International Trade Law

By

-

January 26, 2023

In this blog post, Sreeraj K.V and Pranav Sethi studying at the NMIMS School of Law in Navi Mumbai. This article explains international trade law’s general principles, cross-border transactions, dispute settlement mechanisms, and India’s foreign trade policy.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

International trade laws are those areas of law that deal with certain rules and customs regarding the handling of trade between countries. It is also used for trade between two private sector companies in two countries. This branch of law has now become independent as almost every country is now a member of the World Trade Organisation (WTO). The General Agreement on Tariff and Trade (GATT) has been the backbone of international trade laws since 1948. It contains a provision relating to rules of ‘unfair’ trade practices, dumping and subsidies. In 1994, World Trade Organisation (WTO) was established to take the place of GATT. This is because GATT was meant to be a temporary fix to trade issues and the founders needed something more which was concrete.

The legislation governing global trade is known as International Trade Law (ITL). It has both public and private components. The public component of ITL, which is a subset of public international law, aims to regulate state governments’ business policies. The private part of ITL regulates cross-border business dealings between citizens of various nations. The majority of this is protected by private international law. Additionally, organisations like the United Nations Commission on International Trade Law have been working to create standard rules on a variety of topics related to international business transactions. Also, governments are expected to adopt these laws into their legal frameworks.

ITL was established to promote international trade. In this context, “free trade” refers to the right of individuals to freely exchange goods across international borders. In other words, a person should have the freedom to purchase a good from wherever in the globe they can buy it for the best value. Similarly, they ought to have the freedom to negotiate the maximum price for his goods wherever they are sold. Article 301 of the Indian Constitution states that trade, commerce, and intercourse shall be unrestricted within the boundaries of India.

United Nations Commission on International Trade Law (UNCITRAL)

United Nations Commission on International Trade Law (UNCITRAL) is the main legal body of the United Nations in the area of international trade law and was founded in 1966. It is a legal organisation with global participation working to improve the practice of commercial law. The goals of UNCITRAL are to coordinate and standardise international trade laws.

It is important to distinguish UNCITRAL from the World Trade Organization (WTO), which was established in 1995 and continues the work of the GATT (General Agreement on Tariffs and Trade). In terms of international procedures, UNCITRAL offers the legal principles relevant to private law topics and is thus incapable of dealing with issues about relations between countries such as the fight against dumping, countervailing duties, or import quotas. The WTO deals with trade policy issues such as trade liberalisation, the removal of trade barriers, and unfair business practices.

The International Institute for the Unification of Private Law (UNIDROIT), founded in 1926 and headquartered in Rome, should not be confused with UNCITRAL. UNIDROIT’s mission is to research ways and techniques to modernise, harmonise and keep a check on the practice of private law, specifically commercial law among states and to achieve this goal by creating unified legal mechanisms, and guidelines for the same. Each of these types does have a specific function to perform in International trade law.

UNCITRAL Model Law on International Commercial Arbitration

It was on June 21st, 1985, at the time when the Commission’s 18th annual session concluded and the UNCITRAL Model Law on International Commercial Arbitration was adopted. The Model Law encourages the parties to select the legal principles that will apply to the facts of the dispute, and they are no longer required to select any particular legal framework of any nation. The identified principles overall make the Model Law more practical and flexible.

Due to the flexibility, it provides to states in developing new arbitration laws, the application of a model law was selected as the driver for cooperation and improved performance. Following the model as precisely as possible would represent the biggest contribution to the preferred seat of arbitration and be in the best interests of international arbitration participants, which are mainly foreign participants and their lawyers.

The UNCITRAL Model Law provides a useful foundation for dispute settlement because it contains all of the essential and applicable regulations to make sure that arbitration proceedings run smoothly. Model Law recognises 5 main principles under which international commercial arbitration is ruled. Party Autonomy, Separability, Competence-Competence, Territorial Principle, and Enforceability are the aforementioned principles. The following are explained below:

Party Autonomy

Arbitration provides a much more neutral forum for discussion in which each party thinks it will receive a fair chance in the proceedings. Furthermore, the functionality of tailoring the dispute resolution procedure to the requirements of the groups as well as the option to identify arbitrators who are competent in the subject matter of the dispute makes the arbitral award so passed after hearing both parties more convincing. Arbitration provides parties with independence and procedures that will be used to settle their disputes. This is especially meaningful in international commercial arbitration since parties do not want to be subject to the rules of the opposing party’s court system. Each side is concerned about the other’s “home court advantage.”

Parties are free to choose the arbitrators, who are generally one or three, i.e., selected by parties to the dispute in odd numbers. Parties also determine whether the settlement will be managed by an international arbitral institution or ad hoc, which implies no institution will be engaged. The rules that implement them are the rules of the arbitral institution. The parties are free to select the applicable substantive law. In general, international arbitral law allows parties to a contract comprising an arbitration clause to select the substantive law that will enforce disputes. It is through this arbitration clause that parties are further compelled by default to enter into an arbitration agreement.

Separability

The UNCITRAL Model Law considers the arbitration clause as separate from the main contract for the objective of granting the arbitral tribunal the authority to determine its regulatory authority. Article 16(1) provides mainly two interpretations. The first interpretation states that the arbitration clause shall be dealt with as a standalone agreement from the main agreement, and it must have the implication of limiting a party from proceeding to court and challenging the applicability of the main agreement. Now, this interpretation implies that any argument on the relevance of the main agreement would also be a counter-argument to the arbitration clause.

The agreement to arbitrate provided in an arbitration clause is considered a separate agreement from the remaining portion of the contract among both parties under the autonomy doctrine of the arbitration clause, and thus it may remain in force when the contract has come to an end for any other reason. The arbitration clause withstands the termination, void nature, or invalidity of the main contract. The principle of separability refers to this “staying alive” function of arbitration clauses. Many international trade disputes are resolved through arbitration rather than approaching the court because it helps create a win-win situation for both parties in the arbitration matter.

Competence-Competence

Competence is a commonly recognised principle in current international arbitration that enables the arbitral tribunal to determine its jurisdiction, such as by asserting any arguments to the existence or applicability of the arbitration agreement or requiring final assessment by a competent court of law. The competence-competence principle has the beneficial impact of allowing arbitrators to rule on their own jurisdiction, as extensively recognised by international treaties and the latest statutory provisions on international arbitration. Besides this, the negative impact is similarly relevant. It is to permit the arbitrators to serve as first judges of their territory rather than the sole judges. In other words, it is to allow them to decide on their jurisdiction before any court or other judicial power, limiting the function of the judiciary to review the award.

Territorial Principle

The territorial principle’s application only comes into relevance when Model law in a given State appears to apply and only if the venue of arbitration would be in the territory of such a State as elaborated under Article 1(2). Despite this, there are still some provisions that provide for exceptions. There are crucial exceptions to the rule that certain articles apply whether the arbitration takes place in the state that enacted them, somewhere else, or even before the location of the arbitration is decided. According to territorial principles, every jurisdiction has the authority to supervise the people and events that take place inside its borders, but no jurisdiction has the right to restrict the people and events that take place beyond its boundaries.

Enforceability

In cross-border transactions, it’s important to make sure that the decision to settle the dispute is enforceable in all the nations involved in the exchange. The decision should be enforceable to such an extent that in all of the nations where the losing party has assets, those assets can be attached to fulfill the credit of the winning party.

GATT – the General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade (GATT), a free trade agreement involving 23 nations, reduced tariffs and boosted global trade. Between January 1, 1948, and January 1, 1995, GATT, the first global multilateral free trade agreement, regulated a large amount of international trade. When the World Trade Organization (WTO) replaced it, the agreement came to an end.

It has since been improved, finally leading to the World Trade Organization (WTO) being established on January 1, 1995, which replaced and expanded it. Trade agreements at this point covered 90% of world trade and had 125 signatories. The GATT was supervised by the Council for Trade in Goods (Goods Council), which is made up of members from every WTO member state. The current chair is Ambassador Didier Chambovey (Switzerland). There are ten committees on the council that deals with issues like anti-dumping laws, access to the market, and farming.

Objective

GATT was established to get rid of exploitation through trade restrictions. During the Great Depression, this caused a 66% decline in international trade. Following the destruction of the Great Depression and World War II, the GATT helped the world’s economy recover.

World Trade Organisation (WTO)

International trade is governed by the World Trade Organization (WTO), an intergovernmental body. By offering a foundation for negotiating trade agreements and a dispute resolution procedure intended to enforce participants’ conformance to WTO agreements, which are agreed to be signed by officials of signatory countries and approved by their parliaments, the WTO regulates trade between participating nations. The majority of the WTO’s current concerns originate from earlier trade discussions, particularly the Uruguay Round (1986–1994).

Following the creation of other fresh multilateral frameworks devoted to global economic cooperation, such as the World Bank (founded in 1944) and the International Monetary Fund, the General Agreement on Tariffs and Trade (GATT), the forerunner of the World Trade Organization (WTO), was established in 1947 by a multilateral treaty of 23 nations (founded in 1944 or 1945). Since the United States and other signatories did not approve the founding treaty, the International Trade Organization, a parallel international institution for trade, was never established, and GATT gradually grew into a de facto international organisation.

Basic principles of International Trade Law

Most-Favoured Nation Treatment

The most-favoured-nation (MFN) concept is one of the fundamental principles of the GATT of 1994. MFN entails that all trade agreements must be subject to the same tariff treatment by each member state. Another fundamental declaration of the GATT of 1994 is “national treatment,” which limits favouring imported goods over goods produced domestically when it comes to internal taxation or other forms of regulatory policy. The WTO Agreement allows the assistance of trade remedy policies, although, on one hand, the GATT and WTO require equal treatment and non-discrimination. On the other hand, the WTO Agreement allows the application of trade remedy mechanisms to offer exceptions.

According to the GATT, particular agreements include precise principles that have also been implemented into the national laws of the WTO members. With effect from January 1st, 1995, the Customs Tariff Act, 1975, read with the Customs Tariff (Identification, Assessment, and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, was amended by adding a procedural set of principles to the beginning and execution of trade remedial investigations and judicial review. All trade remedial investigations in India are carried out by the Directorate General of Trade Remedies (DGTR), which is part of the Mi nistry of Commerce and Industry and is led by the Designated Authority (DA). India opened 938 anti-dumping investigations between 1995 and 2019. Overall, from July 2018 to December 2019, India initiated around 53 anti-dumping investigations and 255 investigations pertaining to anti-dumping duties.

National treatment Principle

Treating both foreign nationals and residents respectfully by way of exchanging goods through imports and exports and forming a system of bilateral or multilateral trade wherein trade is free from any barriers and sanctions. The same ought to hold for domestic and international trademarks, copyrights, and patents. The three main WTO agreements (Article 3 of GATT, Article 17 of GATS, and Article 3 of TRIPS) all contain the concept of “national treatment,” however, each of these Articles differ in terms of the interpretation taken up by countries.

Only when a service or a product of intellectual property has hit the market does national treatment take place. Therefore, even if locally produced goods are not subject to an equal tax, the imposition of customs duties on imports does not constitute an infringement on national representation.

Negotiation for free trade

One of the easiest ways to promote business is to lower restrictions on trading. Customs taxes, or tariffs, and restrictions on certain quantities, like import bans or quotas, are included in the list of trade barriers.

Trade negotiations have taken place from 1947 to 1993 in eight rounds total since the GATT was established in 1947–1948. The Doha Development Agenda’s ninth round had started. These first aimed to cut tariffs (customs duties) on imported goods. Due to discussions, in the middle of the 1990s, industrial countries’ and industrial products’ tariff rates had consistently decreased.

However, by the 1980s, non-tariff barriers on commodities as well as brand-new categories like services and intellectual property were included in the negotiations. Opening new markets can be advantageous, but modifying strategies in the same market is sometimes necessary. The WTO agreements permit nations to implement adjustments gradually through “progressive liberalisation.” Developing nations typically receive more time to fulfill their responsibilities and goals.

Supporting the idea of fair competition

Although the WTO is commonly referred to as a “free trade” organisation, that description is not wholly accurate. Tariffs and other types of protection are permitted under certain conditions. It is a set of regulations intended to promote fair, impartial, and unbiased competition.

Fairtrade conditions are ensured by the non-discrimination, MFN, and national treatment rules. Those on providing goods supply by trying to export below cost to increase market share and subsidies are also valid. The rules attempt to define what is fair or unfair and how governments can react appropriately by specifically levying additional import duties determined to make up for harm caused by unfair trade.

Other WTO accords, such as those in the areas of agriculture, intellectual property, and other services, all seek to promote the idea of fair competition. The agreement on government procurement (known as a plurilateral agreement because only a small number of WTO members have signed it) expands the application of competition laws to purchases made by several government bodies across nations.

World trade and intellectual property rights

The agreement establishing the World Trade Organization (WTO Agreement) included the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which went into effect in 1995. The Paris Convention for the Safeguarding of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works, two primary intellectual property treaties dating back to the 1880s that are monitored by the World Intellectual Property Organization (WIPO), were incorporated into and expanded on by the TRIPS.

The importance of intellectual property rights on a worldwide scale has increased as innovation has become a key indicator of global competitiveness. The Agreement on Trade-Related Aspects of Intellectual Property Rights, sometimes known as the TRIPS Agreement, was established during the Uruguay Round of the trade negotiation process to safeguard intellectual property rights.

The TRIPS Agreement created a minimum standard of security for the intellectual property of many other WTO members. It includes topics including secret information, architectural and structural ideas, geographical indications (GI), copyrights, trademarks, and patents (trade secrets). The long-term goal of protecting intellectual property rights was to promote innovation and creativity. The WTO Doha round of trade negotiations discussion includes intellectual property problems as well (launched in November 2001). The Doha mission instructs members to “discuss the implementation of a multilateral system of notification and registration of geographical indications for wines and spirits” and to “interpret the TRIPS Agreement in a manner supportive of public health.”

TRIPS Agreement as a combination – Berne and Paris-plus agreement

There is a link between the TRIPS Agreement and the Conventions on Biological Diversity. Also, the degree of GI protection provided to wines and spirits under the TRIPS Agreement was expanded to a wide variety of items. The two more unresolved operational difficulties (agricultural and non-agricultural alike) were now in question as to whether these two topics should now be subject to negotiation.

All of these conventions’ major substantive clauses were included by reference, with the exception of those in the Berne Convention for the Protection of Literary and Artistic Works. It constitutes duties under the TRIPS Agreement between TRIPS Member Nations. Articles 2.1 and 9.1 of the TRIPS Agreement, which refers to the Paris Convention and the Berne Convention, respectively, contain the applicable clauses. Secondly, the TRIPS Agreement introduces a significant number of new duties in areas where the earlier treaties are silent or were deemed insufficient. As a result, the TRIPS Agreement is occasionally referred to as a Berne and Paris-plus agreement.

Cross-border transactions

A cross-border transaction is a transaction in which at least one party is situated across the world, or an activity where the monetary exchange takes place in international trade between two or more countries outside the geographical bounds of a country. Major types of cross-border transactions include:

Cross-border financing

The term refers to any financial arrangement that crosses national boundaries. It includes loans, letters of credit, banker’s acceptance, bank guarantees, depository receipts, etc.

Buying or selling products or services

It refers to buying and selling of products and services. Both may have different features on infrastructure, establishment, producing product service outside the jurisdictional limits, trading across borders, bridging between local resources and outside supply, etc.

Combined research/shared services etc.

Business entities are now being equipped with shared services. For that, joint research programs are being introduced as one cartel or chamber of commerce. Such shared services are concerned with matters of international trade if those shared service centres are providing services across borders scattered in different locations.

Important aspects for entering a cross border transactions

While entering a cross-border transaction, different countries should keep in mind that as per international trade law one should also follow legal compliances, any precedent rulings, and state contracts in case of reciprocating territories they have entered into. Adding more to this, indirect and direct taxation matters, corporate tax planning, accounting, and financial planning issues have also to be considered for the smooth functioning of cross-border transactions. This will help in maintaining harmony between countries and ensuring that confusion in transactions is avoided.

Corporate records necessarily to be maintained as a due diligence checklist

Some of the important documents required to be attached with the due diligence report should have details about the institution’s formation prior to incorporation as well as about acquisitions, reorganizations, restructurings, bankruptcies, placements, buybacks, and modifications in various forms. It should also be noted that information pertaining to the company’s bylaws, articles of association (AOA), and any revisions to them should also be mentioned in the due diligence report that has been drafted. For conducting successful due diligence, it is required to maintain a summary of panel sessions, which include written consents, executive committee resolutions, and resolutions from shareholders and members. Further mailings, solicitations, financial statements, and registration papers are then sent to shareholders. After this, contracts about option plans, securities issuance, securities acquisition, and investment options are further introduced for the facilitation and maintenance of transparency in cross-border transactions.

Any agreement, plan, or documentation that incorporates provisions preventing a transfer of ownership, as well as all documents connected to anti-takeover procedures, are also required to be disclosed. Lastly, details in case of any organisational diagrams displaying the ownership, organisational structure, along with details on subsidiaries, divisions, joint ventures and a certificate of legal conformity from each relevant department in the jurisdiction of incorporation have to be disclosed for the effective legal compliance and taking into account other parties also know some very important details for further formalities to be done while closing a transaction.

Dispute settlement

Under international trade law, there are different provisions for dispute settlement which is done with the help of WTO and GATT. It was governed by Articles XXII and XXIII of the GATT, which set up a system of consultation for the settlement of disputes among the member nations. The dispute settlement system evolved over time, and there were additional documents, and legal instruments were created to incorporate changes. Even with certain changes, the dispute resolution mechanism was not considered satisfactory.

Among the current international tribunals and bodies, the institution of the WTO’s dispute settlement mechanism has evolved as one of the most reliable and enforceable systems. Its legitimacy is based on several enhancements that were made possible by the approval of the Dispute Settlement Understanding (DSU), which improved the prior dispute resolution system established under the GATT. This element refers to ideas like reverse consensus to illustrate how the WTO’s current dispute resolution mechanism has developed.

It is regarded as one of the most reliable and trustworthy methods of dispute resolution. The system’s awards have a binding nature, which is what makes them enforceable. But to claim that such a structure just emerged in 1995. The new WTO dispute resolution process has assimilated fifty years of experience in resolving trade issues under the GATT. Although the present system has made several additions and improvements to the previous one, it is GATT 1947 that is primarily responsible for its inception. Article 3.1 of the Dispute Settlement Understanding (DSU) is relevant in this situation.

GATT 1947 wasn’t intended to be a global trade organisation. It naturally did not include a comprehensive dispute resolution system and only had two brief provisions—Articles XXII and XXIII—relating to dispute resolution. These clauses allowed GATT members to seek adjudication for three types of claims: violations, non-violations and situational concerns. The General Agreement on Trade and Tariffs (GATT) is one such agreement that was adopted in 1947 by 100 nations to lessen trade restrictions, lower tariffs, and promote international trade in the years following World War II.

Another outcome of trade negotiations under the GATT is the World Trade Organization. The WTO is a global organisation with the responsibility to create effective trade laws, serve as a venue for further discussions to lower trade restrictions, and serve as a forum for resolving disputes.

International Trade laws deal with certain subjects which are inclusive to all the member nations under the WTO. It includes:

Negotiating trade agreements

Agreements of accession to the WTO, general trade agreements, and regional trade agreements.

Compliance

Tariffs and quotas
Administration of customs laws
Government subsidies, anti-dumping, countervailing duties and other trade remedies.
Technical standards for industrial and agricultural products.
Intellectual property protection
Understanding and utilizing various provisions of the WTO for trade enhancement for developing countries during domestic adjustments integrating into the rule-based trading system.

Law reforms

Laws regulating foreign investments
Government procurement laws and anti-corruption measures.

India’s Foreign Trade Policies

It will be clear when we look into India’s economy before the 90’s. Till then, India was a closed economy where average tariffs exceeded 200 percent, quantitative restrictions on imports were very extensive, and there were strict regulations on foreign investments. India started to reform during the 1990’s as it opened up the economy so that there will be a flow of foreign investments and an increase in the foreign trade policies of the country as well. Since then, foreign trade showed a remarkable change. India’s percentage of GDP increased drastically, and the economy is now one of the fastest-growing economies in the world. India is now aggressively pushing for more liberal global trade management. It has gained a leadership role among developing nations in global trade negotiations.

Recently, India has signed various trade agreements with neighbouring countries as well as the United States. Its regional and bilateral trade agreements are at different levels of development.

India – Sri Lanka Free Trade Agreement
Trade agreements with Bangladesh, Bhutan, Maldives, China, and South Korea.
India – Nepal Trade Treaty.
Comprehensive Economic Cooperation Agreements (CECA) with Singapore.
Framework Agreements with the Association of South East Asian Nations (ASEAN), Thailand and Chile.

India is now, one of the largest trading partners with the US, which imports major items such as IT services, textiles, machinery, gems, chemicals, etc. The US have also made notable investments in India’s power generation, telecommunication, ports, roads, petroleum exploration and processing, and mining industries as well.

While looking for the cases involving international trade, we can see that almost all the cases deal with issues involving any private sector business organization on one side and the concerned Government business authority on the other. In the case of Suntec Industries v. the United States, the court was of the opinion that the issue regarding granting of defendants motion for summary judgment would be denied due to the failure of producing evidence for proving their part, and hence the court decided the case for the defendant. Hence it will be clear that for cases involving international trade practices, submission of strong evidence against the concerned parties must be necessary so that they realizes the fault on their part and the correctional mechanism will be implemented accordingly. Or else the case may likely lead to certain international trade disputes among the concerned nations. While looking through India’s use of the WTO dispute resolution mechanism, we can see that the nation is actively involved in all spheres including disputes and also in negotiations and reviews as well. India also had many cases against its international trade partners and won many among them and even considered to be a landmark in this field. The majority of the cases are involved in measures regulating textiles and clothing exports, which is one of the prime areas of India’s international trade. Mainly the United States is the other party in many of such suits. Overall, India was able to make a consistent remark in the field of dispute resolution mechanisms under WTO in order to pursue issues that matter to it.

Trade disputes

The WTO’s Dispute Settlement Body (hereinafter referred to as the “DSB”) adjudicates problems involving international commerce amongst its members. The WTO’s dispute resolution mechanism, as outlined in the Dispute Settlement Understanding, requires disputing members to first engage in consultations targeted at peacefully settling problems. If this is not possible, then the complainant country may seek the DSB to constitute a dispute settlement panel. Such professional panelists may only be established by the DSB, which also has the sole right to accept or reject the panel’s decisions or the outcomes of an appeal after they have considered a matter.

India has been a prominent real concern before the DSB and has so far brought up 24 disputes. Additionally, India has been the target of 32 claims brought by other member countries. Three of the disputes out of the twenty-four WTO cases that India filed have already progressed at this stage.

Disputes filed by India in pursuance of trade remedy

Except for Canada, Mexico, Australia, Argentina, South Korea, Brazil, and countries in the European Union, the US levied additional import taxes of 25% and 10% on specific steel commodities and metal products from all other nations in 2018. India filed the case US – Steel and Aluminium Products (India) to oppose the levying of an extra import tariff and asked the DSB to appoint a group. Eight other WTO members, including Canada, China, the EU, Mexico, Norway, Russia, Switzerland, and Turkey, also have filed disputes against the United States because the selective imposition of additional duties distorts international trade, and nearly 30 other members have reserved their right to participate as third parties.

The panel was set up by the Director General in January 2019 to resolve the conflict. Due to the complexities of the problems and the panelists’ commitments to numerous procedures, the panel subsequently communicated in November 2019 that it would be unable to produce a panel report well within a given timeframe.

Signatory Countries who have filed Disputes against India

The United States brought the case of India – Solar Cells in 2013, and both the panel and the Appellate Body determined that the government of India’s new policies violated both Article 2.1 of the TRIMs Agreement and Article III of the GATT of 1994. India informed the DSB of its intention to execute the order by December 2017, but the United States asserted that India had disrespected the order and asked for the termination of the concessions granted to India. India then asked the DSB to set up a panel in 2018 to settle the dispute between India and the United States. The government launched a safeguard examination in 2015 into shipments of “hot rolled flat items” and levied a 20% excise tax safeguard duty. Japan, which was offended by this decision, filed a dispute against India—Iron and Steel Products with the DSB and claimed that the safeguard measures were implemented in breach of several agreements on safeguard requirements as well as Article 2 of the GATT 1994. The DSB panel came to the opinion that India’s approach violated Articles 3.1 and 4.2(c) of the Agreement on Safeguards because it lacked reasoned opinions on all relevant factual and legal problems. Following that, both India and Japan informed the Appellate Body that they would be appealing this decision. The Appellate Body hasn’t released its report yet since there aren’t enough members to make a decision.

India’s Foreign Trade Policies

India began to reform in the 1990s as it opened up its economy to allow for an increase in international investment and the expansion of its foreign trade policy. Since then, there has been a noticeable change in global trade. India’s GDP share expanded significantly, and the country’s economy is currently one of the world’s most rapidly growing. India is currently making a strong push for a more open approach to managing global commerce. In international trade discussions, it now has a leadership position among emerging countries.

The US now trades with India, which imports significant goods including IT services, textiles, machinery, diamonds, chemicals, etc. The US has also made significant investments in India’s mining, petroleum processing, ports, telecommunications, electricity generation, and transportation sectors.

The Ministry of Commerce is concerned with making India a prominent player in international markets and implying a prominent function in global trade organisations that is compatible with the country’s growing significance. In the mid-term, the department is responsible for making commodity and great national strategies, and in the long term, it develops a strategic plan/vision and India’s Foreign Trade Policy. Multilateral and bilateral corporate contacts, special economic zones (SEZs), state trading, export growth and trade clearance, and the establishment and supervision of specific trade businesses and materials are all responsibilities of the Department.

The Foreign Trade Policy (FTP) of India establishes the planning and strategy frameworks for encouraging shipments and trade. It is updated regularly to keep up with changes in the domestic and foreign environment. India’s Foreign Trade Policy (2015-20) aims to increase India’s competitive position in the marketplace and commodities while also discovering new consumer goods in the business sector. In addition, India’s Foreign Trade Policy envisions assisting manufacturers in maximising the beneficial effects of GST (goods and services tax), carefully monitoring export performances, boosting cross-border trading ease, raising revenue from agriculture-based export markets, and boosting exports from MSMEs and labour-intensive industries.

