Pune; and Monesh Mehndiratta, of Graphic Era Hill University, Dehradun. The authors of this article have discussed Juvenile delinquency in India and the legislation available. The article explains the meaning of juvenile delinquency, its causes, and the relevant laws in India regarding this. It also explains the juvenile justice system prevailing in the UK and the USA.

It has been published by Rachit Garg.

Table of Contents

Introduction

Have ever heard or seen a child stealing something from a shop or witnessed a minor assaulting or threatening somebody?

I am sure this might be shocking for you. You might also be questioning why a child would commit such unlawful or illegal acts. But let me tell you, it’s true.  

A country’s future relies largely on its future generation. Whether a country would be a developed country in future or its growth would be static depends on its human resource. Thus, it is necessary to invest in the development of the citizens, especially the young generation which consists of children, adolescents and teenagers. If they are nourished well with love and care and moral values are imbibed in them, they will surely become law-abiding citizens. However, if they are neglected or involved in bad company or experience an abusive childhood, they might turn into a delinquent, i.e., one who shows disapproved behaviour or does not abide by the norms, rules and laws in a society, at a young age. 

Children of tender age are delicate and mould themselves according to the circumstances they face. They could either come out and shine bright or become criminals. Thus, it becomes necessary to give importance to their development and growth. Any reason that could contribute to juvenile delinquency must be taken seriously, and efforts must be made to minimise such reasons. The present article deals with the meaning of juvenile delinquency, factors that are responsible for such acts and behaviours, laws prevailing regarding this, and the treatment of juveniles. It also provides initiatives or measures for the prevention of juvenile delinquency.

Meaning and Aim of the Juvenile Justice System

Adolescent Justice System

An adolescent is a youngster who isn’t yet mature enough to be viewed as a grown-up. Juvenile Justice manages the treatment of kids in the struggle with the law and furthermore takes a gander at the main drivers of culpable conduct and measures to avert such conduct.

Aims of Juvenile Justice

  • It is based on the rights of the child.
  • It applies the principle of restorative justice i.e. to restore the balance of a situation disturbed by crime rather than simply meting out punishment.
  • This system puts the best interest of the child first.
  • The primary objective of this system is to focus on the prevention of crimes and injustice done to juveniles.

Juvenile Delinquency

Juvenile Delinquency is the involvement of a kid who is between the age of 10 and 17 in illegal activity or behaviour. Adolescent misconduct is likewise used to allude to youngsters who display constant conduct of underhandedness or noncompliance, in order to be considered out of parental control, getting to be plainly subject to legitimate activity by the court framework. Juvenile delinquency is also known as “juvenile offending,” and each state has a separate legal system in place to deal with juveniles who break the law.

The term ‘delinquency’ is derived from the Latin word ‘delinquer’, which means ‘omit’. Juvenile delinquency refers to the disapproved behaviour of children and adolescents, where they tend to show criminal behaviour. In simple terms, it means deviance from the approved norms and laws in society, where children usually indulge in anti-social activities. 

The term has an extensive meaning and also includes the hostile behaviour of a child. However, according to a settled principle of criminal law which is also applicable to international criminal law, “nullum crimen sine lege,” which means that an act of a person cannot become a crime and he or she cannot face punishment for that unless it is recognised or defined under the law. Thus, an orphan or abandoned child or a child with uncontrollable and aggressive behaviour cannot be said to commit a crime unless he does an unlawful or illegal act which is considered to be an offence under the existing law of the country in which it is enacted. These offences could include murder, rape, theft, kidnapping, assault, and so on.  

This problem of juvenile delinquency is persistent in every country and thus, the issue of having a uniform definition of the term was identified by the United Nations. This resulted in the Second United Nations Congress on the Prevention of Crime and Treatment of Offenders which was held in 1960.  The term was defined as, “ acts of minors due to which they violate criminal law and indulge in behaviour which is objected to and disapproved by society and law of the country in which they reside.”

Causes of juvenile delinquency

The problem of juvenile delinquency has become a hot issue for the world and persists in every country across the globe. In order to deal with this issue and uproot it from our society, it is imperative to understand the fundamental causes and reasons of juvenile delinquency.  

Advancement of technology and economic growth

With the advancement of technology and the growth and development of society, there has been a change in the thinking process. There is a high influence of westernisation and modernisation on the lifestyle of people. Apart from this, with the establishment of industries, people started migrating from rural areas to urban areas and there arose the issue of slums, overcrowding etc. This further led to economic and financial problems for families. 

To curb such problems, children engaged themselves either in child labour or deviant activities. This gave rise to juvenile delinquency. It has been observed that the temptation to live a luxurious life led youngsters towards wrongful means to fulfil their desires. 

Family issues

Another major reason behind the increase in juvenile delinquency is family issues. Family is the first place to which a child is attached. Children usually learn from what they observe around them. If there is disintegration in the family, such as continuous fights between parents, lack of love and affection, broken families, etc., it will affect a child’s growth and development mentally, physically, and emotionally and would also lead to juvenile delinquency. 

Once a child feels neglected by his or her own parents and relatives, it can cause him or her to commit crimes due to aggression and other negative feelings. Children at a tender age need affection, love, care, protection, and guidance. Families must emphasise preventing children from indulging in criminal behaviour and focus on their growth and development so that they become successful and law-abiding citizens. Adequate opportunities must be given to them by their parents to develop their personalities with proper education that is channelled correctly.

Contract drafting

Changing patterns in lifestyle

A change in lifestyle is yet another reason for criminal behaviour in children. The immaterial and changing patterns in the lifestyle of people make it arduous for children and teenagers to adjust and revamp their family relations. They are mostly confronted with the issue of the generation gap due to which they detach themselves and develop apathy. They are also incapable of distinguishing between right and wrong i.e., become amoral. Apparently, they are misguided and end up choosing the immoral or evil path. Another reason for showing delinquent tendencies is the company of children. People with whom they spend most of their time can either shape their personalities into law-abiding citizens or turn them into criminals. 

Another drawback of change in lifestyle is that most of the time, parents and children do not interact with each other. Parents are either too busy with their office work and schedules or struggling with their own complications in life as a result of which children are often neglected. This might induce frustration, anxiety and aggression in children. Thus, it is necessary that parents and children interact with each other and spend some quality time to comprehend the issues faced by children in their day-to-day lives. Parents must also listen to their children and be concerned to help them whenever they require it. 

Biological factors

Biological factors like physiological and mental issues, low intelligence, a lack of understanding, etc. also lead to delinquent behaviour among children. It has been observed that girls usually attain puberty at a very young age and can easily become prey to sexual offences. Curiosity is another preeminent reason for delinquent behaviour among juveniles with respect to sexual offences like rape. Here comes the role of parents, teachers, and elders. They must educate their children regarding the biological differences between a male and female and answer all their questions regarding other biological processes and consequences of any illegal or unlawful act.

Poverty

When a child is not able to get the basic necessities of life, there is high chance that the child may indulge in delinquent acts to get those necessities. This means that poverty also contributes to juvenile delinquency. Failure to provide children with necessities like food, shelter, clothes, education, etc. can force them to earn money by hook or crook in order to get what they desire. People living in slums find it difficult to survive as they are not able to get even the basic necessities of life. Corruption is another major reason which contributes towards poverty which ultimately leads to increased instances of juvenile delinquency in society. Poor children often get involved in stealing, robbery and other criminal activities to help their families with basic necessities. The government must take initiatives to eradicate the problem of poverty and provide basic necessities like food, clothing, shelter etc to its citizens. Efforts must be made to provide quality education and quality training so that they can lead a good life in the future. 

Other factors

Other factors like child labour, abusive childhood, traumatic experiences, financial issues, illiteracy, unsoundness of mind etc are also responsible for delinquent behaviour in juveniles.

Juvenile justice in other countries 

Juvenile justice in the U.K.

Juvenile delinquency in the United Kingdom was considered a transient phase meaning that it would vanish with age. The penal reformists in the country adopted a different approach to the treatment of juveniles. The Ragged Industrial School Movement is considered to be the first initiative taken towards the prevention of juvenile delinquency. This movement led to the establishment of an industrial school for homeless, destitute, and delinquent children. 

Miss Marry Carpenter, a famous social activist, is known for the significant effort that she made towards the prevention of delinquency in juveniles. She started a Ragged Industrial School in Bristol. Further, in 1838, a Parkhurst prison was established for the treatment of juveniles. The enactment of the Summary Jurisdiction Act, 1879 in the country, provided that a child under 7 years of age is incapable of committing a crime and hence, must not be convicted. In 1907, the Probation of Offenders Act, 1907 was enacted which empowered the courts to release juveniles in certain offences. Finally, the Juvenile courts were established in 1908 under the Children Act, 1908. These courts were empowered to deal with matters involving juveniles and take proper care and provide protection to the young offender. 

Further, the Children and Young Persons Act, 1933, provided remand homes for the treatment of juveniles. Children below the age of 17 were kept in observation homes before the trial.  It is noted that after the enactment of the Criminal Justice Act, 1982, the U.K. government liberalised the law relating to juveniles in order to abide by the guidelines of the United Nations in this regard. 

Juvenile justice in the U.S.A

The history of juvenile courts in the USA starts with the appointment of state agents in 1869 who were responsible for taking care of juveniles. In 1878, this work was given to probation officers. Currently, each state in the country has one juvenile court and a specialised unit in the judicial service to deal with such matters. These courts are provided financial support by the local governments of each state. Further, Congress enacted the Juvenile Justice and Delinquency Prevention Act of 1974 to tackle the issue of juvenile delinquency.  

These courts function in the following manner:

  • The police first take the custody of a child offender and decide whether to keep the child in custody or not. 
  • The next duty of the police officer is to inform the court.
  • During the trial, hearing is given to the probation officer as well. 
  • It is the duty of a probation officer that when a child is under his supervision, he must find a school or employment for the child. However, if the juvenile violates any condition during probation, he is sent to a certified school or children’s home.  

Who are Juvenile Delinquents?

Juvenile delinquents are regularly youngsters between the ages of 10 and 17 who have carried out a criminal demonstration. There are two principal sorts of guilty parties: rehash wrongdoers and age particular guilty parties.

  • Rehash Wrongdoers– rehash guilty parties are otherwise called “life-course constant wrongdoers.” These adolescent delinquents start culpable or hinting at other solitary conduct amid pre-adulthood. Rehash guilty parties keep on engaging in criminal exercises or forceful practices even after they enter adulthood.
  • Age-particular guilty parties- Age-Specific Offenders indicate adolescent reprobate conduct starts amid youthfulness. Not at all like the rehash wrongdoers, in any case, the practices of the age-particular guilty party closes before the minor turns into a grown-up.

The practices that an adolescent shows amid youthfulness are frequently a decent marker of the kind of guilty party he will progress toward becoming. While age-specific offenders leave their delinquent behaviour behind when they enter adulthood, they often have more mental health problems, engage in substance abuse, and have greater financial problems than adults who were never delinquent as juveniles.

In the case of Gopinath Ghosh v. State of West Bengal, the accused had given his age as much above the cut-off age prescribed for being a child. However, in this case, the court not only allowed the plea of child status to be raised for the first time but also referred the matter to the sessions judge for a determination of the age of the accused. Approving this approach, the Supreme Court in Rajinder Chandra v State of Chhattisgarh, further laid down that the standard of proof for age determination is the degree of probability and not proof beyond a reasonable doubt.

Risk Factors and Predictors of Juvenile Delinquency

Numerous kids end up noticeably adolescent delinquents early, frequently between the ages of 6 and 12 years. Numerous adolescent practices amid the pre-high schooler and young years might be viewed as ordinary conduct for kids, as they extend their limits, and battle to build up their self discernment. There are, in any case, certain signs that a child may be going an awful way.

Indicators of adolescent misconduct may show up as ahead of schedule as preschool and frequently include:

  • Abnormal or moderate advancement of essential abilities, for example, discourse and dialect.
  • Chronic infringement of the principles.
  • Serious forceful conduct toward different understudies or instructors.

Studies have discovered that various life conditions constitute chance components for a youngster to end up noticeably an adolescent reprobate. While these are numerous and changed, the most well-known hazard factors for adolescent misconduct include:

  • Authoritarian Parenting – characterized by the use of harsh disciplinary methods, and refusal to justify disciplinary actions, other than by saying “because I said so.”
  • Peer Association – usually resulting from leaving adolescents unsupervised, encouraging a child to engage in bad behaviours when acting with his peer group.
  • Low Socioeconomic Status
  • Permissive Parenting – characterized by lack of consequences for bad behaviour, permissive parenting can be broken down into two subcategories: (1) neglectful parenting, which is a lack of monitoring a child’s activities, and (2) indulgent parenting, which is the enablement of bad behaviour.
  • Poor School Performance
  • Peer Rejection
  • ADHD and other mental disorders

History and Evolution of Juvenile Delinquency in India

Apprentices Act of 1850

It was the first legislation which was passed in the colonial period for dealing with children who had done something in conflict with the law. According to this act, the children who have committed some petty offences shall not be sent to prison but to treat them as apprentices i.e. a person who is undergoing a course training in industry or under any establishment.

Stand of Indian Constitution

Article 15(3), Article 39 clause(e) and (f), Articles 45 and 47, force an essential duty of guaranteeing the necessities of kids and of securing their fundamental Human Rights. The General Assembly of the United Nations received the Convention on the Rights of the Child in November 1989 and laid the norms to be trailed by all part States in ensuring the enthusiasm of the kid. It additionally underscored on social reintegration of youngster casualties.

The Indian Penal Code Act, 1860 and Criminal Strategy Code, 1861 treated kids diversely through different methodologies. Act XIX of 1850, 1876 Reformatory Schools Act, the Borstal School Act, the Children’s Act of 1920, and other state-specific legislation like the Bengal Children’s Act, and Madras Children’s Act to address neglected and deviant children these laws gave delinquents some special provisions regarding their Institutionalization and rehabilitation.

The primary formal enactment on adolescent equity in India came in 1850 with the Apprentice Act, 1850 which required that youngsters between the ages of 10-18 indicted in courts to be given professional preparation as a component of their recovery procedure. This demonstration was transplanted by the Reformatory Schools Act, 1897 along these lines gave that youngsters up to the age of 15 might be sent to the reformatory cell, and later the Juvenile Justice Act 1986 gave a uniform component of Juvenile Justice. This demonstration was supplanted by the Juvenile Justice (Care and Protection) Act, 2000.

Different Stages of Legislation

Juvenile Justice Act, 1986

Truth be told the indigenous speculation on Juvenile Justice has been staying informed concerning the worldwide patterns in this field. With the reception of the United Nations Standard Minimum Rules for the organization of Juvenile Justice, India was the main nation to advance its framework in light of the standards articulated in that. Obviously, alternate targets were to lay down a uniform lawful structure for Juvenile Justice, to give a specific approach towards the counteractive action and control of adolescent wrongdoing, to spell out the apparatus and framework for Juvenile Justice operations, to build up standards and measures for the organization of Juvenile Justice, to create proper linkages and coordination between the formal framework and deliberate offices and to constitute unique offences in connection to adolescents and to recommend discipline thereof.

Keeping in mind the end goal to understand this objective, the Act soaks up the basic components of all the due procedures and participatory models. The new law without a doubt puts a difficult obligation on the state to properly outfit the assets from different segments of financial advancement in guaranteeing the prosperity and welfare of adolescents and an opportunity to recover from the struggle they went through.

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

The JJ Act 1986 required that the prior framework worked around the execution of the then-accessible Children’s Acts be rebuilt. Be that as it may, because of the non-attendance of national accord on the time span for such a rebuilding, the means taken by a large portion of the State Governments were still intensely shy of the declared objectives. So as to support and institutionalize the approach towards adolescent equity with regards to the significant arrangements of the Constitution of India and International commitments in such manner, the Government of India re-enacted the Juvenile Justice (Care and Protection of the Children) Act, 2000. For this, a Working Group was set up and the Act has been implemented since April 1, 2001, to manage the kids inside its domain.

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

Adolescent Justice (Care and Protection of Children) Act, 2015 means to supersede the existing Indian adolescent misconduct law i.e. Adolescent Justice (Care and Protection of Children) Act, 2000, with the goal that adolescent criminals under the age gathering of 16– 18 can be attempted as grown-ups for genuine wrongdoings. It was passed on 7 May 2015 by the Lok Sabha consistently and it is currently pending in the Rajya Sabha. Adolescent Justice (Care and Protection of Children) Act, 2014 will permit a Juvenile Justice Board, which would incorporate analysts and sociologists, to choose whether an adolescent criminal in the age gathering of 16– 18 should attempt as a grown-up or not. The bill presented ideas from the Hague Convention on Protection of Children and Cooperation in Respect of Inter-Country Adoption, 1993 which were absent in the past demonstration. The bill likewise tries to influence the selection to the procedure of stranded, deserted and surrendered kids more streamlined.

The United Nations in 1989 adopted the Convention on the Rights of the Child in 1989, for the protection of the rights of children. This convention was ratified by India in 1992. Further, the United Nations Standard Minimum Rules for the Administration of Juvenile Justice, 1985, also known as the Beijing Rules, and the United Nations Guidelines for the Prevention of Juvenile Delinquency, 1990, also known as the Riyadh Guidelines, provided certain guidelines to be followed in cases of juvenile delinquency. The fundamental principles in this regard include the presumption of innocence, the right to be heard, positive rehabilitation, proper care and avoiding maltreatment of juveniles, etc. 

The Juvenile Justice (Care and Protection of Children) Act, 2015, was enacted keeping in mind Article 15(3), Article 39(e) and 39(f), Article 45 and Article 47 of the Indian Constitution.  

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

The objectives of the Act are:

  • The Act is enacted with the aim to amend and consolidate the law related to categories of children covered under the Act. 
  • It tries to provide basic needs, protection, care, development and treatment of such children.
  • The Act adopted a child-friendly approach for adjudication and disposal of matters involving juveniles. 
  • To ensure that such children are reintegrated back into society. 
  • The Act also provides provisions for aftercare programmes and the establishment of organisations to help young offenders become sober citizens. 

Categories of children recognised under the Juvenile Justice (Care and Protection of Children) Act, 2015

The Act recognises two categories of juveniles:

  • Children in conflict with the law.
  • Children who need care and protection

Children in conflict with the law

Section 2(13) of the Act defines ‘children in conflict with law’. According to the definition given in the Section, any child who commits an offence or is alleged to have committed it and has not completed 18 years of age, is included in the category of children in conflict with the law. The Act also provides provisions and makes it mandatory that no such child be subject to any kind of harm, abuse, neglect, corporal punishment, or maltreatment. Apart from this, no accusatory words like arrest, remand, accused, etc. can be used during the trial of a juvenile nor can they be referred to with such words.

Children in need of care and protection 

Section 2(14) defines the category of children in need of care and protection. The following children are included under its ambit:

  • A child who is rendered homeless and there are no means of sustaining. 
  • A child who is involved in child labour or any activity contravening the labour laws or found begging or living on streets.
  • A child living with another person:
    • Who abused, exploited, injured and neglected him,
    • Who threatened to kill him,
    • Who has killed, abused, injured or exploited any other child and there is a reasonable apprehension that he or she might do the same with another child. 
  • A child with an unsound mind or mental illness and one who is physically challenged and has no body to care for. 
  • A child having parents or guardians but they are unfit or unable to care and protect him or her. 
  • A child who does not have parents and no one is willing to take care of or one who is abandoned or surrendered by his or her parents.
  • A child who ran away from home and whose parents cannot be found even after a reasonable inquiry.
  • A child who has been, is being, or is likely to be sexually abused or indulged in illegal or unlawful acts.
  • A child who is used or abused for unconscionable gains. 
  • A child who was a victim of any armed conflict, civil unrest or natural disaster. 
  • A child who is forced into marriage before attaining the age of puberty by the parents, relatives or guardians. 

Juvenile Justice Board

Section 4 of the Act provides for the constitution of a Juvenile Justice Board for hearing matters involving juveniles. The power to constitute the board in each district is given to the state government. It consists of:

  • A Metropolitan Magistrate or a Judicial Magistrate of First Class with three years of experience who will be referred as the principal magistrate. 
  • Two social workers and one of them should be a woman. They must be involved in health, education and welfare activities for children with seven years of experience or have a professional degree of law, sociology, psychiatry or child psychology. 

However, a person will not be eligible for selection by the board on the following grounds, as given under Section 4(4) of the Act:

  • If he has violated any human rights or rights of children.
  • If the person is convicted of an offence related to or which involves moral turpitude. 
  • Removed or dismissed from government services.
  • The person was involved in child abuse or child labour. 

Termination of appointment

A member of the board will be terminated on the following grounds, as given under Section 4(7) of the Act:

  • The members of the board abused or misused the powers and authority.
  • The member did not attend the meeting for three months consecutively without any reasons.
  • If the member did not attend 3/4th sittings in a year.
  • If the member does any act because of which he becomes ineligible.  

Powers and functions of the board

Section 8 of the Act gives the powers and functions of the board:

  • It is the duty of the board to ensure that the child or his guardians participate in the trial. 
  • Another duty of the board is to ensure that no rights of children are violated during the entire process. 
  • It is the duty of the board to provide legal aid to the child with the help of legal services institutions in the district and state.
  • To provide the interpreter or translator to the child if necessary.
  • The board can direct the probation officer or the child welfare officer in his absence to investigate the case and submit a report within 15 days. The report must contain the circumstances under which the offence was committed.
  • The board has a duty to adjudicate and dispose of the cases related to juveniles. 
  • The board has a duty to visit the residential places where juveniles are kept and make recommendations for their improvement to the District Child Protection Unit.
  • It can order police to register FIR of the offences committed against children covered under the Act. 

Child welfare committee

Section 27 of the Act provides that a child welfare committee must be constituted in every district by the state government. This committee must be empowered to work for the welfare of children who need care and protection.  Such a committee must consist of:

  • A chairperson;
  • Four other members, out of whom at least one should be a woman; 
  • The tenure of the members in the committee is three years.

The District Magistrate is empowered under the Act to take review from the committee and look upon its functioning. He or she will also act as the grievance redressal authority under the Act. The Act provides that the members of the committee can be terminated on the following grounds:

  • Any member abused or misused the powers and authority.
  • The member did not attend the meeting for three consecutive months without any reason.
  • If the member did not attend 3/4th sittings in a year.

Functions of the committee

Section 30 of the Act provides the functions of the committee:

  • Take cognizance of children produced before it.
  • To conduct inquiries regarding the health and safety of children. 
  • To direct the probation officers, child welfare officers, or district child protection unit to investigate the matter related to such children.
  • To conduct an enquiry with respect to people taking care of such children and deciding whether they are fit to do so.
  • The committee has a duty to direct the placement of children that are in foster care.
  • To ensure the care, protection, rehabilitation and restoration of such children.
  • To select institutions for placement of such children keeping in mind their gender, disability and needs.
  • To inspect the premises where such children are kept once in a month.
  • To certify the execution of surrender deed given by parents and ensure that they are given sufficient time for making the decision.
  • Make required efforts for the welfare of children abandoned or lost. 
  • The committee can declare an abandoned or surrendered child as an orphan and look for his or her adoption.
  • The committee also has the power to take suo moto cognizance of matters related to such children.  
  • The committee has to work for the rehabilitation of children who are abused sexually.
  • It is empowered to coordinate with the police and other institutions for the welfare of such children. 
  • It is the duty of the committee to provide legal services to children who are abused.

