Download Now
Home Blog Page 261

Rights of Persons with Disabilities Act, 2016

0

This article is written by Gautam Badlani, a student of Chanakya National Law University, Patna. This article examines the provisions and judicial decisions relating to the Rights of Persons with Disabilities Act, 2016 thereby highlighting the salient features of the Act and critically analyzing rights of the disabled. The article also points out certain drawbacks of the Act and makes certain suggestions with respect to the amendment and changes that can be made to the Act to make it more efficient. 

It has been published by Rachit Garg.

Table of Contents

Introduction 

The Rights of Persons with Disabilities Act, 2016 was enacted by Parliament in the year 2016. It replaced the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995

In India, for a long time, disabled individuals were considered a liability and were subjected to stigmatization and discrimination. However, around the 1980s, it was felt that disabled people must be provided with an opportunity to participate in societal development. Governments, NGOs, and society at large realized that disability was a medical condition which could be addressed through appropriate rehabilitation. With the UN declaring the 1982-1992 period as the Decade of Disabled Persons, the rehabilitation movement got a further boost. The Decade of Disabled Persons played a key role in improving the status of  disabled people. Emphasis was laid on improving educational and employment status and raising more funds for the disabled.

The Indian Government set up the Rehabilitation Council of India in 1986 with the aim of facilitating the rehabilitation of disabled people. Furthermore, the National Policy on Disability was adopted in 2009. This comprehensive policy focuses on critical areas such as education, employment, social security, etc., for the disabled. 

Need for the Rights of Persons with Disabilities Act, 2016

The primary aim of enacting the Act was to safeguard the interests of people who suffer from disabilities. This Act provided for the individuality and dignity of disabled people, prevented discrimination against them, and called for an inclusive society. 

The Act was enacted owing to India’s international obligations under the United Nations Convention on the Rights of Persons with Disabilities. This Convention was adopted by the UN General Assembly in December, 2006. India ratified the Convention in 2007. As per the Convention, the signatory States were mandated to enact new laws or amend the existing laws to remove obstacles to the development and growth of disabled people. The National Policy on Disabled Persons needed to be modified in order to bring it in line with the 2007 UN Convention. 

The Convention imposed a duty on the States, private individuals, and civil society to ensure that the rights of disabled people were secured. The signatory States are under an obligation to not only ensure the implementation of the Convention but also to modify their domestic law to bring it on par with the provisions of the Constitution and to prepare the country’s report.

India, being one of the first signatories of the Convention, enacted the 2016 Act to fulfill its obligations under the Convention. In November, 2015, India submitted its first country’s report. 

This Act, furthermore, widened the definition of disability by incorporating 21 types of disabilities, as compared to 7 in the preceding statute. The schedule to the Act covers physical disability, mental disability, intellectual disability, and disability resulting from chronic neurological conditions and blood disorders. Acid attack victims and those with speech and language disabilities have been included in the list for the first time. 

Overview of Rights of Persons with Disabilities Act, 2016

The Rights of Persons with Disabilities Act, 2016 aims to provide certain rights to disabled people and protect them from social stigmatization and discrimination. Section 2(s) of the Act defines “person with disability” as a person who suffers from long-term mental, physical, sensory or intellectual impairment which, in collaboration with barriers, affects his effective participation in society.

The definition of disability provided in the 2016 Act is much more inclusive than the definition in the preceding Act. The 1995 Act included only those persons within the definition of disabled persons who suffered from a 40% or more of a certified disability. 

Section 27 of the Act also provides for the rehabilitation of a disabled person. The appropriate government is responsible for the rehabilitation of the disabled, with a special focus on education, employment, and health concerns. The appropriate government has to provide financial assistance to those non-government organizations which are engaged in facilitating the rehabilitation of disabled people. 

Objectives of Rights of Persons with Disabilities Act, 2016

  • The primary objective of the Act is to ensure that disabled people enjoy their right to equality and are able to live a dignified and respectful life. 
  • The Preamble of the Act provides that it is aimed at protecting disabled people from all sorts of discrimination. The Act seeks to ensure the full social, political, and economic participation of disabled people. 
  • This Act promotes inclusive education and provides employment safeguards for disabled people. Thus, it aims at empowering disabled people through inclusive growth and active societal participation.

Salient features of Rights of Persons with Disabilities Act, 2016

Rights of disabled persons

Chapter II of the Act deals with the rights of disabled people. Disabled people have been conferred with the following rights:

  1. They have a right to equality and protection from discrimination. They cannot be discriminated against due to their disability. The appropriate government is responsible for ensuring that the dignity and integrity of the disabled persons is not violated. 
  2. The disabled persons have a right to live in the community and the government is responsible for protecting them from being forced into living in any specific arrangement. 
  3. The disabled persons enjoy equal rights and cannot be forced into undergoing infertility medical procedures. 
  4. The Central as well as the state elections commissioners are responsible for ensuring that the polling booths are accessible to disabled people. 
  5. The disabled persons are to be protected from violence and exploitation. They cannot be subjected to any degrading or cruel treatment. Disabled people cannot be forced to be the subject of research without their consent. In case of any natural disaster or emergency, they have equal rights to safety and protection. Section 7(2) of the Act provides that if any registered organization believes that an act of violence or abuse is likely to be committed against a disabled person, then the registered organization must give such information to the Executive Magistrate having the requisite jurisdiction. 
  6. Section 38 of the Act provides that where a person suffering from benchmark disability believes that he is in need of high support, he can make an application for such high support to the notified authority. An application in this regard can also be made by any other person or organization on behalf of the disabled person. Such an application is to be forwarded to the Assessment Board, which will assess the application and submit a report to the concerned authority. The disabled person would then be provided high support on the basis of the report and the relevant government schemes.
  7. The Act also provides that if an employee acquires a disability while he is in service, he may not be dismissed or removed from employment. He may be transferred to another suitable post but the pay scale cannot be reduced.

Educational safeguards

Chapter III of the Act deals with the education of disabled children. Section 16 of the Act imposes a duty on government funded educational institutions to provide inclusive education to disabled children. Educational institutions are prevented from discriminating against children suffering from disabilities and are required to provide education, sports and recreation facilities to the disabled children, provide them with reasonable accommodation, make the campus more accessible to them, ensure that dead and blind children are imparted education using appropriate means of communication and suitable pedagogic means, provide them with transport facilities and monitor their participation and progress. 

Section 17 aims at promoting inclusive education. It provides that the government and the local authorities are responsible for setting up training institutes and for training staff and professions on how to promote inclusive education. Children with a benchmark disability are entitled to free books and other learning materials until they attain the age of 18 years. 

Section 32 provides for a 5% reservation in all government higher education institutes and those educational institutes that are beneficiaries of government funds.

Skills, development and employment of disabled persons

The Act makes special provisions for the promotion of skill development and employment of disabled people. Under Section 20, discrimination against  disabled people in matters related to employment is specifically prohibited. The government establishments are mandated to provide them with reasonable accommodation and are prohibited from reducing the ranks of those employees who acquire disability during the work. Disabled people cannot be denied promotion merely on grounds of disability. 

Section 21 mandates every establishment to notify an equal opportunity policy and the same has to be registered with the Chief or State Commissioner.

Section 23 requires every establishment to appoint a grievance redressal officer and to inform the chief commissioner or the state commissioner about the same. Any person can approach the officer and complain about the discrimination done by the establishment on the grounds of disability. The redressal officer has to maintain a register of complaints and the enquiry into every complaint has to be completed within two weeks of registration.

Equal recognition before law and guardianship 

People suffering from disabilities have the right to equal recognition before the law in regards to the general people under Section 3. This gives them the right to inherit and own property and manage their own financial affairs.

While disabled people have the right to take their own legal decisions, this Act also envisages a situation where a disabled person might face difficulty in making legally binding decisions. For such a case, Section 14 provides for the concept of a limited guardian. The limited guardian is to help the disabled person and can take legally binding decisions on their behalf. Limited guardianship implies joint decision making between the disabled person and the guardian on the basis of mutual trust and understanding. Such a guardian can be appointed by the District Court or any such authority notified by the State Government. The disabled person has a right to appeal against such an appointment by the designated authority. 

Special provisions under the act for people with benchmark disabilities

People suffering from benchmark disabilities are provided special provisions in Chapter VI of the Act. Section 31 provides that every child suffering from a benchmark disability has a right to free education in any neighborhood school or in any special school until he attains the age of 18. All higher government educational institutions as well as educational institutions receiving government grants are mandated to provide a minimum of 5% reservation in favor of children suffering from benchmark disabilities.

Section 33 provides that the appropriate government has to identify the posts which can be reserved in favor of a person’s suffering from benchmark disabilities. An expert committee will be constituted for the identification of suitable posts which could be reserved for disabled people suffering from benchmark disability, and the identified posts have to be periodically reviewed within a period of three years. 

Moreover, every government establishment has to reserve a minimum of 4% of vacancies in favor of people suffering from benchmark disabilities. The Act also provides that the appropriate government shall incentivise the private organizations to employ persons suffering from benchmark disabilities.

Social Security and Healthcare

Chapter V of the Act makes special provisions for disabled people with respect to social security and healthcare. 

Section 24 of the Act imposes an obligation on the appropriate government to frame necessary schemes for improving the living standard of the disabled persons and to provide them with an independent living. The government may formulate the schemes keeping in view its economic capacity. 

While framing the schemes, the government has to consider the age, economic and social status, nature of disability, and gender of the disabled people. Section 24 also provides a list of matters with respect to which the government may frame welfare schemes. The government should set up community centers to provide adequate counseling, guidance, safety, and medical care to disabled people. The government should also provide support to disabled people during natural disasters and help  disabled children who have been abandoned or have no family or shelter. The government should also frame policies for providing unemployment allowances to disabled people who have been unable to get any gainful employment for a period of 2 years or more.

Section 25 of the Act provides that the appropriate government should take the necessary steps to ensure that disabled people get access to free healthcare, particularly in rural areas. Disabled people must be given priority in treatment and should be provided with barrier free access to all private healthcare organisations.

Duties and responsibilities of the appropriate government as laid down in Rights of Persons with Disabilities Act, 2016

Chapter VIII of the Act prescribes the duties and responsibilities of the appropriate government. The appropriate government has to organize awareness and sensitization campaigns in order to ensure that the rights of the disabled people as provided under the Act are secured. The government has to consider the Chief Commissioner or the state commissioner in organizing the awareness campaigns. 

Under Section 41 of the Act, the appropriate government has to take appropriate steps to ensure that the modes of transport, such as railways, buses, and airports, are made accessible to disabled people. The ticketing procedure, toilets, and parking must be designed keeping in mind the needs of disabled people. The appropriate government should ensure that the roads are also accessible to disabled people. 

The government must also promote the development and distribution of consumer goods that are generally used by disabled people. The government must take the necessary steps to ensure that technology, communications, and information, including print and electronic media, are made accessible to disabled people.

Section 48 mandates that the appropriate government must perform a social audit of the welfare schemes to ensure that they fulfill the needs of disabled people and do not have an adverse effect on them. This would also enable the government to make the necessary modifications to the schemes to ensure that they fulfill the object of this Act.

Registration of institutions for people with disabilities

Chapter IX of the Act provides the procedure through which institutions for disabled people may be registered. The component of authority for the registration of the institutions has to be appointed by the state government.

Under Section 50, the component authority will be responsible for delivering the certificates to the institutions that are established for disabled people. The manner in which the application for registration is to be made has to be prescribed by the state government. Upon receiving a registration application, the competent authority may conduct such enquiry as he considers necessary to ensure that the applicant has met all the essential conditions of the Act; upon being satisfied, the competent authority shall issue a certificate. If the competent authority is not satisfied, then he may refuse to issue a certificate of registration.

Section 52 of the Act authorizes a component authority to revoke a registration certificate if he reasonably believes that the certificate holder has breached any of the conditions on which the registration certificate was issued or has produced false material. An appeal against the order of the component authority may be preferred under Section 53.

Advisory Board and District Level Committee

Chapter XI of the Act provides for the establishment of Central and State Level Advisory Boards as well as District-level Committees. These advisory boards are responsible for advising the government on matters, programs, and policies related to disabled individuals. The advisory boards also coordinate and review the activities of the various departments engaged in matters relating to disabled people. 

Central Advisory Board

Composition

Section 60 of the Act provides for the composition of the Central Advisory Board. The Mister in charge of the Department of Disabled Persons is the ex officio chairman of this board.  The Vice Chairman is the Minister of State in charge of the department of disabled persons. Other than the Chairperson and the Vice Chairperson, the Central Board consists of three members of Parliament, two of whom are elected by the lower house and one by the Rajya Sabha. 

Disqualification

The members of the Central Advisory Board are appointed for a term of three years. The members can be removed from office before the expiry of their term by the Central Government. The members can also submit their resignation to the central government. A casual vacancy will be filled by a fresh nomination, and the person so nominated will hold the office for the remainder of the term.

Under Section 62, an insolvent person, a person of unsound mind, or a person who has been convicted of an offense is disqualified from being a member of the advisory board.

Functions

These advisory boards are responsible for advising the government on matters, programs, and policies related to disabled people. The advisory boards also coordinate and review the activities of the various departments engaged in matters relating to disabled people.

State advisory board

Composition

The state advisory board report consists of five members with expertise in matters relating to disabled people and rehabilitation. The state government also appoints five other members to represent the various districts. Ten other members are appointed to represent the NGOs and other associations dealing with matters relating to disable people. These 10 persons may preferably be the persons suffering from disabilities. Other than this, three members may be appointed to represent the state chamber of trade and commerce.

Disqualification

The members of the state advisory boards are also appointed for a term of three years. The members can be removed from office before the expiry of their term by the Central Government. A person convicted of an offence, a person of sound mind or an insolvent person who has failed to pay his debts is disqualified from being appointed as a member of the state advisory board. 