India signatory to other countries for trade agreements

India had even signed various trade agreements with neighbouring countries as well as the United States. Its regional and bilateral trade agreements are at different levels of development.

India – Sri Lanka Free Trade Agreement
Trade agreements with Bangladesh, Bhutan, Maldives, China, and South Korea.
India – Nepal Trade Treaty.
Comprehensive Economic Cooperation Agreements (CECA) with Singapore.
Framework Agreements with the Association of South East Asian Nations (ASEAN), Thailand and Chile.

While looking for the cases involving international trade, we can see that almost all the cases deal with issues involving any private sector business organization on one side and the concerned Government business authority on the other. In the case of Suntec Industries v. the United States, the court was of the opinion that the issue regarding granting of the defendants’ motion for summary judgment would be denied due to the failure of producing evidence for proving their part, and hence the court decided the case for the defendant. Hence it will be clear that for cases involving international trade practices, submission of strong evidence against the concerned parties must be necessary so that they realise the fault on their part and the correct mechanism will be implemented accordingly.

Analysis of Foreign Trade Policy of 2015-2020

The foreign trade policy of 2015-2020 is a policy aimed at facilitating international trade by lowering money transfer costs and times while also boosting the profitability of Indian exports. For the benefit of import and export trade stakeholders, the administration has prioritised trade between countries and implemented steps in this regard through the terms of this policy.

Strengthening the “Make in India” initiative – under the 2015 – 2020 foreign trade policy, the first key step planned to be taken was under the Export Promotion Capital Goods (hereinafter referred to as EPCG) scheme, where the aim was to decrease Export Obligation (EO) for domestic purchasing. In promoting domestic capital goods production, the targeted export responsibility under the EPCG scheme, which was reportedly 90 percent of the usual export obligation (six times the duty recovered sum), was lowered to 75 percent in cases where capital goods were obtained from indigenous builders. The Merchandise Exports from India Scheme (MEIS) awards export commodities with an increased household composition and quality enhancement at a superior stage. It is suggested that commodities with increased domestic content and added value be rewarded more generously than items with a high import content and little added value.

Two new schemes have been introduced, namely the Merchandise Exports from India Scheme (MEIS) for the sale of defined commodities to selected markets and the Services Exports from India Scheme (SEIS) for the increased export of registered facilities. The MEIS programme offers incentives ranging from 2% to 5%. The specified services would be awarded at 3% and 5%, respectively, under SEIS. Under the EPCG system, initiatives have been implemented to encourage the purchase of capital assets from indigenous producers by lowering specified export obligations by 25%. With the MEIS, agricultural and village industry commodities will be subsidised at levels of 3% and 5% globally, respectively. With MEIS, prepared and manufactured agriculture and food commodities will receive a better amount of funding.

Scope of improvements

The primary objective is to enhance Indian export performance by utilising innovation and manufacturing.
Numerous low-cost, low-quality goods, particularly from China, have entered the market as a result of mismanagement and insufficient quality management. These are harmful to India’s economy, ecosystem, and balance of trade.
Logistical challenges are another major hurdle to Indian exporters. India’s leading access points, such as Kochi, have timeframes that are two to three times lengthier than Chinese ports.
India falls far short of its prospects in trying to attract foreign direct investment (FDI), which is critical for increasing exports.

Modifications proposed in Foreign Trade Policy of 2021-2026

With the 60 percent drop in Indian exports and the 59 percent drop in imports as a result of COVID-19, the government established and continues to update a long-term strategy that takes such circumstances into account. This is one of the main reasons why the new Foreign Trade Policy 2021-2026 should include goods delivery. Parliamentarians, officers, merchants, exporters, and others provided input to the FTP 2021-2026 throughout its planning phase.

Main objectives to be met from the FTP 2021-2026

Infrastructure upgrade

Under this, the government needs beneficial investments to be made in infrastructure development, which will help improve trade as per the FTP 2021-2026. India may learn from China as well because China is well-ranked for its exports, which will help India in the growth and development of its existing ports, warehouses, certification centres, etc. Under this FTP, it is recommended that the Trade Infrastructure for Exports plan that was approved in 2017 be expanded further.

More focus on increasing exports

As per Financial Year 2020, Subsidies are less expected to perform a significant impact on enhancing global trade. In this approach, factors such as quality, manufacturing size, and innovation will be game-changers. This approach was likewise agreed upon by the majority of industry specialists. Similarly, trade policy can also include benefits focused on research and development. The Amended Technological Upgradation Fund Scheme, which was created to improve production, investments, export markets, and performance in the manufacturing industry through technology modifications, can now be applied to other industries.

Tax benefits in compliance with world trade organization – RoDTEP

The DGFT (Directorate general of foreign trade) had proposed the Remission of Duties or Taxes on Export Products (RoDTEP) Scheme that replaced the MEIS (Merchandise Exports from India Scheme), and the scheme came into effect on January 1, 2021. The scheme would guarantee that exporters obtain reimbursements for previous non-recoverable underlying charges and taxes. The initiative was implemented to increase export volume, which had previously been low.

Relaxation in credit access

As per this, MSMEs (micro, small, and medium enterprises) will be offered easy access to credit under the FTP of 2021 – 2026. Earlier, it was difficult for MSMEs to get loans from formal institutions. Fortunately, the FTP of 2021 – 2026 will open Alternate Credit Avenues.

E-Commerce and digitalization

India needs improved trade procedures as Covid-19 hinders established supply channels. E-commerce and digitization may be able to help in this direction. Digitization can play a key role since it eliminates the need for manual operation in slow-moving import-export operations. Nasscom, an apex government agency, proposes a web-based platform for Import-Export Code holders to update basic information such as email addresses and phone numbers. The digitalization procedure makes the entire import and export procedure automated and online. This contributes to increased transparency in global trade.

Conclusion

On the whole, international trade gives an opportunity for the buyers and the sellers to be exposed to a new market environment as well as to new products. Industrialization, advanced technology, globalization, multinational corporations, as well as outsourcing, receives a major impact on the area of international trade and commerce. Hence, there lies utmost importance in the area of international trade so that there are effective laws and statutes in this sector which are applicable and convincing to each and every member nation under the WTO as well as various other international trade federations. According to the World Bank, around twenty-four developing countries have gained higher income growth, an increase in revenue and various other developmental aspects solely through the way of increase in international trade relations among their member countries. Various economic theories also state that international trade raises the standard of living and eventually, a drastic change from a closed economy to an open economy will be visible then.

Globally speaking, trade provides opportunities for both buyers and sellers to experience new items and market environments. Globalisation, multinational firms, industrialization, advanced technology, and outsourcing are all significantly impacted by international trade and commerce. Therefore, there must be efficient regulations and statutes in the sphere of international commerce that are relevant to and persuasive to all members of the WTO as well as several other international business organisations.

The FTPs (Foreign Trade Policies) are updated every five years to set new objectives and take into account developments that can be incorporated into the Policy for the betterment of the country. They play a very important role in promoting trade and business in the country on a worldwide platform by focusing on the most critical areas. By supporting export-related advantages and reimbursements of duties and GST (Goods and Services Tax), the FTP for the period of 2015 to 2020 placed a strong emphasis on increasing the Indian market share and adding new inclusive products to the Indian market.

There are high hopes for the FTP 2021–2016, which got delayed because of the COVID-19 pandemic. But it appears that the government has adopted a highly comprehensive stance and has included all relevant parties in the decision-making process. The FTP 2021–2026, which became effective on January 1, 2021, appears to exhibit encouraging development and results, particularly against the framework of the recovery from the COVID–19 pandemic.

Frequently Asked Questions (FAQs)

What is the main purpose of International trade law?

The main purpose for which international trade law has been formed is to regulate the trade system among developed, developing, and transitional economies in the world. Export controls and sanctions are two domestically imposed measures that affect international trade. To remedy imports that are seriously harming domestic industries due to unjustified foreign prices and/or foreign state subsidies, the government may use trade measures. An illustration of a trade remedy is the imposition of antidumping duties by the International Trade Commission (“ITC”) in response to dumping. This happens when a foreign company offers an item in the United States for less than it does in its “home market,” harming American business.

The transfer of protected hardware, software, and information for purposes associated with foreign policy goals and national security is regulated by export control legislation. Every nation has its department setup that is responsible for keeping a check on the exchange of material goods and information with other countries. In India, we have the Ministry of Commerce and Industry, and under it, two departments were formed. First is the Department of Commerce, and another one is the Department for Promotion of Industry and Internal Trade. These departments have the power to impose penalties for not complying with export control legislation that can be both civil and criminal.

On the subject of international treaties, businesses may want guidance regarding the World Trade Organization’s (“WTO”) regulations, a formally recognised international body that governs trade. The North American Free Trade Agreement (“NAFTA”) and bilateral investment treaties are further important agreements.

While some law firms have relatively limited practice groups that cover all facets of international commerce, others have very broad practice groups that concentrate on all aspects of the law (such as anti-dumping). Since what is legal varies widely across nations, the laws governing the transfer of data and personal concerns are expected to grow in importance in the future.

How does WTO enforce International trade policy?

Actions at the WTO are “member-driven,” meaning that all participating states must agree on them. The membership, to its full extent, makes all significant judgments, either through ministers (who meet at least once every two years) or through their ambassadors or delegates (who meet regularly in Geneva). Consensus is typically used to make decisions.

The WTO differs from certain other international institutions like the World Bank and International Monetary Fund in this regard. The leader of the organisation or a board of directors does not have any authority in the WTO. The result of discussions with WTO members is that regulations place limitations on countries’ actions. The members voluntarily enact the regulations following specified procedures, which may include trade sanctions. However, those penalties are applied by member nations and approved by the entire membership. This is very unique to other organisations whose bureaucrats, for instance, can affect a nation’s policies by threatening to reject credit.

It can be challenging to decide on the 150 members. The biggest benefit is that everyone can agree on the judgments made in this manner. And yet, some very spectacular deals have been struck despite the challenges. However, there are occasionally calls for the formation of a more concentrated executive structure, maybe along the lines of a board of directors with each member serving a different group of nations. But at the moment, the WTO is a consensus-driven or member-driven organisation.

What are the main legal barriers in International trade law?

The improvement of developing nations’ capacity for domestic services is one of the goals of the GATS as stated in Article IV (1) (a) and (b). Furthermore, this goal is hampered by a wide range of obstacles. Stringent import licensing, widespread government contracting, stringent recruitment and foundation standards, selective taxes, caps on equity involvement, and insufficient technological requirements are a few of the general hurdles mentioned in the framework of finance as a whole. The following are some specific obstacles that affect the trade in banking activities, particularly in a rapidly developing economy:

entry rules that forbid financial firms from having any kind of representation and impose strict capital standards that are higher than those applicable to financial institutions;
equity involvement, which involves the authority of domestic authorities to assess whether foreign capital in a small bank complies with the restrictions on the purchase of a majority interest by foreigners working set forth by the country’s interest,
restrictions on domestic markets of firms under foreign ownership, including the prohibition of foreign banks’ security-related operations (such as issuance);
prohibitions on cross-border transactions that prevent foreign banks from being accepted or restrict taking out loans through foreign banks.

References

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

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

https://t.me/lawyerscommunity

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

Judicial system of Singapore

By

Rachit Garg

-

January 25, 2023

0

This article is written by Parth Sharma, pursuing a Certificate Course in Introduction to Legal Drafting: Contracts, Petitions, Opinions & Articles from LawSikho. This article is an in-depth study of the judicial system in Singapore.

It has been published by Rachit Garg.

Table of Contents

Introduction

The judicial system of Singapore is well known for the efficiency it has shown to international businesses as well as the reliability it has given to its citizens. The system has significantly developed since 1989. At that time, it was infamous, as it was characterised by delays, limited access, high costs, archaic procedures, and weak administrative capacity, among other problems. The island country in Southeast Asia has witnessed exponential growth in its economy because of its amended and improved judicial system.

Witnessing these changes, some questions have emerged in everyone’s mind. How did a country so embedded in the status quo and often considered inward-looking achieve these remarkable changes? What were the adopted reforms? How did the system evolve? What is the legislative and judicial history? How did the modern system come into shape? Answers to these questions will help us better comprehend the modern judicial system of Singapore and shed light on lessons that policymakers all over the globe could grasp to make their judicial systems as effective as the ones in Singapore. This article seeks answers to these questions. To do so, several perspectives can be taken into account. This article delves into the perspective that would take a holistic look at the multidisciplinary facets of the judicial system and shows how the overall development of the jurisprudence of Singapore’s courts took place.

Historical background and evolution of the judicial system of Singapore

Historical records that were not shrouded in time and several accounts from the third century describe Singapore as “Pulau Ujong,” which, as per the Malay language, means “island at the end of the peninsula.” Since then, the city has been ruled by several ancient rulers who turned the city into a trading post for vessels such as Chinese junks, Arab dhows, Portuguese battleships, and Buginese schooners.

The modern city of Singapore was established in the 19th century. The man responsible for the establishment of the city was Sir Stamford Raffles of the East India Company. The British Empire was eyeing the island because of its strategic location, which was ideal for the convergent point of the traders from east and west. In1819, a treaty was signed between Sir Raffles and Sultan Hussein that equipped the East India Company with the rights to establish a factory in Singapore. This is considered to be the inception of the modern legal system of Singapore. In 1823, a code of law was administered for Singapore by Sir Raffles. Though these regulations are considered illegal as Sir Raffles was acting beyond his legal powers, the code functioned as the sole body of judicial regulation in Singapore until 1826. The code was responsible for setting up the magistrates’ courts in Singapore.

The occupation of the British Empire was formalised by the Anglo-Dutch Treaty of 1824. On September 19 1924, a treaty was signed between the Sultan and the new resident, John Crawfrud, through which Singapore and Malacca were surrendered to the East India Company. Until 1826, the treaty of cessation was not ratified by the British Parliament. Until the arrival of the second charter of justice, the judicial administration of John Crawfrud was, technically speaking, illegal. The Crawfrud administration established resident’s courts in place of magistrates’ courts. A Court of Requests was also established. Higher government officials and leading merchants were appointed as the justices of the peace by the administration. A recorder’s court was also established.

In 1825, the British parliament enabled the King to administer the judicial system in the British colonies of Singapore and Malacca. These colonies, along with the Prince of Wales Islands (Penang), formed strait settlements. The criminal courts started functioning in a manner identical to the courts in England. The customs and usages of the native inhabitants were given due diligence.

On 12 August 1855, the third charter of justice was passed to bifurcate the workload upon the court of judicature. The charter reorganised the court of judicature into two divisions. The jurisdiction of the first division was over Singapore and Malacca, Prince of Wales Island and Province Wellesley came under the jurisdiction of the second division. It included the recorder, the governor, and the resident councillor of Prince of Wales Island.

The judicial system of Singapore was further introduced to some new changes. The Judicial Duties Act was approved in 1867 which ceased the governor to be the judge of the court of Judicature in the strait settlements. The resident councillors were bestowed with the new title of Lieutenant Governors, and they continued to be the judges of the courts under the new title. Under the new act, the title of “Recorder of Singapore” was renamed to “Chief Justice of Strait Settlements,” whereas the title of “Recorder of the Prince of Wales Island” was renamed to “Judge of the Prince of Wales Island.” In 1868, an ordinance was passed that abolished the Court of Judicature of the Strait Settlements and replaced it with the Supreme Court of the Strait Settlements. After the reconstitution of 1873, the court consisted of a Chief Justice, the judge of Penang, a junior and a senior puisne judge. From 1873 to 1875, several ordinances were passed in the United Kingdom that modified the structure of the courts in England. In response to these changes, in 1878, the judicial system of Singapore underwent some structural changes that brought the Supreme Court of Straight Settlements into line with the High Courts of England. Until 1934, the court of appeals had only exercised civil appellate jurisdiction. To correct this, on September 1, 1934, the criminal appeal ordinance came into force, resulting in the establishment of the court of criminal appeal.

Singapore was facing the wrath of World War II along with the rest of the Pacific. In 1942, it was invaded by Japan. Post-invasion the judicial system of Singapore ceased to function. The Japanese military established military courts that administered the laws of the Japanese army. By a proclamation dated 1942, the courts were allowed to function as per the former laws in so far as they did not interfere in the military administration. The Japanese surrendered on 12^th September 1945. Singapore came under the administration of the British military, and it stayed under its helm till March 31, 1946. On April 1, 1946, Singapore was made into a separate British colony, and the strait settlements were disbanded. The Singapore colony order in council constituted the Supreme Court, which comprised the High Court and a court of appeals. The final appeals were laid before the judicial committee of the Privy Council in England. On September 16, 1963, Singapore was merged with Malaysia, following which the judicial system of Singapore underwent some changes. The Federation of Malaya Act of 1963 established the structure of the Malaysian Judicial System in Singapore. The judicial committee of the Privy Council of England still functioned as the final appellate authority.

On August 9, 1965, Singapore attained its independence and the ties between the countries were severed in 1969. In 1969, the Supreme Court of Judicature Act was passed, which re-instituted the Supreme Court. The High Court, the Court of Appeals, and the Court of Criminal Appeal were also revived. In the same year, an amendment was introduced to the Criminal Procedure Code of Singapore that abolished jury trials. Another amendment was introduced in 1992 that allowed the single judges bench to try cases related to capital offences. Before the 1992 amendment, capital offences were tried by a two judges bench. In 1993, the separate appellate courts were merged into a single court of appeal for both criminal and civil offences.

The modern judicial system

Singapore, a former British colony, has adopted the English common law in its legal system. Constitution, legislation, subsidiary legislation and precedent are considered to be the four pillars of the legal system of Singapore. Singapore’s legal system majorly follows three kinds of laws. First, the common law. As we know, Singapore is a former British colony, and common law, which was inherited from the empire, is still practised in the legal framework. Second, the criminal law. The island country has a penal code divided into 24 chapters that are based on the Indian Penal Code. Third, civil law. Various courts in the system have been entrusted with hearing matters involving civil disputes. The various kinds of courts and their jurisdictions are mentioned below.

Hierarchy of courts in Singapore

There are two tiers of courts in the judicial system of Singapore. One is the Supreme Court and the other are the subordinate courts, with the former comprising the high court and the court of appeal. Following are the kinds of courts that are found in the judicial system of Singapore, along with their jurisdictions:

Court of Appeal– The judgements pertaining to both civil and criminal matters that are passed by the high courts are challenged in the court of appeal. The Chief Justice and two judges of appeal preside over the court of appeals. However, this figure may change on certain occasions.

The doctrine of Stare Decisis is one of the features of Singapore’s judicial system. The precedents of the court of appeals are binding on the subordinate courts. In the case of Public Prosecutor vs. Lam Leng Hung, the word “agent” under the penal code was interpreted by the High Court of Singapore, and the interpretation was upheld by the Court of Appeal. In case the Court of Appeal decides to depart from its earlier judgements, a reason for the same has to be provided by the court. In the case of Ng Kean Meng Terence vs. Public Prosecutor, the Court of Appeal reconsidered its stance on the guilty plea of the accused and held that the guilty plea can only be considered as a mitigating factor in consideration of sentencing. In criminal matters, the court tries cases involving the death penalty and imprisonment for over 10 years.

High Court- It is composed of a chief justice and other judges. In some cases, the judges can be of the Court of Appeal or experts on a particular subject. The appeals from district and magistrates courts are presented in the High Court. For instance, in the case of Parti Liyani vs. Public Prosecutor, the High Court took a different view than that of the district court, in consideration of the evidence, overturned the decision of the district court, and acquitted the accused person.

The jurisdiction extends to both civil and criminal cases. The cases with a value of over S$ 2,50,000 are dealt with by the High Court.

District Courts– Civil cases of value up to $2,50,000 and criminal offences with a maximum punishment of up to 10 years are dealt with by the district courts. The district court has the power to sentence a person to up to 7 years imprisonment, a fine of value up to $10,000, a caning of a maximum 12 of strokes, reformative training, or a combination of all. However, Amnesty International has requested the Singapore authorities to let go of the punishment of caning.
Magistrates Court– Civil cases of value up to $60,000 are dealt with by the magistrates’ court. In criminal cases, offences that have a maximum punishment of 3 years or are punishable with a fine are dealt with by the magistrates’ court. Caning of a maximum of 6 strokes, a maximum fine of $2000 and a maximum imprisonment of 2 years can be given by this court.
Coroner’s Court– Deaths that have happened a) due to violence or b) in an unnatural manner or c) the reason for the death is unknown, in such cases, the coroners’ court hold inquiries. The investigation is conducted by the judge with the assistance of the police.
Juvenile court– The juvenile court entertains the offences that are committed by a child up to the age of 14–16 years.
Small Claims Tribunal– Small claims between suppliers and consumers, cases about contracts for goods and services, and leases of residential property of up to 2 years are dealt with by the small claims tribunal. Referees appointed by the president preside over the tribunal and are permitted to try cases of value up to $ 10,000.
Family Court- Matters pertaining to matrimonial disputes, domestic violence, matrimonial property, adoption of children, and maintenance of a child are entertained by the family court.
Night Court- From Monday to Friday, after 6 pm, the night courts deal with the issued summons and notices by the government departments such as the Urban Redevelopment Authority, Central Provident Fund Board etc. The traffic offences highlighted by the traffic police are also dealt with by the night court.
Community Court- Matters pertaining to the offences committed by youthful offenders (aged 16-18 years), family violence, attempted suicide, neighbourhood disputes and offences committed by mentally challenged offenders are dealt with by the community court.
Syariah Court– The Syariah Court deals with marriage and divorce disputes between parties who married in accordance with Muslim law or are Muslim by religious identity.
Traffic Court– The traffic court entertains the offences put forward by traffic police and land transport authorities.

Caseload and employment structure

Out of all the cases that the judicial system of Singapore entertains in a year, more than 95% are dealt with by the subordinate courts. The subordinate court works under immense pressure. Around 70% of the total workforce in the judicial system works in the subordinate courts. Around 14% out of that 70% are judicial officers.

Either the president appoints the judicial officers in the subordinate courts or they are appointed on the recommendation of the Chief Justice. The judicial officers hold their office at the pleasure of the president.

Singapore’s Supreme Court comprises the Chief Justice, High Court judges, Judges of Appeal, and Judicial Commissioners. The appointed judges stay in their office until they attain the age of 65, with eligibility for re-appointment post-retirement. The judges are appointed by the President in consultation with the Prime Minister.

Alternative dispute resolution

Singapore has witnessed immense growth, thanks to the liberalised economy, which has led to the growth of the ADR sector in the country. Singapore is one of the epicentres in the world for dispute resolution. Famous for its impartiality and integrity, it has become the forum of choice for dispute resolution. Mediation is actively encouraged by the government for dispute resolution before turning to the courts for relief. The Singapore International Mediation Institute and the Singapore International Mediation Centres have established their names as being the preferred forums of the international business community for international commercial mediation. Furthermore, the Singapore convention provides for the cross-border enforcement of mediation awards.

Arbitration is still a fairly new concept in the context of Singapore being a hub for dispute resolution. With the passing of the New York Convention on the Recognition and Enforcement of Foreign Awards and Singapore being a signatory to the convention, the awards made in Singapore have been made binding and enforceable in India. Arbitration has gained immense popularity in Singapore, so much so that, in 2018, Singapore was named the 3^rd most preferred country for arbitration.

Specialised tribunals in Singapore

The following are the specialised tribunals that were established in Singapore’s judicial system:-

Community Dispute Resolution Tribunal- On 1^st Oct 2015, under the Community Dispute Resolution Act, this tribunal was established. In case the issues between neighbours are not solved through mediation, the tribunal steps in to resolve such cases. Neighbouring issues such as loitering, excessive noise, smell, smoke, and trespass are dealt with by this tribunal. These cases often emerge in areas with a high density of people belonging to different races and cultures.

The following are the orders that can be passed by the Community Dispute Resolution Tribunal: a) Damages up to $20,000; b) an injunction; c) specific performance; d) the issuance of an apology.

The registrar is entrusted with the passing of such orders. In case parties are not satisfied with the order, an appeal can be made to the tribunal judge. The high court is the second appellate authority.

Employment Claims Tribunal- As the name suggests, this tribunal resolves disputes regarding the salary between the employee and the employer. This tribunal was established on April 1^st 2017, to provide a low-cost and speedy resolution of disputes. The Employment Claims Act 2016, The Employment Claims Rules 2017, and The Employment Claims Regulations 2017 are some of the primary pieces of legislation that govern the ECT.

The ECT is empowered to try cases with a value up to $20,000. However, disputes up to the value of $30,000 that have undergone mediation with the assistance of the Industrial Regulations Act recognised unions can also be settled by the ECT.

The appeals of the orders passed by the ECT may only be made on the ground that the tribunal went out of its jurisdiction in the passing of such an order, or on the ground involving a question of law. The high court is the appellate authority for the orders passed by ECT.

Industrial Arbitration Court– The IAC, in 1960, was established to resolve the settlement of trade disputes and to resolve matters on employee-employer relations. It is presided over by a President and Deputy President. The President of Singapore, on PM’s advice, appoints the president and the deputy president of the court.

In case the disputes between the employer and the union are not resolved through discussions, the assistance of the Ministry of Manpower is sought. If the parties still fail to resolve their dispute, the IAC steps in.

The first channel that’s adopted by the registrar is mediation. If the dispute is not resolved amicably, the registrar arranges for the matter to be heard by the court.

Intellectual Property Office of Singapore- The IPOS is entrusted with using its expertise for the growth of Singapore through IP and innovation strategies. The registries of patents, trademarks, plant varieties and registered designs work within the IPOS for processing and granting intellectual property rights in Singapore.

The registrar and his delegates preside over the mediation and hearing department of the IPOS for granting speedy resolution of disputes regarding the registration of trademarks and patents, plant varieties protection and registered designs. The IPOS also acts as the secretariat of the copyright tribunal and helps in administering the copyright tribunal.

Strata Tiles Board- These tribunals were established under the Building Management and Strata Management Act 2004 (BMSMA). The tribunal mediates disputes regarding floor leakages, performance or failure of a duty under the BMSMA, resolutions that are passed by the management corporations, issues related to car parking, and complaints related to modification of the common property. President and deputy president preside over the tribunal and are assisted by a registrar.

