This article was written by Mahesh P Sudhakaran from KLE Society’s Law College, Bangalore and covers all aspects of the opportunity cost theory of international trade.
It has been published by Rachit Garg.
Table of Contents
Introduction
From a concept-based narrative economics begins with the fundamental issue of scarcity and scarcity creates roadblocks to the pathway of utility. With the existence of scarcity comes the need to make choices, but choices aren’t easy. Hence, is it paramount to derive parameters based on which these choices are made taking due note of all essential variables, and parameters which ensure optimum utilisation of resources and utility. Similarly, in the international sphere carrying out trade is complex and the problem of scarcity takes the centre stage as every country establishes different patterns of trade, due to diversity in resources, culture and other variables. Every country has their niche when it comes to production as each country is different in terms of what they are skilled in producing, For eg gulf countries are rich in oil resources and are equipped with the skill to capitalise upon these resources whereas India is capable of producing iron-ore. Countries are independent of one another for the exchange of skills and products to balance out their respective deficiencies and to provide stability to the demand-supply ratios, hence international specialisation refers to utilising one country’s resources in certain specialised areas of production wherein that particular country has an absolute or comparative cost advantage in the global spectrum. The principle of comparative advantage has been a basis of international trade since the culmination of World War 1, this was initially a Ricardian theory, which was further modified by economists like J.S Mill, Alfred Marshall and Taussig. This concept was further explained through Haberler’s opportunity cost theory which we’ll discuss in detail below.
Who introduced the opportunity cost theory of international trade
The opportunity cost theory was propounded by Gottfried Haberler in 1936. Haberler sought to explain the theory of comparative advantage in international law using the opportunity cost theory. Gottfried von Haberler was born on July 20, 1900, and passed away on May 6, 1995. He was an Austrian-born American economist, teacher, and author who specialised in international trade. He pursued a study in Economics at the University of Vienna and obtained his doctorate in 1925. After the completion of his studies, he started teaching economics and statistics at the University of Vienna and also lent consultation services to the League of Nations. He joined Harvard University as a professor up until 1971, wherein he joined the American Enterprise Institute. Haberler is most known for his written work in the field of international trade, his theory of international trade is deemed to have been his most significant work to date. His theory of international law was accepted as a more accurate take on comparative costs in terms of opportunity cost. He derived the production substitution curve which generated a mechanism to ascertain the effects of various variables in the process of production. Haberler is considered to be someone who was ahead of his time about the ideologies he possessed as he advocated for free trade system and abolishment of unnecessary trade barriers. He exerted his influence in reconsidering and reviving key doctrines like purchasing power doctrine which was concerned with considering relative price levels as important determinants that have a bearing upon equilibrium exchange rates.
What does the theory say
As per Haberler. “The marginal cost of a given quantity (x) of a commodity, say A must be regarded as the quantity of a commodity, say, B must be forgone so that X, instead of (X-1) units of A can be produced. The exchange ratio on the market between A and B must equal their costs in this sense of the terms.” In simpler terms, this theory states that the cost of a particular commodity is the quantity of the second commodity that has to be given up so there are adequate resources to produce additional units of the commodity that is fixed. This is an extension or recreation of the comparative advantage theory using the theory of opportunity cost. The Ricardian theory of opportunity cost stated that labour was the sole factor of production and that labour is homogeneous. Haberler’s theory departs from this view and recognizes pre-trade and post-trade situations concerning constant, increasing, and decreasing opportunity cost under different circumstances. As per this theory, the country which has a lower opportunity cost in producing a certain commodity has a comparative advantage with respect to that particular commodity but is at a comparative disadvantage when it comes to another commodity. Let’s examine both these doctrines in detail now.
Ricardo’s Theory of Comparative Advantages
As per David Ricardo, both absolute and comparative differences in costs have influence over the trade relations of two or more countries in the international sphere. Countries have specialisation when it comes to the production of certain products due to variables like differences in climate, natural resources, geographical situation, and the efficiency of labour. Due to these factors, certain countries can produce certain commodities at lower prices when compared to other countries; this is indeed what the concept of specialization stands for. Hence, when a country enters into trade with some other country, it will export those products or commodities which has comparatively lower production costs and will import those commodities which have relatively higher production costs when compared. The important conclusion drawn here is that countries carry out imports and exports based on their comparative advantage and that labour is the sole factor of production. Ricardo considered this to be the very basis of international trade. The Ricardian theory is based on certain key assumptions:
There are only two countries, For eg, India and China.
They produce the exact two commodities.
Tastes are identical in both countries.
The only factor of production is labour.
There is an unchanged labour supply.
Labour units are homogeneous.
Prices of both commodities are purely based on labour. cost, i.e, the number of labour units employed to produce each.
Commodities are produced as per the law of constant costs or returns.
The existence of unchanged technological knowledge.
Trade between these countries is carried out through the barter system.
Perfect mobility with respect to factors of production within each country, but are perfectly immobile between countries.
Free trade between countries and the absence of trade barriers.
Transport costs are absent during trade.
Fully employed factors of production in both countries.
The international trade market is perfect making the exchange ratio of both commodities the same.
Criticism of the Ricardian theory
Assumption of Labour costs
The primary and the most commonly opined criticism of Ricardian doctrine is that it exclusively considers labour cost as the factor of production and does not take into bearing non-labour costs involved in the production process. Furthermore, the assumption of labour being homogeneous is unrealistic as labour is heterogeneous at varying degrees.
Dissimilar taste
Dependance on the idea of similar taste is a flawed assumption as taste is subjective based on various factors. Taste is subject to change based on income levels, economic growth, personal biases, and many other variables.
Fixed proportions
This doctrine is based on the assumption that labour is used in fixed proportions to carry out the production of all commodities or products, whereas practically perceiving this scenario can be deemed as irrational and unrealistic. Labour is used as per the requirements of each product based on its purpose, nature, and other factors and cannot be rigidly said to be fixed.
Constant Cost assumption
The Ricardian theory is based on the assumption that an increase in output is owed to constant costs generated by international specialization, however, this is unrealistic as if an increase in output is owed to constant costs, the comparative advantage is reduced and can even disappear.
Transport cost factor
This theory completely ignores the transport cost factor while the comparative advantage is calculated. This assumption lacks merit as transport cost is a paramount factor to be considered when it comes to trade within the international spectrum.
Mobility
The Ricardian theory also assumes that factors stand perfectly mobile internally or domestically and are immobile externally or within the global sphere. This is not true as factors whether internal or external cannot move freely as the mobility is inversely proportional to the degree of specialisation.
Two commodity model
This theory is based on the two-country and two-commodity models, as in the real world trade can take place between multiple countries at the same time.
Free trade assumption
This theory assumes the existence of free trade between all countries within the global sphere, but this assumption is unrealistic as practical trade is not completely free as there are barriers and other forms of restrictions which vary from country to country.
Full employment assumption
The Ricardian theory bases itself on the assumption of full employment. The full employment assumption is unrealistic as employment levels vary and unemployment prevails based on the socio-economic conditions of each country. Keynes was against this assumption and hinted towards the existence of unemployment and underemployment within every economy.
Ignores self-interest
The Ricardian doctrine does not take into account the strategic standpoint of any nation against imports despite having a comparative disadvantage, this can be due to military or strategic reasons.
Role of technology
The role of technology here is disregarded by Ricardo and such an assumption is incorrect as technology is an indispensable factor, technology helps in the generation of supply within the international sphere and international trade has benefited greatly since the advent of technology.
Neglects the demand aspect
This theory is solely based on the supply aspect and in this process it completely disregards the demand side of it, this was falsified by Prof. Ohlim who criticised the theory for not accommodating the supply aspect of it.
Haberler’s opportunity cost theory
The opportunity cost of any commodity is the quotient of the second commodity that is compromised to produce additional units of the first commodity, Haberler departed from the essential labour-centric approach set forth by Ricardo. This very form is termed the law of comparative cost. A nation with a relatively lower opportunity cost is said to possess a comparative advantage when it comes to a particular commodity. Haberler reformulated the theory while rejecting the classical labour theory of value. The consequential fall in the quantity of the second commodity depicts the opportunity cost of the additional quantity of a particular commodity. For example, if India has to reduce the production of cotton by 2 lakh bales with a view to increasing the production of wheat by 1 lakh tons, in such a scenario, the opportunity cost of one unit of wheat is two units of cotton (1W = 2C). Using the opportunity cost curve, Haberler expressed the opportunity cost of one commodity in terms of a second. The opportunity cost curve is also called the ‘transformation curve’ or ‘production possibility curve’ by Paul Samuelson and A.P. Lerner also termed the ‘production frontier’ or ‘production indifference curve’.
Assumptions of the opportunity cost theory of international trade
Existence of full employment equilibrium within the economy.
Perfect competition.
The price of each commodity is equivalent to the marginal cost of producing the same.
The price of each factor is equivalent to its marginal productivity.
A fixed supply of factors.
State of technology is already given.
Two trading nations or countries.
Every country carries out the production of two commodities, For eg, X and Y.
Countries have two productive factors- capital and labour.
Existence of perfect factor mobility within each country.
Immobile factors of production between two countries.
No trade restrictions by either of the countries.
Derivation
After carefully considering the above restrictions the production possibility curve of any country can be drawn. The opportunity cost curve, also known as the production possibility curve can be a straight line, concave to the origin, or convex to the origin based on the increasing, decreasing, or constant returns to scale of a particular country. Haberler further asserted that the theory of comparative cost would be accurate provided the theory of labour is not considered. The opportunity cost curve reflects the different combinations of two products a country can produce as per its characteristics and availability of technology. The slope of the opportunity cost curve is derived by the ratio or quotient of units sacrificed of one particular commodity to have one extra unit of the other commodity, this ratio is termed the marginal rate of transformation, or MRT.
If a particular country A produces two products X and Y, and a compromise is made with regard to a certain quantity of labour, capital, or any other particular input of product Y for the increased production of product X. I.e., for the additional production of X, a certain quantity of Y is sacrificed and certain units of Y are given up and have been converted into a marginal unit of X. This very rate at which marginal unit of product X is being substituted for units of product Y is the marginal rate of transformation. Alternatively, the MRTxy can be calculated as a ratio of the marginal cost of producing X to the marginal cost of producing Y.
The derivation of the same is as shown:
Here δC is the change in total cost, whereas δC/δX and δC/δY are marginal costs of commodities X and Y, respectively. Taking note of the assumption that minute changes in X and Y, δC is zero.
As MRTxy is negative, the production possibility curve slopes down from left to right.
As per figure 6.1(a) the MRTxy remains equivalent, that is MRTxy = – δY/δX = PP1/OQ1 = P1P2/Q1Q2. This also specifies that the marginal costs of both these commodities are untouched or unchanged. This establishes that all factors of production are efficient in equal terms with regard to all lines of production, as this view would differ in real life the Production Possibility Curve may not fall in a straight line. (in detail below)
This occurs when the production of commodities is based on increasing returns to scale. In simpler words, this happens when the cost of commodity X in terms of commodity Y goes on diminishing and lesser units of Y are sacrificed in order to produce more units of X.
As per Fig.6.1(c) the production possibility curve AB falls in a concave manner towards its very origin. In this instant scenario, MRTxy goes on increasing.
The production possibility curve takes this shift when production is based on diminishing returns to scale. Due to the increase in the production of X, the MC of the same increases while the MC of Y falls. In simpler terms, a greater availability of X commodity shows deterioration in the significance of Y.
Key terminologies
Production possibility Curve
The production possibility curve or the PPC depicted various combinations of producing two products by an optimum and complete utilisation of all factors of production. In simpler words, the production possibility curve represents the ceiling limit which the production process cannot be carried out with the available level of technology and other key resources. Figure 1.3 represents the production possibility of a particular country A. With the available quotient of productive resources, it can carry out the production of either 10 units of cloth (provided all resources of the cloth production are employed) or 20 units of wine (provided all resources are specifically used in wine production). On the contrary, it can have a combination of both cloth and wine if resources are allocated optimally for both. Let’s take an example, it may possess eight units of cloth and four units of wine, or six units of cloth and eight units of wine. If the output of cloth falls by one unit, the output of wine can be increased by two units as using the resources needed to carry out the production of one unit of cloth, the production of two units of wine can be completed.
To be precise any point on the production possibility curve represents the output of producing combinations of the two commodities which are cloth and wine when the resources are fully allocated between the two commodities.
Increasing, Decreasing and Constant Cost Conditions
The production possibility curve is also known as the transformation curve. The slope of the curve at each point of the graph depicts the ratio of the marginal opportunity costs of both commodities. In simpler words, what can be understood is that the marginal opportunity cost of extra units of one commodity causes deterioration in the output of the other commodity or product. The shape of the curve is according to the assumptions laid down pertaining to the opportunity cost. It is to be noted that the opportunity cost curve shifts as per constant, increasing, and diminishing costs.
Constant costs
Trade under constant costs means that the MRT remains constant. It is the outcome of each factor of production being effective equally with respect to producing both goods. MRT as discussed above, is the amount of a particular good that must be sacrificed to ensure the availability of more resources to produce more units of the second commodity or good. Let’s take an example here, let G denote the good or commodity that has to be given up and let D denote the good or commodity that is to be produced additionally, it’s important to note that in this scenario the MRT remains the same. The table below represents alternative outputs of G and D when all resources are utilised and the figure depicts the production possibility curve.
As per the table above, each extra unit of D has the same cost when compared with its cost in terms of G, so resources which have the potential to produce 8 units of G must be sacrificed to maximise the output of D by a unit, irrespective of the level of production of both these commodities. Constant cost signifies that the MRT remains constant or unchanged. It is the outcome of each factor of production being effective in an equal manner with regard to the production of both goods. The production possibilities curve represents all possible combinations of two commodities that a particular country in this instance W might produce. The choice of the combination is made as per the curve. Points within the curve like point (g) show outputs of less than full employment and are not taken into consideration. The point above the curve, such as point (h), requires more resources than that particular country has and is hence also outside the ambit of consideration. The full employment output must be taken on the curve. The slope of the production possibilities curve depicts the MRT. The slope represents the sacrifice required of one commodity to ensure an increase in the output of the other commodity. Since the MRT is constant in this scenario, the slope must also be constant and therefore, the production possibilities curve has to be in a straight line. It can be inferred here that the MRT of G for D is 8 to 1; then a fall in the output of D by a single unit will ensure the availability of resources to increase the output of G by 8 units. Country Z here has a comparative advantage in the production of product D. On the contrary, country W has a comparative advantage when it comes to the production of G. During constant returns to scale, trade can only occur if each nation has a distinct MRT. The benefits accrued from carrying out the trade by a particular nation are based on how much the international exchange rates differ from that given nation’s MRT. The higher this difference, the greater the benefits or profits a nation will get from trade. The profits that arise from trade depend further on the amount of trade or the volume of trade that takes place. In the constant costs scenario, the exchange ratio is ascertained exclusively based on costs, the demand influences only the allocation of available factors of production between the two branches of production, and therefore the quantities of both commodities which are produced and in this particular situation demand has no correlation with price.
Increasing and diminishing costs
It would be unrealistic to assume that all nations would only face the constant cost scenario. When the figures above are considered for each extra or additional unit of one particular product produced, ever-increasing quantities of the other product must be compromised. That is to produce an additional unit of one product the amount produced of the other product must be sacrificed. On the other hand, diminishing costs refer to the reduction in average costs as the output expands. As per Graham’s thesis pertaining to diminishing costs, there is a contrary or contradictory view to the classical stigma that the specialisation based on comparative cost specifically leads to an increase in the quotient of output among trading countries. His notion was that in a scenario wherein there are free trade conditions when a country is subject to specialisation on the basis of comparative cost industries and tends to forgo decreasing-cost industries, its aggregate real income will fall in a manner that it’s less than before trade.
Innovation
It refers to the creation, development or establishment of any new product, service or procedure in order to improve efficiency, effectiveness, competitiveness or productivity. Innovation is mainly carried out with the objective to improve the quality of life or standard of living as a whole.
Neutral innovation
Neutral innovation is an innovation that is capable of increasing productivity of all the factors that are present in the very same proportion.
Labour saving innovation
Labour-saving innovation is a form of innovation that is capable of increasing the productivity of labour.
Capital saving innovation
Capital saving innovation is the kind of innovation that is capable of increasing the capability of capital making it more productive and causing a shift in the product possibility curve.
Benefits of the opportunity cost theory of international trade
Haberler’s opportunity cost theory has the following benefits:
Haberler’s theory is a more exact and precise representation of international trade when compared with Ricardian theory.
It has wider applicability than the Ricardian approach.
Haberler’s theory explains the international trade scenarios in constant, increasing and decreasing returns to scale.
Haberler’s theory also attempted to elaborate on the theory of international trade at various costs, that is constant, decreasing and constant.
Factor substitution was taken into consideration while profits were generated out of international trade.
Criticism of the opportunity cost theory of international trade
The following are a few drawbacks of Haberler’s theory:
As per many economists like Jacob Viner, the opportunity cost theory is to be deemed comparatively more inaccurate than the real cost approach as it failed to take into account certain real aspects or factors like strain, pain, sacrifice, lack of utility etc.
This theory was also criticised on account of its disregard for change in factor supplies.
It was contended by various economists that the opportunity cost theory was unrealistic and invalid in many manners like the non-existence or absence of economies to scale, diseconomies and perfect competition. (this is applicable to both product markets and factor markets).
Another criticism laid down by Jacob Viner is that the opportunity cost theory does not take into consideration the preference for leisure.
It has also been criticised after being called notional costs as the earnings sacrificed by one can be earned by another and not investments.
The employment market at every position may not be in a steady position to absorb skilled labour.
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This article was submitted by Ms. Rayman Kaur, a legal counsel working with a prestigious pharmaceutical company. This article explains the concept of evidence and its various kinds, as prescribed under the Evidence Act, 1872. It emphasises on Documentary Evidence- primary and secondary evidence by way of various examples, the difference between the two, and various judicial pronouncements.
It has been published by Rachit Garg.
Table of Contents
Introduction
The term ‘Evidence’ has been derived from the Latin word ‘evidere’, which means to showclearly or to make certain, plain, ascertain or prove. In layman’s terms, the word ‘evidence’ can be defined as a set of facts or information substantiating the argument or proposition put forth by the parties.
Evidence plays a crucial role in every legal system. Each case that comes before the court of law has to be supported by evidence, as it helps the court establish the genuineness of the arguments made by the parties. From the stage of admission of a case in court until the pronouncement of judgement, evidence plays a vital role.
Types of evidence
Evidence can be broadly classified evidence into two categories:
All statements which the court permits or requires to be made before it by witnesses in relation to matters of fact under inquiry, such statements are called Oral Evidence; and
All documents including electronic records produced for the inspection of the Court, such documents are called Documentary Evidence.
In other words, oral evidence, as its name suggests, may be referred to as the words of a person who is credible enough to give statements in a court of law, and his statements are not required to be corroborated with documentary evidence. Whereas, Documentary Evidence includes all kinds of documents which are produced before the court to prove certain facts of the matter and are physical/tangible in nature. Secondary evidence is further divided into two categories, namely, primary evidence and secondary evidence.
What is primary evidence
Primary evidence is considered the best quality of evidence and is referred to as the documents produced before the court of law for inspection. Section 62 of the Indian Evidence Act, 1872, explains primary evidence by stating that when a document is in various parts, each part of the document forms a part of the primary evidence. But if the documents are merely copies of a common original work, then they cannot be considered as primary evidence of the original work. For instance, a movie script is written, and copies of it are handed over to all the members of the cast, but the copies of the original movie script are not the primary evidence; only the one whose copies were made is the primary evidence.
Illustrations
Original Art which includes painting, drawing, plans, sculptural drawings, blueprints, etc.
Manuscripts, scriptures, books which are original and not copies of original. It can also include handwritten notes or plans, memoirs, diary entries, letters, etc.
What is secondary evidence
Secondary evidence, as the name suggests, is the evidence that is used in the absence of any primary evidence and is defined under Section 63 of the Indian Evidence Act, 1872.
A bare reading of Section 63 of the IEA, 1872, secondary evidence means and includes:
Certified copies under the provisions of Section 76 of the Indian Evidence Act, 1872;
Copies of the original while ensuring accuracy in such copying, which is to say that a copy which has been transcribed from the original is considered as secondary evidence and is admissible in the court of law;
Copies produced from or compared with the original, which means that the copy so produced must be compared with the original to be called as secondary evidence if not compared then it fails to be a secondary evidence;
Counterparts of documents as against the party/parties who had not executed them;
Oral accounts of the contents of a document given by the person who has himself seen the document must be closely examined before relying on it.
Illustrations
A photograph of the original is admissible as secondary evidence of its contents, even when the two have not been compared.
If a copy of a letter is made using the copying machine and it has been proved that such copy was made from the original document, then it is admissible as secondary evidence in the court of law.
If a copy is transcribed from another copy, but is afterwards compared with the original, then it would be considered as secondary evidence; but if one fails to compare the copy with the original then it cannot be referred to as secondary evidence of the original. It is irrelevant even if the copy from which the second copy was made has been compared with the original.
Neither any oral account of a copy compared with the original, nor any oral account of a photograph or machine-copy of the original, can be considered as secondary evidence of the original.
Provisions in the Indian Evidence Act
Circumstances where Secondary Evidence relating to documents, is admissible
Section 65 of the Act enumerates the situations/circumstances wherein secondary evidence is admissible in place of primary evidence. These are as follows:
In case where the originals are in possession of :
a person against whom the said document is sought to proved; or
a person who is not reachable; or
a person who is legally obligated to produce such document but fails to produce the same even though a notice under Section 66 of Evidence Act has been served upon him;
In case where the person against whom the said document was to be proved, admits in writing the existence, condition or contents of the original;
In the case where the original document has either been destroyed or lost, or when the party that offers to produce evidence fails to do so within a reasonable time, due to reasons others than their own neglect or default;
In cases where the original/primary evidence is immovable, for instance, it is a caricature or inscription (as defined under Section 3 of Indian Evidence Act) then in such circumstances secondary evidence can be admitted;
In case where the original document is a public document and falls within the definition of Section 74, then certified copy of such documents can be tendered;
In cases where the original document is of such nature that the Evidence Act itself permits certified copy of the same;
In cases where numerous documents are to be produced which are not convenient for the Court to examine; or the fact to be proved is the general result of the entire set of documents.
In situations (1), (3), and (4), any secondary evidence proving the contents of the document is admissible. Furthermore, in case (2), only written admission can be tendered. In cases (5) and (6), only certified copies of the original document are admissible as secondary evidence. Lastly, in case (7), evidence can be given by any person who has examined all the documents, who is an expert in examining such documents.
Circumstances when secondary evidence can be tendered without rendering any notice for its production
Section 66 of the Act prescribes conditions wherein secondary evidence can be rendered to the court of law without serving any notice:
when the document which is to be proved is itself a notice;
when, from the subject matter of the case, the opposing party must realise that he will be expected to produce it;
when it appears or is demonstrated that the opposing party has acquired possession of the original document by fraud or force;
when the opposing party or his agent has the original document in the Court;
when the opposing party or his agent has admitted the loss of the document;
when the individual possessing the document is not reachable, or not subject to, the course of the Court.
Difference between primary and secondary evidence
S.NO.
PRIMARY EVIDENCE
SECONDARY EVIDENCE
1.
Section 62 of the Evidence Act defines primary evidence.
Section 63 of the Evidence Act defines secondary evidence.
2.
It is considered the best or finest quality of evidence in a court of law.
It is used in the absence of primary evidence and is considered as lower quality of evidence.
3.
The original document or work that can be produced before the court of law for inspection can be considered primary evidence.
Any and/or all kinds of copies made of the original document/work as mentioned under Section 63, form part of the secondary evidence.
4.
Primary evidence can be presented to the court without serving any prior notice.
Permission is to be sought from the court to lead secondary evidence on the grounds of the unavailability or loss of original documents.
5.
It has high evidentiary value in the court as it is the main source of evidence.
It has low evidentiary value in court as it is an alternative source of evidence.
6.
Birth Certificate issued by the MCD is primary evidence.
In case of loss of birth certificate, Copy of the 10th marksheet if it has Date of Birth is admissible or any ID Proof i.e. Voter Card or Aadhar Card are also admissible and are secondary evidence of the birth certificate.
Judicial pronouncements
The various judicial pronouncements over the years have given clarity on the subject of importance of primary evidence as well as the admission of secondary evidence in the absence of primary evidence.
The Hon’ble Supreme Court in J. Yashoda v. Smt. K. Shobha Rani, 2007(2) R.C.R.(Civil) 840 : 2007(1) R.C.R.(Rent) 466 : 2007(2)held that “it is a general rule that the Secondary evidence can be admitted only in the absence of primary evidence. In a situation where the original is found to be inadmissible as the party who files it to prove its validity has failed to do so, then the said party cannot be allowed to introduce any secondary evidence of its contents”
In the case ofH. Siddiqui (dead) by LRs Vs. A. Ramalingam 2011 (4) SCC 240, the Apex Court reiterated that “where the originals are not produced then secondary evidence without providing a rational reason and factual foundation for laying such evidence is established, the court cannot permit the party to adduce secondary evidence”.
“15. The preliminary requisite for leading secondary evidence is that the party relying upon the original documents were unable to produce them in spite of their best efforts, due to reasons beyond its control. Furthermore, in order to produce secondary evidence before the court of law, the party must establish the plausible reason for the non-production of primary evidence. Secondary evidence cannot be accepted until it is established that the said original documents are lost or are/have been destroyed or have been deliberately withheld by the party against whom the said documents were sought to be used”.
The Hon’ble Apex Court in Chandra v. M. Thangamuthu (2010) 9 SCC 712held that “the secondary evidence must be authenticated by foundational evidence that the alleged copy is in fact a true copy of the original. It should be emphasised that the exceptions to the rule requiring primary evidence are designed to provide relief in a case where a party is genuinely unable to produce the original through no fault of that party.”
Conclusion
Primary evidence is a high form of evidence in law, whereas secondary evidence is considered to be a substitute for primary evidence. But each of these falls under the definition of ‘evidence’ under Section 3 of the Indian Evidence Act. It is a trite law that secondary evidence can only be admitted in exceptional circumstances. It has also been established by way of various judgements that the presentation of primary evidence is the general rule and the presentation of secondary evidence in a court of law is an exception to that general rule.