Section 67 provides the terms and conditions of the service of the members. A member may be removed from office before the expiry of his term by the state government after giving him a reasonable show cause notice. A member may also submit his resignation to the state government. A casual vacancy is filled by a fresh nomination, and the person so appointed will hold the office for the remainder of the term. 

Functions

These advisory boards help in continuously evolving a comprehensive policy for safeguarding the rights of disabled people. They advise the concerned state government in framing appropriate policies and programmes for the empowerment of  disabled people. They coordinate and monitor the functioning of all the state departments and government as well as non-government organizations working for the welfare of the disabled. 

District Level Committees

Section 72 of the Act provides for the establishment of district level committees. The District- level Committees are responsible for redressing local level grievances of the people suffering from disabilities. The state governments prescribe the rules for the constitution and functioning of these committees.

Chief commissioner and state commissioner 

Chapter XII of the Act deals with the Chief Commissioner and the state commissioner. The Chief Commissioner is appointed by the Central Government, and the Central Government may also appoint two additional commissioners to help the Chief Commissioner. One of the commissioners must be a disabled person.

Section 77 of the Act provides the powers of the Chief Commissioner. The chief commissioner has the power to summon the witnesses and enforce their attendance, order the production of documents, and examine witnesses and documents.

The State Commissioners are appointed by the respective state governments. Only those people are eligible to be appointed as State Commissioners who have special knowledge in relation to matters of rehabilitation. The powers of the State Commissioner are defined under Section 82. State commissioners have the power to summon witnesses, order the production of documents, receive affidavit evidence and issue commissions for document examination.

Special Courts

The special courts are set up by the state government in concurrence with the Chief Justice of the concerned high court. Section 84 provides for the setting up of special courts in each district for the speedy disposal of cases relating to violations of the rights of persons suffering from disabilities. 

National and State Funds

Section 86 provides for the setting up of a national fund for disabled persons, and Section 88 provides for the setting up of state funds for disabled persons. The government is required to maintain proper accounts and records of these funds. It would be utilized to provide financial support and relief to disabled people. 

Punishment

Under Section 89, persons contravening the provisions of the Act will be punishable with a fine up to Rs. 10,000 for the first offense and every subsequent offense will be punishable with up to Rs. 5,00,000.

Section 92 provides that the offense of committing atrocities on disabled people will be punishable with up to 5 years of imprisonment along with a fine. 

The Act also points out that unfairly availing the benefits of the provisions aimed at the welfare of people suffering from benchmark disability will be punishable with up to two years of imprisonment or up to a fine of Rs. 1,00,000 or both.

Landmark judgments surrounding Rights of Persons with Disabilities Act, 2016

Vikash Kumar v. Union Public Service (2021)

In the landmark case of Vikash Kumar v. Union Public Service Commission & Ors. (2021), the appellant, who suffered from writer’s cramp, was denied scribe during the civil services examination. The appellant had applied for a disability certificate at the Ram Manohar Lohia Hospital, Delhi, but the certificate was refused. The appellant then appealed before the Central Administrative Tribunal, but his appeal was dismissed. The appellant then approached the Delhi High Court and, in the meantime, obtained the disability certificate. The appellant then approached the Apex Court, and the Court directed AIMS to constitute a board and submit a report on the appellant’s condition. The report stated that the appellant was a person with a disability, but he did not suffer from a benchmark disability. 

The primary contention of the appellant was that he was entitled to a scribe due to his medical condition.

Observations of the Supreme Court

  • The Court primarily noted that, as per government guidelines, only people suffering from benchmark disability are entitled to have a scribe during an examination. However, the Ministry of Social Justice and Empowerment, which is the nodal agency for the enforcement of the provisions of the Act, recognised that there might be other medical conditions which could hinder the writing ability of the candidate and hence, left it at the discretion of the examination agency to decide on the grant of scribe or other such facilities. 
  • Thus, the existence of benchmark disability was not a precondition to the grant of scribe, extra time or other similar facility. 
  • The golden triangle, comprising Articles 14, 19, and 21 provides protection to disabled people. The Constitution promises full and complete citizenship to disabled persons and the Persons with Disabilities Act, 2016 merely operationalizes this promise. 
  • It is essential but not sufficient to merely ensure that disabled people are not subjected to discrimination. Additional support and facilities must also be provided to disabled people.
  • The Court then referred to the principle of reasonable accommodation and stated that the State has a positive obligation to provide additional facilities to disabled people to ensure that they enjoy full participation in society.
  • The Court noted the judgment of V Surendra Mohan v. State of Tamil Nadu (2019), where the Apex Court upheld the Madras High Court’s judgment, stating that a person suffering from more than 50% visual or hearing impairment would not be eligible to be considered for the post of a judicial officer. The Court observed that the Surendra Mohan judgment was based on the Persons With Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and did not consider the principle of reasonable accommodation. Thus, the Surendra Mohan judgment could not be a binding precedent. 
  • The Court thus concluded that since the appellant suffered from a disability which made it difficult for him to write, denying him a scribe would defeat the purpose of the Act. 

State Of Kerala v. Leesamma Joseph (2021)

In the case of State of Kerala v. Leesamma Joseph (2021), the issue arose before the Apex Court that whether the disabled persons were entitled to reservation in promotion. The Court interpreted the provisions of the 1995 Act and 2016 Act while deciding the issue. The Court held that disabled people are entitled to reservation in promotion under the scheme of the 1995 Act. 

The Court further noted that while it is easier to enact legislation, changing the social mindset of people to give effect to the good intentions of the legislation in the true sense is a difficult task. The intention of the 1995 and 2016 Acts is to ensure that disabled people are provided with equal opportunity, and such an opportunity can be provided only by granting them reservation in promotion as well. Section 20(2) of the Act mandates every government establishment to provide “reasonable accommodation” and a conducive environment for disabled people. 

The Court concluded that disabled people are entitled to reservations in promotion. 

Disabled Right Group v. Union Of India (2017)

In the case of Disabled Right Group v. Union of India (2017), a public interest litigation was filed before the Apex Court to look into the non-implementation of reservation provisions for disabled people, to ensure that full access was provided to people suffering from orthopedic disability so that they can move freely throughout the educational institutes and to ensure that effective steps are taken to provide adequate pedagogy facilities to the disabled students. 

The Court commented on the fundamental premise of the 2016 Act and said that the Act was based on the idea that there are barriers and hindrances created by society which impede the disabled persons’ progress. The Act aims at ensuring that disabled people are provided with sufficient opportunities to enable them to realize their full potential. In order to achieve this objective, it is essential to provide fruitful education to the disabled persons by making the buildings, libraries, labs and other facilities accessible to them. 

The Court noted that the 1995 Act provided for a minimum of 3% reservation for disabled persons in government aided educational institutions. The 2016 Act only widened the scope of the welfare provisions, and Section 31 provides for the free education of disabled children from 6 to 18 years of age. This right is wider in scope as compared to the right granted under the Rights of Children to Free and Compulsory Education Act, 2009. Disabled people not only have the right to have a minimum education but also the right to higher education. 

The Court thus ordered that all educational institutions must comply with the reservation provisions of the Act. The UGC and the Bar Council of India (in case of law schools) were directed to conduct inspections to ensure that the educational institutions comply with the reservation provisions. 

Union of India & Anr. v. National Federation of the Blind (2013)

In the landmark case of Union of India & Anr v. National Federation of the Blind (2013), the Supreme Court made several important observations with regards to the reservation for disabled persons. The Court made the following observations:

  • Employment is essential to provide full participation, empowerment, and inclusion of disabled people. The primary reason for the joblessness of disabled people is not functional disability but the artificial social barriers that hinder their growth. 
  • The 50% ceiling limit on reservations set by the Indra Sawhney v. Union of India (1992) judgment applies only to reservations in favor of Other Backward Castes and not in case of reservations for disabled persons. 
  • The Central Government and the state governments are under an obligation to provide welfare measures for disabled persons. This obligation is based on the Constitutional provisions as well as the international treaties to which India is a party. 

Avni Prakash v. National Testing Agency (2021)

In Avni Prakash v. National Testing Agency (2021), the primary contention of the petitioner was that she was entitled to reasonable accommodation as she had been diagnosed with 40% permanent disability and suffered from dysgraphia and thus fell within the criterion of benchmark disability. However, when she appeared for the National Eligibility and Entrance Test (NEET), she was denied the relaxation that she was entitled to in terms of the Guidelines on Written Examinations which are issued by the Ministry of Social Justice and Empowerment. 

The Court observed that the National Testing Agency (NTA) was bound to follow the Guidelines on Written Examination. The appellant was not provided with the statutory facilities because the designated examination center was unaware of the provisions of the Act. It was the responsibility of the  NTA to ensure that all the designated centers were aware of the provisions made for disabled people. The Court further observed that the right to equality and reasonable accommodation cannot be denied to disabled people by treating the existence of benchmark disability as an essential prerequisite. 

Where the rights have been conferred on disabled people by the statute, they cannot be diluted. The Court thus concluded that the reasonable accommodation provisions provided in the Act are mandatory and form the pillar of equality and non-discrimination. The provisions with respect to disabled people must be published in the NEET bulletin. A higher threshold for benchmark disability cannot be used to deny the statutory rights to the disabled persons. 

Drawbacks and suggestions for Rights of Persons with Disabilities Act, 2016

  • The Rights of Persons with Disabilities Act, 2016 provides for the appointment of limited guardians to help the disabled persons in taking legal decisions. At the same time, the Act also includes mental disability within its scope. Yet, there is no provision to address a situation where a person suffers from a psychiatric disability and does not have proper insight. In such a situation, the disabled person might be vulnerable to the influence of the guardian. It might also be difficult to implement joint decision making which is the aim of limited guardianship. 
  • Section 9 provides that a child suffering from a disability is to stay with his parents unless the court is of the opinion that separation from parents will be in the child’s best interests. Even in those cases where the court believes that the parents are incapable of taking proper care of the child, the child has to be placed with near relatives. 
  • However, Section 13(3) provides that where any conflict arises between the disabled person and the person who is supporting the disabled person with respect to any economic, property, or finance-related matter, then the person providing the support will have to mandatorily withdraw their support. This might lead to situations where a willing and bona-fide family member might be prevented from helping and assisting the disabled person. This is probable in cases where the disabled person suffers from mental disability and is deprived of sound judgment. 
  • The Act tries to protect the disabled person from any sort of coercion or threat. However, it does not take into consideration that where a disabled person suffers from mental disability and is a threat to himself, family members might have to use force for the interest of the disabled person. However, even such protection by family members can be coloured as a criminal act due to the stringent provisions of the Act. 
  • While the Act intends to promote inclusive education, this goal might be difficult to achieve considering the existing shortage of teachers in schools. Promoting inclusive education would require trained teachers and the requisite infrastructure. Furthermore, children who suffer from severe disabilities would require greater support and a targeted approach as they might not be able to meet the needs of regular schools. 
  • A major setback for disabled people can be the lengthy certification process. The Central Government has issued the guidelines that the various state governments need to follow for the certification of disabled people. The state government has to constitute a three member medical board consisting of at least one specialist in the field of disability for which the certification needs to be granted. This means that disabled people will have to take several appointments with specialists before they can finally secure a certificate. The lengthy process might lead to the denial of several rights to disabled people. Children and those who require immediate assistance would be the worst affected. A multi-member medical board should be required only where there are multiple disabilities under consideration. For a single disability, a single specialist should suffice. Another solution to this problem could be decentralization of the certification process and enabling the various states to formulate their own certification guidelines on the basis of the available resources.

Conclusion 

The Rights of Persons with Disabilities Act, 2016 is certainly a progressive legislation. It marks a paradigm shift from charity based statute to a rights based statute. In many cases, the ill-treatment meted out to the disabled person etches into their heart, causing immense psychological damage. The aim of the Indian Constitution is to ensure social and economic justice. The rights guaranteed by the Act secure social justice for disabled people, and the special provisions with respect to education and employment guarantee economic justice to disabled people. 

While the government and the judiciary have adopted a right based approach with respect to disabled people, the implementation of the Act would require regular monitoring. Even after the Act came into force, several statutory rights have been denied to disabled people, and the judiciary needs to take a proactive approach in ensuring that the provisions of the Act are implemented in their letter and spirit. 

Frequently Asked Questions

How many countries are signatories to the United Nations Convention on the Rights of Persons with Disabilities?

There are 82 signatories to the Convention.

What are the different models of disability?

  1. Social model of disability: This model emphasizes that it is not the impairment but rather the social barriers that disable people. The artificial and environmental barriers lead to the social construction of disability, which affects people. It is not the functional disability that denies disabled people equal participation in society, but rather the social setting of discrimination and stigmatization is the root cause of their disability. 
  2. Economic Model of Disability: This model points out the faults in the economic system that provides low pay work to disabled people, thereby pushing them to a lifetime of perpetual dependency. Instead of providing them with vocational training and 
  3. Medical model of disability: This model views disability as a purely medical problem which needs to be curated. It emphasizes the physical and mental limitations of disabled people and focuses on the setting up of special institutions such as special schools, transport, etc., for disabled people. 
  4. Rights based model of disability: This model treats disability as a normal phenomenon in human society and emphasizes that disabled people are entitled to equal rights as others. 

References 


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

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

https://t.me/lawyerscommunity

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

Download Now

What is corporate finance

0

This article is written by Mohammad Sahil Khan of Dr Ram Manohar Lohiya, National Law University, Lucknow. The article comprehensively deals with corporate financing, principles of corporate financing, and types of corporate financing. It also covers the entirety of Indian financial system which includes various types of financial institutions, financial markets, and all other financial aspects.  

It has been published by Rachit Garg.

Introduction 

In the era of start-ups and entrepreneurship, it is important to understand the concept of corporate financing. Corporate financing deals with the capital structure of a firm or corporation. The management of the corporation involved in corporate finance has to deal with various activities from funding to making suggestions and taking actions that would increase the value of the company. Capital restructuring, making investment decisions, accounting, and dealing with the funding of sources are some of the key aspects of corporate financing. 