Problems with the court system and reform strategies

The courts in Singapore were working sluggishly until 1990. The traditional English laws and the ineffectiveness of the judges to deliver justice timely resulted in a serious backlog of cases. Litigants were not given the right to be heard, the parties and their lawyers controlled the pace of the litigation, which caused some serious delays. The backlog problem was the result of these practices. A shortage of judges was limiting the efforts that were made to reduce the backlog. The subordinate courts were not functioning well because of a lack of proper infrastructure. Courtrooms were insufficient to handle the number of cases that were being filed. To tackle the backlogs, in 1976, the jurisdiction of the subordinate courts was expanded. Despite taking several measures, the backlog of cases was not decreasing. Singapore was emerging as a global commercial hub, with foreign investments pouring in from all over the world; serious reforms were needed for Singapore to become a financial superpower. Several measures were taken that proved ineffective. According to a report from the World Bank, “the reforms were not feasible for the long term.”

To tackle the backlog problem, a new Chief Justice, Yong Pung How, was appointed. Soon after his appointment, he started working on the reforms. The first issue that was dealt with was the lack of manpower in the judiciary. The number of judicial appointments increased exponentially between the years 1990 and 2000. The increase in manpower resulted in the faster disposal of the backlog of cases. However, the increase in manpower was just one plank in a raft of reforms. Reforms were introduced to improve the case management system, and mediation was promoted. Adjournments were denied. The jurisdiction of the subordinate courts was expanded. These reforms were fruitful, as they cleared the backlog of cases in the Supreme Court within 3 years of their implementation. Similar reforms were implemented in the subordinate judiciary, and around 90% of the backlog from the year 1990 was cleared. The reforms proved to be so successful that in the year 2000, Singapore achieved the highest case clearance rate when compared with any other country in the world.

Conclusion

The modern judicial system of Singapore is considered to be one of the most effective systems in the world. The island country is a major hub for dispute resolution. The country has a very rich history, and over several years, Singapore witnessed a substantial evolution in its jurisprudence and its economy. But the judicial system was not always the epitome of effectiveness and reliability. Singapore, being a former British colony, inherited English laws and a court system. In the long run, these systems proved to be inefficient, which led to a major backlog of cases. Several reforms were introduced to tackle the problem that was inherited from the old English laws. These reforms exponentially reduced the backlog and made the judicial system of the country effective. The modern judicial system is well-equipped and has all the resources needed to ensure justice is delivered speedily and effectively. In contrast to a lot of Asian countries, the judicial system of Singapore is reasonable and business-friendly. It provides quick resolution of disputes and ensures that laws are fairly applied, minimising the scope for corruption.

References

‘Introduction to Singapore’s legal system’ (GuideMeSingapore) < https://www.guidemesingapore.com/business-guides/immigration/get-to-know-singapore/introduction-to-singapores-legal-system> accessed Nov 30 2022
Bridge HW, ‘Court Backlogs: Balancing Efficiency and Justice in Singapore’ (2017) 7 (4) Oñati Socio-legal Series < https://opo.iisj.net/index.php/osls/article/view/861/1046> accessed Nov 30 2022
Singhania & Partners LLP, Ying TY, Khoo J, Chai K, ‘India: International Commercial Arbitrations Between Singapore And India’ (Mondaq)< https://www.mondaq.com/advicecentre/content/3714/International-Commercial-Arbitrations-Between-Singapore-And-India> accessed Nov 30 2022
Tan, K, Essay In Singapore Legal History (1^st edn, Singapore Academy of Law 20
World Bank, Judiciary-led reforms in Singapore: framework, strategies, and lessons / Waleed Haider Mali, (2007) < https://documents1.worldbank.org/curated/pt/641511468300664743/pdf/387790SG0Judic101OFFICIAL0USE0ONLY1.pdf

Fair use under Copyright Law

By

Sneha Mahawar

-

January 25, 2023

0

This article is written by Nishka Kamath, a graduate of Nalanda Law College, University of Mumbai. It gives an in-depth overview of the fair use doctrine under Indian Copyright Law. Moreover, a global perspective of the fair use doctrine is talked about inter alia.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

Several people draw inspiration from the copyrighted works of others to create something unique of their own, whether it’s a painting, a movie, a song, or even this article. The new work thus produced may either be adaptive, derivative, or transformative (discussed below). A question might occur to your mind as to “whether such pieces of work are protected by the doctrine of fair use under the Copyright Act, 1957 or not?” or “whether such pieces cause any copyright infringement?”

This article is an attempt to shed light on all such questions and to elucidate the concept of fair use under copyright law.

A brief history of fair use in India

The history of fair use in India goes back to the 17th century when the French expressions were copied by some English authors without prior permission. This practice of infringement in no time became inevitable, thus paving a way for enacting law(s) against copyright infringement of any copyrighted content in the coming years.

Fair use under Copyright Law: a detailed analysis

The purpose of copyright law is to safeguard the interests of the creator and their original work. The original work can only be used with prior permission from the creator; however, there are certain exceptions to this principle, one of them being the concept of fair use and fair dealings.

Fair use and fair dealing

The concepts of fair use and fair dealing are related to copyright law, but they are not synonymous with each other. Their scopes are defined under different legal systems. It is challenging to summarise adequately; below is just a brief overview of the distinctions between them.

What is fair use

As mentioned above, fair use is an exception to the infringement of copyright and enables a narrow usage of copyrighted works without the prior consent of the individual holding copyright against the original copyrighted work. It allows the usage of copyrighted work, provided some value is added to the original copyrighted piece of work. It is pertinent to know that adaptive and derivative works of an original work do not fall under the category of fair use doctrine exceptions. The factors considered for a piece of work to fall under the ambit of fair use are discussed in detail below.

What is fair dealing

Fair dealing is another exception to copyright infringement in countries like Canada, Australia, Great Britain, New Zealand, etc. These countries’ copyright acts include provisions for copyrighted works that do not constitute infringement if the dealing is specified in the act; in other words, if an original work is copied for a purpose other than the statutory fair dealing purposes, the copyright cannot be considered a fair dealing, regardless of the intentions of the individual copying the work.

In India, the terms “fair use” and “fair dealings” are used interchangeably. Let us understand the key differences between the two terms.

Difference between fair use and fair dealing: a tabular representation

Prima facie the terms ‘fair use’ and ‘fair dealing’ may sound synonymous to each other, but their scope and meaning are distinct as portrayed below:

	Fair use	Fair dealing
Applicability	For fair use, the application list is quite illustrative and subjective.	Fair dealings only apply to those uses or exceptions mentioned in the law.
Scope	Fair use has a wider scope, as only the test of fairness has to be passed, even if used for an unspecified purpose.	Whereas the scope of fair dealings is narrower in comparison to fair use, as fair dealings are applicable only for specific purposes as opposed to fair use.
Nature	Fair use is flexible and resistant to change, especially those that lead to uncertainty.	The fair dealing exceptions are said to be uncertain too, especially for terms like ‘parody’ and ‘satire’ that are not defined under any provision.

Where is the principle of fair use applicable

As mentioned above, the principle of fair use is applicable in cases of “transformative work”. For instance, one can refer to or copy certain parts of the copyrighted work to create their own work in cases of criticism or parody, among other things.

The quantity and whether the usage is just under the fair use doctrine will depend on the discretion of the court to a large extent. The court, while determining the same, will consider the circumstances and facts of the case.

Fair use under Indian Copyright Law: an overview

Section 52 of the Copyright Act, 1957

Section 52 of the Copyright Act, 1957, has provisions regarding exceptions to copyright infringement and limited usage of the already copyrighted work of an individual without prior permission. The entire Section has provisions on what constitutes fair use and fair dealings under the Copyright Act. These exceptions, along with other exceptions to the fair use doctrine, are discussed in brief below.

Berne Convention and TRIPS Agreements

The Berne Convention for the Protection of the Literary and Artistic Works, 1886, commonly known as the “Berne Convention,” along with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, has provisions for the incorporation of the “fair use concept” in national legislation.

Three-step test under the Berne Convention

The Berne Convention has a three-step test for fair use. It also asserts that the laws of the countries must mandatorily have provisions for reproducing work in the following instances:

In certain special cases.
The original work must not be milked/exploited by the reproductive work.
The new reproductory work must not be prejudicial against the interest of its author(s).

Examples of fair use

There is no straight-jacket formula to establish whether something qualifies as fair use; hence, it is always advisable to seek advice from a copyright attorney before taking on a significant activity that would depend on the fair use doctrine as a copyright infringement defence. However, there are some instances that have been used to portray the activities to which the doctrine is applicable. The following are some examples:

Quoting a few lines from a play

Re-quoting or using a couple of lines from a play, say, in a blog is permissible under the doctrine of fair use. The reason behind this is that the amount of work copied is quite small, and the work in the blog is oftentimes used for critical analysis. In other words, quoting or excerpting a work for the purpose of review, criticism, or comment is acceptable under the fair use doctrine.

Sharing a video parody of a renowned song online

Let us assume someone has uploaded a video parody of a popular song to Instagram. Now a question might occur in your mind, “Will that be fair use?” The answer will be yes because a parody is considered a transformative work as it creates something new.

Non-profit educational uses

Suppose a professor, say, Ms. A, has uploaded a picture of the current president on her class website, stating that this will be the topic of discussion in the next social science class as a part of the curriculum; this will be said to be fair use considering the educational motive behind it.

New reporting

In a news report, if there is a summary of an article with proper annotations and credit, such use can come under the fair use doctrine.

Any non-commercial use

Any work that is published for private commercial gain will not come under the principle of fair use.

Adaptation, derivative work, and transformative work under fair use doctrine

Before we dive into the nitty-gritty of the fair use doctrine, it is crucial that we understand the basics of it, and to do so, we need to know the following:

What is adaptation

Adaptation can be described as the original work presented distinctly. Say, the transition of a novel like that of Shakespeare’s Hamlet into a screenplay or J. K. Rowling’s famous novel, Harry Potter, into a movie.

What is derivative work

A derivative work can be defined as a work that is derived from one or more existing works but has enough original elements. For instance, the Spiderman or Superman movie series.

What is transformative work

The term “transformative work” can refer to work that is entirely new yet has been inspired by an already existing copyrighted work. For instance, the Assamese song “Bistirnapaarore” by Dr. Bhupen Hazarika took inspiration from the song “Old Man River” by Paul Robson and also translated it into Bengali and Hindi by changing the lyrics totally but keeping the essence of the song intact.

The conditions of fair use

Under copyright law, the only way to determine whether a particular use is fair use or not is via the federal courts. The judges determine the fair usage policy with the four conditions, which are discussed in detail below. It is pertinent to note that these factors act as guidelines for the courts to reach a decision; however, they are free to make decisions based on the facts of the case at hand. In simple words, the judge has the right to determine whether a particular usage is a fair use at his discretion.

The purpose and character of the use

The purpose and character of your intended use are of utmost importance when deciding whether the particular use is fair use or not. While dealing with it, a question can be asked like the one mentioned below:

Whether you are creating something new or whether the news immaterial is just a copy of the original piece.
Whether any value has been added to the original work by the new creation, such as new information, new aesthetics, new insights, or the like.
Whether the new material that has been taken from the original work transformed into a new creation by adding new expression or meaning to it.

It is pertinent to note that it is not a cakewalk to determine which creation is transformative or to what extent the original work has been transformed. For instance, in the case of Warner Bros. Entertainment, Inc. v. RDR Books (2008), the creation of the Harry Potter encyclopaedia (that made Harry Potter conditions available in one volume) has been said to be “slightly transformative,” but the transformative quality was not sufficient for the creation to come under the fair use doctrine.

The nature of the copyrighted work

There is more leeway in copying from factual works like biographies than from fictional works like plays and novels, as the same proves beneficial to the public at large. Moreover, there will be a greater advantage in copying from materials that are already published than from unpublished work, the reason being that the scope of fair use for unpublished work is not as broad as it is for published work because it is at the author’s discretion to determine how he/she would want to announce it to the public. Simply put, using information from primarily factual works will have a greater advantage under the fair use doctrine than using purely fictional works.

The volume and substantiality of the part borrowed

It is oftentimes believed that the smaller the quantity of copied material, the greater the chances of it being excused under the fair use doctrine, but that is not the case. Even if a small portion of work is copied, the same will not come under the fair use doctrine if the copied work is said to have been taken from the “heart” of the original work. So, an individual may get into trouble if he/she copies the most noteworthy aspects of the original creation. For instance, it will most likely not be fair use to copy the words “I can’t get no satisfaction” from the song “Satisfaction.”

There is no straightjacket formula for how much quantity is a fair use; however, it is said one must not quote more than a few words or paragraphs from a book, article, or poem, or add more than a chart, image, illustration, or any other artwork in a book or newsletter without the permission of the artist. However, there is no absolute word limit on fair use; for instance, adding 200 words from the copyrighted work to a 300-word new creation will not amount to fair use. Nonetheless, copying 2,000 words from a work consisting of 500,000 words may amount to fair usage. Ultimately, it all depends on the circumstances and the facts of the case.

The volume and substantiality of the part borrowed in the case of parody

The aforementioned rule does not have to be true in the case of parodies because the Supreme Court in the US case of Campbell v. Acuff-Rose Music (1994) affirmed that “the heart is also what most readily conjures up the (original) for parody, and it is the heart at which parody takes aim.” In short, as per the Supreme Court’s decision, a parodist is allowed to borrow a larger portion, even the heart of the original work, to conjure up the original work.

The effect of the usage on the prospective market

Another crucial condition under fair use is whether the new creation divests the original copyright owner of income or hinders the creation of a new or potential market for the copyrighted work. In any circumstance, if the original copyright owner is deprived of any source of income, it is very likely that a lawsuit will be filed against the owner of the transformative work, and the same will be so even when the new work is not competing with the original work.

For instance, in the case of Rogers v. Koons (1992), an artist, without taking prior permission from the owner of the copyrighted work, i.e., the creator, created wood sculptures using the copyrighted photographs of the creator and earned a huge amount of money by selling these sculptures. When the creator of the photographs sued the artist, the artist contended that the sculptures were fair use as the photographer would never have considered making sculptures using his photographs as a reference. However, the Court opined that it did not matter if the photographer had considered making sculptures or not; what actually matters is whether there is scope for a potential market for selling sculptures of the photographs or not.

The effect of the usage on the prospective market in case of parody

Even here, parody is given a distinct fair use analysis for the impact it would cause on the market, for there is a possibility that a parody may reduce or even destroy the market value of the original work, i.e., there is a possibility that the parody is so good that the public can never take the original work seriously ever again. Yashraj Mukhate’s “Rasode Me Kon Tha Song” is one such example.

A circuit judge in the case of Fisher v. Dees (1986) asserted, “The economic effect of a parody with which we are concerned is not its potential to destroy or diminish the market for the original—any bad review can have that effect—but whether it fulfils the demand for the original.”

The fifth fair use factor: Are you good or bad

While studying cases on fair use, you might come across situations where the rules contradict the ones expressed in this doctrine. Fair use includes subjective judgments, often affected by elements like the discretion of a judge or jury or his individual sense of right or wrong. Irrespective of the fact that offending a judge is not fair use, an individual should be aware that a morally offended judge or jury may rationalise its decision against fair use.

For instance, in the case of Original Appalachian Artworks, Inc. v. Topps Chewing Gum, Inc. (1986), a manufacturer of novelty cards parodied the successful children’s dolls, the Cabbage Patch Kids. The parody series was named “Garbage Pail Kids” and used repulsive and bizarre names and characters to ridicule the wholesome image of Cabbage Patch.

Exceptions to infringement under fair use principle

Exceptions to infringement under Copyright Act, 1957

Under the Copyright Act, 1957, certain acts do not amount to infringement of copyright. Some of the exceptions are as follows:

A fair dealing with any creation, not being a computer programme, for the purpose of-

i. Private or personal use, including research;

ii. Criticism or review, whether of the work or any other work;

iii. Covering current affairs and current events, including the coverage of a lecture given in public.

The reading or recitation in public of reasonable extracts from an already published literary or dramatic work;
Reproducing any research work or private study with the motive of publication of an unpublished literary, dramatic, or musical work kept in a library, museum, or other institution that is accessible to the public at large.
The production or publication of any Act or set of rules or orders in a language that is not already translated in or published, or produced by the Government.

The de minimus defence

There have been certain cases in the history of copyright law wherein courts, without even conducting the fair use policy have given the authority to individuals to use it considering the amount of material copied. For instance, in the motion picture Seven, a few copyrighted photographs appeared in the film, which prompted the copyright owner to file a suit against the producer of the movie. The Court in this case [Sandoval v. New Line Cinema Corp. (1998)] concluded that the photos “appear fleetingly and are obscured, severely out of focus, and virtually unidentifiable.” The Court affirmed that the quantity of the copyrighted work occurring in the movie was less, excused the use of photographs under the “de minimus” doctrine, and stated there was no need for any fair use analysis.

However, there have been cases where this doctrine has been declared unacceptable. For instance, in the case of Ringgold v. Black Entertainment Television, Inc. (1997), the Court opined that using a copyrighted poster for 27 seconds in the background of the TV show “Roc” was not de minimus.

So, now you might wonder, what made this case any different from the one mentioned above, and why was the use of photographs in the Seven case accepted and the use of posters denied? The Court stated that in the case at hand, the poster was clearly visible and could be identified with enough observation for the “average lay observer” to view the imagery and colourful style of the creator.

Inspired work and fair use principle

While reading about fair use, a question might occur in your mind as to “whether inspired work will be an exception under the fair use doctrine?” Let’s find out.

The exception of fair use doctrine for adaptive and derivative works

As stated above, adaptive and derivative works are not novel in nature, the reason being that they use and rely particularly on the original work. So, they do not fall under the purview of fair use exceptions. Further, it is pertinent to note that adaptive and derivative works are entitled to protection only after receiving proper licensing from the owner of the original copyrighted work.

The exception of fair use doctrine for transformative work

Now you might think, “What about transformative work?” In the case of transformative work, the original work is used as inspiration for creating the new work, perhaps an idea or expression transformed into something new, thus offering insights into the previous work.

Chancellor Masters & Scholars of The University of Oxford v. Narendra Publishing House and Ors. (2008)

In this famous case, the Delhi High Court opined that the “fair use” doctrine is an essential part of copyright law. One idea can be moulded into distinct ways to create new work, and the question of copyright infringement does not arise here.

The main issue here was that a renowned publisher had published a book and mentioned in the agreement (between the defendant and the publisher) that the copyright in the book vested with the publisher. It later occurred to the publisher that the defendant was publishing guidebooks containing similar questions. The publisher then filed a suit against the defendant on the grounds of copyright infringement.

The Delhi High Court held that since the manner of use of the defendant’s publication and that of the publisher’s textbook was dissimilar, the defendant was said to have created a “transformative” work, not amounting to infringement.

Interesting fact:

There is a week particularly dedicated to fair use and dealing in the United States and Canada, amongst other jurisdictions. The 2023 Fair Use/Fair Dealing Week will commence on February 20, 2023. This annual week is celebrated with the motive of promoting and discussing the opportunities presented, celebrating the stories of success, and explaining the doctrine of fair use and fair dealing. Further, individuals from various sectors, like art, music, film, academia, etc., flock together to share their experiences and promote the importance of fair use in their community.

Fair use and freedom of speech

Fair use is another exception to the fair use doctrine and is quite an important legal tool in a free, democratic society like ours. It will not be an exaggeration to state that fair use is as important as any of the fundamental rights enshrined in the Constitution of India. Copyright holders have the legal right to protect their work from duplication or distribution of copies in the public domain, as well as to prevent someone from creating derivatives of their work or portraying their work to the general public; however, there are limitations to this right. If these exclusive rights had not been limited, copyright holders would have had complete or near-complete control over the use of their work. Without this fair use doctrine, the following consequences would have occurred:

A politician would have complete control over the delivery of his speech and no news channel would have the authority to publish it.
A researcher would have complete control over his/her work and could preclude another individual from producing criticism or quoting the research.
An artist would have the right to charge every visitor who visited a museum where his work was on display.
A publisher would have the right to charge a school for asking for remuneration every time a child reads a book.
The entire genres of music like jazz, rap, and hip-hop would stop existing as the first person to create the type would have the sole copyright to that genre of music.
A journalist would barely have any news to publish or address the audience at large, and the first person to witness it would claim its copyright.
Academic fields like history, art, and modern literature would nearly disappear.

We, as a society, value education, individual participation in government, and free speech. Without a healthy use of the fair use doctrine, there is a threat that individuals will lose their rights, which is why we need to balance the usage of the fair use doctrine, even though the struggle to do so is ongoing.

Case laws on freedom of speech and fair use doctrine

Consim Info Pvt. Ltd v. Google India Pvt. Ltd. (2012)

The Madras High Court, in this case, ruled that any unauthorised use of a trademark must meet three conditions in order to be considered “normative fair use,” namely:

The product or service in question must not be easily recognised without the use of the trademark.
Only as much of the mark or marks as is fairly important to recognise the product or service should be engaged in.
The consumer must not do anything that implies sponsorship or endorsement by the trademark owner while using the mark.

If only the aforementioned conditions are met, the defence of fair usage will be accepted.

Havells v. Amritanshu (2015)

In this case, the Delhi High Court reached a verdict that for any advertisement to be qualified as normative use under the fair use doctrine and under Ar ticle 19 (freedom of speech and expression), it is important that the specific quality or qualities of the product be specified, which distinguish the product from that of its competitor, and that the comparison must be accurate and true.

Wiley Eastern Ltd. v. Indian Institute of Management (1995)

The Delhi High Court, in this case, opined that “The basic purpose of Section 52 is to protect the freedom of expression under Article 19(1) of the Constitution of India-so that research, private study, criticism or review or reporting of current events could be protected.“

Judicial pronouncements on the principle of fair use: Indian perspective

Below are some of the recent instances where the doctrine of fair use came into play.

Shemaroo Entertainment Limited v. News Nation Network Private Limited (2022)

In this case, the Bombay High Court restricted the new channel titled “News Nation” from incorporating, recording, distributing, broadcasting, telecasting, disseminating, or publishing any work from the catalogue of the plaintiff, i.e., Shemaroo Entertainment.

The plaintiff, in this case, filed a suit against the defendant for using their content, even though there was an agreement made between the two parties that were later terminated. The defendant, in his defence, argued that he had used the content in issue while reporting news, which is just considering the doctrine of fair use and “de minimis”, and that the same was done not to individually or commercially exploit the work of the plaintiff but only to report the news. The defendant further contended de minimis use, as the use of the clip in issue was less than a minute.

The Bombay High Court made a decision in favour of the plaintiff, stating that the plaintiff had terminated the contract and hence the defendant had no right to use the content. Further, the Court said that a mere quantitative analysis of the duration of the content does not make a huge difference; thus, a meagre use of one minute does not make the defendant not guilty of copyright infringement. Furthermore, the defendant did not produce any material to support his argument that the content was used as part of its ordinary course of business for news reporting.

Super Cassettes Industries v. Mr Chintamani Rao & Ors. (2011)

In this case, the Delhi High Court opined that while determining what constitutes reportage of current events as criticism or review, courts must take a liberal approach. The Court further opined that using the copyrighted work merely for copyrighted work does not amount to unfair usage and that any transformative work will not be fair usage under the fair use doctrine.

Saregama India Ltd. & Ors. v. Alkesh Gupta & Ors. (2013)

In this case, the Calcutta High Court opined that permitting streaming or filtering another copyrighted sound recording on a website is not permissible. If the copyrighted content is being downloaded by some other website, this will lead to an infringement. Such an issue is not permitted under fair use if the website receives a fee or revenue from its sponsors or from third parties. The Court further asserted that such a usage amounts to commercial exploitation and cannot come under personal or private use.

Tips Industries Ltd v. Wynk Ltd. And Anr. (2019)

In this case, the Bombay High Court opined that making available another’s repertoire of copyrighted songs over a music streaming/OTT platform will not come under the exception of fair use or fair dealing for the purpose of private or personal use. Here, it was held that selling and/or commercially renting any copyrighted sound recordings for the purpose of commercial gain cannot come under fair dealing for the purpose of personal or private use or conducting research.

Devendrakumar Ramchandra Dwivedi v. State of Gujarat and Ors. (2009)

In this case, the issue of whether playing music at Navratri, a Dandiya event, a Garba programme, or other festival-related events where there are entry charges falls under the purview of fair use or not, was raised before the Gujarat High Court. The Court held that, usually, fair use and fair dealing in such matters refer to on-profit performances of music and other non-dramatic works. It further propounded that the basic gist of these doctrines is to absolve live performances of such works when they are not used for a commercial motive or when they are used for the purpose of education, religion, or charity and not for any ulterior motive or private or economic gain.

Further, the Court stated that playing music during Navratri, aarti, a marriage procession, other social gatherings related to marriage, or any official ceremony of the government is permissible under Section 52(1)(u)(za) of the Copyright Act. Furthermore, since there is no commercial purpose, no entry charge or procedure for admission, or any hidden agenda like personal or economic gain, playing music during such ceremonies is permissible.

Masters & Scholars of University of Oxford v. Rameshwari Photocopy Services (2016)

The Delhi High Court, in this renowned case, held that use of copyrighted material for educational purposes will not lead to an infringement of copyright. The Court said that reproducing copyrighted material from coursebooks for academic purposes does not require prior permission from the publisher for distribution.

Judicial pronouncements on the principle of fair use: a global perspective

Sony Corp. of America v. Universal City Studios, Inc. (1984)

In this landmark case, the United States Supreme Court ruled that making personal recordings of entire television programmes for time-shifting purposes does not amount to copyright infringement but rather comes under the fair usage policy. Further, the Court affirmed that the makers of home movie recording equipment, like Betamax and other VCRs, will not amount to copyright infringement.

The Donald Duck case

In this case (Disney v. Geva), the Israeli Supreme Court addressed the doctrine of fair dealing provisions for the first time via the work of the late artist David Geva. In this case, Geva created a character named “Moby Duck” in a book titled “The Duck Book” and remodelled Donald Duck (a Walt Disney’s famous character) with a Tembel hat and a curl on the forehead, thus giving typical Israeli features to the character. Upon seeing this, Disney sued Geva for copyright infringement. Geva contended that his use of Donald Duck’s character was a parody and would fall under the fair use policy under American laws. Even though the Court made a decision against him, it set the foundation for fair use exceptions, and the Court readily accepted the four fair use factors as discussed under Section 107 of the US Act.

The influence of fair use internationally: a global perspective

Each country has a distinct fair use policy, which is why it is always advisable to refer to the fair use laws of the particular state or country. A lot of countries have taken inspiration from the four factors laid down in US law, whereas there are other countries that are quite different from the US fair use framework. Let’s look at a few countries.