However, there are numerous circumstances when primary evidence is unavailable or impossible to present in court due to the reasons mentioned in Section 65 of the Act. In such circumstances, the court admits the secondary evidence in order to meet the ends of justice. Documentary evidence is covered under Chapter Vof the Indian Evidence Act, 1872, wherein both primary and secondary evidence are defined and what each includes, including exceptional circumstances when secondary evidence can be presented in place of primary evidence, etc., have been explained in an elaborate manner .
Frequently Asked Questions
What are the various types of secondary evidence?
Secondary evidence includes certified copies, age certificate, photograph, copies made by using mechanical process, tape recordings, oral accounts, photocopies, newspaper report, unprobated will, voter’s list, duplicates/Xerox, typed copy, carbon copy, etc.
What is the process for adducing secondary evidence in the court?
In order to produce secondary evidence, firstly, the party is required to seek permission from the court to do so. Although, in circumstances covered under Section 66 of the Act, notice may not be served while tendering secondary evidence before the court (it is an exception to the general rule). Thereafter, the court shall allow presentation of secondary evidence only after the non-availability of the original documents has been sufficiently established.
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This article has been written by Sarthak Mittal, a student at the Vivekananda Institute of Professional Studies of Indraprastha University, Delhi. This article explains the issuing of a proclamation against a person.
The Court in criminal proceedings has two prominent ways to secure the appearance of a person before it, which are namely issuing of summons and issuing of warrants. When a summons is issued, it becomes the duty of the person to appear himself before the court, whereas, in the execution of a warrant, generally a police officer is ordered to arrest the person and produce him before the court. This article is, however, based on stringent provisions of proclamation which are invoked by the court when the person against whom warrants have been issued has in its opinion absconded or has concealed himself to prevent the execution of warrants. The provision relating to the proclamation in the Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC” for brevity) is Section 82, which is read with some supplementary provisions providing for attachment of property of a proclaimed offender under Sections 83 to 86 (both inclusive) of CrPC. It is imperative to understand that these provisions can only be invoked as a matter of last resort where the power of issuing warrants has been exhausted by the court. The provisions are not for punishing the accused but have the sole purpose of compelling him to appear before the court.
Section 82 CrPC
Scope of Section 82 CrPC
Section 82 of the CrPC provides for the issuing of a proclamation in a case where the court has reason to believe that the person has concealed himself or has absconded in order to evade the execution of warrants issued against him. The court may form its opinion suo motu from the material on a record or on the presentation of evidence by the prosecution. Through a written proclamation, the court orders the accused to appear at a specific place and at a specific time should be given; it should not be less than 30 days from the date of publishing of the proclamation.
It is pertinent to note that the conditions in the provision are of a mandatory nature. Thereby, a proclamation cannot be issued without first issuing a warrant. Further, the legal implication of this provision is that if the court has no authority to issue a warrant then the court will also be bereft of any authority to issue a proclamation. The same proposition of law has been confirmed in the case of Bishundayal Mahton v. King Emperor (1943). Further, in the case ofDevendra Singh Negi v. State of U.P. (1994), the Allahabad High Court held that the proclamation is a notice to the accused whereby he is asked to surrender before the authorities. The provision is to be strictly construed, and a person who is not instantly available can not be termed as an absconder, but there has to be a reasonable ground to form a belief of him being absconded for ascertaining the facts, the court can even examine the serving officer in order to satisfy itself of the fact of absconding, concealment, or of evading of the execution of the warrant. The court further held that the issuing of the proclamation can not be in an arbitrary or whimsical manner but there should be reasons recorded by the court to substantiate the order of proclamation. It is also imperative to understand that proclamation can also become illegal if the time for appearance before relevant authority is fixed before the expiration of 30 days and also the orders of attachment passed on the basis of such proclamation will become illegal, same was held in the case of Jagdev Khan v. Crown (1946).
In the case of Jayendra Vishnu Thakur v. State of Maharashtra, (2009), the Supreme Court observed that the title of proclaimed offender ceases to exist as soon as the person is arrested or otherwise becomes capable of being presented before the court. In the following case, the court held that an order under Section 299 of the CrPC, which allows the recording of evidence in the absence of the accused who has absconded, should have been vacated as soon as the person declared to be the proclaimed offender was in the custody of the police. The court held that as soon as the person was in the custody of police he acquired the right of taking part in proceedings and thereby no evidence could have been recorded against him under Section 299.
Further, in the case of Kailash Chaudhari v. State of U.P. (1993) the Court held that the court should make sure that the case is not disposable under Section 203 of the CrPC before invoking his powers under Section 82 of the CrPC.
In the latest judgment of the Rajasthan High Court in the case of Bhavin Tanwar v. State of Rajasthan (2022), it was held that the courts should first issue summons as per the mandatory requirements of Section 204, as it is an important part of the principles of natural justice, and only after being satisfied with the fulfillment of all essentials in Section 82 should they issue a proclamation. The court observed the exercise of powers by the court under Section 82 in a routine manner and held that the court should be cautious and reluctant and pass orders only in conformity with the provisions of Section 82.
Object of Section 82 CrPC
The object of Section 82 of the Code is not to penalise the absconded person but rather, it is to secure his presence. It is Section 174A of the Indian Penal Code, 1860 whereby a person who fails to appear as per the directions issued under Section 82 of the Code is punished with a term of imprisonment which may extend up to 3 months or fine, or both. Further, an interesting question arose in the case of Manish Dixit v. State of Rajasthan, (2001) that whether the mere fact of a person absconding be enough to draw an inference of guilt against him, the Supreme Court, in this case, observed that such fact of absconding is not sufficient to draw a conclusive inference of guilt, rather it would be seen as cementing evidence and used to fill the gaps in the chain of circumstances.
Manner in which proclamation is made
Subsection (2) of Section 82 deals with the procedure through which a proclamation is issued. The provision provides that the proclamation can be issued by:-
It is read in some conspicuous place of the town or village where the accused person ordinarily resides.
It is affixed at some conspicuous part of the house where such a person ordinarily resides. It can also be fixed at some conspicuous part of town or village.
It shall be affixed at a conspicuous part of the courthouse.
The proclamation can also be circulated through a daily newspaper circulated in the place where the person ordinarily resides.
Further, the question may arise that how can it be ascertained that the court has taken the above-mentioned necessary steps to publish the proclamation. The following fact becomes important as on the basis of such a proclamation there can be further incidental orders of attachment of property under Section 83 of the CrPC, there can be orders of declaration of a person as a proclaimed offender, and there can also be criminal proceedings against such person under Section 174A of the Indian Penal Code, 1860. Subsection (3) of Section 82 provides that a statement by the court in writing can be taken to be conclusive in this regard.
Who is a proclaimed offender
Proclaimed offender as per Section 82(4) CrPC
In 2005, an amendment was brought to add sub-sections (4) and (5) in Section 82, whereby a person who is accused of serious offences under the Indian Penal Code, 1860, if he fails to appear as per the requirements of the proclamation, the court can declare him a proclaimed offender after inquiring into the matter. The CrPC further provides that the declaration of him being a proclaimed offender will also be published in the same way a proclamation is published.
Section 174A of the Indian Penal Code, 1860, also provides that where a person has been declared a proclaimed offender under Section 82(4) of the CrPC, he shall be liable for a term of imprisonment that may extend to seven years and shall also be liable to fine in tandem with such a punishment. The following criminal liability is far greater than what has been inflicted upon a person who fails to appear as per the direction of the proclamation.
Effects of declaring a person as proclaimed offender
Section 40(1)(b) of the CrPC provides that every officer employed in connection with the affairs of a village, or the residents of the village for that matter, has a duty to communicate to the nearest magistrate or officer in charge of possessing information regarding the place where a proclaimed offender has resorted to. Section 41(1)(ii)(c) of the CrPC provides that a police officer can arrest a person who has been declared a proclaimed offender without any warrant. Under Section 43 of the CrPC, a private person can arrest a proclaimed offender and present him to the nearest police station. Section 73(1) of the CrPC confers power upon the Chief Judicial Magistrate or a Magistrate of First Class to direct a warrant against a proclaimed offender. It is pertinent to note that the term proclaimed offender in Section 82 has been added by the 2005 amendment, however, the term has been used in the following sections even before the 2005 amendment. Thereby, before the amendment, any person against whom a proclamation was issued was called a proclaimed offender. However, through the 2005 amendment, an embargo has been imposed whereby a person cannot be declared a proclaimed offender without an inquiry.
Anticipatory bail when declared as a proclaimed person
In the case of Lavesh v. State (NCT of Delhi) (2012), Supreme Court held that, usually, on a declaration being made against the accused under Section 82 of CrPC he is not entitled to the relief of anticipatory bail. However, In the case of Sidharth Kapoor v. State of UP and Anr (2022), the Allahabad High Court held that seeking processes under Section 82 of the CrPC during the proceedings of anticipatory bail is circumventing the procedure by the investigating agency, and the issuing of processes under Section 82 engrafts no embargo upon the accused to exercise his statutory right of seeking anticipatory bail.
Both judgments seem to be in conflict. As per the law, the law laid down by the Supreme Court is to be followed; however, by a purposive construction of the provision, we can say that an application under Section 438 can be filed by the accused even after being declared as a proclaimed person or proclaimed offender, as there is no bar expressed against a proclaimed offender for the filing of anticipatory bail under Section 438. On the other hand, it is pertinent to note that as per the Supreme Court’s ruling courts will be reluctant in granting anticipatory bail considering the chances of such a person absconding or concealing.
Difference between proclaimed offender and proclamation
It is pertinent to note that there is a difference between a proclamation and a proclaimed offender, this difference did not exist before the 2005 amendment. A proclamation is a notice to the accused, who is believed by the court to have absconded or concealed himself to evade execution of warrants whereas, proclaimed offender is a title that is conferred upon a person against whom a proclamation has been published and also who have committed a serious offence. The title of a proclaimed offender is declared after an inquiry is conducted by the court, in which the court has to confirm that such a person has been intentionally in hiding to evade the execution of warrants. The title of proclaimed offender opens up the person to penal liabilities and also to other disqualifications; these consequences also make it essential for the court to conduct an inquiry before declaring such a title. However, it is pertinent to note that there has been no reference made in the provision which expounds upon the extent of such inquiry.
Difference between proclaimed persons and proclaimed offenders
In the case of Deeksha Puri v. State of Haryana, (2012), it has been held by the court that there is only one difference between proclaimed offenders under Section 82(4) and Section 82(1) is of the criminal liability being inflicted upon them whereby all other provisions like Sections 40, 41, 43, and 73 of the CrPC will equally apply on both sets of persons but the liability of imprisonment up to 7 years and a fine can only be imposed if the person has been accused of any of the offences mentioned in Section 82(4) and a proclamation has been issued against him.
Further, in the case of Satinder Singh v. State of U.T., (2010) the Punjab and Haryana Court held that for declaring a person a proclaimed offender, it is essential that he be accused of any of the offences listed in Section 82(4) of the CrPC. However, the court has been silent upon the matter relating to clarity of the term proclaimed offender used in Sections 40, 41, 43, and 73 of the CrPC. The same proposition of the law has been followed by courts in the cases of Satinder Singh v. State of U.T., (2011) and Likhma Ram v. State of Punjab and Anr., (2011). The courts in the following case filled that those persons who have not committed any of the offences provided under the list of offences in Section 82(4) can be termed as ‘proclaimed persons’ and not ‘proclaimed offenders.’
The Single Bench of the Delhi High Court in the case of Sanjay Bhandari v. State (NCT of Delhi), (2018)has clarified the law on two issues which are whether ‘proclaimed offenders’ and ‘proclaimed persons’ be treated as the same set, and when provisions like Sections 40, 41, 43, and 73 are to be invoked. The court held that proclaimed persons can not be treated the same as proclaimed offenders as later can only be the persons who the court has declared under Section 82(4) after they have failed to adhere to the notice of proclamation issued under Section 82(1). The declaration only can be made if the person has been accused of any of the offences mentioned in Section 82(4). The court went ahead and clarified that if a declaration has been made under Section 82(4) where a person has been accused of an offence other than mentioned in the provision which may be an offence under a special law or under the Indian Penal Code itself it will be seen as an illegal declaration and will be bad in law. Further, the court held that there is no provision in CrPC other than Section 82(4) which specifically and expressly talks about the declaration of a proclaimed offender thereby, the section is to be followed strictly for such declarations and other persons can be called ‘proclaimed persons’ at best. Pertaining to the second issue the court held that only after the declaration under Section 82(4) the provisions like Sections 40, 41, 43, and 73 can be invoked.
Conclusion
Before the 2005 amendment, the terms proclaimed offender and proclaimed person were used interchangeably. However, through the 2005 amendment, there was a specific provision incorporated for the declaration of proclaimed offenders, which resulted in the dichotomy of opinions between the courts. One where the court construes that there is no major difference except criminal liability, and the other where the court not only draws a difference between the proclaimed offender and proclaimed persons but also construes that other legal ramifications like the power of police to arrest, the power of issuing a warrant, and criminal liability will also be affected by the said distinction, whereby all provisions that were earlier applicable only on a proclamation being issued against the person under Section 82(1) can now be invoked only on a declaration being made as per Section 82(4).
This being said, it is pertinent to note that the legislative intent has been made manifest by Delhi High Court in its recent Sanjay Bhandari case. However, the dichotomy in opinion still has to be resolved, either by legislation or by the Supreme Court. The declaration of a person as a proclaimed offender makes him part of a class of citizens who can be treated differently for the safety of society, and various legal repercussions take place from such a declaration; thereby, there should be cogent laws/rules/guidelines on the given matter.
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This article is written by Monika Pilania, a student of Maharshi Dayanand University, Rohtak. This article seeks to elucidate Section 160 of CrPC which contains the Police Officers power to summon a witness.
It has been published by Rachit Garg.
Table of Contents
Introduction
We usually face situations where crime happens every day. It is not possible for police officers to be present everywhere when a crime is committed. And it is not possible to install CCTV cameras everywhere in the country. The criminals are well trained, and they leave no evidence of their crimes. In such a situation, the only way left for the police officers to catch the culprit is to interrogate those who see and witness the crime. Therefore, police officers are given certain powers to properly investigate a crime. The common misconception that often haunts the citizens of this country is that the powers and authority of the Police Department are autocratic and unbreakable. Instances of police officers harassing individuals in connection with investigations abound. The added stigma stems from the fact that most people are unfamiliar with the legalities associated with such situations, and in all such cases, ignorance is almost always not “bliss”, but it is nothing short of suffering.
The present article attempts to shed some necessary light on the provisions of Section 160 of the Code of Criminal Procedure in respect of a notice issued by an investigating police officer, which requires the presence of any person who is acquainted with the facts and circumstances of the given information or otherwise, and such a person shall be present as and when required.
Essentials of Section 160
According to Section 160(1), an investigating officer can by order require the attendance before himself of any person if the following conditions are satisfied:
The order requiring the attendance of the person must be in writing.
The person is one who appears to be acquainted with the facts and circumstances of the case; and
The summons issued under Section 160 of the Criminal Procedure Code must include the Investigating Officer’s name, title, and address as well as information on the FIR and the offence.
The person called for investigation is within the limits of the police station of the investigating police officer or is within the limits of any adjoining police station.
The police officer must also pay this person’s reasonable expenditures when they attend at a location other than their home, in accordance with the rules.
However, a person below 15 years of age or above 65, a woman, or a mentally or physically disabled person shall not be required to attend any place other than the place in which such person resides. This provision is intended to give special protection to children and women against the probable indignities and inconveniences that might be caused to them by the abuse of police powers under Section 160(1). There is a public policy, not complimentary to the police personnel, behind this legislative proscription that keeps juveniles and females away from the police company except at the former’s safe residence. Maybe, in later years, community confidence and consciousness will regard the police force as entitled to better trust and will soften the stigmatising or suspicious provisions now written across the code.
Who is a witness
Those who give testimony under oath or affirmation in person, by oral or written deposition, or by an affidavit are considered witnesses if they see, know, or are witnesses to something. Evidence that is admissible in court is the foundation of a criminal case. Whether it be direct evidence or indirect evidence, witnesses are required for it.
Section 160 Examined
The wording of Section 160 is simple and unambiguous, and there is no doubt that this provision is placed in the service of a fair and comprehensive inquiry, which is the most basic need in any criminal procedure in any country. In situations where the police sends a notice under Section 160 of the Code, the police should explicitly explain the contents of the F.I.R/Case No. Non-compliance with a summons issued pursuant to Section 160 of the Criminal Procedure Code is a crime punishable under Section 174 of the Indian Penal Code. This provision states that anyone who is required by law to appear in person or through an agent at a specific location and time in response to a summons, notice, order, or proclamation issued by a public official who is legally authorised to do so, if intentionally omits to attend that place or time, shall be punished with a simple imprisonment for a term which can also be extended to one month or with a fine which can extend to five hundred rupees, or with both; or if the summon, order, notice is to attend in person or through its agent in a court of justice, shall be punished with simple imprisonment which may extend to six months, or with a fine which can extend to one thousand rupees, or with both.
It is quite clear from the language used in Section 160 that a police officer making an inquiry has the power to summon only the person who is within the limits of one’s own police station or within the limits of any adjacent police station. A police officer has no power to call a witness who is not within the said limits of Thana or any nearby police station.
Therefore, if a witness is residing in another state, in a different district, or is an outside witness, he cannot be called to appear before the investigating police officer. However, if the area within which such a witness is located is adjacent to a police station, even if it is in any other state or district, such a witness may be called by a police officer.
In this regard, it is important to note that an order was issued in the 1975 case of Krishan Bans Bhadur v. State of Himachal Pradesh, pursuant to Section 160 of the Code of Criminal Procedure, that required petitioners to appear at Police Station Chhota Simla in connection with an investigation of a case. They received the order in New Delhi. The petitioners were unable to comply with the order by appearing at the police station.
As a result, a charge sheet for a violation of Section 174 of the Indian Penal Code was filed against the petitioners. In light of the facts, the Himachal Pradesh High Court made the following ruling:
“It is clear that the petitioners did not violate any of the directions or provisions provided under Section 160 of the Code of Criminal Procedure. Any person being within the limits of his own or any adjoining station who, from the information given or otherwise appears to be familiar with the circumstances of the case, is required by Section 160 to be present before a police officer conducting an investigation, and Section 160 adds that such a person must attend as so required. It is clear from the record of the current case that the petitioners were not located within the boundaries of the police station where the police officer was issuing the order or of any neighbouring stations at the time the orders under Section 160 of the Code of Criminal Procedure was issued. The petitioners were in New Delhi, according to their address, which is specified in the order. There is absolutely no proof that they were ever in Shimla. Section 160 of the Code of Criminal Procedure appears to lack authority. The order was not issued by a public official who was duly authorised to act in that capacity. Therefore, it cannot be stated that any offence was committed that falls under Section 174 of the Indian Penal Code.”
Can Police Officer issue a summon to a suspect under Section 160 CrPC
According to Section 160 of the CrPC, a police officer conducting an investigation under Chapter XII of the CrPC may demand that anyone within the boundaries of his own police station or an adjacent police station who, in his judgement, appears to be familiar with the facts and circumstances of the case appear before him. Until the investigation is over and a charge sheet is produced, police or IO may summon any individual, even if he is a suspect in the case.
This was held in the Nandini Satpathy v. Dani and Anr., 1978case. The Court held that Section 161(2) functions as a kind of parliamentary commentary on the Constitution’s Article 20(3). The police have the authority to question someone who was or might become an accused person in the future under Section 160 and Section 161 of the CrPC because section 161 covers actual accused and suspects. People who are first or ultimately accused would be considered any person under Section 161 CrPC.
Powers of Police officer
The police investigation begins when:
FIR (First Information Report) is lodged,
When a police officer suspects the committing of a crime that is punishable by law,
When a competent magistrate directs the Police.
Both cognizable and non-cognizable offences are subject to a police investigation. Without a magistrate’s permission, police officers can investigate cognizable offences. A police officer has the authority to conduct an investigation under Section 157 without first filing an FIR if he suspects the commission of a cognizable offence. Additionally, in order to conduct an investigation, police have the power to compel the appearance of witnesses.
Under Section 156 of the Code of Criminal Procedure, police officers have the power to investigate a case. In accordance with Section 160 of the Criminal Procedure Code, a police officer conducting an inquiry may summon a witness. However, Section 161 allows any investigating officer to examine someone in person if they are deemed to be familiar with the facts and circumstances of the case. Such a person may be interviewed orally by a police officer, and he is required to truly respond to any inquiries about the case unless his statements have the potential to subject him to criminal prosecution, a fine, or forfeiture. The police officer may also use audio-video technology methods to put such remarks in writing. The police officer will provide the accused with copies of the statements. After an investigation, a police officer is empowered to present a charge sheet.
Prerequisites to the power granted to a Police officer under Section 160
The prerequisites to the power granted to a police officer under Section 160 are:
The registration of an FIR is required before a police officer may issue summons or notices.
The person is one who appears to be acquainted with the facts and circumstances of the case; and
The summons issued under Section 160 of the Criminal Procedure Code must include the Investigating Officer’s name, title, and address as well as information on the FIR and the offence.
The person is within the limits of the police station of the investigating police officer or is within the limits of any adjoining police station.
Can you refuse to be witness under Indian Laws
Before we analyse the question, let’s first have a look at the various sections of the Indian Constitution, the Code of Criminal Procedure, and the Evidence Act. First, according to Section 160 of the CrPC, a police officer has the right to call any person familiar with the facts of the case during an investigation, and they are compelled to appear. Section 132 of the Evidence Act states how a witness can be made to answer questions that may incriminate him, with the condition that if the court compels him to answer, he is required to do so, but the prosecution cannot be initiated against such compelled incriminating questions. And last but not least, according to Article 20(3) of the Constitution, no one can testify against themselves.
In an adversarial system like ours, the burden of proof rests with the prosecution to establish guilt beyond a reasonable doubt. So, the prosecution needs additional power. Because of this, a witness can be compelled to testify against another, but a witness cannot be compelled against himself; Instead, he has a right to remain silent.
Important judicial pronouncements
Amandeep Singh Johar v. State of NCT of Delhi & Anr
In this case, a Division Bench of the Delhi High Court heard a Writ Petition in which the Petitioner complained about being summoned to the police station on a frequent basis to participate in an investigation without even receiving a single notice under Section 41A of the Code. The police issued a notice directing the person against whom a complaint has been made that he has committed a cognizable offence to appear before them. Even though Section 41A of the Code deals with situations where the arrest of a person is not required under the provisions of sub-section (1) of Section 41 of the Code, the underlying fallacy remains the same. People’s rights are violated when they are harassed by demands for their appearance in the absence of notices required by Section 160 or in response to notices that were given incorrectly. The aforementioned verdict also raises severe concerns about the police’s practice of failing to acknowledge receipt of documents that are presented by and of failing to enter same into the police report. In the aforementioned Writ Petition, the Delhi Police was ordered to establish fair and reasonable regulations for the issuing and service of notifications under Sections 41A and 160 of the Code.
The High Court considered that the aforementioned Writ Petition addressed basic flaws and directly affected the rights of everyone who is subjected to police inquiries. The Delhi High Court established strict guidelines for the Delhi Police to follow regarding the application of Sections 41A, 91, and 160 of the Code, which were made mandatory in nature, following lengthy deliberations that included a report that was prepared by the Learned Registrar General of the Delhi High Court that was very critical and invaluable. The Delhi High Court further ordered the Delhi Police to publish and issue a departmental circular mandating strict adherence to the court’s proceedings. The interesting part of the aforementioned ruling is that the Court established a model format for notices sent out in accordance with Sections 41A, 91, and 160 of the Code, and the model format explicitly instructs recipients to study the F.I.R/Case No. of the investigation proceedings. This makes it quite obvious that no such notification of an F.I.R./Case No. may be given to a person who is not present.
Nandini Satpathy vs Dani (P.L.) And Anr, 1978
In this case, the police filed a complaint against the appellant under Section 179 of the Indian Penal Code for failing to answer questions. The Magistrate summoned the accused to appear before the court, which the appellant refused, and she proceeded to the High Court under Article 226 of the Constitution and Section 401 of the CrPC, where her appeal was dismissed. As a result, she filed an appeal with the Supreme Court under Article 132 (1). The main concern in this case was determining the scope of Section 161 (2) of the CrPC and Article 20 (3) of the Constitution. The Judge decided that calling a woman a witness in the police station violates Section 160 (1) and influences her testimony, and that Section 161 (2) and Art. 20 (3) protect the witness from being forced to answer incriminating questions at the investigation stage. The Court also held that, in order to invoke Art. 20(3), the party pleading must be accused of an offence and that he or she was subjected to a compulsion to answer the incriminating questions asked. This protection also extended to the investigative stage according to the Miranda rules. The appellant was therefore instructed to respond to any pertinent and non-self-incriminating questions. As a result, the prosecution’s case was dismissed.
Lalita Kumari vs Govt.Of U.P.& Ors
In this case, the Hon’ble Supreme Court of India has clearly stated that there is no scope for a police officer to conduct preliminary inquiry after receiving information about the commission of any cognizable offence, and consequently, he should proceed immediately by registering an FIR. The Supreme Court has only granted limited discretion to police officers where they are only allowed to conduct a preliminary investigation which is limited to determining whether the information they have received reveals the commission of a cognizable offence. In cases where the police authorities undertake to start and carry out an inquiry, any notice issued to anyone to verify the commission of an offence should not be exempt from the requirement and powers granted to the police by virtue of Section 160 of the Code, since an F.I.R. has not yet been registered.
Latest Supreme Court and High Court rulings
High Court Rulings
The Delhi High Court has held that under Section 160 CrPC, a police officer cannot summon a person located outside the territorial limits of his or her police station, or at most the territorial limits of his or her adjoining police station, for the purposes of an investigation. This ruling was made in the highly significant case ofJamshed Adil Khan & Anr. v. Union Territory of Jammu and Kashmir and Anr (2022). Police officers are given the power to request witnesses’ attendance under this provision. The Single Judge Bench, stated that it is “clear from the plain reading of sub-section (1) of Section 160 CrPC that, for the purposes of an inquiry, a police officer can request appearance of an individual placed within the limits of his own police station or that of the neighbouring police station and not someone who is positioned outside the stated territorial limits.”
In another recent ruling by the Delhi High Court,Kulvinder Singh Kohli v. State of NCT of Delhi & Ors. in W.P.(CRL) 611/2022, made the rational observation that a police officer may issue summons or notices under Section 160 of the Code of Criminal Procedure to initiate an investigation, but that the registration of an FIR is required before doing so. The Court noted that an inquiry cannot be deemed to have begun without the registration of an FIR.