The purpose of corporate finance is to enhance the value of a company or business through strategic planning and implementing resources efficiently. Corporate finance is instrumental in maximizing the values of shareholders which can be done through the process of short-term or long-term financial planning. 

A financial system is a chain of financial institutions such as banks, stock exchanges, and insurance companies existing on a firm, national or global level. Investors, lenders, and borrowers are essential components of a financial system. These institutions exchange funds amongst themselves for financing various projects. Financial systems are extremely essential in corporate financing as they are the institutions that provide funds for financing various financial projects. A financial system is a robust system containing various rules and practices that helps in determining which project needs to be financed. 

What is corporate finance 

Corporate finance is the subfield of finance that deals with how corporations address funding sources, capital structuring, accounting, and investment decisions. Corporate finance is often concerned with maximizing shareholder value through long- and short-term financial planning and the implementation of various strategies. Corporate finance activities range from capital investment to tax considerations.

Corporate finance plays a major role in the functioning of a corporation or firm as they focus on the growth of a corporation by enhancing the overall value and business of the corporation. The management dealing with corporate finance takes crucial decisions in the aspects of capital allocation, investment, and organizing budgets. The management also looks into the amount of capital needed for acquiring assets. Depending upon the type of asset acquisition, management looks into whether to do financing by issuing the equity or through debt. Many times, the management follows both issuing equities as well as debt to maintain a safe balance because too much debt can increase the risk factor while diluting the equity of the corporation to a large extent can hinder the process of growth or increase the valuation of the corporation. 

Elements of corporate finance

Capital budgeting

Capital budgeting is a process that assesses the viability of an investment proposal for determining the potentially profitable corporate financing projects. In order to determine capital budgeting, a bunch of financial analysts conduct a comparative analysis of the present and estimated future value of an investment proposal. After conducting a comparative analysis, the most viable investment proposal is chosen. 

Capital structure

Capital structuring is a method by which a financial entity employs the method of structuring corporate finance. The capital structure includes equity or debt as a method for corporate financing. From an investor’s point of view, they want an optimum mix of debt and equity because it produces a balanced combination.

Working capital

Working capital is associated with the capital required on a daily basis for business conduct. An adequate cash flow is maintained by an efficient financial management company which ensures liquidity in the organization.

Dividend distribution

Companies which are publicly listed are accountable to their shareholders and in order to serve them well, they give out dividends from time to time. Dividends are generated from the surplus profit of an organization. An organization can either distribute the surplus profit amongst its shareholders or it can reinvest the same amount to look for growth in business operations. 

Importance of corporate finance

  • Corporate financing manages financial activities by obtaining funds from the right sources.
  • Corporate financing manages financial activities to maximize the return on investment.
  • Corporate financing balances risk and profitability by properly structuring and budgeting the capital.
  • Corporate financing is essential in determining future cash flow.
  • Corporate financing strategizes to have an optimum mix of debt and equity in capital structuring.

Examples of corporate finance

Corporate financing system requires the management of interactions between investors, corporations, government, financial institutions, etc. Following are the examples of corporate financing:

  1. Financial modelling: It analyzes the risk and values associated with an investment option.
  2. IPO: Initial Public Offering is a method of raising capital by financing equity.
  3. Bank loan: Corporations often require loans from banks for funding their projects, banks then carry out due diligence to analyze loan costs and their repayment.
  4. Refinancing and renegotiating debts and payments: Owing to the change in circumstances in the market, corporations need to strategically anlyze and change the terms of loans or other payment agreements.
  5. Dividend distribution: A company offers dividend to its shareholders on the basis of its dividend policy which might be fixed or variable. 

Principles of corporate finance

Investment principle

This principle focuses on finding the right investment option by carrying out a financial feasibility study to determine revenues, future costs, and estimated profits. The investment is carried out by assessing the risk and return. An investment proposal is evaluated based on a hurdle rate which acts as a benchmark to determine the return analysis of an investment. A financial analyst goes over an array of investment alternatives to find the most profitable business venture. To conclude, financial analysts conduct a comparative analysis of the present and future value of an investment. The risk-to-reward ratio is observed whether they align with the goals of an organization’s business. The risk-to-reward ratio is a measure to calculate whether the risk associated with the investment of capital is worth it or not.

For an investment to be successful, the invested project should yield a greater return than the minimum acceptable hurdle rate. The hurdle rate serves as an indicator to determine the risk prospects of an investment. If an investment is supposed to be risky, it ought to have a significant hurdle rate. In cases of a risky project, the financing should be a mix of both equity and debt. Cash flows generated and their timing in the due course of business determines the return on the invested project. 

Financing principle

The financing principle is essential in determining the method of financing to optimize the value of an investment. There are three ways of financing investment, issuing debt, equity, or a mix of both. It is a very critical course of action because too much debt can lead to a high risk of defaulting while on the other hand if too many stockholdings are diluted, it would curb the maximization of the profit.  

The diversification of the investment method depends on various factors such as a short-term goal or long-term goal, cost of financing, business structure, access to the equity market, and interest rates. The finances should be carried out in such a manner that it crosses the acceptable hurdle rate.

Dividends and return of capital

When the business of a firm grows and it comes to a state where the cash flows generated by the business exceed the acceptable hurdle rate, corporate finance has a role to determine whether the excess fund should be distributed to the shareholders or should be reinvested in the business to expand the business.

 Reinvesting the returns obtained is an ideal way because, in such a situation, the firm need not dilute its equity, nor do they need to take a debt that would increase its risk factor. At the same time, it is also pertinent to appease the shareholders by rewarding them with dividends. If corporate financiers believe that the rate of return is enough for the expansion of the firm’s business, they then direct firms to reinvest the funds to aim for expansion. 

Types of corporate financing

There are two chief types of corporate financing that come into play in the process of investing in a firm. 

Equity financing 

Equity financing is one of the most preferred methods of financing a firm’s business. Most firms nowadays prefer offering equity in exchange for obtaining finances. Angel investing is a type of equity financing, wherein; the shareholders of a firm dilute their shareholdings to get finances for their firm’s business. The equity of a company is divided into two types of stocks, that are:

Common stock

Common stock represents the ownership of shareholders in a corporation. The common stockholders of a corporation are entrusted with the responsibility of electing the board of directors and voting on various corporate policies. Common stock ownership is beneficial for the long term as it yields a higher rate of returns over some time. With rewards, there are also risks associated with common stock ownership because, in cases of liquidation, common stockholders receive their due only after all the preferred shareholders, and bondholders are paid their amount. 

Preference stock

In common stock, shareholders have great power in deciding the fortune of the company, or rather they are the ones deciding the fate of the company by carrying out various operations. Preferred stockholders receive a significant amount of dividends in comparison to the common stockholders. Preferred stockholders receive dividends on a monthly or quarterly basis. 

The dividends are set up according to a benchmark interest rate, similar to the London InterBank Offered Rate (an interest rate at which various global banks lend to each other in the international interbank market for short-term loans). Although preferred shareholders enjoy a better dividend yield, they are kept out of some of the important strategic conversations. Voting rights are not available to the preferred shareholders, still, people opt for preferred stock because it provides stability in future cash flow as it includes fixed dividends and equity from time to time. 

Debt financing

Debt financing is a method of financing in which funds are raised by obtaining loans from financial institutions or by issuing bonds. Debt financing involves paying off regular interest payments and eventually the entire principal is paid back after the loan tenure. The firm benefits by using debt financing because the ownership of the corporation is not diluted and as a result, the ownership of the company remains intact. Debt financing is generally used when the company requires a large sum of money, the corporation’s owner attaches some of the firm’s assets, and based on the values of assets, the loan is given to the corporation. 

However, while taking up a loan the corporation always ensures that a threshold level is maintained while taking up the loan so that the risk of defaulting is covered and the corporation carries out its smooth functioning. 

Indian financial system : an overview

A financial system is a system for the exchange of funds among a set of institutions like stock markets, banks, and insurance companies. A financial system is a chain of institutions that exchange funds among each other to finance a project, lead an investment, or pursue a return on financial assets. The financial system is instrumental in setting up rules and practices for borrowers and lenders who decide on the kind of projects to be financed, who would finance the investment projects and the terms regarding such investments. 

The financial market is a system involving borrowers, lenders, and investors, wherein, there is an exchange of an economic commodity and the goods are traded in the form of cash, credit, or equity. In the financial market, derivative instruments are traded which are essential contracts determined based on the performance of an underlying asset. The financial system can be organized through a market economy, central planning, or a combination of both. The financial system functions at both national and international levels, it is governed by rules which determine the usage of funds for various investment purposes and the eligibility of the participants. 

Examples of Indian financial systems 

Banking Institutions

  • Public banks,
  • Commercial banks,
  • Central banks,
  • Cooperative banks,
  • State-managed cooperative banks,
  • State-managed land development banks.

Non-banking financial institutions

  • Finance and loan companies,
  • Mutual funds,
  • Insurance companies.

Components of the Indian financial market

Financial institutions 

Financial institutions work in the arena of providing monetary help to corporations and individuals by depositing money, investing money, or managing money. Investment firms, banks, insurance companies, trusts, and brokerage ventures fall under the ambit of financial institutions. Financial institutions are an integral part of developing or maintaining a healthy economy. These institutions are administered by the administrative authority of a nation by placing certain regulations on these institutions. 

Financial institutions also provide consulting services to consumers regarding any particular investment. Financial instruments are classified into three categories based on their nature of activities. 

Regulatory and promotional institutions

All the four structures of the financial system are regulated by various financial regulatory authorities such as the Ministry of Finance, Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA), Securities and Exchange Board of India (SEBI), the Company Law Board, etc. 

RBI and the Securities and Exchange Board of India (SEBI) are the two major regulatory and promotional institutions governing all the financial systems. SEBI and RBI have the authority to supervise, monitor, legislate, and control the entire financial system. 

Banking institutions

Banking institutions are responsible for mobilizing people’s savings. Banking institutions establish an efficient mechanism for enabling the smooth exchange of goods and services. Banking institutions are further categorized into three types:

Commercial banks

Commercial banks are institutions that accept deposits and provide loans and other financial services, these financial institutions operate to seek profit. Apart from offering financial services, commercial banks also provide administrative services by making business advances, encouraging saving deposits, offering various fundamental investment schemes, cash management, schemes on bond investment, etc. Commercial banks are further divided into four types:

Public sector banks

Banks whose majority stake (more than 50% share) is held by the Government of India are referred to as public sector banks. State Bank of India, Punjab National Bank, and Bank of Baroda are some examples of public sector banks. The public sector holds 90% of the banking business in India and overall, 27 banks fall under the category of the public sector. 

Private sector banks

As the name suggests, the equity of private sector banks is held by the private shareholders. Owing to the liberalization in 1994, we are living in an era where private sector banks constitute a huge chunk of commercial banking. Private sector banks are registered as companies with limited liability. These banks deal with the management of the wealth of high-income groups. Private sector banks provide services in the form of tax advisory, financial brokerage, and assets management. 

Foreign banks

Foreign banks are those which are registered and headquartered in foreign countries but operate their branches in India. As per RBI recognition, 46 foreign banks are operating in India. Citibank, Hong Kong, Shanghai Banking Corporation, and Bank of Tokyo are some of the prominent names in the foreign bank category of financial institutions. 

Regional rural banks

Regional rural banks perform a very important feature in paving economic development in the rural part of the country. These banks were first established on October 2, 1975, and since then they have worked on their objective of developing the rural economy. State Bank of India, Syndicate Bank, Punjab National Bank, United Bank of India, and United Commercial Bank are the five commercial banks that are the drivers of regional rural banks by sponsoring them. National Bank for Agriculture and Rural Development (NABARD) regulates regional rural banks. Central Government (50% stake), state government (15% stake), and sponsor bank (35% stake) are the entities that own regional rural banks. 

Nonbanking institutions

Like banking institutions, nonbanking financial institutions also work towards mobilizing financial resources either directly or indirectly from people. What separates banking institutions from nonbanking financial institutions is the fact that they lend funds but they do not create credit. Life Insurance Corporation of India (LIC), Guaranteed Investment Certificate (GIC), and Development Financial Institutions are some of the prominent names in the nonbanking institutions. These institutions are governed by relatively lower authorities in comparison to the banks, non banking institutions are not subjected to any regulatory prescriptions which apply to the banks. 

Financial markets

Financial markets are the places where borrowers and lenders exchange assets like bonds, derivatives, and commodities. In financial markets, investors invest in stocks of the companies to obtain a return on the capital. When a business or a firm runs in profit, it tends to pass on a share of its profit to the investors. Financial markets allocate resources and create liquidity for businesses and entrepreneurs. 

The market allows buyers and sellers to trade their financial holdings. Financial markets play a very significant role in speeding up the economic growth of the country. Financial markets speed up the process of capital formation and provide for savings flow to investment. There are two components of financial markets:

Money market

In the money market, the borrowing and lending process lasts for a short period. The money market is associated with transacting in financial instruments and funds for the short term which has a maturity period ranging from a day to a year. The money market provides a great amount of liquidity and the market is mostly dominated by banks, financial institutions, and governments. 

Financial instruments traded in the money market are:

Treasury bill

A treasury bill is a financial instrument that is essentially a promissory note issued by the Reserve Bank of India to meet short-term fund requirements. Treasury bills have high liquidity and these instruments get issued at a price less than their face value and redeemed at face value.

Certificate of deposits

Certificates of deposits are short-term instruments issued by various commercial banks and financial development institutions. Certificates of deposits are issued to individuals, and corporations during times of tight liquidity when banks have slow deposit growth and the demand for credit is quite high. Certificates of deposits are negotiable and unsecured instruments that play an important role in mobilizing money for a short interval of time. 