Fair use in the United States

Under US law, the following, inter alia, are protected under the fair use doctrine:

Satire,
Critiques,
News broadcasting,
Research and education.

The concept of fair use in US copyright law emerged in the 19th century after a suit was filed for copyright infringement by Charles Folsom, who published a biography of George Washington, and the respondent reproduced around 353 pages from the same work. Even though a decision was made in favour of the plaintiff, Justice Joseph Story laid out the four factors of fair use, which, to date, are being used across the globe. The four factors are as follows:

The purpose and character of the use,
The nature of the copyrighted work,
The amount of copyrighted work used,
The effect of the use on the potential market for the work.

Fair use in the United Kingdom

In the United Kingdom, there is a fair dealing policy discussed under Sections 29 and 30 of the Copyright, Designs and Patents Act 1988. Under this provision, there are three situations where fair dealing is a valid defence, namely:

Where the copyrighted material is used for the purpose of research or private study,
Where the copyrighted material is used for criticism or review,
Where it is copied with the intention of reporting current events.

These defences can be contrasted with the US provisions that have a rigid acceptable policy, i.e., the four-factor policy.

Fair use in Singapore

In Singapore, there is a doctrine of fair dealing, and it has been discussed under Section 35 of the Copyright Act, 1987, after the 2004 Amendment. The conditions discussed above, the first four, to be precise- have been included in this Section after the Amendment for matters related to fair use.

Fair use in Malaysia

Even in Malaysia, there was an Amendment carried out in 2012 to Section 13(2)(a) of the Copyright Act, 1987. Even in Malaysia, the four factors for fair use as stated under US law are incorporated.

Fair use in Australia

There has been quite a debate on whether fair use policy must be implemented or not in Australia since 1998. In most of the inquiries, the Australian Government was in favour of introducing a “flexible and open” fair-use policy.

In 2012, the Australian Law Reform Commission (ALRC) was instructed to carry out a survey on whether the exceptions and statutory licences in the Copyright Act, 1968, were enough and appropriate in the digital environment. In 2013, the ALRC released Copyright and the Digital Economy, where it made recommendations on incorporating the US-style framework on fair use.

Further, in 2015, a public inquiry into Australia’s intellectual property system was instructed to be taken to the Productivity Commission. In 2016, a report titled “Intellectual Property Arrangements” was released with the key recommendation of replacing ‘fair dealing” with “fair use.” The Australian Government was hesitant and responded by saying that this would “publicly consult on more flexible copyright exceptions.”

Moreover, in 2018, the Department of Communications and the Arts started a conference and asked the public to make submissions in response to its “Copyright Modernisation Consultation Paper.” Out of 89 submissions, 39 were in favour of fair use, 39 were against it, and 11 could not make an inference; the final report is not yet released.

Presently, under Australian law, the following does not constitute fair dealing:

News reporting,
Criticism or review,
Parody or satire,
Personal research or study,
Judicial proceedings or professional advice,
Access by a person with a disability.

Fair use in South Korea

In South Korea, there is the Korean Copyright Act, which was amended in 2012; here, changes were made in Article 35-3. This Act, too, outlines the four-factor test, similar to the United States law.

Fair use in Israel

Israel, too, has a new copyright law for fair use that includes a similar US-style framework. Under this law, fair use is permitted for the following purposes:

Private study,
Research,
Criticism,
Review,
Journalistic reporting, inter alia.

Fair use in Poland

In Poland, the fair use doctrine is covered under the Polish Copyright Law under Articles 23–35. Under Polish law, a distinction is made between private and public use. So, if the usage of any copyrighted material is for public or commercial purposes, a fine will be imposed. The defendant has to provide evidence that he/she used the copyrighted content for private purposes as opposed to public purposes, as contended by the plaintiff.

Conclusion

To sum it all up, for the copyrighted work to fall under the ambit of fair use or fair dealing by being modified into a transformative work, it is crucial that the work be created using one’s own expertise and labour. The amount of copyrighted work in another work generally referred to as the “transformative work,” must be in a manner that would portray that the work is merely being used as a guide or help to the final content. Moreover, it is pertinent to remember that the main motive of the fair use doctrine is to avoid any sort of hindrance to the growth of the original creator.

In a country like India, the concept of fair use and fair dealings goes beyond Section 52 of the Copyright Act, as mentioned above, there are exceptions like the de minimis defence, and the free speech exception, inter alia. The ambit of fair use or fair dealings, especially in India, depends on the facts, circumstances, and external factors of the case.

Frequently Asked Questions (FAQs) on the fair use principle

How much-copyrighted work can be used without prior permission from the original owner?

In the US as well as Indian law, a limited portion of work, including quotations for criticism, news reporting, scholarly reports, etc., is permissible. There are no set rules for how much quantity is a fair use; it usually depends on the circumstance and the facts of the case at hand.

Can an owner sue another individual who has copied his/her work?

If copyrighted work is used without prior permission, there is a possibility that a suit can be filed against the person infringing the content. However, certain set principles under the fair use doctrines allow for the use of a quote or sample without prior authorisation, such as when the content is used for educational purposes. But if there is any doubt about taking permission, the copyright officer will always recommend taking permission before using the work.

How can an individual obtain permission to use another person’s work?

Usually, one can obtain permission by directly asking the owner of the copyrighted work. If one does not know who the owner is, he/she can request the copyright officer to conduct a search of its records or may perform a search by himself/herself.

How can an individual find out who owns the copyright to a particular work?

One can obtain information available on records. Usually, upon request, the copyright officer will assist in finding who owns the copyrighted work in many countries.

Whereas in India, information on the copyrighted work can be found on the Search Registered Work page. The search can be conducted by choosing one or more options from Diary No., RoC (Registrar of Companies) No., applicant, and title. For instance, assuming the diary number is used to search for a particular registered work, in this case, all the information pertaining to the RoC number, the titles of the work, the diary number, and the applicant’s name will be displayed.

What is an e-register?

The e-register is a monthly database in pdf format that contains the RoC issued in a particular month. It has all the RoCs issued in a particular month, the diary number, RoC Mo, date, title of the work, category, and name of the applicant. The RoCs were issued in 2016, so all the data from that year is available on the e-register website.

References

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

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

https://t.me/lawyerscommunity

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

Ex parte evidence

By

Rachit Garg

-

January 24, 2023

0

This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article discusses the concept of ex parte evidence, circumstances under which ex parte evidence can be ordered and remedies available against ex parte acceptance of ex parte evidence.

It has been published by Rachit Garg.

Table of Contents

Introduction

Ex parte is a legal expression that directly translates to “from/out of the party/faction of” (name of party/faction is frequently omitted), denoting “on behalf of (name).” Ex parte refers to a legal procedure brought by one party without the opposing party’s presence, representation, or notice. The phrase is often used more loosely to describe improper, one-sided interactions with a court, arbitration, or party that is being represented without informing the other party or its legal representative. Ex parte evidence, therefore, signifies the collection and examination of the evidence of only one party to the dispute before the adjudicating authority thereby abstaining the other from presenting the same. Often judicial decisions are also reached by means of ex parte evidence. This article aims to highlight the same, thereby also discussing whether ex parte collection of evidence stands against the established principles of natural justice or not.

What is an ex parte evidence

When a petitioner presents their evidence in the form of documents, photographs, or witnesses who can attest to the relevant facts, the court first permits their presentation before evaluating all of it in accordance with the evidence laws and rendering a decision on the basis of that evaluation.

After the case has been resolved ex parte, the party against whom the ex parte order was made may appeal the decision to a higher court. Even if the defendants fail to appear, the court will decide the case on merits.

The Supreme Court has ruled that an ex-parte decree, which can be annulled in accordance with Order 9 Rule 13 of the Code of Civil Procedure, 1908 (CPC), is one that was issued after the plaintiff’s evidence was taken into consideration but before the defendant had appeared at the trial stage. The observation was made in the case of G. Ratna Raj by Lrs v. Sri Muthukumarasamy Permanent Fund Ltd. (2019), which was an appeal against a High Court’s decision that set aside a preliminary decree under Order 9 Rule 13 CPC, and the ruling was made by a bench of Justice A M Sapre and Dinesh Maheshwari.

The plaintiff was present when the suit was called on for hearing, but the defendants were not present despite service of summons, so the trial court proceeded to hear the suit ex parte by using Order 9 Rule 6 (a) in terms of Order 17 Rule 2 of the Code. As a result, the trial court issued the preliminary decree. When the case reached the Supreme Court, it opined that this decree did qualify as an “ex parte decree” under Order 9 Rule 6(a) read in conjunction with Order 9 Rule 13 of the Code and might, thus, be revoked in accordance with Order 9 Rule 13 upon the establishment of a valid ground by the defendants.

Circumstances when ex parte evidence is relied on

In accordance with Order 17, Rule 2 of CPC, a court may proceed to resolve the case in any of the ways listed in Order 9 in the event that a party to the suit does not present. The Explanation to Rule 2 states that the court may continue with the case’s resolution if any party’s evidence or a significant amount of the evidence presented has been recorded and the opposition party has failed to appear.
Instances such as when a party defaults in providing evidence or witnesses, or in carrying out any conduct required for the progress of the suit for which time was given, are covered under Order 17, Rule 3 of CPC. If the parties are present in such situations, the court may proceed to consider the case despite the default (Rule 3(a)). If one or more parties are not present, the court may proceed according to the instructions listed under Order 9’s Rule 3(b).
Order 9 Rule 6(a) specified that in the absence of the defendant, the court may proceed with the suit ex-parte, if the defendant has been duly served with the notice to appear.

Is ex parte administration of evidence valid

In order to understand the validity of ex parte evidence, precedents need to be looked into as have been discussed hereunder.

In the case of G.N.R. Babu @ S.N. Babu v. Dr. B.C. Muthappa (2022), the Supreme Court noted that the defendant (who had not submitted an application in accordance with Order 9 Rule 13 CPC) may contend that the ex parte proceedings against him were inappropriate while contesting the ex parte decree through an appeal. The bench was made up of Justices Ajay Rastogi and Abhay S. Oka, who noted that a defendant cannot argue that the judgement ordering that the matter proceed ex parte was invalid or wrong until the motion submitted by the defendant under Rule 13 of Order 9 of CPC stands dismissed.

Therefore, in reference to the above judgement, it can be said that the defendant cannot argue in the appeal against the ex parte decree that the order directing the suit proceed ex parte was illegal, until the application made by the defendant under Rule 13 of Order 9 of CPC is dismissed. The appellant can always point out from the trial court’s record that the order passed to proceed with the suit ex parte against him was illegal. The appellant can always argue based on the suit record that either the suit summons was not served upon him or that the trial court was not justified in proceeding ex parte against him despite the fact that he would not be permitted to lead evidence in appeal for establishing a sufficient reason for his absence before the trial court.

In Shah Bharat Kumar Premchand’s case (1979), the Full Bench of the Gujarat High Court had stated that Order 9 Rule 13 CPC empowers a Court to set aside an ex parte judgement against the defendant if the court is convinced that the summons was not properly served or the defendant was prevented from appearing when the suit was called out for hearing. The Court may annul the ex parte decree if it is satisfied. The evidence that has already been recorded is not deleted from the record when the ex parte decision is set aside. In order to give the defendant the opportunity to act as he would have if he had been present on the date the suit was called out in his absence, the decision setting aside the decree has the legal effect of returning the defendant to the pre-ex parte status. The obvious goal is to protect the defendant from prejudice given that he cannot be held accountable for not being present on the day the case was undergoing an ex parte hearing.

According to the same decision, there is no legal justification in Order 9 Rule 13 CPC or any other provision of the Code for maintaining that the evidence gathered before the ex parte decision was set aside would cease to exist or even exist in the eyes of the law. Nothing in Section 33 of the Evidence Act, 1872, prohibits the use of such evidence. When the witness is made available to the defendant for cross-examination and he is given the opportunity to do so, the principle underpinning Section 33 is actually respected rather than broken. Even when the defendant declines to take advantage of the chance to be cross-examined or is not present, the aforementioned Section does not additionally call for re-recording of the evidence.

To summarise the two precedents discussed above, ex parte evidence is valid if the court of law accepts it with a discerning mind and reasoning.

Remedies against ex parte acceptance of evidence

It is ideal to note that the remedies that are available with regard to an ex parte decree will ipso facto (by the fact itself) be applicable in the ex parte acceptance of evidence because, without the admission of evidence, a decree cannot be reached.

An application under Order 9, Rule 13 of CPC, 1908

When setting aside an ex-parte decree, according to Order 9 Rule 13, the defendant may apply to the court by which the decree was passed for an order to set it aside. If the court is satisfied that the summons was not properly served or that the defendant was prevented from appearing when the suit was called on for hearing, the court may make such an order setting aside the decree against him as it thinks fit and shall appoint a day for proceeding with the suit.

Two justifications are listed in Order 9, Rule 13, for overturning an ex-parte decree:

Whether the summons was not properly served:

According to Order 5 Rule 19 (issue and service of summons, examination of serving officer), a court is required to record a declaration of due service prior to conducting ex parte proceedings. When there is insufficient evidence to demonstrate that Order 5 Rules 13 (service on agent through whom the defendant does business) and Order 5 Rule 20 (substituted service) were properly followed, the decree should be overturned. If the summons was not properly served, the subsequent proceedings would be void.
According to the requirements of the Code dealing with summons service, due service is defined as service that occurs in a manner that effectively notifies the defendant of the claim, in good time for the defendant to appear, and at the correct address.
According to the proviso, if the court determines, for reasons to be recorded, that despite the irregularity, the defendant had knowledge in sufficient time to appear on that date and respond to the claim, an ex parte decree will not be annulled on the basis of irregularity in the service of the summons.

There was good reason for the defendant to be excused from showing up when the case was summoned for hearing:

The decree must be annulled when good cause is demonstrated. Each case must be evaluated in light of its unique circumstances, and where non-appearance is not intentional, a strict view should not be taken to throw a party out of court. The term “sufficient cause” is not susceptible to an exact definition, and no hard and fast rule can be established to cover all possible cases. The phrase “sufficient cause” refers to circumstances that are outside of a party’s control and do not include grave negligence.

If either of these requirements is met, the court must annul the decree; if neither of these requirements is met, the decree cannot be annulled.

After notice had been served in the case of Gayathri v. Ramesh (1993), the respondent/husband did not appear before the court of law. He was then adjudicated ex parte. The case was made available for ex parte testimony. In this case, the petitioner filed an affidavit certifying to certain conditions and pleading for support. The petition was denied by the learned trial court after it determined there was no basis for granting maintenance without recording any supporting documentation. The Karnataka High Court received an appeal filed against the family court ruling. The High Court opined that the family court cannot immediately place the party ex parte and proceed as in a civil issue if the party against whom the court is proposing to order maintenance payment is not present. In accordance with the proviso to subsection (2) of Section 126 of the Code, the matter can only be decided ex parte when it is determined that the person is purposely avoiding service or has been purposely absent from court.

Does setting aside an ex parte decree signifies setting aside evidence recorded before passing that decree?

Ex parte decrees according to Order 9 Rule 13 CPC do not imply the removal of previously filed material from the record. It has the legal effect of returning the defendant to their pre-ex parte position. The obvious goal is to prevent any harm to the defendant when the ex parte decree is overturned. When the ex parte order is overturned, he should be given the opportunity to pursue all of his options, had he been present on the day the ex parte hearing took place.

Any harm done to the defendant is undone if the defendant is given the chance to cross-examine the witnesses whose testimony was taken in his absence and is permitted to raise the issue of the admissibility of a document and request its re-exhibition if a document was admitted by the court but was inadmissible as evidence. Demanding that the main examination, which was recorded while the defendant was not present, be recorded again will be useless. The ex parte decree may be set aside under Order 9 Rule 13 CPC.

However, nothing in the cited provision states that the proceedings that took place in the defendant’s absence are null and void or that the evidence already recorded becomes non-existent by overturning the ex parte decree, subject to the erasure of any harm caused to the defendant, as previously stated, that is, subject to his right to cross-examine the witness whose testimony was recorded in his absence and/or to contest the admissibility of the document.

The entire observation has been viewed by several courts over time, the most notable being the Karnataka High Court in the case of Ramesh Patil v. Lakshamma (1993).

Appeal under Section 96 of CPC, 1908

An ex parte initial judgement may be appealed. Any court order may be appealed, barring any stated provisions to the contrary. If the lawsuit’s value is less than Rs. 10,000, an appeal may only be made on a legal issue when an ex-parte appeal is allowed after a judgement has been rendered against the defendant. The decision of the majority shall apply in situations presided over by two or more judges. If there isn’t a majority, the lower court’s ruling will be upheld.

A review application under Section 114 of CPC, 1908

Subject to the aforementioned, anyone who feels wronged-

By a judgement or order from which an appeal is permitted under this Code but which has not yet been filed,
By a judgement or order from which there is no right of appeal under this Code, or
By decision following a referral from a court of small causes,

may apply to the court that issued the decree or order for a review of the judgement, and the court may issue any order it deems appropriate thereon.

If the prerequisite conditions outlined in Section 114 are met, the court is essentially given the authority to reconsider its order. The substantive law does not specify any restrictions on the court’s authority other than those that are specifically stated in Section 114 of the Code, which gives it the authority to issue any orders it sees fit. In another case named Kaptur Agro Forest Enterprises v. Union of India (2002), the issue of the concession in relation to an overhead charge was resolved in the earlier writ suit by the allotters, and the Supreme Court likewise denied the special leave petition.

Conclusion

As far as ex parte recording of evidence is concerned, courts must use their authority judiciously so that prejudice is not caused to the interests and rights of the defendant. Keeping in mind the celebrated principle of natural justice, the right to a fair hearing and the right to provide an opportunity for both parties to the dispute to be heard must be of supreme importance, even when ex parte evidence is collected and the case proceeds ex parte.

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.

Unnatural sexual offence

By

Sneha Mahawar

-

January 24, 2023

0

This article is written by Sukhmandeep Singh, a law student at the Guru Nanak Dev University, Amritsar. This article explains what unnatural sexual offences are, what provisions are related to them, important judgments, and the POCSO Act provisions that are related to them.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

In our world, generally, men are attracted to women and women to men. It means most people are attracted to people of the opposite gender or sex. Along with this majority, there exists a minority who are attracted to people of the same sex or gender. This minority is known as the LGBTQ community. LGBTQ is an acronym that stands for “Lesbian, Gay, Bisexual, and Transgender.” The people who are part of this community are known as homosexuals, whereas others are known as heterosexuals. When there was carnal intercourse between two same-sex persons, then previously it was considered to be an unnatural sexual offence.

Homosexuality has been in existence for thousands of years and is attested in several religious and cultural literatures. In earlier periods of time, being homosexual was considered a sin, as the people had to confront this with the whole society, which was against homosexuality. People’s thinking has advanced in the twenty-first century, and everyone has the right to marry as well as the right to choose his or her life partner. But even with a changing mentality, LGBTQ community members face discrimination in almost every place. Some members of this community are even afraid to express their preferences for fear of being judged by society. There have been instances where they have been forcefully married by their families to protect their dignity in society. In the US, consensual sexual intercourse was declared valid and not against the law in 2003.

Homosexuality is still a crime in many countries around the globe. In the recently held FIFA World Cup in Qatar, even the logo of the LGBTQ community was not allowed in the stadiums, which is also the latest example of discrimination against the LGBTQ community. In India, until 2018, sexual intercourse between the same gender or sex was a crime under Section 377 of the Indian Penal Code (IPC); as in this Section, sexual intercourse between the same gender or sex was seen as an unnatural sexual offence. To decriminalise this offence, the first petition was filed by the AIDS Bhedbhav Virodhi Andolan in 1994.

History of the legislation

There are several favourable portrayals of same-sex couples and transgender gods in Indian Vedic texts. Ancient Greece and Rome also had similar views and likewise accepted same-sex relationships, and at that time, homosexuals were not prosecuted until there was a rise in the influence of Christianity in history. The history of this legislation dates back to the 19th century, when India was ruled by the British. India’s modern criminal law was drafted way back in 1861 by Lord Macaulay, who drafted the Indian Penal Code of 1860. As the Indian Penal Code was drafted by Britishers, it had many provisions similar to the English law of that time. If there was any Act that was declared unlawful by British laws, then that same Act was also declared an offence in the IPC. One example of such a law is Section 377 of the IPC.

This Section of the IPC is quite similar to England’s Buggery Act of 1533 and is thus said to be derived from the same. In this Buggery Act, the act of sodomy was declared unlawful between homosexuals as well as heterosexuals. Sodomy means anal or oral intercourse between human beings, especially those of the same gender or sex, or between a human and an animal. The act of sodomy was declared unlawful and thus, offenders were hanged to death. The word ‘sodomy’ was borrowed from the book of Genesis found in the Bible, which meant ‘city of sin.’ ‘Sin’ means an action that is not allowed by religion. Later, in 1563, this Act was re-enacted by Elizabeth I, which led to the formation of similar laws in British colonies. Thus, on this basis, homosexuality was declared an unnatural offence, which led to the drafting of Section 377 in India.

During the earlier period, as the influence of Christianity increased, there was an increase in the number of nations that declared sodomy unlawful, especially in European nations. Although it is not prohibited in all countries, there are nations like Poland that have never declared sodomy or homosexuality unlawful. As time passed, many nations that had earlier declared homosexuality unlawful willfully changed their laws, and France was the first European country to repeal its anti-sodomy laws. Later, many nations took the same step and passed legislation accepting their right. But, till now, there are many nations that still do not give LGBTQ community members their rights.

Types of unnatural sexual offences

As we know, unnatural sexual offences have been present in our society since time immemorial. It is important to know and understand the types of unnatural sexual offences. These are the following:

Tribadism/ Lesbianism
Bestiality
Sodomy/ Buggery

Tribadism/ Lesbianism

It refers to female homosexuality. ‘Lesbian’ is a term used to describe women who are romantically or sexually attracted to other women. Sexual intercourse involving two women or persons with vulvae is referred to as ‘tribadism.’ Sexual intercourse is typically between a man and a woman; tribadism is considered against the order of nature and thus falls under the category of unnatural sexual offences.

Bestiality

It refers to carnal intercourse between a person and an animal. Under this type too, there is an act that is considered against the order of nature and, thus, not legal.

Under this type, consent also plays a huge role. It is said that consent has two parts, i.e., communication and competence to consent. Under bestiality, neither of these two parts is there. The animals can’t communicate their consent and are not competent to give their assent clearly. With humans, too, when someone is not competent enough to give consent, we do not consider that consent. So, similarly, in this case, too, consent cannot be considered valid.

Sodomy/ Buggery

A sexual penetration other than vaginal intercourse is defined as sodomy. Sodomy laws mostly target gay men. Nowadays, generally, the term ‘sodomy’ refers to anal sexual intercourse between two men, a man and a woman, or a man and a kid, male or female, which is similar to rape. This act is also considered against the order of nature and, thus, an unlawful sexual offence.

What are the legal provisions dealing with unnatural sexual offences in India

Sexual offences are covered in the IPC from Section 375 to Section 377.

Section 375 of the IPC defines “rape” and various provisions related to it. Section 376 of the IPC puts light on the punishment given for the offence of rape under various conditions. Section 377 of the Indian Penal Code is the only Section that deals with unnatural sexual offences.

According to Section 377 of the IPC, if any person, against the order of nature, voluntarily performs carnal intercourse with any man, woman, or animal, then that person is said to have committed an unnatural sexual offence. Whoever commits an act, as defined by Section 377 of the IPC, will have to face life imprisonment or imprisonment of any kind for a period of up to ten years, as well as a fine.

In this Section, only penetration is sufficient to hold someone liable.

Meaning of the phrase “against the order of nature”

In Section 377 of the IPC, the phrase “against the order of nature” is used. The order of nature is something that is expected and occurs in normal life. If any artificial or man-made act is done and the events do not occur as normal, then it is said to be against the order of nature.

But as there is no proper definition present, it is hard to determine which action is in the order of nature and which is not. In the Khanu v. Emperor (AIR 1925 Sind 286) case, the court observed that, naturally, the purpose of sexual intercourse is pregnancy and, further, to conceive a child. The court then defined ‘sexual intercourse’ as ‘the temporary visitation of one organism by a member of the other organism, for certain clearly defined and limited objects.’ It means sexual intercourse is done for some limited purposes as well as to achieve some clearly defined goals. So, the court held that if conceiving a child is not the purpose of intercourse, then the act is said to be against nature’s order. The court interpreted the laws related to unnatural acts to include bestiality, consensual gay sex, and child sexual abuse.

With the changing of the times, interpretations of the court have also changed. Earlier, only anal sexual intercourse was considered unnatural, but after Khanu v. Emperor, oral sexual intercourse was also declared unnatural. According to the most recent interpretation by the courts, penile penetration through artificial orifices has likewise been considered unnatural. The court’s interpretation has gone so broad that sometimes it leads to the tyrannical application of this law. In literal terms, this interpretation declares sodomy, bestiality, paedophilia, homosexuality, and teen sexual abuse as punishable. The only type of sexual intercourse it does not include is heterosexual penile-vaginal intercourse; the rest are declared unnatural.

In Brother John Antony v. State (1990), the petitioner was a boarding home’s sub-warden who had the duty of taking care of inmates. The sub-warden was alleged to have committed unnatural acts with the boys, who were inmates. The acts were done in such a way as to create an orifice-like thing to create manipulated movements by inmates. Therefore, the court held the sub-warden liable as per Section 377 of the IPC.

Essentials of Section 377 IPC

There are three important essential elements of Section 377 IPC that must be fulfilled to make someone liable under this section:

The offender must have had carnal intercourse with a man or a woman (modified, discussed later) or an animal.
The offensive act committed must be against the order of nature.
The offender must commit the act voluntarily and with his or her own free will.

In the case of G.D. Ghadge v. State of Maharashtra (1980), it was held that even the least degree of penetration is sufficient, and proof of completion of the act is not required. ‘To penetrate’ in this Section means ‘to enter or pass through or force passage into or through.’ According to the explanation attached to the Section, penetration, no matter how little, is necessary to establish carnal intercourse.

Decriminalisation of Section 377 IPC

There have been a large number of petitions and PILs filed in different courts around the country seeking the decriminalisation of Section 377 of the IPC. However, there were some important judgments that led to the final decision regarding the decriminalisation of Section 377 of the IPC.