Following is the table statistics showing the recent development in comparison mode

Juveniles between 16-18 years apprehended under IPC
Crime 2003 2013
Burglary 1,160 2,117
Rape 293 1,388
Kidnapping/abduction 156 933
Robbery 165 880
Murder 328 845
Other offences 11,839 19,641
Total 13,941 25,804
Note: Other offences include cheating, rioting, etc.  Sources: Juveniles in conflict with the law, Crime in India 2013, National Crime Records Bureau; PRS.

Claim of juvenility 

The first and foremost question that the juvenile board is required to determine in any case that comes before it, is the age of the child and whether he or she is a juvenile according to the Act. This claim of juvenility can be raised by the person at any stage during the trial before any court and even after the matter has been disposed of. However, there have been a plethora of cases on this issue of juvenility and how the age of a juvenile should be determined in a case involving him or her.  

In the case of Kulai Ibrahim @ Ibrahim v. State represented by I.G. Police, Coimbatore (2014), the appellant was convicted under Section 148 and Section 302 of the Indian Penal Code, 1860, with life imprisonment. This conviction was challenged in the Supreme Court on the ground that on the date on which the offence was committed, the appellant was a juvenile and must not be convicted. The Hon’ble Supreme Court observed that this plea of juvenility was not raised by the appellant in the trial court but raised only in the High Court. Due to lack of evidence in this regard, the High Court had to reject the plea. However, it was further observed that according to Section 7A of the Juvenile Justice (Care and Protection of Children) Act, 2000, the accused has a right to raise this plea at any stage during the trial. He also has the option of raising it after the disposal of the case. 

In the case of Deoki Nandan v. State of Uttar Pradesh (1996), the Supreme Court held that the school certificate can be used as evidence to determine the age of the child and is admissible in court. Further, in the case of Ajay Pratap Singh v. State of Madhya Pradesh (2000), the High Court had to set aside the charges against the accused because no proper inquiry was done to determine his exact age. 

The Hon’ble Supreme Court in the case of Satbir Singh and others v. State of Haryana (2005), reiterated that in order to determine the age of the accused and whether he or she is a juvenile, the date of birth of the child as mentioned in the school register can be taken into consideration. In the case of Panna Lal and Others v. State of Madhya Pradesh (2015), four people, along with a juvenile, were charged with the offence of murder. However, the case of the juvenile was separated from the other accused and handed over to the juvenile justice board. 

Rehabilitation of delinquent juveniles

The main objective of the juvenile justice system in the country is to restore and rehabilitate young offenders back into society as sober citizens. Thus, the treatment of juveniles becomes important. The Act provides that no child will be subject to any cruelty, abuse, or harsh treatment and establishes institutions like observation homes, shelter homes, etc. for their reformation. The following institutions can be helpful to achieve the purpose:

Observation homes

According to Section 47 of the Act, juveniles in custody during the inquiry or pendency of trial are to be kept in observation homes. These homes provide for the treatment of juveniles and children who are in need of care. 

Special homes

According to Section 48 of the Act, a special home is to be established by the state government in every district for the juveniles and those who have been ordered to live in these homes by the juvenile justice board during their trial. The aim of these homes is the social reintegration of such children and juveniles. However, the authorities have the power to separate the juveniles living in these homes on the basis of their gender, age, nature of the offence committed etc. 

Children’s home

Section 50 of the Act empowers the state government to establish a home for children who are in need of care and protection. This can be done with the help of voluntary groups and non-governmental organisations. These homes provide care and protection to such children and work towards their development, treatment, education, and training. 

Aftercare programmes

These programmes aid and support juveniles and children to lead a normal life after they are released from observation homes or special homes or other homes established under the Act. For example, the government or NGOs can provide financial support to such juveniles to establish their means of livelihood. Apart from this, the Act also provides for the adoption of children in need of care and protection under Section 56 of Chapter VIII of the Act. 

Preventive programmes for juvenile delinquency

Education

Education is essential to shape a person’s life. If quality education is imparted to the children and youngsters, they can become assets for the country and contribute towards its growth and development. The aim of every government must be to provide quality education and guidance to its younger generation. These programmes not only help the children choose their career path but also open opportunities for them to shine and use their energy in a proper manner. 

Recreational activities 

A famous saying that “all work and no play makes Jack a dull boy” is actually true. Recreational and fun activities can contribute towards the growth of children and help in preventing delinquent behaviour. With the help of these activities, children can be engaged in fun yet intellectual activities which will also give them a chance to interact with peers, counsellors, teachers, businessmen, motivational speakers, and other eminent personalities. These people can help them understand how to differentiate between right and wrong. 

Parent-children interaction

Children are usually sensitive by nature. It is important that their parents interact with them and create a friendly environment at homes where they are not hesitant or scared to share their problems, thoughts and opinions. They must not be abused or harassed in any manner because if done so, it would have a negative impact on their mental growth.

Community services

Children must be engaged in community services like helping people in need through scouts, youth groups, and NGOs. It would also imbibe in them the values of helping and respecting each other, honesty, and truthfulness, and make them responsible citizens. 

Anti-ragging programmes or anti-bullying programmes 

Ragging or bullying had negative and adverse effects on the minds of children. Initiatives were taken by the government to stop these activities.The Central Board of Secondary Education in India issued guidelines to schools to establish a committee to ensure an anti-ragging culture in schools and that there must be a counsellor in every school. Further, in 2007, the Ministry of Human Resource Development constituted the Raghavan Committee on the issue of increasing bullying and ragging incidents in colleges and universities. In 2009, the University Grants Commission (UGC) issued regulations to prevent and reduce the menace of ragging in universities and higher education institutions. Due to all these initiatives, ragging is completely prohibited and punishable. 

Recent case laws

Narayan Chetanram Chaudhary v. State of Maharashtra (2023)

Facts of the case

The appellant in this case filed an application for claiming the plea of juvenility that at the time of commission of offence, he was a juvenile. The appellant was convicted under Sections 302, 342, 397 and 449 read with 120B of the Indian Penal Code, 1860. It was argued that at the time of the commission of the offence, he was a juvenile, and thus, he cannot be awarded with death penalty.  

The issue involved in the case

Whether the claim of juvenility in this case, be accepted or not?

Judgement of the Court 

The Hon’ble Supreme Court in this case observed that the convict was already in prison for more than 28 years. He had faced severe limitations and difficulties during the time he was in jail. It would even have been difficult for him to find his school certificate as proof of his age for the plea of juvenility. The court further observed that his age in the school certificate was mentioned as 12 years, which means he was a juvenile at the time of the commission of offence and hence, the court accepted this certificate to determine his age. Thus, the court, in this case, held that since he has already been in jail and served imprisonment, and according to the Juvenile Justice (Care and Protection of Children) Act, 2015, no juvenile can be awarded the death penalty and hence, the order of death penalty passed by the lower court was invalidated.  

Reserved on: 12.04.2022 v. Union Territory of J&K (2022)

Facts of the case

This case pertains to an order of a lower court which set aside the order granting bail to a juvenile. A revision petition was filed by the petitioners in the High Court of Jammu and Kashmir against the judgement of the lower court i.e., Court of Principal Sessions Judge, Kulgam. The petitioners argued that the court misinterpreted the law and passed the erroneous judgement, ignoring the law related to juveniles. 

The issue involved in the case

Whether the said order setting aside the grant of interim bail to the juvenile, in this case, should be set aside or not.

Judgement of the Court 

The petitioner argued that neither Section 8, Section 15 nor Section 18 of the Juvenile Justice (Care and Protection of Children) Act, 2015 provides any provision that has to be considered while granting bail to a juvenile. Also, no investigation report is required to be submitted in this regard. It was further contended that the lower court failed to consider the observations of the Juvenile Justice Board and the procedure followed therein. The Jammu and Kashmir High Court in this case held that Section 12 of the Act is clear and unambiguous, and so the lower court’s order to cancel the order granting bail to a juvenile was set aside. 

Anuj Kumar v. State of U.P. (2021)

Facts of the case

The petitioner applied for the post of constable and also passed the required written examination and the physical test. However, after the appointment, an inquiry was conducted by the Senior Superintendent of Police regarding the criminal history of the petitioner. It was found that the petitioner had once faced criminal prosecution, as a result of which, his appointment was refused. Aggrieved by this, the petitioner filed a writ petition in the court to set aside the cancellation of his appointment. He contended that he was a juvenile when he faced criminal prosecution and so must not be disqualified from the appointment. 

Issues involved in the case

The issues involved in the case are:

  • Whether the petitioner was juvenile when he faced criminal prosecution;
  • Is the refusal of his appointment correct?

Judgement of the Court

The Allahabad High Court in this case observed that even though the plea of juvenility was not raised by the petitioner during the criminal prosecution, this does not negate the fact that he was a juvenile when he faced the trial.  According to the Juvenile Justice Act, all the charges against him are to be put down and he must not face any kind of disqualification because of the criminal prosecution. The court held that the appointment of the petitioner in this case cannot be cancelled merely on the ground of criminal prosecution. The Court issued a writ of mandamus against the respondent authority and gave the following directions:

  • The respondents were directed to appoint the petitioner to the required post.  
  • This appointment must be done in accordance with the law. 
  • He must be given the same post for which he qualified.  

Critical Analysis and Recommendations

It isn’t sufficient to order elegant laws, however, the execution ought to be finished and culminate. Under the watchful eye of bringing the law into constraint, the enactment ought to consider the foundation required to actualize the law and money-related consequences associated with executing the law. With no discourse with regard to the likelihood/possibility of the usage, laws are brought into drive immediately. Subsequently, there is disappointment in the execution of the laws.

Suggestions and Recommendations

Children and protection had been accepted as the responsibilities of modern welfare. Through social welfare programs and the JJ Act, States have undertaken the responsibility of ensuring developmental opportunities to children living in conditions of want and showing signs of social maladjustment. But the fragmented implementation and malfunctioning of the various organs under the JJ Act have brushed off the basic fundamental principle of different policies. Hence there is a need to transform this approach towards juvenile justice into a ‘system’ of juvenile justice. The first and foremost requirement is to think clearly about the direction of change.

  1. Formulation of Minimum Standards-  A child cannot develop into a normal human being by the normal provision of food, shelter and clothing. It is necessary to formulate minimum standards of services for various community and institutional services for children under the JJ Act. The qualifications, salary structure, staff pattern, the architecture of the building, and other factors should be in accordance with the objective of providing alternative family care to the juveniles, ultimately leading to their rehabilitation in society.
  2. National Commission for ChildrenA national commission for children’s welfare was suggested by the high-level committee constituted by the Supreme Court in a public interest petition for basic facilities for children engaged in the fireworks industry in Madras and Sivakasi in the early 1990s. The government has reiterated its desire to constitute one on several occasions subsequently, but one has still to be constituted.
  3. Strategy for Change Probation and other community-based programs cost less than institutionalization. They should also be preferred for their potential for ensuring better care and rehabilitation for juveniles. The state has paid some attention to children but other more demanding pressure groups and priorities deemed necessary have been able to divert the resources for their causes.
  4. Special Training Programme-A special training program must be prepared and the officers of the Board including the Principal Magistrate should be given training of child psychology and child welfare.
  5. Sports and Functional Programmes-For better welfare of juvenile games, sports and other functional programs may be organized in observation homes and institutions and encourage the juvenile to participate in these programs so they connect themselves with society. During festival seasons some cultural programs should be organized in the homes for the inmates with the assistance of voluntary organizations.
  6. Education and Schooling– Schooling of children in homes up to the age of 14 should be made compulsory. They should be given the best of the facilities and opportunities like any Boarding school (hostel) making a course of moral science and civics compulsory for those who are in homes. For the welfare of the juvenile, he must be allowed to go on leave and released on license during the examination so that he can continue with his studies. Sponsorships should be provided for the education of juveniles in good institutions. Personality enhancement courses should be organized.
  7. Courses and Seminars-Orientation courses, seminars and awareness programs should be organized by the government on juvenile justice on regular intervals to enable the functionaries to imbibe the message discussed and conveyed to them.
  8. Providing Assistance-A social worker may be associated with the investigation made by the police officer. In the child cell, at least one lady police officer should be posted.
  9. Needed Change-Unless a more effective lobby is generated for children, it may not be possible to bring about a change in the policy towards children whether for the purposes of finding resources or for implementing the statutory provisions or for a continuous review of policy and implementation patterns relating to children.

Conclusion

For the development of any country, it is necessary that adequate attention is paid to the growth and development of the human resources i.e., its future generation. Initiatives must be taken by the government to introduce quality education and training for its citizens and must impart the same to them. Various Schemes must be introduced to provide education to those children who are unable to pay school or college fees. Apart from this, other aspects like health, safety and welfare of such children must also be taken care of. Most of the states are welfare states and so the focus must be to reform and rehabilitate young offenders rather than awarding harsh punishments. 

The Juvenile Justice (Care and Protection of Children) Act, 2015 helps to achieve this purpose as it provides provisions for the development, treatment, correction, and reintegration of children who have committed any kind of offence or who are in need of care and protection. The Act provides separate machinery and authority to deal with juvenile matters, which makes the whole process easy and speedy. It also aims at providing protection to children who have been abused or harassed in any manner. However, efforts must be made for the strict implementation of the Act. Any person who contravenes the provisions of the Act must be punished. This can help reduce crimes against children. 

The Government of India has introduced numerous schemes in this regard which include the most famous scheme of Atmanirbhar Bharat to help the youth become self-reliant and independent and use their aptitude and intellect for the benefit of oneself and the country at large. Other such initiatives include Ujjawala with the aim to reduce the cases of child trafficking, the National Youth Policy 2021, the National Education Policy 2020, and many more. 

Frequently Asked Questions (FAQs)

What are the orders that a juvenile justice board cannot make?

According to Section 21 of the Act, the board is prohibited from making the following orders against a juvenile:

  • Order awarding a juvenile the death penalty;
  • Order of punishing the juvenile with life imprisonment;
  • Any order that imposes a sentence of a specific period on the juvenile in default of payment of fine; 
  • Order awarding punishment to a juvenile on the failure of payment of security. 

Is a juvenile disqualified from exercising his or her rights after conviction like any other adult convict?

No, according to Section 24 of the Act, no juvenile would be disqualified from anything pertaining to his conviction under the Act for any offence committed.  

Can a juvenile be released on bail?

Yes. According to Section 12 of the Act, if a juvenile is apprehended by police, the general rule is that a he or she is entitled to bail with or without surety both in bailable or non-bailable offences. However, if there are reasonable grounds that granting him or her bail would be dangerous then no bail wou;d be granted but the board has to record reasons for the same. 

How is the juvenile justice system different from the criminal justice system?

The juvenile justice system and the criminal justice system possess certain differences:

  • In the juvenile justice system, no First Information Report (FIR) or chargesheet is filed against the accused which is a juvenile or minor in this case. However, in the criminal justice system, FIR and charge sheet are important to start a trial against the accused. 
  • The accused in criminal cases can be arrested by police but a juvenile accused of committing an offence cannot be arrested in the juvenile justice system. 
  • Juveniles are not awarded punishment like death penalty, life imprisonment or sentence for a specific period in the jail but can be kept in special homes or observation homes. 
  • Under the juvenile justice system, the Juvenile Justice Board is empowered to hear and dispose of cases related to juveniles unlike the criminal justice system where this power is vested with the courts.  
  • Juveniles are entitled to bail but an accused in the criminal justice system may or may not be entitled to bail depending on the nature and gravity of the offence committed.

References


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Punishment under Sections 3 and 25 of the Arms Act

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new laws on keeping arms affect the present situation
Image source - https://bit.ly/36MWjEK

This article has been authored by Bhavika Mittal, pursuing BA LLB from DES’s Shri Navalmal Firodia Law College, Pune, affiliated with Pune University. This article discusses Section 3 and 25 of Arms Act, 1959. It further talks about the punishment given upon contravening the provisions of the section mentioned above. 

Introduction 

Article 21 of the Constitution, under its purview, guarantees the right to live safely, and the Indian Penal Code, 1860 protects the right to private defence. This indicates that the citizens are permitted to take any action to safeguard their bodies and property via any means. Well, this doesn’t stand absolutely true because there are exceptions everywhere, especially in law. Yes, individuals have the right to protect themselves, but owning and using imminently dangerous weapons can lead to civil rebellions, which would contravene the purpose of the law.

To prevent such a society from disrupting acts, the Arms Act, 1959 was enacted. This central legislation does not aim to impose a complete ban on arms usage but rather sets conditions for the same. As George Washington had said, “Firearms stand next in importance to the Constitution itself,” an absolute prohibition on arms and ammunition is somewhat out of the question. Thus, the act, similar to any substantive law, provides rules and punishments entailing it. This article discusses one such offence under the Arms Act of 1959, but mainly the punishment prescribed for the offence. 

All about the Arms Act of 1959

It was after the first battle of independence that the Arms Act was introduced in India. The Indian Arms Act of 1878 was enacted by Britishers; the act prohibited the possession of arms by Indians unless permitted by the British Crown.

The Act of 1878 was later replaced by the Arms Act of 1959, the provisions of which are currently applicable throughout India.

The scope of the Arms Act 1959 includes governing and regulating the purchase, manufacturing, possession, import, export, sale, and transportation of arms and ammunition. The Act, just like any other substantive law, lays down the penalties and punishments imposed upon contravention of its provisions. 

Over the course of years, rules that are supplementary to the Act and amendments have been incorporated in accordance with contemporary times. For instance, the Arms Rules of 1962 lay down the rules for possessing a firearm or ammunition and rules for certain specific situations.

Next, with the Arms (Amendment) Act, 2019, wherein the number of people who possess arms has been reduced, the punishments have become more stringent. 

Under all the rules and acts related to arms, being a valid licensee is a vital condition that needs to be fulfilled for conducting any activity regarding arms or ammunition. The provision of holding a valid licence and the offence committed upon contravention of such provision, along with the punishment, have been discussed further. 

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Section 3 of the Arms Act

Section 3, titled “Licence for acquisition and possession of arms and ammunition,” has been provided under Chapter II of the Arms Act, 1959. The Section mainly comprises elements of Section 13 and Section 14 of the previous Act, the Arms Act 1878.

Section 3 of the Arms Act of 1959 prescribes rules for legally holding a firearm or ammunition.

The Section explicitly states that no individual without a licence issued in conformity to the provisions of the Act shall-

  • acquire, or 
  • have in possession, or 
  • carry  

any firearm or ammunition as defined under clause 9 (b) and (e) of Section 2(1), Arms Act, 1959.

However, if a person 

  • has a written authority, or
  • possesses a firearm or ammunition in the presence of the licence holder.

This type of possession or carrying of firearms is legally valid. 

Moreover, a licence holder is prohibited from acquiring, possessing, or carrying more than two firearms. But before the amendment inserted by Act 48 of 2019, the quantity limit on firearms was three. 

Further, dealers, rifle clubs, or associations are exempt from the limitations of possessing two firearms.

Conclusively, individuals are strictly prohibited from possessing firearms or ammunition without a licence, apart from those in the presence or with the written permission of the licence-holder. The licensed individual can possess only two firearms, but those holding and conducting businesses, international medalists, and renowned shooters are exempt from the limit on quantity.

In Rajat Yadav v. State of U.P. and two others (2021), the Allahabad High Court dismissed the writ petition filed against the order of the licensing authority. The High Court upheld the decision of the licensing authority not to grant an arms licence to the petitioner. In the instant case, the petitioner was a grain merchant and had applied for an arms licence in 2020 and 2021.

However, the petitioner’s applications were denied, and the arms licence was not granted. The licensing authority based its rejection on the fact that the petitioner does not face any imminent threat to his life or property, as reflected in the police inquiry reports. 

Further, the petitioner didn’t fall under any category required to be entitled to an arms licence, like holding an office, discharging various office functions that entail life threats, etc. To this, the petitioner questioned the reasoning by calling it arbitrary and illegal, but the High Court held that protecting an individual and his or her property is the duty of the state. 

Every individual cannot be entitled to an arms licence unless faced with a genuine threat. Additionally, holding an arms licence is not a right guaranteed under Article 21 of the Constitution, as decided by the Apex Court of India in various judgements. Therefore, the licence under Section 3 of the Arms Act, 1959, is granted only after thorough research. 

This Section is crucial to the Act. It deters civil rebellions by limiting the possession of firearms and ammunition by many Indians. The penalty imposed and punishment given upon contravention of Section 3 of the Arms Act, 1959, has been mentioned under Section 25 of  the Arms Act, 1959. 

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Section 25 of the Arms Act 

The second last chapter of the Arms Act, 1959, Chapter V, titled “Offences and penalties” contains Section 25, titled “Punishments for certain offences”, prescribes punishment for contravening the provisions laid down under Section 5, Section 6, Section 11, Section 7, Section 4, Section 12, Section 3, and other sections of the Arms Act, 1959. Thus, most of the offences committed under the Arms Act of 1959 are punishable under this Section. 

The above mentioned sections and others are bifurcated into ten sub-sections and further into clauses, wherein the penalty and punishment to be imposed are prescribed. For instance, Section 25(1) includes Section 5, Section 6, and Section 11 and contravention to these provisions leads to imprisonment of not less than seven years and may extend to life imprisonment. While under Section 1(A), the punishment is varied, and similar is the case under different sub-sections.

In Mursalim Shaikh and Others v. State of West Bengal (2011), the petitioner and his accomplice were armed with a dagger, chisel, and pistol. They had stopped a rickshaw by force and demanded valuables from the travellers. They extorted the valuables and fled. Later, the petitioner was caught, and the pistol in his possession was found to be illegal. The Additional Session Judges, Jangipur, had convicted them under Section 25 of the Arms Act, 1959, and other relevant sections of the Indian Penal Code, 1860. In the instant case, the petitioner appealed in the Calcutta High Court for the dismissal of the order, but the Court dismissed the appeal, and conviction under Section 25 of the Arms Act, 1959 was upheld as the petitioner had no valid reason for possessing the weapon. 

The punishments range from a minimum of six months to life imprisonment, either simple or rigorous imprisonment. It can safely be deduced that the punishments and penalties imposed are diverse under the Section; this depends upon the nature of the offence committed.

For instance, breaching the provisions of the Arms Act, 1959, namely, acquiring, having in possession, or carrying firearms and ammunition without a licence, is an offence committed under Section 3 and Section 4 of the Arms Act, 1959. Since the objective of this article is to elucidate punishment under Section 3/25 of the Arms Act, we shall discuss the same hereafter. 

Essentials of Section 3 and 25 of the Arms Act 

From the brief explanation of Section 3 and Section 25 of the Arms Act of 1959, it can easily be said that these are the two most important Sections of the Arms Act of 1959. The stringent rule of compulsory licence and the punishment granted upon contravention prevent life-threatening violent situations. Thus, the sections overlap at the juncture of the offence and consequently punish the wrongdoer. 