Reserve Bank of India introduced the concept of certificate of deposits in 1989 to assist commercial banks in raising funds. The maturity period of these instruments ranges from 3 months to a year, issued in multiples of 25 lakhs and the minimum subject value is 1 crore.

Call and notice money market 

The call and notice money market is short-term repayable finance used for inter-bank transactions. Call money is a system wherein, transactions of funds occur on an overnight basis. This system is primarily used to maintain the high credit rate of banks. Notice money market is used in scenarios where banks need to hold funds for a longer duration, the maturity period of the notice money market ranges from two days to fourteen days. 

Commercial papers

Commercial papers were introduced into the financial market in 1990. They are short-term debt instruments issued in the form of promissory notes by listed companies having working capital of at least 5 crores. Commercial papers are an indicator of the market interest rates at any given point in time. 

Capital market

The money market is instrumental in dealing with short-term funds but the capital market engages in medium and long-term funds. The capital market provides facilitation for the marketing and trading of securities. The capital market consists of borrowings from financial institutions, foreign markets, and banks for the long term and the capital is raised by issuing securities in the form of shares, debentures, and bonds. These securities are traded in a market known as the Securities market. 

Segments of capital market

Primary market

The primary market is referred to as New Issue Market as it is a market consisting of new issues or financial claims. The primary market is involved in transacting with securities issued to the public for the first time. Since the capital market is associated with long-term (assets held for more than three years) manoeuvring of funds, the primary market allows borrowers to exchange financial securities for a longer time frame. A company may raise capital in the primary market by three methods:

Public issue

When a corporation invites the public at large to become an investor in their corporation by offering them a particular stake in their venture, it is called a public issue. There are five types of public issues:

Initial public offer (IPO)

The process of an unlisted company entering into the financial market by issuing shares or convertible securities of its companies or by offering its existing shares or convertible securities for sale, the process is known as an initial public offer. Once a company is listed, its shares and convertible securities can be traded on stock exchanges.

Further public offer (FPO)

FPO is a process in which a company that is listed on the stock exchange makes a fresh offer by issuing shares or convertible securities to the public. 

Rights issue

When shares or convertible securities are issued by the issuer to its existing shareholders on a particular date assigned by the issuer, it is referred to as a rights issue. 

Composite issue

A composite issue is one in which an already listed company offers shares on the public-cum-rights basis and makes concurrent allotment of the shares.

Bonus issue

An issuer makes an issue of shares to existing shareholders without any investment on their part based on the number of shares held by the shareholders on the record date, this phenomenon is known as a bonus issue. The shares are issued in a particular ratio to the number of securities held on a record date out of the company’s reserved shares. 

Private placement 

When a company decides to offer shares to a selected group of individuals or institutions such as mutual funds, insurance companies, and banks to raise capital, it is known as a private placement. There are three kinds of private placements, those are:

i) Preferential issue

When a public listed company allots shares to a particular group of venture capitalists, individuals, and companies on a preferential basis, such an allotment of shares is known as a preferential issue.

ii) Qualified institutional placement

When qualified institutional buyers such as venture capital funds, mutual funds, insurance funds, etc are offered non-convertible securities or equity shares for selling by a listed organization to raise capital is known as Qualified Institutional Placement. 

iii) Institutional placement programme

An institutional placement program is that part of Private Placement wherein, a public listed company or the promoters of the company make a follow-on offering of equity shares, where the stakes are allotted only to Qualified Institutional Buyers to purchase minimum public shareholding. 

Financial instruments

Financial instruments provide a gateway for the flow of capital to investors all around the world. Financial instruments are documents that may be real or virtual and represent a legal agreement involving any kind of monetary value. Financial instruments can be in the form of cash, a contractual right of delivering or receiving cash, or any other type of financial instrument. 

Types of financial instruments:

Equity-based financial instruments

Equity-based financial instruments are those which represent ownership of an asset. Common stock, preferred stock, and convertible debentures are some of the prominent examples of an equity-based financial instrument.

Debt-based financial instruments

Debt-based financial instruments are those which represent loans made by an investor to the owner of assets. Bonds, certificated, and debentures are examples of debt-based financial instruments.

Foreign exchange Instruments

Foreign exchange is a trading platform where one currency is traded with another one. The transactions associated with foreign exchange take place in the foreign exchange market which is also known as the Forex Market. Currency futures, currency swaps, and currency options are some examples of foreign exchange instruments.

Financial services sector

An economy comprises various segments which are referred to as sectors, all the sectors cover different businesses and provide goods and services to consumers. A sector consists of various companies which offer similar kinds of services. For example, a company offering medical services comes under the healthcare sector or a company offering cellular telephone service comes under the telecommunication sector. Similarly, institutions offering financial services come under the financial services sector. Commercial banks, mutual funds, insurance companies, and non-banking financial intermediaries are some of the institutions covered under the financial services sector. 

The financial services sector is focused on increasing earnings and equity market capitalization. International Monetary Fund has defined financial services as the process by which consumers or businesses acquire financial goods. Financial services companies are responsible for managing money. 

Roles of financial services

  • Financial services play a massive role in the economic development of a country. Financial services assist businesses or corporations by giving out loans, mortgages, etc. The loans provided by the financial services are further used by corporations to purchase assets or to invest in any other fundraising source. 
  • The entrepreneurial era that we are witnessing in India has been given direction by financial services institutions. Banks do not give loans to new budding entrepreneurs because of credibility issues, financial services step in to rescue the aspiring entrepreneurs by providing them loans to start their ventures. Angel investors and venture capitalists are some of the common ways for an entrepreneur to seek money for starting their entrepreneurial journey. 
  • Financial services form a chain of networks wherein each branch is linked to one another either directly or indirectly. For example, a person invests his money in the stock market and gets a return, he later decides to purchase a house with the money that he received and gets his house insured. In this scenario, the individual has circulated his money in three segments (stocks, buying house, and insurance company) and thus, a chain of networks in the financial services sector is established. 
  • Investors have got the choice to invest their money due to a vast array of financial services. The better the services, the more would be the demand by the investors. Consequently, financial services promote healthy competition amongst the firms offering financial services which is beneficial for the business of the country as the power is in the hands of investors. 

Functions of Indian financial system

The financial system is a pillar of a country’s economy and is extremely instrumental in shaping the way for the economic development of the country. Through the constant exchange of funds among the institutions, circulation is maintained across the sector and a network chain is formed of financial systems. There are certain key functions that a financial system performs:

Savings mobilisation

The financial system is extremely effective in mobilizing savings which are further used for other productive purposes. The financial system obtains funds from various business firms, central government, state government, and other public sector units. The financial system mobilizes the savings by moving them into financial assets like bank deposits, post office saving deposits, bills, bonds, equities, etc.

Allocation of funds

The financial system arranges credit smoothly and efficiently. Although, indigenous bankers and money lenders have been allocating funds for a long time, their system of allocating funds is disorganized. Since the inception of the financial system, the financial sector, financial institutions, and financial markets have been completely organized. Subsequently, the allocation of funds has become an extremely smooth and easier process. 

Development of trade

The financial system of the country not only benefits domestic trade but also foreign trade is being promoted by an effective financial system. To promote domestic trade, financial instruments such as bills are discounted by the financial system and when it comes to foreign trade, it is promoted by commercial banks through per shipment and post-shipment finance. 

Settling commercial transactions

The financial system is responsible for settling commercial transactions. Various financial claims which arise due to the sale of goods and services are settled by the financial system. All transactions including sales of goods and services are monitored in terms of money since money is a legally recognized instrument. 

The financial system has evolved over some time and has adopted instruments like credit cards, cheques, and demand drafts for settling commercial transactions. These instruments are used by the financial system because they have been legally recognized as money substitutes. 

Protecting risks

We have often come across various television commercials, wherein, life insurance, and health insurance are being advertised, these life insurance, healthcare policy, and property insurance are also covered under the financial system. By selling these insurances, the financial market protects people from risks associated with health and income.

Ease of liquidity

Liquidity simply means converting an asset to cash. The financial market provides an opportunity for investors to liquidate their investments which are in the forms of shares, bonds, and debentures. The market experiences price fluctuation daily owing to the operational forces of the market and other factors such as demand and supply. 

Economic development 

The Indian economy is a developing economy and still has a long way to go. The financial system provides the force to push the economic development of the country. The government plays a massive role by influencing macroeconomic variables like inflation or interest rate. This allows corporations to avail of credits at a cheaper rate, which further works towards boosting the economy of the country, and as a result, the overall economic development goes significantly up. 

Conclusion

Corporate financing is one of the most important aspects of developing an economy. Corporate financing deals with all the major issues of a corporation such as seeking funds, making investment decisions, capital structuring of the company, etc.  

A financial system is a well-established institution wherein different parts of the financial system work in collaboration with each other to fund an entrepreneurial venture, help borrowers and lenders, etc. A financial system is a well-organized chain of institutions that exchange funds amongst themselves depending upon the requirements of each segment of the institution. These systems work in unison to create a chain of financial networks which proves to be beneficial in developing an economy. 

Frequently asked questions

What is angel investment?

Angel investment is a phenomenon wherein an individual known as an angel investor invests in a start-up or business in exchange for equity or convertible debt.

What is the difference between the money market and capital market?

In the money market, the process of lending and borrowing lasts for a short period in comparison with the capital market. 

What are the four components of a financial system?

The four components of a financial system are: 

1. Financial institutions, 

2. Financial markets, 

3. Financial instruments, and 

4. Financial services sector. 

References

  1. https://investortonight.com/blog/financial-system/
  2. https://businessjargons.com/types-of-issue-of-shares.html
  3. https://www.sebi.gov.in/sebi_data/commondocs/subsection1_p.pdf
  4. https://pscnotes.in/role-of-financial-services-in-economic-development/
  5. https://caknowledge.com/institutional-placement-programme/
  6. https://www.indianeconomy.net/splclassroom/what-is-call-money-market-cmm/

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

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

https://t.me/lawyerscommunity

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

Download Now

Section 439 CrPC

0

This article has been written by Naveen Talawar, a law student at Karnataka State Law University’s law school. The article deals with Section 439 CrPC, its scope, power of the High Courts and the Court of Sessions to grant, refuse or cancel the bail along with some recent cases in detail. 

This article has been published by Sneha Mahawar.

Introduction 

Bail is a fundamental component of any criminal justice system that ensures the accused will receive an equitable and fair trial. If someone is being held for a crime they didn’t commit, they have the right to request bail, and the police officer is required to present them in court. A person is released on bail if they agree to appear in court as instructed or summoned by the court to answer the charge.

The Criminal Procedure Code,1973 does not define bail. According to Wharton’s Law Lexicon, bail is defined as “releasing a person who has been arrested or imprisoned on security being taken for his appearance on a day and at a certain place.” For the purpose of bail, offences are classified into two categories: bailable and non-bailable. Chapter XXXIII of the CrPC deals with bails and bonds. Bails in various circumstances are specifically covered in Sections 436, 437, 438, and 439. Section 436 provides for bail in bailable offences and Section 437 deals with bail in the case of non-bailable offences, Section 438 with anticipatory bail, and Section 439 with the special powers of the High Court or Sessions court regarding bail. This article mainly focuses on Section 439 of the CrPC.

Special powers of High Courts and Courts of Sessions regarding bail

The High Court and Sessions Court have some special powers under Section 439 of the Criminal Procedure Code, 1973, when it comes to bailing out someone who has been accused of an offence and is in custody. Only the High Court and the Sessions Court have jurisdiction under this section; if a Magistrate refuses to grant bail to an accused person, the High Court or the Court of Session may grant bail in appropriate cases.

Section 439 CrPC

According to Section 439 (1) (a), the High Court or Court of Session may direct the release on bail of any person who is in custody and has been charged with an offence, and if the crime is of the kind listed in subsection (3) of Section 437, the court may impose any necessary conditions for the purposes mentioned in that subsection.

Under Section 439(1) (b), the High Court or the Court of Sessions can set aside or modify any condition imposed by a magistrate when releasing an accused on bail.

However, before granting bail to a person accused of an offence that is exclusively triable by the Court of Session or that, though not so triable, is punishable with life imprisonment, the High Court or Court of Session shall give notice to the public prosecutor, unless it is of the opinion, for a reason to be recorded in writing, that such notice is not practicable. 

According to Section 439 (2), the High Court or Court of Session may direct that any person who has been released on bail under this Chapter be arrested and commit him to custody.

Amendment to Section 439 CrPC

The Criminal Procedure Code was amended in 2018, and the following provisions were added to Section 439.

  1. After the first proviso, another provision was added to subsection (1), which states that “the high court and the session court shall, before granting bail to a person accused of an offence triable under sub-section (3) of Sections 376, 376AB, 376DA, and 376DB of the Indian Penal Code, give notice of the applicant for bail to the public prosecutor within a period of 15 days from the date of receipt of such notice.”
  2. Following sub-section (1), a new sub-section (1A) was added, which states that the presence of the informant or any person authorised by him is required at the time of hearing the application for bail of the person under sub-section (3) of Sections 376, 376A, 376DA, and 376DB of the Indian Penal Code.

Meaning of expression “In custody”

A person can move to the High Court or the Court of Session for bail under Section 439 only when he is in custody, and a person is considered to be in custody within the meaning of this section if he is being held under duress by the investigating agency, another police or allied authority, or because he is under the control of the court after being remanded by judicial order, or because he has offered himself to the court’s jurisdiction and submitted to its orders by physical presence.

According to Section 439, CrPC, a person is “in custody” not only when the police arrest him or present him before the magistrate for remand or other forms of custody, but also when he surrenders before the court and complies with its orders. 

In Niranjan Singh v. Prabhakar Rajaram Kharote and others (1980), Justice VR Krishna Iyer stated, “Custody, in the context of Section 439, is physical control or, at the very least, the physical presence of the accused in court coupled with submission to the jurisdiction and orders of the court.” Furthermore, it was noted that no person accused of an offence may apply to the Court for bail under Section 439 unless he is in custody. By surrendering to the court and submitting to its orders, he is declared to be in judicial custody and, as a result, is eligible for bail.