Naz Foundation v. Government of NCT of Delhi (2009)

In the case of Naz Foundation v. Government of NCT of Delhi, the decision was taken by the Delhi High Court’s Divisional Bench. In this case, consensual sexual intercourse was declared no longer a crime. This decision was given on the basis that Section 377 violates the fundamental rights of homosexuals.

Significant findings in this case

The court held that Section 377 of the IPC is violative of the right to privacy of all the persons involved in such acts. Article 21 of the Indian Constitution provides us with the right to privacy and the right to live with dignity, and homosexuals should also be given these rights.
Article 14 of the Indian Constitution was also taken into consideration while decriminalising Section 377. The court held that categorising people based on their gender violates Article 14 because Article 14 addresses the right to equality in the country and also provides for equal access to every human just because of being a human being. So, we can say that Section 377 is violative of Article 14.
The court also held that Section 377 of the IPC is violative of Article 15 of the Indian Constitution, as according to it, no one should face discrimination based on sex. In this Section, “sex” does not refer to only biological gender but also sexual orientation, and discrimination based on sexual orientation was seen in Section 377.
The court held that Section 377 also hinders homosexuals’ right to fully realise their identity in society. This violates Article 19(1)(a) of the Indian Constitution, i.e., freedom of speech and expression.
Section 377 was also found to violate the Universal Declaration of Human Rights.

So these are some of the findings of this case that led to the decriminalisation of Section 377 of the IPC by the Delhi High Court’s Divisional Bench.

Suresh Kumar Koushal & Anr. v. Naz Foundation & Ors. (2013)

The above judgement in Naz Foundation v. Government of NCT of Delhi was challenged in the Supreme Court on the basis that this liberal judgement by the Delhi High Court goes against India’s religious and cultural beliefs. The judgement of Suresh Kumar Koushal & Anr. v. Naz Foundation & Ors. led to the overturning of the previous judgement of the Delhi High Court.

Significant findings in this case

The Court held that Section 377 does not specifically target any group but rather specific sexual acts that are against the order of nature.
The Court held that only a small number of cases had been filed charging members of the LGBTQ community members, and it would be too early to declare Section 377 of the IPC unconstitutional.
The Court was not on the same page that the LGBTQ community faces discrimination, blackmail, etc., due to this Section.
The Court held that “the mere fact that the Section is misused by police officers and others is not a reflection of the Section’s virtues.” It means that even if it is misused by police officers, that is not proof that this Section’s power is ultra vires.

With all these findings, the court held that Section 377 is constitutional and overturned the Delhi High Court’s judgement.

National Legal Services Authority v. Union of India (2014)

In the case of National Legal Services Authority (NALSA) v. Union of India, the court put the utmost priority on psychological sex rather than the biological sex of the person. The court had negative views towards gender recognition based on biological sex and gave importance to psychological sex after going through many countries’ laws on this issue.

Major findings in this case

The Court, in this case, observed that transgender people and international treaties related to them must be acknowledged, and if they are in line with fundamental rights, they should be followed. Recognising transgender people’s identity also helps in the case of decriminalisation of Section 377 of the IPC.
The Court observed and declared that the transgender population is expected to receive legal recognition under ‘third gender’ and that the state must work on the same. Along with this, they are also given the freedom to choose their self-identified gender, i.e., in Article 21 of the Constitution.
The Court also held that Article 19(1)(a) of the Indian Constitution protects the right to privacy, gender identity, and integrity of all.
Along with the above, many more rights were also given to transgender people under this judgement.

Justice K.S. Puttaswamy v. Union of India (2018)

The case, Justice K.S. Puttaswamy v. Union of India, was heard by a 9-Judge Bench. In this case, Justice D.Y. Chandrachud admitted a mistake made by the Supreme Court in the Suresh Koushal v. Naz Foundation case. In this case, the Supreme Court ruled that sexual orientation is part of the right to privacy, i.e., Article 21, and no one can infringe on this right.

Navtej Singh Johar v. Union of India (2018)

Navtej Singh Johar v. Union of India is a landmark judgement that gave clarity over the interpretation of Section 377 of the IPC. A five-judge bench comprising CJI Deepak Mishra, J. Indu Malhotra, J. RF Nariman, J. A.M. Khanwilkar, and J. D.Y. Chandarchud heard the case. In this decision, the Supreme Court decriminalised any type of consensual sexual intercourse among adults in private, including homosexual activities.

Major findings in this case

In this case, the court held that a distinction must be observed between consensual and non-consensual acts by adults, either heterosexual or homosexual, and also held that if the acts are consensual, then the acts need not be classified as an offence under sodomy, etc.
The court also focussed on the NALSA judgement along with the Puttaswamy judgement and acknowledged that the right to sexual orientation is an important part of the right to privacy.
The Supreme Court agreed with the decision made by the Delhi High Court in the Naz Foundation case that ‘sex’ in Article 15 of the Indian Constitution means sexual orientation as well as biological sex.
The court, under its ruling, held that sexual orientation is inherent and natural. The decision will be taken by LGBTQ persons to either engage in intimate sexual relations with persons of the same sex or not, and this will be interpreted as their statement of autonomy and their power of self-determination of their sex.
The Supreme Court, while giving its judgement, dismissed the argument that the decision would increase the number of AIDS and HIV cases and is also immoral for Indian society. The Supreme Court held this argument as unreasonable, untenable, and arbitrary.

Thus, the Supreme Court, under its 5-Judge Bench judgement, held Section 377 unconstitutional if the act is consensual, i.e., with consent, regardless of the sex of the individual. The court also observed that consent must be free, voluntary, and without any type of pressure. Although it was not deleted from the Constitution of India, an unnatural sexual act is still an offence if it takes place without the consent of either party to the act.

Provisions under the POCSO Act

The POCSO Act stands for the Protection of Children from Sexual Offences Act, 2012. This act deals with the protection of children against sexual offences. This act relates to unnatural sexual offences as well. This Act is gender-neutral and deals with both male and female children. Important provisions are as follows:

Section 3: This Section defines ‘’penetrative sexual assault.’’ The definition of this section is similar to the definition of rape given in Section 375 of the IPC. The only difference is that the POCSO Act is gender-neutral, whereas rape, as covered in the IPC, covers only female victims.

Section 4: This Section deals with punishment for the offence committed, as given in Section 3. This Section holds the offender liable and orders punishment of imprisonment, which should be not less than 10 years or extend to life imprisonment. Along with imprisonment, a fine will also be imposed. If the offence is committed on a child under the age of 16 years, then the imprisonment should not be less than 20 years or can extend till the natural life of the offender. A fine will also be imposed. Fine imposed would be given to the victim and should be adequate to cover the victim’s medical expenses.

Section 5: Section 5 of the POCSO Act defines when penetrative sexual assault becomes aggravated penetrative sexual assault.

Section 6: In this Section, punishment for aggravated penetrative sexual assault is provided. If anyone is found guilty under Section 5, he or she will be punished with rigorous imprisonment of not less than 20 years, and it can extend to imprisonment till natural life. A fine will also be imposed. In this Section, the punishment of death can also be given.

So, these are the provisions of the POCSO Act, which can also deal with unnatural sexual offences against children.

Conclusion

Unnatural sexual offences have been in the spotlight for many years now. Various interpretations of the laws have been made, and their extent has also been studied. There is still a need to make provisions with clear wording that exhibit the extent of the operation. Although, with the passing of Navtej Singh Johar’s judgement, many things have been made clear, and various rights have been given by the Supreme Court to the LGBTQ community. Consent has been declared a key feature to determine whether an act is constitutional or unconstitutional. In my opinion, the use of the word “penetration” limits the scope of this Section, and many offences continue to remain in the grey area.

Frequently Asked Questions (FAQs)

Is an offence under Section 377 IPC a bailable offence?

Yes, the offence covered under Section 377 of the IPC is bailable.

When and why was Section 377 IPC decriminalised?

Section 377 of the IPC was declared decriminalised in 2018 with the passing of the Navtej Singh Johar v. Union of India judgement. It was decriminalised in cases where consent was present on the basis that Section 377 violated Articles 14, 15, 19, and 21 of the Indian Constitution.

Can a wife file a case against her husband for unnatural sexual offences?

Yes, the wife can file a case against her husband for an unnatural sexual offence if he commits such an act without her consent. She can file a case under Section 377 of the IPC, which prohibits sexual intercourse if it is against the order of nature. Such an act can also act as the basis for divorce.

In India, are same-sex marriages legal?

The answer to this question is no; as of now, they are not legally recognised. But on January 6, 2023, the Supreme Court ordered the transfer of all the cases related to the recognition of same-sex marriage. The Supreme Court also gave the government four weeks, i.e., February 15, 2023, to clarify its position on the same.

In this regard, in the United States of America, the House of Representatives granted final approval to legislation allowing for the legal recognition of same-sex marriages.

Is Section 377 IPC applicable to child sexual abuse?

Yes, Section 377 of the IPC is applicable to child sexual abuse too. The reason is that the consent of those under 18 years is not taken as valid consent, and thus, as no valid consent is present, it is an offence. However, it does not cover child sexual abuse to the extent that the POCSO Act does. In Section 377, penetration is a must, whereas under the POCSO Act, even if penetration is not there, the offender can be held liable. And also, the POCSO Act has many provisions that would be beneficial for the child in cases of sexual abuse.

References

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

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

https://t.me/lawyerscommunity

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

Difference between negligence and malpractice

By

Rachit Garg

-

January 23, 2023

0

This article is written by Sneha Mahawar and Kishita Gupta. This article aims to explain the two terms negligence and malpractice along with differentiating them from each other. The article includes key elements, origin of the concept, types and landmark judgments related to malpractice and negligence.

it has been published by Rachit Garg.

Table of Contents

Introduction

In our daily lives, we tend to use the two terms “negligence” and “malpractice” interchangeably. However, negligence and malpractice are legally two distinct concepts. Both may indicate that a defendant is responsible for the victim’s losses, but depending on whether the plaintiff is claiming negligence or malpractice on the part of the defendant, the elements that need to be proved and the nature of the claim may change.

The four components of negligence, according to McMinn Law Firm, are the duty of care, breach of duty, factual causation, and damages. Similar to this, malpractice includes four components: the presence of a legal duty; a breach of duty; a causal link between the breach of duty and the injury caused; and measurable harm as a result of the injury caused. According to Robenalt, in order for a claim to be accepted as a legitimate legal case, all four components of malpractice must be satisfied.

Every individual has a duty of care toward each other. However, if that duty is not followed, then it can be termed as negligence. Malpractice can be classified as a form of negligence, as negligence that causes harm is called malpractice.

Key differences between negligence and malpractice

Basis of distinction	Negligence	Malpractice
Meaning	Negligence occurs when one person fails to exercise the care that any reasonable person would have exercised if he or she had been in a similar position and as a result causes harm, damage, injury, or loss to the other person.	Malpractice occurs when a professional breaches their duty of care towards a client.
Claims	Negligence claims can be against anyone who has breached his duty of care.	Malpractice claims are brought against professionals who have breached their professional duty of care.
Scope	Negligence is a wider term, and includes malpractice.	Malpractice is a narrow term that is a part of negligence.
Form	Negligence is not a form of malpractice.	Negligence is a form of malpractice.
Result	It is the result of an unintentional action that occurs due to a failure to take the necessary steps that should have been taken under the circumstances to avoid or prevent that harm.	It is the result of an unreasonable lack of skill causing harm, damage, injury, or loss.
Failure	Negligence is a failure to exercise appropriate care.	Malpractice is a failure to use the professional set standards in undertaking a particular professional skill.
Intent	In cases of negligence, there may or may not be the presence of intent.	In cases of malpractice, the intent is usually present, i.e., knowing that harm may be caused.
Example	A driver causing harm to passengers due to his negligence.	A doctor not performing her duties in accordance with medical standards, resulting in harm being caused to her patient.

Meaning

Negligence

The Latin word “Negligentia,” which means ‘to fail to pick up,’ is the source of the English word ‘negligence,’ which refers to a lack of care. It is a common belief that when someone acts negligently causing injury to another person, that person is legally responsible for the harm under the legal doctrine of negligence. Both criminal and civil wrongs can result from negligence.

Negligence is a synonym for carelessness. As a result, we can describe this as an instance in which one person suffers harm or is hurt as a result of the negligence of another. Although the careless act does not directly cause harm to the other person, it nonetheless constitutes a tort. Negligence occurs when one person fails to exercise the care that any other reasonable person would have exercised if he or she had been in the other person’s position and as a result causes harm, damage, injury, or loss to the other person.

Accordingly, failure to take the necessary steps that should have been taken under the circumstances to avoid or prevent that harm is negligence as opposed to knowingly or deliberately creating that harm.

Malpractice

The term “malpractice” has been derived from two Latin terms, “malus” and “practicare,” which mean “bad” and “to practice,” respectively.

Malpractice refers to the tort that occurs when a professional breaches their duty of care to a client. According to most definitions, a professional’s obligation to a client is to uphold generally recognised professional standards. Of course, it is also necessary to demonstrate the other components of a tort (breach, proximate cause, actual cause, and damages). Lawyers and doctors are the targets of malpractice claims most frequently.

Any action or inaction by a doctor during the course of treating a patient that varies from the accepted standards of care and results in harm to the patient is referred to as medical malpractice. Professional negligence is a particular area of tort law that deals with medical malpractice. The term ‘malpractice’ is not directly used in India. While in the USA the term ‘medical malpractice’ is used, India uses the term ‘medical negligence.’

Legal malpractice is when a lawyer violates the client’s trust and the client suffers as a result. Not every error a lawyer makes is regarded as malpractice. Legal malpractice occurs when a lawyer mishandles a matter out of negligence or malicious purpose and causes injury to a client. In most countries, you must show an attorney-client connection between you and the lawyer, a violation of the duty to provide skillful and competent counsel (negligence), causation, and a monetary loss in order to win a legal malpractice action. In the legal profession also, in India, legal malpractice is known by the term ‘profession misconduct.’

Key elements

Negligence

The judgment delivered in Overseas Tankship (UK) Ltd. v. Morts Dock and Engg. Co. Ltd. (1961) is one of the earlier English cases that neatly summed up the elements of negligence. There are three elements to negligence. These are as follows:

Duty of care

There must be a “duty of care” between the plaintiff and the defendant for a negligence claim to succeed. It is a duty to refrain from acting or failing to act in a way that could reasonably and significantly harm others. The obligation is owed to individuals who might reasonably and likely suffer harm as a result of a failure to uphold the obligation.

The Supreme Court of India noted in Jay Laxmi Salt Words (P) Ltd v. State of Gujarat (1994) that a duty, which is the obligation to exercise care and reasonable care, is the central tenet of negligence law. However, the concept of obligation, its reasonableness, and the needed standard of care cannot be constrained. It can’t be fixed inflexibly. The obligation of today is the right of yesterday. The more developed a society is, the more sensitive it gets to the wrongdoing of private or even public officials. Social, economic, and political evolution continuously affect and modify tort law, particularly in the area of negligence.

Breach of the duty

When a duty breach results from a liability separate from the personal obligation assumed by the contract, it is considered a tort and may be considered a tort even though the parties have a contract if the duty in question develops independently of the contract. When a complaint involves a duty breach as a result of the contract’s promises, a breach of contract occurs.

In Dr. C.B. Singh v. The Cantonment Board, Agra (1973), the Court noted that there can be no doubt that the responsibility to exercise caution may arise from common law because the rule is too firmly established. Negligence is nothing more than a failure to uphold a duty of care. This obligation results from the relationship that one person has with another person or authority. These relationships can develop in a variety of situations. It occurs most frequently when someone uses their common law right to use a highway. By doing so, he establishes a relationship with other highway users, placing a responsibility on the local agency in charge of monitoring and managing the roadway to exercise caution. Whether or not the Legislature has authorised the formation of such a hazard, the basic duty of care or precaution is always implicit when a danger has been established by a person or authority. The common law obligation is to notify others of the danger you have posed for them.

The loss suffered by the plaintiff resulted from the defendant’s violation of that duty.

A negligence lawsuit is only actionable if the plaintiff suffers harm or damages that are solely attributable to the defendant’s violation of their duty of care and not from any other cause. If the damage is not reasonably attributable to the defendant’s conduct, the defendant will not be held accountable. The following types of harm could befall the plaintiff: “Physical hurt, harm to reputation, harm to property, financial loss, and mental harm.” The defendant is required to pay the plaintiff for the harm they suffered after the plaintiff establishes such damage.

Malpractice

There are four elements of malpractice. These are as follows:

Duty of care

In cases of medical malpractice, the first and most important element is the existence of a legal duty toward the patient. Now, this duty arises anytime a business connection is made between the patient and the healthcare provider. The fundamental tenet of law is that every individual owes others a duty of care in a civilised society. This idea is extended to the professional setting, where a doctor treating a patient owes him a duty of reasonable professional care. Practically speaking, this is the simplest part for the patient to prove because such a duty is practically assumed every time a doctor takes on a patient’s care. In the absence of a patient-doctor relationship, there is no duty.

In Chandigarh Clinical Laboratory v. Jagjeet Kaur (2007), the National Consumer Disputes Redressal Commission confirmed the conclusions of the District and State Commission, which required the appellant to pay the complainant a compensation of Rs. 25,000 plus costs of Rs. 2,000. Since the patient received inaccurate reports from the appellant’s laboratory, the Hon’ble Commission ruled that medical negligence resulted from the appellant’s failure to exercise due care. The appellant had a “duty of care” to the patient to provide accurate findings.

Breach of duty of care

The patient must use the idea of a “standard of care” to demonstrate a breach of professional duty. While the exact meaning of “standard of care” varies by jurisdiction and can be difficult to apply, in general, the term refers to the treatment that a reasonable practitioner in a similar situation would have given the patient.

In Dr. Laxman Balkrishna Joshi v. Dr. Trimbak Bapu Godbole (1968), the Honourable Supreme Court made an observation that every doctor must apply acceptable “standards of care” that are set out in the profession. Any violation of these duties will subject him to medical malpractice liability.

The Supreme Court ruled in State of Haryana & Ors. v. Smt. Santra (2000) that every doctor has a duty to exercise a reasonable amount of care and expertise. However, given that no one is perfect and even the most renowned specialist can make a mistake in diagnosing a disease, a doctor can only be held liable for negligence if it can be demonstrated that she or he failed to act with the degree of care that no other doctor of ordinary skill would have exercised.

Causation

Once a breach of duty of care is established, it must be proven that the professional’s negligence was the direct cause of the injury. This is often proved by demonstrating that the damage was the consequence of the professional’s negligence or that the condition would not have deteriorated or occurred in the absence of the professional’s negligence or error. However, there must be some kind of hurt, injury, or harm. If a professional is negligent but no harm or injury is inflicted, no malpractice claim may be made.

Causation in medical negligence cases implies establishing that negligence occurred as a result of a breach of duty of care, which further resulted in causing an injury. The process of proving the negligence of such a healthcare provider is known as “establishing causation.” Whenever an individual undergoes medical treatment, it is a general assumption that there can be complications, which is why one must prove a breach of duty to take care to establish causation.

For instance, a patient receiving care in a hospital may get an infection while receiving that care, and because the hospital was negligent, the infection might become lethal, leading to the patient’s death. In this instance, many actions combined to cause the person’s death, and it is therefore possible to establish causation.

In Wilsher v. Essex Area Health Authority, a doctor acted negligently and failed to provide a baby with an adequate amount of oxygen at birth, which tragically led to the baby being blind. When the parents of the baby alleged medical malpractice, it was stated that there were five causes for the baby to become blind and the doctor’s negligence is not the sole reason. Thus, the claim was rejected since it was determined that the doctor’s negligence was one of the five causes due to which the baby became blind. The claim was rejected because it was impossible to pinpoint which one of the five causes contributed to the baby’s blindness.

Damages for the breach

One must establish that they were actually harmed or injured by the medical institution or practitioner before claiming damages. The injuries must be quantifiable for the court to be able to value them financially. Medical records and expert testimony can be used to claim damages.

The estimation of damages in a medical malpractice lawsuit is often highly difficult and may take into account a variety of different factors. That may be particularly true when a patient dies or has serious injuries as a result of a doctor’s negligence. Damages in a malpractice case may include things like the price of further medical services and compensation for emotional distress brought on by the doctor’s negligence.

For instance, a child has broke his arm, and he goes to a doctor for medical assistance. If the fracture did not mend properly due to the doctor’s mistake in setting it, the child would have to undergo additional medical procedures to fix the arm. The cost of the additional medical treatment would be included in the damages, and the need for quantifiable injuries would be fulfilled.

Origin of the concept

Negligence

The concepts of justice, equity, and good conscience were used by Indian courts to approve and adopt the English common law as the foundation for Indian tort law in general and Indian negligence law in particular.

In Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum (1997), the Supreme Court concluded that it might be inferred that the Indian judicial system had expressly recognised the common law tort principles developed by the English courts. The degree to which such tort law ideas are appropriate and applicable to Indian circumstances must be considered. Therefore, it is essential to think about and develop our beliefs in line with English tort liability law.

Further, in this case, Justice Ramaswamy remarked that understanding the concept of tortious liability should be guided by the principles established by the House of Lords. Therefore, in order to move forward, it is necessary to analyse the common law of negligence as established by the House of Lords over the years.

Malpractice

The concepts of justice, equity, and good conscience were used by Indian courts to approve and adopt the English common law as the foundation for Indian tort law in general and malpractice law in particular. Two cases altered the legal meaning of the standard of care as it is now used in medical malpractice law.

In the T.J. Hooper, (1931) case, the owner of a tugboat was sued for the value of two barges. The tugboat had become engulfed in a thunderstorm, and the two barges it was transporting had sunk. The barge owners claimed that the T.J. Hooper was unfit for maritime service because it lacked a radio receiver for monitoring vital storm warnings. Furthermore, they claimed that having this radio receiver was “customary” for tugboats. The plaintiff argued that if T.J. Hooper had a radio, the storm might have been averted. Here, Justice Hand delivered a verdict in favour of the plaintiff but not on the basis of custom. He stated that it was not typical for tugboats to be supplied with receivers but that because the procedure was reasonable, the T.J. Hooper’s owners might be held accountable for damages. According to him, if a procedure is appropriate and reasonable but not uniformly “customary,” it can still be utilised to determine the standard of care.

In the case of Helling v. Carey (1974), the plaintiff sued her ophthalmologist for the loss of her eyesight due to glaucoma. The defendant won both the initial trial and the appeal, but when the case reached the Washington State Supreme Court, the decision was reversed. During the early trials, expert witnesses stated that because the patient was under the age of 40 and the incidence of glaucoma in this group was barely one in 25,000, testing individuals under 40 with tonometry was not the standard. The Supreme Court, on the other hand, concluded that the test was inexpensive and safe and that it should have been suggested to the patient.

Types

Negligence

Ordinary negligence

Ordinary negligence is defined as failing to exercise the amount of caution required in a given situation. Whereas, in a similar scenario, every prudent individual would use this amount of caution. Here, the person did not want to cause injury to another person.

Comparative negligence

In a comparative negligence lawsuit, the plaintiff is partially responsible for the harm done to himself. The plaintiff may or may not be given damages for the harm done, depending on the facts of the case.

Contributory negligence

Contributory negligence, unlike comparative negligence, does not allow for compensation if the plaintiff was slightly responsible for the injury, damage, or harm caused. Even if the plaintiff’s role was just 1%, they will not be eligible for compensation under contributory negligence.

Vicarious negligence

Vicarious responsibility is a type of negligence under which an individual or an organisation can be held accountable for damages even if they are not directly responsible. In certain circumstances, the defendant is accountable for the actions of another person and liable for their negligent conduct. An example of vicarious responsibility is when a dog owner is held liable for the damage done by their pet.

Gross negligence

The gravest sort of negligence is gross negligence, which involves behaviour that no rational person would ever conduct. Personal injury claims involving gross negligence are particularly prevalent in circumstances involving extremely aggressive behaviour. When a person’s acts demonstrate a full disregard for the safety of others, or if their actions are deliberate, they may be guilty of gross negligence.

Civil negligence

Civil negligence is a breach of a duty to care. Anyone found guilty of civil negligence is presumed to have behaved contrary to what a reasonable person would have done in identical circumstances. For there to be a claim, the negligent act must result in an injury or loss.

Criminal negligence

Criminal negligence arises when one person endangers another by failing to exercise a reasonable level of care. Law enforcement agencies issue criminal negligence claims, and for someone to be criminally negligent, they must be aware that their behaviour poses an unreasonable risk to another, representing a shockingly poor divergence from an adequate level of care.

Malpractice

Medical malpractice

Misdiagnosis

One of the most prevalent forms of medical claims in malpractice lawsuits is misdiagnosis. When a patient’s health deteriorates as a result of obtaining the incorrect treatment for their condition, a misdiagnosis can become medical malpractice. A misdiagnosis is when a medical professional incorrectly diagnoses a patient’s condition. A patient may suffer injury as a result of unnecessary treatment for a condition he does not possess.

Misdiagnosis is not always considered malpractice. A misdiagnosis will only be considered malpractice if the doctor failed to treat the patient with the same level of skill and competence that another doctor would have under similar circumstances, resulting in the patient’s injuries and ensuing losses.

In Johnston vs. St. Francis Medical Center, a 79-year-old man complained of stomach pain and was examined by radiography and lab tests, but his examination was not conclusive. He was evaluated by two doctors, who discovered that he was just slightly distressed. Additional tests, including computed tomography and ultrasound, were requested, but the patient was moved to the ICU after becoming hypotensive. An aortic aneurysm was suspected by the ICU doctor, and it was discovered during a laparotomy. In the operating room, the patient passed away. The plaintiffs contended that the doctors ought to have discovered the aneurysm sooner. Except for one professional doctor, everyone else said that this was a challenging diagnosis. The verdict was delivered in favour of the defendant. The court further stated that, though the aneurysm was visible on radiographs and in the lab after the diagnosis, there was no compromise in the quality of care.

Delayed diagnosis

In cases of delayed diagnosis, the patient must demonstrate that the doctor could have done more to assess and diagnose the patient’s illness. In addition, the patient must demonstrate that they sought medical assistance as soon as the symptoms began. One must establish a doctor-patient relationship and show that the doctor was negligent in providing the required level of medical care in order to establish medical malpractice for a delayed diagnosis. This negligence led to a delay in diagnosis and subsequent injury to the patient.