Further, in order to bring an action under the Section, the prosecution has to prove:

  1. That the article is a firearm or ammunition,
  2. that the accused had in his possession, or acquired it or carried the incriminating article, and
  3. that such acquisition, possession or carriage of the article was in question without a licence issued in accordance with the rules and provisions of the Act. 

In Jagjeet Singh v. State of Rajasthan (1999), the police, upon receiving a piece of secret information, set out to arrest the petitioner, but the petitioner, upon seeing the police officials, started running. However, the police apprehended the accused petitioner. The police personnel searched and found in his possession a 32-bore pistol without a licence. Taking due consideration of the facts, the petitioner was charged under Section 3/25 of the Arms Act, 1959. 

The three conditions to bring an action under the Section were proved by the prosecutor, and the petitioner was sentenced to one year’s rigorous imprisonment with a fine of rupees two hundred and a default of one month’s simple imprisonment. The Rajasthan High Court dismissed the petition against the judgement pronounced by the Trial Court, and the Court upheld the punishment and penalty imposed. 

Punishment under Section 3/25 of the Arms act 

A plain reading of Section 25 (1B), Arms Act, 1959, states that noncompliance with the provisions of Section 3 is punishable under the section. So, where all the required criteria are fulfilled, the convict will be punished with the following:

  • imprisonment for two years, which may extend up to five years, and 
  • be liable to a fine.

But before Act 48 of 2019 inserted the above-mentioned provisions, the criminal wrongdoer was sentenced to imprisonment for one year, which may extend up to three years. However, under certain special circumstances and if the court deems it adequate, a sentence of fewer than two years can be imposed.

In Vishwanath Gaonkar v. State (2012), the High Court of Judicature at Bombay, Panaji bench, upheld the Additional Sessions Judge’s decision of holding the accused guilty and convicted of the offence under Section 3 read with Section 25 (Section 3/25) of the Arms Act, 1959. But the sentence of rigorous imprisonment of one year and a five thousand rupee fine imposed by the Sessions Judge was modified. The accused had already undergone rigorous imprisonment of five months; the Bombay High Court held that rigorous imprisonment was part of the period already undergone by the accused. Additionally, the accused shall pay a fine of rupees five thousand and undergo the default simple imprisonment of three months. The facts of the case are such that the exception to the punishment under Section 3/25 was imposed, as the court deemed the facts and circumstances to have special and adequate reasons. 

Judicial pronouncements

Bhairon Singh and Anr v. State of Rajasthan, (2009)

In Bhairon Singh and Anr v. State of Rajasthan (2009), the accused-appellants were found to be in possession of one 315-bore rifle, 25 live cartridges, one country-made pistol, and one empty cartridge by police officials. In the instant case, the accused attempted to run away from the police officials, and during that tussle, the two miscreants fired at the police, but the shot was missed. Upon arrest, the above-mentioned firearms were recovered without any valid licence. The police registered the case under Section 307, Section 323, Section 34 of the Indian Penal Code, 1860 and Section 3/35 of the Arms Act, 1959. However, only the charge under Section 353 IPC was maintained by the learned Rajasthan High Court. There was no proof or witness to confirm whether the arms used by the appellants were serviceable or not.

Thus, the Rajasthan High Court upheld the verdict passed by the Trial Court that the acquittal of the accused-appellants for the offence under Section 3/25 Arms Act, 1959, is valid. Thus, the conviction was set aside on the grounds of the non-working condition of the recovered pistol. A similar judgement was pronounced by the Supreme Court in Merambahi Punjabhai Khachar v State of Gujarat, (1996). 

State of Rajasthan v. Ram Kailash alias Ram Vilas (2016)

In the State of Rajasthan v. Ram Kailash alias Ram Vilas (2016), the respondent, from a moving motorcycle, fired at the deceased with a pistol, also travelling on a motorcycle. Upon identifying the wrongdoer, a case under various IPC sections was filed, and Sections 3/25 and 3/27 of the Arms Act, 1959. The Additional Sessions Judge, Nagpur, sentenced the accused under the various IPC Sections, and under Section 3/25 Arms Act, the accused was sentenced to three years of rigorous imprisonment and a fine of rupees two thousand and, in default, to undergo one month’s simple imprisonment. 

The accused, aggrieved by this decision, filed an appeal in the High Court of Rajasthan, where the punishment under IPC sections was reduced. However, as the pistol used to fire at the deceased was possessed by the accused without a licence, the punishment under Section 3/35 Arms Act was held valid. The State of Rajasthan presented an appeal to the Supreme Court, aggrieved by the judgement of the Rajasthan High Court. Here, the appeal was against the reduced punishment, and the sentence under Section 3/25 Arms Act, 1959, remained untouched as the requirements to sentence an individual under the Section were fulfilled. 

Conclusion 

It is an undeniable fact that the use of arms and other weapons is a necessity for certain individuals. But at times, this requirement leads to misusing these life-threatening weapons. Also, the illegal possession of firearms is a possibility that needs to be controlled and regulated. Under its purview, the central legislation of the Arms Act 1959 includes such concerns. 

The legislation, through Section 3, ensures that no individual, without a genuine reason or as prescribed under the Act possesses any firearm or ammunition. If found, breaching the provisions of the act, Section 25 prescribes punishment for the offence. So, Section 25 can be referred to as supplementary to Section 3. Conclusively, the sentence under Section 3/25 Arms Act curbs deadly conflicts and safeguards the third party. 

Frequently Asked Questions (FAQs)

What is meant by ammunition as per the Arms Act? 

In a general sense, ammunition means the number of bullets or shells. Section 2(1)(b) defines ammunition as ammunition of firearms and states that ammunition includes the objects coming out of rockets, guns, bombs, tubes, other explosive objects etc. 

What is the meaning of a firearm? 

Section 2(1)(e)  of the Arms Act, 1959, defines a firearm as something that projectiles any explosive or similar energy. It could include pistols, weapons, hand grenades, machinery for manufacturing firearms etc. 

Is it possible to get bail under Section 3/25 of the arms act? 

The offence under Section 3/35 Arms Act is a bailable offence. Hence, getting bail under Section 3/25 of Arms Act is possible. 

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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Analyzing the impact of the Data Protection Bill on business

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This article has been written by Jai Khurana, pursuing 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.

Introduction 

Humans tend to work and grow every day in today’s ever-changing and evolving world. There is a creation of a lot of information regarding humans’ choices, nature, activities, etc. in the process of everyday functioning. Now let’s take an example; imagine that all the information which is connected to you, say your everyday functioning activities and timetable, your family members and personal relations, your bank account passwords, etc. is compromised by an entity without your consent or knowledge. This kind of situation may trigger astonishment and fear for many. Thus, to prevent such acts to occur and cause harm to an individual who does not know the extent of information shared and compromised, a Bill was introduced in the parliament namely The Personal Data Protection Bill, 2019 (The Bill). This article works towards discussing the Bill of 2019 and its impact on businesses in terms of opportunities offered, challenges faced and the cybersecurity considerations that were made. The article also throws light on the arrival and repeal of the Data Protection Bill, 2019. 

What enticed the creation of the Data Protection Bill

The privacy and protection of data were considered and controlled by the Information Technology Act, 2000 (IT Act, 2000), and the Reasonable Security Practices IT (Amendment) Act, 2008. These legislations specify security safeguards for data collection, disclosure, and transfer of j information for entities processing the data. However, the aforementioned Acts and provisions could not take due care of the agenda of the development of the digital economy as IT Act, 2000 was not able to provide a broad definition of ‘sensitive personal data’. The Act which was drafted in the year 2000 comes to be recognised as a toothless tiger currently. The reason behind the same is the outdated provisions that are failing to keep up with the recent changes that are being brought about in the field of technology. Concerns are being raised therefore to locate a governing legislation that can define terminologies in relation to technology thereby benefiting its user. 

The major contemporary issue for privacy arises with the creation of the Bill. The origination of the Bill can be tracked down when the question of privacy being a fundamental right under Part III of the Indian Constitution was raised in the case of Justice K.S. Puttaswamy (Retd.) & Anr. vs. Union of India & Ors (2018). Through six separate opinions, the Supreme Court of India had concluded that privacy is a distinct and independent fundamental right under Article 21 of the Constitution. The crux of the decision spelled out an expansive interpretation of the right to privacy – it was not a narrow right against physical invasion or a derivative right under Article 21, but one that covered the body and mind, including decisions, and choices, information, and freedom. Privacy was held to be an overarching right of Part III of the Constitution which was enforceable and multifaceted.

A Committee of experts was appointed by the Government namely Srikrishna Committee and it submitted its report in July 2018. The Report stated the obsoleteness of the IT Act, 2000 and recommended the Personal Data Protection Bill, 2019. The Committee noticed major loopholes in the relationship between the user and the service provider where there was an ‘asymmetrical distribution of power’ as the user had no knowledge and couldn’t control the diversity of the user’s personal information shared by the service provider to any entity. Moreover, the relationship was controlled not by a specific provision but by general clauses of the contract law. Thus, the Committee further recommended setting-up of an authority that would take control of all the aforementioned ill acts against the unaware user.

An overview of the Personal Data Protection Bill, 2019

The Personal Data Protection Bill, 2019 was introduced in the Lok Sabha by the Ministry of Electronics and Information Technology, Mr Ravi Shankar Prasad, on December 11, 2019. The Bill was introduced to protect a person’s (data principal) personal information from being shared and to establish the Data Protection Authority (DPA). This Bill would regulate the processing of information done by:

A.   The government.

B.   The companies are located in India.

C.  Foreign companies which are engaged with the data and personal information of Indians.

Individuals/ companies (data fiduciaries) collecting such information and processing it would also be regulated and would be allowed to collect such information for a specific purpose only. Individuals covered under the Bill would also have certain rights like obtaining confirmation regarding the processing of information by the fiduciary, correcting the wrong information collected and processed by the fiduciary, and restricting continued disclosure of information to fiduciaries in case of the purpose being fulfilled for which the information was initially shared. Individuals further have a right to forget where they can ask the fiduciary to delete all the data regarding the individual. However, the Bill also establishes certain grounds where there is no consent requirement of the data principal for processing the data. This includes:

A.    Information required by the state for the provision of benefits

B.     Legal proceedings

C.     Respond to a medical emergency.

Social media intermediaries would also be controlled under the Bill whereupon crossing a certain threshold; the intermediaries would have certain obligations including a voluntary user verification system. Sensitive data, if transferred out of India for processing, would be bound by certain conditions. Further, the transferred data must be stored in India too. The Indian Government would have the power under the Bill to exempt any of its agencies from the provisions of the Bill for: 

A.   The interest of the security of the state and friendly relations with foreign states

B.    Preventing incitement to the commission of any cognisable offense

C.    Prevention and prosecution of any offense

D.    Personal, domestic or journalistic purpose.

A fiduciary would be punished with Rs. 15 crores or 4% of the annual turnover, whichever is higher in case of failure to transfer personal data in violation of the Bill, and Rs. 5 crores or 2% of the annual turnover, whichever is higher in case of failure to conduct data audit in time. The government can ask fiduciaries to share non-personal information or anonymized personal data for better provision of services to the masses.

How is the bill aiding individual interests

The Data Protection Bill was developed for aiding the individual’s interest as the area has remained unexplored by the existing legislations in India. The European Union’s GDPR also played a role in developing the Data Protection Bill as it was observed that there was no applicability of WhatsApp’s policy changes in the European Union unlikely in India where the same and other companies are able to take advantage of the lack of airtight data protection laws.

With the introduction of the Data Protection Bill, individuals would be able to give consent over the topic of whether their data shall be used or not. This consent would be free, clear, specific, and capable of being withdrawn. There has been a history of evident data leaks such as the data leak at IRCTC where the personal information of millions of Indians was sold on the dark web in 2020. Similarly, the data of 45 lakh passengers were leaked on Air India’s passenger system service provider SITA, including information about their passport and credit card details. Even apps like Truecaller have been looked down upon with sceptical eyes as the Swedish site is found upon investigation, to be a bane for a country like India where privacy is considered to be a fundamental right. This is where the Data Protection Bill acquires importance for the same identifies an individual and their details, including names, addresses, financial information, IP addresses, cookies, and device IDs under the framework.

Impact of the Data Protection Bill, 2019 on businesses if the same would not have been repealed 

The functioning of businesses under the Data Protection Bill remains a grey area. The Bill of 2019 had not explicitly mentioned and explained the cross-border information flow and functioning procedure. As of now, the Bill only calls for certain personal information to be localized which again questions whether the same would be enough for data protection and will boost the Indian economy or not. 

The 2019 Bill had allowed the data fiduciaries to share non-personal data or anonymized personal data. This may again alter the outcome of how the business performs as the same information can be shared with the competitors who can dominate the market based on the shared data. It is necessary to note that if the Data Protection Bill, 2019 was put into effect, small businesses would have suffered because of the same, as the companies would attract cost and expenditure which could only be afforded by large businesses easily as compared to the small and medium enterprises.

The businesses would also need to invest a bigger chunk on cyber-security, as well as update their cybersecurity policy and practice as it requires businesses to implement reasonable measures to protect consumers’ personal data and privacy against data loss or exposure. The businesses also need to report the data breach to the DPA as soon as possible, being in compliance with the Data Protection Bill, 2019 (if the same was put to effect). 

The Data Protection Bill would have further increased the demand for cybersecurity professionals and data protection officers. To address the current skills shortage for cybersecurity professionals and data protection officers, both governments and tech companies need to invest in more cybersecurity training and education programs. 

Looking at the bright side, the Data Protection Bill, 2019 would aid in the business functioning as the entities would be able to identify the areas of data necessary for them to keep, maintain, secure and let go of the unnecessary data. Further, the businesses would exactly know the cycle of data utilisation and areas where they need to maintain security measures, if the Bill was not repealed. 

Personal Data Protection Bill, 2022

The Ministry of Electronics and Information Technology prepared a new draft of the PDP Bill in 2022 keeping in view the repercussions the 2019 Bill would have entailed if it would have been implemented. Like the 2019 Bill, the PDP Bill, 2022 sets out the rights and duties of the citizens, and the obligations of the data fiduciary to use the collected data in an authorized manner.  The new Bill was introduced on the 18th of November, 2022 with the invitation to the public to provide feedback on the Bill by the 17th of December 2022. The key highlights of the 2022 Bill are entailed as follows: –

  1. Country specification: The Government has the authority to specify the countries to which the data will be transferred. This is in relation to the sending of user data to companies having data servers located abroad.
  2. Exemption to state agencies: The government can exempt specific state agencies from the protection of proposed law in interest to process data in the name and spirit of national interest.
  3. Data Protection Board: A Data Protection Board would be set up as per the 2022 Bill which ensures compliances are in check and also hear user complaints. The Central Government would establish the Board by issuing a notification in the same regard. The allocation of work, receipt of complaints, formation of groups for hearing, the pronouncement of decisions, and other functions of the Board shall be digital by design
  4. Appointment of Data Auditor: There shall be the appointment of a Data Auditor by the Companies of “significant” size, the volume of data they process and other factors. The Data Auditor will work for checking the compliances that need to be followed by the company.
  5. Pecuniary liability: The Board can charge financial penalties over a data server or data fiduciary for non-compliance with any of the provisions of the then Act. Fines up to 2.5 Billion rupees can be levied as fines for the failure of entities to take reasonable security safeguards to prevent data breaches.
  6. Children’s safety: The new Bill safeguards children’s interest in the digital era by restricting companies or organizations to process personal data that is likely to cause harm to children. Also, advertising cannot be targeted at children. Parental consent is necessary for connection with minors and children.
  7. Gender neutrality: Unlike the previous Acts and codes, the PDP Bill 2022 uses ‘she’/’her’ as a general term to depict data users. This shows the intent of the Indian legislature to incorporate more gender-neutral terms and laws in the future.

Opportunities for businesses under the PDP Bill, 2022

The comprehensive data protection regime that the PDP Bill, 2022 brings about, proves to be amenable to businesses in India. Currently, the data protection regime in India is governed by the Security Practices and Procedures, the Sensitive Personal Data or Information 2011 and the Information Technology Act, 2008. With the enactment of the PDP Bill, 2022, there will be several implications for virtually every organisation that has their operations in India. The list of  opportunities have been stated hereunder whose taste can be enjoyed only if businesses abide by the compliances listed by the Bill.

Privacy protection

While there remains scope for erasing unnecessary data by the businesses, compliance with the Bill will help businesses safeguard privacy of their customers thereby providing the latter with greater control on their data. 

Improved data security

The 2022 Bill establishes stringent criteria required for the implementation of appropriate technical and organisational measures to secure data by data controllers and processors. Compliance with the same can help businesses improve data security thereby building reliance with their customers. 

Building trust 

The Bill is anticipated to build trust between customers and businesses by giving the former more protection and control over their personal data. This may result in better communication between businesses, their stakeholders and customers.

Boosting the digital economy of new India

The 2022 Bill can promote wider adoption of digital technologies by increasing customer confidence in digital goods and services by guaranteeing personal data protection. This will help businesses flourish better in the Indian market. 

Challenges for businesses under the PDP Bill, 2022

The PDP Bill, 2022 welcomes several challenges for businesses operating in India in terms of its compliance. Aligning business processes with the proposed regulations will necessitate new business infrastructure and significant process modifications for many Indian businesses. But one thing is certain that companies, irrespective of their nature, must adhere to four essential procedures to set up a thorough, legally sound data protection policy thereby complying with the new law. It is also necessary to note that technology which makes use of deep learning and AI will be serving as the glue holding everything together.

Maintaining a defensible data inventory

One can only comply with data regulatory mechanisms if they are unaware about where the data lives, who has access to it, and who in the organisation is responsible for it. The Digital Data Protection Bill requires businesses to have in place a rational procedure and an effective mechanism for redressal purposes of customer grievances. It is necessary to note that for organisations to effectively address the grievances in relation to customer data, the requirement of an effective inventory of data which will be residing across departments, in one centralised repository, arises. For organisations which deal with large amounts of data, fulfilling this requirement is difficult without the appropriate technology to ease processes. If the data is not inventoried, owing to its growth over the years, the problem gets worse for businesses handling them. Organisations are able to develop a legally sound data inventory that serves as a guide for meeting compliance requirements, locating existing vulnerabilities, and proving accountability.

Manage data subject access requests 

PDP Bill, 2022 requires organisations to provide a summary report of the amount of data processed and what they relate to and make it available for customers to readily access and be aware of their data. The requirement of a defensible data inventory can be felt in this regard for otherwise accessing requests of customers will take up a lot of time. For this reason, business organisations in India require a robust system that can handle request intake thereby accurately authenticating the identity of the person or entity, as well as gather, review, and redact the essential data. Businesses need tech stacks that can access employee data because the new regulation also governs employee data, and they need integrations with HR systems to make sure that employee records are properly kept. Technology makes the process simpler by integrating data deletion requests with other legal requirements and compliance measures.

The new Bill vests the right to request personal data deletion on individuals thereby making organisations liable to do so. The process of data deletion if done manually takes up a lot of time because different departments have to be coordinated simultaneously for smooth functioning of the request. While this takes up an immense time period, an automated mechanism will do thai work fluently in minutes. Thus, organizations require integration of automated tools in their system. 

Manage third-party risks

One of the prime risky areas for organisations complying with cybersecurity regulations is third-party.  Let us understand how a third party can cause risk to the business organisation alongside its customers, simply. Majority organizations have migrated to the cloud for handling operations. Now, it is necessary to note that cloud solutions often connect to other data sources which are within a business. This signifies that the sensitive business data alongside personal information of the customers means is likely to be accessed by third party vendors. In thai regard, businesses need to understand two important things, namely: 

  1. What type of customer data third parties are accessing?
  2. Whether the data accessed is being done in a secure manner or not.

It is only with the right uses of technology, that businesses can track vendors’ activities thereby abiding by compliance laid down by regulation and also safeguarding unnecessary infringement of such data in the most unauthorized manner. The new data protection bill lays down the imposition of Rs 250 crore as a deterrent fine on organisations failing to manage third party risks. 

Data retention and minimisation

Although reducing data retention is a welcoming approach to create a deterrent against cyberattacks, most businesses actually save more data than is necessary. This problem was addressed in the new data protection bill, which states that organisations should only keep the data they actually need thereby erasing the rest. When an individual’s personal information is no longer needed for the reason for which it was gathered, “a data fiduciary must cease to retain personal data.” Data retention is considered one of the finest ways to counter cyber attack because unnecessary data that is not required by the organisations is protected by being removed and those that are required remains of a significantly lesser amount and is therefore easy to handle. 

One must keep in mind that organisations may be forced to decide whether or not to keep certain categories of data they have since there is so much data and many regulatory standards that require compliance. Data minimizations can be an easy procedure if the correct technologies are used to detect if data is subjected to another regulatory requirement, such as a legal hold, or not. Technology can help organisations maintain legal compliance while achieving a balance between data minimization and retention.

Conclusion 

Technology that remains up-to-date and satisfies all compliance requirements with regard to data privacy and protection is necessary in the ever-changing legal landscape. Businesses in India have to pull up their socks once the new legislation is implemented for if they don’t, the legislation will backfire their functioning. It may seem difficult to overhaul current procedures for businesses, but with the appropriate tools, they can reduce privacy-related concerns and stay competitive by ensuring their procedures are flexible and scalable.

References 

  1. https://timesofindia.indiatimes.com/blogs/voices/what-indias-proposed-digital-data-protection-bill-means-for-businesses/.
  2. https://cxovoice.com/indian-digital-personal-data-protection-bill-2022-what-it-means-for-the-business/.
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Difference between tort and breach of trust

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This article is written by Aadrika Malhotra, a law student at Guru Gobind Singh Indraprastha University. It talks about the differences between the law of torts and the law circling around breach of trust. A tort is a civil wrong for which the remedy is unliquidated damages, whereas a breach of trust is a civil and criminal wrong for which the remedy is liquidated damages. 

It has been published by Rachit Garg.

Table of Contents

Introduction 

The concept of breach of trust is often regarded as a portion of law so self-constrained as to be easily detached from the rest of the legal system. There are several different definitions of tort that have been passed over the years. The definition given under Section 2(m) of the Limitations Act, 1963 makes a clear distinction between tort and breach of trust. It states that a tort is a civil wrong which is not exclusively a breach of contract or the breach of trust. Several practitioners have tried to distinguish between these two and have considered one important thing that the law of torts gives rise to damages, whereas the law of breach of trust gives rise to restitution. Both of them can be constituted as breaches of duty, which give rise to these claims that seek compensation. 

Origin of tort and breach of trust

Tort 

Tort law addresses and provides remedies for civil wrongs and compensation for damages for people who are liable. The law of torts came into existence in India through England after the Norman Conquest. The term “tort” means that there are certain rights that are endowed in society to further enforce the rights and duties mentioned in the Constitution. The sessions during the trials of the judges in England were “assizes,” or in simpler language, “sittings.” 

In the fourteenth century, the word “negligenter” began to be used in trespass writs to portray negligent conduct. In the twentieth and twenty-first centuries, negligence was considered to be the most important tort, which plays a crucial role in all other tort categories. 