In Sundeep Kumar Bafna v. the State of Maharashtra (2014), the Supreme Court held that an accused in custody can approach the Sessions Court or the High Court directly for regular bail under Section 439 even if he has not approached the magistrate in the first instance.

Scope of Section 439 CrPC

The marginal note of Section 439 clearly shows that the section has used the term “special power,” which in a sense means special or greater, implying that these courts, specifically the High Court and the Court of Sessions, have greater power to grant and cancel bail. They have the power to modify the conditions and impose any other condition on bail granted by a magistrate under Section 437. The marginal note to Section 439 also demonstrates that the bail provision grants concurrent jurisdiction. However, this does not imply that the accused can file an application in both courts at the same time. So, in most cases, an application should be made first to the session court and then to the High Court if the Court of Sessions rejects it.

The powers given in section 439 are unrestricted by any limitation other than that which controls all discretionary powers vested in a court. Though the discretion granted by Section 439 is unrestricted in some ways and broad enough to allow bail in the case of a non-bailable offence of the worst kind, it must be exercised judicially in accordance with well-established principles.

In Kanwar Singh Meena v. the State of Rajasthan and Others (2012), the Court noted that even though Section 439 of the Code gives the Court of Session and the High Court more power in granting and cancelling bail, these courts also follow the same principles, including; 

  • The gravity of the crime, 
  • The character, evidence, position and status of the accused, 
  • The likelihood of the accused fleeing from justice, 
  • The likelihood of tampering with evidence and influencing witnesses, and so on. 

The Court also stated that each criminal case presents its own unique factual situation, which influences the court’s decision on bail.

The Supreme Court ruled in Sundeep Kumar Bafana v. the State of Maharashtra (2014) that there are no restrictions on the High Court or Sessions Court hearing a bail application if the accused is in custody. The decision has ended the long-standing practice of submitting a regular bail application to a magistrate with jurisdiction, having it denied, and then requesting bail from the Sessions Court or High Court.

Grant or refusal of bail 

The provisions of the Criminal Procedure Code give the criminal court’s discretionary jurisdiction to grant bail to accused pending trials or appeals convictions. Because the jurisdiction is discretionary, it must be exercised with great care and caution, balancing an individual’s valuable right to liberty with the interests of society as a whole. The granting of bail under Section 439 of the Criminal Procedure Code is a matter of judicial discretion. The court’s discretion in granting or refusing bail, like any other discretion vested in it as a judicial institution, is not unstructured. The courts are required to state the reasons for granting or refusing bail, which may be in brief .

The historical context of the bail provision has been elaborately and clearly explained in a decision delivered in Nikesh Tara Chand Shah v. Union of India (2018) dating back to the days of the Magna Carta. It was noted in that decision that bail should not be withheld as a punishment. This assertion was supported by the case of Gurbaksh Singh Sibbia v. the State of Punjab (1980). A reference to Emperor v. H.L. Hutchinson (1931) was also made, in which it was stated that bail is the rule and refusal is the exception. The provision for bail is therefore age-old and the liberal interpretation to the provision for bail is almost a century old, going back to colonial days.

Although bail is a rule and jail is an exception, the accused who has committed grave, serious, and heinous offences falls under the exception rather than the rule. The court is not required to determine whether the accused is guilty or not while considering a bail application. It is sufficient if adequate grounds are established to connect him to the offences.

In Dataram Singh v. State of Uttar Pradesh and Anr., (2018), the Court decided that while the judge hearing the case has complete discretion to grant or deny bail, that discretion must be used judiciously, humanely, and compassionately. Furthermore, bail conditions should not be so stringent that they are impossible to satisfy, thereby making the grant of bail illusory.

In the case of Lt. Col. Prasad Shrikant Purohit v. the State of Maharashtra (2018), the law governing the granting or refusal of bail is well settled. The Court should exercise its discretion sparingly and not as a matter of course while granting bail. Though a detailed examination of evidence and elaborate documentation of the merits of the case are not required at the stage of granting bail, it is still important to explain in such orders the reasons for reaching a prima facie conviction that bail was appropriate, especially in cases where the accused is charged with a serious offence. Any order that lacks these reasons suffers from non-application of mind.

Further, it was stated that the following factors must be taken into account by the court while deciding on the granting of bail;  

  1. The nature of the accusation, the severity of the punishment if convicted, and the nature of the supporting evidence. 
  2. Reasonable apprehension of tampering with the witness or of a threat to the complainant. 
  3. Prima facie court satisfaction in support of the charge.

The Supreme Court ruled in Ramesh Bhavan Rathod v. Vishanbhai Hirabhai Makwana (Koli) and another (2021) that Section 439 of the CrPC mandates that the reasons for granting or denying bail must be recorded.  No matter how briefly, the courts that grant bail must use their judicial judgement when making their decision. It should be noted that when issuing a bail order, the Court is required by law to provide (at least brief) reasons. As a result, a bail order that doesn’t have sufficient reasons to support it may be set aside for lack of due diligence. 

Cancellation of bail 

According to subsection (2) of Section 439, the High Court or Court of Session has the power to cancel any bail that has been granted by it or another criminal court in accordance with Chapter XXXIII, re-arrest him and place him in custody. Cancellation of bail shouldn’t be done frequently. If it appears to the superior court that the court granting bail acted without using its judgement or on irrelevant information, or if the court neglected to take into account any statutory prohibition against granting bail, an order for cancellation of bail may be issued. The court must consider all pertinent factors when deciding whether to deny a bail cancellation application.

In the cases of Mahipal v. Rajesh Kumar @ Polia and another (2020) and Neeru Yadav v. State of Uttar Pradesh (2016), the Supreme Court has categorically held that the court may exercise its power under Section 439(2) of the CrPC to cancel the bail granted in favour of the respondent if the order in question is absolutely perverse and completely unjustifiable.

In the case of Myakal Dharmarajam and others v. State of Telangana and others (2020), the Supreme Court discussed the criteria to be taken into account while granting and cancelling bail; the principles are also summarised. The rejection and cancellation of bail were also distinguished, and it was decided that while the former stands on its own, the latter is a harsh order because it restricts the individual’s liberty and should not be used carelessly.

The Supreme Court ruled in X v. State of Telangana (2018) that bail should not be cancelled unless a cogent case based on supervening events is made and that the Court cannot exercise its power under Section 439(2) of the CrPC.

Grounds for cancellation of bail

The section gives the court the power and discretion to cancel the bail, but it makes no suggestions regarding when or how the discretion is to be exercised. 

In Public Prosecutor v. George Williams (1951), the Madras High Court listed five instances where a person granted bail may have the bail cancelled and be recommitted to jail:

  1. Committing the same offence for which they are facing charges or have already been found guilty while free on bail, proving they are completely unfit to be out on bail.
  2. If he obstructs the investigation, as he will if he prevents a search for the corpus delicti or other incriminating evidence in locations under his control while out on bail.
  3. If he tampers with the evidence by coercing prosecution witnesses, altering the crime scene to erase signs of the crime, etc. 
  4. If he flees the country, goes underground, or goes beyond the control of his sureties; and 
  5. If he engages in acts of violence against law enforcement, witnesses for the prosecution, and those who have or are attempting to bring charges against him.

The Supreme Court considered the elements to be taken into account while directing the cancellation of bail in Dolattam v. State of Haryana (1995). It stated that generally, the grounds for the cancellation of bail are as follows :

  • Abuse of any concession made to the accused in any way, including interference with or attempts to interfere with the administration of justice and evasion or attempts to evade it. 
  • Another reason for bail cancellation is the court’s satisfaction with the possibility of the accused absconding based on the evidence presented.

According to Tulaseedharan Nair v. State of Kerala, 2006, interference with the administration of justice, hindering the investigation, abusing the freedom granted by the Court, intimidating witnesses, and other similar offences are typically and ordinarily cited as justifications for cancelling bail. Further, it was noted that these are merely illustrative and are not exhaustive grounds. Additionally, it has been noted that the cancellation of bail is a harsh order because it restricts the individual’s liberty and should not be used carelessly. It is up to the competent judicial discretion of the superior courts. The court has the authority to cancel bail when the investigation requires it to do so.

The court stated in Krishna Reddy v. State (2007) that the likelihood of an accused fleeing justice and tampering with evidence while on bail are two factors for cancellation of bail.

In Shabana Taj v. State of Karnataka (2022), the Karnataka High Court ruled that courts may use their power under Section 439(2)in two circumstances: first, when the court’s conditions are violated; and second, when the trial court makes an arbitrary or perverse decision.

The High Court and the Court of Session have extensive powers over bail under Section 439 of the Criminal Procedure Code. However, the High Court and the Sessions Court follow the same guidelines as other courts while granting bail. The seriousness of the crime, the nature of the evidence, the accused’s relationship to the victim and the witnesses, his likelihood of eluding justice and committing the same crime again, his potential to tamper with the witnesses and obstruct the administration of justice, and other factors must all be taken into account.

Each criminal case presents a distinct factual scenario, and as a result, the court may be required to consider grounds specific to that case. The court is only required to rule on whether the accused has a prima facie case. The court is not required to conduct an in-depth examination of the evidence gathered by the police and make comments on it. Such evidence evaluation and premature comments will almost certainly deny the accused a fair trial.

Concurrent jurisdiction 

It is now well established that there is no legal impediment to a party approaching the High Court or the Sessions Court with an application for ordinary bail under Section 439, Cr PC. The power granted to the High Court or the Sessions Court by Section 439 is an independent power, and when the High Court exercises such power, it does not exercise any revisional jurisdiction, but rather its original special jurisdiction to grant bail.

As a result, even though the High Court and Sessions Court have concurrent jurisdiction under this section, the fact that the Sessions Court has refused bail under this Section does not preclude the High Court from hearing a similar application on the same facts and for the same offence. 

The decorum and hierarchy of the courts, however, demand that if the party chose to approach the High Court first and the High Court dismissed the application, the application will be dismissed if the Sessions Court is approached with a similar application based on the same facts. The accused is not permitted to file for bail in the Sessions Court and the High Court at the same time.

Some recent cases

Kirankumar Vanmalidas Panchasara v. State of Gujarat (2022) 

Facts 

As per the facts of the case, an FIR was filed against the petitioner for offences punishable under Sections 406, 420, 114, and 120(B) of the IPC, as well as Section 3 of the Gujarat Protection of Depositors’ Interests (In Financial Establishments) Act, 2003. The petitioner was arrested in response to the aforementioned FIR, and an application for regular bail was filed under Section 439 of the CrPC. The trial court agreed, subject to certain conditions. The first condition was that the applicant produce a bank guarantee of Rs.33,06,695/- within two weeks of his release from custody. The second condition stated that if the I.O. failed to recover the amount, the bank guarantee would be forfeited in favour of the complainant state.

Issue

Whether the Court, in exercising its power under Section 439 of the CrPC, could impose a condition that amounted to exercising powers envisaged under a different law, namely the Gujarat Protection of Interest of Depositors (In Financial Establishments) Act, 2003.

Judgment

After reviewing the provisions of the Act, the Court determined that the Act itself had an inbuilt mechanism for dealing with offences related to the Act. The Competent Authority was to take the necessary actions in relation to the financial establishment, after which the Designated Court was to either make an order of attachment absolute or a portion of the assets or money realised from the attachment or to cancel the order of attachment. As a result, the trial court’s conditions imposed under Section 439 of the CrPC were determined to be completely beyond its jurisdiction because they amounted to usurping powers contemplated by Section 10(6) of the Act without following any prescribed procedure.

It was held that while exercising its powers under Section 439 of the CrPC, the Court could not impose any condition that amounted to the court exercising powers contemplated by another enactment. The court ruled that any such condition would be completely outside of the court’s jurisdiction. As a result, the order was modified.

Narugahr Songhar Goswami v. the State of Gujarat (2022)

Facts

The brief facts of this case are that 69 bags of poppy straw weighing 1371.72 kg were seized from the property of a 66-year-old man. As a result, an FIR was filed for offences of Sections 15, 25, and 29 of the NDPS Act. The FIR was filed in 2020 after police received information that several people were transferring liquor from one truck to another in an abandoned Essar Company petrol pump. The police discovered several vehicles, including a truck, and several people transferring goods. The goods being transferred were later revealed to be poppy straw rather than liquor.

The applicant asserted that neither he nor anyone else was located close to the crime scene, nor was he mentioned in the FIR. He did not possess the illegal substance, nor had he instigated or participated in such activities, either intentionally or by illegal omission. 

The APP objected to this contention on the grounds that the applicant, one of the property’s owners, had permitted the use of the property’s premises for the commission of the crime. As a result, Sections 25 and 37 of the Act were applicable.

Section 25 imposes penalties for allowing property, etc., to be used in the commission of an offence. The Court also took Section 37 of the Act into account, which specifies strict bail requirements when recovered contraband is in commercial quantities.

Issue

Whether the court can grant bail to a senior citizen who was not present at the scene of the crime or in the near vicinity?

Judgment

The Gujarat high court rejected a 66-year-old man’s request for regular bail under Section 439 of the Criminal Procedure Code, from whose property the contraband (Poppy Straw) worth Rs. 16.6 lakh was seized.

Justice SH Vora observed that even though the elderly man was not present at the crime scene or in the immediate area, Section 25 of the Narcotic Drugs and Psychotropic Substances Act, 1985 was applied to the case because he was the property owner.

Conclusion

Section 439 of the Criminal Procedure Code grants the High Court or Court of Session special powers regarding bail. Even if a Magistrate denies bail, the High Court or Court of Session may grant it in appropriate circumstances. The granting of bail under Section 439 of the Criminal Procedure Code is at the discretion of the judge. As a result, the court’s discretion in granting or refusing bail, like that of any other judicial institution, must be exercised with great care and caution. 