For example, a doctor who dismisses a patient’s complaint and fails to send them to a specialist or otherwise fails to give care that would result in adequate treatment within a reasonable time frame may be deemed to have committed medical malpractice.

Prescription drugs

Prescription errors can have life-threatening repercussions for patients. As a result, prescription medication malpractice claims are widespread, and compensation may be awarded. In addition to prescribing the incorrect prescription, drug-related malpractice lawsuits may encompass giving the incorrect dosage of a medication or neglecting to be aware of potential drug interactions. Furthermore, lawsuits may be made against pharmaceutical corporations that produced defective medication or failed to advise customers of all of its hazards.

Negligent failure to treat

In certain circumstances, a correctly diagnosed patient will not receive appropriate treatment, which can be termed as negligent failure to treat. This sort of circumstance can arise when a doctor has too many patients to treat and prioritises money over the safety of the patient. It may include a patient’s early discharge from the hospital, or the doctor may neglect to refer the patient to a specialist or to propose required follow-up care.

Surgical malpractice

If a surgeon injures a patient further while conducting an operation, he may be held responsible and can be sued for malpractice. Surgical errors have an adverse impact on the patient’s quality of life and can result in permanent injuries. Signing a consent document prior to surgery does not exclude a patient or surviving family members from filing a malpractice claim. Many different sorts of surgical errors may constitute medical malpractice, including the following:

Wrong-site surgery;
Wrong-patient surgery;
Wrong surgical procedure performed;
Using the incorrect surgical technique;
Causing nerve, tissue, or organ damage;
Performing unnecessary surgery;
Using tools that have not been sterilized;
Leaving objects inside the patient;
Anesthesia administered in excess or insufficiently;
Failure to offer appropriate follow-up care.

Birth injuries

If the tools used to deliver a baby are used inappropriately, medical personnel may be held liable for birth injury malpractice. Furthermore, negligence may exist if medical practitioners give treatments that are harmful to the health of the baby and mother or if they fail to plan ahead of time for the likelihood of a C-section birth. Birth injuries can kill both the mother and the infant in some cases. Birth injuries can result from any of the following malpractices:

Provision of inadequate prenatal care;
Failure to detect major complications;
Using assistive equipment incorrectly and resulting in cerebral palsy or brachial plexus injuries;
Performing an unnecessary C-section delivery;
In an emergency, failing to perform a C-section delivery;
Failure to monitor both the baby and the mother throughout labor;
Anesthesia administered in excess or insufficiently.

Defective medical devices

When a medical device fails, the patient might sustain serious harm or death. Poorly constructed medical equipment may cause organ failure in some individuals.

For example, if a pacemaker is discovered to be faulty, but a doctor in a position to know the device was bad chose to implant it nevertheless, the doctor is very probably accountable, not the manufacturer.

Legal malpractice

A legal malpractice claim alleges that a legal professional fails to perform their obligations with the degree of knowledge required of the profession. This generally includes failing to adequately represent a client in court. A legal professional may be guilty of malpractice if they fail to properly present the facts of a case, overbill their client, or have conflicts of interest pertaining to the case. Many different sorts of errors may constitute legal malpractice, including the following:

Failure to know the law

The most prevalent malpractice claim is failure to know or implement the law. It is a must for a client to expect his attorney to be well-versed in his field of practice. Furthermore, knowing the law and how to apply it in multiple situations is critical to the success of any case. When a solicitor operates in numerous areas of the law, this form of malpractice is more likely to occur. This makes knowing and understanding the nuances of the law in each subject more challenging.

Failure to meet deadlines

Failure to fulfill critical deadlines, such as a delay in submitting documentation to the court, can have serious consequences for a client. At various phases of the legal procedure, there may be deadlines for filing specific papers. Missing any of these might damage the client’s case. This can happen when numerous advocates from the same firm work on the same case. Due to significant turnover in the business or a tremendous workload, more than one lawyer may be managing distinct areas of the case. Missing important deadlines is more probable when there is not a single professional consistently tracking a case.

Planning errors

When an advocate fails to appropriately prepare for every possibility, it might result in planning errors. These mistakes might range from failing to develop a competitive strategy in a civil case to failing to maintain and subsequently provide copies of essential documents in response to petitions to dismiss the lawsuit. This is more likely to occur for advocates who have not digitised all forms and papers and have an ineffective technique for document retrieval.

Inadequate discovery

A lawyer is obligated to discover all necessary facts about a case. It might take time to investigate all essential facts, identify witnesses, and seek necessary information to effectively handle a case. Inadequate discovery occurs when a lawyer fails to discover all necessary facts about a case. For instance, if a lawyer fails to unearth all of a spouse’s financial assets during a divorce or if the lawyer recommends the client to accept a settlement without first thoroughly investigating all of the spouse’s assets, he or she may be held accountable for misconduct.

Failure to calendar

Failure to calendar refers to missing a deadline for bringing a lawsuit in certain situations. A lawyer would be held accountable for legal malpractice if they are engaged to pursue a personal injury claim and the statute of limitations expires before they file the required documentation.

Professional or White collar malpractice

Finance malpractice can take the form of stock brokers making deceptive claims or cases of insider trading. Financial and accounting professionals may be held accountable for malpractice which is termed “professional or white-collar malpractice”. Accounting mistakes may also result in a malpractice suit. An accountant may be held accountable if they fail to properly charge an individual or purposefully overbill them.

Landmark judgments

Lakshmi Rajan vs. Malar Hospitals Ltd. & Another

Facts

In this case, the plaintiff had a tumor in her left breast and had voluntarily gone to the hospital to have it surgically removed with her consent. The surgeon removed both her uterus and the tumor in her left breast, even though the latter had nothing to do with the former. The plaintiff claimed that because the defendant took action without the complainant’s consent, the act of the surgeon had a direct impact on the plaintiff that caused her medical discomfort; causation was proven. Here, the issue was raised both for volenti non-fit injuria and medical negligence.

Judgment

The Court ruled that the defendants could not raise the defence of volenti non-fit injuria since the plaintiff never consented to the removal of her uterus and only came to the hospital for the removal of the tumor discovered in her left breast. Nonetheless, the surgeon removed her uterus, which is an instance of medical malpractice, and the defendant could not avoid culpability since the mere act of removing the woman’s uterus is enough to show causation. It was held that the hospital was liable for deficiency in service.

Pravat Kumar Mukherjee vs. Ruby General Hospital and Ors

Facts

In this case, a second-year engineering student was riding his motorbike when he was hit by a bus, and a bystander took him to the Ruby General Hospital in Kolkata, which was close to the accident location. He was conscious when he got to the hospital, but he was bleeding from the nose and mouth. According to independent witnesses, at the hospital, the boy showed hospital employees his Mediclaim insurance policy, under which he was covered for 65,000 rupees. The boy assured them that bills would be reimbursed and urged them to begin treatment. Hospital personnel began the treatment. Soon after, though, a clerk asked the bystander to pay 15,000 rupees in order to continue the boy’s treatment. The bystander deposited 2,000 rupees and offered the boy’s motorcycle as collateral for the remainder, but the hospital refused, and treatment was discontinued. Thereafter, the boy was transferred to a government hospital some distance away. On the route to the second hospital, he died. The boy’s parents filed a lawsuit against the hospital for discontinuing the treatment.

Judgment

According to the Court, treatment was “initiated and discontinued” based on the circumstances of the case, and there were “no reasonable grounds” for its discontinuation. The Court noted in its decision that the inability to deposit 15,000 rupees was not a sufficient reason for discontinuing treatment. The Court stated that recognised medical jurisprudence requires treatment until “the last breath.” The Court quoted the Code of Medical Ethics, which codified doctors’ duties, such as practising with expertise and not discontinuing treatment without adequate notice to the patient and his family. Held, the defendants were found guilty of medical malpractice on humanitarian grounds, and the plaintiff was given compensation.

Jasbir Kaur vs. State of Punjab

Facts

In this case, a newly born infant was reported missing from the hospital. The toddler was discovered bleeding near the bathroom’s wash basin. The hospital administration said that the infant was taken away by a cat, which caused him harm.

Judgment

Held, the hospital administration was negligent and failed to take reasonable care and precautions. Further, the Court granted Rs. 1 lakh in compensation.

V. Kishan Rao vs. Nikhil Super Speciality Hospital

Facts

In this case, the complainant’s wife was admitted to the hospital of the respondent while experiencing fever and chills. For four days, she received incorrect typhoid treatment rather than malaria treatment. She passed away as a result of the wrong treatment. An officer in the Malaria Department sued the hospital administration for improperly treating his wife, who was receiving treatment for typhoid illness rather than malaria fever.

Judgment

Held, the res ipsa loquitor principle was followed, and the plaintiff received Rs. 2 lakhs from the defendant as a result of their negligence.

Conclusion

Both negligence and malpractice are civil claims. Negligence and malpractice proceedings seek to compensate the victim for damages incurred rather than hold the defendant accountable. In a negligence lawsuit, the plaintiff’s side just needs to demonstrate that the defendant violated or breached his duty of care to the plaintiff, which resulted in the accident. In contrast, the plaintiff in a malpractice claim must prove that the professional duty of care was broken. This can call for further information or actions, such as calling in a subject-matter expert to discuss the appropriate professional standards of care for the defendant or circumstances.

Everyone who decides to pursue a certain career takes the necessary precautions to ensure that his behaviour in that field is of an acceptable level of care and competence. A certain amount of education is required to be regarded as a professional in a particular field of the profession, which implies that the individual in that field has a sufficient level of care and expertise to prevent carelessness. But even with the greatest care, a medical expert cannot assure a patient of the outcome of an act. Among all the professions that are now in existence in the modern world, medicine is one of the oldest and most well-regarded. A doctor or other medical practitioner owes a duty of care to the patient, and when that obligation is broken and the patient is harmed, that is considered medical negligence. A medical professional has a duty of care to determine whether to accept a case, what therapy to deliver, and how to administer that treatment based on the specifics of the situation. As a result, it may be claimed that medical negligence refers to the careless, incorrect, or inept treatment of a patient by a doctor or other healthcare professional who has a duty of care to the patient.

Frequently Asked Questions (FAQs)

Distinguish Medical negligence from Medical malpractice

The violation of a medical service provider’s duty of care is known as medical malpractice. Whereas, Medical negligence occurs when a practitioner of medical services treats a patient incorrectly and causes the patient injury. Medical malpractice will not entail malicious intent.

Where and against whom can a lawsuit of medical negligence or malpractice be filed?

A lawsuit for medical negligence or malpractice can be filed against the professional doctor or hospital in the Consumer Court.

Is medical negligence a criminal offence?

All cases of medical negligence are not offenses of criminal negligence. Criminal liability can be imposed upon a medical practitioner under particular situations wherein no doctor in his ordinary senses would have done such an act that leads to harm to a patient.

When can compensation for medical malpractice be claimed?

Compensation for medical malpractice can be claimed in the event that a patient suffers a disability or dies due to medical malpractice.

What are common defenses against claims of negligence?

Assumption of risk;
Release of liability waiver was signed;
Pre-existing injuries.

References

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

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

https://t.me/lawyerscommunity

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

Cognizable Offences under Code of Criminal Procedure

By

Ayush Verma

-

January 23, 2023

0

1528955129criminal-law2 — Image Source- https://bit.ly/2JS7GS8

The article is written by Kashish Grover and Monesh Mehndiratta, law student at Graphic Era Hill University, Dehradun. This article explains the meaning of cognizable offence and what offences are covered therein. It further gives the difference between cognizable and non-cognizable offences along with the investigation procedure followed in cases of cognizable offence.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

The Indian Legal System works on three types of law namely:

Substantive Law
Procedural Law
Evidentiary Law

The Procedural Law which is well known as the Code of Criminal Procedure, 1973 is the one that deals with the process of how a person can approach the authorities to get justice. For example, types of offences, the procedure of arrest of offenders for different types of offences, the procedure of investigation, the procedure of bail provision etc.

Offence, as defined by Merriam Webster Law Dictionary, is something that outrages moral or physical senses. It refers to an illegal act or crime that is punishable in nature and against which a complaint can be registered by police or magistrate.

‘Offence’, you must have heard this word somewhere or other. We usually use it to mean that a crime has been committed. Do you know that offences given in the Indian Penal Code, 1860 (IPC) are classified as cognizable and non-cognizable offences?

While reading your Bare Act, law students come across a particular offence that is cognizable in nature, tried by a magistrate, and so on. Have you thought about what this means and how various offences are classified?

Well, all the answers are discussed in this article. You will get all your answers as you read this article. So let’s begin the journey to understand the concept of cognizable offences.

Collins dictionary defines offence as “a crime in which a person breaks a particular law and then requires to be punished by a particular punishment.” All the offences given under the IPC are not the same, and so is the procedure of investigation and trial. On the basis of the nature, gravity, and seriousness of the offence committed, it can be classified as:

Cognizable and non-cognizable offences
Bailable and non-bailable offences
Compoundable and non-compoundable offences

In this article, we will discuss the concept of cognizable offence, its investigation, and its proceedings. It further explains the difference between cognizable and non-cognizable offences.

What is a cognizable offence

Section 2(c) of the Criminal Procedure Code (1973), defines a cognizable offence. According to the definition given in the Code, such offences are those where the police are empowered to make an arrest of the accused without a warrant or permission from the magistrate. These offences are more serious and heinous. This classification of offences and whether a particular offence falls under the category of cognizable offence or not is given under the First Schedule of the Code. Examples of such offences are rape, murder, abduction, theft, kidnapping, etc. These offences create a threat to society and disturb the peace and harmony therein.

In these offences, the police can arrest the accused without any warrant or permission from the court and initiate the investigation proceedings. The punishment in such offences is usually more than 3 years and may extend up to life imprisonment or death. However, these offences may either be bailable or not, which also depends on the discretion of the court. The first schedule in the Code also mentions whether the particular offence is bailable or not.

When does a criminal case become a cognizable case

We all know that a crime is not committed against a particular person but against the whole society at large. Whenever any heinous crime like rape, murder etc is committed, the state takes cognizance after an FIR is lodged and an investigation begins. When the offence committed is so heinous and serious in nature and gravity that it affects society at large, it becomes a cognizable offence. Whether a particular offence is cognizable or not is mentioned under the First Schedule of CrPC.

On the other hand, non-cognizable offences are not as serious and are defined under Section 2(l) of CrPC. Police cannot arrest an accused in such cases without a warrant. They need permission from the court to make an arrest in such cases. Examples of such offences are assault, cheating, forgery, etc. In the case of State of West Bengal v. Joginder Mallick, 1979 it was held that the alleged offence is not cognizable according to the First Schedule given in CrPC, and the police cannot make an arrest just because of the reason they were empowered to do so.

Investigation in cognizable cases

The investigation into cognizable offences starts after FIR has been lodged. It is information that is given in oral or writing to the police officer and is treated as a piece of evidence obtained in matters that are cognizable in nature. It further helps in corroborating the prosecution’s case. The power of police officers to investigate a cognizable offence is given under Section 156 of CrPC. This investigation has to be carried out without permission from the magistrate.

Any police officer of a police station under whose jurisdiction an offence is committed can investigate the matter, and he will not be questioned as to the nature of the offence or whether he had the power to carry out the investigation or not. Further, any Magistrate of First or Second Class is under an obligation to order the police to investigate any such matter if the complaint received by them reveals that the offence committed is a cognizable offence (Section 190 of CrPC).

Initiation of proceedings in case of cognizable cases

The following are the steps that are involved in the proceedings whenever a cognizable offence is committed:

Lodging of an FIR;
Investigation;
- If no offence is made out, a closure report is submitted, and the magistrate either accepts it or orders a re-investigation.This is the perfect time for the accused to find a good Criminal law expert to hire.This is the perfect time for the accused to find a good Criminal law expert to hire.
If the offence is proved, a charge sheet is filed within 60 days or 90 days, as the case may be;
The magistrate takes cognizance of the case, and the trial begins;
The defence and prosecution present their arguments, and the magistrate frames charges;
If prima facie no case is made out, the accused is discharged or else the trial continues until he pleads guilty.

This can be better understood as:

FIR (First information report)

The first step to initiate the investigation when a cognizable offence is committed is the filing of an FIR. It was held in the case of Lalita Kumari v. Government of Uttar Pradesh (2013) that the lodging of an FIR is mandatory under Section 154 of CrPC, if it discloses the commission of a cognizable offence, and in such a case, no preliminary inquiry is permissible. But if the information does not disclose a cognizable offence and indicates the necessity of an inquiry, it may be conducted only to ascertain whether the offence committed is a cognizable offence or not.

The following people can lodge an FIR for the commission of a particular offence:

The person against whom the offence is committed, or the victim,
Person associated with the victim in any manner,
Eye witness to the offence or any person having information about the offence.

Objective

The objective of FIR is to:

Set the criminal justice machinery in motion.
Safeguard the interest of society.
Help the police officials to proceed with the investigation.
Obtain first information about the offence committed.

Procedure

The procedure to file an FIR is given under Section 154 of the CrPC.

The police must write down the information about the commission of an offence that is given orally.
The officer must read the record information to the person who made it.
It must be signed by the person giving the information.
If the person is unable to sign, he/she must give a thumb impression.
A copy of the FIR must be given to the person who lodged it.

Further, if the officer in charge of the police station fails or refuses to file the FIR. The aggrieved party can go to the superintendent of police, and if he also does the same, he/she can file a complaint with the magistrate under Section 156 of the CrPC. The court in the case of Damodar v. State of Rajasthan, 2003 held that any information given to the police on the telephone about the commission of an offence does not constitute an FIR, even if it is written down by the officer and discloses a cognizable offence unless it is confirmed.

Investigation

The next step is the investigation of a cognizable offence which is done in accordance with Section 156 of CrPC, while the investigation of non-cognizable offences is done according to Section 155 of the Code. In Mohd. Yousuf v. Afaq Jahan, 2006 it was held that the magistrate is empowered with implied powers under Section 156 of the Code to ensure that any investigation in cognizable offence is done properly, and if not done so, he may order a proper investigation to be conducted by the police. Further, according to Section 57 of the Code, a person arrested cannot be detained for more than 24 hours and must be produced before the nearest magistrate.

Examination of witnesses

Section 161 of the CrPC deals with the examination of witnesses by police and gives them the power to record their statements. However, such statements cannot be used as substantial evidence before the court. The Section also provides that the witness must answer all the questions truly other than those which may expose him. This is based on the maxim “Nemo tenetur prodere accussare seipsum”, which means no man is bound to accuse himself.

On the other hand, the statements and confessions made before the magistrate under Section 164 of the Code are administered on oath and signed by the person making them. They can be used against him in court as evidence and the magistrate must inform the same to the person making such confessions. This was held in the case of Mahavir Singh v. State of Haryana, 2001.

Filing of Chargesheet

After completion of the investigation, a charge sheet is filed by the police according to Section 173 of CrPC, which states the following information:

Names of parties,
Nature of offence or information,
Witnesses,
Whether prima facie any offence is committed,
Whether the accused is arrested,
Whether he is released on bail,
Medical examination and its report, etc.

Trial

The court takes cognizance of the case under Section 190 of the Code and frames charges if the case is made out or else discharges the accused. The trial begins after the court has taken cognizance of the case.

Provisions under CrPC

Section 154

Information in cognizable cases.

Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf.
A copy of the information as recorded under sub-section (1) shall be given forthwith, free of cost, to the informant.
Any person aggrieved by a refusal on the part of an officer in charge of a police station to record the information referred to in subsection (1) may send the substance of such information, in writing and by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by this Code, and such officer shall have all the powers of an officer in charge of the police station in relation to that offence.

With reference to the particular section, an officer can register an F.I.R. and take cognizance of and arrest a suspect without seeking the court’s prior approval. If she/he has a “reason to believe” that a person has committed the offence and is satisfied that arrest is a necessary step.

Then within 24 hours of arrest, the officer must get the detention ratified by the concerned judicial magistrate. Police officer also has a chance to conduct a preliminary investigation before registering the F.I.R. to crosscheck the facts but the liability lies totally upon him for the same. This is because if the Police Officer doesn’t register an F.I.R. at the moment the information is received, and there is any mishappening because he was not sure of the serious offence like murder taking place and someone loses his life will be a careless mistake.

Procedure to be followed in cases of cognizable offences

Information Received? Entered in General Diary? Registration of F.I.R.? Arrest of accused? Remand? Investigation under Section 156? Charge-sheet under Section 173? Inquiry? Trial? Judgment

Each of this process relating to the Cognizable Offences has been described below.

F.I.R.

F.I.R. means the information, given to the police that a person known or unknown has committed an offence which is listed as cognizable offence in Schedule 1 of Cr.P.C. It has to be signed by the informant. A copy of F.I.R. has to be given to the informant and the second copy of F.I.R. has to be sent to the magistrate for his perusal and record. This is regarded as the basis or foundation of the prosecution case. F.I.R. is said to be the first, untainted, unguided version of the case and generally is never false.

Report to the Magistrate

When a cognizable offence has been reported, the officer-in-charge makes the reports to the concerned judicial magistrate and appoints himself or a subordinate officer for investigation.

Investigation

In cognizable offence, the investigation begins as soon as the information is received and recorded. All formalities of the order of the magistrate and warrants arrive later. The Police officer assigns proceeds to spot, arrest the suspect, and ascertain the facts and circumstances of the case.

For heinous offences, no time limit has been prescribed specifically by Section 468 of Cr.P.C. for the completion of the investigation but one can always approach the Supreme Court for unreasonable delay under Article 21 which is the Right to Freedom as provided by the Indian Constitution.

Search and Production of Documents

If the Police believes that some search has to be made during the investigation, he is authorized to do so for cognizable offence. He can also issue or order a person to produce any documents that are relevant to the case.

Arrest

Arrest refers to a physical restraint put on a person as a result of an accusation made against him for an offence that is cognizable in nature. Three elements are present for the arrest of a person:

Intention to arrest under authority;
Detention in legal manner; and
Arrested person understands why he is arrested and knows his rights.

Arrest in cognizable offences does not require a warrant. It can be done on making of an accusation that is so dangerous or serious in nature that it cannot be avoided. Within 24 hours of the arrest, the Police have to acquire an arrest warrant for the person in custody. Within 24 hours, the Police have all the time to investigate the offence and question the person.

Remand

When the Police arrest a person in case if cognizable offence and investigation cannot be completed within 24 hours, then they make a written application to the magistrate and request him to keep the accused in police custody for a further period otherwise the accused has to be released. The request of remand can be granted for not more than 14 days under police custody.

Statement of Witnesses

During the investigation, the persons who are included in the case basically the witnesses, as well as the accused, are questioned and their statements of their side of the event are recorded.

Medical Examination

In case of rape and molestation or any such crime where the medical examination is necessary, it’s the duty of the police officer to get it conducted within 24 hours of the offence being reported.

Chargesheet

When a Police officer concludes an investigation of a cognizable offence, he sends a report to the magistrate of that investigation in which the I.O. finds the material to proceed against the accused. This report includes F.I.R., statements of witnesses recorded by police, names of parties, brief facts and information gathered by the I.O. during the investigation etc.

Inquiry

At the stage of inquiry, the judge doesn’t give a decision. He/she reaches a preliminary finding and leaves it to the parties to make further action like plead guilty etc. In this stage, witnesses are generally required to come to the court, take an oath and then give evidence in respect of what they have seen and stated before the police during the investigation.

Trial

The hallmark of trial is that every witness who gives evidence will now give the same evidence in court binded by an oath. The trial has several categories:

Trial of warrant case by a magistrate;
Trial of summons case by a magistrate;
Trial started on cognizance taken on a police report; and
Sessions Trial.

In cognizable offences, the trial is usually under Warrant Case or Sessions Case as they deal with more serious and heinous offences.

Judgment

The judgment contains the points for determination, the decision on those points and reasons for the same by considering the examination, and cross-examination of the accused and the witnesses.

Punishment

In Cognizable cases, the punishment period is usually more than 3 years going up to life imprisonment or the death penalty as they are serious and heinous in nature.

Issues related to cognizable offences

The police don’t depend on the precedents of the Supreme Court that modify definitions of offences to bring them in line with the Constitution. They follow the old line of rules and laws and the outdated ways that are being followed to take the crime out.
For instance, the definition of sedition was read down in Kedarnath Singh v. Bihar (1962) to encompass only speech or conduct that can “incite violence” or “involves the intention or tendency to create disorder”. According to the supreme court, an officer examining a sedition FIR needs to accurately understand and apply Kedarnath Singh, before taking cognisance of the offence. But inspite of this, there has been increasing F.I.R. under cognizable offences like sedition or act of promoting enmity between religious groups.
In the case of cognizable offence, there are no restrictions on the powers of the police that deter the arrests. There are many problems and issues that come with it:

There can be errors in determining whether the suspect’s conduct will result in or cause harm as a downstream effect.
This might cause hatred, contempt or excite disaffection against the government or promote enmity between religious groups.
An arrest based on such an error would unconstitutionally curtail not only the arrested person’s freedom to engage in speech and conduct (Article 19) but also the liberty against arbitrary arrest (Article 22).

Multiple judgments of the supreme court such as Joginder Kumar (1994), DK Basu (1997) as well as Law Commission Reports (154th, 177th) critiqued the wide powers of arrest for cognisable offences.

This led to the 2009 amendment which restricted the power to arrest, to persons against whom “a reasonable complaint” or “reasonable suspicion” exists, or “credible information” is received, of having “committed a cognisable offence.”
However, the term reasonable is very ambiguous and may be subjected to arbitrariness.

Therefore, the CrPC neither deters arbitrary arrests nor comprises incentives for carrying out arrests consistent with the individual liberty and autonomy of individuals.

Difference between cognizable and non-cognizable cases

Point of difference	Cognizable offence	Non-cognizable offence
Meaning	Offences for which the police are empowered to make an arrest without a warrant or prior permission of the court are known as cognizable offences.	Offences for which the police cannot make an arrest without the prior permission of the court are known as non-cognizable offences.
Provision	Section 2(c) of CrPC.	Section 2(l) CrPC.
Procedure of investigation	The procedure for investigating cognizable offences is given under Section 156, CrPC.	The procedure of investigation in such cases is given under Section 155, CrPC.
Powers of police officers	The police are empowered to make an arrest without a warrant and start the investigation as soon as an FIR is lodged, without any permission from the magistrate.	The police cannot initiate the investigation until they receive orders from the magistrate to do so.
Arrest	The accused can be arrested without a warrant and permission of the court.	Requires prior permission from the court.
Gravity of crime	Offences committed are heinous and serious as compared to non-cognizable offences.	Such offences are less serious and grave in nature.
Quantum of punishment	Punishment in such offences is more than 3 years and may extend to life imprisonment or the death penalty.	Punishment is usually less than 3 years.
Bail of accused	Cognizable offences may either be bailable or non-bailable depending upon the nature of offence and the discretion of the court.	Non-cognizable offences are bailable due to less severity.
Examples	Murder, rape, kidnapping, abduction, etc.	Assault, cheating, defamation, etc.