Conflict between King Henry II and Archbishop Thomas 

The grandson of the infamous conqueror William, King Henry II, instituted a statute which stated a jury that consisted of twelve men would decide whether an alleged crime was committed or not and to what extent the punishment for the defendant would go. The only way to avoid the harsh punishment was to be a member of the clergy, for those eligible could be tried by the Ecclesiastical courts, which were more humane. King Henry II became aware of this source and considered this as Thomas Becket’s (King Henry’s chancellor) disloyalty, whom he promoted to the archbishop of Canterbury. 

Court of Chancery 

Becket’s courts were dubbed the Court of Chancery, later courts of equity, which are now known as the civil courts. The major reason for this court’s existence was that the common law courts could only award financial compensation. It ignored the fact that the affected person must be suffering emotional loss, which is something the Courts of Chancery could help with. They can order the perpetrator to refrain from doing something that puts the victim in distress. The law of equity was a forum to compensate for emotional as well as financial pain, all heard in English, not just Latin. 

Law of Torts and ancient India 

Tort law in India is a fragment of English law that states that morality is a legal impulse to perform duties amongst each other, and if in the event such a breach occurs, there shall be a remedy to prevent the same and compensate the plaintiff fairly against the tortfeasor. The word “jimha,” which means “crooked,” constitutes tortious or fraudulent conduct in ancient Indian languages as the liability of the state. 

The Vedas, Sutras, Smritis, Epics, and Arthashastras define law and legal scriptures from ancient India. They describe the responsibilities the state had to compensate the plaintiffs as imposed by kings and officials. The infamous concept of vicarious liability developed in the Vedic era in ancient India, when the king had to safeguard the lives and personal liberty of people. Such compensations for any breach, if admitted, were all taken from the king’s “malkhana.” The settled law states that the common man will be fined “Karshapana,” and the king shall be fined one thousand. If an act done by the servant was for the benefit of the master, the latter shall be punished and compensated for the same.  

Henry Maine defined the Penal law of ancient communities as “not a law of crimes,” but the “law of wrongs,” which later got termed the law of torts.  

Development of Law of Torts in India 

During British rule, all courts in India were intertwined by the UK Acts of Parliament along with a few Indian enactments to act in accordance with equity and justice if there was no specific rule in a dispute during a suit. When there arose a suit for damages for torts, the courts followed the English Law for it was consistent with the ideas of equity and justice. 

In the case of M.C. Mehta v. Union of India (1986), the Apex Court laid down principles to deal with new problems in the economy and not be restrained by English or any foreign laws. This landmark case stated that India’s own tort laws, apart from the ones taken from Britain, will be taken into consideration while deciding cases. The court further held that Section 9 of the Code of Civil Procedure, 1908 enables the civil court to try cases in all civil matters; therefore, it will implicitly confer the right to apply the Law of Torts principles as well for equity and justice. 

Winfield and Indian judiciary 

Winfield defines torts as all injuries done to a person unless there is a reasonable justification in the eyes of the law. All unjustifiable harm is tortuous, and that enables the court to create new torts. This concludes that the law of torts is ever-growing. The principle of “ubi jus ibi remedium” means that “wherever there is a right, there is a remedy.” In the case of Ashby v. White (1703), Chief Justice Holt held that “man will multiply injuries, and actions must be taken for every man who has been injured to get him the compensation for such injury.” 

The Indian judiciary is in huge favour of the Winfield theory, which has also been upheld in the case of M.C. Mehta, as discussed above. In this case itself, the Apex Court made a new law of absolute liability in place of the strict liability prevalent in English laws. Winfield also commented on Salmond’s Pigeon Hole Theory, which states that there shall be no general principle of liabilities; if a plaintiff can prove his point beyond a reasonable doubt in any of the already mentioned torts, he will be compensated. Winfield said that both of these theories are correct, except for his proclamation of the concept from a wider point of view.       

Breach of trust

A person is said to have committed a breach of trust if he violates trust and abuses property that was given to him by another person. The concept of trust came from the ancient Roman and Greek laws prevalent before the twenty first century. The term “fiducia”, which means a contract between two parties where a party transfers property to another for specific reasons with a promise of restoration in the future, the former being called the “fiduciant” (settlor) and the latter the “fiduciarius” (trustee), and the agreement between them was called “Fiducia cum amico.” If the terms were met, the fiduciarius was liable for an “acto fiduciae,” which was to be upheld, or else it would be an “infamia,” a lack of legal or social standing. 

Crusader and Court of Chancery 

When a person would leave England to fight in the Crusades, he would give his land ownership to another to manage his estate and also pay and receive any feudal dues, after which the land would be returned to the original owner. The English common law regarded property as an invisible entity, and the owner of such property had all legal rights to it, which also meant that even after the return of the crusader, the manager did not give the property back to him. This would lead to a petition being filed in front of the king and, furthermore, proceeding to the Lord Chancellor in the Court of Chancery. He would determine what was fair and just to find the crusader’s plea admissible so the title could be returned to him despite his acquaintance having legal ownership of the estate.  

This meant that the crusader was the beneficiary and the acquaintance was the trustee, which developed into the concept of trust that we are familiar with today. In the twentieth century, jurisdictions such as the Cook Islands and Nevis developed and offered asset protection trusts and frivolous lawsuits to administer the estates of the beneficiaries.  

Civil breach of trust 

A trustee is said to commit a civil breach of trust if he fails to do any duty assigned to him by the beneficiary and the law, like protecting the investment of trust money. In a civil breach of trust, the trustee is liable to compensate the beneficiary for any losses to the property trusted due to the trustee’s negligence. 

Criminal breach of trust 

The presence of mens rea, or dishonest intention, is an essential part of a criminal breach of trust. The dishonesty and misappropriation of the property trusted for his own benefit by the trustee can constitute a criminal breach of trust. 

Essential elements of tort and breach of trust

Tort

There are four key elements that constitute a tort: 

A wrongful act or omission 

The accused can be both morally and legally wrong for the petitioner to seek remedy under the law of torts. A moral wrong does not always have to be legally wrong, and it is not enough for an act to be immoral to the extent that it can be termed a wrongful act under tort law. An act is wrongful only when it is legally wrong, regardless of whether it is moral or immoral. A wrongful act is recognized by law when one’s legal rights are violated. If an act seems prima facie legal, classifying it as a crime or tort might violate somebody else’s legal rights. A tort will arise only if the act done amounts to the infringement of a private legal right or if there is a breach of a legal duty. 

A duty to care 

The law has imposed a duty on everybody to observe and maintain a reasonable standard of care while performing any act that may be injurious to another. To constitute a breach of duty or tort, there has to be a proven duty to care for the affected party that was breached by the tortfeasor, with or without any direct connection to the said duty, which is imposed by law. 

In the case of Donoghue v. Stevenson (1932), the House of Lords came up with the neighbour principle, wherein Lord Atkin stated that an individual must take reasonable care to avoid accidents that are foreseeable and would likely injure one’s neighbour. He said that neighbours are the people closely and directly affected by one’s act, and one must have them in contemplation because those people might get affected when one directs their mind to the act or omission in question to be constituted as a tort.  

Actual damages or a legal injury 

For a wrongful act to be termed a tort, the plaintiff must have suffered some harm or loss from the particular act, or there must exist an infringement of any legal right of the plaintiff by the said act done by the tortfeasor. There are two maxims that determine the types of damages or injuries that fall under a tort. 

Damnum Sine Injuria  

It literally translates to damage without injury, where the party affected suffers damage, which may or may not be physical, but does not suffer any infringement of legal rights. There shall be an actual or substantial loss to the plaintiff without his legal rights being infringed. The plaintiff cannot take action or make a claim because his legal rights have not been violated, which has also been explained in the case of Gloucester Grammar School, wherein the defendant set up a school next to the plaintiff’s school, causing the plaintiff to suffer monetary loss. The Court of Common Pleas of England held that there would be no suit in this case, irrespective of the monetary damages, as no legal right of the plaintiff was violated when the defendant set up his school. 

Injuria Sine Damnum 

It literally translates as injury without damage, which is actionable under the law of torts because there was a legal damage suffered by the plaintiff regardless of actual harm or loss. The plaintiff can approach the court for remedy, as seen in the case of Ashby v. White (1703), wherein the plaintiff was forbidden from voting by the constable. Even though the candidate the plaintiff was to vote for won, the court held that his legal rights were violated, constituted a legal injury without damage, and held the defendant guilty of tort.  

Remedies 

Wherever there is a wrong, there is a remedy. This is the basic principle of tort law, so granting rights without the provision of a remedy is of no point. The injured parties receive compensation in the form of damages and restitution of property after examining the liabilities of the defendants and undergoing certain tests.  

Breach of trust

The property in dispute must be that of another person entrusted to the trustee

The property held in dispute must belong to another person, i.e., there shall be a beneficiary who owns the property, and a trustee shall be trusted with the same under the conditions of the beneficiary, which shall be agreed on by both the plaintiff and defendant.  

Illustration: Person A trusts his property to Person B, and on his return, Person B refuses to return the property to him; this is a breach of trust. 

Dishonest intention and use of the property for personal gain 

Dishonesty, as defined under Section 24 of the Indian Penal Code 1860, means wrongful gain or loss to a person. The use for personal gain by the trustee will be proved only if he has obtained some personal gain from the use of the property without the permission of the owner. In the case of Krishan Kumar v. Union of India (1959), the Supreme Court held that misappropriation arises when a person, the trustee, sets another person up with the property of the beneficiary by way of conversion or disposal of property with malafide intention. The person who has committed a criminal breach of trust must dispose of the property to another person or willfully make that person misappropriate the property. 

Statutory provisions for tort and breach of trust

Tort 

Provisions for constitutional tort 

A constitutional tort is committed by the violation of the fundamental rights of a person at the hands of the state or any of its regulatory bodies. This implies that the government of India can be held vicariously liable for the acts of its employees. 

Article 300 of the Indian Constitution

The Indian Constitution does not immunise the state from any liability by its citizens and gives them the power to sue the Government of India for respective affairs. The union and state are considered juristic persons who can make contracts and carry on business, which further gives them the right to defend their actions legally like any other person. 

The article gives sovereign immunity to the state, including matters of defence of a country or protection of the military, and any other matters regarding the welfare of the state. Other administrative and legislative functions also fall into this domain, also known as the Act of State Defence.     

Judicial precedents 

In the case of P&O Navigation Company v. Secretary State of India (1861), the question of sovereign immunity came up, with it being held that the government cannot be liable for the injuries caused to people while carrying out sovereign functions. The only time it will be held liable is when the acts done by the public servants are non-sovereign in nature.      

In the case of Rudul Shah v. State of Bihar (1983), the petitioner filed a case against the state for his illegal imprisonment and asked for compensation for the same. The question of law arises as to whether the court can provide damages under Article 32 of the Constitution. Furthermore, the court stated that such monetary damages will be granted and that civil liability can arise when the constitutional rights and liberty of a person are violated. 

In the case of Sebastian Hongray v. Union of India  (1984), two people whisked away by the Sikh regime were missing, and a writ petition for habeas corpus was filed by the students of JNU under Article 22 of the Constitution. The Supreme Court initiated an inquiry into the matter and also discovered that the defendants misled the inquiry and meanwhile committed wilful disobedience, which led the Court to award exemplary damages of one lakh rupees to each of the individual’s wives. 

Bhim Singh v. State of Jammu and Kashmir (1985) is another case where the Supreme Court held that it would only consider appropriate cases for constitutional tort, but it did not lay down the said appropriate criteria. A MLA was illegally detained and could not attend the house proceedings, after which his wife filed a writ for habeas corpus under Article 32 of the Constitution. The Court held that it shall pass exemplary damages where there is an appropriate case for the remedy of the violation of the constitutional and legal rights of a person. 

Remedy under Articles 32 and 226 of the Constitution 

The claim of damages or compensation in every case that asks for remedies for the violation of fundamental, legal, or constitutional rights of a person was obvious but needed to be discussed in detail, which was further done in the case of Nilabati Behera v. State of Orissa (1993), wherein the Apex Court clarified that a remedy sought under Articles 32 and 226 may be denied if the claim is questionable. Both of these articles precisely lay out the remedies sought, and in the case of the violation of a fundamental right, the remedy for tort can be sought, which is also an inherent remedy. 

Can a minister’s statement constitute a constitutional tort? 

In the case of Kaushal Kishore v. The State of UP (2023), a constitutional bench held that a mere statement made by a minister that may be inconsistent with the rights of a person may not be actionable as a constitutional tort. 

The same can be actionable if that statement instituted an action taken by government officials or officers against that particular person that harmed that person in a way that would invoke a constitutional tort remedy in court.  

The matter regarding constitutional tort has been left open-ended and vague by the court on many occasions, and judgements have been passed in favour of people who have been harmed by the words of any minister. The Government (Liability in Torts) Bill was introduced after the judgement of Kasturi Lal v. State of Uttar Pradesh (1964), which laid down the legislation for the tortious liability of the state, but until now, no proper legislation has been passed.        

Breach of trust

The Indian Trust Act, 1882 

The definitions of private trusts, trustees, duties, and liabilities are all discussed under The Indian Trust Act, 1882. The person who created a trust is called a truster, and the one who benefits from the trust is called the beneficiary, whereas the trustee is the one who holds the property. Section 6 of the act lays down the provisions for the elements of a valid trust as follows: 

  • There must be an intention by the author to create trust.
  • There shall be a specific purpose fulfilled by the trust so formed. 
  • Any monetary purpose thus applied shall be served by the entrustment of the property. 
  • Giving control or transferring the property to the trustor is the sole intention of the author. 
  • The trustee shall expect a salary for the benefit of his trust. 

The liabilities of a trustee are defined under Sections 23 to 30 of the Act, wherein the concept of breach of trust is discussed in detail. 

Where a trustee commits a breach of trust, he is liable to compensate the beneficiary for all the losses sustained as an effect of the breach of trust on the said property. If the beneficiary commits fraud to frame the trustee, the former shall be liable as per the provisions stated in the act. A trustee won’t be liable to pay if he actually received interest, is  fairly presumed to, or ought to receive such interest. 

Non-liability on co-trustees default

A trustee is not liable for the acts of his co-trustee in the breach if admitted, though there are certain conditions under which the trustee is liable for the breach by his co-trustee which are as follows:

  • If the trustee delivers the trust property to his co-trustee without seeing if the co-trustee would use it for proper application; 
  • If the trustee allows the trust property to the co-trustee without enquiring what dealings the co-trustee would undergo with the property and lets him keep the property longer than the case requires it to be kept; and
  • If the trustee becomes aware of the breach committed by the co-trustee and actively tries to conceal it or does not take adequate steps to prevent it, he would be liable for breach of trust.  

The Indian Penal Code, 1860

Chapter XVII of the IPC deals with offences against property and compensation for damages to property. Criminal breach of trust is dealt with in Sections 405 to 409, which are as follows: 

Section 405 of the IPC states that if any person entrusted with property dishonestly converts, misappropriates, uses, or disposes of that property while violating the law or any legal contract associated with that property, expressly or impliedly, or makes any other person do so, they commit a criminal breach of trust.  

Ingredients

  • The accused must be entrusted with the property of the plaintiff. 
  • The accused must have violated the trust of the plaintiff by misappropriating the property. 
Entrustment

It means that the property was given to the trustee to take care of for a specified period of time by the trustor for its protection or any other person prescribed to the trustee, which may be movable or immovable. In the case of R.K. Dalmia v. Delhi Administration (1962), the Supreme Court clarified that the term “property” used is wide enough to be compared with movable property and shall be confined to it as well. In the case of Ramaswamy Nadar v. State of Madras (1957) the Apex Court held that entrustment is the most important element without which an offence of breach of trust cannot be committed. 

Misappropriation 

After the entrustment of property, any kind of misappropriation on the part of the trustee will be considered a breach of trust. It can be him using the property for his own unauthorised purposes or wrongful gains with dishonest intention over which he has no authority. In the case of Surendra Prasad Verma v. The State of Bihar (1972), the Supreme Court held that, irrespective of whether the accused had possession of the property at the time of misappropriation or not, he would be held liable because he was the only one who had possession of the property. 

Violation of Law 

The trustor gives directions for the maintenance of the property entrusted to the trustee, which may be in an oral or written contract. Any misappropriation during the period of trust so formed is a violation of the law and is thus considered a breach of trust. In the case of Krishan Kumar v. The Union of India (1959), the Supreme Court held that it is not essential to prove how the accused misappropriated the property in every case, but rather that the intention of the accused is what holds value. 

Section 406 of the IPC states the punishment for criminal breach of trust, which says that the accused shall be punished with imprisonment for a term up to three years or with a fine, or both. This offence is tried in front of a magistrate and is also a non-bailable and cognizable offence that is also compoundable on behalf of the plaintiff. 

Section 407 of the IPC states the types of criminal breaches of trust wherein whoever is entrusted with the property as a carrier, wharfinger, or warehouse-keeper commits a breach of trust and shall be punished with up to seven years of imprisonment, a fine, or both. 

Section 408 of the IPC states that any clerk, servant, or employee who is entrusted with property in any manner or in any domain and commits breach of trust will be punished with a term up to seven years, a fine, or both. 

Section 409 of the IPC states the punishment for the breach of trust committed by a public servant, banker, merchant, or agent with respect to the property entrusted, which may be imprisonment for life or up to ten years, a fine, or both. 

Compensation for tort and breach of trust

Tort

An injured person under tort law is compensated by several remedies, the most common of which is damages, which is the amount of money the tortfeasor pays to the plaintiff.  

Damages in Tort Law 

Nominal damages 

This type of damage refers to the damages awarded to the plaintiff where he has not suffered any substantial injury or loss for which he must be compensated. It can be seen in cases of injuria sine damno, where the legal rights of the person have been violated but the actual loss is not there. In the case of Ashby v. White (1703), the plaintiff went to the tortfeasor’s hotel, but since he belonged to the West Indies, he was rejected. The House of Commons held that even though the plaintiff did not suffer any actual harm, his legal rights were violated, and the defendant had to pay nominal damages of five guineas. 

Contemptuous damages 

This type of damage is similar to nominal damage except that actual harm occurred to the plaintiff, but the amount is so meagre that the court considers that the suit wasted its time. Therefore, only a meagre amount of damages is awarded to the plaintiff in such cases. Let’s say White’s dog enters Beige’s house, and the latter steps on the dog’s faeces; the latter approaches the Court because he is disgusted by that; in such a case, the Court shall presume that its time has been wasted and shall grant minimal damages.   

Compensatory damages 

This type of damages is awarded for actual injuries incurred by the plaintiff from the tortfeasor, which are not to punish the defendant but to return the plaintiff to his original position before the breach was committed. These damages help cover monetary losses that can be easily recovered by the defendant, which the plaintiff has already lost and nothing more. 

Aggravated damages 

This type of damage is awarded when the exceptional harm caused to the plaintiff cannot be recovered by compensatory damages such as loss of self-esteem, pain, agony, or mental torture, which cannot be sorted out monetarily. 

Punitive damages 

In cases where the tort committed is oppressive or vindictive, this type of damage comes into play when the court wants to punish the tortfeasors so that there is an example set for people to deter from crimes like these. The goals of punishment and deterrence are served when compensatory and aggravated damages cannot cover the tort committed. 

Damages in shortening of lifespan 

If, due to the tort committed by the tortfeasor, the lifespan of the plaintiff is reduced, the court may award damages to the latter without considering his social status. The test to determine compensation is the prospect of a happy life, not the amount of time reduced from his lifespan, which is an objective one for which very moderate damages are awarded. 

Damages in case of death 

Interest theory

The loss suffered by the dependent by the death of the person he depended on is covered in this theory, where a lump sum payment is made, which would be determined as to how much interest it would bring if deposited in a fixed deposit.        

Multiplier theory 

If there is a loss that might occur in the future due to the tortfeasor, which is determined by multiplying the likely loss due to occur every year by a multiplier indicating for how many years the loss would occur, the court awards a certain amount of damages. 

Breach of trust   

The plaintiff can opt for legal remedies in case a breach of trust occurs, such as injunctions, restitution, liquidated damages, a fine, incarceration, or criminal proceedings. Section 23 of the Indian Trust Act, 1882 states the liability for breach of trust, which has been mentioned above in the article (supra). A beneficiary can claim punitive damages for the breach of trust in a fiduciary relationship in addition to the actual damages suffered.  

Liquidated damages 

Imprisonment 

If the case of breach of trust is criminal and not civil, the court may award imprisonment that can extend up to ten years with a fine, as discussed above (supra).  

In the case of K.M. Nanavati v. State (1961), the Apex Court sentenced the accused, who was a naval officer, for breaching the trust of his wife by abandoning her after having an extramarital affair to three years in jail. In the case of Niranjan Singh Karam Singh Punjabi v. Jitendra Bhimraj Bijjaya (1990), the Apex Court held the accused guilty of criminal breach of trust for misappropriating the goods entrusted to him and sentenced him to two years in prison. 

Injunction 

An Injunction is a civil remedy sought by the plaintiff in a suit for the admitted breach of trust, which is an order by the court forbidding the accused from doing a certain act. Injunctions will be offered only when it is proved beyond doubt that such harm occurred or is likely to occur due to the breach committed by the accused against the plaintiff. The court may grant a temporary injunction to the plaintiff and may also deny the final injunction if it doesn’t deem such action necessary. In the case of S. Jatinder Singh v. Ranjit Kaur (2001), the plaintiff filed a suit for permanent injunction in Apex Court against the trustee who sold the property without the plaintiff’s permission. The court ruled in favour of the plaintiff by granting a permanent injunction to restrict the accused from interfering with the possession of the property. 

Summary of differences between tort and breach of trust 

BasisTortBreach Of Trust
Nature It is a civil wrong for which a civil suit can be filed in court. It is both a civil and criminal wrong for which one can approach the civil or criminal court, depending on the circumstances. 
LegislationTort law is not part of the legislation. The law for breach of trust has been codified. 
MotivationMotivation is unimportant. Motivation is important. 
FoundationThe common law is the foundation for tort law. The law of equity is the foundation of a breach of trust. 
Relationship of the plaintiff and defendant The plaintiff and defendant might not have been acquainted before the wrong was done. The plaintiff and defendant must have a sense of trust between each other before the wrong is done. 
Damages The plaintiff can claim unliquidated damages as remedies for tortious acts. The plaintiff can opt for legal remedies in case a breach of trust occurs, such as injunctions, restitution, liquidated damages, a fine, incarceration, or criminal proceedings.

Conclusion

The law of tors refers to a system that makes it possible for the plaintiff to sue for damages in a civil suit where the accused’s actions cause harm to the plaintiff, which can be intentional, negligent, or strictly liable. The accused has to compensate for the losses that occurred or any emotional pain that was inflicted on the plaintiff, intentionally or unintentionally. There is no legislation for the law of torts, and the parties to the wrong may or may not know each other before it was committed. On the contrary, breach of trust is a crime that may be civil or criminal in nature, with the prerequisite that the parties have some sense of trust in each other, particularly on the part of the trustor entrusting the trustee with his/her property. There is a fiduciary duty on the part of the trustee to fulfil, and if some breach occurs on his/her behalf, he/she will be liable for breach of trust. The nature of damages also differs in both terms, wherein tortious liabilities award unliquidated damages, whereas breach of trust remedies award liquidated damages. 

Frequently Asked Questions (FAQs)

What constitutes a violation of trust? 