Frequently Asked Questions (FAQs)

What are the special powers of the High Court and the court of sessions regarding bail?

Both the courts have the powers of granting bail, modification of conditions, and cancellation of bail.

Can a court grant conditional bail while exercising its powers under Section 439?

Yes, the court can grant conditional bail under section 439 of the CrPC. The Andhra Pradesh High Court recently granted conditional bail to the petitioner who was charged with a non-bailable offence because there had been significant progress in the investigation since the time of the arrest in Mara Manohar v. the State of Andhra Pradesh (2022).

Can a court cancel bail based on vague allegations? 

No, the court cannot cancel bail on the basis of vague allegations. The Andhra Pradesh High Court recently ruled in Vaddu Lakshmidevamma @ Lakshmi Devi v. the State of Andhra Pradesh (2022) that if there are vague allegations against the accused without any solid evidence, bail granted under Section 439(2) of the Code of Criminal Procedure cannot be cancelled.

References


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

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

https://t.me/lawyerscommunity

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

Download Now

Non-cognizable offences

0

This article is written by Parth Verma, a student of the School of Law, Christ University, Bengaluru. This article seeks to explain the concept of non-cognizable offences and its various examples. In addition, the article also aims to determine the impact of such offences on society.

This article has been published by Sneha Mahawar.

Introduction

There are a large number of offences that we witness in our day-to-day lives for which the wrongdoer might be punished. The nature of different crimes might vary. While some offences might be serious, others won’t require a very high magnitude of punishment. Even the procedure to be followed for different offences varies. In the case of less serious offences, i.e., non-cognizable offences, which generally have an impact only on an individual or a few individuals, police require an authorised arrest warrant in order to arrest the wrongdoer. However, when an offence is of a very serious nature and poses a threat to the entire society in general i.e., a cognizable offence, the police need not issue an arrest warrant. The police can directly arrest the person for the purpose of taking quick action. This is one way of classifying various criminal offences that might be committed in a country. 

With a rapid increase in the crime rate in India, it has become very important for the general public to be aware of the type of crime committed against them and the rights available to them in that particular situation in order to obtain justice. This article aims to delve deeper into various aspects and examples of non-cognizable offences to fulfil this purpose.

What are non-cognizable offences

A non-cognizable offence refers to a criminal offence committed by an individual which is generally less serious in nature. In other words, such offences only have an adverse impact on the affected person or set of people and not on the entire society in general. There are various examples of non-cognizable offences, the explanation and punishment for which have been stated in the Indian Penal Code, 1860. Some of its examples are cheating, defamation, forgery, or criminal assault. 

For arresting a person for such an offence, the police is required to have a valid arrest warrant without which they would not have the required authority to arrest. In such cases, they also won’t have the authority to investigate any crime without the due consent of the court. Only when a complaint is filed before a judge in a court of appropriate jurisdiction, an investigation can be initiated as per their orders. An arrest warrant needs to be issued only when the trial court finds the person guilty of any non-cognizable offence. Such offences are mostly bailable in nature i.e., the person convicted has the right to obtain bail in the event he/she has been arrested. The person concerned must be released once a bail application has been filed before the police. Procedural aspects relating to non-cognizable offences have been laid down in the Code of Criminal Procedure, 1973

Legal provisions relating to non-cognizable offences

There are various provisions relating to the non-cognizable offences under the IPC and the Code of Criminal Procedure that go as follows:

  1.  Section 2(l) of the Code of Criminal Procedure, 1973 defines non-cognizable offences. It refers to all those offences for which the police have absolutely no authority to arrest any person without a valid arrest warrant.
  2. Section 155 states that the police don’t have any legal authority to record an FIR (First Information Report) regarding any non-cognizable offence, unless they have obtained permission from the magistrate for it.
  3. Under Section 158 of the Code of Criminal Procedure, 1973 a police report is to be duly submitted to the concerned magistrate to inform him/her that a police investigation is taking place on a given matter. This report is to be submitted for both cognizable and non-cognizable offences in order to help the magistrate keep track of the inquiry that is taking place. 
  4. As per Section 159 of the Code, the magistrate can decide whether he/she wants the police to proceed with an investigation or not. Further, they can also issue directives for carrying out the investigation. 
  5. All non-cognizable offences as well as their punishments have been defined in the IPC, 1860. These offences are provided in the First Schedule of this code.

These are some of the provisions relating to the concept of non-cognizable offences, including both their substantive and procedural aspects under different codes.

Features of non-cognizable offences

Less serious offence

An offence committed by a person should be of a less serious nature. At the same time, it shouldn’t lead to higher penalties. Offences such as defamation, cheating, or nuisance are included under its purview and they generally impact only a particular individual. As a result, such offences do not pose a major threat to society. 

Bailable

Non-cognizable offences are generally bailable in nature. It means that a person can be granted bail by the police upon filing a bail application. The primary reason behind granting bail is that the person hasn’t committed a huge offence and hence the right to get bail must be provided to them to ensure fair justice.

Presence of an arrest warrant

In order to arrest any person committing a non-cognizable offence, the police are required to have a valid arrest warrant. This arrest warrant is required to be issued by a judicial magistrate or by a court of appropriate jurisdiction. The police can not start an investigation without approval from the court.

No recording of first information report (FIR)

The police, in the case of a non-cognizable offence, are not allowed to receive or record the First Information Report. They are only permitted to do so when they have obtained the required permission from a judicial magistrate. However, this could sometimes go against the aggrieved person. This is so because taking appropriate action against the wrongdoer might become a very lengthy process due to the requirement of prior permission from the court for all purposes.

Police investigation

Once any particular issue has been brought before the judicial magistrate, they might direct the police to conduct an investigation after considering the matter of the case. After carrying out the complete investigation, they would be required to prepare several reports to be submitted before the appropriate court or judicial magistrate. The reports that are required to be submitted by the police are a preliminary report and a final report.

Preparation of charge sheet

Charge sheet refers to a document consisting of various charges which are alleged against the person under trial. This charge sheet is prepared after the reports from the investigation have been submitted by the police. The trial of the person then takes place to verify various charges against him/her in the charge sheet. 

Trial of accused

In a trial, if a person has been convicted by the court of an offence that is non-cognizable in nature, an arrest warrant could be issued. However, this could only be done once the decision has been passed by the trial court. 

Examples of non-cognizable offences

There are various non-cognizable offences stated under the IPC, 1860. Some of these are as follows:

Defamation

The offence of defamation has been defined under Section 499 of the IPC, 1860. It refers to any statement, made in an oral or written form that aims to injure the reputation of a person among rational members of society. Such a statement must refer directly to the person concerned and should lower their moral and intellectual character in any given manner. Defamation can also be of various types, such as libel (written defamation), slander (oral defamation), and innuendo (indirect defamation).

For example, a person ‘A’ writes in a magazine that a particular politician ‘B’ was involved in bribery. However, his claims were proved to be false after investigation. In this situation, ‘A’ can be held liable for defaming ‘B’ among prudent members of society. This is an example of libel.

Cheating

According to Section 420 of the IPC, any person who is involved in cheating or dishonestly inducing a person to give, destroy, or alter any property can be held liable for cheating. There is a need to prove the intention of a person to cheat for it to be considered an offence. However, this is strictly related to property matters and doesn’t apply to any other aspects that could be subjected to cheating.

Public nuisance

Under Section 268 of the IPC, public nuisance has been defined as any act or omission that causes an injury or annoyance to any occupier of a property. Under Section 290, its punishment has been defined and it is declared to be a non-cognizable offence. Such an act is likely to impact society, in general, thereby violating the fundamental rights (certain basic rights) of citizens. However, any act causing a public nuisance should not be excused on the ground that it was for the convenience or advantage of an individual.

For example, a person ‘A’ established a wheat grinding industry in a residential area, and it releases a huge amount of dust into the air. This would make the air harmful for breathing, thereby having an adverse impact on the people in the nearby areas. This would constitute public nuisance since it is causing discomfort to the entire neighbourhood at large.

Criminal assault

As per Section 351 of the IPC, assault refers to any act or gesture which creates a threat or an apprehension in the mind of the person that some criminal force might be inflicted upon him/her. The words used should be provocative in nature. Mere use of normal words without any ill intention isn’t going to constitute an assault. It is a non-cognizable offence as has been stated under this section and the harm or threat being imposed through the gesture must be reasonably foreseen and immediate.

Procedure to be followed for a non-cognizable offence

The entire procedure for a non-cognizable offence is quite different from the procedure to be followed in the case of a cognizable offence. There are several steps involved, which are as follows.

  1. The police as stated earlier, don’t have the power to record a First Information Report. They can only take action when they are ordered by the magistrate to do the same. 
  2. A complaint is to be directly filed with a judicial magistrate. When the police receives an order from the magistrate, they are required to investigate the matter and obtain more information.
  3. While carrying out the investigation, the police are required to prepare several reports. These reports are further submitted to the magistrate.
  4. The officer in charge of the police station is required to submit a preliminary report to the judicial magistrate as per Section 157 of the Code of Criminal Procedure, 1973.
  5. Under Section 168 of this Code, the junior officer is required to submit a report to the officer in charge of the police station for the purpose of investigation.
  6. At the end of the investigation, a final report is required to be sent to the concerned magistrate as per Section 173 of the Code.
  7. On the basis of the investigation reports and trial conducted at later stages, a magistrate can order the police to issue an arrest warrant.
  8. It is only when a person has been convicted in a trial that an arrest warrant can be issued by the police and they can arrest the convict. However, the convict has the right to apply for bail and could also appeal against the decision of the trial court. 

Hence, it can be concluded that a convict is certainly not deprived of his/her basic right to a fair trial for committing such offences. This is the entire procedure that is required to be followed in the case of a non-cognizable offence.

Relevant case laws 

Public Prosecutor v. Ratnavelu Chetty (1926)

Facts of the case

This case laid down one of the most important essentials with respect to non-cognizable offences. An appeal was made by the public prosecutor in this case against the order of acquittal passed by the sessions court for an alleged offence of making false charges against the respondent. 

Issues before the Court

The question before the court, in this case, was whether the charge sheet in a non-cognizable offence could act as a report or not.

Judgement of the Court

The Court in this case laid down that when any information is received by the police in respect of a non-cognizable offence, they are required to inform the magistrate. Only a magistrate has the power to initiate the proceedings. On the other hand, when a person files a complaint before any magistrate, certain formalities are required to be completed, such as a sworn statement. A magistrate also has the power to dismiss a complaint under Section 203 of the Code of Criminal Procedure, 1973. 

Om Prakash and Anr v. Union of India (2011)

Facts

In this case, a petition had been filed when the Central Excise Act was introduced in 1944, which provided for certain offences to be non-cognizable. One of the learned counsel filed a petition that the provisions were arbitrary and needless at times. Further, there was ambiguity regarding whether the offences should be bailable or non-bailable.

Issues before the Court

The issue before the Court was whether the offences under the Act are cognizable or non-cognizable and whether they should be bailable in nature.

Judgement

In this given case, the Court interpreted the powers of the police in case of non-cognizable offences. They stated that a police officer, or in the instant case, the excise officer, can’t arrest any individual without a valid arrest warrant. The same provision is stated in Section 41 of the Code of Criminal Procedure, 1973 which gives the various conditions under which the police can arrest a person with or without a warrant. 

Dr. Kamal Kishore Kalra v. State of NCT of Delhi (2008)

Facts of the case

In this case, it was contended by the prosecution that they had received a piece of information stating that a person had stolen government medicines with the intention of selling them. It was recognized to be a non-cognizable offence under the Delhi Police Act, 1978. However, the inquiry was conducted by the police without permission from the magistrate, which is always required in the case of a non-cognizable offence. 

Issue before the court

The court was faced with the question of whether the investigation was null and void if it was conducted by police without the magistrate’s permission.

Judgement of the Court

The Court, in this particular case, declared that if the police were initially carrying out an investigation under the procedure of a cognizable offence but later on, it transpires to be a non-cognizable offence, the investigation report of the police can be regarded as a complaint made by the police officer.

Difference between cognizable and non-cognizable offences

There are certain differences between cognizable and non-cognizable offences in both substantive and procedural aspects. Some of these differences are as follows.

Cognizable offencesNon-cognizable offences
Cognizable offences refer to all those offences for which police can arrest a person without an arrest warrant, i.e., police can take the cognizance of the offence into their own hands. These have been defined under Section 2(c) of the Code of Criminal Procedure, 1973.Non-cognizable offences refer to all those offences for which police can arrest a person only if they have a valid arrest warrant. They can’t take the cognizance of the case into their own hands. Such offences have been defined under Section 2(l) of the Code.
A first information report can be recorded by the police in case such an offence is alleged to be committed.A first information report is not allowed to be recorded by the police in case of a non-cognizable offence.
These are more serious in nature and affect a larger section of society.These offences are comparatively less serious in nature and no physical injury is generally inflicted upon the aggrieved person. 
All cognizable offences are either bailable or non-bailable. However, they are mostly non-bailable because the offences are very heinous or harmful in nature.Non-cognizable offences are mostly bailable in nature because such offences are not very grave or heinous.
Police can conduct an investigation without approval from the court in the case of a cognizable offence.An investigation can’t be initiated by police in a non-cognizable offence on their own. It is only after the evaluation of facts by the magistrate that they could permit the police to conduct an investigation.
Examples of cognizable offences are murder, rape, and kidnapping.Examples of non-cognizable offences are cheating, public nuisance, etc.

Punishment for non-cognizable offences

Non-cognizable offences, as stated previously, are less serious or grave in nature. Hence, the amount of punishment for such offences is also less severe. Further, these offences are also bailable through filing an application by the arrested or any related person. The punishments for non-cognizable offences are stated in the First Schedule of the IPC, 1860 some of which are as follows.