Case laws

DK Basu v. State of West Bengal (1996)

Facts of the case

In this case, a letter written by DK Basu, Executive Chairman of Legal Aid Services, West Bengal, was considered to be a writ petition. The letter addressed to the Supreme Court mentioned several custodial deaths happening in jails due to arrests made by the police.

Issues in the case

Whether there must be some guidelines with respect to the arrests of the accused and their detention in jails?

Judgement of the court

The Supreme Court in this case addressed the issue and gave guidelines for arrest which must be followed whenever any arrest is made out by the police in cognizable offences. These are:

The officers making the arrest must wear precise, visible, and clear identification labels with their designations imprinted on it.
They must prepare a memorandum of arrest that must be attested by at least one witness, who may be a family member of the person arrested or any person present during the arrest. This must be signed by the arrested person and shall contain the time and date of the arrest.
The family members or friends of the person arrested must be informed about his arrest, along with the time and place of the arrest.
A proper case diary must be maintained in this regard.
They must also maintain an inspection memo, which must be signed by the person arrested and the police officer making the arrest. A copy of the inspection memo must be given to the person arrested.
The person arrested must undergo a medical examination after every 48 hours that he spends in jail.
All the necessary documents, along with the case diary and memo, must be sent to the magistrate for his reference.

Arnesh Kumar v. State of Bihar (2014)

Facts of the case

In this case, the wife alleged that she has been thrown out of her matrimonial house because her parents failed to fulfil the demands of dowry made by her father-in-law and mother-in-law along with her husband. The appellant was arrested along with his parents and filed an application for bail, which was first rejected by the Sessions Court and then by the High Court. He alleged that all the allegations made by his wife were false and fabricated. The Supreme Court in this case addressed the issue of liberal and casual arrest in cases of dowry that are heinous and fall under cognizable offences.

Issues in the case

Is it mandatory to arrest the person accused of committing a cognizable offence?
What remedies are available to the person arrested if the allegations and FIR were false and fabricated and resulted in his arrest?

Judgement of the court

The Supreme Court in this case restricted the powers of police officers to make an arrest in cognizable offences, especially under Section 498 A of IPC and issued guidelines for the same:

Police officers must be instructed not to automatically make an arrest of the accused for allegations made under Section 498A of the IPC.
They must be provided with a checklist, according to Section 41 of CrPC.
The police officer must give reasons for not arresting the accused in writing to the magistrate.
If the magistrate is satisfied with the reasons for the arrest of the accused, he may order further detention.
A notice to appear must be served upon the accused within 2 weeks from the institution of the case under Section 41A of the Code.
If the police officer fails to comply and follow the directions, he will be made liable for contempt before the High Court.
If the magistrate makes an order for detention without considering the reasons, he shall be liable for departmental proceedings.

These directions limit the powers of the police to make an arrest in case of cognizable offences.

XYZ v. State of Madhya Pradesh (2022)

Facts of the case

In this case, a woman wanted to complain about the Vice-Chancellor of the institute where she was working for harassment but was denied by police. She filed a complaint with the Superintendent of Police but no action was taken. As a result, she decided to file a complaint with the Judicial Magistrate First Class. The magistrate, after receiving the complaint, ordered the police to conduct an investigation. However, the proceedings were delayed due to the Covid-19 pandemic. At the onset of proceedings, the Magistrate allowed the complainant to examine the witnesses, who were questioned by the appellant. The High Court rejected his application on the ground that it was not mandatory for the Magistrate to order an investigation.

Issues involved in the case

Whether the Judicial Magistrate First Class is under an obligation to order an investigation under Section 156 of the Crpc.

Judgement of the Court

The Supreme Court in this case held that a magistrate is only under an obligation to order an investigation if, prima facie, it is shown that the offence committed is cognizable in nature. It was observed that the word ‘may’ used in the Section gives the magistrate discretionary power, wherein it is not mandatory to order an investigation. He is entitled to order an investigation only when a cognizable offence is committed. The Supreme Court also observed that the decision by the High Court that it is not obligatory for a magistrate to order an investigation was correct.

State of Jammu and Kashmir v. Dr. Saleem ur Rehman (2021)

Facts of the case

In this case, the FIRs filed under the Ranbir Penal Code (1989) and J&K Prevention of Corruption Act (1949) were quashed by the High Court on the ground that no prior sanction of the magistrate was taken for investigation. The offences committed were non-cognizable according to the Code. This issue was taken up in the Supreme Court.

Issues involved in the case

Whether the prior sanction of the magistrate is necessary for conducting an investigation in non-cognizable offences?

Judgement of the court

The Hon’ble Supreme Court in this case observed that the High Court made an error while examining whether it is necessary to obtain permission from the Magistrate to conduct an investigation in non-cognizable offences. It was held that there is no need to obtain any such sanction from the Magistrate to conduct an investigation in non-cognizable offences along with cognizable offences.

Way forward

India must adopt an inquisitorial system of investigation practised in countries such as Germany and France, where a judicial magistrate supervises the investigation.
Separation of investigation wing from Law and Order.
As of 2017, the judge-population ratio in India is one judge per 19.66 per million people, against 50 judges per million population in many parts of the world. therefore, the government needs to fill vacant judicial posts.
Establishing All India Judicial services will be a step in the right direction.
The higher courts, including the Supreme Court, should have a separate criminal division consisting of judges who have specialised in criminal law.
According to the Malimath Committee, instead of the current classification of offences as cognisable and non-cognisable offences needs to be classified as social welfare code, correctional code, criminal code, and economic and other offences code.
It also recommended providing for a Presidential Commission for a periodical review of the functioning of the Criminal Justice System.

Conclusion

It can be concluded that offences can be classified into 3 categories on the basis of the nature and gravity of the crime. These are bailable and non-bailable offences, compoundable and non-compoundable offences and cognizable and non-cognizable offences. Based on the kind of offence, further steps are taken by authorities under the criminal justice administration. India follows an adversarial system in which the investigation is carried by police and a judge being neutral decides a case on the basis of arguments presented by the prosecution and defence. This also leads to delays in cases, which is a major problem in our country. This is different from what is done in the inquisitorial system, where the magistrate can himself conduct an investigation, which helps him decide the cases much faster than in an adversarial system. To deal with the situation, many recommendations have been made by various committees, and measures have been taken from time to time. Our criminal justice system tries to protect the rights of both parties and gives them a fair chance to represent their side.

Frequently Asked Questions (FAQs)

How are bailable offences different from non-bailable offences?

Offences for which bail is a matter of right are bailable offences. These are less serious in nature and defined under Section 2(a) of the Code. Examples of such offences are bribery, defamation, etc. On the other hand, non-bailable offences are those in which bail is not a matter of right and the accused has to apply to the court and his bail depends on the discretion of the court. Examples include, murder, dowry, rape, etc.

What are compoundable offences?

Offences in which the victim can enter into a compromise with the accused outside the court to drop the charges against him are known as compoundable offences. These are given under Section 320 of the CrPC. Grievous hurt, Criminal breach of trust etc are some examples of such offences.

What do you mean by Zero FIR?

The FIR that is lodged in any police station, irrespective of its jurisdiction, to deal with the matter is known as a ‘Zero FIR’. The concept of zero FIR was inserted as a result of the Justice Verma Committee’s recommendation after the Nirbhaya Rape Case. It is further transferred to the concerned police station.

References

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

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

https://t.me/lawyerscommunity

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

10 skills you must learn to get started in Real Estate Law with a bang

By

Sneha Mahawar

-

January 22, 2023

0

This article is written by Ms. Sushree Surekha Choudhury from KIIT School of Law, Bhubaneswar and by Satyaki Deb, an LL.M. candidate from the Rajiv Gandhi School of Intellectual Property Law, IIT Kharagpur. The article gives an insight into the Indian real estate sector and discusses ten skills that you must learn to get started in real estate law with a bang.

This article has been published by Sneha Mahawar.

Indians’ love for real estate is known to the world. If there is one form of asset that every Indian wishes to own in some form or another, it is real estate. Being a traditionalist country, different income classes and age groups of Indians have always preferred real estate investment.

This hyped demand is due to the perspective that real estate is a safer form of investment with almost zero risk and volatility as compared to stock markets, bonds, debentures, etc. This perspective has gained traction in the real estate sector in India.

From wealthy landlords who owned acres of land to wealthy businessmen and property investors, the real estate sector has boomed over the years. People from all income groups in India wish to own real estate in different budget ranges.

Thus, Indian markets have witnessed a wide range and forms of real estate buy and sell transactions, ownership, and investments.

The global pandemic came as an unforeseeable shock to India as well as the rest of the world. The global economy, trade, commerce, business, and employment all suffered.

The real estate sector was no exception. However, the sector bounced back sooner than expected. A surge in demand was witnessed in the sector rapidly post-pandemic with the demand increasing even in the luxury segment.

So, if you are a law student or a lawyer who wants to make a career in the real estate sector, you can learn the following skills and your real estate practice can be a roaring success:-

Table of Contents

Contracts drafting and reviewing

Contracts are one of the most essential parts of any real estate deal. A buying, selling, leasing, mortgaging, letting out, etc., in a property is facilitated through a series of contracts.

A real estate transaction of a big scale may require the signing of a memorandum of understanding between its parties. A development project requires the execution of a development agreement.

The buying and selling of real estate require the execution of a sale agreement between the parties. Leasing land or properties for a particular duration of time is facilitated by a lease agreement.

A temporary possession or tenancy is secured by a tenant’s agreement. Several other agreements take place in the process, such as a broker agreement, a leave and license agreement, etc. These agreements are drafted and executed by a lawyer.

Further, the pre-existing contracts, third-party contracts, vendor agreements, etc., which may exist or will exist, will be reviewed by the lawyers. All of these require drafting and reviewing skills of a lawyer.

Therefore, it is essential for a lawyer in the real estate sector to acquire practical knowledge and develop skills on the contracts that are relevant and necessary in the real estate sector, and they must possess skills in drafting and reviewing them.

For example:- contract expertise in property management, property taxes, drafting MoUs, lease agreements, leave and license agreements, builder-buyer agreements, agreements to sell, joint developer agreements, and analyzing search-title and revenue records of a property to meet legal provisions in the RERA Act, etc., are quintessential skills for a real estate lawyer.

Due diligence and research skills

One of the most crucial skills that a real estate lawyer can and must possess is the skill to conduct due diligence and research. Good research skills can help you stand out in a crowd. The ability to conduct thorough and skilled due diligence is an attribute appreciated by many. The real estate sector is no exception to this necessity. As a sector that involves several regulatory compliances, registrations, and other procedures, etc., it comes with a need to conduct thorough research to understand the prevailing rules and regulations in the market.

Further, when two parties transact with one another in relation to real estate, conducting exhaustive due diligence is a mandatory requirement. The bigger the deal, the greater the need for thorough due diligence. This is to ensure the correctness and truthfulness of the transaction and prevent fraud, misrepresentation, or other illegal activities. Due diligence is required when buying and selling take place between parties. When a buyer wishes to acquire properties of another, stages of research and due diligence, take place in the process. Conducting title search, checking if the taxes are paid, appropriate and undisputed property papers are in place, reports are up to date and in a suitable position, mortgages, debts, or ongoing litigation or arbitrations if any. Therefore, it is crucial for a lawyer to gain and develop their skills in conducting research and due diligence.

Knowledge of state-specific laws, rules, regulations and monitoring policy

While the central legislation, the Real Estate (Regulation and Development) Act of 2016 governs the real estate sector as a whole and makes rules and regulations to monitor and regulate the activities in the sector, there are laws, rules, and regulations that differ from jurisdiction to jurisdiction. These laws and regulations are made by the state governments of each state, and they are applicable to those particular states. These differences are usually in the form of different stamp duties, registration procedures and fees, and other procedural requirements.

For instance, a transaction in the real estate sector in Maharashtra requires adherence to specific laws and regulations in Maharashtra. The procedural requirements demand adherence to the Maharashtra Regional and Town Planning Act of 1996, several standardised building by-laws, Development Control Rules, etc. Therefore, it is important for a lawyer to gain skills and expertise in state-specific laws, rules, and regulations in the jurisdiction in which he or she takes up cases.

It is interesting to know that the Real Estate (Regulation and Development) Act of 2016 has been put as a subject in the Concurrent List of the Seventh Schedule of the Indian Constitution.

Therefore, although all the states have had specific laws relating to real estate specific to their state, they will be applicable only to the extent it is consistent with the Real Estate (Regulation and Development) Act of 2016. State-specific legislation which is inconsistent with the central RERA legislation will be overridden by the central Act.

Therefore, when there is a conflict between the central legislation and the legislation of any state, the central legislation will always prevail. This provision is as per Article 254 of the Constitution of India. For example:- The Maharashtra Housing (Regulation and Development) Act was repealed due to its provisions’ overlapping nature with the central Act.

In addition to these, it is good for a real estate lawyer to have a proper rapport or liaison with government bodies and regulators at various levels in order to understand and predict shifts in policy and regulations.

Learning licensing, permissions, and approvals skills

The real estate sector is one where licensing, permission, approvals, and other statutory and regulatory requirements are enormous. It can sometimes be complex. The procedural requirements are minutely supervised and strictly adhered to.

Permissions and approvals are required from the Real Estate Regulatory Authority at the central level and other authorities at the state level. Apart from this, several other approvals are taken in due process.

When a builder undertakes a land development project, he subsequently needs to acquire several permissions from the government and other authorities. Builders usually find difficulties due to the complexity and number of approvals that are to be taken.

The law has been stricter after the implementation of RERDA and it prevents builders from escaping any approval and licensing. For instance, for starting a development project in, say, Delhi or Gurgaon, one has to get over 50 clearances, permissions, approvals, no objection certificates, etc.

While these permissions and clearances may seem a lot and appear to be chaotic, it has been made so in order to prevent real estate fraud by builders. Getting these permissions, clearances, licenses, and approvals is the work of a real estate lawyer.

A builder needs a lawyer to get all these permits so that he can begin a real estate project. Therefore, a lawyer in the real estate sector must learn these skills. He must know all the procedures that are needed to be undertaken and also the clearances that are required to be taken.

Compliance and risk consulting

Compliances and consulting come as an overall task and skill to incorporate all other skills and mandatory requirements of the job as a real estate lawyer.

The drafting and negotiations, papers and reports, due diligence on a company’s documents, the correctness of their reports, adherence to government norms, statutory requirements, and regulatory compliances, everything is covered by the head of compliance.

Big firms offer these facilities for big bucks of money in India and globally. Lawyers in big firms regularly update themselves with the changing laws and norms to ensure that their client’s project is up to date and compliant with the government’s requirements. The licensing, getting permits and approvals, and other clearances all come within the ambit of compliance.

Builders may choose to hire big firms or independent lawyers to do their compliance work. Compliance is always complemented by risk advisory and business consultancy. A builder or property owner must, at all times, know the compliances he needs to do.

When a builder is on the brink of being non-compliant or has been doing activities that are inconsistent with central and state laws, his project is at risk of getting backlashed by the government.

At this point, it is the duty of the lawyer to advise and give consultancy services to his client on potential risks and help him mitigate the consequences of non-compliance. Therefore, a real estate lawyer must possess these skills that will help him keep track of all regulatory and compliance-related requirements of his clients and should stay updated on such laws and regulations at all times.

Knowledge of intellectual property laws

This is an important but highly underrated skill for any real estate lawyer. While dealing with real estate, a lawyer should definitely ask these questions to his clients:-

Does your real estate have a distinct name or trademark or logo?
How well-known is the trademark of your real estate? (This can increase the valuation of your real estate)
Are there any pending disputes regarding your logo or mark? (Besides pending disputes in civil courts, pending IP disputes can also bring down the valuation of your real estate)
Is there any website or mobile app or desktop application associated with your real estate?
Does your client own the domain name of your real estate or is he a victim of cybersquatting? (Domain name of your client’s real estate can be sold separately or together with the physical property or the website may be deactivated partially/totally)
Are there any copyrighted marketing materials that the new owner will need?

Basically, the real estate lawyer should ensure that the client’s estate’s IP is smoothly taken care of too during any sort of agreement by strategically inserting proper IP clauses in the deeds.

Dispute resolution skills

Needless to say, dispute resolution skills are essential in every part of the law and in life. Disputes arise every day. Sometimes it is due to a conflict of interests, and sometimes, it is due to a lack of information or misinformation.

In the real estate sector, it may also be due to disputed lands or properties. It may be due to delayed projects. It may be due to intellectual property disputes. Whatever may be the reason, disputes are inevitable but mitigation is always a solution.

Builder-consumer disputes may arise due to the non-performance of contracts and other obligations. It is the duty of the lawyers involved in these transactions to mitigate the risk of disputes and also to resolve disputes that arise between parties. It is advisable to have a dispute resolution clause in all agreements taking place between parties.

In case the parties choose to opt for litigation as a means to resolve disputes, it is the duty of the lawyer to file the motion and defend the suit. Prior to the implementation of RERDA, disputes went to civil courts, High Courts, or consumer courts.

After the implementation of RERDA, these disputes are now heard and resolved by RERA. A real estate lawyer must know the procedure for filing a complaint before RERA and the procedure that it needed to be undertaken.

The real estate lawyer needs to file all the relevant documents of the parties in dispute and the property in dispute with the RERA along with the applicable fees. Thereafter, the regulatory authority disposes of the matter within 60 days.

Thus, a real estate lawyer must possess the skills for effective dispute resolution that can include managing litigation and taking responsibility for the outcome, hiring, instructing and managing external litigators, strategising on how to win cases, how to delay or deflect legal action, whether to settle etc.

Client advisory

A real estate lawyer must possess advisory skills. He must be updated on the laws, regulations, and compliance requirements that are necessary for a builder or developer. With the complexity of the process and new legislation in place, the builder should seek legal assistance at all times.

This helps him to avoid disputes and the risk of litigation due to non-compliance. Client advisory is an integral part of every lawyer’s career. A lawyer must possess advisory skills and he should be able to give important and appropriate advice to his clients on necessary issues and legal implications.

The lawyer must advise his clients on everyday business and also help them mitigate risks with timely bits of advice. The legal advice that a real estate lawyer should be able to give includes legal advice on property management, zoning violations, restrictions and agreements on real estate, property taxes, value estimates, etc.

Negotiation skills

A lawyer must possess good negotiation skills. Negotiation skills are essential when entering into a business deal. Negotiation is essential to guiding the terms and conditions of a buy and sell transaction or any other form of transaction between the parties.

Negotiating real estate transactions puts a better offer on the table. It is also essential while drafting a contract between parties to guide the agreed terms between them. Good negotiation skills can make a deal in favour of the lawyer’s client.

Negotiation skills also come in handy in dispute resolution between parties. Good negotiation skills can prevent losses and save the parties and companies from reputational harm. Therefore, a lawyer must possess negotiation as well as good communication skills.

Effective management and soft skills

A real estate lawyer may also need to perform activities such as team management, Management Information Systems (MIS), reporting and exhibit time management skills, organisational skills, interpersonal skills and great problem-solving skills.

You can learn all these skills from our courses:

https://lawsikho.com/course/certificate-real-estate-rera

https://lawsikho.com/course/diploma-advanced-contract-drafting-negotiation-dispute-resolution

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.

7 incredible stats about the real estate sector in India

By

Rachit Garg

-

January 22, 2023

0

This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a list of seven incredible statistics about the real estate sector in India that indicate its fast growth in today’s time.

It has been published by Rachit Garg.

Table of Contents

Introduction

We all know how well the real estate sector of India is blooming in current times. The industry reflects its growth in numbers and data and that is exactly why you are reading this article.

The article is going to present to you 7 incredible statistics concerning the Indian real estate sector that will not only grab your interest towards knowing more about the sector but also make you think about the blooming future of this sector.

Well, before going to the statistics, it is interesting enough to note that according to NITI Aayog, the Indian real estate market is predicted to reach $1 trillion in value by 2030 and represent 13% of the country’s GDP by 2025. Keeping the same in mind, let us proceed with the other mind-blowing statistics.

Capital investment in the real sector of India

It is interesting to note that the capital investment in the real estate sector of India reached $7.8 billion in 2022 and 48% of the investment was made in land deals, while 25% was committed to mixed-use developments.
To make the market more accessible to small and retail investors, the Securities and Exchange Board of Indiareduced the minimum application value for Real Estate Investment Trusts from Rs. 50,000 (US$ 685.28) to Rs. 10,000-15,000 (US$ 137.06 – US$ 205.59) in July 2021.

Generation of employment by the real estate sector of India

After agriculture, the real estate industry is India’s second-largest employment generator. The real estate sector, which currently makes up around 10% of the country’s GDP, is anticipated to expand by roughly 30% over the following ten years.
According to statistics, the surge in the young population and expanding urbanisation are to be held as reasons for the high demand for homes. The IT and retail industries will also increase demand for office space to meet the needs of the divergent population. Together, these elements will result in the development of jobs in the real estate sector. By the end of 2022, the industry has reportedly employed up to 70 million people.
The government’s “Housing for All by 2022” initiative is a significant employer in the real estate sector. In fact, 1.12 crore dwellings will be built exclusively in urban areas under the Pradhan Mantri Awas Yojana (Urban) Scheme by 2022, which will generate almost 1.2 crore jobs.

Acceleration in housing sales

India is one of the top 10 home markets in the world for price appreciation. In the top eight cities, housing sales increased by 50% and new supply by 101% in 2022.
Up to the end of September 2022, there were more than 1.61 lakh flats sold in the top seven Indian real estate markets. The success seen in the first three quarters of 2022 will undoubtedly set a new record for housing sales, which had last peaked in 2014 at 165,791 flats.
Asia’s second-largest residential colony, Kankarbagh in Patna, spans 900 acres. It has all the amenities of a mini-township, such as a sports complex, a number of dining options, a park, as well as numerous schools, hospitals, and shopping centres.

Choosing planet over property by going for greener cities and homes

The Indian real estate market is expected to increase at a rate of over 75% Y-o-Y during the next three years. In the past ten years, green real estate assets in India’s six major cities, NCR, Mumbai, Pune, Hyderabad, Bengaluru, and Chennai, have increased by 31%.
Green buildings can save up to 30% of energy and 50% of water, according to studies. Green buildings are resilient to climate change, use less water, use energy efficiently, save natural resources, produce less waste, and promote biodiversity. This is accomplished through sustainable design, construction, and operations.
According to a Jones Lang LaSalle (JLL) report titled “Sustainable Real Estate: India’s reaction to a greener future,” 81% of respondents believe real estate can revolutionise efforts to advance sustainability. As the corporate landscape changes quickly, companies are trying to fit in with the low-carbon economic agenda by setting ambitious net-zero carbon goals.
The Central Government has allocated 19,500 crores in the Union Budget 2022 to promote the production of solar modules under its flagship PLI (production-linked investment) scheme. Developers working on climate-adaptive and environmentally friendly developments are being rewarded by both government policy and investors’ attention.

Booming real estate market in Gurugram (Delhi-NCR) region

Gurugram’s real estate sector has experienced extraordinary growth, with property sales increasing by more than three times between January and September 2022. The uptick was noticed because housing demand across pricing points has increased. In comparison to last year, Gurugram’s housing sales increased by about three times in 2022.
Sales reached 24,482 units from January to September in 2022 due to increased demand for homes in all price ranges, including entry-level, middle-class, and luxury homes. After 2020, investors have been favouring plots over flats, causing NCR to experience the highest appreciation between 20 and 40% in comparison to other metro centres.

Rise in sales in the real estate sector by means of digital portals

The National Association of Realtors (NAR) reported in 2016 that there had been a 253% increase in real estate property searches over the preceding four years.
Last year (2022), India saw a startling 658 million new internet users. These numbers show that there is a significant digital presence in the nation and that people are becoming more and more dependent on it. Brokers often charge 1-2 percent in sales and rental commissions from both buyers and sellers. Broking fees have been substantially reduced as a result of the steady shift in consumer choice toward real estate portals.

Contribution of the Indian real estate sector to the developing economy

Private equity investment inflows into India’s real estate market from January to September 2021 totalled US$3.3 billion. The residential real estate sector is thriving despite the pandemic. The COVID-19 pandemic has increased the demand for real estate in India’s Tier 1 cities because the pandemic has intensified people’s desire to own a home.
In the top seven cities, 1,700 acres of land were transacted in the Indian real estate market in one year. $10.3 billion foreign investments were made in this industry between 2017 and 2021.
The Indian real estate sector is expected to register a CAGR of 9% during the forecast period of 2023 to 2028.
Looking ahead to 2023, the general Indian economy shows what can only be interpreted as encouraging indicators, including a predicted increase in job creation of 8–9% and a rebound from the current stock market fall. All of these factors would eventually enhance housing demand as more individuals entered the housing market, which is crucial for the health of the real estate industry.

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.

Sale under Transfer of Property Act, 1882

By

Sneha Mahawar

-

January 21, 2023

0

This article is written by Vandana Kumari, a student at Lawsikho. This article tries to shed some light on the laws governing sales under Chapter III of the Transfer of Property Act, 1882.

This article has been published by Sneha Mahawar.

Introduction

In common parlance, a “sale” is a transaction wherein one person purchases some article from another in exchange for some consideration. However, when it comes to the law, a sale has several facets. The law categorises the subject matter of the sale into moveable and immoveable properties. At present, when it comes to property laws, there are no laws that exhaustively deal with them. For instance, the Sale of Goods Act, 1930, generally covers the sale of moveable properties. However, it excludes “money” and ”actionable claims” from its scope, even though they are considered moveable properties, according to Section 2(7) of the Act. Similarly, in the Transfer of Property Act, 1882 (here-in-after also referred to as “TPA”), the general rules of transfer provided in Chapter II and the modes of transfer under Chapters VI (exchanges), VII (gifts), and VIII (actionable claims) of the Act apply to both moveable and immoveable properties. However, when it comes to the specific modes of transfer, such as sale, mortgage, and lease, TPA only deals with immoveable properties.