A violation of trust occurs when the accused violates/breaches the terms of a trust agreement, which is also a violation of the law. 

What are the different types of torts? 

The different types of torts include assault, battery, property damage and conversion, causing emotional distress or pain intentionally or unintentionally. 

Can a wrong be both a tort and breach of trust? 

Yes, it can be both, depending on the harm caused and the party injured, where tort law and trust law can intersect.  

Is tort a breach of duty? 

Tortious acts are committed if the accused breaches his duty of reasonable care towards the plaintiff. The breach of any fiduciary duty is also considered a tort, for a tortious act cannot happen without the responsibility underlying the accused’s actions. 

Who can you not sue under the tort law of the state? 

A foreign enemy residing in enemy territory of a state cannot sue for tort, for he/she does not have the right to do so. If a public official in his/her official capacity commits a tort, he/she cannot be sued, but they can be sued for acts outside their official capacity. 

What are the legal provisions for breach of trust in IPC?

The provisions for breach of trust are enumerated in Sections 405 to 409 of the IPC, 1860. 

References 


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Impact of High Performance Work System (HPWS) and HRIS on employee performance

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This article is written by Aditi Vaid pursuing Diploma in Labour, Employment and Industrial Laws for HR Managers. This article is edited by Shreya Pandey. 

This article has been published by Sneha Mahawar.​​

Introduction 

In today’s fast paced and competitive business environment, every organisation is seeking a way to enhance employee performance and productivity. To address this quest, companies are adopting different ways of implementing strong performance strategies to monitor employee progress and productivity. But have you ever thought about why there is so much stress on performance? Why has it become a buzzword in the business industry?

Employee monetary benefits, career growth, and motivation all depend upon their work performance; in fact, organisation efficiency is also linked to employee performance. In other words, in most organisations, work is termed as performance. So what is the best approach to increasing employee as well as organisation performance?

In recent years, two systems that have gained the attention of various HR leaders and are considered effective in the organisation are HPWS (High Performance Work Systems) and  HRIS (Human Resources Information Systems). This article provides you with an understanding and impact of HPWS and HRIS. 

What is High Performance Work System (HPWS)

The High Performance Work System (HPWS) is a combination of all the HR activities implemented with the aim of enhancing organisation culture and employee experience. High competence and high involvement are the essence of executing HPWS, as it involves high performance work practices. Some of the characteristics of HPWS are –

  1. The purpose of using HPWS is to adopt people orientated human practices instead of process oriented.
  2. The culture of HPWS emphasises employee involvement and reflects a work environment of trust, cooperation rather than controlled and closed culture.
  3. Employees are encouraged to be highly competent and constantly engaged in productive work activities.
  4. Managers play a key role in implementing a high performance work system in the organisation. It is the manager’s duty to act as a coach for their employees and guide them periodically. Manager must set the clear expectations from their employees and inform them how their goals are aligned to organisational goals

Examples of High Performance Work Systems (HPWS) 

  1. Organisation culture- HPWS promotes a healthy work environment and open work culture. Employee empowerment is the essence of effective organisation culture under HPWS. The management encourages employees to put their ideas and innovations to boost business performance. They are involved in the business decision making process. Employees feel a sense of belongings, trust, and commitment which are critical for success in the modern organisation.
  1. Smart Hiring – Before initiating the recruitment process, ensure that all your actions must be aligned to your recruitment strategy then only it will be called Smart hiring. In today’s time there is high demand for talented candidates, and many companies are using several ways to attract these candidates. So you cannot expect great results in recruitment without adopting a good recruitment strategy and including attractive perks and benefits. It means the Talent acquisition manager must have a hiring plan (workforce plan) before actual work starts. Identify the open job requirements, regularly updated job descriptions, treating candidates as customer and have strong business relationship, providing some interview tips or tricks to the candidate before their round with the hiring manager, regular update your company’s social media pages, employee referral schemes and many more strategies can be in order to enforce smart and selective recruitment as a part of HPWS.
  1. Automation in HR – Humans and technology go hand in hand.  I don’t think any area, or industry left not using technologies in the form of software’s, tools, CRM etc. Whether it is a HR industry or manufacturing or hospitality or health & care etc. all are shifting to use technology in their work.  AI, Chat Bots, HRM’s , ERP’s all are buzzwords in the business world. Then why should the HR industry remain the last one to adopt technology? Actually, it is not. To smooth the work flow from bottom to top or vice versa, for creating employee experience many companies are moving from manual process to automation. This ultimately leads to high performance work culture in the companies who  are adopting automation in HR

Examples

During my career journey, I had the opportunity to handle two HR automation projects, which I thoroughly enjoyed and learned a lot from. So the management of my company wanted us to focus on automation in the onboarding and L&D functions. With the right plan of action, process flow, and people support, I successfully delivered automation for onboarding and learning and development functions. As a result, employee engagement has increased, onboarding has been hassle free with a consistent Net Promoter Score between 70 and 75, participation rates have improved from 90 to 95% in L&D activities, and it is easier to track and monitor learners’ progress.

Apart from the above examples, other HR activities include in HPWS  are-

  1. Analytics and Reporting– Providing insights on HR metrics to do diagnostic analytics, prescriptive and predictive analytics to the management to take the wise decision which promote business growth
  2. Competitive Compensation– Develop attractive compensation benefits that rewards employees for their efforts and recognition to increase retention
  3. Performance Management– PMS must be planned, monitored, observed, and documented. Managers play a crucial role in driving effective PMS, as they act as a mentor or coach for the employees to improve employee job performance and productivity, and provide them feedback.
  4. Comprehensive Development Plans– HR and leaders identify the gap skills and plan training programs to boost employee productivity as well as organisation performance. 

Impact of HPWS on employee performance

  1. Open communication

HPWS promotes open communication flow  from bottom to top which means employees to management openly communicate ideas, share views, and are involved in important business decision making processes. 

  1. Boost Business productivity and employee performance 

The implementation of a high performance system in an organisation leads to high motivation in employees which results in improvement in performance and boosts productivity. Happy, well trained, motivated workforce work hard for their own performance and benefit of the company.

  1. Organisation performance

As organisational performance is directly linked to employees performance hence, as the employee performance increases, overall organisation performance also goes up. Hence, an employee’s motivation and contributions results in the company’s success.

  1. Increase employee engagement 

It has been researched that companies using HPWS in their HR practices, have higher employee engagement than others. An individual in the company  knows what he is doing and why he is doing and how his efforts are important to the organisation goals. Employees have a  clear understanding of their goals and objectives and how they are part of the organisation’s bigger goals. Continuous constructive feedback from their managers helps them  to enhance their potential and achieve goals.

  1.  Employee fast career growth

When we develop comprehensive training programs keeping business growth and employee’s skill gap in mind , it results in higher job satisfaction among the employees. Regular L&D activities including training, enablement programs, workshops help in upskilling employees, increase confidence to take additional responsibilities , and give monetary benefits. Highly competent employees are likely to attract more salary than unskilled employees.

  1. Compensation and Benefits 

Developing systematic and attractive compensation and benefits systems has a great impact on employee’s performance and organisational productivity. It helps in attracting top talent, increase employee retention, promote positive culture and enhance employee well –being.

With the change in time and trends in the HR industry, it is significant to adopt people’s approaches and execute strategic HR activities  in order to enforce a High performance work system in the organisation. This can be a powerful and effective way to succeed in a competitive business environment if used with the right approach.

HRIS and its impact on employee performance 

Introduction and HRIS concepts

In traditional HR practices, any information related to HR, any query, or  any request is addressed solely by a HR practitioner or HR expert in the company. However, with the increase in business complexity, the HR industry is getting more advanced and quick  too. Companies are widely choosing HR software to make the people process more efficient and effective for the employee experience.

Human Resource Information Systems (HRIS), here “systems,“ refers to HR information processes conducted electronically or digitally. HR software or an online HR solution that is intended to centralise all HR data, provide employee self- services and manage employee data.

What is HRIS

HRIS stands for Human Resource Information System. It is a software solution that collects, stores, maintains, manages, and processes employees’ detailed information and data. It encompasses the basic functions that are needed for end-to-end HRM. It is a “two-way street,” wherein the data of employees is delivered into the system, and, conversely, sent back to employees. This system eliminates paper-based manual procedures. It provides seamless, streamlined, efficient, and direct interaction between employees and the company. This system lowers the burden on HR professionals so that they can focus on strategic and high-value work processes for the company’s growth and better performance.

Some of the prominent HRIS systems are Workday, Oracle’s PeopleSoft, SAP’s SuccessFactors, Ultimate Software, Ceridian, and ADP, etc    

The HRIS Analyst supports HRIS by researching and resolving problems. It acts as a liaison between business parts such as finance and payroll.

SAP is an Enterprise Resource System that keeps a track of a company’s resources such as financial assets, etc. SuccessFactors is a module of SAP’s HRIS. It is any knowledge, skill, trait, personality, or other personal characteristics that are required of the applicants for the job or role. It also differentiates solid from superior performance. Success factors are of two types: behavioral and technical. Behavioural are the personal characteristics that specify how to perform the job or role. The technical factor includes the technical knowledge or skill needed to perform the job or role effectively.

Stages for HRIS implementation

Following are the stages of HRIS implementation:

  1. Search- To identify the needs of the stakeholders and select appropriate HRIS providers.
  2. Plan and align- In this stage an implementation team and a steering committee. Steering committee comprises senior delegates from the chosen HRIS provider, HR director of the company or business, internal project manager, and a senior user from the business or company.
  3. Define and design- In this stage, user groups, procedure and work flow is defined. 
  4. Configure and test- In this stage there is a need to create a core test team to check and verify the HRIS and provide feedback for potential improvements.
  5. Train and communicate- Technical staff needs to be trained. A communication plan, Frequently Asked Questions (FAQs), and support documents need to be prepared.
  6. Deploy and sustain- After following the above mentioned procedures, HRIS can finally be launched. There is always a scope of improvement, therefore, constant feedback and updating training material is important.   

Impact of a High Performance Work System on employee performance

  1. Increase Process Efficiency

HRIS plays the most important role in streamlining the HR process. With the use of HRMS tools, processes become more organised and smooth to manage. Multiple HR activities can easily be managed with the help of these tools. This leads to an increase in process efficiency which can’t be ignored as it is one of the approaches to develop employee experience.

  1. Increase Employee empowerment 

HRIS brings automation in HR practices that make the entire function faster, smoother and error free. People expect timely and accurate responses from HR on their concerns. The HR software helps in closing employee concerns and queries faster than the manual process. It takes care of HR administrative work and allows HR focusing on strategic HR decisions. Also, a portal like employee self service enables employees to refer, update, edit or access their documents without any dependency on the HR team. By giving employees easy access to their information, HRIS empowers them to control their career decisions leading to increase in job satisfaction and motivation.

  1. Increase Employee Productivity/Engagement 

Because of the multiple features and work capabilities, HRIS helps in increasing employee engagement. Employees and other stakeholders can track the level of work engagement and act accordingly. Learning Management Software or Performance Management modules help employees to keep a track of their performance, provide measures to fill the skill gaps, ultimately lead to increase in career growth.

Conclusion 

This article concludes and makes it very clear that HPWS and HRIS systems have a powerful impact on overall organisation performance. First, HR experts must develop the HR policies and procedures aligned to HPWS systems and then by introducing HRIS in the organisation, unlock the capabilities and potential of employees to contribute to the company success.

Reference


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Extension of GST compensation

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This article has been written by Tanishka Gupta pursuing Diploma in M&A, Institutional Finance and Investment Laws and has been edited by Shashwat Kaushik.

This article has been published by Sneha Mahawar.​​

Introduction 

Towards the end of June 2022, the government extended the deadline for the levy of the GST compensation cess until March 31, 2026, i.e., by almost four years. Initially, the levy of the compensation cess was supposed to be terminated on June 30, but it will now continue to be collected starting July 1, 2022. The decision has been taken by the GST Council, established under Article 279A(1) of the Constitution of India and presided over by Union Finance Minister Nirmala Sitharaman and finance ministers of states. The time frame has been extended so that the Centre could pay back the loans taken in the previous two fiscal years (2020-21 and 2021-22) which were used to make up for the states’ reduced revenue collection. This has been done in accordance with the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, notified by the Finance Ministry. The Goods and Services Tax (Compensation to States) Act, 2017 states that the cess shall be levied and collected until 31st March, 2026.

Background 

Implementation of GST 

On July 31, 2017, The Central Goods and Service Tax Act went into effect. At every point of sale, the supply of goods is subject to The Goods and Services Tax (GST), an indirect tax. The states agreed to let the multiplicity of taxes imposed be incorporated under the GST and ceded almost all of their authority to the GST Council to levy local-level indirect taxes, which thereby made possible the establishment of the GST.

Introduction of GST compensation fund

The Constitution (One Hundred and First Amendment) Act, 2016, includes a clause that makes up for the states’ revenue losses as a result of the implementation of the GST. Section 18 of the 2016 Amendment Act states that the Parliament must compensate the states for revenue losses resulting from the implementation of the GST for a period of five years. The GST (Compensation to States) Act, 2017, which was enacted by the Parliament as a result, stipulates that the financial year 2015–16 shall be taken as the base year for the purposes of calculating compensation. As a result, states were guaranteed 14 percent growth in revenues each year. It is to be noted that such a computation mechanism is mentioned under Section 7 of the GST (Compensation to States) Act, 2017.

Levy of compensation cess

On the recommendations of the GST Council, a cess is being levied on goods over and above the GST on a particular item in order to raise funds for compensation. The cess is called  the compensation cess. A compensation cess is levied on luxury, demerit, and sin goods over and above the 28 percent tax. The cess is collected by the Centre from consumers and then released to states. The GST compensation fund, a non-lapsable fund in the public account, receives the compensation cess proceeds. According to figures provided by the Central accounting authorities, all compensation payments due to the states are provisionally released from the aforementioned fund every two months. After obtaining the year’s audited accounts from the Comptroller and Auditor General of India, final adjustments are made.

States’ demand for extending the compensation period 

Even though the levy of the compensation cess period has been extended until March 2026, whether the states will be compensated beyond five years has not yet been decided by the GST Council. Most non-BJP-ruled states, including, Tamild Nadu, Punjab, Delhi, West Bengal, Chhattisgarh, Kerala, and Rajasthan, have been advocating for a five-year extension of the GST compensation period since 2019. More states began requesting a five-year extension of the payout as June 30, 2022, drew closer. In fact, during the GST council’s meeting on June 29, 2022, around 12 states requested an extension beyond the month of June and hoped for a decision in their favour. Only three to four states mandate that they have to be self-sufficient and independent of any compensation. Some state ministers even wrote to the finance minister, Nirmala Sitharaman, requesting a revision in the GST revenue distribution formula in case the deadline for state compensation is not extended. However,  the compensation term extension remains the primary demand. Amit Mitra, the principal chief advisor to West Bengal’s chief minister and finance department, even said that the Supreme Court’s ruling in the Mohit Mineral case would serve as the foundation for all future decisions made by the Council. He also reminded Nirmala Sitharaman about the SC’s observations in the matter in a separate letter.

Why are the states demanding an extension

The states have been demanding the extension on two counts and those are, due to the introduction of the GST and due to the COVID-19 pandemic, which affected revenue collection. They also expect a larger deficit due to  the slow rate of income growth and rising expenses. Only five (Arunachal Pradesh, Manipur, Mizoram, Nagaland, and Sikkim) out of the 31 states and UTs had revenue growth greater than the safeguarded revenue rate for states under GST in the fiscal year 2021–2022, according to data on revenue growth gathered for the council meeting. The states with the largest revenue gaps between protected revenue and post-settlement gross state GST revenue in 2021–22 were Puducherry, Punjab, Uttarakhand, and Himachal Pradesh. With COVID-19 widening the gap between protected revenue and actual revenue receipts, including a decrease in cess collection, the states’ protective revenue collection has grown at a slower rate than the guaranteed 14 percent compounded growth.  

The states also argue that they have not fully recovered from the losses caused by COVID-19 and now the Ukraine-Russia war poses a threat to the economy. Keeping this in mind, the extension was given, which will help the states recover their economies. States form a nation, and the development of the states is the development of the nation.

How is this compensation funded

A cess is being levied on some goods to provide compensation to the states; this cess, after its collection, is credited to the Compensation Fund. This Compensation Fund provides compensation to the states. GST compensation to states for the years 2017-2018 and 2018-2019  was released timely out of the GST Compensation Fund. But since 2020, the collection for cess has not increased as promised, which was 14 percent, but rather grew at a slower rate. COVID-19 also increased the value between the promised revenue and the actual revenue. So to meet the shortfalls of the states in cess collection, the centre borrowed and released Rs. 1.1 lakh crore for 2020-2021 and 1.59 lakh crore for 2020-2022 as loans, and all the states have also agreed to this decision.

Step by step calculation of the cess amount

Step one: For the states that are in consideration, the revenue for 2016-2017 will be regarded as the base revenue.

Step two: For the 5 years period over which the cess is applicable, the state’s growth rate is considered to be 14% per annum. So based on this, the total amount of revenue for a particular state’s fiscal year that a state could have collected if GST wasn’t there is calculated.

Step three: The amount is then calculated and released every two months. This mechanism is considered to be in effect until July 1, 2022.

GST compensation cess rates of goods

GoodsGST Compensation Cess
Pan masala60%
Chewing tobacco (with lime tube) featuring a brand name65%
Chewing tobacco (without lime tube) with brand name71%
Branded tobacco refuse61%
Non filter cigarettes not exceeding 65mm 5% + Rs. 1591 per thousand
Non filter cigarettes exceeding 65mm but not 70 mm5% + Rs 2876 per thousand
Filter cigarettes not exceeding 65mm5% + Rs. 1591 per thousand
Filter cigarettes exceeding 65mm but not 70mm5% + Rs. 2126 per thousand
Other types of cigarettes 5% + Rs. 4170 per thousand
Cigar and cheroots21% or Rs. 4170 per thousand, whichever is higher
Cigarillos21% or Rs 4170 per thousand, whichever is higher
Cigarettes of tobacco substitutesRs. 4006 per thousand
Cigarillos of tobacco substitutes 12.5% or Rs.  4006 per thousand, whichever is higher
Hookah or gudaku tobacco bearing a brand name72%
Tobacco used for smoking hookah or chillum 17%
Other smoking tobacco not bearing a brand name11%
Smoking mixtures for pipes and cigarettes290%
Homogenised or reconstituted tobacco bearing a brand name72%
Preparations containing chewing tobacco72%
Snuff72%
Preparations containing snuff72%
Tobacco extracts and essence bearing a brand name72%
Tobacco extracts and essence not bearing a brand name65%
All good, other than pan masala containing tobacco ‘gutkha,’ bearing a brand name96%
All good, other than pan masala containing tobacco ‘gutkha,’ not bearing a brand name89%
Motor vehicles (10<person<13)15%
Small cars (length< 4m; Petrol<1200cc) 1%
Small cars (length<4m; Diesel<1500cc)3%
Mid segment cars (engine<1500cc)15%
Large cars (engine>1500cc)15%
Sports utility vehicles (length>4m; engine>1500cc; ground clearance>170mm)15%
Hybrid motor vehicles15%
Motorcycles3%
Aircrafts for personal use3%
Yacht and other vessels for pleasure or sports3%

Conclusion

The issue has witnessed many opinions and views by states, wherein it has been said that the consequences for states should the compensation not be extended would be very negative and devastating in some cases. If the protective revenue provision is not maintained, it has also been suggested that the current 50:50 split between Central GST (CGST) and state GST (SGST) should be amended to 70–80% for states and 20–30% for CGST. On the other hand, the Centre has argued that because of the pandemic, the cess has been extended by an additional four years and that it is currently impractical to offer additional compensation. It is still to be seen whether the compensation period for states will be extended, and a final decision regarding it may be taken at the next GST Council, which will be held in the first week of August.

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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Muslim law of inheritance

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This article has been written by Vaishali.N from the School of Excellence in Law, Chennai. This article provides an overview of the Muslim law of inheritance and discusses the concept of inheritance under Muslim personal laws, the class of heirs, and the procedure followed in obtaining inheritance under Muslim laws.

it has been published by Rachit Garg.

Introduction  

Inheritance refers to the transfer of property from a deceased person to a living person who is legally related to him or her. The process of devolution of inheritance for Muslims is governed by various Muslim personal laws, which are based on pre-Islamic customary succession laws and principal scriptural sources like the Holy Quran, the Sunnah, the Ijma, and the Qiyas.

As one might know, there are two kinds of succession – testamentary (where a will was created before the death of the deceased person) and non-testamentary (where the person dies intestate, i.e., without creating a will). Under Muslim laws, non-testamentary succession is governed by the Muslim Personal Law (Shariat) Application Act, 1973, while testamentary succession is governed by separate Shariat laws for the Shia and Sunni sect of Muslims. The Muslim laws of inheritance also have a unique system of classifying the heirs into ‘sharers’ and ‘residuary’, derived from the Quran and Hadith.

Concept of inheritance under Muslim law 

The concept of inheritance is rooted in the Islamic or Quranic principles enumerated by the Prophet. Islamic laws do not recognise joint tenancy, and the heirs are tenants-in-common, i.e., they can only seek to inherit the shares of the property that is held in common. In the case of Abdul Raheem v. Land Acquisition Officer (1989), the court remarked that Muslims do not follow or recognise the joint family system in matters of inheritance, and after the death of a Muslim person, the rights, title, and interest he held in his estate cease to exist and stand vested in others.  

However, inheritance is not guaranteed to every child that is born into the family, i.e inheritance is not at all a birth-right under Muslim law.  An heir- apparent must survive the deceased to claim an inheritance. A child in the womb of its mother is also competent to inherit, provided it is born alive. If the child is stillborn, it will be treated as though it never existed, and thus the interest in the share of property that was vested in the child is stripped off. 

Under Islamic laws, male and female heirs alike have the right to inherit property. Near female heirs or cognates are recognised in the class of heirs.  However, the females get only half of the quantum shares allotted to their male counterparts, since under the Islamic system, females will go on to receive more wealth through mehr and the maintenance provided by their husbands, while males only have inheritance, which contributes to their duty of maintaining their wife and children.

Nevertheless, in a marital setting, the husband and wife are equally entitled to inheritance from their spouse. A widow is also included in the scheme of inheritance. A widow who has children or grandchildren is given 1/8 of the property of her deceased husband, and if she is childless, she gets 1/4 of his property. However, if a woman marries a Muslim man during his illness, which subsequently became the reason for his death, and the marriage has not been consummated for that reason, then as a widow, she would  not have the right to inheritance. But if her husband divorced her before dying of illness, then her right to inheritance continues until she remarries. 

The Islamic laws also give priority to the  ascendants of the deceased over the descendants in the scheme of inheritance by making them the immediate heirs or the first-in-line to inheritance.  

The Islamic scheme of inheritance comprises two kinds of heirs – the Sharers, or Quranic heirs, and the customary heirs, called the residuaries. 