  1. As stated in Section 417 of the IPC, cheating is a punishable offence that might lead to imprisonment for a period extending to a maximum of one year or a fine, or both.
  2. Under Section 352 of the IPC, punishment for assault has been given as imprisonment which might extend to three months, a fine of three hundred rupees, or both.
  3. Under Section 500 of the IPC, punishment for defamation is imprisonment that may extend to a period of two years, a fine, or both.
  4. According to Section 290 of the IPC, punishment for public nuisance is the payment of a certain amount of fine that may extend to two hundred rupees.
  5. Under Section 465 of the IPC, forgery is also a punishable offence having an imprisonment period that might extend up to two years, fine, or both.

These are some of the punishments for non-cognizable offences. No such offence generally has an imprisonment period exceeding two years.

Issues in non-cognizable offences

  1. The procedure to be followed in the case of non-cognizable offences is very cumbersome and consists of a large number of formalities. This might lead to delays in decision-making and could go against the interests of the affected person.
  2. The excessive responsibilities imposed on all magistrates could increase their burden, which would eventually impact the speed of case disposal. The process would be extremely slow because of the numerous duties being assigned to the magistrates.
  3. The procedure is very different from that which is generally followed for cognizable offences. As a result, this might create ambiguities for both the aggrieved party and the police at times as they are dealing with a large number of cases simultaneously.
  4. There might be several delays in the preparation of investigation reports by the police. This might further lead to delays in the disposal of cases. In order to provide fair justice to the aggrieved person who is not at fault in this situation, the courts would need to wait and eventually admit the reports in order to proceed with the case.

These are some of the major issues that arise in the procedure of non-cognizable offences, and certain actions are required to be taken to fill these gaps. This would reduce unnecessary delays and provide timely justice for all.

Analysis and recommendations

Non-cognizable offences have a totally different procedure as compared to cognizable offences. This could lead to several issues with respect to the powers of the police and the process to be followed for non-cognizable offences, as stated above. Hence, there is a need to address these issues to ensure fair justice for both the aggrieved party and the accused.

  • There is a need to increase the powers of the police in cases of non-cognizable offences. To take quick action, the police must be provided with investigative powers in all circumstances, in order to reduce any delays arising out of formal permission from a magistrate. 
  • With these increased powers, the police should also be made more accountable for the submission of investigation reports on time in all circumstances. The powers of a judicial magistrate should be distributed among other officers as well. This would firstly reduce the possibility of any form of personal bias and, secondly, it would also reduce the burden of the magistrate, thereby helping him/her to focus on their work and improve their overall efficiency.
  • There is also a need to ensure fair and speedy trials by the courts for quick acquittal or arrest of the alleged wrongdoer. This would further help in obtaining a quick payment of compensation to the aggrieved person. 
  • The fines to be paid for such offences under the IPC, 1860 are still stuck in the olden times. There is a need to update the amount to be paid as compensation or fine, along with the imprisonment period, on a case-to-case basis. 
  • Lastly, there is also a need to create sufficient awareness among people regarding the route they would need to take in case they are a victim of a non-cognizable offence. This would also keep them informed about their rights at all times.

Conclusion

Non-cognizable offences are a category of offences stated in the first schedule of the IPC, 1860. These offences are less severe in nature and, as a result, are also bailable. These offences have a lesser sentence, but the issues arise in their procedural aspects and the distribution of powers. To curb these issues, certain measures could be proactively pursued. If all these measures are taken, non-cognizable offences could also be smoothly dealt with. The aggrieved party would not need to suffer, and discretionary powers would be brought under control. Therefore, certain measures are still required to be taken to improve the process of the judicial system and punishment in the country with respect to non-cognizable offences.

Frequently asked questions (FAQs)

What is the punishment for non-cognizable offences?

The punishments for non-cognizable offences are generally lesser in comparison to cognizable offences with an imprisonment period generally extending to 3 years.

What is the role of police in a non-cognizable offence?

Under Section 155 of the Code of Criminal Procedure, a complaint can be made to the police. They are then required to provide all the necessary information to an officer empowered by the State Government to maintain records and also refer the informant to the magistrate.

What is the alternative to FIR in a non-cognizable offence?

In case of a non-cognizable offence, a Community Service Register is maintained by the police to keep a record of all the non-cognizable offences. Hence, it is an alternative to FIR that is recorded for all cognizable offences.

References


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

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

https://t.me/lawyerscommunity

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

Download Now

Difference between decree and order

0

This article is written by J Jerusha Melanie, a student of SRM School of Law, Tamil Nadu. This article seeks to elucidate the differences between a decree and an order. It also provides a complete explanation of everything that one needs to know about a decree and an order. 

This article has been published by Sneha Mahawar.

Introduction

The legal world is filled with a myriad of complicated terminologies. Some of the terms are so similar in their meanings that one cannot help wondering whether they mean the same or not. One may not possibly understand them at first glance. “Decree” and “order” are two such terms. The Code of Civil Procedure, 1908 (hereinafter referred to as “the CPC”) defines and distinguishes decree and order to some extent. The Indian courts have tried to explain the same further. Let’s dive in to know the difference between these two terms. 

Difference between decree and order

S. No.Grounds of difference DecreeOrder 
1. DefinitionUnder Section 2(2) of the CPC, a decree is the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be preliminary or final. Under Section 2(14) of the CPC, an order is the formal expression of any decision of a civil court which is not a decree.
2.Finality A decree may be preliminary, final, or partly preliminary and partly final. An order is always final. 
3.AppealabilityUsually, a decree is appealable until and unless it is explicitly prohibited by law.Most orders are not appealable, except those specified in Section 104 and Order 43, Rule 1 of the CPC. 
4.Institution A decree is passed in a suit instituted upon presenting a plaint.An order is passed in a suit that may be instituted upon the presentation of either a plaint, an application, or a petition.
5.Ascertainment of parties’ rightsA decree ascertains the substantive rights and duties of the parties.An order ascertains the procedural rights of the parties. 
6.Number of decrees/ ordersUsually, only one decree is passed in a suit.One or more orders may be passed in a suit.

Decree

To understand the meaning of the term “decree”, let us see what the CPC says about it. Section 2(2) of the CPC defines a “decree” as the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include- 

  1. Any adjudication from which an appeal lies as an appeal from an order, or
  2. Any order of dismissal for default. 

Furthermore, Section 2(2) of the CPC goes on to provide a short explanation of the term “decree”. It states that a decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final. 

A decree is the manifestation of the court’s adjudication. In simple language, the court’s expression of its adjudication in favour of one or more parties to a suit is called a “decree.” It is the decree that clarifies which party won the suit. 

In a decree, there are two parties; one is the decree-holder and the other is the decree-debtor. A decree-holder is the party in favour of whom a decree is passed (Section 2(3) of the CPC); on the other hand, a decree-debtor is the party against whose favour a decree is passed.  

To further understand what a “decree” actually means, it is important for us to know the meaning of another term, “judgement”. As per Section 2(9) of the CPC, a “judgement” means the statement given by the judge on the grounds of a decree or order. It means that a judgement contains the grounds of a decree. A decree is derived from a judgement. So, every decree follows a judgement. Ultimately, a decree is the formal manifestation or representation of the judge’s ruling. 

Essentials of a decree

A bare reading of Section 2(2) of the CPC clarifies that a decree has the following essentials. It has been further restated in the case of Vidyacharan Shukla v. Khubchand Baghel (1964). 

Adjudication 

The very beginning of Section 2(2) of the CPC states that a decree is the formal expression of an adjudication. The CPC does not define the term “adjudication.” However, in general parlance, it means a judicial decision or a formal judgement on a disputed matter. It is the legal process in which the court resolves a particular dispute brought forth for its perusal. So, a decree is formal in its expression; furthermore, it should not be merely administrative in nature. 

In the case of Madan Naik v. Hansubala Devi (1983), the Supreme Court held that only those decisions that are judicially determined can be recognized as a decree. Furthermore, in the case of Deep Chand v. Land Acquisition Officer (1994), it was held that a decree can proceed only from an officer of the court. 

Suit

Section 2(2) of the CPC provides that a decree must be in a suit. In other words, a decree arises only when a suit is instituted. Though the CPC does not explicitly elucidate the term “suit”, generally, a suit under the CPC is a civil proceeding instituted by the presentation of a plaint (Section 26(1) of the CPC). It is instituted to enforce the civil rights of parties. 

Determination of the parties’ rights

In a civil suit, there are two parties- the plaintiff (the person who institutes a suit) and the defendant (the person against whom a suit is instituted). It is instituted only when the plaintiff feels that his civil rights are being infringed upon by the defendant. 

Further, it is pertinent to note that, as per the Supreme Court’s decision in the case of Dattatraya v. Radhabai (1997), the substantive rights, not the procedural rights, of the parties are determined in a civil suit. So, under Section 2(2) of the CPC, a decree is passed only when there is a civil suit in which the rights of the parties are disputed.   

Conclusive determination 

Section 2(2) of the CPC provides that a decree should be conclusive in nature. It should conclusively decide the rights and duties of the parties in such a way that the judge has nothing further to decide on. For this very reason, provisional decisions like interlocutory orders do not fall under the ambit of “decree” under the CPC. Similarly, an order partly deciding on and partly remitting some issues to the trial court for determination is also not a decree. 

Formal expression

Section 2(2) of the CPC requires that a decree must be the formal expression of an adjudication. It means that every decree is manifested in the form of writing, complying with the laws relevant to the particular case. So, the informal comments of the judges during the course of the judgement (obiter dicta) are not considered a decree. 

A decree must be drawn separately and conclusively; in no case can the parties appeal any judgement if the decree is not formally expressed. 

What does a decree include

Section 2(2) of the CPC provides the following aspects that fall under the ambit of the term “decree”:

  • Rejection of a plaint

When a plaint reaches the court, the court first determines whether it needs to be tried, returned, or rejected. The court regards the material facts of the particular case and the provisions under Order 7 Rule 11 of the CPC to determine it. Order 7 Rule 11 of the CPC states the scenarios when a plaint shall be rejected. A plaint can be rejected by the court if: 

  • It does not disclose any cause of action; 
  • The relief claimed is undervalued by the plaintiff, and he/ she failed to correct it within the time stipulated by the court;
  • The plaintiff has failed to furnish the appropriate stamp paper within the time stipulated by the court after the court returned it due to the usage of insufficiently stamped paper; 
  • The statement in the plaint shows that the suit is barred by any law; 
  • The duplicate copy of the plaint is not filed, or 
  • The provisions of Order 7 Rule 9 were not adequately complied with by the plaintiff. 

Order 7 Rule 12 of the CPC provides that while rejecting a plaint, the judge should record the reasons for such rejection in the form of an order. Section 2(2) of the CPC states that an order made by the judge under Order 7 Rule 12 of the CPC is also a decree.   

  • Determination of any question under Section 144 of the CPC 

Section 144 of the CPC deals with the doctrine of restitution. Restitution refers to the duty imposed on a party to a suit who received a benefit from a decision of the court to return such a benefit to the other party when the decision is reversed. Section 2(2) of the CPC provides that the determination of any question under Section 144 of the CPC is also a decree. 

What is not included in a decree

Also, Section 2(2) of the CPC provides that the following aspects are not included within the meaning of “decree”;

  • Any adjudication from which an appeal lies

No adjudication which is appealed as an appeal from an order is a decree under Section 2(2) of the CPC. 

  • Any order of dismissal for default

No order of dismissal of a suit on the ground of the parties’ default is a decree. Examples of parties’ default are failure to appear when the suit is called for a hearing and failure to pay adequate court fees or postal charges. Order 9 of the CPC deals with such dismissal orders. 

Types of decrees

Generally, there are 3 classes of decrees, as explained below: 

Final decree

Section 2(2) states that a decree may be final. A final decree is one which wholly disposes of a suit and finally settles all disputed matters in the suit. It is issued when all the hearings of a suit are complete and there is nothing more to decide upon. 

As held by the Apex Court in the case of Shankar Balwant Lokhande (deceased) v. Chandrakant Shankar Lokhande (1995), a decree is said to be final in the following scenarios:

  • When the decree is not appealed within the stipulated time;
  • When the decree is passed by the Apex Court, that is, the Supreme Court, and
  • When the court regards the decree as having been completely disposed of. 

The following are characteristics of a final decree:

  • It is executable; 
  • It may be passed without any preliminary decree;
  • It conclusively settles the disputed matter, and
  • The Court may pass more than one final decree. 

Preliminary decree

Section 2(2) states that a decree may be preliminary. Let us recall what Section 2(2) of the CPC says about a preliminary decree. The said Section states that a decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such an adjudication completely disposes of the suit. So a preliminary decree is passed when there is still something that the court needs to decide upon before conclusively determining the rights and duties of the parties. There may be more than one preliminary decree in a suit. 

As held by the Supreme Court in the case of Mool Chand and Ors v. Dy. Director Consolidation (1995), the court passes a preliminary decree when, though the rights of the parties are figured out, a few other matters are still pending to be decided upon. 

One must note that a preliminary decree does not completely dispose of the suit; it leaves the suit pending before the court until the final decree is passed. 

Under the CPC, a preliminary decree may be passed in the following types of suits: 

  • Administration suits (Order Rule 13)
  • Suits for possession and Mesne profit (Order 20 Rule 12)
  • Partnership dissolution suits (Order 20 Rule 15)
  • Suit for partition and separate possession (Order 20 Rule18)
  • Suit regarding the sale of mortgaged property (Order 34 Rule 4)
  • Suits regarding accounts between the principal and agent (Order 20 Rule 16)
  • Suits regarding foreclosure of a mortgage (Order 34 Rule 2)
  • Mortgage redemption suits (Order 34 Rule 7)

Partly preliminary and partly final decree

Sometimes, depending upon the nature of the suit, the court may pass a partly preliminary and partly final decree. Such a decree may contain parts that are final, while the majority of the decree may still be preliminary. 