Before moving further, we must understand the kinds of transfers this Act deals with. Though it encompasses many types of transfers, such as mortgage, lease, exchange, gift, and actionable claims, it must be noted that the scope of this Act is not exhaustive. It applies only to certain kinds of transfers.

As provided under Section 2(d) of the TPA, it governs only those transfers which take place by the ‘act of parties’ and not by the ‘operation of law’ except in cases of Section 57 (discharge of encumbrances on sale) or Chapter IV (mortgage of immoveable property and charges). This simply means that TPA is not applicable for transfers due to insolvency, forfeiture, succession or execution.
Section 5 of the TPA further explains that the transfer must be an act of ‘living parties’. Thus, it can be said that this Act only deals with transfers inter vivos (between the living).

Now that we have a clear understanding of the applicability of this Act, we can deduce that a sale under TPA is also a transaction between living parties dealing with immoveable property. The provisions of sale under TPA range from Sections 54 – 57 which deal with the definition, modes of transfer, registration, rights and liabilities of buyer and seller, and other aspects relating to marshalling and encumbrances.

Let’s take a look at the said provisions.

Definition of sale

Section 54 of the Transfer of Property Act, 1882, defines “sale” as the transfer of ownership in exchange for a price. The term “price” is to be interpreted as a price in terms of money and not otherwise. If the transfer involves any other kind of consideration, it is not a sale. Further, the Section also provides that the price need not be paid simultaneously with the transfer. The price may either be paid in full or partially, or partly paid and partly promised. The transfer will be deemed complete in all three cases. Thus, what is relevant is not the immediate payment but the reference as to when and how the payment is to be made.

The subject matter of the sale under the said Act is immoveable properties. Section 54 includes immoveable properties, both tangible and intangible. The tangible properties are those that are visible, such as lands, houses, etc. The intangible properties are those that do not have a physical existence, such as copyrights, trade secrets, the right to ferries or fisheries, or a right to mortgage debt, etc. This Section provides two specific methods for how a sale can be made and executed. According to this Section, a sale can be completed by a “registered instrument” in cases of

Transfer of tangible immoveable property of the value of Rs. 100 or upwards;
Transfer due to reversion; or,
Transfer of intangible immoveable property.

In other cases, such as the transfer of tangible immoveable property of a value less than Rs 100, a sale can be made either by a “registered instrument” or by “delivery of property”. According to this Section, when the seller hands over the possession to the buyer or the person he specifies, delivery of the property is deemed to have occurred.

Contract for sale

Section 54 further incorporates the concept of “contract for sale.” It is an agreement between the parties that a sale will be effectuated in the future by executing a sale deed on mutually settled terms.

In English law, such a contract transfers an equitable estate in favour of the purchaser. However, under Indian law, a contract for sale does not transfer any title, nor does it create a charge or interest on the property. It is merely a promise to create a right to obtain another document, i.e., a deed of sale. Therefore, it does not require registration, as held in the case of Dave Ramshankar Jivatram v. Bai Kailasgauri (1972). The Gujarat High Court in this case also held that it is not enforceable in any court of law. For instance, A agreed to sell the property to B, but they did not execute any documents. Later on, A sold the property to C. In this case, B cannot approach the court to enforce his right to specific performance.

However, as the courts in India developed from the common law approach to equity courts in contractual matters, this difference has become insignificant to a great extent. Various judgements have laid down that if an overt act, such as payment of advance money, delivery of possession, or any similar act, has been done in pursuance of the agreement, the transferee becomes entitled to obtain relief from the courts. For instance, in Kodapalli Satyanarayan v. Kondapalli Mavullu (1998), the Andhra High Court observed that if a property has been transferred to someone other than the prior agreement holder and the subsequent transferee has notice of the earlier transaction, then he will be deemed to hold that property in trust for the former party.

Similarly, in Ramesh Chand Ardawatiya v. Anil Panjwani (2003), the defendant agreed to sell his piece of land to the plaintiff. He also puts the plaintiff in possession of the property for an advance payment. The plaintiff constructed a boundary wall on that property. A trespasser tries to encroach upon the land at the behest of the defendant. The plaintiff sought a declaration from the Court that he was rightfully in peaceful possession of the property and sought a permanent injunction to restrain the trespassers from interfering with his possession. The Court granted the relief and held that the plaintiff is entitled to protect his possession and that A should refrain from taking the law into his hands and instead assert his title through due process of law.

The Court also observed, “if a person who entered into possession under a contract for sale and is in peaceful and settled possession of the property with the consent of the owner, he is entitled to protect his possession against the whole world, except the true owner.” However, if he is in possession of the property in part performance of the contract for sale and the requirements of Section 53A are satisfied, he may protect his possession even against the true owner.”

Parties to sale

In every sale, there are always two parties. The person who transfers the property is known as the “seller,” and the person who receives such property in exchange for monetary consideration paid by him is known as the “buyer.” They both must be competent in the eyes of the law to effectuate a valid sale deed.

Competency of a seller

Section 7 of the Act deals with the persons who are competent to transfer. According to this Section, a transfer will be valid only if the transferor (the person who is transferring the property) fulfils the following conditions:

He must be competent to enter into a contract.

This part of the Section is pari materia (on the same subject matter) with Section 11 of the Indian Contract Act, 1872, which deals with competency to enter into a contract. It states that to make a valid contract, a person must have reached the age of majority, must be of sound mind and must not be disqualified by any law from contracting

He must be entitled to the transferable property at the time of the sale i.e., he holds the legal title to dispose of the property; or,
He must be legally authorised to dispose of such property.

For instance, a Karta is empowered to sell the property of a Hindu Undivided Family (HUF) only in cases of legal necessity, pious purpose, or in favour of the female members of the family. Likewise, a guardian of a minor is authorised to sell the property of the minor only with the permission of the court and not otherwise. Similar observations have been made by the Supreme Court in the case of Lakhwinder Singh v. Miss Paramjit Kaur (2003), wherein it observed that if a sale deed has been executed by a person having a general power of attorney over the property without the permission of the Court, such a sale deed will not be valid in the eyes of the law. The case of Smt M Bhagyamma v. Bangalore Development Authority (2012) further extended the scope and held that if a power of attorney authorises the agent to transfer the property, then he will be deemed to be a competent seller.

Competency of a buyer

Generally, every person is competent to be a buyer, provided they are not disqualified from purchasing any property under any law that is in force in India. Besides that fact, even a minor can be a buyer, provided that the transfer is made by his guardian. It is based on the principle that a minor is entitled to retain assets and be exempt from liabilities. It was observed by the Allahabad High Court, in the case of Ulfat Rai v. Gauri Shankar (1911), that a sale to a minor by the guardian, which has been duly executed in exchange for a duly paid consideration, is valid.

In a nutshell, the essentials of a sale can be summarised in the following points:

The sale must be between living persons. “Living persons” includes a company or associations or body of individuals, whether incorporated or not;
The subject matter of sale must be an immoveable property;
There should be at least two parties to a sale i.e., a seller and a buyer;
They must be competent to enter into a contract;
They must hold a legal title to the transferable property at the time of the sale or must be legally authorised to dispose of the property;
There should be an absolute transfer of ownership in favour of the buyer;
The consideration must be in the form of money/price. It can be either paid at the time of the transfer or as per the time or conditions mutually settled by the parties;
The sale deed must be registered if it is a tangible immoveable property valuing one hundred rupees or more;
A sale deed must be registered if the sale involves a transfer of intangible immoveable property or a transfer due to reversion;
In cases of a tangible immoveable property valuing less than Rs 100, the sale can be made either by a registered instrument or delivery of property.

Rights and liabilities of buyer and seller

Every property transaction create certain rights and liabilities for the contracting parties. In the case of a sale, the contracting parties, a buyer and a seller, are also vested with some rights and liabilities. Generally, the parties themselves expressly agree as to which rights and liabilities they will subject themselves to. These are mostly mentioned in a sale deed. However, the Act does not leave it entirely up to the parties. Section 55 lays down a detailed description of every right and liability in the absence of a contract to the contrary. For convenience, the rights and liabilities of the buyer and seller can be categorised into the rights and liabilities before and after the completion of the sale.

Liabilities and rights of the seller and the buyer before completion of sale

Liabilities of a seller

Disclosure of material defects (Section 55(1)(a)): A seller is bound to disclose any latent material defect in the property or his title in his knowledge. A material defect is of such a nature that if it was known to the buyer, his intention to enter into a sale might deviate [Flight v Booth (1834)]. It is a latent defect because it cannot be discovered by the buyer even after ordinary care and inquiry.
Production of title deeds for inspection (Section 55(1)(b)): A seller is bound to produce all the title documents relating to the property at the request of the buyer for his inspection.
Answer relevant questions regarding his title or the property (Section 55(1)(c)): The seller must answer every relevant question put to him by the buyer relating to his title or the property. The answer must be to the best of his information.
Execute a proper conveyance of the property (Section 55(1)(d)): Conveyance means an act of transferring a property. It can be done by signing or affixing a thumb impression on the sale deed by the seller. A seller is bound to execute a proper conveyance only on the payment of the consideration by the buyer. This clause imposes reciprocal duties on both the buyer and the seller. The clause also provides that the execution must be at a proper time and place.
Take reasonable care of the property and title deed (Section 55(1)(e)): The seller is bound to take care of the property and title deed in the same manner as an owner of ordinary prudence would do. This duty is to be exercised till the delivery of the property to the buyer.
Pay all the charges (Section 55(1)(g)): A seller is bound to pay all the rent and public charges of the property, with interest if any, due till the completion of the sale except if the buyer purchased the property with all the encumbrances.

Rights of a seller

Right to take rents and profits (Section 55(4)(a)): A seller is entitled to collect rents and profits from the property until the ownership is transferred to the buyer.

Liabilities of a buyer

Disclosure of all the facts known to the buyer that materially increase the value of the property (Section 55(5)(a)): The buyer is under obligation to confide to the seller any fact to which he has reason to believe is not known to the seller relating to the increase in the property’s value. If he fails to do so, it will be considered fraud, and the seller can avoid the sale if it is proven.

In the English case of Summers v. Griffiths (1866), an old lady contracted to sell a property at a much lower price, believing that her rights in the property were not absolute. The buyer was aware that the lady’s interest in the property was perfect and absolute, but he did not disclose it to the lady. He was held liable for fraud, and the sale was set aside.

Pay the price in accordance with the contract (Section 55(5)(b)): The buyer must pay the purchase money at the time of completion of the sale to the seller or any person as directed by the seller. If there are any encumbrances existing on the property at the time of sale, the buyer is free to deduce such amount from the consideration he has to pay. It is in correspondence with the duty of the seller to execute a proper conveyance.

Right of a buyer

Refund of money paid on proper denial to accept delivery (Section 55(6)(b)): The buyer is entitled to receive the amount of any purchase money with interest properly paid by him to the seller in anticipation of delivery. The buyer is also entitled to get a refund of any earnest money paid by him or the cost awarded to him in a suit to compel the specific performance of a contract or to obtain a decree for its rescission.

Liabilities and rights of the seller and the buyer after completion of the sale

Liabilities of a seller

To give possession (Section 55(1)(f)): The seller is bound to put the buyer or person as directed by the buyer in possession of the property on being so required. This clause uses the words- “…such possession of the property as its nature admits.” It refers to the nature of possession. For instance, in the case of tangible immoveable property, physical control is to be given over property. In the case of intangible immoveable property, the possession is symbolic.
Implied liability (Section 55(2)) – The seller must undertake impliedly that he holds the perfect title to the property and is transferring the same free from any encumbrance. The rights or interest created by the sale shall vest with the transferee and may be enforced by every person in whom that right or interest is for the whole or any part thereof from time to time is vested.
To deliver title deeds on receipt of price (Section 55(3)): The seller is bound to hand over all the documents relating to the title of the property to the buyer on payment of the whole of the purchase money. Proviso (a) to Section 55(3) states that if a seller retains any part of the property comprised in the documents, he is entitled to keep the documents as well. Proviso (b) also imposes the same duty on the buyer of the greatest value when the property is sold to different buyers. However, in both cases, such a person must furnish such documents and their true copies to other buyers at their request. They are also under an obligation to keep the documents safe unless prevented from doing so by fire or other inevitable accidents.

Right of a seller

Charges upon the property for the unpaid price (Section 55(4)(b)): Where the ownership has been transferred to the buyer before payment of the whole consideration amount, the seller becomes entitled to a charge upon the property which is in the hands of the buyer or any transferee without consideration or any transferee with notice of non-payment. The charge will be for the amount of the purchase money or the part remaining unpaid or for the interest on such amount or part from the date on which possession has been delivered.

Liabilities of a buyer

To bear loss to the property (Section 55(5)(c)): After the completion of the sale, the ownership is completely transferred to the buyer. From that date, if any damage, destruction or decrease in value occurs in the property, the buyer will be bound to bear such losses.
To pay the outgoings. (Section 55(5)(d)): The buyer is liable to pay all the public charges or rent accruing after the completion of the sale or as agreed by the terms settled in the sale deed.

Rights of a buyer

Benefit of the increment. (Section 55(6)(a)): Any benefit arising from improvement or increase in value of the property or the rents and profits after completion of the sale shall vest with the buyer.

Marshalling by subsequent purchaser

Section 56 of the Act deals with marshalling. The situation of marshalling arises when a debt has to be satisfied and two or more properties are available. The rule of marshalling suggests that where the owner of two or more properties mortgages them to one person and sells one or more of the properties to another person, the buyer of the property is entitled to make an arrangement with the mortgagee to satisfy his debt out of those properties that are not sold to him.

This Section is based on the principles of equity. It insists that when a buyer purchases some property, its absolute interest must be protected. In Brahm Parkash v. Manbir Singh (1963), the Supreme Court held that under Section 56, a subsequent purchaser has a right to claim marshalling. This Section also provides that such marshalling shall not affect the rights of the mortgagee, persons claiming under him, or any other person who has acquired any interest in the property for consideration.

Encumbrances and court sale

Generally, a sale needs to be free of any kind of lien, charge, or obligation. However, there may be instances in which a property with encumbrances has been sold. Section 57 of the Act caters to such a situation. This Section covers both the sales made by the court or in the execution of a decree and those made outside the court. It offers a legal procedure to obtain a declaration from the court that the property is free from any kind of encumbrance.

Section 57(a) provides that any party to the sale may apply to the Court to obtain this relief. If the court thinks fit, it may direct or allow the applicant to deposit in court, for the encumbrancer (who has the charge over the property), a capitalised value of the periodic charge or a capital sum charged on the property, together with incidental charges, sufficient to satisfy the charges or any interest thereon. The court shall also order the deposit of any additional amount that it considers sufficient for meeting any further costs, expenses, interest, or any other contingency, but it shall not exceed one-tenth of the original amount unless otherwise directed by the court.

Section 57(b) states that the court may serve notice on the encumbrancer after the payment has been made. The court can also dispense with such notice after recording its reasons. In addition to that, the court may also declare the property to be free from any encumbrances and proceed to issue an order of conveyance, or vesting order, proper for giving effect to the sale. Further, Section 57(c) deals with the order of transfer and distribution of the deposit to the encumbrancer.

It is also provided that an appeal is allowed from any declaration, order, or direction made in accordance with this Section, just as if it were a decree. (Section 57(d)).

Under this Section, the jurisdiction is vested in either of the following Courts, as provided in Section 57(e):

A High Court in the exercise of its ordinary or extraordinary original civil jurisdiction;
A District Court within the local limits of whose jurisdiction the property or any part thereof is situated; or,
Any other Court notified by the State Government in the official gazette from time to time.

Recently, the Kerala High Court, in M.P. Varghese v. Annamma Yacob (2020), elaborated in great depth on Section 57. The Court discussed the aims and objectives of this Section as well as thoroughly explained its procedural mechanism. In this case, the property was divided among the siblings through a partition deed with a clause stating that the brothers must pay Rs. 500 each to their sister within a year. If they fail to do so, the sister will acquire a charge over the property. The brother, who is the appellant in this case, entered into a contract of sale with someone. He contends that the respondent, in this case, the sister, is refusing to accept the payment because of which the property is burdened with the charge, and consequently he is not able to execute the sale deed. The respondent failed to show any reasonable cause for refusal of payment apart from personal reasons. The Court noted that the amount of Rs. 500 alone stands charged on the property as a capital sum, and the appellant has no further obligation whatsoever. Thus, it was held that the appellant is entitled to a declaration under Section 57.

Rescission of a contract of sale

To rescind a contract means to do away with it. Rescission is an equitable remedy that allows the contracting parties to cancel the contract and return to the position they would have had if the contract had not been made. A sale transaction is similar to a contract. It can also be rescinded by the parties in the same manner as other contracts.

Rescission of a contract is governed under Sections 27-30 of the Specific Relief Act, 1963. Section 27(1) of this Act provides the ground of rescission, which can be claimed by any person interested in the contract. These grounds are mentioned as follows:

Where the contract is voidable or terminable by the plaintiff;

The contract becomes voidable when the plaintiff’s consent to enter into a contract has been obtained through coercion, fraud, misrepresentation, or undue influence. This has been provided under Section 19 and Section 19A of the Indian Contract Act, 1872. Section 55 of the TPA also contemplates a similar situation. It states that when the buyer or seller, as the case may be, omits to disclose any material fact to the detriment of the other, such omission will be considered fraudulent. Thus, rescission in such cases can also be claimed by the aggrieved party.

Where the contract is unlawful for causes not apparent but the defendant is to be blamed more

The Specific Relief Act, 1963, also contemplates one other ground for rescission under Section 28(1) of the Act. This rescission is a result of non-compliance with the court’s order to pay the purchase amount within a stipulated time in a suit of specific performance. It states that when the order of specific performance has been decreed against the seller and the purchaser is directed to pay the amount within a time fixed by the court and he fails to do so, the seller may apply in the same suit to have the contract rescinded.

Apart from the aforementioned grounds, the Indian Contract Act, 1872, also provided some more grounds on which the rescission of a contract can be claimed. These provisions are mentioned in the following points:

Under Section 39, if a party to a contract refuses to perform the promise or disables himself from performing the promise in its entirety, the other party is at liberty to put an end to such a contract.
Section 53 states that if a party to a contract prevents another party from performing his part of the promise, the contract becomes voidable at the option of the party so prevented.
Section 55 mentions that time is the essence of the contract and if the party fails to perform his promise in a specified time, the aggrieved party can claim to put an end to such contract.

Effects of rescission

The rescission renders the contract null and void and aims to put the parties back to their status quo ante, i.e., the previously existing state of affairs. If the parties cannot be restored to the same position, they will not be able to go for rescission. Thus, restoration of benefit is one of the essential elements for the rescission of a contract. The provisions for the restoration of benefits and compensations are mentioned in the points listed below:

Section 64 of the Indian Contract Act, 1872, provides that if the party who is claiming rescission had received any benefit from the other party then he must restore such benefit to the person from whom he has received it.
Section 75 of the Indian Contract Act, 1872, deals with the compensation for the loss sustained by the aggrieved party because of the non-performance of the contract by the party in default.
Section 28(2) of the Specific Relief Act, 1963, states that if the vendee was in possession of the property and the contract was rescinded because of the non-payment of the purchase amount, he must make payment of all the rent and profits to the vendor that has accrued from the date of his receiving possession until the date of restoration. Similarly, the vendor, if received any earnest money from the vendee, must refund the same.

Important case laws

Essential elements of sale

The courts have interpreted Section 54 now and again. A thorough interpretation of this Section has helped the Courts decipher the essential ingredients of sale. Following is a list of cases that helps in understanding the nature of some of the important ingredients:

In Vidhyadhar v. Manikrao (1999), the Supreme Court held that to constitute a ‘sale’ the parties must intend to transfer the ownership of the property. The intention is to be gathered from the recitals in the sale deed, the conduct of the parties, and the evidence on record.
In the case of Commissioner of Income Tax v. M/s. Motor and General Stores (1967), the Apex Court opined that the price, in the ordinary sense connotes monetary consideration for the sale of the property. It also observed that if some other valuable consideration is kept, the transaction is not a sale but can be an exchange or barter.
The Allahabad High Court in Hakim Singh v. Ram Sanehi (2001), observed that inadequacy of consideration is not a relevant factor in a sale. Even when the price or the consideration is found by the Court to be less than the market value of the property, the sale is valid.

Effect of an unregistered sale deed

The Gauhati High Court in Saniram Kachari and Anr. v. Gauri Ram Koch and Ors. (1951) held that though an unregistered sale deed is valid under the Registration Act, it cannot confer a title on the purchaser under Section 54. However, when an unregistered sale deed is followed by delivery of possession in compliance with Section 54, then such a sale will be considered effective. It also observed that the registered sale deed might be regarded as a surplusage when the delivery of possession is sufficient to confer title under Section 54.
In a landmark case of Suraj Lamp and Industries Pvt. Ltd. v. State of Haryana and Anr. (2011), the Supreme Court affirmed that a sale of the immovable property could be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter.
The Karnataka High Court, in the recent case of Gangappa v. Lingareddy (2022), resolved the issue of whether an unregistered sale deed can discard the title which has been acquired by delivery of possession of a tangible immoveable property whose value was less than rupees one- hundred.

In this case, the appellant contended that the property belonged to her mother, who inherited it from her father, and the respondent was trying to interfere with the property by creating a bogus document of title in his favour. However, the respondent claimed that he received the property through the will of his father, who acquired the property through a sale deed from the appellant’s maternal grandfather. Since the value of the property was less than one hundred rupees, they did not register the sale deed.

The court held that Section 54 of the Transfer of Property Act, 1882, allows two alternative modes for the execution of the sale in the case of tangible immoveable property valued at less than Rs. 100, namely, by way of either a registered instrument or simple delivery of the property. Since the latter criteria have been fulfilled by the respondent, the appellant’s claim stands to be dismissed.

Conclusion

In light of the above discussion, we can conclude that the Transfer of Property Act, 1882 deals with the sale of immovable property by the act of living parties lucidly and comprehensively. It does provide not only the definition but also the modes of execution and registration. It also provides a framework of rights and liabilities to which the seller and buyer will be subjected, but at the same time, it is also flexible enough to allow the parties to settle on other terms at their discretion. In my view, there is one matter that needs some clarification. It can be seen that the bare text of Section 54 lacks clarity regarding the ramifications of an unregistered sale deed. It plainly states that it does not create any title or interest in the property. Though various courts have ruled that the answer depends on the facts and circumstances of each case and the applicability of principles of equity in those cases, the language of the Section remains rigid. To eliminate any confusion, it should be more comprehensive and expansive.

Frequently Asked Questions (FAQs)

What is the difference between a sale and a contract for sale?

Sale	Contract for sale
In a sale, ownership is transferred.	A contract for sale is merely an agreement to sell. There is no transfer of ownership.
The sale creates certain rights and interests for the parties over the property. Ownership refers to a bundle of rights such as possession, interest, title, authority to dispose of, etc.	It does not create any charge, interest, or lien over the property.
Sale creates a right in rem i.e. against the whole world. The buyer in whose favour the sale has been made can defend his title against anyone.	A contract for sale creates a right in personam, i.e., against a particular person. The buyer can only compel the seller to execute a sale deed if any ingredients of part performance have been fulfilled by the buyer.
Registration of the sale deed is required if the value of the property is Rs 100 or more.	As a contract of sale does not create any right or interest, no registration is required for such contracts.

What is the difference between sale and exchange?

The only thing that differs between a sale and an exchange is the nature of the consideration involved. As per Section 54 of the TPA, the consideration for the sale of immovable property must be in terms of money (price). Whereas Section 118 of the TPA, which governs exchange, specifies that money can be a consideration for the exchange of money only and not any other property. Ownership of any immovable thing can be exchanged only by transferring ownership of another immovable thing and not otherwise.

References

Textbook on The Transfer of Property Act, Dr. Avtar Singh, Universal Law Publishing Co. Pvt. Ltd., 2006
The Transfer of Property Act, Dr. Hari Singh Gour, Delhi Law House, 2004

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.

iPleaders

International Trade Law

Introduction

United Nations Commission on International Trade Law (UNCITRAL)

UNCITRAL Model Law on International Commercial Arbitration

Party Autonomy

Separability

Competence-Competence

Territorial Principle

Enforceability

GATT – the General Agreement on Tariffs and Trade

Objective

World Trade Organisation (WTO)

Basic principles of International Trade Law

Most-Favoured Nation Treatment

National treatment Principle

Negotiation for free trade

Supporting the idea of fair competition

World trade and intellectual property rights

TRIPS Agreement as a combination – Berne and Paris-plus agreement

Cross-border transactions

Cross-border financing

Buying or selling products or services

Combined research/shared services etc.

Important aspects for entering a cross border transactions

Corporate records necessarily to be maintained as a due diligence checklist

Dispute settlement

Negotiating trade agreements

Compliance

Law reforms

India’s Foreign Trade Policies

Trade disputes

Disputes filed by India in pursuance of trade remedy

Signatory Countries who have filed Disputes against India

India’s Foreign Trade Policies

India signatory to other countries for trade agreements

Analysis of Foreign Trade Policy of 2015-2020

Scope of improvements

Modifications proposed in Foreign Trade Policy of 2021-2026

Main objectives to be met from the FTP 2021-2026

Infrastructure upgrade

More focus on increasing exports

Tax benefits in compliance with world trade organization – RoDTEP

Relaxation in credit access

E-Commerce and digitalization

Conclusion

Frequently Asked Questions (FAQs)

What is the main purpose of International trade law?

How does WTO enforce International trade policy?

What are the main legal barriers in International trade law?

References

Judicial system of Singapore

Introduction

Historical background and evolution of the judicial system of Singapore

The modern judicial system

Hierarchy of courts in Singapore

Caseload and employment structure

Alternative dispute resolution

Specialised tribunals in Singapore

Problems with the court system and reform strategies

Conclusion

References

Fair use under Copyright Law

Introduction

A brief history of fair use in India

Fair use under Copyright Law: a detailed analysis

Fair use and fair dealing

What is fair use

What is fair dealing

Difference between fair use and fair dealing: a tabular representation

Where is the principle of fair use applicable

Fair use under Indian Copyright Law: an overview

Section 52 of the Copyright Act, 1957

Berne Convention and TRIPS Agreements

Three-step test under the Berne Convention

Examples of fair use

Quoting a few lines from a play

Sharing a video parody of a renowned song online

Non-profit educational uses

New reporting