In A. Sankar v. V. Kumar and others(2022), the Madras High Court slammed the police officers for issuing a summons to the counsel representing a party in violation of Sections 91 and 160 of the CrPC. The order, according to the court, was issued carelessly, and the summons’ issuance degrades the status of an advocate. The police’s attitude and carelessness in sending the summons to the petitioner’s counsel were seriously noted by the court. Petitioner filed the contempt petition on the grounds that the respondent had disobeyed the court’s decision requiring the respondent to take the petitioner’s arguments into consideration. The court issued the above mentioned order in accordance with the rules outlined in Sabari v. The Assistant Commissioner of Police, Madurai City and Others (2018).
Supreme Court Ruling
In Charansingh v. State of Maharashtra (2021), the Supreme Court stated that the statements made during the open inquiry at the pre-FIR stage cannot be considered statements under Section 160 of the Criminal Procedure Code and cannot be used against the accused during the course of the trial because they were not recorded during the course of the investigation as required by the CrPC. The bench made up of Justice DY Chandrachud and Justice MR Shah noted that such a remark cannot be classified as confessional and that if it were to be considered confessional, only then could it be classified as self-incriminatory and illegal under the law. The bench further stated that the statement and the material obtained during an investigation should only be used to meet any requirements and determine if an offence has been committed.
Conclusion
Despite the fact that the law requires the investigating officer to issue a written summons to any individual for questioning. However, in practice, this is rarely followed. In most cases, the investigating officer or a constable from the police station summons the witness to the station and interrogates him. He is frequently forced to wait for hours, and in extreme cases, days.
The police officer has the legal authority to question anyone who has reliable information. It is also true that such people are rarely willing to provide a fast and accurate hint to the crimes. As a result, some persuasion and promise may be required. That does not mean that the police are free to physically abuse them. To ensure the effectiveness of the inquiry, interrogation should be effective. The use of force is inhumane and illegal. Police officers are the guardians of the law; if they commit crimes, no one in society is secure.
Some have questioned whether it is essential to summon a witness to the police station for questioning. A witness is not an accused; he does not need to go to the police station to provide testimony. Nonetheless, as a responsible citizen, it is the duty of every citizen to provide the police with information about facts and circumstances that are within his knowledge.
Frequently Asked Questions (FAQs)
Can a notice issued under Section 160 of the CrPC be quashed?
The police have every authority to issue a notice under Section 160 of the Criminal Procedure Code, and a notice issued under Section 160 cannot be quashed by a Court. The Court is not permitted to intervene with an inquiry after giving notice under Section 160 of the Criminal Procedure Code.
Can the Police Officer summon an outside witness under Section 160 CrPC?
In accordance with Section 160 of the Criminal Procedure Code, a police officer cannot call someone who is located outside of his police station’s jurisdiction, or at most, the jurisdiction of his adjacent police station, for the purposes of an inquiry.
Can a woman be summoned at the police station?
Section 160 prohibits summoning women to the police station for questioning. According to this rule, women have the right to refuse to appear in person at a police station for questioning. The police can question a woman at her home in front of a woman constable and family members or friends.
Can the police issue notices under Section 160 of the Criminal Procedure Code prior to the filing of an FIR?
The police can issue a notice requiring witness appearance under Section 160 CrPC only after the FIR is registered and not before the case is registered.
Difference between Section 160 and Section 41(a) of CrPC?
The notice under Section 41(a) CrPC is issued for an attendance in lieu of arrest, but the notice under Section 160 CrPC is issued to a witness. Under the provisions of sub-section (1) of Section 41, the police officer is required to issue a notice instructing the person against whom a reasonable complaint has been made, credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence, to appear before him or at such other place as may be specified in the notice, in all cases where the arrest of a person is not required.
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This article is written by Kishita Gupta, a graduate from the Unitedworld School of Law, Karnavati University, Gandhinagar. The article discusses the provisions of the Micro, Small, and Medium Enterprises Development (MSME) Act of 2006 along with various judicial interpretations.
India has one of the world’s fastest-developing economies. Small-scale industries have long been a top concern for the government because they constitute the foundation of the industrial sector of the nation’s economy. The micro, small, and medium enterprise sector accounts for 95% of all industrial facilities in India, 45% of the nation’s industrial employment, and 50% of the nation’s total produced exports. The micro, small, and medium enterprise sector offers the most chances for both employment and self-employment in the nation, second only to agriculture. There is significant room for future expansion and growth in the Indian small business sector. In actuality, no other economic sector can compare to the sector’s employment potential. This is where the Micro, Small, and Medium Enterprises Development (MSME) Act, 2006, comes into play. In this article, we shall be discussing all the factors relating to the statute along with its key provisions while also skimming through the latest developments that took place.
Scope and objective of the MSME Act
In terms of the nation’s industrial output, exports, and job opportunities, small-scale industries play a significant role in the Indian economy. On October 14, 1999, the government established the Ministry of Small-Scale Industries and Agro and Rural Industries as the nodal ministry for policy formulation, central sector programmes and schemes, and their implementation and related coordination to support the state’s efforts to promote and develop these industries in India. On June 9, 2001, the Ministries of Small-Scale Industries and Agro and Rural Industries were split into two independent Ministries, both the Ministry of Agro and Rural Industries and the Ministry of Small-Scale Industries
According to suggestions made by the western nations through the WTO, the Central Government chose to introduce the idea of small and medium companies into India instead of the term ‘small-sector.’ The Micro, Small, and Medium Enterprises Development Act of 2006, for example, offers the first legal framework to support the promotion and growth of MSMEs, which include both manufacturing and service companies.
On October 2, 2006, the Central Government passed the Micro, Small, and Medium Enterprises Development Act, 2006, with the intention of facilitating industrial establishments, regulating them, and removing them from bureaucracy and red tape. There was no all-encompassing legislation in place in India before this Act. Each state government has its own laws and regulations regarding the growth of the industrial sector.
Over 300 industrial groups, governmental organisations, and numerous stakeholders from all over India participated in a consultative process that resulted in the Micro, Small and Medium Enterprise Development Act, 2006. Many long-standing objectives of the government and stakeholders in the micro, small, and medium enterprise sector are achieved by the Act.
Key provisions of the MSME Act
Definition of MSME
The following two types of micro, small, and medium enterprises are used to classify them in compliance with the provisions of the Micro, Small, and Medium Enterprises Development Act, 2006.
Manufacturing enterprises
These are the industries that produce goods for any of the sectors listed in the first schedule of the Industries (Development and Regulation) Act, 1951, or that use machinery and plants to add value to the finished product so that it has a unique identity, character, or use. Investment in plant and machinery is used to characterise manufacturing corporations, as mentioned below:
Micro enterprise’s investment does not exceed 25 Lakh Rupees;
The investments of small enterprises are more than 25 Lakh Rupees but do not exceed five crores;
The investment for medium enterprises is more than Five crores but does not exceed ten crores.
Service enterprises
Companies that provide or deliver services are referred to as service enterprises and are identified by their equipment investment.
In micro-enterprises, the investment does not exceed ten lakh rupees.
In small enterprises, the investment is more than ten lakh rupees but does not exceed two crore rupees.
In medium enterprises, the investment is more than two crores but does not exceed five crores.
New criterion on definitions
To prepare the ground for the implementation of the upward adjustment in the definition and criteria of MSMEs in the nation, the Union Ministry of Micro, Small, and Medium Enterprises (M/o MSMEs) has issued a Gazette notification. The revised criteria and definition took effect on July 1st, 2020.
As we are aware, the MSME Development Act was established in 2006; thus, after 14 years, on May 13, 2020, through the Atmanirbhar Bharat package, an amendment was announced to the MSME definition. According to this notification, the definition of micro manufacturing and service units has been expanded to include investments of Rs. 1 crore and turnover of Rs. 5 crores. The small unit’s investment and turnover caps have been raised to Rs. 10 crore and Rs. 50 crore, respectively. Similar to this, the medium unit’s investment and turnover limits were raised to Rs. 20 crores. On June 1, 2020, the Indian Government decided to significantly increase the MSME definition. Now, medium-sized enterprises must invest 50 crore rupees and generate 250 crore rupees in revenue.
The MSMED Act of 2006 serves as the foundation for the current MSMEs’ defining criteria. For the production and service units, it was different. Financially speaking, it was also quite limited. The economy has changed significantly since then. Several arguments were made following the package’s announcement on May 13, 2020, arguing that the disclosed amendment is still out of step with current market and price conditions and should therefore be increased. In light of these representations, the Prime Minister made the decision to raise the limit for medium units even further. This has been done to make business easier to conduct, to provide an objective classification system, and to be realistic with time.
National Board for micro, small and medium enterprises
The Act creates the framework required to monitor and control the growth of India’s micro, small, and medium-sized enterprises. The Act makes clear the National Board for Micro, Small, and Medium Enterprises’ whole organisational structure and its composition. The Act is quite clear about the board’s responsibilities and long-term goals, which include managing cluster development, training entrepreneurs, building infrastructure, and increasing financial access. According to the Act, the board and advisory committees must have a diversified representation of interests from the government, business, finance, and civil society.
Section 3 of the MSME Act mentions the composition of the National Board. The Board shall consist of the following members:
The ex-officio Chairperson of the Board shall be the Minister in charge of the Central Government Ministry or Department with administrative jurisdiction over Micro, Small and Medium Enterprises.
The ex-officio Vice-Chairperson of the Board shall be the Minister of State or a Deputy Minister.
Six state government ministers who oversee the administration of the micro, small, and medium enterprise departments.
Two of the three members of Parliament must be chosen by the House of the People, and one must be chosen by the Council of States.
The Administrator of a Union territory.
The Secretary to the Government of India who oversees the administration of the micro, small, and medium enterprise departments.
To represent the Ministries of the Central Government dealing with business and industry, finance, food processing industries, labour, and planning, the Government of India must appoint four secretaries.
The ex-officio Board of Directors Chairman of the National Bank.
The ex-officio chairman and managing director of the Small Industries Bank’s board of directors.
The ex-officio chairman of the Indian Banks Association.
An officer who is not below the rank of Executive Director who represents the Reserve Bank.
Twenty individuals will represent the associations of small, medium-sized, and micro businesses where at least three persons must be from associations of women’s enterprises and associations of micro-enterprises.
Three persons of eminence representing the fields of economics, industry and science and technology consisting of at least 1 woman.
Two representatives of Central Trade Union Organisations.
The Member-Secretary of the Board shall be one officer not below the rank of Joint Secretary to the Government of India.
However, these members are not permanent and can be removed from the board for the reasons mentioned in Section 4 of the MSME Act:
If any person is now or ever has been deemed insolvent; or
If any person is, or becomes, mentally unsound and a court has so declared; or
If any person has been convicted of an offence that, in the eyes of the Central Government, includes moral turpitude; refuses to act or loses the ability to act as a member of the Board;
If any person has, in the eyes of the Central Government, abused his authority as a Board member to the point where his continued membership on the Board would be against the interests of the general public.
Then Section 5 of the Act mentions the functions of the Board, such as the examination of factors affecting the promotion and development of MSMEs and further making recommendations on such matters as well. Further, the Board is required to make advice to the Central Government on the use of funds, as discussed under Section 12.
According to Sections 20 and 21 of the Micro, Small and Medium Enterprises Act of 2006, each State must establish a Micro and Small Enterprises Facilitation Council with a minimum of three and a maximum of five members, including the director of industries, the MSE Association, a bank, and individuals with specialised knowledge in business, finance, etc.
Measures for promotion, development and enhancement of competitiveness of micro, small and medium enterprises
Under Section 9 of the MSME Act, the Central Government may, from time to time, provide for technological advancement, marketing assistance, or infrastructure facilities, as well as the development of clusters of these businesses in order to strengthen their competitiveness and facilitate the promotion and development of micro, small, and medium-sized enterprises, particularly the micro and small enterprises.
Section 11 of the MSME Act mentions that to ensure a timely and smooth flow of credit to such enterprises, reduce the incidence of illness among them, and boost their competitiveness, the policies and practises with regard to credit to micro, small, and medium-sized enterprises shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank from time to time.
The Central and state governments are given the authority to announce preference policies on the procurement of products and services produced and delivered by MSMEs under Section 11 of the MSME Act, 2006. In order to support and expand MSMEs, the Public Procurement Policy was made public under Section 11 of the MSMEs Act, 2006. Competitiveness, ethical purchasing procedures, and the execution of supplies in line with the system’s fair, equitable, competitive, transparent, and cost-effective requirements are the policy’s guiding principles.
Conflicts developed following the granting of a tender for the design, installation, and maintenance of firefighting and detection systems in Sterling and Wilson (P) Ltd. v. Union of India (2017). Therefore, the question that needed to be decided was whether “works contracts” would fall within the scope of the MSME Act, 2006. The Court described the key elements of the Policy for Micro and Small Enterprises Order, 2012, in detail while making its decision. Section 11 of the Act and Clause 3 of the Policy both allow for the purchase of “goods and services” made and offered by MSEs. Therefore, purchasing “goods and services” created and offered by MSEs is subject to the Act’s and the policy’s provisions. It is plainly evident from the answer to FAQ number 18 of the Policy, as observed by the Court, that the policy is only intended to be used for the purchase of products and services made or provided by MSEs. However, the Public Procurement Policy does not apply to traders. Work contracts, which are fundamental of a composite nature involving the supply of commodities as well as labour or other services, etc., would therefore not be subject to the Act’s restrictions.
Numerous courts, including the Allahabad High Court inRahul Singh v. Union of India (2017), have recognised that the policy is relevant to MSMEs that offer “goods and services.” In the aforementioned case, the question that needed to be decided was whether the petitioner was eligible for a waiver of the earnest money requirement because it was an MSME and, as such, was subject to the Act’s rules as well as the exemption provided by the policy. The petitioner, being associated with an MSME, would have been eligible for benefits under the aforementioned Act and policy. However, since the tender in question was of a composite nature, i.e., a “works contract,” such contracts would not be covered by the aforementioned Act or the Policy. This observation pleased the High Court.
Delayed payments to micro and small enterprises
The MSMED Act specifies in Section 17 that the buyer must “pay the amount with interest thereon as required under Section 16” in exchange for any goods or services delivered by a provider. However, Section 18(1) states that “any party to a dispute may, with respect to any sum due under Section 17, make a referral to the Micro and Small Enterprises Facilitation Council” in the event that such payment obligations are not met.
In addition, Section 18 MSMED Act subsection (2) specifies that the Council shall, upon receiving a referral under Section 18(1), either undertake conciliation in the matter itself or request assistance from any institution or centre offering services of alternate conflict resolution for conciliation. In the event that these conciliation processes are unsuccessful, a procedure for conflict resolution through arbitration is then specified. Significantly, Section 18(3) of the MSMED Act makes it clear that, should arbitration proceedings be initiated, the provisions of the Arbitration and Conciliation Act, 1996 (Arbitration Act), apply to the disputes as if the arbitration were in pursuance of an arbitration agreement referred to in sub-section (1) of Section 7 of that Act.
It is noteworthy in this regard that the Hon’ble Calcutta High Court in the case of National Projects Construction Corporation Limited v. West Bengal State Micro and Small Enterprise Facilitation Council (2017) noted, among other things, that the Act of 2006 permits a party that is governed by it to apply to the Council established under the Act of 2006 to first mediate and then arbitrate disputes between it and the other parties. This was made in connection with the provisions under Section 18 of the MSMED Act.
In a similar circumstance, the Hon’ble High Court of Gujarat noted in Yamuna Cable Accessories Pvt. Ltd. v. Gujarat Chamber of Commerce and Industries (2018) that the respondent council is empowered to initiate the dispute for arbitration on its own or to refer it to any institution or centre offering alternative dispute resolution services for such arbitration if the conciliation conducted by the respondent council is unsuccessful and terminates without any settlement between the parties. Clearly, the failure or termination of a conciliation proceeding is what triggers arbitration under the MSMED Act after a dispute is referred to the Council.
However, despite the MSMED Act’s machinery for dispute resolution appearing to be perceptive and complete on the surface, disagreements frequently emerge regarding its applicability, particularly when a contract between a customer and a supplier has an arbitration clause. Notably, in such cases, arguments in support of arbitration in accordance with the terms of the contract are typically predicated on the idea that an arbitration clause would not be voidable solely because one of the parties to the contract meets the description of a supplier under the MSMED Act.
In fact, those in favour of contractual arbitration make an effort to make their case even stronger by asserting that because Sections 15 to 23 of the MSMED Act and the Arbitration Act do not conflict with one another, there is no reason why Section 24 of the MSMED Act should prevent the invocation or initiation of such arbitration.
The Bombay High Court in the case of Steel Authority of India Ltd. v. Micro, Small Enterprise Facilitation Council (2010) observed that after being persuaded by similar reasons, among other things, noted that there is no clause in the Act that nullifies or invalidates an agreement the parties made to arbitrate their dispute. Additionally, since Section 24 of the Act only supersedes things that are in conflict with Sections 15 to 23, it would not have the effect of invalidating an arbitration agreement. Since the overriding clause only applies to things that are inconsistent with it, there is no concern that an independent arbitration agreement will lose all of its force. Likewise, since both an arbitration conducted by the Council under Section 18 and an arbitration conducted under an individual clause are subject to the provisions of the Arbitration and Conciliation Act, 1996, there is no conflict between the two.
In a similar case, the Hon’ble Court held in Porwal Sales v. Flame Control Industries (2019), that the legislature’s intent was to prevent a party from using the aforementioned provision under the Arbitration Act, rejecting the argument that Section 18(4) of the MSME Act bars courts from hearing any application under Section 11 of the Arbitration Act.
While recognising the provisions under Section 18(3) of the MSMED Act and Section 43 of the Arbitration Act, the Hon’ble Apex Court in the M/s. Silpi Industries v. Kerala State Road Transport Corporation (2021) case further clarified that the Limitation Act of 1963‘s provisions would apply to the statutory arbitration under the MSMED Act. However, in light of the Hon’ble Apex Court’s ruling in the M/s. Silpi Industries case, it is settled as of this writing that by filing a memorandum under sub-section (1) of Section 8 of the MSME Act that, subsequent to entering into a contract and supplying goods and services, one cannot assume the legal status of being classified under the MSME Act, 2006, as an enterprise, to claim the benefit retroactively from the MSME Act, 2006.
No application to set aside any decree, award, or other order made by the Council itself, or by any institution or centre providing alternative dispute resolution services to which the Council refers shall be entertained by any court unless the appellant has deposited with it 75% of the amount in terms of the decree, award, or, as the case may be, the other order. This is stated in Section 19 of the Micro, Small, and Medium Enterprises Act of 2006.
In Snehadeep Structures (P) Ltd. v. Maharashtra Small Scale Industries Development Corpn. Ltd. (2019), Chatterjee, J., of the Supreme Court further reaffirmed the point by observing that the requirement of a pre-deposit of interest is introduced as a disincentive to prevent the buyers from using dilatory tactics to avoid paying the award that small-scale industry may have obtained, just as in cases of a decree or order. The legislature’s aim behind Section 7 presumably was to target purchasers who, in an effort to delay the inevitable occurrence of payment to the small-scale industry endeavour, filed legal challenges against the award/decree/order made against them. Such purchasers cannot be permitted to arbitrarily contest arbitral awards, particularly since the clause mandates a pre-deposit of 75% interest even when an appeal is lodged against an award as opposed to an order or decree.
According to Section 19, the court must direct that the pre-deposit amount be paid to the supplier under the terms it deems appropriate in the circumstances of the case, pending resolution of the application to set aside the decree, award, or order.
The terms that the court typically imposes are a directive to provide a bank guarantee for all or a portion of the money paid out of the pre-deposit. Despite anything to the contrary contained in any other law now in force, the provisions of Sections 15 to 23 shall be applicable.
Requirement to specify unpaid amount with interest in the annual statement of accounts
The MSMED Act also made it a requirement for buyers to include payments owed to suppliers in their audited financial accounts. Unpaid sums to suppliers must be disclosed in the buyer’s financial accounts under Section 22 of the Act. According to Section 27(2) of the MSMED Act, a violation of Section 22 constitutes a crime with a minimum mandatory fine of Rs. 10,000.
For any infringement of the MSME Order, further penalties were set down under Section 405 of the Companies Act. The MSME Order made sure that any errors or omissions in a company’s declarations would result in up to Rs. 3 lakh in fines or perhaps jail time for officers under the Companies Act. In essence, the MSME Order changed an offence that might only result in a fine (as was the case under Section 22 of the MSME Act) into one that might result in a prison sentence.
In addition to the aforementioned, it is important to take into account the impact of disclosing a debt in the financial statements from the standpoint of the consequences it may have under the Limitation Act. Most recently, the Mumbai bench of the National Company Law Tribunal in the case of TJSB Sahakari Bank Ltd. v. Unimetal Castings Ltd. (2019) maintained that the inclusion of a debtor’s amount in the financial statements constitutes an “acknowledgement of debt.” The inclusion of debt in a buyer’s financial statements suggests that with each act of disclosure, the buyer “acknowledges the obligation” owing to a supplier, giving birth to a new cause of action for the supplier and lengthening the statute of limitations. Thus, the act of disclosure would prevent a corporate buyer from claiming that a debt owed to a supplier had been time-barred.
This results in a situation wherein the buyer could receive a prison sentence for failing to disclose while doing so would keep the claims that could otherwise have expired from becoming time-barred.
Conclusion
The MSME Act represents a turning point in the growth of the micro, small, and medium-sized business sector in India. It is the newest step the government has taken to support small-scale industries. The Act imposes obligations on those who purchase goods and services from micro, small, and medium-sized businesses in addition to providing specific benefits for these businesses. One can say that a very vibrant and effective Act is the Micro, Small, and Medium Enterprise Development Act, 2006. It has offered micro and small enterprises unprecedented opportunities to expand and thrive like never before.
Frequently Asked Questions (FAQs)
What are the salient features of the MSME Act, 2006?
The MSME Act, 2006 has the following salient features:
Creation of a legal national board for micro, small, and medium-sized businesses;
Submitting a memo;
Protective, growth, and competitiveness-enhancing measures for micro, small, and medium-sized businesses;
Credit resources;
Restrictions on payments to micro, small, and medium-sized businesses that are delayed.
What was the objective behind the formation of the MSME Act of 2006?
The following objectives made up the framework for the Micro, Small, and Medium Enterprises Development Act:
To aid in the development and promotion of micro, small, and medium-sized businesses;
Increasing the competitiveness of small, medium-sized, and microbusinesses;
To focus on issues concerning micro, small, and medium-sized businesses;
To broaden the scope of gains from undertakings by small-scale industries and supporting industries to micro, small, and medium-sized businesses.
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This article is written by Diksha Paliwal, a practising advocate in the High Court of Indore and a student of LLM (Constitutional Law). The article consists of a detailed analysis of Section 207 of the Code of Criminal Procedure, 1973. The article starts by providing a general overview of the Section, followed by a brief description of the documents furnished to the accused under this Section. Lastly, it critically analyses the extent to which the Section is being implemented in our criminal justice system.
It has been published by Rachit Garg.
Table of Contents
Introduction
Article 21 of the Indian Constitution guarantees the accused’s right to a fair trial. The Supreme Court of India also acknowledged the right to a fair trial as a crucial part of the criminal justice system. The right to a fair trial shall not be compromised at any cost. The right to a fair trial provides the accused with an opportunity to protect himself and defend against the allegations made against him. Section 207 of the Code of Criminal Procedure, 1973, is one such safeguard provided to the accused that ensures a fair trial. This Section corroborates providing all the documents to the accused that form a part of the investigation process. The Court is duty bound to provide all the relevant documents, like a police report, FIR, the statement recorded under Section 161/164 of the CrPC, or any other document that forms a part of the police investigation, to the accused. Let’s have a detailed understanding of the Section.
What is Section 207 of the CrPC: a general view
Section 207 of the Code states that the accused must be provided with copies of documents or relevant excerpts from the documents upon which the prosecution has relied. These documents must be provided to the accused free of cost. The reason behind supplying these copies is to acquaint the accused with the charges brought against him. The accessibility of these documents to the accused also makes him aware of the materials that the police and prosecution have used to prove his guilt. In case the magistrate fails to comply with the provisions of Section 207, the accused may use it as a plausible ground for setting aside his conviction.
The Section states that the accused should be given the copies without delay, and no cost shall be demanded from the accused for the furnishing of these copies. The Madhya Pradesh High Court in the case ofBhole v. State of M.P. (1992), held that the term ‘without delay’ in Section 207 does not denote that the copy must be provided immediately or forthwith since both these terms are quite different. The Court further clarified its contention by saying that the term ‘without delay’ holds much less speed than the term ‘forthwith’. Also, it was held that the word ‘shall’ used in Section 207 is a directory in nature and not mandatory. Hence failure to comply with these provisions will not necessarily lead to vitiating of the trial.
As per Section 207, the documents that must be made accessible to the accused are;
statements of all the persons examined by the prosecution as witnesses recorded by the police under Section 161(3), provided that documents wherein a special request under Section 173(6) has been made by the police officer for the exclusion of any document can be excluded,
confessions and statements recorded under Section 164,
any other document or extracts from any document which were forwarded to the magistrate.
In cases wherein the police request the exclusion of any document, thus after considering the reasons given by the police, can direct that a copy of the statement be provided to the accused. Hence, if the magistrate deems it fit, the statement copy that the police requested to be excluded shall be furnished to the accused. In a situation where the magistrate thinks that any such document or extract is voluminous, the magistrate can ask the accused to inspect that copy in court via a pleader or personally rather than providing a copy.
In the case of Seikh Maheboob v. State of Maharashtra (2004), the complainant made a written report to the police about a murder case. The accused in that case requested a copy of the documents by writing an application while the trial was going on, however, it was not provided to him. The Court held that this act of non-production of documents despite receiving an application from the accused could mean that documents may have been suppressed by the prosecution.
It was held in the case of Harminder Singh Pritam v. State of Maharashtra (1990) that while providing the documents to the accused, there is no mandatory rule that the documents must be provided in English; however, if the accused requests so, he is entitled to be provided with a copy of the documents in English.