The Quran amended the customary tribal laws of succession to align them with Islamic philosophy. The major amendment to customary law is the introduction of the class of ‘sharers’ or ‘Quranic heirs’ which led to the inclusion of heirs who were previously excluded under the customary succession laws. Therefore, if ‘M’ a Muslim man, dies leaving behind his widow ‘W’ and his sons S1 and S2, then W, being the sharer, will take 1/8 (one-eighth)  of the property and the remaining 7/8 (seven-eighths) will be allocated to the residuaries – S1 and S2.

However, there is divergence in the application of Quranic principles between the divided sects of Sunni and Shia Muslims, creating slightly different rules of inheritance – the Sunni law of inheritance and the Shia law of inheritance. 

Sunni Law of inheritance 

The Sunni in India primarily belong to the Hanafi school and are governed by Hanafi school of law. The Hanafi laws attempt to create a more harmonious relationship between the customary law and the Quranic law by which the inclusion of the Quranic class of heirs does not deprive the customary heirs of their share but rather just a portion of the estate is allotted to the Quranic heirs. It is important to note that, even though the new class of heirs created included females, it still retained the preference of agnates over cognate heirs. That is, the Quranic class recognizes the female agnates’ right to inherit a share much like their male counterparts. 

The position of the Quranic heirs and the customary heirs with respect to inheritance differs in two cases:

  • If the Quranic heir is more in proximity to the deceased than to a customary heir, the Quranic heir gets a portion of estate first and then the residuary is given to the customary heir.
  • If both the Quranic and customary heirs are equally close, the customary heir gets double of the amount of share given to the Quranic heir.

Even though the agnates are given preference in inheritance over cognates, they’re not completely excluded from the scope of succession, as cognates such as uterine brothers and uterine sisters are included. 

Under the Hanafi law, the heirs of the deceased are either sharers or residuaries, and in the absence of both of these classes of heirs, the estate is passed down to other relatives of the deceased, who fall under the category of “distant kindred”. In case of absence or some inability that restricts the distant kindred from inheriting, the estate is passed on to the state by escheat, meaning that if a Muslim dies heirless, then the property is devolved on to the state.

Further, the distribution of estates under the Sunni law is per capita, according to which the estate of the deceased is distributed equally among the heirs. Thus, the number of shares one gets is proportional to the number of heirs. 

Shia Law of inheritance 

The Shia law of inheritance is guided by the general principles of the Ithna-Ashari law. The Quranic rules here are interpreted very widely, unlike the strict interpretation followed by the Sunni law. This causes a very significant divergence in the principles and rules of succession under Shia laws, leaving them with an almost independent scheme of succession. 

Shia law follows per strip distribution, i.e., the distribution of property among the heirs is based on the strip they belong to. 

The Shia law does not prioritise the rights of agnates over cognates or of males over females with respect to inheritance. But there is a certain exception to the rights of husband and wife – the estate of the deceased devolves to the blood relations equally, and the females are allowed only half of the share of the males in each class. Therefore, there is no hierarchy with respect to who inherits the estate first between the descendants, ascendents, and collaterals, as they all inherit side by side. 

Thus, the shias right to inheritance is based upon two categories of relations:

  1. Nasab – blood relationships or consanguinity;
  2. Sabab – special cause or heirs by affinity, through marriage. 

In testamentary succession, if the property in question is an immovable property located in Chennai, West Bengal, or Bombay, then it becomes an exception, where the Muslims will be bound by the Indian Succession Act, 1925, rather than Shariat laws.

The rule of spes successionis in Muslim Law 

The doctrine of spes successionis is an important rule relating to the transfer of property. Spes successionis is a Latin maxim that translates to ‘expectation of succession’. It means a person who is the apparent heir of another person is expected to succeed to his estate after the death of that person. The rule states that just because a person is expected to inherit a property after the death of another person, it does not mean that it amounts to him having an interest in that property. Thus, mere ‘expectation’ or ‘chance’ to succeed to a property does not provide him with any legal right over the property. The transferability of a Spes Successionis is prohibited in Indian law under the provision of Section 6(a) of the Transfer of Property Act, 1882.

However, the rule of spes successionis is not recognized in the Muslim law of inheritance.

Thus, the transfer of spes successionis is considered the renunciation of the chance of succession. The chance of a Muslim heir – apparent succeeding an estate cannot be the subject of a valid transfer or release.

In the case of Shehammal v. Hasan Khani Rawther and Ors.(2011), it was ruled that the doctrine of spes successionis need not be considered in a family arrangement. In this case, the respondent was one of the heirs-apparent to inherit a share of the plaintiff’s property. But even before inheriting his share, the respondent executed a deed with his father to relinquish his rights over the property in exchange for some consideration. The Apex Court was to decide whether a Mohammedan can relinquish his right to inherit by way of a family arrangement even before acquiring the property. It was ruled that the doctrine of spes successionis can be avoided in family arrangements or in cases of relinquishment of inheritance rights over consideration.

Class of heirs under Muslim law 

Both the Shia and Sunni schemes of inheritance consist of sharers and residuary classes of heirs. However, there are differences in the arrangement, hierarchy, and distribution of shares between the two. 

 Class of heirs under Hanafi law 

  The heirs of a deceased Muslim fall under the following classes – 

  1. Sharers 
  2. Residuaries 
  3. Distant kindred relations

Class – I heirs 

The sharers fall under class I heirs, and there are 12 relatives of the deceased on the  list of sharers. 

  1.  Wife (Widow) – takes 1/8 (one-eighth) part of share if she has children and ¼ in case of her being childless. She can never be excluded.
  2. Husband (widower) – gets 1/8 (one-eighth) shares, but in case he is childless, the share portion increases to 1/2 (one-half). He can never be excluded.
  3. Daughter –  a single daughter gets 1/2 (one-half) shares. If there are two or more then they take 2/3 (two-thirds) of shares together. In the presence of a son, she becomes a residuary. She can never be excluded.
  4. Son’s daughter – gets 1/2 (one-half) shares and if two are more then, 2/3 (two-thirds) shares. Share is reduced to 1/4 (one-fourth) when there is only one daughter and to 1/8 (one-eight) in presence of one higher son’s daughter. In the equal presence of a son’s son, she becomes a residuary. Can be excluded under certain conditions.
  5. Full sister – a full sister gets 1/2 (one-half) shares and in case there are two or more in number they together take 2/3 (two-thirds) shares. In the presence of a full brother, she becomes a residuary. Can be excluded under certain conditions.
  6. Consanguine sister – gets 1/2 (one-half) shares and 2/3 (two-thirds) together if there are two or more. In presence of a full brother, share gets reduced to 1/6 (one-sixth) and in presence of a consanguine brother, she becomes a residuary. Can be excluded under certain conditions.
  7. Uterine sister – gets 1/6 (one-sixth) shares if single and 1/3 (one-third) together if two are more in number. Can be excluded under certain conditions.
  8. Uterine brother – gets 1/6 (one-sixth) shares if single and 1/3 (one-third) together if two are more in number. Can be excluded under certain conditions.
  9. Mother – gets 1/6 (one-sixth) shares and never excluded. Share increases to 1/3 (one-third)  if there is no child or no son’s child or if she has a sibling. If the husband or wife of the deceased exists, then she gets 1/3 (one-third) of shares after deducting the shares of the husband or wife.
  10.  Father – gets 1/6 (one-sixth) shares and is never excluded. When there is no child or son’s child then he becomes a residuary. 
  11. True grandmother – gets 1/6 (one-sixth) shares. Under Certain exceptions she can be excluded.
  12. True grandfather – gets 1/6 (one-sixth) shares. Under certain exceptions he is excluded. If there is no child or son’s child, he becomes a residuary.

Class – II heirs 

The Quranic residuaries and the general residuaries constitute the class – II heirs. Quranic residuaries are those members who were originally sharers who become residuaries due to certain conditions or presence of a higher degree heir. 

 There are 5 Q uranic residuaries – 

  1. Daughter – becomes a koranic residuary due to the existence of a son of the deceased.
  2. Son’s daughter – becomes a residuary due to the presence of a son’s son or a male agnatic heir in a lower degree
  3. Son’s son’s daughter – becomes a residuary due to the presence of a son’s son’s son or a male agnatic heir in lower degree.
  4. Full sister – becomes a residuary due to the presence of a full brother 
  5. Consanguine sister – becomes a residuary due to the presence of a consanguine brother

The residuaries can be classified into three categories – 

  • the ascendants – the parents, grandparents the other relation who precede or ascent directly to the deceased.  
  • the descendants – individuals succeeding in the direct biological line of the deceased, like children, grandchildren, and so on.
  •  the collaterals – individuals who are descendants in parallel lineage of the ancestors of the deceased but are not direct blood relatives. Eg., consanguine brothers, sisters, paternal aunts and uncles. Maternal aunt and uncles etc. 

The collaterals can be further divided into the descendants of father and the descendants of grandfather.

  • Descendants 
  1. Son 
  2. Son’s son howsoever low
  • Ascendants 
  1. Father 
  2. True grandfather 
  • Collaterals – descendants of the father 
  1. Full brother 
  2. Full sister 
  3. Consanguine brother
  4. Consanguine sister 
  5. Full brother’s son 
  6. Consanguine brother’s son 
  7. Full brother’s son’s son 
  8. Consanguine brother’s son’s son 
  • Collaterals – descendants of the true grandfather 
  1. Full paternal uncle 
  2. Consanguine paternal uncle
  3. Full paternal uncle’s son 
  4. Consanguine paternal uncle’s son 
  5. Full paternal uncle’s son 
  6. Consanguine paternal uncle’s son’s son 

Class – III heirs 

In the absence of both sharers and residuaries,  the estate of the deceased is devolved to the distant kindred. All those blood relations that did not make it to the list of sharers and residuaries are constituted in this class, which includes female agents and the male and female cognates. 

The distant kindred can be categorised under descendants, ascendants, and collaterals. The number of collaterals, ascendants, and descendants is limitless, and relations of all degrees are included. 

  • Descendants 
  1. Daughter’s children and their descendants however low 
  2. Son’s daughter’s children and all the succeeding descendants however low
  • Ascendants 
  1. False grandfather how so ever high 
  2. False grandmother how so ever high 
  • Collaterals  – descendants of parents 
  1. Full brother’s daughters and their descendants 
  2. Consanguine brother’s daughter and her descendants 
  3. Uterine brother’s children and their descendants 
  4. Full brother’s sons’ daughters and their descendants 
  5. daughters of consanguine brother’s sons and their descendants 
  6. Children of sisters (full, consanguine or uterine)
  • Collaterals – descendants of immediate grandparents ( false or true) 
  1. Full paternal uncle’s daughters and their descendant s
  2. Consanguine paternal uncle’s daughters and their descendants 
  3. Uterine paternal uncles and their children and their descendants 
  4. Daughters of pull paterna; uncle’s sons and their descendants 
  5. Daughter of consanguine paternal uncle ‘s sons and their descendants 
  6. Paternal aunt’s (full, consanguine or uterine) and her children and their descendants 
  7. Maternal uncles and aunts and their children and descendants 
  • Descendants of remote grandparents (true or false) how so ever high. 

In the absence of heirs in all three classes, the estate passes onto the state by way of escheat.

Class of heirs under Shia Law 

The Shia Muslim heirs fall under two classes –

  1. Heirs by marriage – the husband and wife 
  2. Heirs by consanguinity 

Under the Shia scheme of heirs, the husband and wife are never excluded, and thus they always inherit with all other classes of heirs. The class of distant kindred is not recognised under Shia law.

Class – I heirs 

Under Shia Law, all Sharers are not Class – I heirs.

  1. Husband 
  2. Wife 
  3. Father 
  4. Mother
  5. Daughter 
  6. Son 
  7. Grandchildren 
  8. Remote lineal descendants 

Class – II heirs 

Class – II constitutes heirs by consanguinity, with three sub – categories, say, a, b and c, with priority of heirs decreasing from a to b. 

  1. 1. Parents

2.   Children and succeeding descendants 

  1. 3. Grandparents (both true and false ) 

4. Brothers, sisters and their descendants 

  1. 5. Paternal uncles and aunts of the deceased, the parents and grandparents and  their descendants of all degrees

6. Maternal uncles and aunts of the deceased, their parents and grandparents and their descendants of all degrees

If a Muslim dies without leaving any heirs to inherit his or her property, it passes to the state by escheat. 

Doctrine of Radd and Aul 

The shares are distributed to the heirs in fractions. When situations arise where these fractions do not add up to unity, that is, where the fractions are more or less than unity, the doctrines of return (Radd) and increase (Aul) are applied. By applying these doctrines, shares among the heirs can be increased or decreased. 

It is important to note that both of these doctrines are recognized in the Sunni laws, however, the Shias do not recognize the doctrine of Aul.

Doctrine of Radd 

After the shares are distributed to the sharers and there is a residuary share left but there residuaries to take it, the residuary shares are re-distributed among the shares in proportion to their shares. The residue property is not transferred to the distant kindred in the absence of a residuary heir. The right of the sharers to get the residue shares in the absence of residues is called the Doctrine of Radd or return.

For example, a mother and a daughter, both being sharers, get 1/6 (one-sixth) and 1/2 (one-half) property respectively. Adding these shares together, we end with 2/3 (two-thirds) fraction which is less than unity (1). Thus, the remaining 1/3 (one-third) share is the residue. If there are no residuary heirs, this share, by the application of the doctrine of Radd, will be distributed among the shares again.

Doctrine of Aul 

If the total of the shares allotted to the sharers is more than unity (1), then the excess amount is deducted from the daughter or daughters or from the consanguineous or full sister or sister. 

For example, if a Muslim woman dies, leaving her husband, father and 2 daughters, then each will get a share of 1/4 (one-fourth), 1/6 (one-sixth) and 2/3 (two-thirds)  respectively and this adds up to 13/12 (thirteen-by-twelve) which is more than unity. By the application of the Doctrine of Aul, firstly the denominators are made common and are increased to the total sum of sharers. Hence 12/13 (twelve-by-thirteen) becomes 13/13. Then, new fractions of shares are allotted to the sharers, whereby the husband, father, and the two daughters get 3/13 (three-by-thirteen), 2/13 (two-by-thirteen) and 8/13 (eight-by-thirteen) respectively. 

Procedure of inheritance under Muslim law 

The Muslim laws only laid down a process for distribution of the estate after a person’s death and did not contain any procedure regarding administering an estate to the heirs. Thus, the administration of the estate of a deceased person is governed by the Indian Succession Act, 1925.

The procedure of inheritance under Muslim law is carried out as follows- 

  1. An executor or administrator of a deceased Muslim is appointed as his legal representative. The executor cannot be a non-muslim.
  2. The executor collects the assets, discharged debts and dues, pays legacies and distributes the remaining assets among the heirs. 
  3. For the purpose of realisation of debts, a probate has to be obtained where the deceased had died testate (with a will). In case if the deceased had died intestate (without a will), then a letter of administration is obtained and produced before the court of law.
  4. The payment of funeral expenses and debts of the deceased are fulfilled by the executor and he begins to act as an active trustee for the bequeathable one-third shares and bare trustee to the heirs for the remaining two- third shares.
  5. The probate or the letters of administration with the will (oral or written) is annexed and produced before the court. After they are granted, the claim of the executor to represent the estate for all purposes is established. 
  6. If the executor fails to obtain the probate, then the court appoints another person as the administrator with the copy of the will annexed. If the letter of administration may be granted to the heir, legatee or a creditor if the deceased. 
  7. Any person who has an interest in the property or estate of the deceased may file a suit for administration of the estate, to ascertain debts and liabilities, to allocate debts to relatives to whom different rules of descent apply, and for declaration and delivery of interest. 

The appointment of an executor or administrator is essential to the process. But if a Muslim dies without appointing an executor, then the property of the deceased vests in the heirs. The heirs act as the legal representatives of the deceased. But in this case, it is necessary to obtain a certificate under the administrator general’s act or a succession certificate under the Indian succession act, 1925. Without these certificates, it will not be possible to take legal action against the debtors of the deceased.

Difference between inheritance and succession

Even though succession and inheritance are interlinked by meaning, the Indian laws recognise them as two separate legal concepts while dealing with transfer of property.  Succession is the process by which an estate, its rights and liabilities are transferred from one person to another. Succession is the determination of who is entitled to inherit the estate of the deceased. While, inheritance is the process of transferring the ownership and interest in property of the deceased to his or her legal heir.

With respect to Muslim personal laws, succession involves transfer of rights, responsibilities, and obligation onto the legal heir upon the death of the person. It encompasses inheritance, distribution of property, transfer of assets, guardianship and other roles. Inheritance, under the islamic laws, refers to the distribution of property among different classes of heirs in accordance with the specific shares and portions allocated for each category.  

Judicial pronouncements 

Abdul Majid Khan Sahib v. Krishnamachariar (1916) 

In this case, the court addressed the question of whether the sale of property by a co-heir who is in possession of the whole or part of the estate of the deceased, for the purpose of discharging the debts of the deceased, is binding on the other co-heirs or creditors of the deceased. The court observes that after the death of the deceased, one portion of the estate goes toward fulfilling the funeral expenses and the debts of the deceased, and the remaining portion is distributed to the heirs. Citing precedents, the court remarked that one co-heir does not have the right or authority to deal with the shares of the other co-heirs in the Muslim legal system. Thus, one co-heir cannot perform any act involving the shares of another without consent. He can only transfer his shares to another co-heir of a third party, subject to certain conditions. A single co-heir cannot bind other co-heirs in any action, however, if a decree is issued against one co-heir onto whom all the effects of the deceased are in possession, then that will be binding on all other co-heirs since a decree passed against the co-heir is considered to be a decree passed against the deceased and the co-heirs serve as a representative of the deceased in such a decree. 

Therefore, it was concluded that one co-heir cannot bind the others to a voluntary sale. He can only deal with inherited property in which he has an interest.  He does not have the authority to represent the others, even for the purpose of paying off debts.  

Imambandi v. Sheikh Haji Mutsaddi (1918)

In this case, a man named Ismail Ali Khan died, leaving behind three widows and several children. The petitioner, Enayet-uz-Zhora is one of his widows. She, along with her two minor children, bought a share of his estate through a suit. The defendants disputed the legitimacy of her marriage to Ismail and the children, thus denying her claims over the shares and her right to sell them. The petitioner contended that her children are legitimate, and she is their legal guardian and thus entitled to the share of property that belongs to her children. 

The issue dealt with here was whether a mother’s dealings with her minor children’s property were binding on them. 

The court observed that under the Muslim legal system, the mother has the right to the custody of her minor children, but that does not make her the natural guardian of the children. In the absence of the father, the paternal grandfather becomes the natural guardian, and he has full control over the minors and their affairs. Under Sunni law, after the death of the father, custody vests in the executor appointed by him. If the father dies without appointing an executor, then custody devolves to the paternal grandfather. Therefore, it was held that the petitioner (the mother) had no authority to alienate the property as she was not the natural or legal guardian of the children.

Illyas and Ors. v. Badshah alias Kamala (1989)

The issue in this case revolves around the property of Munilal, an eunuch. Munilal had executed a will in favour of Abdul Gafoor, who claimed ownership of the property. The respondents, an eunuch of Munilal, argued that they followed a Guru – Chela system, and by this, the eunuchs formed a separate class of heirs themselves, and they followed a custom of property transfer among their community. Thus, the respondent, being a disciple of Munilal, claimed ownership over the property and argued that the will in favour of Abdul was forged. The trial judge passed a decree in favour of the respondent and declared the appellant’s will null and void. 

The trial judge’s decision was challenged by the appellant in the High Court, where the bench was to deal with the issue of whether the will executed by Munilal in favour of Abdul Gafoor was valid or not, considering the customs among eunuchs in Muslim law. 

The appellant argued that Munilal, just like any other Muslim, had the right to bequeath his property to him, and the respondent’s claim over the customary transfer of property should not be recognized as it debars the right of a Muslim from executing a will in favour of anyone outside the community, and thus, the custom functions against public policy.

The court, after examining the submission of the respondents, held that the custom followed by the eunuchs is well recognized. The custom does limit the choice of the legatee to execute the will, but that does not make the custom invalid or against public policy. Moreover, the appellant failed to prove the legitimacy of the will document as it did not meet the requirements of Section 68 of The Indian Evidence Act, 1872. It was also established that the property of eunuch cannot be transferred by a will to a person outside the community. 

Therefore, the decision was held in favour of the respondent, and the appeal was dismissed.

Rukmani Bai v. Bismillavai (1992)

The deceased in this case left behind a certain amount of money in his provident fund and EDLI benefits. He had converted to Islam from Hinduism before his death. The respondent’s daughter applied for a grant of a succession certificate under Section 372 of the Indian Succession Act, 1925. The appellant, the niece of the deceased,  filed a suit against the succession court’s decision granting the certificate to the respondent under Section 384 of the Act. The appellant challenged the respondent and claimed the grant for herself. 

The court observed that the deceased had indeed converted to Islam, and the respondent, being his daughter, was eligible to obtain the succession certificate. The court noted that under Section 21 of the Principles of Mohammedan Law, in the absence of a contrary custom, succession of a convert to Islam is governed by Islamic laws. Further, it cited the precedent set in the case of Mitar Sen v. Maqbul Rasan Khan (1930), where the privy council held that when a person changes his religion, his personal laws change, and the new law governs him and his children alike. The court observed that there was no residuary, and thus the daughter was entitled to her share and the share of the residuary under Section 66 of the Mahomedan law. Therefore, the court held that the respondent was legally entitled to obtain the succession certificate, and due to the lack of merit on the side of the appellant, the appeal was dismissed.

Mohammed Gani v. Parthamuthu Sowra (2008)

This case involves the distribution of the property of Abdul Rahiman Rowther. He had divided the property among himself, his first wife, his daughter (the plaintiff) and his two sons ( the defendants). The plaintiff and the defendants were minors when the partition deed was created, with their mother as the guardian.The plaintiff along with the defendants was offered a joint share of their rice mill which was obtained by their mother, of which the plaintiff seeks partition of 1/4th of the share for herself. The defendants refused to allow the plaintiff’s claim. It was argued that the plaintiff, who is married, can only have 1/8 th of share and the defendants were entitled to 7/8th shares according to the Muslim laws of inheritance. The trial court issued a decree in favour of the plaintiff, offering her 1/4th of the share. The defendants appealed against this decision to the Madras High Court. 

The High Court remarked that the partition deed did not specify equal distribution of shares between the plaintiff and the defendants and that the intention of the deceased was for the parties to jointly enjoy the property. However, since the partition is sought, Muslim laws of inheritance will apply, by which the plaintiff is entitled only to 1/8th of shares and the remaining 7/8th shares to the defendants. 

Rijia Bibi and Ors. v. Abdul Kachem and Anr.  (2013)

This case revolves around the validity of the will executed by (Late) Abdul Khalaque. The plaintiffs are the first wife and the sons born through her and the defendants are the second wife and her daughter and sons. The deceased left behind 3.25 acres of land. The plaintiffs claimed partition of the land which the defendants denied, contesting that the property was bequeathed to them in the will. The trial court concluded that the will was forged and favoured the plaintiffs. The defendants filed their first appeal to this judgement, in which it ruled out the possibilities of the will being forged but held that the will was invalid and modified the shares to alloted to the plaintiffs. The defendants then filed a second appeal. The Court upheld the first appeal and stated that the will was void and inoperative. 

The Court referring to Section 118 of principles of Mohammedean law explained that a Mohammedan will should be within a prescribed limit, must have a competent legatee and consent of the heirs should be given after the testator’s death. a muslim can bequeath his property in favour of his heir, provided that the consent of the other legal heirs are sought after the death of the testator. When heirs do not question such a bequeathal for a long time, it amounts to consent. Further, Mohammedan law limits the testator’s power to bequeath estate exceeding the 1/3 rd of the surplus after the payment of funeral expenses and debt. Here, the will exceeds the permissible limit, rendering the will invalid and depriving the plaintiffs of their rightful share. 

Jannath Beevi v. Tahsildar (2022) 

Here, the petitioner, the wife of the deceased, filed for a legal heirship certificate for her husband. The petitioner filed for a fresh application, as she erroneously left out her father-in-law, who is also a valid legal heir. But the application was rejected on the grounds of error and she wasn’t given a chance to speak. 

The issue was thus, whether the rejection of the petitioner’s application to include her father-in-law, was justified. The court, referring to the muslim laws of inheritance, remarked that the father is also a legal heir in line of inheritance to the deceased’s property. It also noted that the petitioner was not heard, which is violative of the principles of natural justice. 

Thus, the court quashed the order which rejected the petitioner’s application and remanded it for consideration in accordance with the law and to provide the petitioner with a fair hearing. 

Conclusion 

Inheritance for Indian Muslims is governed by their respective personal laws, which are based on Islamic or Quranic principles. It contains the framework for how inheritance must pass on within a Muslim family by providing detailed rules on the scheme of inheritance, distribution, and administration of the estate. However, Muslim personal laws are quite rigid and not very open to criticism or amendment. There are standing concerns regarding issues such as, the inequality in property rights between male and female heirs, exclusion of step-children, and illegitimate children and non – recognition of adopted children etc. 

Further, there is an ongoing legal and judicial struggle to bring harmony between personal laws and the constitution, which calls for developing a more inclusive legal framework that could attempt to balance personal and constitutional laws.  

Frequently Asked Questions (FAQs) 

Can a Non-Muslim inherit from a Muslim?

Under traditional Islamic laws, a non – Muslim is not eligible to seek inheritance from a muslim. But in India, if a Muslim person renounces Islam or ceases to be a Muslim, he is still entitled to claim shares of property from his deceased Muslim relative. However, the vice – versa is not true. A person who converts to Islam will thereafter be governed by Muslim personal laws and thus cannot claim shares from his non-Muslim relatives. 

What is the position of illegitimate children, step – children and adopted children under the Islamic rules of inheritance?   

Under Hanafi laws, an illegitimate child is not entitled to claim inheritance from the father, but he or she is eligible to inherit property from the mother and all other relations from the mother’s side of the family. However, under Sunni Islam’s Ithana Ashari school of thought, an illegitimate child cannot inherit property from any of the parents. 

Step – children under Mohammedan laws cannot inherit property from their step parents or their relatives, but a step- brother can inherit from his step-brother or step- sister. 

As for the position of adopted children, it is to be noted that Islam does not recognise the concept of adoption in the first place, hence, adopted children have no right over inheritance. 

Is an insane or unchaste heir eligible for inheritance? 

Yes, under muslim laws insanity and unchastity is not considered as a ground to disqualify a Muslim from claiming inheritance. Thus, an heir who is insane or unchaste is also entitled to inherit.

Can a criminal or convicted person be eligible to inherit under Muslim laws?

Under Muslim personal laws, an heir being a convict or a criminal does not automatically disqualify him to inherit his share of the property. However, under Hanafi law, if an heir is responsible for the death of the deceased whose property he is to inherit, regardless of the crime being intentional, he is disqualified to inherit. In the case of Shia laws, the heir is disqualified from inheritance only if he had intentionally caused the death of the deceased.

References 


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Essential clauses in a Data Processing Agreement (DPA)

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This article is written by Aparna Naraparaju pursuing Diploma in International Data Protection and Privacy Laws. This article discusses the essential clauses in a Data Processing Agreement or DPA.

This article has been published by Sneha Mahawar.​​

Introduction

In this global age, it is often said that data is the new currency. So, today there are thousands of companies that deal and exchange with tons and tons of data and it becomes imperative that adequate security measures are put in place to protect such data at various levels. Data Processing Agreement is one such important step that inter alia looks after data security, data breach and data misuse. In some places of the world like the European Union (EU), it is already mandatory to have a DPA for data controllers and data processors. This shows the sheer importance of DPAs. In this article, we will discuss the essential clauses that a DPA should have.

What is a Data Processing Agreement (DPA)

Data Processing Addendum is a documented agreement between data controller and data processor. It can also be an arrangement between data processor to sub-processor, controller to controller or controller to joint controller. DPA lays down certain guidelines as to who are the data subjects, what type of information is processed, what categories of data are processed, who collects the client’s personal data, how it is treated, where it is stored, how long it is stored, how it can be retrieved, how it can be deleted, how it can be processed, how it is protected, what kind of measures should be taken by the parties in order to prevent data breaches.

Organizations that handle the Personal data of European Union Data subjects will definitely require a DPA in place. Article 28 of the EU GDPR provides guidelines on the clauses to be included in such Agreements. Heavy fines and penalties will be imposed in case of failure to observe these guidelines. DPA can be annexed as an Appendix to the underlying service contract like the SAAS contract etc. The terms of such Agreements should exactly reflect what activities pertain to the services provided. It is a legally binding document and relates to any individual. This document cannot live on its own but refers back to certain underlying agreements. There will be a certain amount of cross-referencing between the DPA and the underlying contract.

M&A

Essential clauses in a Data Processing Agreement (DPA)

Definitions

One essential clause is that DPA should contain definitions of certain important terms to avoid any ambiguities in interpretation. Parties should agree to include the important definitions of Applicable Laws, Client, Client Personal Data, Contractor, EU DataProtection Laws, GDPR, Restricted Transfer, Services, Subprocessor, Controller, Data Subject, Member state, Personal Data, Personal Data Breach, Processing, Processor, Rights of Data subjects, Supervisory Authority.

Data Subject

In this clause, it is laid down who all come under the ambit of the DPA. Such as individuals belonging to European Union whose Personal data was collected can be the data subjects.

Personal Data Breach

Unauthorized use, access to the client personal data, loss of data or unauthorized disclosure or alteration of such data on the systems managed by the processor.

Applicability

Processing should be regulated by applicable laws like GDPR.

Example Clause:

Each party shall strive to comply with their respective obligations under all applicable Data Protection requirements.

Effective Date and termination date 

Effective date of the DPA  and the DPA end date has to be provided in this clause. It could be any date post May 25, 2018.

Processing of Client Personal Data 

Any operations performed upon personal data are called processing. What actually is the processing activity performed by the processor needs to be clearly provided. That is whether the processing involves collection of data, recording, organization, structuring, storage of data, adaptation, retrieval, big data analysis, consultation, disclosure of data, making available certain data, alignment, combination, matching, restriction of use or access, profiling ofIndividuals, erasure or destruction, media handling, use of data etc.

Roles and responsibilities of a controller

Controller is the entity which determines the means and purposes of processing. Controller has certain specific set of R&R as per GDPR. 

  • Controller is the entity which receives the data, 
  • Controller determines  the legal basis for collection of data
  • Controller obtains the data with the consent of data subject
  • Controller determines what when and how much time the data shall be retained, 
  • Controller implements Organizational & Technical measures for safeguarding Client Personal data
  • Controller determines policies and Procedures to process data
  • Controller determines mechanisms to put in place mechanisms to enable data subjects exercise rights
  • Controller determines how long to keep the data
  • Controller to acquire valid consent, explicit consent from data subject for data processing.
  • Controllers collect minimum data required for processing and they shall not collect or store unnecessary data.

Example Clause:

Controller is to determine the purposes and general means of processor’s processing of client personal data in accordance with the Agreement and comply with its obligations as per the data protection requirements for data controllers. 

Roles and responsibilities of a processor

  • Processor is the entity that processes personal data under the instructions of the Controller. Processor processes the personal data on behalf of Data Controller. We need to include few or all of the roles as follows:
  • Data Processor carries processing under a contract.
  • Processor carries processing on behalf of the Controller
  • Processor carries processing under documented instructions.
  • Follow organisational and technical measures while processing client Personal Data.
  • People in that project follow confidentiality measures
  • Processor would assist controller during investigations
  • Processor to provide description of personal data breach in case if breach occurs.
  • Data Processor to comply with Applicable Laws

Example Clause:

Client PersonalData shall be processed in accordance with the MSA and solely for the purposes as stated in the MSA and this Addendum. Processor shall take appropriate Technical and Organizational measures in order to prevent data breaches. Only the personnel working in this project shall have access to the client personal data and such personnel shall sign Non Disclosure Agreements with the Processor. Processor shall cooperate reasonably in order for the controller to comply with its obligations under Article 32 of GDPR and during any data breach investigations. Processor shall notify the controller about any data breaches within 2 days of happening of such events.

Organization and security measures (O&Ms)

We need to provide the list of O&Ms the Processor shall implement in relation to the Client Personal data

Example:

  • Is the Processor responsible or Vulnerability testing o Customer Internal Systems.
  • Does the Processor  provide SOC (Security operations centre)
  • Does the Processor deploy and configure Data Loss Prevention Solution
  • Does the Processor manage encryption at rest on client devices
  • Does the Processor deploy and monitor Anti Virus solutions
  • Are data bases encrypted

Subprocessing

Subprocessors can only be hired by a processor based on the notification and approval given by the Controller. We need to mention the list of subprocessors, if any. In case of any objection, controller has to object within agreed timelines.

Example Clause:

Engagement of any 3rd Parties as Subprocessors shall be authorized by Data Controller. Legally binding contract terms which are restrictive in nature shall be imposed on the subprocessors. Client Personal Data shall be accessed by the Subprocessor only to the extent required to perform the obligations under this Agreement. List of Subprocessors shall be annexed to this Agreement as Exhibit C and any changes in the list shall be notified to the Data Controller before 2 Months. Data Controller reserves the right to object the addition or deletion o subcontractors.

Data transfers

Data transfer means if processing involves transferring of Client Personal Data from Controller to Processor in a third country other than European Economic Area, UK, Switzerland or a country subject to an adequacy decision made by the EU. In case of any such transfer, parties are to draft certain Standard Contractual Clauses (SCCs).

Example Clause

The Procesor shall not transfer Client Personal Data to countries in a jurisdiction outside EEA or UK without prior written consent of the Controller. Parties shall rely on EU-approved Standard Contractual Clauses (SCCs) for the transfer of Client Personal Data from a country in European Economic Area to a country outside European Economic Area.

Deletion and return of data

Like in any other agreement, it is a pretty standard clause stating post completion of the underlying contract, data should either be returned or deleted or destroyed etc.; who bares the costs of such an obligation, whether they have policies in place in their security documentation etc. should be incorporated in the DPA.

Example Clause:

Processor shall, upon the completion of the obligations as per the underlying Master Services Agreement dated January 25, 2022 shall:

  • Return the client personal data which is in the processor’s possession to data controller.
  • Anonymize the client personal data so that it no longer constitutes Personal Data.
  • Make the client personal data unreadable or delete it permanently.
  • Processor must provide written confirmation of anonymization, return or deletion of client personal data upon request by data controller.

Audits

Audit clause is to be incorporated in order to check Whether the Organizational and Security measures are properly implemented or not. This can be done by including certain processes like Data Protection Impact Assessments (DPIA).

Conclusion

When a company handles client personal data, it is an essential requirement to have a Data Protection Addendum in place which helps the parties to comply with the data protection regulations of various geographies. These arrangements will prevent and protect the parties from any untoward incidents to happen. Enormous rights were given to the data subjects, like the right to access, data, modify data, recall data etc. in order to safeguard their personal data. They include the right to seek judicial remedies, claim compensation for material and non-material damages etc. Supervisory authority can impose fines for negligence and the intention to support data subjects will be checked. Companies can protect themselves and their customers from data mishaps when there are certain clear-cut stipulations between parties in terms of how the data needs to be governed.

References


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Section 42 of Companies Act, 2013

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This article is written by Sakshi Singh, from Amity Law School, Lucknow. This article provides a detailed analysis of Section 42 of the Companies Act, 2013, dealing with private placement along with further rules incorporated in the Companies (Prospectus and Allotment of Shares) Rules, 2014. 

It has been published by Rachit Garg.

Table of Contents

Introduction

For a company to sustain and flourish, it becomes crucial to raise capital for its functioning. Companies limited by shares have to issue shares to raise the necessary capital required for the operation of the company. These shares can be issued in the following ways:- 

  1. By means of issuing a prospectus and inviting the public directly to subscribe for the shares of the company.
  2. By allotting entire shares to an ‘Issue-House’, which in turn, offers these shares for the general public to subscribe to.
  3. Lastly, by private placements of shares, a provision for which is given in Section 42 of the Companies Act, 2013 (“the Act”). 

Following the report of the Company Law Committee published in February 2016 relating to the requirement of amendment in the provisions of ‘private placement’ in the Act, Section 42 underwent various changes in August 2018. Among others, the Amendment of 2018 changed the heading of Section 42 of the Act from “offer or invitation of security on private placement basis” to “Issue of shares on private placement basis” thereby limiting its interpretation. 

Private placement

A private placement is a method of raising capital in which an offer to subscribe for securities is given to a selected number of people. Section 42 of the Companies Act gives power to the companies for the private placements of securities. Explanation I to sub-section 3 of Section 42 defines ‘private placement’ as “any offer or invitation to subscribe for the securities or issue the same to a selective group of people.” These selective groups of people are also known asidentified persons’.

The importance of private placement can be assumed from recent statements by RBI deputy governor T Ravi Shankar, who said that companies are placing overwhelming preference for private placement. A maximum of corporate bond insurance in a financial year is obtained through private placements rather than public issuances. 

Issue of shares on private placement basis 

Section 42 of the Companies Act, 2013 depicts a complete procedure for the issuance of shares through private placement. 

Number of identified persons [Section 42(2)]

The board identifies not more than 50 persons to whom an offer of private placement has to be made. Private placement offers shall be made to these identified persons in such form and manner as may be prescribed. This cap of 50 people can be altered upon prescription under any rules or regulations of the government. Any non-compliance with this condition would lead to the conversion of the private placement offer into a public offer. 

Offer of private placements cannot be offered to qualified institutional buyers or employees of the company. In this regard, Explanation II of Section 42 states that the meaning of “qualified institutional buyer” is the same as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

Details of identified persons [Section 42(3)]

Further, the company has to make a record of the names and addresses of the identified persons. In the case of Mrs. Proddaturi Malathi vs. SRP Logistics Pvt. Ltd (2018), directors of the respondent company allotted shares on a private placement basis without following the necessary procedure. It was held by the National Company Law Appellate Tribunal that the increase in share capital and subsequent allotment of shares are invalid and thus, can be set aside. 

Payment of the subscription money [Section 42(4)]

After that, every identified person who is willing to subscribe to the offered securities shall have to apply for private placement along with subscription money either in the cheque, demand draft, or any other banking medium. The subscription money can’t be paid in cash. 

Allotment of securities [Section 42(6)]

After the application money has been paid by the identified persons, the company shall allot the securities within 60 days from the date of the application money. 

Repayment of application money 

In case, the company is unable to allot the securities within the prescribed period, it has to repay the application money within 16 days from the expiration of the above-mentioned 60 days. Further, if the company fails to return the application money as required, it would be liable to repay such an amount with interest at 12% per annum from the date of expiration of the 16th day. 

In the case of Kushan Mitra vs. Amit Goyal (2021), the National Company Law Appellate Tribunal has dealt with the question as to whether application money in case of non-allotment of shares would be treated as ‘loan/debt’ and would be in the ambit of Section 5(8) of the Insolvency and Bankruptcy Code (IBC). The tribunal has opined that “in the event of non-allotment of shares, application money attracts the interest under Section 42(6) of the act and therefore falls with the ambit of ‘financial debt’ as defined under Section 5(8) ICB, 2016.” The tribunal has further held that the concerned person would be compensated for the time value of the money given to the company as the application money. 

Filling the return allotment [Section 42(8)]

The company needs to file a return allotment through the Registrar of the Company (“ROC”) within 15 days from the date of the allotment. The return allotment shall also contain a list of all the allottees with their names, addresses, number of allotted securities, and other relevant information. 

Failure to file a return allotment would cast a liability on the company’s promoters and directors, along with the company itself. Upon each default, a penalty of Rs. 1,000 per day will be imposed. In any case, such a penalty should not exceed 25 lakh rupees. 

Utilisation of subscription money [Proviso to section 42(6)]

Once a return allotment is filed with the ROC, you can start utilising the funds collected through the subscription amount of the private placement. This fund has to be kept in a separate bank account in any scheduled bank. 

It shall only be utilised for the:-

(i) adjustment against allotment of securities; or 

(ii) repayment of application money where the company failed to allot securities. 

Prohibition on advertising [Section 42(7)]

As the name suggests, it is a private offer of securities made to a selected group of people. So, any advertisement in the media or elsewhere in the public domain is prohibited in order to maintain the sanctity of the private placement offer.

Fresh offer of securities [Section 42(5)]

As per sub-section 5 of Section 42, a fresh offer of securities on a private placement basis can be made only when the previous offer has been dealt with by the company in the following ways:- 

(i) Offer of private placement has been accepted and subsequently completed, or

(ii) offer has been withdrawn by the company; or

(iii) company has abandoned the offer of the private placement. 

The above-mentioned condition on the fresh offer of securities does not prohibit a company from issuing securities to one class of identified persons more than once,  subject to the limit of identified persons mentioned in Section 42(2). 

When a private placement offer becomes a public offer [Section 42(11)]

Sub-section 11 of Section 42 states that in the event of contravention to the condition of a total number of ‘identified persons’ for the issue of shares on a private placement basis, it would be deemed to be a public offer. Thus, the provisions of this Act, the Securities Contracts (Regulation) Act, 1956, and the Securities and Exchange Board of India Act, 1992, shall be applicable to such issues of securities. 

A similar connotation is provided by explanation III of Section 42. It states that if a listed or unlisted company allots or offers to allot securities to more than the prescribed number of persons, then such an offer or allotment would be considered a public offer and thus would be governed by Part 1 of the Act. It should be noted that the status of payment of the subscription fee and place of allotment in or outside India would have no effect on it.

In the case of Sanjay Paramanik In Re (2021), SEBI held that where a company offers private placement to more than 200 companies, then in terms of Section 42 of the Companies Act read with Rule 14(2) of the Companies (Prospectus and Allotment of Shares) Rules, 2014 (“the rules’) the said issue would be deemed a public issue. 

Liability for breach of procedure [Section 42(10)]

Every company raising capital through private placement has to follow the provisions mentioned under Section 42 of the Companies Act, 2013. Any contravention of the said conditions while making the offer or accepting the application money would render the company liable, along with its promoters and directors. 

The company would be imposed with a penalty of the amount raised through private placement or Rs. 2 crore, whichever is less. The company shall also be made to repay the application money to subscribers with an interest rate of 12% per annum within 30 days of the imposition of the penalty. 

Why do companies prefer private placement

Following are some of the major advantages of issuing securities on a private placement basis- 

A cheaper way of raising capital 

Raising money through the issue of securities via private placement is comparatively cheaper, as it requires only the passing of a resolution by the Board, unlike a public offer which requires issuing a prospectus. Thus, it saves on the issuing cost and time value. 

A public offering, on the other hand, is costly because advertising, public disclosure of documents and reports, and updating the public about the financial status of the company quarterly or as prescribed, require money. 

Easier compliance formalities

The issue of shares on a private placement basis does not impose an unnecessary burden in the form of registration with the Securities and Exchange Commission (SEC) or compliance with public trade. It allows the company to issue securities with fewer compliance formalities. 

Further, private placements also do not require to be filed with the Securities and Exchange Board of India (SEBI) for their comments. 

Companies enjoy confidentiality

In the issuing of shares on a private placement basis, companies enjoy confidentiality as it is offered to selected and limited people. In fact, public display of information, i.e., advertisement, is prohibited in the process. 

Because of this reason, sometimes it is argued that private placement lacks transparency, but to a great extent it is beneficial for the companies as there are no restrictive rules regarding disclosure to the public. 

Benefits of expert advice

Once a company’s securities are subscribed on the basis of a private placement, they raise money along with expert advice in the dealings of the company. This direction and guidance from experienced private equity players, along with a broadened business network, would lead the company to faster success.

A greater degree of control 

Companies exercise a greater degree of control when securities are issued on a private placement basis. It is upon their will to issue securities either in the initial stage or the mature stage. There is no such restriction on raising capital through private placement, unlike in public offerings, where companies have to undergo detailed scrutiny as to financial and other statuses of the company. 

Drawbacks of private placement 

Although the offer of securities on a private placement basis holds way more advantages than drawbacks, there are certain disadvantages that need to be tackled:-

Dependency on private players

Though there is greater control of the company while issuing private placement offers, they still have to undergo the pressure of investors demanding more shares of the profits of the company. Sometimes, inverters also impose their irritable demand of participating in the decision-making process of the company. So to say, not only do they provide funds to the company, but they also try to almost acquire the principal company and often corrupt its ideas.

Companies in their initial stages often fall for this business trap because of the dire need for funds. 

Illiquid market & limited investors

Another drawback of offering securities on a private placement basis is the illiquid market, which means there is less opportunity to resell the securities. 

The number of potential investors in the company in a private placement offer is comparatively low. Therefore, companies often price the share at a substantial discount for the greater risk of investment and the longer duration of the investment. 

Private placement to a public company

Generally, private companies raise capital on a private placement basis, but a public company can also issue securities to private individuals or institutions. For a public company to issue securities privately, a broker or agent is required, who then finds a suitable person willing to buy the securities of the public company. In such a case, it can be said that the securities are allotted on a private placement basis since there have been no conditions for issuing a prospectus, etc. 

But then SEBI released a guideline, according to which an unrelated third person cannot be involved in the issue of shares on a private placement basis under Section 42. So, as per the current situation, only direct relations like friends, family, or other such associations can subscribe to the securities offered on a private placement basis.  

Applicable rules from the Companies (Prospectus and Allotment of Shares) Rules, 2014

Private placement offer letter [Rule 14(1)]

Rule 14 of the Companies (Prospectus and Allotment of Shares) Rules, 2014 states that a private placement offer letter in Form PAS-4 has to be issued by the company willing to raise capital through private placement. Along with a private placement offer letter, the company is required to send an application form with serial numbers addressed to specific persons. The offer letter and application form have to be sent within 30 days of recording the names of such persons, either in written or electronic mode. 

Only such a person has the right to apply whose name is specifically mentioned in the application form. Any person applying for private placement in contravention of the above-mentioned condition for a private placement offer letter, then such application will be treated as invalid. 

The private placement offer letter shall contain the following information as per the form PAS-4 

arbitration
Form no. PAS-4 
Private placement offer letter
1. General information(It contains various info about the company including name, address etc.)
2. Particulars of the offer
3. Disclosure with regard to the interest of the directors
4. The financial position of the company
5. A declaration by the director
6. Undersigned 

Special resolution of shareholders [Rule 14(2)(a)]

In order to issue the securities on a private placement basis, a proposal should get the approval of shareholders, by passing a special resolution beforehand. It is pertinent to note that approval is needed for each offer or invitation. 