Scope of Section 207 CrPC
Section 207 of the Code deals with supplying copies of statements (recorded by the police), other relevant documents, or extracts from the documents to the accused. It confers a duty on the magistrate to supply copies of documents prescribed under the Section, that too free of cost. The magistrate is obliged to make sure that these copies are furnished to the accused as stated in Section 238 of the CrPC. The Section makes sure that the documents on which the prosecution relies to prove its case are supplied to the accused to conduct a fair trial. Providing the accused with copies of documents is very crucial to ensuring a free trial so that the accused can defend himself against the charges and try to establish his innocence.
The Karnataka High Court in the case of Chirag R. Mehta v. State of Karnataka (2022), held that a petitioner or the accused is entitled to get all the copies of charge sheet material, and wherein he is denied for any such material this would amount to an unfair trial, thus, contrary to the principles of natural justice and fairness. In the Bangalore riots in a case titled Muzammil Pasha v. National Testing Agency (2022), the Karnataka High Court directed the National Investigation Agency to furnish the documents, which consist of statements of the witnesses recorded by the local police, in two weeks to the accused in the case.
The Calcutta High Court, while dealing with the scope of Section 207 in the case of Sri Anish Loharuka v. The State of West Bengal (2022), held that where there is a possibility of disclosure of a victim’s identity in cases of sexual offences against a minor, then the Court may order that the accused or his lawyer inspect the documents rather than supplying a copy of the documents. However, the Supreme Court, in the case of Waheed-Ur-Rehman Parra v. Union Territory of Jammu and Kashmir (2022), held that even the documents containing the statements of protected witnesses can be furnished to the accused by providing him with a copy of redacted statements, thereby ensuring the safety of the witnesses as well. But this is not a mandatory condition that must be followed. What must be given priority in such cases is the victim’s security. In such sensitive cases, if the court asks the accused to inspect the documents rather than supplying him with copies, no wrong is done against the accused in such a scenario.
The courts in several cases have also opined that the prosecution cannot say that an accused cannot move successive applications before the court under Section 207 of the CrPC. The provision of Section 207 itself contemplates providing copies to the accused. The interpretation of Section 207 must be done from the accused’s standpoint and not that of the prosecution because this section was enacted to safeguard the accused’s rights.
Object of Section 207 CrPC
When a person is accused of an offence, his life and liberty are at stake, so safeguarding the rights of the accused is an important part of criminal jurisprudence. No person shall be jeopardised unfairly, and also, the principles of natural justice must be followed while conducting a trial, thus ensuring fairness in the trial. Section 207 of the Code fulfils this concept of a fair trial, thereby providing the accused with a pathway towards a free and fair trial. The objective of this section is to provide the accused with the documents that the prosecution relies on. Thus, providing the accused with the opportunity to defend himself. Also, this will make the accused aware of the charges and materials brought against him, thus, giving him an idea of what he will be facing in the trial.
What are the documents under Section 207?
The principles of natural justice provide that an accused has a right to know about the charges made against him. Thus, the court must provide him with the documents or other extracts that the prosecution has relied upon to prove his guilt. The Magistrate has to furnish the documents to the accused before the commencement of criminal proceedings. The Court is under obligation to supply copies of such documents to the accused. The word ‘document’ in the Section denotes all the materials that have been relied upon and used by the prosecution to prove the charges made against the accused. All these documents are the ones that enable the accused to prepare for his defence.
In the case of Arvind Kejriwal v. State NCT of Delhi (2020), the Court while dealing with the scope of supplying documents under Section 207, held that while reading Section 173(5), Section 173(6), and Section 207(1) of the Code together, they provide that the police officer is bound to furnish all the statements recorded under Section 173(5)(b) to the magistrate so that he can further supply copies of these documents to the accused as provided under Section 207.
List of documents to be furnished to the accused
The documents that need to be supplied as per Section 207 are a police report, an FIR, statements recorded and confessions, and any other documents or relevant extracts. Let’s have an overview of these documents.
Police report
In common parlance, the term ‘report’ means to convey or disseminate information, or to deliver information regarding any incident or any other matter. A formal or written representation of the facts of any case or any recommendation to perform a certain action can be termed a report. The term ‘police report’ is defined in the CrPC as a report forwarded by the police officer to the magistrate under Section 173 (2). It is a record stating the facts of the case made by the police. This report forwarded to the magistrate culminates in the initiation of criminal proceedings.
The meaning of the term ‘police report’ was clarified in the case of State of West Bengal v. Anwar @ Answar Ali @ Anwar Rehman (2000). The Court stated that the term ‘police report’ is defined in Section 2(r) of the and is about the report prescribed under Section 173(2) only. It does not include the documents or statements under Section 173(5) of the Code. The Court further stated that if the legislature had the intention of including the documents/statements recorded under Section 173(5) as part of a police report, it would have mentioned it. Even the definition of a police report has nowhere mentioned that without these statements or documents the police report shall lose its validity.
The main objective of police reports is to establish the facts and circumstances of the case along with proving the charges made against the accused. The police report acts as a summary consisting of the facts necessary to start a further investigation into the crime. Section 173 of the Code confers a mandatory duty on the police officer to furnish all the documents and materials, be they oral or written, to the magistrate. This will in turn help him to properly examine the facts and circumstances of the case, and then decide whether the case is fit for taking cognizance or not. The police report plays a vital role in determining the fate of the trial. In the case of Om Prakash And Another v. State of U.P. and Another (2022), the Allahabad High Court, while acknowledging the importance of the police report, held that where the magistrate has taken cognizance based on a police report, in such a case he is not required to write a full reasoned order if it is clear from the order that the magistrate has carefully examined the material on record.
The information regarding the commission of a cognizable offence given to the police or officer in charge of the police station is called a First Information Report (hereinafter referred to as FIR). It is the information given to the police about the commission of the cognizable offence. It forms the foundation on which the investigation of a criminal case starts. This information, when reduced to writing, becomes the First Information Report. The term ‘FIR’ is nowhere defined in the Court, but the provision for it is enumerated under Section 154 of the Code. FIR embarks on the commencement of an investigation in cases of cognizable offences. The police officer is obligated to reduce the information in writing received by him from the informant about cognizable offences.
To sum up, FIR can be defined as follows:
It is information given to the police by any informant or any of the police’s sources;
The information must relate to the commission of the cognizable offence;
It is the information received first at that point in time;
It is the foundation on which the investigation process begins.
In the case of State of U.P v. Mukesh (2013), the Court held that FIR is an indication of the happening of an incident.
Where any information is received by the police about the occurrence of an incident, which involves a cognizable offence, the police have to register the FIR based on that information. It is to be noted that, as required under Section 154 of the Code, only the main information received needs to be mentioned in the regular diary. Also, this information shall not be considered the source of every fact.
It is pertinent to mention that if the information received is through an anonymous telephonic message that does not clarify that the information is related to the commission of the cognizable offence, then it will not constitute an FIR. Just because such information was received first at that point in time does not mean that it will be treated as an FIR. The information received will constitute an FIR or not, depending on the facts and circumstances of the case.
In the case of Lalita Kumari v. State of Uttar Pradesh and ors. (2013), the Court held that the word ‘shall’ used in Section 154(1) of the Code, is mandatory. The word ‘shall’ clearly shows the intention of the legislation and states that the police are bound to register an FIR if the information is regarding the commission of a cognizable offence. The Court also stated that the only sine qua non for the registration of an FIR is that offence must be cognizable.
The purpose of providing the provision of promptly lodging an FIR is that it helps in gaining information on the circumstances in which a crime has been committed on an early basis. The lack of timely lodging of the FIR hinders the spontaneity of the investigation. Also, this may hamper the true evidence and facts. In cases where the FIR is reduced to writing after the preparation of an inquest report, this hampers the authenticity of the FIR.
Statement of witnesses
The police while investigating a cognizable offence can examine the witnesses, who have any information on the facts of the case and then reduce it in writing. This power of examining a witness by the police is enumerated under Section 161 of the Code. However, the Section does not confer with police the right of beating or confining a person for obtaining a statement. The police should not use force to extract a statement from the witness. A statement recorded under this Section during an investigation of the cross-case is not considered to be admissible.
The examination of the accused in common parlance is also termed interrogation. The examination should be done by the police officer himself who is conducting the investigation. However, in certain exceptional cases, the head constable or the writer associated with the police station may record the statements, but they must be signed by the investigation officer as well as the recording officer. Administering an oath or affirmation in the examination is not a requirement of Section 161(3). The statements recorded under Section 161 of the Code shall be provided to the accused.
In the course of the examination, the person is under obligation to answer the questions asked by the police. Provided if these questions may be such that it might expose the accused to any criminal charge or forfeiture, then he cannot be forced to give answers. The person under examination shall always speak the truth and not make any false statements. The accused has the right to remain silent, as mentioned under Section 161(2) CrPC.
However, any other witness can be punished under Section 179 of the Indian Penal Code if he does not answer the question asked by the police. Furthermore, if the witness gives false information to the police, he shall be punished under Section 193 of the IPC.
The police examine a witness under Section 161(3). After the police officer conducting an investigation examines the person who is aware of or has an idea about the facts and circumstances of the case, he shall reduce those statements to writing. The police shall not make an unreasonably long delay in recording the statements. Wherein the police make an unreasonable delay of more than 10 days, which after examination, it has also been found that it contains contradictory statements, which will hinder the authenticity and reliance of the documents. However, the court must first ask the police officer in charge about the reasons behind such a delay. A delay of very meagre time will not affect the veracity of the case. But if the delay caused in examining the victim is unexplained, then chances are that it might affect the prosecution’s case.
It is very important to understand that these statements recorded under Section 161 of the CrPC can in no way be used by the prosecution as evidence. However, it may help the prosecution make their contentions in the case stronger. These statements can be used by the defence for contradicting the contentions of the prosecution. Also, it is important to note that in cases where the witness for the prosecution turns hostile, the public prosecutor in such a case can cross-examine that witness to help him establish contradiction by using the statements made by him under Section 161 of the CrPC.
If the statements recorded fall under the purview of Section 27 or Section 32(1) of the Indian Evidence Act, 1872, then the prosecution can use such statements as evidence. The statements recorded by the police are not substantive evidence. In the case where a person whose statements are recorded under Section 161, but thereafter dies, then in such a case, these statements can be considered a dying declaration. The Court also cannot use statements under Section 161, even for drawing any disadvantageous impression against the witness.
Confessions and statements
The term ‘statement’ is nowhere defined in the Code of Criminal Procedure. But the term holds wide relevance in the criminal justice system and can have a meaning with wide connotations. Section 164 of the Code, provides that the magistrate is empowered to record the statements or confessions of a person made in the interregnum of the investigation by the police or even afterwards the investigation. However, this shall not be after the commencement of inquiry or trial. This can only be done for the statements that have been recorded under Chapter 12 of the CrPC.
In the case of State v. Ram Autar, the Allahabad High Court held that the confessions that had been recorded after the investigation had been concluded and the trial had commenced will not be admitted. The magistrate is bound to provide copies of statements and confessions recorded under Section 164 of the Code. This provision is to ensure a free and fair trial for the accused as well. Where the magistrate feels that recording the statement or confession of any of the witnesses will ensure a free and fair trial, he may record the statement or confession.
The statement or confession as stated under this Section shall be recorded and signed by complying with the conditions mentioned in Section 281 of the Code. The person whose confession is recorded must positively sign it. Also, the magistrate shall inform the accused that he is in no way bound to make a conversion and must not be forced to make one. The magistrate should ensure that the confession is being made voluntarily. It is to be noted that this Section includes all kinds of confessions, i.e., of both the accused as well as other witnesses.
The term ‘confession’ herein means an admission made by the person accused of a crime, in which he states or suggests that he has committed a crime, whereas the term statement recorded under this Section has a very limited scope and cannot be treated as substantive evidence. These are recorded to fix the statements given by the witness when the court fears that he might back off from his statement or it may have been tampered with.
Document or Relevant Extracts
Section 207(v) of the Code, states that the accused shall be forwarded copies of other documents or relevant extracts from documents based on which the case is made against him and which have been recorded under Section 173(b) of the Code.
The Court in the case of Arvind Kejriwal vs. State of NCT Delhi (2020), held that the police shall transfer all the documents or evidence to the magistrate to bring them to the notice of the Court irrespective of the fact that the police think that some particular material is not important for the case of the prosecution. The police are not entitled to decide the point and forward all the materials to the magistrate.
The term “any other document or relevant extract thereof forwarded to the magistrate with the police report under S. 173(5) ” can even include documents or papers which are too numerous to mention like, postmortem reports, handwriting reports or reports of fingerprints, sanction copies, reports of chemical examination books of accounts, bills, registers, correspondence, copy of cheques. In the case of Mithan Lal v. State Of Haryana And Anr. (1979), it was held that wherein such documents or materials are voluminous, then the court rather than supplying copies to the accused, can ask the accused to inspect such documents personally or in court through a pleader.
Judicial pronouncements of Section 207, CrPC
Superintendent & Remembrancer Of legal affairs v. Satyen Bhowmick and ors. (1981)
Facts of the case
In the case of Satyen Bhowmick, the accused was charged under the offences of the Official Secrets Act of 1923. The accused was suspected of the fact that he passed some very confidential secrets of the military to the enemies, and thus, was held under Section 3, Section 9, and, Section 10 of the Act. This act of the accused of spilling the secrets resulted in a huge detriment to the country. During the committee inquiry that was going on, the prosecution requested the magistrate that certain copies of statements must not be supplied to the accused. However, the defence lawyer was allowed to take note of those statements. Thereafter, the magistrate asked the opposition to furnish those notebooks for perusal, which the defence lawyer denied, stating that he was entitled to this privilege under Section 126 of the Indian Evidence Act, as those notes had some important points given by the accused. The magistrate upheld the contention of the lawyer. Later on, the state went before the Supreme Court by filing a revision.
Issue
The issue in the present case was only about the scope of Section 14 of the Official Secrets Act, 1923, and whether the accused is entitled to get copies of documents or statements in cases that relate to this Act.
Judgement
The Apex Court held that the right of the accused to get copies of all the statements or documents, on which the prosecution has relied or based on which charges have been made, exists even in the cases wherein the accused is held for offences under the Official Secrets Act,1923. The Court further stated the magistrate should have proceeded against the defence lawyer for not complying with his order of showing the notebooks. The Court clarified that providing copies to the accused doesn’t come under the purview of Section 14, of the Act.
Kishor v. Sudama Prasad and ors. (2001)
In the present case, the Madhya Pradesh High Court held that the object behind Section 207 of the Code, is that the accused should be made aware of the case made against him. It was further held that the investigating officer does not have any option other than to forward all the copies of the statements, evidence, or documents to the magistrate so that he can further furnish those copies to the accused. This is done to ensure a free and fair trial. Section 173(5)(a) of the Code mandates that the copies shall be forwarded to the magistrate by the police officer. Section 173(5), 173(6), and Section 207(1), when read together, make it crystal clear that the police are duty-bound to forward all the copies of recorded statements to the magistrate which will further help him to discharge his duties.
Dharambir v. Central Bureau of Investigation (2008)
Facts of the case
In the Dharambircase, the petitioner was charged with violating Section 120 B of the Indian Penal Code, along with Sections 7 to 12, Section 13(2), read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The charge sheet filed by the police consisted of some phone conversations between the accused persons, which were further saved on a hard drive and kept in the special unit of the Central Bureau of Investigation. After following the due process and proper investigation for these tapped phone recordings, they were forwarded to the learned Special Judge in New Delhi. The accused were provided with copies of charge sheets, other relevant documents, and the transcripts of the phone conversations. However, the accused persons applied to the Special Judge that they must be given mirror image copies of the hard drives, which was rejected by the learned Judge. Being aggrieved by the decision of the learned single judge, the accused filed a petition under Article 226 of the Constitution.
Issues
Whether the hard drives on which intercepted phone conversation was stored come under the purview of ‘papers’ as per Section 173(5)(a) the CrPC, read with Section 207(v) the CrPC?
Is the prosecution free to choose which of the documents must be forwarded to the accused depending on the fact that they have only relied upon a few of the documents gathered?
Does the trial Court have the power to supply those copies also for which the prosecution says that they have not relied upon those documents?
Is the denial of documents at the pre-charge stage in contravention of the rights of the accused?
Can the prosecution only provide the relevant extracts from a hard drive or is it mandatory that the accused must be forwarded complete recordings?
Judgement and observations
The Court held that the telephonic recordings that were stored in the drive come under the purview of the word ‘document’ as defined under the Indian Evidence Act. The Court further stated that there is a difference between the documents forwarded by the police to the court along with charge sheets or the ones that were sent to it earlier while the investigation was going on, and, the statements recorded under Section 161 of the Code, which are also forwarded to the police. From a bare perusal of the relevant provisions of the Code, the intention of the legislature to treat these two as separate is very clear. Concerning the statements recorded by the police of the witnesses, it holds a certain amount of discretion regarding whether to forward them or not. However, a reasonable explanation and the presence of public interest are expected from the police, which must be provided by them to the magistrate. Further, it was said that the first proviso to Section 207(v), empowers the magistrate to even provide such copies to the accused if it deems fit. It is to be noted that this is not the case with the documents, the police have to furnish all the documents before the magistrate. Also, in matters concerning such documents, the magistrate has no choice but to forward these to the accused except when they are voluminous.
Ujjawal Das Gupta v. State (2008)
Facts of the case
The case of Ujjawal Das involved the provisions of three statutes, namely, the Indian Penal Code, the Officials Secrets Act, and the Code of Criminal Procedure. The case was very similar to the Satyen Bhowmick case, which has been discussed earlier. The petitioner in the present case was a retired Brigadier and was working with the Research and Analysis Wing (R&AW) at that time. The petitioner was accused of supplying documents from the National Security Council Secretariat, where he was working at that time, to some foreign agents. At the time of the investigation and when his arrest was made, three pen drives on which those documents were stored were procured from the petitioner. The data was also stored on his official laptop. The petitioner was denied certain copies of documents on which the respondent relied by the magistrate, and hence he preferred a petition before the High Court of Delhi.
Issues
Whether those documents should have been forwarded to the accused even if the case involved the offences of the Official Secrets Act and does the supply of these documents include Section 14 of the Act?
Judgement and observations
The Court relied on the judgement passed in the Satyen Bhowmick case and held that the petitioner has the right to get the documents, and has set aside the order passed by the Special Judge. It was held that just because the case comes under the purview of the Official Secrets Acts, the legal position cannot be different. The accused has the right to a free and fair trial, and thus, the copies must be supplied to him. Provided that the privacy and confidentiality of those documents must be maintained by both the accused as well as his lawyer.
Manjeet Singh Khera v. State of Maharashtra (2013)
Facts of the case
In the case of Manjit Khera, the accused was charged with offences under Section 13(2), read with Section 13(1)(e) of the Prevention of Corruption Act, 1988, read with Section 109 of the Indian Penal Code. The accused filed an application requesting that the prosecution be directed to supply them with a copy of the original complaint, which was filed by an unknown person. The trial court rejected the application of the accused. Thereafter, the petitioner moved an application before the High Court, where his application was also rejected, and hence he came before the Apex Court.
Issue
Is the prosecution bound to supply the original complaint made by an unknown person to the accused as the inquiry was initiated based on that complaint?
Judgement and observation
In a catena of cases, it has been observed by the courts that several documents are seized during an investigation, in a criminal case. While going through these documents, the investigation agency applies a fair amount of mind and scrutinises the documents in two categories. These two categories comprise; one which supports the prosecution, and the other that is in the favour of the accused. The Court held that the prosecution is bound to forward all the documents to the accused irrespective of the fact that it might favour the accused. In case initially, these documents have not been forwarded, and in the later stage accused demands these documents then they must be provided to the accused. Furnishing the documents to the accused is an inalienable right that the accused possesses, in respect of a free and fair trial.
Tarun Tyagi v. Central Bureau of Investigation (2016)
Facts of the case
In the case of Tarun Tyagi, the accused was prosecuted by the Central Bureau of Investigation under Section 66 of the Information Technology Act, 2000 along with Sections 63, and 63 B, read with Section 14b(ii) of the Copyright Act, 1957. The prosecution filed the charge sheets, along with some documents saved in hard drives which were not furnished to the appellant herein. The application filed by the accused for the supply of these documents was rejected by the trial court as well as the high court. Hence, the appellant filed an application before the Supreme Court.
Issue
The issue before the court was to decide whether the accused is entitled to get copies of those documents even after the apprehension made by the prosecution lawyers that furnishing those documents at this stage might result in the accused’s misuse of the documents.
Judgement and observation
The Court did not at any stage dispute that, as provided by Section 207 of the Code, the accused has the right to get all the copies of the documents, and this fact was not disputed by the prosecution. However, the only contention of the prosecution is that providing the documents at that stage may have adverse consequences. The important point that needs to be taken care of is that, if the accused is provided with the copy, then under no circumstances should it be possible that the contents of the drive can be tampered with. The Court dismissed the petition of the accused and held that it must be made sure that those contents are safeguarded, but at the same time, the rights of the accused should be taken care of by providing him with a fair opportunity to defend himself.
Exceptions to Section 207
In respect of the copies of documents or materials that must be supplied to the accused, there exist certain exceptions that allow the police or magistrate to restrain the supply of certain copies of documents or statements to the accused. Some flexibility or an element of discretion has been provided to the police officer and magistrate, to withhold certain documents. As stated above also, there exist certain documents or statements that are voluminous and can be withheld by the magistrate but do there exist any such cases wherein documents can be withheld even if they are not voluminous?
It has been observed in a plethora of cases pertaining to the category of offence, that deals with ‘Modesty of women’ under the Indian Penal Code, or cases of offences under the Protection of Children from Sexual Offences Act, 2012, in which the prosecutor requests to restrain the supply of documents or materials, including electronic evidence, to the accused since they may prejudice the victim’s rights or if they are very sensitive materials. Although Section 207, is clear on the point of exception that the voluminous documents can be withheld, the Courts in various instances have also allowed the plea of the prosecution to withhold certain other documents also, taking into view the gravity of the matter. This is done to balance the rights of both the accused and the victim or even the prosecution. The courts have granted permission to withhold the documents, and just ask the accused to inspect such documents, even though they are not voluminous.
In cases where the prosecution pleads that the documents may be misused by the accused, or if they are very sensitive documents and there is reasonable apprehension behind such pleas, the court agrees to withhold the documents despite their not being voluminous. Also, where the Courts find that supplying any document which might cause harm to the victim’s identity, in such cases they may order the accused to inspect those documents rather than supplying them with a copy.
P. Gopalkrishnan v. State of Kerala and ors. (2020)
Facts of the case
In the case of P. Gopalkrishnan, the appellant was one of the accused who was facing a trial for an offence punishable under Section 376 of the IPC. In this matter, the documents and materials that were supplied to the appellant did not include a copy of one piece of electronic evidence, which was relied upon by the prosecution to prove their case. The electronic evidence was said to have a video of the incident. The appellant asked for a copy of that video by way of filling out an application before the Judicial Magistrate which was later on rejected. The Magistrate however allowed the appellant to inspect the video. Being aggrieved by the order, he moved an application before the High Court of Kerela, which was also rejected. Hence the appellant preferred an appeal before the Supreme Court.
Issues
In the present case, the Apex Court dealt with the matter concerning the rights of free and fair trial of the accused versus the right to privacy of the victim. The main issue before the Court was whether the contents of memory cards come under the purview of the meaning of documents as given in the Indian Evidence Act. The second issue raised was whether the Court can decline the application of the appellant, to furnish the contents of the memory card as they were relied upon by the prosecution, to prove their case and thereby the accused’s guilt.
Judgement and observations
The Court held that a balance must be maintained between the right guaranteed under Article 21 of the Indian Constitution to the accused (right to a free and fair trial) and the right to privacy of the victim. The balance must be maintained between the two fundamental rights. Since it was observed that there was a conflict between two rights, the Court applied the test of larger public interest, and the Court also stated that since the CrPC, is an ongoing statute it must be applied to cases keeping in view that it is contemporary with the situation and the changes thereof. It was further stated that the offence for which the accused has been charged is very serious and that in such cases keeping in view the rights of the accused the copies must be furnished to him. However, it is also important to take into account the privacy of the victim, and thus, balance this conflict that has arisen between both rights. It is important to note that the documents herein were the memory card’s contents. The Court finally held that the accused will only be allowed to inspect the contents of the memory card keeping in view the peculiarity of the case, even if the document cannot be treated as voluminous since it is an electronic record, and the same could have been supplied.
Criticism of Section 207
The Section mandates the Court to furnish copies of documents to the accused, that the prosecution relied upon. The Court is duty-bound to supply a copy of the police report, FIR, statements recorded under Sections 161, and 164 of the Code, or any other document or relevant extract, that the prosecution relies on. Non-compliance with this section leads to infringement of the rights of the accused as guaranteed under the Indian Constitution. However, in various instances, it has been observed that the accused uses several means to tamper with these statements and evidence, especially in high-profile cases. Also, in certain cases where the accused belongs to a sound family with a strong background, they try to use their power to suppress the witnesses and often try to cause harm to the victim by threatening the victim and their family. In some cases, they try to bribe the witnesses once they get acquainted with the documents and statements that may be used against them by the prosecution. In such cases, it becomes very hard to get the accused convicted, thereby resulting in the acquittal of even the criminals.
Conclusion
This Section was enumerated with the view of enabling the accused a free and fair trial by supplying copies of documents and other materials, thereby providing him with a proper opportunity to defend himself. Section 207 of the Code, forms a very crucial part of criminal jurisprudence and plays a significant role in ensuring the safety, and protection of the rights of the accused. The idea behind this Section is to acquaint the accused with the case made against him, and thus, give him a chance to defend himself when the trial commences. The Apex Court, and the High Courts, have held in a plethora of judgements that the magistrate must supply copies of the documents to the accused.
FAQs on Section 207, CrPC
When is a police report considered complete to forward to the magistrate?
A police report is said to be completed when it is made following the manner prescribed under Section 173(2) of the Cr.P.C.
Does the magistrate have limited discretion in considering the matter of the supply of documents?
It has been observed in various judgements by the courts that ordinarily the magistrate has very limited discretion in the matter of supplying documents. The Magistrate is bound to supply the copies except in the case where the documents are voluminous. In such cases, he can order for inspection.
Can the contents of a memory card or pen drive be considered documents as mentioned under Section 207 of the Code?
It is to be noted that a particular content can be treated as a document or not, will be determined based on its nature, and not by the place where it has been stored. It depends on what information that content holds, and the relevance it has in the prosecution’s case.
Is the Magistrate bound to supply the documents about the supplementary investigation also?
It is to be noted that wherein the investigation officer has been granted permission to conduct a further investigation by the magistrate, and wherein the supplementary report contains facts related to the accused then the magistrate is bound to supply a copy of such supplementary charge sheets and reports to the accused.
References
Sarkar, The Code of Criminal Procedure, 11th edition (2015).
DD Basu, Code of Criminal Procedure, 1973, 6th edition.
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The article is written by Tushar Singh Samota, a law student from University Five Year Law College, Rajasthan University. The article discusses the Prevention of Corruption Act, of 1988 along with its evolution and key features. The discussion will be supported by various judicial pronouncements as well.
Corruption has existed in India for centuries. It begins with opportunistic leaders who see any task that comes to them as a chance to gain money. Corruption is seen as one of the most significant barriers to advancement, particularly in developing nations such as India, and particularly in government agencies. Even the education sector, which is intended to instil ideal ethical behaviour in students, is not immune to this evil. For example, the Anti-Corruption Bureau detained two top executives of the Directorate of Higher Education for seeking and receiving a bribe of Rs. 20,000 from a Professor apprehended by the Anti-Corruption Bureau’s (ACB) Thane section in Maharashtra Mumbai. The Criminal Law (Amendment) Ordinance, of 1944 was one of the earliest pieces of law to manage the field of corruption. It was designed to prevent the disposal or concealment of property obtained by corruption, bribery, or other related offences. In 1964, a Central Vigilance Commission was established to specifically deal with cases of corruption, and many State-specific vigilance commissions were also established to address the issue of corruption.
As a result, the Prevention of Corruption Act, 1988 (POCA) was established to consolidate all existing laws and combat corruption in government agencies and prosecute and punish public workers who engage in corrupt acts. It is a powerful tool for combating this evil. The effectiveness of this legislation is critical to the success of the anti-corruption effort. The Central Government has the authority under this Act to appoint judges to investigate and try cases when the offences punishable under the Act are committed or where a conspiracy to conduct or an attempt to commit the offences defined under the Act is made.
The author attempted to explore The Prevention of Corruption Act, of 1988 in this article by addressing its evolution as well as its significant provisions. The article will also discuss the legislation’s amendments as well as judicial pronouncements on the Act.
As a result, the 1947 Act served as a model for the 1988 Prevention of Corruption Act, which went into effect on September 9, 1988. It was aimed at making anti-corruption legislation more effective by broadening their inclusion and strengthening the requirements to make the general resolution more realistic and to eliminate corruption in government offices and public sector organisations in India. The purpose of the Prevention of Corruption Act aims to combat corruption in different government organisations and public sector entities in India.
However, it is not only important to understand the extent to which corruption may be detected in government agencies, but it also means prosecuting and punishing public workers who are participating in corrupt actions. Furthermore, the Act considers those who assisted the criminals in perpetrating the bribery or corruption offence.
Distinctive features of the Act
The following are some of the key features of the Act:
It has broadened the definition’s application to include terms like “public duty” and “public servant” under Section 2 of the Act’s definition clause.
According to the Code of Criminal Procedure, 1973, it has transferred the burden of proof from the prosecution to the person accused of the crime.
The Act’s requirements are very clear: an officer with at least the rank of Deputy Superintendent of Police must conduct the inquiry.
The 1988 Act broadened the definition of “public servant” to include Central Government personnel, union territories, nationalised banks, University Grants Commission (UGC), vice-chancellors, academics, and others.
The Act criminalises corrupt conduct like bribery, misappropriation, acquiring a monetary advantage, having assets disproportionate to income, and so on.
Important provisions of the Act
Important definitions
Section 2(b) of the Act defines “Public duty” as a duty in the execution of which the state, the public, or society at large has an interest. The term ‘state’ has a broad meaning as well. In this context, state means
A corporation created or founded by a Central, Provincial, or State Act.
A government authority or a body controlled or aided by a government company, as defined in Section 617 of the Companies Act of 1956.
The importance of the term “public duty” is that those who are paid by the government for doing public tasks or who otherwise conduct public obligations may also prevent corruption among public workers.
Section 2(c) of the Act defines“public servant”broadly and expressively. Thus the term includes the following:
Any individual employed by the government, receiving government compensation, or receiving fees or commissions from the government for the performance of any public obligation;
Any individual who works for or is compensated by a local government;
Any employee of a firm created by or operating under a Central, Provincial, or State Act, as well as any authority, body, or company owned, controlled, or assisted by the Government, as defined in section 617 of the Companies Act, 1956.
Any Judge, as well as anyone permitted by law to carry out adjudicatory duties on their own or as a part of any group of people;
Any individual designated as a liquidator, receiver, or commissioner by a court of justice with the authority to carry out any function related to the administration of justice;
Any arbitrator or other individual to whom any issue or subject has been submitted by a court of justice or by a competent public authority for judgement or report;
Any person who occupies a position that gives him the authority to conduct an election or a portion of an election, or to compile, publish, maintain, or update an electoral roll;
Any individual holding a position that allows or obligates them to carry out public duties;
Anyone serving as the president, secretary, or other office-holder of a registered cooperative society engaged in agriculture, industry, trade, or banking who is currently receiving or has previously received financial aid from the Central Government, a State Government, or from any corporation created by or operating under a Central, Provincial, or State Act, as well as any authority or body owned, controlled, or assisted by the Government or a Government company as defined in Section 617 of the Companies Act, 1956
Any individual who serves as the chairman, a member, or an employee of any Service Commission or Board, regardless of its name, or a member of any selection committee chosen by the Commission or Board to conduct any examinations or make any selections on its behalf;
Any Vice-Chancellor, member of a governing body, professor, reader, lecturer, or other teacher or employee of any university, regardless of their title, as well as any individual whose services have been used by a university or another public authority in connection with the holding or conducting of exams;
Any official or employee of an educational, scientific, social, cultural, or other institution, regardless of how it was founded, who is receiving or has previously received financial support from the Central Government, any State Government, a local government, or other public authority.
Whether they are public servants or not?- Minister, Chief Minister, and Prime Minister
According to Clause (12) of Section 21 of the Indian Penal Code, which is equivalent to Clause (c) of Section 2 of the Prevention of Corruption Act, 1988, a Minister, Prime Minister, or Chief Minister is a public servant.
The Supreme Court in the case of M. Karunanidhi v. Union of India (1979), determined that a Minister is employed by and subject to the authority of the Governor, receives compensation for labour or duties performed on behalf of the public, and is paid his salary from public money. A Member of the Legislative Assembly (MLA) was found not to be a public servant under Section 21 of the Indian Penal Code, but he is covered by Clause (c) of Section 2 of the Prevention of Corruption Act, 1988.
The term is not limited to the cases specified in the defining clause, and courts have adopted an interpretation that allows additional people to be included within its scope. In P.V. Narasimha Rao vs State (1998), the definitions of “public duty” and “public servant” were questioned. Thus the Supreme Court’s decision made it apparent that the terms “public duty” and “public servant” would be given a broad construction. An MP would therefore be subject to section 2 of the Prevention of Corruption Act, 1988, even if no authority may obtain authorisation for his prosecution under section 19 (1) of the Act.
Accepting rewards, influencing public officials, and accepting gifts
Sections 7 to 11 of the POCA define cases of receiving gratification, influencing public officials, or accepting gifts. The Act categorises offences according to the severity of their effects. Similarly, actions of abetment, conspiracy, agreement, and attempt to commit these offences have been made criminal since it is more vital to nip bribery and corruption in the bud. Various actions have been classified and rendered punishable under various Sections.
It is crucial to note that these parts are currently being requested to be significantly changed in light of India’s duties under the UNCAC. The provisions of the Prevention of Corruption Act as they currently exist are detailed below. The Act’s provisions for offending transactions always include a public servant and illicit remuneration in conjunction with obtaining a favour from the public servant or as an incentive or reward for the public servant.
Section 7 allows public workers to receive rewards other than lawful pay in exchange for doing an official act. According to the explanation for Section 7, gratification is not limited to monetary or monetary-equivalent gratifications. However, it is equally crucial that such a demand be made by the public servant, and the mere possession of the valuable property, in the absence of proof of such a demand, may not result in guilt under Section 7 of this Act.
When a public servant takes or gets illicit gratification for himself or another person, the act is criminal. The term gratification has also been used extensively, and it refers to a variety of things. Within itself, there are instances and transactions. The term “gratification” is not just limited to monetary or monetary-equivalent gratifications
Section 8 prohibits obtaining gratification by corrupt or criminal means to influence a public worker. The phrase “whoever accepts or acquires, or agrees to accept, or seeks to obtain” is used throughout the provision and has been determined to apply to both public workers and non-public servants.
The main distinction between Sections 8 and 9 is that Section 8 allows the use of “personal influence” to secure favour or disfavour, whereas Section 9 contemplates the use of “corrupt or criminal methods.” Although Section 8 uses the term “corrupt,” it is not defined in the Prevention of Corruption Act.
A public servant who receives a valuable object from a person who is involved in any business or transaction involving that public official might be prosecuted under Section 11. The mechanism of this provision requires public employees to acquire something of value while doing their official duties, and these advantages must primarily benefit the employee or any other person.
According to Section 12, whoever aids any crime defined under Sections 7 to Section 11 regardless of whether the crime is committed as a result of the aid shall be punished with imprisonment for a term that shall not be less than three years but which may extend to seven years, as well as being subject to a further five years in prison.
Section 13 of the Act enables the prosecution of a repeat offender and more significantly, makes a public employee who:
Gets any valuable item or financial gain by corrupt or criminal means,
Acquires said item by abusing his position as a public official or,
While serving as a public servant, obtaining something of value or a financial benefit for someone else without serving the public interest.
Without evidence of demand, the mere possession and seizure of cash from a subject of an inquiry do not constitute a violation of Section 7 or Section 13(1)(d) of this Act. In P. Satyanarayana Murthy vs The District Inspector of Police (2015), the Supreme Court ruled that the use of corrupt or illegal means or abusing one’s position as a public servant to obtain any valuable item or financial advantage cannot be deemed to have been proven in the absence of any proof of a demand for illegal gratification.
Is this Act applicable to private individuals as well
As previously stated, the Prevention of Corruption Act of 1988 applies to public workers. To some extent, it also applies to a segment of private individuals. Though the Prevention of Corruption Act of 1988 punishes violations committed by public workers, there are a few occasions where it also applies to private individuals.
Section 8 describes the circumstances in which a person seeks illicit gratification in order to influence a public worker. Thus, anytime an illegal payment is received by a person other than a public worker under the criteria specified in Section 8 of the Act (which are the same as those specified in Section 7), that person is equally responsible for the violation. The Act provides for penalties ranging from six months to five years in jail, as well as a fine. Similarly, activities undertaken by individuals who utilise their personal influence with public workers to obtain illicit gratification are likewise prohibited by the Act.
Thus, this Section 8 applies to anyone who has a connection to public workers who are engaging in corrupt actions. Given our country’s V.I.P. mentality, this is a critical provision. There are a lot of people who are relatives, acquaintances, or friends of public workers who brag about their relationship with such public servants and try to obtain illicit advantages in a variety of areas. Furthermore, this regulation inhibits public officials from obtaining illicit advantages by concealing their identities behind the identity of another individual.
Whether it is illegal to abate some offences
If a public employee who has been charged with an offence under Sections 8 or 9 aids and abets the actions of those other people, the act of aiding is itself criminal under the Act, Whether the crime was done as a result of the abetment, in this case, is irrelevant. The abettor will be subject to a fine in addition to a sentence of imprisonment that must be at least six months long but may not exceed five years.
As a result, the abettor will face the same form of penalty. It is a positive feature when it comes to preventing people from assisting others to commit crimes under the Act, as it provides the same level of penalty for the abettor regardless of whether the offence aided is committed or not. Similarly, Section 12 makes it a crime to aid and abet an offence described in Sections 7 and 11. Section 7 makes it a crime for a public officer to accept a reward other than lawful pay in exchange for performing an official act.
Section 11 makes criminal acts of a public officer getting valuable things without compensation from the person involved in the proceeding or transaction undertaken by such a public servant.
Investigation
Persons authorised to investigate
An investigation of the offence is critical in the criminal justice system. Generally, the police conduct the investigation. It is their primary obligation to gather evidence and try to identify the true perpetrators of the crime. The police have been granted extensive powers for this reason. However, the police can abuse their broad powers at times. Because this is a question of administration and governance by public workers, these powers should be thoroughly reviewed. Not all police officers are permitted to conduct investigations for this reason. Only police personnel of a certain rank are permitted to investigate the matter.
Section 17 of the Act addresses those who are authorised to conduct investigations under the Act. The following individuals have been authorised:
In the case of the Delhi Special Police Establishment: An officer with the rank of Inspector of Police or higher (CBI).
In metropolitan locations such as Bombay, Madras, and Calcutta: An official with the rank of Assistant Commissioner of Police or above.
Elsewhere: An officer with the rank of Deputy Superintendent of Police or higher is authorised.
No approved official may conduct investigations or make arrests until an order from the Metropolitan Magistrate or Magistrate of First Class is obtained. Furthermore, as previously indicated, he may arrest the accused without a warrant from such Metropolitan Magistrate or a Magistrate of First Class. In this approach, we can see that under the Prevention of Corruption Act of 1988, not all police officers are permitted to investigate accusations of corruption. Only the designated police personnel are authorised to conduct investigations into the offences.
Thus, an effective arrangement has been created in context, and a good balance has been struck between the two sides, namely, the accused and the prosecution, to ensure that no public worker is harassed unduly by the police. It is an effective structure for controlling the evil of corruption and establishing the rule of law in order to achieve the lofty goal of natural justice.
Restriction on the investigation in certain cases
Section 17A of the Amendment Act 2018 stipulates that no one may investigate an alleged offence if it involves a recommendation/decision made by a public worker in the course of his official responsibilities. If such an inquiry is to be performed, the following approvals are required:
Approval of the Central Government is required for offences involving Union matters.
For offences involving the conduct of state affairs, state government approval is required.
However, if an arrest is conducted on the scene and the offender admits to committing an offence, no such clearance is necessary.
The authority to examine bankers’ books
Section 18 of the Act stipulates that if the investigation officer believes that the bankers’ records need to be examined for the purpose of inquiry, the officer may examine them. This power of inspection extends beyond the offender’s bank accounts and includes the authority to search the bank accounts of anybody whom the officer suspects of holding money on behalf of the criminal.
The function of the bribe provider and the presumption of taint
According to Section 20 of the POCA, there is a presumption that any expensive item or pleasure discovered in the hands of a person under investigation was obtained for the reasons described in Section 7 of the Act. This is a rebuttable presumption, and the individual under investigation would have the burden of proving that the valued item or gratification was not obtained in connection with the Act’s violation. Accordingly, a person under investigation would be found guilty if no evidence was presented to refute the assumption, as was decided in the case of M. Narsinga Rao vs State of Andhra Pradesh (2001).
Section 24 of the POCA grants immunity to the bribe giver and states that the bribe giver’s confession will not expose him to prosecution. The immunity granted to bribe providers under this rule has been seen as a fundamental weakness as well as contradictory with international norms.
Offences under the Act
Punishment under the Act
Taking gratification other than legal remuneration. (Section 7)
Those found guilty shall face imprisonment for 6 months, extendable up to 5 years. A fine shall also be levied.
Taking gratification to influence a public servant, through illegal and corrupt means. (Section 8)
Imprisonment for not less than three years, which is expandable up to seven years. A fine shall also be levied.
Taking gratification to wield personal influence with public servants. (Section 9)
Imprisonment for not less than 6 months, extendable up to 5 years. A fine shall also be levied.
Act of criminal misconduct by the public servant. (Section 13)
Imprisonment for not less than 1 year, expandable up to 7 years. A fine shall also be levied.
Punishment or penalty under the Act
The imposition of punishment or penalty is a fundamental need of the criminal justice system. The aim of the law is impossible to achieve in the absence of consequence or retribution. Penalty or punishment has a deterring impact on potential future wrongdoers. The severity, amount, and length of the penalty all have an impact on the accused’s rehabilitation. Under the Prevention of Corruption Act of 1988, the general punishment is from three to seven years in jail for lower-level offences (under Sections 7 to 12), in addition to a fine. Higher-level offences, such as the acts performed by the accused under Section 13, are penalised with harsher penalties.
The offence of criminal misconduct, as defined in Section 13, is punished by imprisonment for a duration of not less than four years but not more than ten years, as well as a fine. Persons who commit the offences listed in Section 14, i.e. the habitual commission of offences listed in Sections 8, 9, and 12, face a five-year jail sentence, which can be increased to 10 years. In addition, he will be required to pay a fine as determined by the court. The Act also makes efforts to commit offences criminal. It is specified that anybody who attempts to commit an offence referred to in clause (c) or clause (d) of sub-section (1) of section 13 is punished by imprisonment for a minimum of two years, which can be increased to five years in jail with a fine.
The Act further states that the Court must examine the value or financial interest in the object or property that is the subject of the offence committed. Previously, the Prevention of Corruption Act of 1988 only provided for a short term of imprisonment, which was insufficient to effectively combat the evil of corruption. The Lokpal and Lokayuktas Act of 2013 later extended the sentence. It was extended as a result of increasing pressure from all walks of life against the scourge of corruption. In recent days, civil society has made significant contributions in this area by building a strong public opinion against the scourge of corruption. The Lokpal and Lokayuktas Act, 2013, was the outcome of this awareness, as well as the government’s legal responsibility to execute the terms of UNCAC.
The procedure used to investigate and prosecute corrupt public officials
Under the Prevention of Corruption Act of 1988 and the Indian Penal Code of 1860, the CBI and state ACBs investigate charges of corruption. The CBI investigates cases inside the federal government and Union Territories, whilst state ACBs investigate crimes within the states. Cases can be referred to the CBI by states.
The CVC is a statutory agency that oversees corruption investigations in government agencies. It is in charge of the CBI. The CVC has the authority to recommend matters to the Central Vigilance Officer (CVO) in each department or to the CBI. The CVC or CVO advises disciplinary action against a public worker, but the decision to take such action against a civil servant remains with the department authorities.
An investigative agency may commence a prosecution only with the prior approval of the national or state government. Prosecutors chosen by the government handle the prosecution process in the courts.
Under the Prevention of Corruption Act of 1988, all matters are heard by Special Judges chosen by the national or state governments.
Amendments to the Act
The Prevention of Corruption Act of 1988 was recently updated because no further improvements were made to the Act, resulting in its limited success. With this Act’s limited success, a new Act was required. As a result, The Prevention of Corruption Act, 2018 went into effect (the “Amendment Act”). The majority of the revisions are targeted at tightening up the Act’s current provisions and broadening the scope of the offences.
The significant changes to the Act are as follows:
The word “Prescribed” has been adopted to refer to rules that the Central Government may create under the Act. As a result, we predict the following rules: Rules requiring organisations and businesses to develop internal policies and procedures to prevent their personnel from giving undue benefit to public officials and rules governing the prosecution of a public servant under the Act.
“Undue advantage” after this amendment is defined as any reward other than legal payment. Similarly, the term “gratification” has been defined to embrace all types of monetary gratification other than economic gratification.
The phrase “Legal remuneration” under this amended Act has been defined to cover all pay that a public worker is authorised by the relevant body to receive.
Under Section 4(4), the courts no longer have to finish trials for Act-related offences within two years, failing which the judges must record the necessity for a time extension. A trial can now be prolonged for six months at a time up to a maximum of four years.
The amended Section 8 lays out the consequences for anybody who aids in the payment of a bribe or attempts to engage in corruption alongside a public official. The Amendment Act exempts actions taken under duress as long as the person who was forced to take them files a complaint with the police or an investigative agency within seven days after paying a bribe.
For business organisations, Section 9 now clearly addresses business organisations and the people connected to them. The phrase “persons affiliated with the commercial organisation” is broad enough to cover workers and suppliers, while the word “commercial organisation” is defined to include all types of corporate organisations.
For the penalty section under this Act, provides that where the commercial organisation’s directors, officers in default, or a person with power over the organisation has consented to the corrupt act breaking the Act’s requirements, Section 10 now sets specific periods for imprisonment and a fine.
When Sections 10 and 9 are amended together, it may be helpful to keep in mind that the amended Act appears to punish both commercial organisations for violating the Act by levying a fine and the officers in charge of such commercial organisations under Section 10 by subjecting them to criminal liability.
For provisions related to public servant corruption, it appears that the Amendment Act has reduced the circumstances in which a public employee may be charged with suspected criminal misbehaviour. Only the misappropriation of property and unjust enrichment are included as reasons for misconduct in the modified Section 13 of the Act, which is assessed by disproportionate assets. In the past, Section 13 included broad propensities to engage in corrupt behaviour or seek bribes as grounds for criminal wrongdoing.
The Amendment Act seems to make it more challenging to bring charges against government personnel. According to the change made under Section 19, to prosecute a public employee under Sections 7, 11, 13, and 15 of the Act, a sanction must first be acquired from a body that has the power to fire them. Second, an authorization request must be made by the investigating authority such as a police officer or else other complaints must be satisfied before the court may declare an offence to have occurred.
Act-related constitutional provisions
The codified laws additionally provide statutory and legal provisions against corruption. The provision of Writ Jurisdiction is also included in the supreme law, namely the Indian Constitution. The office of the Comptroller and Auditor General (CAG) is established to control money and economic offences; in addition, there are authorities at the Central and state levels such as the Central Vigilance Commission, the Committee on Parliament Accounts, the Central Bureau of Investigation (CBI), and the Anti-Corruption Bureau of State (ACBS).
The Supreme Court is the Constitution’s custodian. The Constitution has enabled the Supreme Court to protect the basic rights entrenched in Part III of the Constitution. Fundamental rights are rights against the overwhelming powers of the state. The state is defined under Article 12 of the Constitution. The following Writs are provided by Articles 32 and 226 of the Indian Constitution, as well as the opportunity of Public Interest Litigation (PIL) is available.
Writ of Habeas Corpus;
Writ of Mandamus;
Writ of Prohibition;
Writ of Certiorari; and
Writ of Quo-Warranto
All of these writs have their own influence and authority in various domains, and they are nothing more than powers in the hands of the judiciary to restrict administrative discretion. The preamble of the Indian Constitution guarantees the residents of India the right to justice. The Constitution established a federal government, which consists of a Central government and state governments at the state level. Crime is included as a state issue, although law and order are listed concurrently. A number of measures in the Constitution have been enacted to combat corruption in society. Article 311 of the Indian Constitution and the judicial reform process seek to remove corruption from society.
Judicial pronouncements
Parkash Singh Badal And Anr vs State Of Punjab And Ors, (2006)
The Supreme Court ruled in the case of Parkash Singh Badal And Anr vs State Of Punjab And Ors, (2006) that if a public servant received compensation for persuading another public servant to perform or refrain from performing any official act, he would be subject to the provisions of Sections 8 and 9 of the Prevention of Corruption Act. In the same case, the Supreme Court determined that satisfaction might be of any form for Sections 8 and 9, indicating that the scope of their applicability was broad. In this instance, the Court was investigating the relationship between offences under Sections 8 and 9 and Section 13(1)(d) on the one hand.
Subash Parbat Sonvane vs State of Gujarat (2002)
Similar to Section 7, Section 13(1)(d) has been the focus of extensive litigation. The Supreme Court in the case of Subash Parbat Sonvane vs State of Gujarat (2002) held that to be found guilty under Section 13(1)(d), there must be proof that the subject of the investigation, i.e the person under investigation, obtained something valuable or financially advantageous for himself or another person through dishonest or illegal means, by abusing his position as a public servant, or by obtaining something valuable or financially advantageous for another person without any consideration of the public interest.
Bhupinder Singh Sikka vs CBI (2011)
The Delhi High Court in the case of Bhupinder Singh Sikka vs CBI, (2011) found that an employee of an insurance company established by an Act of Parliament was inherently a public servant and that no evidence was necessary in this regard. The Supreme Court’s wide definitions may result in unpredictability and confusion in the law.
Habibulla Khan vs State of Orissa (1995)
It was decided in this case, Habibulla Khan vs State of Orissa,(1995) that, while an M.L.A. falls under the definition of a “public servant,” he is not the type of “public servant” for whom the prior sanction is necessary for prosecution. This paradox was further resolved by a five-judge bench of the Hon’ble Supreme Court in P.V. Narasimha Rao vs State (C.B.I.), 1998, which stated that a Member of Parliament holds an office and is required or accredited to execute responsibilities like public obligations by such office.
As a result, even if no authority may issue approval for his prosecution under Section 19(1) of the Act, an MP would fall within the purview of subparagraph (viii) of clause (c) of Section 2 of the Prevention of Corruption Act, 1988. It was also determined that sanction is not required for the court to take notice of the offences and that the prosecuting agency must obtain permission from the Chairman of the Rajya Sabha or the Speaker of the Lok Sabha, as the case may be, before submitting the charge sheet.
Amrit Lal vs State of Punjab (2016)
Bribery was addressed in Section 7 of the Prevention of Corruption Act of 1988. The complainant’s evidence about the bribe money demand was not validated due to a lack of verification. The amount of money asked as a bribe was challenged in the complaint. Furthermore, two witnesses who testified in front of whom the contaminated money was seized were not interrogated and were unnecessarily released. The Punjab-Haryana High Court, in this case, Amrit Lal vs State of Punjab, (2016) determined that the appellant was entitled to the benefit of the doubt and therefore acquitted of the allegation.
Vasant Rao Guhe vs State of M.P. (2017)
The Supreme Court held in this case of Vasant Rao Guhe vs State of M.P., (2017), that a public official accused of criminal misconduct cannot be expected to explain the absence of evidence to support the claim that he had property or money that was out of proportion to his known sources of income. The bench ruled that the prosecution must prove beyond a reasonable doubt that the public servant, either directly or indirectly through another person, had at any point during his employment had pecuniary resources or property that was out of proportion to his known sources of income. If the prosecution fails to prove this burden, the prosecution will only be able to prove criminal misconduct.
Conclusion
Thus, the evil of corruption has been endangering the evolution of humanity and civilization. Regardless of the period, evil has persisted due to the hungry character of humans. Humans are drawn to this evil because of the material benefits they gain from engaging in immoral acts. This Act may be useful in developing an efficient system to combat the evil of corruption. As a result, the Prevention of Corruption Act of 1988 is an important statute to combat corruption. However, an Act alone will always lose this battle against corruption; it is also the performance of our lawmakers that will give us an advantage in controlling this menace.