In the notice for the general meetings, along with the explanatory statement, the basis or justification for the price (including premium, if any) at which the offer or invitation is being made is to be disclosed. 

In the matter of Gozing Technology Private Ltd. (2022), the ROC of the NCT of Delhi & Haryana has held that a company shall issue a private placement offer letter only after the required special resolution of the board or shareholders, approving the proposals to issue securities on a private placement basis, has been passed. 

Consequently, the registrar has imposed a penalty on the company pursuant to Section 450 of the Companies Act, which provides for punishment for the offences or contraventions to the provisions for which there is no specific punishment or penalty provided. 

Offer for non-convertible debentures [Proviso to Rule 14(2)(a)]

When an invitation is made for subscribing to non-convertible debentures, relaxation is provided to the company to pass a resolution for it. A special resolution has to be passed only once a year for all such shares to be issued throughout the year. Further, it is provided that when non-convertible debentures are offered within 6 months of the commencement of the rules, the above-mentioned special resolution may be passed within that period. 

Limit on private placement offer [Rule 14(2)(b)]

Rule 14(2)(b) of the rules provides that offers of private placements can be made to no more than 200 people in a given financial year. Similar to the provision of Section 42, the rules further state that qualified institutional buyers and employees of the company are excluded while calculating the cap of 200 people. 

It is pertinent to note here that the limit of 200 people is for each kind of security. Provided that a company can issue another kind of share only when the allotment of previously offered securities has been made. 

Example- A company can issue a maximum of 200 equity shares, 200 preference shares, and 200 debentures in a financial year. Once 200 equity shares have been offered to be issued, preference shares or debentures cannot be issued until allotment with respect to 200 equity shares is made. 

Value of private placement offer [Rule 14(2)(c)]

Rule 2(c) states that the value of the offer made to each person must not be less than Rs. 20,000. Further, sub-rule 5 states that such a value of the offer need not be fixed in the following cases:- 

If RBI or National Housing Bank has not made similar regulations to govern the above-mentioned companies then only the rule mentioned in rule 14(2)(c) would be applicable. 

Payment for subscription [Rule 14(2)(d)]         

This sub-rule states that the person subscribing to the securities has to make payment from his bank account only. The emphasis on the source of payment can be judged by the fact that companies have to keep a record of bank accounts from which payments are received. In the case of the joint holder of the security, the payment shall be made from the bank account of the person appearing first in the application. 

Record of private placement offers [Rule 14(3)]

Records of each private placement offer shall be maintained by the company in the form PAS-5 as given below- 

Name of the company –
Registered office of the company –
CIN –

Details of private placement offer

Date of approval by the authority -(directors or shareholders)
Amount of offer –
Date of circulation of offer letter –

Details of person to whom offer was made

Name –
Father’s name –
Complete address –
Phone no. (if any) –
Email Id (if any) –
Officer designated to keep the record –

Copies of the record along with a private placement offer letter shall be filed with ROC or SEBI (in the case of a listed company) with a fee as provided in Companies (Registration Offices  and Fees) Rules, 2014 (‘fee rule”). The record shall be filed within 30 days from the date on which the offer was circulated.

Format for return of allotment [Rule 14(4)]        

In furtherance of Section 42(8) of the Companies Act, sub-rule 4 provides that a return of allotment shall be filed with the ROC in the form PAS-3 within 30 days. The return shall be accompanied by the fee prescribed in the fee rule. A list of security holders containing the following information –

  • Personal details of the security holder including name, address, PAN, Email address, etc.  
  • The class of security held.
  • The date of allotment of security.
  • Total no. of securities held, along with nominal value and paid-up capital on these securities.
  • Particulars of the consideration received if the securities were issued for  consideration other than cash.

Timeline in private placement offer  

The following table depicts a clear picture of the timeline in which various procedures have to be adhered to while issuing securities on private placement.

S. NoSubject Time limitation 
Filing particulars of special resolution30 days from the resolution passing
2.Issuance private placement offer letter30 days from recording the names
3.Filing record of private placement offer30 days from the circulation of the offer
4. Allotment of securities60 days from payment of application money 
5. Repayment of application money16 days after the time for allotment of security (60 days) has elapsed 
6. Filing return allotment15 days from the allotment
7. Payment of penalty30 days from the imposition of penalty
8. Completion of allotment12 months from the date of resolution

Recent amendment to the rules

In May 2022, the Ministry of Corporate Affairs notified the Companies (Prospectus and Allotment of Shares) Rules, 2022, which will amend the earlier rule of 2014. The amendment has inserted another proviso to rule 14(1) of the rules. It states that for allotment of shares to corporate bodies incorporated in neighbouring countries of India, prior approval of the government of India is required under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.

Conclusion

Section 42 provides a complete procedure for private placement, starting from the selection of the ‘identified person’ to the allotment of securities to these persons. It also contains limitations and conditions for issuing shares on a private placement basis. Rule 14 of the Companies (Prospectus and Allotment of Shares) Rules as amended in 2022, is complementary to Section 42 of the Act. 

Further, there are certain issues in private placement that remain unresolved. For instance, the imposition of wills of investors on the principal company makes startups suffer the most. Altogether, private placement is a way of raising funds for the company with fewer hurdles, and companies nowadays are preferring it over the public issue of shares. But studies still have to be conducted as to why there is such a craze for private placement in the market.

Frequently Asked Questions (FAQs)

What do you mean by ‘securities’ in a private placement offer?

The following kinds of securities can be issued via private placements: 

(i) Debentures; and 

(ii) Equity shares and preference shares. 

For more, refer to https://blog.ipleaders.in/different-types-of-securities-dealt-with-in-the-capital-market/ 

What is the maximum number of people to whom private placement offers can be made? 

Earlier, the number of identified persons had to be no more than 50. However, according to the Companies (Prospectus and Allotment of Shares) Rules, 2014, private placements could be offered to up to 200 people in a financial year. 

What is the validity of the private placement made to the existing shareholders?

There is no specific mention of offering securities to shareholders in the Companies Act. But, as per the definition of private placement, it is an offer made to a select group of people to subscribe to securities. A shareholder also comes under the ambit of private personality; therefore, offering private placement to shareholders is valid. 

What is result of non-compliance with Section 42 while issuing shares through private placement?

In case of non-compliance shareholders can take legal action against the company also, SEBI has authority to impose penalty in such cases. 

Which type of companies can issue shares through private placement?

Only private companies can issue share through private placement. Public companies are not allowed to do so. 

References 


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Narcotic Drugs and Psychotropic Substances Act, 1985 : an insight

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This article has been written by Kashish Dhawan and Akshit Narula pursuing Diploma in Intellectual Property, Media and Entertainment Laws and has been edited by Oishika Banerji (Team Lawsikho). 

This article has been published by Sneha Mahawar.​​

Introduction

The Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985 is a crucial legislation in India aimed at controlling and regulating the production, manufacture, transportation, and consumption of narcotic drugs and psychotropic substances. This article delves into the investigation procedure and bail conditions under the NDPS Act. The investigation procedure under the NDPS Act is unique and different from other criminal laws. It involves a thorough examination of the accused person’s conduct, belongings, and properties. The investigating officer needs to follow specific guidelines to carry out the investigation, such as obtaining a warrant before searching a place. When it comes to bail conditions under the NDPS Act, there are some significant differences from other criminal laws. Bail is not an by default right under the NDPS Act, and the burden of proof lies with the accused to prove that they are not guilty of the offence. Additionally, bail is granted only under specific conditions such as the nature of the offence, the severity of the punishment, the character and antecedents of the accused, and the likelihood of the accused committing any further offence while on bail. Overall, this article aims to provide a comprehensive understanding of the investigation procedure and bail conditions under the NDPS Act, which is essential for anyone dealing with drug-related offences.

Background of the Narcotic Drugs and Psychotropic Substances Act, 1985

India was a party to three United Nations Drug Conventions, namely the 1961 Single Convention on Narcotic Drugs, the 1971 Convention on Psychotropic Substances and the Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988. By virtue of the parliamentarian authority to make law for the country by implementing “any treaty, agreement or convention or decision made at the international conference”, abiding by the principles of the Indian Constitution, the Indian Parliament enacted the Narcotic Drugs and Psychotropic Substances Act, 1985. 

There was no statutory law present before the establishment of the NDPS Act. Smoking of cannabis was accepted as a form of recreation similar to drinking alcohol in the Atharva Veda. Various other drugs which were derivatives of cannabis such as hashish, marijuana, bhang etc. were legal before 1985. The Act came as a replacement to the Opium Act and the Dangerous Drugs Act. 

The NDPS Act aims to provide penalties for drug trafficking, strengthen the enforcement power, and implement international conventions to which India is a party.  The introduction of NDPS made it illegal to produce, manufacture, cultivate, possess, sell, transport, buy, and use any narcotic drugs or psychotropic substances. 

The Act classifies drugs into a schedule according to their therapeutic value and scope for potential abuse. The Act has undergone numerous revisions over the years to strengthen its clauses and keep up with the introduction of new drugs. A more thorough approach to drug policy that emphasizes prevention, treatment, and harm reduction has been called for, along with concerns about the Act’s effects on drug users.

Classification of drug possession under NDPS Act, 1985

The possession of drugs under NDPS has been defined in 3 categories and all of them carry different sentences, namely: 

  • Small quantity: It is the quantity lesser than the quantity specified by the Government in the official gazette. If anyone is found with the illegal exclusive possession of any drug such as opium, cannabis, poppy seeds etc. will be punished for 1 year of imprisonment or a fine of Rs. 10,000 or both.
  • Intermediate quantity: It is the quantity which is more than the small quantity but less than the commercial quantity and if anyone is found with the illegal exclusive possession of any drug such as opium, cannabis, poppy seeds etc, the same will be punished for a term which may extend to 10 years of imprisonment with a fine up to 1 lakh. In the case of State v. Mushtaq Ahmad and ors (2015), it was held that intermediate quantity is the one which is above small quantity and below commercial quantity.
  •  Commercial quantity: It is the quantity greater than the quantity specified by the government in the official gazette and if anyone is found with the illegal exclusive possession of any drug such as opium, cannabis, poppy seeds etc, will be punished for a term which shall not be less than 10 years but which may extend to 20 years with a fine which shall not be less than 1 lakh but which may extend to 2 lakhs.

Investigation procedure in NDPS cases 

The entire process of investigation under NDPS Act, 1985, is broadly divided into the following aspects which are to be borne into mind by the investigating agencies i.e. the police personnel. 

Steps to be taken on receipt of information

The two major aspects of the NDPS Act, without which further investigation is not possible are “recovery” and “possession”. The reason behind these two elements is that once an accused is found to be in possession of any of the prohibited substances as mentioned in the schedule of the Act, it raises a presumption as to the commission of the offence and also about the mental state (mens rea) of the accused. The major sections dealing with the procedural aspects of the Act are Sections 41, 42, 43 and 50

Section 41 of the NDPS Act, 1985

Section 41 of the 1985 Act deals with the power of the magistrate and any other officer to issue a warrant for search and seizure or arrest of any person suspected to have committed any offence under the Act. 

Part 1 of Section 41 of the Act primarily provides that the metropolitan magistrate or the magistrate of first class or any other magistrate of second class having being specially empowered in this behalf has the power to:

  1. Issue a warrant for the arrest of any person, who he has either suo-moto or on the basis of information received, reason to believe that he/she has committed any offence punishable under the provisions of the Act or;
  2. Issue warrant for the search of any building by the day or night and to make a seizure of any substance liable to be seized under Chapter V-A of the Act.

Further, Part 2 of Section 41 deals with the power of any officer of the central excise, narcotics, customs revenue intelligence, or any other officer of the department of the Central Government to issue a general or specific order to any officer subordinate to him, however superior to the rank of a peon, sepoy or a constable to arrest any person or conduct a search and seizure in any building, place or conveyance etc, when the former has reason to believe that the person has committed any offence under the Act or some prohibited substance has been stored in such a place as the case may be. 

It is pertinent to mention here that the Supreme Court in the case of T.Thomas V. State of Kerala (2013) has held that the authorisation as mentioned in Part 2 of Section 41 is not required wherein the gazetted officer himself conducts the search and such authorisation is only required when such search is to be conducted by an officer subordinate to such officer. 

Section 42 of the NDPS Act, 1985

Section 42 of the Act deals with power of the gazetted officer or any other officer subordinate to such officer to conduct search and seizure without any warrant or authorization. 

Part 1 of Section 42 provides that any officer above the rank of a peon, sepoy or constable of the Central Government or any other officer as mentioned in the provision of the state government has reason to believe either from personal knowledge or information received and reduced into writing has reason to believe that with respect to any narcotic drug or psychotropic substance or controlled substance, any offence has been committed or that such substances or any document for the disclosure of such substances are stored in any building, place or conveyance, such officer may between sunset and sunrise:

  1. Enter into and search any such building, 
  2. Conveyance or place or break open any door or
  3. Remove any obstacle for exercising the above mentioned power or
  4. Make a seizure of any such article in respect of which any offence is punishable under the Act. 

It is pertinent to mention that Part 1 further provides that when such an officer has reason to believe that such authorisation or warrant cannot be obtained without affording an opportunity for the concealment of evidence or the possibility of escape of the suspect, he may, without warrant, enter and search such place after recording reasons in writing. 

Part 2 of Section 42 provides that any such information as recorded under sub-section (1) shall within 72 hours be forwarded to the immediate official superior.  The following procedural requirements have been mentioned under Section 42 of the Act-

  1. Any officer above the rank of  a peon, sepoy or constable of the Central or the state government may conduct and search and seizure process
  2. Where the above-mentioned officers feels that authorisation or warrant cannot be obtained without affording an opportunity of concealment or destruction of evidence, he may conduct a search without such authorisation or warrant and after recording reasons in writing
  3. The recorded reasons have to be forwarded to the immediate official superior within 72 hours. 

Judicial precedents surrounding Section 42 of the NDPS Act, 1985

In a plethora of judgments, the Supreme Court has emphasised on the stringent application of the provisions Section 42 of the Act wherein the Court has acquitted the accused individuals on many occasions due to the non-compliance of the provisions of this section. Certain relevant judgements dealing with this aspect are as follows: 

  1. Sukhdev Singh vs. State of Haryana (2012): In the case, the Apex Court held that Section 42 is a mandatory provision which ought to be construed and complied with strictly. The requirement of furnishing information to the superior officer should be forthwith or within a very short period of time, however it was very explicitly mentioned in this case that such compliance must at any cost be prior to the recovery. 
  2. Krishan Kanwar v. State of Rajasthan (2004):  In this particular case, the Supreme Court has held that Section 42 comprises two of components. One relates to the basis of information i.e.
  • From personal knowledge and
  • Information given by a person and taken down in writing. 

The second is that the information must relate to the commission of offence punishable under Chapter IV of the Act and /or keeping or concealment of document or article in any building, conveyance or enclosed place which may furnish evidence of commission of such offence. Unless both the components exist Section 42 has no application.

  1. Directorate of Revenue v. Mohd. Nisar Holia (2007): This particular case dealt with the recording of the FIR, wherein it was held that the statutory provisions had not been complied with because the person who had received the information did not reduce the same into writing. It was further held that an officer who received the information was bound to reduce the same into writing and not the person who hears thereabout. 

Section 43 of the NDPS Act, 1985

Section 43 of the Act deals with the provision of conducting search and seizure processes in a public place. Section 43 provides that any officer authorised under Section 42 may seize in any public place or in transit any narcotic drug or psychotropic substance or controlled substance in respect of which he has reason to believe that any offence as punishable under the Act has been committed. It is further pertinent to mention that such a search and seizure process as mentioned in Section 43 of the Act does not require the officer conducting the search to record his reasons in writing as is a condition precedent under Section 42 of the Act. 

The Apex Court in the case of Directorate of Revenue vs. Mohd. Nisar Holia (2007) has made it clear that a hotel is a public place but a room occupied by a guest may not be one. The Court further observed that though the Act contemplates various measures to be taken for search and seizure between sunrise and sunset and between sunset and sunrise, an authority cannot be given an untrammelled power to infringe the right to privacy of any person.

Section 50 of the NDPS Act, 1985

The investigation in NDPS Act, 1985 usually pertains to receiving secret information, making a search team, gathering public witnesses, apprehending the accused and conducting a search procedure of him and his vehicle or his bag. With respect to the search of the accused, the NDPS Act by virtue of Section 50 of the Act sets out certain conditions which are to be complied with. 

Section 50 provides a reasonable safeguard to the accused before the search of his person is made, this provision is intended to avoid any sort of criticism of arbitrary and high-handed action against the authorised officers.  Section 50 of the Act provides that the officer apprehending the accused must inform him of his right to be searched in the presence of a gazetted officer of any department as mentioned under Section 42 or before the nearest magistrate. Here, the accused has an option either to get himself searched in the presence of the gazetted officer or magistrate or to be searched by the apprehending officer itself. The response of the accused has to be obtained in writing.  What constitutes the most essential part under this section is that the accused must not be given an option of being searched before a gazetted officer or a magistrate, but he should be informed that he has a “right” to be searched in their presence. 

The Apex Court in the case of Vijaysinh Chandubha Jadeja vs. State of Gujarat (2011) has held that the requirements of Section 50 are mandatory in nature and that the same must be strictly construed. Further the Court held that it is mandatory on the part of the officer to inform the accused about his right to be searched before a gazetted officer or a magistrate and the failure to do so will not vitiate the trial but would render the recovery of the illicit article questionable. Where the conviction is based solely on the basis of recovery of an illicit article, the same will be overturned into an acquittal. 

The Supreme Court in the landmark judgment of State of Punjab vs. Baldev Singh (1999) has provided that it is an obligation of the empowered officer and his duty before conducting the search of the person of a suspect, on the basis of prior information, to inform the suspect that he has the right to require his search being conducted in the presence of a gazetted officer or a Magistrate. The failure to so inform the suspect of his right, would render the search illegal because the suspect would not be able to avail of the protection which is inbuilt in Section 50.

Bail under NDPS Act, 1985

The Apex Court in the case of Union of India vs. Ram Samujh and Others (1999), stated that when a person commits murder, 1 or 2 persons are affected by it whereas the individuals who deal in drugs, affect several young minds who are vulnerable and have a deadly impact on the society and if they are given bail, there is a good probability they will start dealing in drugs again.  

Section 37 establishes stringent criteria for the granting of bail. Possession of illegal drugs in illegal quantities is a heinous offence and is cognizable and non-bailable. Under Section 37 of the Act, twin conditions which need to be fulfilled in order to get bail under the Act are: –

  • The Public Prosecutor must be given an opportunity to oppose the application for such release, and
  • Where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.

Reasonable ground 

In the recent case of Aryan Shah Rukh Khan vs. Union of India (2021), bail was rejected repeatedly under the NDPS Act’s requirement of “having reasonable grounds for believing that he is not guilty”. 

What the term ‘reasonable ground’ means, has nowhere been defined in the NDPS Act, however, the Apex Court in the case of State of Kerala vs. Rajesh (2020) stated that “reasonable grounds” encompasses a strong likelihood that the accused will not be found guilty of any of the Act’s listed offences. To eliminate any doubt about the accused committing the crime, the facts and circumstances of the case should be clear. 

Further, according to the decision of the Supreme Court in the case of Municipal Corporation of Greater Mumbai vs. Kamla Mills Ltd (2003), “reasonable ground” means “in keeping with reason.” The final determination of whether the accused’s action was reasonable or not will depend on the facts. After carefully considering the evidence, the courts must wisely render their decision.

The Apex Court in the case of Union of India vs. Shiv Shanker Kesari (2007) explained reasonable grounds as any substantial probable cause for having the belief that the accused is not guilty of the offence charged with criminal antecedents where bail has been granted under NDPS Act. 

The court in the case of Jagdish Chand vs. State of HP (2020) stated that the accused was caught with exclusive possession of 837 grams of cannabis which according to the official gazette is an intermediate quantity which holds punishment for imprisonment up to 10 years and fine up to 1 lakh.                                                                                                                                                   

The accused applied for bail and because the investigation was completed, and no criminal antecedents were found and there is no history of the accused being involved in the drugs case, therefore the court being satisfied that the accused on bail won’t commit any offence granted bail to the accused.

Undue delay in trial as a ground for bail 

Hussainara Khatoon v. Home Secretary, State of Bihar (1980)

The “right to a speedy trial” is a fundamental right that is implicit in the right to life and personal liberty guaranteed by Article 21 of the Indian Constitution, according to the Apex Court’s ruling in this case. In its ruling, the Court imposed stricter bail requirements, more humane living conditions, and a significantly shorter window between arrest and trial. The Court stated that no procedure can be deemed reasonable, fair, or just if it does not ensure a reasonable quick trial.

Mohd. Muslim @ Hussain v. State (NCT of Delhi) (2023)

The Hon’ble Supreme Court while granting bail to an undertrial prisoner, who had been detained seven years earlier on suspicion of participating in a gang that supplied marijuana, stated that the grant of bail on the grounds of undue delay in trial cannot be said to be fettered by Section 37 of the Act, given the imperative of Section 436A  of CrPC, which is applicable to offences under the NDPS Act too.

Loopholes in the NDPS Act, 1985

  1. Absence of a requirement for drug testing: Suspects in possession of drugs are not required to undergo drug testing under the NDPS Act. This may result in the false accusation and conviction of innocent people for drug offences.
  2. Gaps in the seizure procedure: A key component of the NDPS Act is the seizure and custody of drugs. However, drug dealers may be able to take advantage of flaws in the seizure procedure. For instance, there is no provision for an independent verification of drugs that the police have seized, and drugs that have been tampered with or replaced may still be present.
  3. Several agencies, including the police, customs, and excise department enforce the NDPS Act. However, these agencies do not coordinate well. However, there is frequently a lack of coordination between these organizations, which can allow drug traffickers to take advantage of this weakness and continue their operations.
  4. Acquittal in NDPS cases occur on the slightest of gaps in the investigation procedures such as:
  1. Failure of the police personnel to gather public witnesses.
  2. Failure of the prosecution to prove the case beyond reasonable doubt.
  3. Failure of the police to submit an FSL report.
  4. Failure of the investigation officer to submit their recordings to their immediate superior official under Section 42 within 72 hours. 
  5. Failure of the prosecution to prove the identity of the accused.
  6. Practice of the police personnel to record DD entry prior to the recording of an FIR, results in the acquittal of the accused.
  7. Failure of the prosecution to prove that the investigation has been conducted in a fair manner.

Conclusion 

It is crucial to remember that the NDPS Act, 1985 is frequently revised and amended to close these gaps and flaws. To ensure that the law is properly applied, it is essential to have a strong and effective enforcement mechanism in place. The NDPS Act is a crucial piece of legislation in India that plays a vital role in controlling and regulating drug-related offences. In conclusion, it is vital to understand the intricacies of the NDPS Act, particularly the investigation procedure and bail conditions, to avoid any legal complications and ensure that justice is served. It is crucial for anyone dealing with drug-related offences to be aware of these guidelines to ensure that they are well-informed and well-prepared in case of any legal proceedings.


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.

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