Be aware that nothing in the universe could be perfect, and that this Act is subject to the same rule. Further, if needed, effective amendments have to be passed, but the investigating agencies’ effectiveness and efficiency are also crucial in this respect. With the most recent revisions, it is now facing blisters from legal heavyweights, but this should be avoided, and lawmakers should work to find the gap in the law and close it as completely as possible.
Frequently asked questions (FAQs)
What are the goals of the 1988 Prevention of Corruption Act?
The 1947 Act served as a model for the 1988 Prevention of Corruption Act, which went into effect on September 9, 1988. Its goal was to make anti-corruption legislation more effective by broadening its scope and tightening the provisions to improve the whole statute’s effectiveness.
Who are the authorities who may conduct an investigation?
The Government of India, states, and union territories have designated police officials who may conduct investigations, however, it is normally an officer of the rank of Assistant Commissioner of Police/Deputy Superintendent of Police.
Can a briber who cooperates with the investigation face charges of abetment?
A person who admits to paying or offering to pay a bribe in a proceeding against a public servant will not be prosecuted as an abettor.
How may a person seek remedy from dishonest public officials?
If the public servant is a Central Government employee, the person can call the local Central Bureau of Investigation (CBI) office’s anti-corruption branch. If the public worker works for the state government, the citizen may submit a petition to the Lokayukta/Vigilance Commission.
What is meant by using gratification as a motive or reward for performing or refraining from performing any official act?
A public servant may request/accept gratification for performing an official act, such as issuing a driving licence, as well as for failing to perform an official act, such as failing to evict and fine someone who has encroached on public land.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
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This article is written by Ilashri Gaur, a law student pursuing B.A. LLB (Hons.) from Teerthanker Mahaveer University. This is a detailed article containing all the relevant information about the Geeta and Sanjay Chopra kidnapping case popularly known as Ranga-Billa case.
it has been published by Rachit Garg.
Table of Contents
Introduction
In this society where people prefer to live peacefully, they often demand the extinction of the lives of troublemakers and those who pose a menace to society. This case involves professional murderers, and they deserve no sympathy, even in terms of society’s evolving standards. This case revolves around a heinous crime that happened back in 1978. It got popular because in this case, the murderers, who got famous after this occurrence was caught and sentenced to capital punishment. Despite their appeals in the Delhi High Court and Supreme Court, the final conviction warranted the death penalty because these criminals posed a threat to society and if they were given a second chance, there were chances that more heinous crimes of this nature would be committed. These murderers left no stone unturned as they killed two innocent children in a heinous manner merely for the sake of money.
In this article, we will deal with this case study in detail along with the judgement given by the Additional Session Judge, of the Delhi High Court and the Hon’ble Supreme Court.
Facts of the case
The Geeta and Sanjay kidnapping case is also known as the Ranga-Billa case. This heinous crime happened on 26 August 1978. In this case, two children were kidnapped and murdered. This incident took place in New Delhi. The kidnapping and subsequent murder of the two siblings Sanjay Chopra and Geeta Chopra was committed by Kuljeet Singh (also known as Ranga Khus) and Jasbir Singh (also known as Billa).
Madan Mohan Chopra was a captain in the Indian Navy, residing in Dhaula Kuan, New Delhi, with his family. He had a daughter named Geeta Chopra, aged 16-½ years, and a son named Sanjay Chopra, who was two years younger than his sister. During the evening, Geeta and Sanjay participated in a programme for which they had to reach All India Radio, and when their parents turned on the radio to listen to the programme in which their children took part, what they heard was not the voice of their children. Then when their father went to the radio station to pick up his children. Upon reaching there, the father found out that the children did not reach All India Radio in the first place. He got worried and asked his family and friends if they went to their places, but the response was negative too.
Ranga and Billa kidnapped Sanjay and Geeta from outside the radio station in a car. Many people were witnesses in this case as they had seen the car and the children in it asking for help, and people also tried to help them out but were unable to catch them. Soon after, he decided to file a complaint at the police station.
Further, the police tracked the culprits and investigated the case, and soon after, on August 28, 1978, a cattle grazer came across two dead bodies. One was of a boy and the other was of a girl. Their dead bodies were lying in a jungle. The parents who had lodged a missing complaint for their missing children were called for the identification of the dead bodies and these bodies were identified to be of Geeta and Sanjay Chopra.
Post-mortem report
A post-mortem examination was conducted on Geeta Chopra’s body on August 29, 1978, and the doctor found:
A state of advanced decomposition with bluish discolouration of the face which was partially destroyed.
The hair had fallen from the skull due to its own decomposition.
The eyeballs were decomposed, the mouth was open, and the soft tissues of the lips were decomposed.
The tongue and soft tissues of the nose were decomposed and the nails were pale.
There was no evidence of injury to the internal part. The internal part was swollen due to decomposition.
Various injuries were found on the body of the deceased. There were wounds over many body parts like the wrist, fingers, neck, and bones and they were fractured and stained. An internal examination was also conducted in which several other injuries were found. The bones were cut in a sharp manner. The lungs and heart were decomposed. Ribs were intact. Injuries to the neck were sufficient to cause death in the ordinary course of action. The injuries were the result of haemorrhage and shock, which resulted in death.
Was Geeta Chopra raped
The word rape comes from the Latin word ‘rapio’, which means to seize. It is defined under Section 375 of the Indian Penal Code.
Rape is said to be committed under the following circumstances:
If a man penetrates his penis into the vagina, mouth, urethra or anus of any woman or he makes her do so with him or with any person forcefully.
If a man forcefully inserts any object or any body part other than the penis into the vagina, urethra or anus of the woman.
If a man manipulates any body part of the woman so as to do penetration into the vagina, urethra, anus or any part of the body of the woman or he forces her to do with another person.
If a man applies his mouth to the vagina of the woman, anus, and urethra of the woman or he forces the woman to do the same with him or with any other person without her consent, or with consent by putting the fear of death in her mind or by hurting her, or with her consent but she is not of sound mind or intoxicated state, or if she is a minor (in which case her consent does not matter).
In Geeta’s case, the body was in a state of decomposition and, under such circumstances, there was no definite opinion as to whether she was raped or not. During the post-mortem, it was noticed that there was no injury on her private part and also no injury from a violent sexual act in the surrounding area of her private part.
Timeline of events
Before the incident
August 26, 1978.
On this date, the incident took place.
At 6:15 PM
Sanjay and Geeta left the house for All India Radio.
At 7 PM
They were about to reach All India Radio, Parliament Street.
At 8 Pm
The programme in which Geeta and Sanjay took part started at 8 PM, but they were not there to attend the programme.
At 8:45 PM
Mohan Chopra (the father) left the house to pick up his children.
At 9 PM on the same date
Their father reached to pick up his children from All India Radio. However, he did not find his children at the gate where they promised to be. Then he made some enquiries and came to know that the children did not report to the All India Radio Station. He further called home as he thought that the children might have reached home by that time, but he came to know that his children did not reach the house either. He further went on enquiring about it with his family, friends, and other relatives but did not receive any positive response.
At 10:15 PM
Mohan Chopra decided to inform the police. He called the police control room and gave a description of the whole incident and reported that they were missing.
At 11:30 PM
Their father went to find his children and came back home at 11 PM after drawing a blank.
After the incident
At 6:30 PM
A public witness named Bhagwan Das exited Gurudwara Bangla Sahib and rode his scooter towards North Avenue, where he saw a mustard-coloured Fiat car with the registered number and heard noises from that car. He ran back towards the car and saw two people sitting in the front seat and one boy and girl sitting in the back seat.
At 6:45 PM
During that time, other people had also seen and tried to catch the car. One person even held the car door, but the culprits escaped in the direction of Willingdon Hospital. Then Bhagwan Das decided to ring the Police Control Room, and his report was recorded.
At 7:05 PM
At this time, the report was submitted to the sub-inspector and he left for Gole Dak Khana on his motorcycle along with the constable. After enquiring with different people, when they didn’t receive any positive response, they came back at 9:55 PM.
At 7:40 PM
The police station officer passed the report done by Inderjeet Singh (witness) to the police control room and also informed the Mandir Marg police station of the same, after that Rajinder Nagar police station wash off their hands from the case.
At 10:15 PM
A person named Vinod, on the same day was brought to the Casualty Department of the Willingdon Hospital where he was examined by a doctor. He told the doctor that he had been beaten by someone, and on medical examination, it was found that there was a wound on his forehead.
Further, the constable said that 2 or 3 people had snatched his watch and beaten him on the Bangla Saheb Marg near Kali Mandir.
At 10:40 PM
The sub-inspector was directed to investigate the matter at this time.
At 10:50 PM
Then the sub-inspector along with the constable came to the hospital at this time.
At 11:10 PM
The doctor advised Vinod to stay in the hospital as an in-door patient but Vinod refused to remain in the hospital and decided to leave.
On August 27, 1978, at 1:45 AM
The sub-inspector verified the facts and at this time sub-inspector directed Harbhajan Singh to drive to the police station. Vinod and Harbhajan promised to report to the sub-inspector at 10:00 AM. But they didn’t arrive at the police station.
On August 27, 1978
The sub-inspector went to the regional transport office to confirm the car’s number, but there he came to know that this number belongs to one of the scooters.
On August 28, 1978
Around 6:00 PM, a person named Dhani Ram grazing his cattle saw two dead bodies; one was of a girl and the other was of a boy, in a jungle. Then he reported the same to the police (a head constable).
At 2:12 AM
Later, at around 2:12 am, the head constable informed the police control room, which then informed the police station at 2:25 AM. At around 4:30 AM, the sub-inspector sent his report, and an FIR was registered at 5:00 AM.
On August 29, 1978
At 11:00 AM, the post-mortem was conducted on Geeta’s dead body. And later on, at 12:30 PM, the post-mortem of Sanjay’s body was conducted.
Provisions of the law attracted
The Sections under which the culprits were charged were Sections 302, 364, 376, and 394 of the Indian Penal Code, and Sections 365, 363 read with Section 34. Section 27 of the Arms Act, 1959, as Jasbir Singh was also convicted under this Act. Section 164, 354(3), 366, 313 of the Criminal Procedure Code, 1973, as the Trial Court had submitted the proceedings to the High Court for the confirmation of the sentences of all the appeals that will be disposed of by this judgement. They were also charged under Sections 8 and 30 of the Indian Evidence Act, of 1872.
Section
Act
Provisions
8
Indian Evidence Act
This Section states that any fact is relevant if it shows a motive, preparation, or any subsequent conduct in issue or in relevant fact.
27
Arms Act
This Section states that if any person uses any ammunition or any arms in contravention of Section 5 then that person will be punished with imprisonment and will also be liable to a fine.
30
Indian Evidence Act
This Section states that if any confession is made by one person which affects the other person too, then such a confession will be considered by the court, and the court will consider such a confession for another person too.
34
Indian Penal Code
This Section says that if many people commit a criminal act with a common intention, then each person will be liable for the same.
164
Criminal Procedure Code
This Section states the procedure for recording the confession and statements made in an investigation under this section.
302
Indian Penal Code
This Section states that whosoever commits murder will be punished either with the death penalty or with imprisonment for life and shall also be liable for a fine.
313
Criminal Procedure Code
This Section states that there is the power to examine the accused in every inquiry or trial.
354(3)
Criminal Procedure Code
This Section states that when the offence is punishable with death or life imprisonment then the judgement will state the sentence awarded and in such cases the particular reason is given for such sentences.
363
Indian Penal Code
Any person kidnapped from a guardian will be punished under this section.
364
Indian Penal Code
This Section states that whosoever kidnaps or abducts someone in order to murder them will get imprisonment for life or rigorous imprisonment for the term which may be extended to 10 years.
365
Indian Penal Code
This Section states that whosoever will kidnap or abduct a person with the intent to be secretly and wrongfully confined will be punished with imprisonment and will also be liable to pay a fine.
366
Criminal Procedure Code
This Section states that if the court of session passes any judgement which sentence to death then the sentence will not be executed until it is confirmed by the High Court.
376
Indian Penal Code
This Section states that whosoever commits rape in any form described under Section 375 will get punishment under this section.
394
Indian Penal Code
This Section states that whosoever will commit any voluntary hurt to someone in order to commit robbery will be punished with life imprisonment or with rigorous imprisonment as described under this section.
Judgement
After the appeal made by the culprits, the final judgement was passed by the Delhi High Court under the Bench of Justice V Mishra and F Gill.
Kuljeet Singh (Ranga) and Jasbir Singh (Billa) had been convicted by an Additional Sessions Judge, Delhi, under the sections of the Indian Penal Code and sentenced to death. Each of them had been sentenced to rigorous imprisonment for five years under the first count as well as the second, and to rigorous imprisonment for seven years under the third count. After the judgement of the Additional Session Court, the culprits, Kuljeet and Jasbir, both filed separate appeals against their convictions and sentences. The Trial Court had also submitted the proceedings to the Delhi High Court under Section 366 of the Criminal Code Procedure for the confirmation of the sentences of all the appeal and murder references, which were disposed of by that judgement.
The culprits filed a Special Leave Petition against their conviction and, further, the sentence was dismissed by the Hon’ble Supreme Court. By the writ petition, the culprits asked for a re-appraisal of their case and reconsideration of the death sentence was imposed on the court. The Hon’ble Supreme Court said the Session Judge and the High Court were right in giving such a judgement in which the two accused were charged. As there was complete evidence which proves them guilty and they completely showed unimpeachable character, which establishes their complicity in the murder.
Recent updates
The case occurred in 1978, and the culprits got the death penalty in the court where the charges were murder, kidnapping, theft, and having an illegal weapon, preparation for committing murder. The culprits were the reason for the deaths of two children, and for the same, they got imprisonment along with capital punishment. This case was closed after the Chopra family got justice.
Conclusion
India is famous for many things. The positive things are its diversity, culture, different religions, and beautiful states, along with their beautiful view. But this beauty also includes negativity, which makes us take a backseat. Incidents like these are the reasons which ignited the fire of a negative image of India.
This case haunted many people back then and is still remembered by many. The government also indulged personally in this case as it was considered a heinous crime. The government took multiple steps back then and made much stricter rules to safeguard the children and youth of today. In the beginning, it was at its peak, but in the due course of time, it lost its spark and ultimately faded away. But still, it is remembered and has a lasting impact on the Indian populace.
Frequently Asked Questions (FAQs)
Was the Geeta-Sanjay murder pre-planned?
No, the Geeta-Sanjay murder was not pre-planned.
Why did the culprits kill the children?
They knew that their parents would not be able to give them money and that the father was a government servant. So, they killed them.
What is the view of the Supreme Court in this case?
The Supreme Court supported the judgments of the Additional Session Court and the High Court as there is no sympathy for committing such a heinous crime.
Who were Ranga and Billa?
Ranga and Billa were the names of the culprits who murdered two children, Sanjay and Geeta. Kuljeet Singh is known as Ranga Khus and Jasbir Singh is known as Billa.
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This article has been written by Ayush Tiwari, a student of Symbiosis Law School, NOIDA. This article elaborates upon the fundamentals of the Right of Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. Along with its importance, features, and shortcomings, the article covers all the highlights of the Act with the help of recent developments.
Land acquisition in India refers to the procedure by which the Union or a state government in India acquires private land for industrialisation, the advancement of infrastructural facilities, or the urbanisation of privately owned land, and offers compensation to the impacted landowners as well as their rehabilitation and resettlement.
An ordinance with the formal mandate to “meet the dual objectives of farmer welfare; coupled with speedily satisfying the strategic and developmental demands of the country” was issued by the President of India on December 31, 2013. The Land Acquisition Act of 1894 helped institutionalise involuntary acquisition during the course of its 120-year existence, with little respect for the rights of individuals who were evicted from their lands and left without a means of subsistence, security, or community. Under this colonial statute, there was no effective consultation procedure, which was indicative of the larger premise supporting the whole law on land acquisition at the time, which was founded on the idea of eminent domain. The legislation’s tone assumed that the needs of the State for the common good would always take precedence over the interests of landowners and characterised them as tragic “victims of growth.”
The Statement of Objects and Reasons of the Land Acquisition (Amendment) Act, 1984, which discussed the “sacrifices” of the affected people who were “unavoidably” being deprived of their property rights for the greater interests of the society, seemed to indicate this. By seeking to make the land acquisition process more facilitating and collaborative, the Land Acquisition Act of 2013 seeks to rectify this imbalanced paradigm of development.
History of the Land Acquisition Act, 2013
Timeline for the Land Acquisition Act
The Land Acquisition, Rehabilitation, and Resettlement Bill, 2011, was introduced in the Lok Sabha on September 7, 2011.
The Bill was approved in the Lok Sabha on August 29, 2013.
Bill approved in Rajya Sabha on September 4, 2013.
Bill was approved by the president on September 27, 2013.
The Land Acquisition Act goes into effect on January 1, 2014.
The amendment was promulgated by the President on May 30, 2015.
The Indian Government approved the Right of Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. It was passed in order to provide transparent rehabilitation and resettlement processes and equitable compensation in the event of land acquisition. The former 1894 land acquisition Act has been repealed in favour of this one. Due to the gaps and openings in the previous land acquisition Act of 1894, this Act was passed. Its foundation was laid in 2007 when the UPA administration proposed the Rehabilitation and Resettlement Bill of 2007. The Rehabilitation and Resettlement Bill of 2009 and the Land Acquisition Act of 2009 were then introduced in Parliament. Both Bills in Parliament have expired. After carefully examining the circumstances and problems surrounding the land acquisition, the National Advisory Council recommended the “National Development, Land Acquisition, Resettlement, and Rehabilitation Act.” as opposed to the two separate pieces of legislation, the Land Acquisition (Amendment) Bill 2009 (LAA 2009) and the Resettlement and Rehabilitation Bill, 2009. (R&R 2009). The LARR Bill, which was proposed in 2011 and then passed by the Parliament in 2013 to promote the cause, became law as a result.
This is a law that governs land acquisition and lays out guidelines for providing compensation, rehabilitation, and resettlement to those impacted in India is the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. The Act includes measures for equitable compensation for landowners who lose their property, more openness in the land acquisition process for industries, buildings, and infrastructure projects, and guarantees the rehabilitation of individuals who are impacted.
Need for the Land Acquisition Act
There are a number of significant challenges and reasons why a new land acquisition statute was necessary. The following are a few of the primary factors and concerns:
The need for urbanisation and land has grown as a result of industry expansion, globalisation, Special Economic Zones, etc. On the other hand, reasonable compensation, relocation, and restoration plans must be offered to landowners whose property must be acquired by the government. The land is therefore necessary for industrialisation and economic progress, but the affected populations must not suffer as a result of the acquisition.
The term “public purpose” has produced significant issues. The Supreme Court has expanded the definition of “public purpose” in decisions like Yamuna Expressway,Smt. Somavanti & ors. case (1962), and several such cases. In certain situations, the court has ruled that it is legal to acquire property and give it to a private firm for projects that do not truly use it for public purposes. As a result, one of the primary justifications for the acquisition of new property is the wide interpretation and absence of precise criteria.
In the instance of eminent domain acquisition by the state or acquisition for a private enterprise for a project connected to a public purpose, the prior laws provided no provisions for relocation and rehabilitation. Despite receiving compensation, the impacted individuals still face significant difficulties.
Previously, the collector had the ability to decide on compensation. The quantum of the compensation was to be determined using the worth of the local market. However, there was no detailed process for calculating compensation or any other rules. In certain instances, the landowner was deceived.
The previous law lacked a provision requiring permission from the owner of the property the government intended to acquire. Instances like Nandigram, where the government chose to acquire the land of the farmers and gave them short notice so that a Special Economic Zone could be established, occurred as a result of the lack of such laws.
Section 17 of the 1894 legislation, which discusses the urgency clause, was a significant flaw. The government and private businesses have abused this urgency clause a great deal.
Jurisprudence behind the Land Acquisition Act
The Act’s first goal focuses on purchasing public lands in order to enhance the nation’s infrastructure and businesses. The goal of infrastructure development and industrialisation contributes to the nation’s economic growth, and other goals follow from it and work to mitigate its effects. The purpose also discusses the acquisition of property for public use. Public well-being is included in the definition of “public purpose” in its broadest sense. The Supreme Court stated in Dev Sharan v. State of Uttar Pradesh (2011) that the public purpose in cases of land acquisition should be examined from a perspective consistent with the idea of a welfare state. The welfare state discusses societal and public interests.
This legislation is consistent with Roscoe Pound’s notion of social engineering, which focuses on creating an effective society that serves the needs of every member. He discussed three types of interests: private, public, and social. The enacted law compensates all the impacted families, safeguarding their individual rights. Rehabilitation and resettlement frequently result in improvements in the social and economic standing of the impacted family. As the government has taken away their means of support and housing. The statute offers affected families a rehabilitation and resettlement plan as a result of the change in their social and economic circumstances.
It was noted when outlining the objectives of the Acts that the jurisprudence behind these Acts is connected to the economic approach and the sociological approach. Now that the purpose has been thoroughly explained, it is clear that the Act takes an economic and sociological approach.
Objectives of the Land Acquisition Act, 2013
The “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013” and the national draft LARR Bill from 2011 both outline the Act’s objectives. Inferring from the Act and the national draft LARR Bill of 2011, the following primary objective:
The Act’s first goal is to define and direct a land acquisition process that involves consultation with local self-government and the Gram Sabha and is transparent, educational, and participatory. This land acquisition process’s goal is the development of vital infrastructure and urbanisation, both of which are required for public purposes.
The second objective is to guarantee that the landowners whose property is being acquired receive equitable and fair compensation while taking into account all the economic and social factors. likewise to guarantee appropriate procedures and rules for the same.
Aside from the landowners, other families that depend on the property either directly or indirectly also suffer when it is bought. The rehabilitation and resettlement of the affected landowners and their families is the third primary objective, which was not included in the previous Land Acquisition Act.
Applicability of the Land Acquisition Act, 2013
The government acquires property for its own use, possession, and control, including public sector enterprises. The land is acquired by the government with the ultimate goal of transferring it to private corporations for a specific public purpose. Projects involving public-private partnerships are included in LARR 2013, but those involving property acquired for state or national highway projects are not. The land is acquired by the government for declared and immediate use by private businesses for public purposes. Acquisitions made under 16 current laws, such as the Special Economic Zones Act of 2005, the Atomic Energy Act of 1962, the Railways Act of 1989, etc., are exempt from the terms of the Act.
Important provisions of the Land Acquisition Act, 2013
Important definitions
Public purposes
The following are examples of public purposes for land acquisition in India as defined by Section 2(1) of the Act:
For any work essential to the national security, defence, or safety of the people, or for strategic reasons pertaining to the navy, military, air force, and armed forces of the State, including central paramilitary forces; or
For infrastructure projects, such as those listed below, specifically:
All actions or things mentioned in the notice issued by the Government of India’s Department of Economic Affairs (Infrastructure Section) number 13/6/2009-INF, dated March 27, 2012, with the exception of private hospitals, private schools, and private lodging;
Projects which involve agro-processing, the provision of agricultural inputs, warehousing, cold storage facilities, and marketing infrastructures for agriculture and related industries like dairy, fisheries, and meat processing, established or owned by the relevant government, a farmers’ cooperative, or an institution established by statute;
A plan for mining operations or industrial corridors, as well as national investment and manufacturing zones, as specified in the National Manufacturing Policy;
A project to provide sanitary facilities and water harvesting buildings;
A project for institutions or programmes for education and research that are run or supported by the government;
A project for sports, healthcare, tourism, and space programme transportation;
Any infrastructural facility that the Central Government may notify in this respect after notifying Parliament of the notification;
An initiative for families who were impacted by the project;
Housing projects or any income groups that the relevant government may from time to time specify;
The supply of land for residential uses for the weaker sections in rural and urban regions, or a planned development project, or the development of village areas or any place in urban areas;
Project for residential purposes to the poor or landless or to those living in disaster-prone regions, or to people who have been displaced or otherwise impacted by the execution of any project conducted by the Government, any local authority, or a company owned or managed by the State.
The cooperation of the landowner is not necessary when the government announces a public purpose and immediately controls the land. However, before using its authority under the Act to acquire the remaining land for the public good, the government must first obtain the consent of at least 80% of the project’s affected families through an informed process. In the case of a public-private project, at least 70% of the affected families must also consent to the acquisition process.
The Act contains a provision for quick land acquisition. The urgency clause may only be used in cases of catastrophes or natural disasters affecting national defence, security, or the rehabilitation of those impacted.
Landowner
The following people have deemed landowners under the Act:
A person whose name appears in the records of the relevant authorities as the owner of the property, building, or a portion thereof; or
A “displaced family” refers to any family that is to be evacuated and resettled from the affected region to the resettlement area due to the acquisition of land;
Family
“Family” refers to an individual, his or her spouse, minor children, and minor siblings who are reliant on him or her:
As long as widows, divorcees, and women who have been deserted by their families are regarded as separate families;
Explanation: For the purposes of this Act, an adult of either gender who is married, has children, has dependents, or has none of these things is deemed to constitute a separate family.
Interested persons
“Interested person” means—
Any individuals who have a claim to compensation due to the acquisition of land under this Act;
The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, who have forfeited any forest rights recognised under the Act;
A party with an interest in a land-related easement;
Those with tenancy rights under the pertinent State legislation, such as sharecroppers, regardless of their name; and
Anybody whose main source of income is likely to be negatively impacted.
Re-settlement area
“Re-settlement Area” refers to a location where the appropriate Government has relocated the impacted households that have been displaced due to land acquisition;
Determination of the social impact of public purpose
Land may only be acquired for public purposes. The Act defines public purpose to include, among other things, defence and national security; government- and government-built roads, railways, highways, and ports; land for project-affected people; planned development and improvement of the village or urban sites; residential purposes for the poor and landless; etc. This is almost similar to the 1894 Act’s provisions. In some circumstances, getting the approval of 80% of the project’s affected individuals is necessary. These include buying land for the government to use for reasons other than those listed above, for public-private partnerships to utilise, and for private corporations to use.
Section 5
The appropriate government shall ensure that a public hearing is held in the affected area whenever a social impact assessment is required to be prepared pursuant to Section 4, after providing adequate publicity regarding the date, time, and venue for the public hearing, in order to ascertain the opinions of the affected families to be recorded and included in the social impact assessment report.
Preliminary notification
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act of 2013 states that the acquisition process starts with the issue of preliminary notification. A preliminary notification under Section 11 in rural or urban areas shall be issued if it seems to the appropriate government that land in any area is necessary or likely to be required for any public purpose.
Publication of notification
The preliminary notification must be published in the manner described below:
Published in the Official Gazette;
In two daily newspapers published in the specified area, one of which must be in the local dialect;
In the language spoken locally in the offices of the District Collector, Sub Divisional Magistrate, and Tehsil, as well as in the Panchayat, Municipality, or Municipal Corporation;
Displayed on the appropriate Government’s website;
In every case of land acquisition, the concerned Gram Sabha or municipality must be notified of the details of the notification issued at a meeting specifically scheduled for this purpose as soon as it is issued.
The notification that will be sent out must include information about the land that will be acquired, a description of the public purpose that will be served, the reasoning for the need to relocate the affected parties, a summary of the Social Impact Assessment Report, and information about the administrator who will be in charge of rehabilitation and resettlement.
The Court found that the language of Section 4(1) of the Land Acquisition Act, 1984, plainly implies that the provision is an obligatory one in the case of Khub Chand v. State of Rajasthan (1966). According to the Act’s later structure, publication of the notification in the manner specified in Section 4(1) of the Act is a requirement for a legitimate acquisition.
The Allahabad High Court ruled in Habib Ahmed v. State of Uttar Pradesh (1964) that the acquisition of the property was not necessary for a public purpose, and so neither the notification nor the declaration could be revoked. The state government alone must assess whether or not the land is needed for a public purpose.
Although the aforementioned instances were handled in accordance with the previous legislation, the Land Acquisition Act of 1984, the new Act’s provisions, and the previous law’s, are substantially similar. As a result, the guidelines established in the important decisions made under the previous legislation are still applicable to the current Act.
Restraint on transaction
From the date of publication of the preliminary notice until the conclusion of the acquisition procedures, no one may transact on or cause to be transacted on any of the lands indicated in the notification. According to the proviso the Collector may, upon the owner of the land so notified in the application, exempt such owner from the application of this limitation under unusual circumstances that are documented in writing. However, the Collector shall not be liable for any damage or harm incurred by any person as a result of his willful breach of this article.
Survey of land
Section 12 outlines the preliminary survey of land and gives officers the authority to do it. It should be legal for any officer, either generally or expressly authorised by such Government in this regard, and for his servants and labourers, in order to enable the appropriate Government to decide the area of land to be acquired.
to access any land in such area and survey and level it;
to drill or dig into the soil;
to carry out any additional actions required to determine whether the land is suitable for such a purpose;
to outline the boundaries of the land that is being considered for acquisition and the anticipated path of any proposed activity (if any); and
to mark such levels, borders, and lines by planting markers and digging trenches; and, in cases where the survey cannot be finished, levels taken, boundaries indicated, or clear away any part of a standing crop, fence, or jungle away.
Restriction
No action under sections (a) to (e) relating to land may be taken without the owner of the land or without a person authorised in writing by the owner being present. If the owner has been given a reasonable chance to be present during the survey and has been given at least sixty days’ notice, the survey may be conducted without the owner’s presence.
Compensation for damages
According to Section 13, the officer is required to cover any damage at the time of entry pursuant to Section 12. It is compensation for the intended harm. Damage is any harm done to land while surveying it or performing other tasks required to determine if it may be used for a public purpose.
If there is a disagreement over whether the sum paid is sufficient, the officer must immediately report the matter to the Collector or another district chief revenue officer, whose judgment is binding.
The fundamental rule that no man’s property may be acquired without providing him with a fair opportunity to be heard is upheld by Section 15. The major goal of sending out a preliminary notification is to solicit any objections, if any, from the owners or other parties with an interest in the property, giving them a chance to voice their grievances with the government’s plan to acquire their holdings. According to Section 15(1), any party with an interest in land that has been informed that it is necessary or likely to be required for a public purpose may object to the notice within 60 days of the preliminary notification’s publication date.
the size and appropriateness of the land that is intended to be acquired;
provided justification for a public purpose;
the Social Impact Assessment report’s conclusions.
Report on the remarks
Every objection must be submitted in writing to the collector. The Collector shall provide the objector with an opportunity to be heard in person or by any person authorised by him or by an Advocate, and shall submit a report to the appropriate Government containing his recommendations on the objections, along with the record of the proceedings held by him, as well as a separate report providing therein the approximation of the cost of land acquisition, details regarding the number of affected families likely to be relocated, for the decision to be made.
If concerns are raised, the collector will take them into account and, in his report to the government, propose a course of action. The collector is required to provide a report if no objections are raised. The government is then given the green light to continue. According to Section 15(3), the competent government’s decision regarding the objections is binding.
Scheme for rehabilitation and resettlement
The Administrator must prepare the Rehabilitation and Resettlement Scheme in accordance with Section 16. The Administrator for Rehabilitation and Resettlement is responsible for conducting a survey and doing a census of the affected families following the issuance of the preliminary notification by the Collector.
details on the lands and other immovable property each impacted household is buying;
livelihoods lost for those who are landless and who depend heavily on the lands being acquired;
a list of public utilities, government structures, amenities, and infrastructure that are impacted or are anticipated to be impacted, where relocation of impacted families is concerned;
information on any resources that are obtained as common property.
Drafting the scheme
The Administrator must create a draft Rehabilitation and Resettlement Scheme based on the prior survey and census, which must include the following:
The specifics on each landowner’s and landless person’s rehabilitation and resettlement rights when impacted households are being relocated and their livelihoods are substantially based on the acquired lands;
The draft must specify a deadline for the Rehabilitation and Resettlement Scheme’s implementation.
Specifics about the government structures, amenities for the general public, and infrastructure facilities that must be supplied in the resettlement area must be made known locally by holding a public hearing in the impacted region before being considered in the relevant Gram Sabhas or Municipalities.
After the public hearing is over, the administrator must give the collector the draft of the Rehabilitation and Resettlement Scheme, along with a detailed report on the claims and objections made during the hearing.
In accordance with Section 17, the Collector must consult the Rehabilitation and Resettlement Committee established under Section 45 at the project level on the draft scheme that the Administrator has provided. The proposed Rehabilitation and Resettlement Scheme will be submitted by the Collector along with his recommendations to the Commissioner of Rehabilitation and Resettlement for approval.
If the plan is approved, the Commissioner is required by Section 18 to make the Rehabilitation and Resettlement Scheme publicly available in the following ways:
In the local language to the Tehsil, the District Collector, the Sub-divisional Magistrate, and the offices of the Panchayat, Municipality, or Municipal Corporation, as applicable;
In the areas impacted;
Posted on the appropriate government’s website.
Declaration
A final statement dismissing the claims will be made by the appropriate authorities following consideration of any objections that have been raised. According to Section 19 of the new Act, the authority must publish the final declaration within 12 months of the date the preliminary notification under Section 11 of the Act was issued.
When the appropriate government determines that a certain piece of property is required for a public purpose, it must be declared as such, together with a designated area known as the “resettlement area” for the purposes of rehabilitation and resettlement of the affected families, under the hand and seal of the Secretary to the government or of any other officer duly authorised to certify its orders, and different declarations may be made from time to time in respect of different parcels of any land covered by the same preliminary notification.
Publication of the declaration
Every declaration must be published in the manner described below:
Published in the Official Gazette;
In two daily newspapers published in the area, one of which must be published in the local language;
At the Panchayat, Municipality, or Municipal Corporation, as appropriate, as well as at the District Collector, Sub-divisional Magistrate, and Tehsil offices;
Posted on the appropriate Government’s website.
Summary of rehabilitation and resettlement scheme
A summary of the Rehabilitation and Resettlement Scheme and a statement must be published by the Collector. But unless the summary of the Rehabilitation and Resettlement Scheme is published alongside it, no disclosure under this shall be made.
Additionally, the “requiring body” is required to provide a deposit equal to or greater than the cost of acquiring the land, as determined by the respective authority.
According to Section 3(zb), a “requiring body” is any company, body corporate, institution, or other organisation for which land is to be acquired by the appropriate government. This definition also includes the appropriate government if the land is being acquired for the government’s own use or for later transfer to a company, body corporate, institution, or other organisation for a public purpose.
The Court ruled in Habib Ahmed v. State of UP that the acquisition of the property was not necessary for a public purpose, and hence neither the notification nor the declaration could be revoked. The state government must be the exclusive authority to determine whether the land is needed for a public purpose or not.
Lapse of notification
If a declaration is not submitted within 12 months after the preliminary notification date, the notice will be presumed to be revoked. According to the proviso, any time during which the land acquisition procedures were stalled due to a stay or injunction by a court order will be disregarded for calculating the 12-month timeframe. If the appropriate government determines that there are reasons to justify doing so, it may decide to extend the 12-month period. In this case, the decision must be made in writing, notified, and published on the authority’s website. After making the declaration, the appropriate government may acquire the land in the manner described by this Act. The declaration shall be conclusive proof that the land is necessary for a public purpose.
Notice to interested persons
“Person interested” is defined in Section 3(x) as:
All parties claiming a stake in compensation to be paid in connection with the acquisition of land;
The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act of 2006 recognised some forest rights for certain groups, although such rights have since been lost by these groups;
A party with an interest in a land-related easement;
Those with tenancy rights under pertinent State legislation, such as sharecroppers; and
Someone whose main source of income is expected to be negatively impacted;
Public notice
In accordance with Section 21, the Collector is required to post a public notice stating that the government intends to take possession of the land and that claims for compensation, rehabilitation, and resettlement for all interests in such land may be requested by him on his mail and at convenient locations on or near the land to be taken.
The public notice must outline the specifics of the needed property and demand that all parties interested in the land come before the collector at the time and location specified in the notice to make their claims for compensation, rehabilitation, and resettlement, as well as any written objections.
The time frame shouldn’t be less than 30 days or longer than 6 months from the day the notification was published.
If any interested party lives elsewhere and does not have an agent, the collector will see to it that the notice is published in at least two national daily newspapers, forwarded to him by mail at his last known addresses of home and business, and made available on his website.
In State of Madras v. B.V. Subramania Iyer (1961), the Court decided that any dispute over a single claimant’s title is included in the term “dispute.” Public funds must be used to pay compensation to the rightful owner of the property, not just to any claimant who wishes to show up on the scene, when the government uses its power of eminent domain to acquire it. In this regard, the government has a specific duty and cannot afterwards hide behind the justification that the compensation was given to the claimant who showed up while others did not.
Statement to collector
According to Section 22, the collector may also require any interested party to make or deliver to him a statement within 30 days that includes the name of every other person who has an interest in the land or any part of it as a co-proprietor, sub proprietor, mortgagee, tenant, or in any other capacity, as well as information about the type of interest they have, as well as any rents and profits they have received or are due for the three years immediately prior to the date of the statement.
According to Sections 175 (omission to produce a document to a public servant by a person legally bound to produce it) and 176 (omission to give notice or information to a public servant by a person legally bound to give it) of the Indian Penal Code, 1860, everyone who is required to make or deliver a statement to the Collector shall be deemed to be legally bound to do so.
According to the 2013 Act, the minimum payment must be a multiple of the assessed market value of the property, the value of any attached assets, and a settlement equivalent to 100% of the assessed market value of the property, including the value of any attached assets.
Compensation under the Act
According to Section 23, the collector must investigate the objections that any interested party has raised in response to a notice given under Section 21 and the respective interests of the people requesting compensation, rehabilitation, and resettlement, and he must then issue an award under his signature of-
The actual land area;
The compensation calculated in accordance with Section 27 and the Rehabilitation and Resettlement Award calculated in accordance with Section 31 and which in his opinion should be allowed for the land; and
The distribution of the compensation among all parties, whether or not they have individually appeared before him, who are known to have an interest in the land or of whose claims he is aware.
Period for award
According to Section 25, the collector must provide an award within a year of the date the declaration was published. If no award is issued within that time frame, the whole land acquisition process would be abandoned. With the proviso that the appropriate government may decide to prolong the 12-month term if, in its opinion, circumstances exist that warrant the same; nevertheless, such a decision must be documented in writing, informed, and put on the website of the authority involved.
Market value determination
The claimant shall be entitled to compensation based on the market value of the land as of the date of the preliminary notice. The more expensive of the following shall constitute the market value of the proposed land under Section 26 to be acquired:
The minimum land value required under the Indian Stamp Act of 1899 for the registration of sale documents in the region where the land is located, if any; or
The top fifty percent of the sale deeds filed over the previous three years in the closest village or area to the property being acquired, which gives the average selling price for similar types of land being acquired; or
The accepted amount in the event that the site is acquired for private businesses or initiatives involving public-private partnerships.
For land acquired in rural regions, the market value would be multiplied by a factor of at least one to two times, while for land acquired in urban areas, the market value would be multiplied by at least one.
Determination of compensation
The collector will compute the entire amount of compensation to be given to the landowner whose land has been acquired by adding all assets connected to the land under Section 27 after determining the market value of the land to be acquired. The collector is required by Section 28 to take the following factors into account when assessing the amount of compensation to be given for land acquired under this Act:
The award amount is determined in accordance with the First and Second Schedules and the market value as assessed in accordance with Section 26;
The harm incurred by the interested party as a result of the removal of any standing crops and trees that may have been on the property at the time the Collector obtained control of it;
The damage incurred by the interested party upon the collector’s taking control of the property as a result of disconnecting it from his other property;
The harm incurred by the interested party when the collector took possession of the property as a result of the acquisition negatively impacting his other property, whether movable or immovable, in any other way, or his earnings;
The interested party must relocate or change his place of business as a result of the collector’s acquisition of the land, and shall bear all reasonable moving-related costs;
The genuine harm brought on by the reduction in the land’s revenues between the time the declaration under Section 19 was published and when the collector took control of the property; and
Any other basis that would be beneficial to the affected families and in the interests of equality and justice.
Value of attached items
The services of a qualified engineer or any other specialist in the relevant field, as may be considered necessary by him, will be used by the collector to determine the market value of the building and other immovable property or assets attached to the land or building that are to be acquired under Section 29 that:
The collector may use the assistance of experts in the fields of agriculture, forestry, horticulture, sericulture, or any other subject he may see as essential in order to assess the worth of the trees and plants related to the property acquired.
The services of experienced individuals in the agricultural sector may be used by the collector, as he may deem them essential for determining the worth of the standing crops destroyed during the land acquisition procedure.
Award of solatium
The collector must impose a “solatium” equal to 100% of the compensation amount after determining the total compensation to be paid in order to determine the final award under Section 30.
In addition to the compensation due to everyone whose land has been acquired, this solatium sum must be paid. According to the First Schedule of the Land Acquisition Act, the collector must issue specific awards that include information on the compensation that is due as well as how it will be paid. In addition to the market value of the land specified in Section 26, the collector must also award a sum calculated at a rate of 12% annually on that market value for the period beginning on the date that the social impact assessment study was published until the date of the award by the collector or the date that the land was actually taken into possession, whichever comes first.
Contravening provisions and problematic issues of the Land Acquisition Act
The Act being discussed is essentially opposed to land acquisition for public purposes. The word “public purpose” now encompasses a wider range of activities. (Sec. 2(l)) This expanded scope includes a wide range of tasks. As a result, the likelihood of exploitation has grown as the definition of “public purpose” has been expanded. The likelihood of abuse will undermine the fundamental goal of industrialisation-based economic development.
Acquisition by private enterprises is the main change. There are several provisions under the new legislation that must be met in the event of an acquisition by a private corporation. The new statute demands 80% permission in the case of a private company and 70% consent in the case of a public company with impacted families. It has provided an SIA evaluation method for this.
However, the legislation lacks clarity on important aspects of SIA evaluation, such as how it will be done and by which authority or agency. As a result, private corporations might use various improper tactics to get approval. However, the legislation does not need the approval of affected people if the property is acquired by the government under specific circumstances, as specified in Section 2(l) public purpose clause. Now, the provided clause contradicts the purpose, which calls for participatory, informational, and transparent land acquisition.
The “Rehabilitation and Resettlement” clause is one of the major provisions included in the new land acquisition laws. On the one hand, the legislation provides rehabilitation and relocation measures for impacted persons, which include not just landowners but also other affected families. Section 69 states that the “rehabilitation and resettlement cost” shall be calculated in line with Sections 26 and 30. Section 26 discusses calculating the market value of land, while Section 30 discusses “solatium” based on the market value calculated in Section 26. A question might occur as to “how can the cost of rehabilitation and resettlement be calculated using market value, and how realistically does it depend on market value?” There is no answer to this question.
Section 40 also empowers the government to seize land in an emergency if the 30-day notice provided in Section 30 expires, even if such awards are not made by the collector. This part runs counter to the third goal.
Another contentious subject is the compensation requirements from Section 26 through Section 30. Compensation is calculated on the basis of the market value, if any, stipulated in the Indian Stamp Act of 1899 for the sale of land or the average sale price of land in that location and nearby. Although the technique for calculating compensation is provided, it is still arbitrary because market value does not account for the future worth of the land, and the amount indicated in the Act may be undervalued. So the goal of providing reasonable and fair compensation is challenged, despite the fact that compensation in rural areas is double the market value.
Furthermore, it establishes provisions for compensation and the method for determining it, as well as incentives for the affected parties to litigate for the compensation provided to them. The propensity to claim compensation will stay unchanged because the foundation for determining compensation has not changed significantly, despite the fact that the amount of the award is twice as much in rural areas. Although the new legislation replaces the ADJ court with the LARR Authority in cases of compensation-related disputes, it only transfers the burden from the ADJ court to the LARR Authority, which is not an appropriate solution to the problem of litigation and the accompanying wastage of resources.
The Act takes economic loss into account, but it does not take other losses into consideration. When families are separated, they suffer not just economic loss but also social, psychological, and status loss. Because it is not required that the compensation and arrangements created for them provide them with the same status and wealth as the land may provide.
Furthermore, Section 105 exempts land acquired by specific acts from the scope of this Act. The new statute, although including certain modifications, fails to address key issues and contains loopholes.
Landmark case laws on the Land Acquisition Act, 2013
Land Acquisition Officer, A.P v. Ravi Santosh Reddy (2016)
In a 1987 land acquisition case, the Andhra Pradesh Government pursued the landowner into court for 20 years to challenge his Rs. 50,000 claims. Meanwhile, the claimant died in the middle of this lengthy legal process. When the state government sought the Supreme Court, the deceased’s heirs failed to attend. However, in May 2016, the Supreme Court issued a decision in which it slammed the state government for abusing the legal system, saying, “In our opinion, the State unnecessarily pursued this pity matter to this Court in this appeal, which does not involve any arguable point either on facts or in law, nor does it involve any point of public importance, nor does it involve any substantial claim.” It was just a calculation of the payment of interest on the decretal sum for a specific term. In this Court, however, learned counsel was unable to demonstrate any illegality or perversity in the executing court’s assessment of the state’s responsibility in paying Rs.50,000/- in interest. “As a result, it was, in our opinion, a clear abuse of process on the part of the state to pursue a matter by filing a misconceived appeal against an interim order, which we do not approve,” further adding, “It is unfortunate that the state did not satisfy a genuine claim of the land owner for such a long time.“
Balakrishnan v. UOI (2017)
In this case, the Kerala State Government acquired around 27 acres of agricultural land for the expansion of a technopark in South Kerala. The landowner was dissatisfied with the compensation provided, so he negotiated with the concerned party for more compensation; nonetheless, in order to avoid litigation, he decided to sell the land at the price offered by the state. Following payment of the compensation, the state revenue agency assessed capital gains tax on the sum received from the landowner, claiming that the transaction was a “voluntary sale” and so did not qualify for exemption under Section 10 of the Income-Tax Act as a compelled acquisition. The landowner then challenged this judgment in the High Court, which dismissed the appeal. The case was then heard by the Supreme Court, which decided that the owner “succumbed to the measures taken by the government” in order to avoid litigation. As a result, the transaction was not a “voluntary sale,” but rather a “compulsory acquisition,” and therefore it should be excluded from capital gains tax.
G. Padmanabhan and Others v. Tamil Nadu State and Others (2015)
Facts
The facts required for the writ petition‘s disposition were that the lands were bought by the government for the Tamil Nadu Housing Board’s Krishnagiri Scheme. On May 9, 1991, a Notification under Section 4(1) of the Land Acquisition Act was issued, and on July 31, 1992, a declaration under Section 6 of the Act was made. The petitioners filed a writ petition before this Court in 1994, and while hearing the writ petition, this Court granted a stay of the dispossession order on May 18, 1994. The petitioners are said to be in their possession to this day. The award was made on August 3, 1994, and it is the petitioners’ specific argument that the award sum has yet to be deposited with the Civil Court. Finally, on July 10, 2001, this Court rejected the Writ Petition filed in 1994. As a result, the interim order of dispossession was vacated. However, the petitioners claim that even after the stay was lifted, they are still not being evicted. Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. Petitioners have filed a petition seeking a determination that land acquisition procedures commenced under the Act of 1984 with respect to the properties in issue have lapsed in light of Section 24(2) of the Act of 2013.
Issue
Whether land acquisition proceedings were deemed to have lapsed in light of Section 24(2) of Act, 2013?
Judgment
Petitioners were still in control of the land; they were not evicted, and the compensation payment was not made through the civil court. As a result, acquisition procedures were deemed to have ceased in accordance with Section 24(2) of the Act of 2013, hence the petition was allowed.
Guru Nanak Vidya Bhandar Trust Vs. Union of India and Ors (2017)
Facts
In this case, Respondent No. 1 is the property’s lessor. The land was first leased to Sardar Ram Singh Kabli, and afterwards, ownership of the property was transferred to the petitioner. It is also undisputed that the petitioner’s land was encroached upon by the NDMC (New Delhi Municipal Council) and that possession was obtained illegally. In accordance with that provision, the petitioner filed a petition for possession in 1979, which was decreed by a learned single judge of this Court in a decision and decree dated March 8, 2006. The NDMC’s appeal to the Division Bench and then to the Supreme Court likewise failed. Following that, the NDMC asked that the Land Acquisition Authority acquire land, and the current acquisition processes were launched.
Issue
Whether reprieve of the proviso in Section 24 of the 2013 Act can be taken or not, in the facts of the present case?
Judgment
A review of the facts reveals that the compensation was deposited in the court unilaterally and without being offered to the persons interested, as interpreted in the Pune Municipal Corporation case, and no facts have been brought to the court’s attention to suggest that the same was offered to the petitioner. As a result, compensation for a “majority” of land holdings has not been put in the accounts of the “beneficiaries.” As a result, the petitioner would be eligible for compensation under the 2013 Act. The writ petition is granted to the extent that the acquisition will stand, but compensation will be provided to the petitioner in accordance with the amended Land Acquisition Act of 2013. The amount previously released to the petitioner, as stated above, will be deducted from the total amount determined in accordance with the 2013 Act.
Indore Development Authority v. Manohar Lal (2020)
The landowners contended in Indore Development Authority v. Manohar Lal that acquisitions made under the Land Acquisition Act of 1894 had lapsed and that new processes under the Land Acquisition Act of 2013 were required.
The Supreme Court declared in this significant decision that outstanding cases under the 2013 Act will expire under two conditions, and the acquisition procedure will have to be restarted. The Supreme Court declared that new procedures under the Land Acquisition Act of 2013 will be required only if the following conditions are met:
Possession of land has not happened.
Landowners have not received compensation. According to the court, payment of compensation includes not only money given to landowners or put in court, but also money deposited in a government treasury. This implies that, even if the compensation payment was deposited with the government, the 2013 law will not apply to new acquisitions.
The 5-judge bench also ruled that landowners cannot seek compensation under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013, if they declined the supplied compensation or requested for greater compensation. However, if compensation is not made under the provisions of Section 24(1)(a) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013, as of the date of the 2013 Act’s commencement, i.e., 1.1.2014, the proceedings will not be deemed to have lapsed, and compensation must be awarded in accordance with the provisions of the Act of 2013.
Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act of 2013 states:
Notwithstanding anything in this Act, in any land acquisition procedure begun under the Land Acquisition Act of 1894,—
If no award has been granted under Section 11 of the said Land Acquisition Act, then all provisions of this Act related to compensation determination shall apply; or
Where an award has been given under said Section 11, such processes must continue in accordance with the terms of the said Land Acquisition Act, as if the said Act had not been repealed.
Regardless of what is stated in sub-section (1), in the case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under said Section 11 has been made five years or more prior to the commencement of this Act, but physical possession of the land has not been taken or compensation has not been paid, the said proceedings shall be deemed to have lapsed, and the appropriate government, if it so desires, shall initiate new proceedings.
“Provided, however, that where an award has been made and compensation for a majority of land holdings has not been deposited in the accounts of the beneficiaries, all beneficiaries stated in the notification for acquisition under section 4 of the said Land Acquisition Act shall be entitled to compensation in accordance with the provisions of this Act,”
The Court issued the following rulings and interpretations:
“If the award was made within the five-year window period, except the period covered by an interim order of the court, then proceedings shall continue as provided in Section 24(1)(b) of the Act of 2013 under the Act of 1894 as if it had not been repealed.”
In Section 24(2), the term ‘or’ between possession and compensation must be interpreted as ‘nor’ or ‘and.’ The assumed lapse of land acquisition procedures occurs under Section 24(2) of the Act of 2013, where possession of land has not been obtained or compensation has not been paid owing to the inaction of authorities for five years or more previous to the beginning of the said Act.
The term ‘paid’ does not include a deposit of compensation in court in the main section of Section 24(2) of the Act of 2013.
If a person is offered compensation under Section 31(1) of the Act of 1894, he cannot argue that the acquisition has expired under Section 24(2) owing to non-payment or non-deposit of compensation in court. By presenting the sum specified in Section 31(1), the obligation to pay is fulfilled.
The proviso to Section 24(2) of the Act of 2013 is to be considered part of Section 24(2), not Section 24(1)(b).
Under the Act of 1894 and as envisioned by Section 24(2), the way of obtaining possession is by drawing an inquest report/memorandum. Once an award is made on taking possession under Section 16 of the Act of 1894, the land vests in the State; there is no divesting provided under Section 24(2) of the Act of 2013, as there is no lapse under Section 24(2).
Section 24(2) provides for a considered lapse of proceedings in cases where authorities failed to take possession and pay compensation for five years or more before the Act of 2013 came into force, in a land acquisition procedure continuing with the responsible authority as of 1.1.2014. The period of court-issued interim orders must be excluded from the five-year computation.
Section 24(2) of the Act of 2013 does not provide a new cause of action to challenge the legitimacy of completed land 319 acquisition actions. Section 24 applies to any case that is continuing on the date of the Act of 2013, 1.1.2014. It does not reopen finished processes or allow landowners to contest the legality of the way of taking possession to reopen proceedings or mode of depositing compensation in the treasury instead of the court to invalidate acquisition.”
The Nandi gram Land Grab Case
The event occurred on March 14, 2007 in Nandigram, West Bengal, as a result of the Communist Party of India’s forcible acquisition of 10,000 acres of land for the establishment of a Special Economic Zone (SEZ). Farmers from the Bhoomi Raksha Committee refused to give up their land for the proposed SEZ, resulting in violence that killed 14 people and injured 70 more. The CPI (M) took the locals for granted on an issue that directly affected their lives.
Farmers’ experiences with land acquisition have been utterly terrible. To address the complexities of land acquisition, the LARR Act 2013 incorporates the Social Impact Assessment (SIA) to examine if projects are meeting the claimed public purpose. A social impact assessment is described as “the identification, analysis, and evaluation of a social effect arising from a specific event,” with a social impact defined as “a major improvement or deterioration in people’s well-being or a significant change in an element of community concern.” Property acquisitions must result in a social stance that balances the interests of the displaced with the advantages of the acquired land for the general public.
The key social protection offered by the law is the SIA study and its evaluation by an impartial committee of experts. This expert committee will assess the SIA and determine if the project meets the declared public purpose, is in the greater public interest, and whether the project’s costs and negative consequences outweigh the possible benefits. Individually, the expert group is expected to voice its judgment on whether the project should be permitted to proceed or not.
The study draws on consultations with Gram Sabha members to examine the nature of public interest in the project and its potential benefits compared to social and environmental costs; the number of affected families and the socioeconomic impact on neighbouring areas; whether the extent of land proposed for acquisition is the bare minimum required; and whether acquisition at an alternate location is not feasible. The evaluation is then assessed by a panel of five external experts, who may “recommend that the initiative be abandoned” if the consequences are considered intolerable. Ambiguities in this statement impair the social safeguard’s credibility. The recommendation’s binding character must be clearly stated, leaving no space for subsequent interpretation.
In addition to the hefty monetary compensation for landholders, the Act takes a significant step forward by granting Resettlement and Rehabilitation (R&R) entitlements to all impacted persons. However, this will only be significant if R&R efforts are enhanced. Wherever feasible, land of equivalent value should be used to compensate. After accounting for the social cost of acquiring that specific land, the public interest would be met only if such an acquisition resulted in community benefit. As a result, the costs and benefits of the acquisition to society must be assessed in each situation. Only by focusing on the exact amount of land secured in each case would it be equitable.
Chennai Metro case
Background
As a result of the lengthy and difficult method necessitated by the New Act, it had been noted that states were altering their local legislation (similar to the old Act) to acquire land in order to avoid the trouble of the New Act. The acquisition of land for the Chennai Metro by Tamil Nadu using their state laws is one such contentious example.
Judgment
Following the enactment of the New Act, the Tamil Nadu Government passed the Tamil Nadu Land Acquisition Laws (Revival of Operation, Amendment, and Validation) Act, 2019 using their statutory power under Article 254(2) with the intent to exempt the application of LARR in three categories of projects for industrial and infrastructure purposes, which constitute the majority of land acquisition. Their enactment was challenged in the Supreme Court via writ petition, and the Supreme Court upheld the enactment on the grounds that, subject to the assent of the president, a state can depart from the centre law under Article 254(2) of the Constitution.
The Tata Singur Case
Background
In this case, industrialists and real estate developers seek the cooperation of ruling parties in order to obtain property for commercial usage. In general, it has become an implicit standard for the government to acquire land on their own terms under the protection of the law and transfer it over to private players.
The outcome of case
In May 2006, the West Bengal government granted Tata Motors 700 acres of fertile agricultural farmland in Singur, Hooghly, for the construction of their Tata Nano Project.
The land was forcibly grabbed and given over to Tata Motors.
The affected landowners and non-farming households working in agriculture-related occupations were highly agitated by the said acquisition.
Their anger was later fueled by opposing political groups, and other social workers became infamous throughout the country.
The acquisition was contested in the High Court, and it was discovered throughout the court processes that 65% of the total 400 acres had been obtained forcibly with no approval from the government.
As a result of the violence and negative publicity, Tata withdrew from the land and established an industrial plant in Sanand, Gujarat, India.
Conclusion
There is an improvement over the old statute, which provided no compensation (monetary or non-monetary) to people harmed by the land acquisition process. This legislation is a start, paying persons who would be impacted by land acquisition prior to the establishment of the infrastructure or development project, both monetarily and non-monetarily. In some situations, the statute also provides for land-for-land compensation.
Furthermore, the lease provision ensures that the landowner does not have to relinquish land ownership, even though others may lose their livelihoods in the process and must be suitably compensated and restored. The measure has been attacked primarily on two grounds. First, there is a heated dispute about whether such compensation is adequate. Activists argue that prior to the start of a development project, the market price is quite low, particularly in rural or semi-urban areas, and that the compensation amount (up to two times the market price) may be insufficient for a landowner/farmer who is losing a significant portion of his or her livelihood. Second, those who would be affected after the project’s establishment were not considered at all in the Act, despite the fact that this was not the primary purpose of the Bill, and second, these could be addressed through the proper implementation and enforcement of environmental regulations for air and water (if not for land). There are faults with such standards, but this is a secondary concern with the measure itself.
Frequently Asked Questions (FAQs)
In India, can the government acquire your land?
Yes, the government has the authority to acquire your land in order to develop infrastructure or economic zones.
Is the Land Acquisition Act of 1894 still in effect?
The Land Acquisition Act of 1894 was repealed in 2013 and replaced with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act.
What exactly is the Land Acquisition Act?
The Land Acquisition, Rehabilitation, and Resettlement (LARR) Act, 2013, is a piece of legislation that specifies the procedures to be followed when acquiring land anywhere in the country.
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This article is written by Akshaya V, pursuing LLM from VIT School of Law. This article discusses the essential provisions of the long-awaited wage revision released by the Life Insurance Corporation of India in April 2021 for its officers and employees. This article will also discuss the benefits of wage revision for employees and the strong criticisms it encountered.
It has been published by Rachit Garg.
Table of Contents
Introduction
The new fiscal year of 2021-2022 began with a happy note for the employees of the Life Insurance Corporation, India as they finally received a well-deserved wage revision with over a twenty-five per cent hike in their pay packets. The Ministry of Finance released a notification on wage revision as published by the Central Office of Life Insurance Corporation of India for Class-I Officers, Class-III and Class IV employees in the Official Gazette on the 15th of April, 2021. The Secretary of the All India Insurance Employees Association (AIIEA), which is also the major union in LIC stated that the officers and employees deserve a good pay package as the management expense ratio is by far the lowest in the insurance industry and LIC is on a sound financial footing compared to public sector banks. The wage revision primarily includes a hike in the Dearness Allowance (DA) and a 0.08 per cent hike for every 4-point rise in the calculation of DA. This move has also brought in a special allowance ranging between Rs.1,500 to Rs.13,500 per month to calculate dearness allowance, making the wage bill of the corporation go approximately up to Rs. 2700 crore per year. In this article, the provisions of wage revision applicable to Class I Officers and Class III and IV Employees, the benefits of such wage revision and the disapprovals it has received will be discussed in detail.
Overview of working of the corporation
Life Insurance Corporation is an Indian central public sector undertaking headquartered in Maharashtra. It was established on 1st September 1956, after the Parliament of India passed the Life Insurance of India Act,1938 by nationalising the insurance industry. LIC is a leading insurance company in India, having branches all over the country. The company has employees of different cadres and salary is given corresponding to the nature of their work.
LIC has over a hundred divisional offices and extensive training facilities at all levels. The Management Development Institute, seven Zonal Training Centers, and thirty-five Sales Training Centers are at the pinnacle. LIC of India is one of India’s leading financial institutions, providing comprehensive financial solutions in all areas of life. The group provides financial services to individuals and corporations, ranging from commercial banking to stock brokerage to mutual funds to life insurance to investment banking. The LIC has a net worth of more than Rs. 1,800 crores. It has a presence in 82 cities in India and serves a customer base of over 20,000 people.At the industry level, it has collaborated with the government and the GIC to establish the National Insurance Academy. It currently transacts individual life insurance, group insurance, social security schemes, and pensions, grants housing loans through a subsidiary, and markets savings and investment products through a mutual fund. It pays out approximately Rs 6,000 crore per year to 5.6 million policyholders. It was founded with the goals of widely disseminating life insurance, particularly in rural areas, and meeting the various life insurance needs of the community that would arise in the changing social and economic environment.
Organisational Structure of LIC
The Central Government of India appoints 15 members to the LIC committee. The LIC Board of Directors currently consists of four Managing Directors, four members and three non-official directors. Furthermore, the responsibilities are divided into four levels of offices, as follows:
Central Office – In Mumbai, there is only one central office. It takes up investment accountability and formulation of regulations.
Zonal Offices – There are eight Zonal offices located throughout the country. The central office policy is carried down to the branch offices by these divisional offices.
Divisional Offices –There are 113 divisional offices to further penetrate India.
Branch Offices– These are responsible for all interactions between policyholders and the Life Insurance Corporation.
Satellite Offices – It is the mini office established by the Life Insurance Corporation where there are no branch offices available in the nearby areas.
The salary package consists of allowances, perks, and benefits applicable to each group of employees according to the nature of their work. The percentage of increment also differs as per the workload. The salary and other monetary benefits provided to the employees of the corporation are listed below –
Basic Pay – This pay is confirmed with the employees before joining the corporation. It is subject to change as per the rules.
Annual Increment – A certain sum will be added to fixed pay.
House Rent Allowance – This allowance will be fixed based on the employee’s residents, whether in metropolitan or non-metropolitan cities, and subject to change as per the company’s policy.
Dearness Allowance – This allowance applies to all employees and is changed every three months.
Leave Travel Concession – This is given to the employees to meet their travel expenses when they are on leave from work.
Special Allowance – This allowance is given to the employees to meet certain requirements over and above the basic pay.
Gratuity – Gratuity is added to salary and will be disbursed to the employees at the time of completion of employment.
By exercising the powers conferred under Section 48 of the Life Insurance Corporation Act, 1956, the Central Government has made amendments to the Life Insurance Corporation of India Class I Officers’ (Revision of terms and conditions of Service) Rules, 1985, hereinafter called as the Life Insurance Corporation of India Class I Officers’ (Revision of terms and conditions of Service) Amendment Rules, 2021 by way of a notification in the Official Gazette. These rules shall be deemed to have come into force on the 1st day of August 2017. These rules shall apply to whole-time salaried Class I officers on or after 1st August 2017. However, if any officer gives notice to the corporation to be governed by this provision with effect from a date not earlier than 1st August 2017 and not later than the publication of the notification (15th April 2021), he shall be permitted to be governed by these rules and no arrears shall be for the period before the date so opted. Provided that if the resignation of the officer has been accepted or whose services have been terminated during the period from 1st August 2017 to the date of publication of this notification, such officer shall not be eligible for the arrears on account of revision.
Rule 6 – House Rent Allowance
The house rent allowance applicable to Class I Officers except those who have been allotted residential accommodation is specified in the table below:
S.No.
Place of posting
Rate of House Rent Allowance
1
Cities of Mumbai, Chennai, New Delhi, Noida, Faridabad, Ghaziabad, Gurugram, Kolkata, Hyderabad, Bengaluru and other cities with a population of forty-five lakh and above.
10% of Pay or a maximum of Rs. 7,840/- per month.
2
Cities exceeding twelve lakh population but less than forty-five lakh
8% of Pay or a maximum of Rs.6,620/- per month.
3
Other places
7% of Pay or a maximum of Rs. 6,370/- per month.
Rule 7 – City Compensatory Allowance
The City Compensatory Allowance payable to Class I Officers is mentioned in the table below –
S.No.
Place of posting
Rate of City Compensatory Allowance
1
Cities of Mumbai, Chennai, New Delhi, Noida, Faridabad, Ghaziabad, Gurugram, Kolkata, Hyderabad, Bengaluru and other cities with a population of forty-five lakh and above.
3% of Pay or a maximum of Rs. 1,960/- per month.
2
Cities exceeding twelve lakh population but less than forty-five lakh
2.5% of Pay or a maximum of Rs.1,865/- per month.
3
Cities with a population of above five lakh but not exceeding twelve lakh and State capitals with a population not exceeding twelve lakh, ie., Chandigarh, Mohali, Puducherry, Port Blair and Panchkula.
2% of Pay or a maximum of Rs. 1,445/- per month.
Rule 7A – Hill Allowance
The hill allowance payable to Class I Officers is mentioned in the table below –
S.No.
Place of posting
Rate of Hill Allowance
1
Officers situated at the height of 1,500 meters or above the mean sea level
2.5% of Basic Pay or a maximum of Rs. 1,245/- per month.
2
Officers situated at a place situated at the height of 1,000 or above but less than 1,500 meters above the mean sea level, or at Mercara or a place declared as “hill station” by the Central or State Government concerned for their employees.
2% of Basic Pay or a maximum of Rs.1,000/- per month.
3
Officers situated at a height of not less than 750 meters or above sea level.
2% of Basic Pay or a maximum of Rs.1,000/- per month.
RULE 7G – Special Allowance
The special allowance given to Class I Officers shall be specified in the table below –
S.No.
Category
Allowance per month (Rs.)
1
Zonal Manager (Selection)
13,500/-
2
Zonal Manager (Ordinary)
12,000/-
3
Senior Divisional Manager/Deputy Zonal Manager
10,500/-
4
Divisional Manager
9,000/-
5
Assistant Divisional Manager
7,500/-
6
Administrative Officer
6,000/-
7
Assistant Administrative Officer
4,500/-
Class I officers passing examinations
The Central Government has made the following rules by exercising powers conferred by clause (cc) of sub-section (2) of Section 48 of the Life Insurance Corporation Act, 1956, which shall hereinafter be called as Life Insurance Corporation of India Class I Officers (Special Allowance for Passing Examinations of Insurance Institute of India) Rules, 2021. This rule shall be applicable to salaried whole-time and confirmed Officers of the Corporation.
Rule 3 states that the special allowance shall be paid to an officer who passes the examination of the Insurance Institute of India, subject to the conditions enlisted in Rule 4.
Name of the Examination
Special Allowance (Rs.)
Licentiate Diploma
Rs. 650
Associateship Diploma
Rs. 2,600
Fellowship Diploma
Rs. 5,200
Rule 4 – Conditions
An officer who passes one or more examinations of the Insurance Institute of India before getting promoted as Class I Officer shall be eligible for the special allowance for passing such examinations.
An officer who has passed all the examinations of the Insurance Institute of India before getting promoted to Class I Officer shall be eligible for the special allowance for passing all such examinations. However, if such an Officer whose pay is fixed at the minimum of the scale during the promotion to Class I shall be eligible shall be allowed half the amount of special allowance specified under Rule 3.
Class III and IV Employees
The Chairman of the LIC has issued instructions to all the offices of the corporation in India to implement the Life Insurance Corporation of India Class III and Class IV Employees (Revision of Terms and Conditions of Service) Amendment Rules, 2021 and has provided the new method of fixing the new scales of pay. These instructions shall be hereinafter referred to as the Life Insurance Corporation of India Class III and Class IV Employees (Revision of Terms and Conditions of Service) Instructions, 2021.
Definitions
Date of notification means 15.04.2021.
Existing employees means a whole-time salaried employee in the permanent establishment of the Corporation who was in the service on the date of notification.
Existing scales or pre-revised scales mean the scales which applied to the employees immediately before they were governed by the Amendment Revision Rules.
New scales or revised scales mean the scales as revised by the Amended Revision Rules.
Option under the Revision Rules means the option referred to in sub-rule(3), of Rule 1 of the Amended Revision Rules to be governed by the provisions of the Revision Rules from a date not earlier than the date on which the said Rules come into force.
Eligibility
This instruction pertains to Class III & Class IV employees who were in the whole-time salaried service in the permanent establishment of the corporation as of 1.08.2017 and those who have joined after that date. Provided that if the resignation of the officer has been accepted or whose services have been terminated during the period from 1st August 2017 to the date of publication of this notification (both days inclusive), such officer shall not be eligible for the arrears on account of revision.
It has been clarified that this instruction does not apply to –
Temporary employees
Badli workers
Part-time employees
Work charged employees
Employees engaged on daily wages
Employees appointed on ad-hoc basis
Employees to whom the provisions of the Life Insurance Corporation of India (Staff) Rules, 1960 do not apply including actuarial apprentices, CBSE apprentices, etc., and
Employees whose services have been terminated under Rule 39 of the Life Insurance Corporation of India (Staff) Rules, 1960 on or before the date of notification.
Method of fixation of scales of pay
From 1.08.2017 to the date of notification – The scales of pay prescribed in the amended rules shall take effect from 01.08.2017 with reference to the basic pay as of 01.08.2017 or on the date of appointment of the employee as per the Fitment Chart (as in Appendix II of the 2021 Instructions) in the equivalent existing scale. In case of any changes in the pre-revised basic pay due to increment, promotion, or release of NGI, the revised basic pay shall be fixed in accordance with the pre-revised basic pay every period where there is a change in the basic pay of the pre-revised scale.
After the date of notification – There is no need to refer to the pre-revised scales. Any changes after the date of notification shall be effected in the revised scales of pay.
The pay fixed in the pre-revised scales need not to be re-opened for Ex-servicemen who have been re-appointed in the service on or after 1st August 2017. Their basic pay shall be fixed in the same way as for other employees appointed to the corporation.
The Amended Rules, 2021 gives an option to the employees to be governed by the said rules after 1.08.2017 and not later than the date of the notification published in the Official Gazette. This option shall be exercised by the employees in pro forma stipulated in Appendix – III of the 2021 instructions. For those employees who have exercised this option, fitment of their salary shall be done with immediate effect and shall not be eligible for the arrears till the end of the opted period.
Fitment on promotion – Any employee promoted to Class III or Class IV on or after 1.08.2017 and to which position the pre-revised scale of pay is applicable, may re-exercise the option under sub-rule (2) of Rule 52 of Life Insurance Corporation of India (Staff) Rules, 1960 and the salary so fixed shall be final.
The scales of pay
Rule 4 states that for Class III employees, the scales of pay are as specified in the table below –
The following categories of employees shall receive a special allowance in addition to the scales of pay to the extent specified below –
Higher Grade Assistants appointed as Internal Audit Assistants:
Rs. 1525/- per month for the first five years
Rs. 1740/- per month for the next five years
Rs. 1880/- per month for subsequent years
The said special allowance shall not be reckoned for calculating dearness allowance, provident funds, house rent allowance, pension, encashment of privilege leave, gratuity, and fixation of pay upon promotion.
Functional Allowance
Xerox Machine Operators in the scale of Pay of Record Clerks – Rs. 215/- per month.
Microprocessor Operators in the scale of assistants – Rs. 405/- per month.
Programmers in the scale of pay of Higher Grade Assistant – Rs. 1,270/- per month.
Rule 6 states that for the Class IV subordinate employees, the scales of pay is as specified below –
The Class IV subordinate employees mentioned in sub-rule (1), in addition to the scales of pay, shall receive a special allowance which is counted as basic pay to the extent specified of Rs. 1,620/- per month and machine operators in the scale of Sepoy will be paid a functional allowance of Rs. 170/- per month.
Rule 5 – Dearness Allowance
This rule substitutes the sub-rule (1) of Rule 8 of the Life Insurance Corporation of India Class III and Class IV employees (Revision of Terms and Conditions of Service) Rules, 1985. The dearness allowance for such class of employees shall be recovered at the rate of 0.08% of pay plus the special allowance as mentioned in rule 13B for every four points increase or fall in the quarterly average of the All India Consumer Price Index above 6352 points. For the purpose of calculation of dearness allowance, the ‘Pay’ shall include basic pay, additions to basic pay, special allowances payable to liftmen and watchmen, head peon, and special allowance for Passing Examinations payable to Class III employees. Appendix IV of the rules describes the number of slabs for which the dearness allowance becomes payable according to the pre-revised and revised rules. Also, an additional dearness allowance shall be paid whenever it is drawn.
Rule 9(1) – House Rent Allowance
The house rent allowance for Class III and Class IV employees except for those who have been allotted residential accommodation is specified below –
S.No.
Place of posting
Rate of House Rent Allowance
1
Cities of Mumbai, Chennai, New Delhi, Noida, Faridabad, Ghaziabad, Gurugram, Kolkata, Hyderabad, Bengaluru and other cities with a population of forty-five lakh and above.
10% of Pay or a minimum of Rs. 1,720/- per month and a maximum of Rs. 7,840/- per month
2
Cities exceeding twelve lakh population but less than forty-five lakh
8% of Pay or a minimum of Rs. 1,475/- and a maximum of Rs.6,620/- per month.
3
Other places
7% of Pay or a minimum of Rs.1,400/- and a maximum of Rs. 6,370/- per month.
Rule 10 – City Compensatory Allowance
The City Compensatory Allowance payable to the Class III and Class IV employees is as specified below –
S.No.
Place of posting
Rate of House Rent Allowance
1
Cities of Mumbai, Chennai, New Delhi, Noida, Faridabad, Ghaziabad, Gurugram, Kolkata, Hyderabad, Bengaluru and other cities with a population of forty-five lakh and above.
3% of Pay or a minimum of Rs. 510/- per month and a maximum of Rs. 1,555/- per month
2
Cities exceeding twelve lakh population but less than forty-five lakh
2.5% of Pay or a minimum of Rs. 420/- and a maximum of Rs.1,460/- per month.
3
Other places
2% of Pay or a minimum of Rs.310/- and a maximum of Rs. 1,255/- per month.
Rule 11 – Hill Allowance
The scales Hill Allowance payable to the Class III and Class IV employees is as specified below-
S.No.
Place of posting
Rate of Hill Allowance
1
Employees situated at the height of 1,500 meters or above the mean sea level
2.5% of Basic Pay or a maximum of Rs. 1,000- per month.
2
Officers situated at a place situated at the height of 1,000 or above but less than 1,500 meters above the mean sea level, or at Mercara or a place declared as “hill station” by the Central or State Government concerned for their employees.
2% of Basic Pay or a maximum of Rs.790/- per month.
3
Officers situated at a height of not less than 750 meters or above sea level.
2% of Basic Pay or a maximum of Rs.790/- per month.
Rule 13B – Special Allowance
The amount of special allowance payable to the Class III and Class IV Employees is as specified below –
The special allowance that is given to Class I Officers shall be specified in the table below –
S.No.
Class III/Class IV Employees
Allowance per month (Rs.)
1
Higher Grade Assistant
3,000
2
Stenographer
2,500
3
Assistant
2,000
4
Record Clerk
1,800
5
Driver
1,800
6
Peon
1,600
7
Sweeper
1,500
It is important to note that the special allowance shall be reckoned for the purpose of calculation of dearness allowance but not for the purpose of calculation of house rent allowance, pension, encashment of privilege leave, gratuity, pension and fixation of pay upon promotion.
III. Other Officers and Employees
The hikes and allowances that are given to a few other cadres of employees and officers are given over here.
Benefits of LIC wage revision to staff
With the introduction of LIC wage revision in April 2021, the officers and employees finally have a reason to celebrate. The Department of Financial Services (DFS) of the Finance Ministry has approved a sixteen per cent wage hike for the employees of the Life Insurance Corporation. The following are the hikes from which the officers and employees are conferred with –
The revised wage includes a 100 basis point cut in the rate of interest for housing loans taken by various staff.
Although this move by the Centre has created a disparity in banks and insurance sectors, LIC staff were given favourable treatment as there was phenomenal growth and financial stability in the institution.
The settlement records of the Life Insurance Corporation of India are by far the best in the Industry. The employees have been given a well-deserved wage revision.
The said wage revision has also given the benefit of a five-day work week for the employees, unlike the public sector employees.
An additional special allowance ranging from Rs. 1,500 to Rs. 13,500 has also been introduced for employees of all cadres.
This wage revision was a long-awaited move, and the staff may also see an 18.5-20 per cent jump going forward, excluding superannuation.
Another intriguing aspect is the lack of a wage agreement between the LIC management and its employee unions. Even after the “information sharing” meeting, the management’s final proposal will be sent to the government and can be changed at any time before notification by the Finance Ministry (Department of Financial Services). No such thing can happen in a bipartite wage settlement situation and no rupee can be removed without the consent of the unions.
Criticisms and Oppositions
With the increase in wages for the staff, the Life Insurance Corporation pensioners staged lunch-hour demonstrations opposite LIC Divisional Office seeking a wage increase in the family pension. Claiming the wage revisions to be discriminative on account of catering only to the need of working staff, they demanded a family pension at thirty per cent of the last pay drawn in place of the fifteen per cent of the last pay drawn. Although the pension funds were insufficient to meet this small expenditure, the Centre was not acceding to it. Hence, the employees strongly expressed their anguish at the inordinate delay in clearing the issue. Over fifty-eight thousand employees in the public sector general insurance including The New India Assurance Co. Ltd., (Mumbai), the Oriental Insurance Co. Ltd., (New Delhi), the National Insurance Co. Ltd., (Kolkata), and the United India Assurance Co. Ltd., (Chennai) went on a two-day strike condemning their woes of wage revision and the paucity of action from the Centre when the wage revisions are completed for the public sector banks and the Life Insurance Corporation.
Conclusion
The 2021 LIC wage revision has brought out several benefits and increments to all the officers and employees effective from 15.04.2021. The officers and employees are immensely benefitted from the wage hikes as clarified by the above discussion. The ultimate objective of wage hikes is to improve the overall standard of living and to provide them with appropriate finance to meet the cost of living. It is pertinent for any organisation to have a well-devised salary structure and timely revision of such wages or salaries help companies reward their employees from time to time by keeping the human resource cost in control.
Frequently Asked Questions
What is the salary after wage revision?
The salary after wage revision will increase up to sixteen per cent fitment as announced by the Government of India with effect from 01.08.2017.
When has the wage revision come into effect?
The LIC revised pay scales came into effect on the date of publication of notification in the Official Gazette, dated 15th April 2021.
Will the wage differ for each cadre of Class III employees?
After 2021 wage revisions, except for Higher Grade Assistants and Stenographers, all the Class III employees are given the same scales of pay under the “one pay band.”
What are the dearness allowance rates after wage revision?
The dearness allowance is paid at 0.08% on new pay scales at Base: Index No.6352 in the series 1960 = 100.
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