For instance, in a suit relating to inheritance, the court may pass a partly preliminary and partly final decree, in which the determination of whether or not a particular party is entitled to receive a share in the property may be final in nature; whereas the determination of who will receive what share in the property is a part of the preliminary decree. 

Now that we have discussed a decree, let us now see what an order is. 

Order

An order is defined under Section 2(14) of the CPC as the formal expression of any decision of a civil court which is not a decree. As the definition clearly explains, an order is not a decree. However, though an order is not a decree, a decree is usually an order. It is because a decree may be preliminary, final, or partially both, but an order is always final in nature. Nevertheless, it is pertinent to note that here, “final” refers to an order’s conclusive ability to execute; it means that an order must be essentially and procedurally executed. An order determines the procedural rights of the parties. The court may pass orders at any stage of a civil suit. Essentially, a decree is followed by one or several orders. 

Essentials of an order

From the definition of the term “order” provided under Section 2(14) of the CPC, we can say that an order has the following essentials: 

Decision of a Civil Court

  • Only the formal expression of a civil court’s decision is considered as an order. 

Formal expression

  • An order must be expressed formally, that is, in writing. 

It should not be a decree

  • Under Section 2(14) of the CPC, no order can be a decree. 

Types of orders

The following are the types of orders under CPC: 

Final order

A final order is one which ultimately establishes and calls for the execution of the procedural rights of the parties. 

Interlocutory order

An interlocutory order is one which is passed as a temporary measure to prevent the happening of any harm to any person or property. Interlocutory orders are also called interim orders. 

Appealable order 

As the name suggests, an appealable order is one against which an appeal can be filed. Though most orders can not be appealed, a few orders, for instance, the orders provided under Section 104 and Order 43 Rule 1 of the CPC, are appealable orders.

Non-appealable order

A non-appealable order is one against which no appeal can be filed. It is issued during the course of the suit and is provisional in nature. 

Key differences between decree and order

Now that we have understood what a decree and an order mean, let us now discuss the key differences between both terms. 

Definition 

Firstly, a decree is defined under Section 2(2) of the CPC as the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be preliminary or final. 

On the other hand, an order is defined under Section 2(14) of the CPC as the formal expression of any decision of a civil court which is not a decree.  

Finality 

Secondly, a decree may be either preliminary, final, or partly preliminary and partly final. However, an order is always final in nature. 

Appealability

An appeal can lie only against a decree, not an order. A decree is appealable except in cases where the law explicitly bans it. However, most orders are non-appealable, except those specified in Section 104 and Order 43 Rule 1 of CPC.  

Institution 

A decree is passed in a suit instituted upon presenting a plaint. On the other hand, an order is given in a suit that may be instituted upon the presentation of either a plaint, an application, or a petition. 

Ascertainment of the rights of parties 

As discussed earlier, a decree determines the substantive rights of the parties to a suit. Contrarily, an order concerns only their procedural rights.  

The number of decrees/ orders

Generally, there is only one decree in a suit. However, there may be as many orders as needed in the suit.  

Conclusion 

The terms “decree” and “order” are often used interchangeably. Confusion regarding the difference between the terms arises majorly because both are formally expressed. Nevertheless, both are different in various ways, as elucidated in this article. The foremost ground that distinguishes an order from a decree is its finality. Generally, a decree comes to pass only at the end of any suit, and it concludes the controversy regarding the substantive rights of the parties. Contrarily, an order may be passed at any time during the course of a suit, and it establishes the procedural rights of the parties. 

Frequently Asked Questions (FAQs)

What is a judgement? 

Judgement refers to the statement given by the judge on the basis of the decree or order. 

What is the difference between a judgement and an order?

An order is defined under Section 2(14) of the CPC as the formal expression of any decision of a civil court which is not a decree, whereas a judgement is defined under Section 2(9) of the CPC as the statement given by the judge of the grounds of a decree or order. 

What is the difference between a judgement and a decree?

A judgement is defined under Section 2(9) of the CPC as the statement given by the judge of the grounds of a decree or order, whereas Section 2(2) of the CPC defines a “decree” as the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties. 

Which courts can execute a decree?

As per Section 38 of the CPC, a decree can be executed either by the court which passed it or by the one to which it is sent for execution. The term “court which passed a decree” is elucidated under Section 37 of the CPC; it states that the “court which passed a decree” includes:

  • The court that passed the decree in appellate cases; 
  • The court that has jurisdiction to try the case during execution, in case the court of the first instance ceases to exist, or 
  • The court that has jurisdiction to try the case during execution, in case the court of first instance ceases to have jurisdiction over the case.

Can a foreign decree be executed in India? 

Yes. Under Section 44A of the CPC, a foreign decree can be executed in India if it is of a conclusive nature.  

References


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

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

https://t.me/lawyerscommunity

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

Download Now

The Rome Statute

0
Interpretation of statutes

This article is written by Amulya Bhatia, currently pursuing B.B.A. LL.B from Symbiosis Law School, NOIDA. This article is an overview of the Rome Statute. It further discusses the role of various organs established under the treaty for overall promotion of international justice.

It has been published by Rachit Garg.

Introduction 

The United Nations has always been of the opinion that the most effective and efficient way to put an end to human suffering and atrocities faced by people is to put a full stop to conflicts in the first place. With this view, history has witnessed the creation of multiple statutes and treaties with the objective of ensuring world peace. Especially, the post-COVID world requires all the nations to move forward in a united manner in order to deal with the problems that are thrown at humankind. One such treaty is the Rome Statute which was established with the objective of ensuring justice to all. The status quo makes the discussion of the treaty more relevant now than ever.

This article will discuss in depth the purpose of the Rome Statute and how the different organs created under its ambit help enhance that purpose.

The Rome Statute

The Rome Statute is nothing but an effort that focuses on the advocacy of human rights and the promotion of international justice to ensure world peace. The treaty was adopted at the United Nations Diplomatic Conference of Plenipotentiaries held in Rome, Italy on 17th, 1998, but only came into force on 1st, 2002, with over 120 countries being party to the treaty. The Rome Statute consists of 13 parts and 128 Articles; the Preamble is based on the recognition of the atrocities that humans face that threaten the peace and security of the world at large, and the treaty serves as a means of resolution of these atrocities.

To celebrate the signing of the Rome Statute and commemorate this significant effort towards the supremacy of justice and protection of human rights, 17th July is celebrated as World Day for International Justice every year. The Rome Statute is also known as the ‘International Criminal Court Statute’ since it established the International Criminal Court (ICC).

The basic idea behind establishing the ICC was to create an apparatus to tackle crimes that affect the international community. Additionally, the Rome Statute also establishes the Assembly of State Parties and the Trust Fund for Victims, both of which act as catalysts for the proper functioning of the ICC. All of these organs that find their origin in the Rome Statute are discussed in this article.

Objective of the Rome Statute

The world was confronted with an extensive increase in atrocities against humanity, especially after World War II, making the entire international community desperate for justice and having to rebuild the world so torn apart by war. It became an immediate priority to prosecute those committing heinous crimes, which came to be referred to as ‘crimes against humanity’. However, state adjudication mechanisms were not considered credible to cater to international violations of humanitarian law. As a result, an initiative was taken by the international community to combat the worst possible atrocities known to humankind and create an interconnected platform to deal with such crimes at a global level. Subsequently, the Rome Statute came into being, which further established the ICC to prevent the most severe crimes from going unpunished and enhance respect for international law. 

History of the Rome Statute

The road to the Rome Statute was long and included many trials and errors. The intent to create a global platform for dealing with global crimes dates back to the early 19th century. Soon after World War II, efforts were made to create a permanent court for crimes against humanity, but failed. The United Nations General Assembly(UNGA) adopted the Convention on the Prevention and Punishment of the Crime of Genocide in 1948 to try criminals by an international tribunal and further invited the International Law Commission (ILC) to establish a more permanent structure to try people accused of genocide. The ILC drafted such a statute, but this initiative was eventually abandoned. The Croat–Bosniak War, which led to the commission of crimes against humanity, war crimes, and genocide, pushed the UN Security Council to establish two ad hoc tribunals to try these crimes. However, a need for a more permanent structure was felt. The International Law Commission (ILC) 1994 presented its final draft for the ICC and asked for a conference to be convened for evaluation of the statute and subsequent enactment. 

For this purpose, the General Assembly established the Ad Hoc Committee on the Establishment of an International Criminal Court, which met twice in 1995. After analysing the report of the above committee, a Preparatory Committee was formulated by the UNGC to consolidate the draft finally. For two years, starting in 1996 to 1998, a total of six meetings were held by the Preparatory Committee in this regard. The United Nations Conference of Plenipotentiaries, also known as the Rome Conference, took place from 15th June till 17th July 1998 with participation from over 160 governments. At last, 120 nations voted in favor of the Rome Statute of the International Criminal Court and 7 nations against the same which included the United States, Israel, China, Iraq, Yemen, Libya, and Qatar. After heightened emotional deliberation and discussion, the Rome Statute was finally established on the 17th of July, 1998. As of today, 123 states are party to the Rome Statute.

Jurisdiction of the Rome Statute

The following four core international crimes were essentially established by the Rome Statute, and these crimes are not subjected to the statute of limitation. Further, the ICC can only adjudicate these crimes when the domestic courts are unwilling or unable to do the same, or if the United Nations Security Council authorizes it:

Genocide

Genocide has been defined in Article 6 of the Rome Statute as acts that are committed with the intention of harming a national, ethnic, racial, or religious group, and this would include:

  • Killing of the members of that group,
  • Physical or mental harm to a person from the group, 
  • Taking effective steps to prevent reproduction in that group, 
  • Moving of children in the group to other groups. 

It is to be noted that the crime of genocide is not committed randomly and is meant to target specific groups due to their race, religion, or ethnicity. The actual commission, or in other words, actus reus is not necessary to constitute genocide; physical and biological restrictions and harm complimented by the elimination of a particular group constitute genocide.

Crimes against humanity

Crimes against humanity have not been defined in any other statute or treaty. However, the Rome Statute defines it under Article 7 as acts committed on a large scale and is a systematic attack against a civilian population. These include:

  • Murder;
  • Extermination;
  • Enslavement, deportation, or forcible transfer of population;
  • Imprisonment;
  • Torture;
  • Sexual Violence;
  • Persecution against an identifiable group;
  • Enforced disappearance of persons;
  • The crime of apartheid;
  • Other inhumane acts of a similar character intentionally cause great suffering or serious injury to the body or mental or physical health.

War crimes

War crimes have been listed and codified in multiple documents and legislation such as International Humanitarian Law (the Hague and Geneva Conventions) and International Criminal Law treaties such as the Rome Statute itself.

The Rome Statute defines war crimes under Article 8. It essentially entails a breach of the 1949 Geneva Convention. This includes:

  • Killing, inhumane treatment, torture, or causing serious injury to the body and health.
  • Destruction of property that is not justified by military necessity against the sick, wounded, and shipwrecked persons not taking part in hostilities, prisoners of war, and other detainees, civilians, and civilian objects.
  • Other violations of laws and customs, such as initiating attacks on civilians, attacking and bombarding places that are undefended, and partaking in the use of poisoned weapons.

Furthermore, violation of the laws or customs of war would also come under war crimes, and it includes:

  • Atrocities or offenses against persons or property, constituting violations of the laws or customs of war;
  • Murder, ill-treatment, or deportation to slave labor or for any other purpose of the civilian population in occupied territory;
  • Murder or ill-treatment of prisoners of war or persons on the seas;
  • Killing of hostages;
  • Torture or inhuman treatment, including biological experiments;
  • Plunder of public or private property;
  • Wanton destruction of cities, towns, or villages;
  • Devastation not justified by military necessity.

Crimes of aggression

The fourth crime that falls within the jurisdiction of the ICC but remains more or less unclear is referred to as the crime of aggression. According to the Rome Statute, it refers to the use of armed force by a state against the sovereignty, integrity, or independence of another state. Even the Rome Statute adopted the definition at its first review conference of the Statute that was held in 2010.

International Criminal Court under the Rome Statute

The International Criminal Court traces its origins to the Rome Statute and was established as a permanent judicial mechanism with the purpose of dealing with, and subsequently trying individuals who are accused of crimes that affect the entirety of the international community, more specifically, the four core international crimes specified in the Rome Statute. The ICC is headquartered in the Netherlands at Hague. It serves as the most important aspect of the Rome Statute which receives aid from other organs formed under the Rome Statute.

The ICC serves the purpose of being a court of last resort, meaning that when a national court is unable or unwilling to investigate or prosecute a given case, failing to act, the ICC takes over. However, it is pertinent to note that the ICC was not established as a substitute for the national courts, but only as a mechanism to deal with crimes when the national courts are unable to carry out a proper investigation into the same. The Rome Statute formulated the ICC with the basic purpose of protecting human rights at an international level and holding those accountable who are responsible for the commission of crimes entailing a violation of human rights; some of the worst crimes that can be committed. 

Role of International Criminal Court

The Rome Statute mandates the ICC to perform certain key functions for the overall achievement of the objectives of the treaty:

  1. The ICC is an integrated mechanism that is required to adjudicate upon the individuals who are accused of the four core international crimes, as established by the Rome Statute since, for the longest time, nations have felt the need to hold those accountable who commit these serious crimes, especially because the national courts are unwilling to act on such cases due to internal systematic failures.
  2. The ICC is entrusted with the responsibility of promoting international justice. It serves as a more structured mechanism to appropriately deal with these crimes, given how grave they are and their impact on global peace. The ICC has replaced the ad hoc tribunals.
  3. The ICC must also take into account the role played by the UN Security Council. The UN Security Council plays an important role in maintaining international peace and security and has the authority to refer cases to the ICC for investigation.

Structure of International Criminal Court

The ICC has four principal organs: 

  • the Presidency, 
  • the Chambers, 
  • the Office of the Prosecutor, and 
  • the Registry.

The Presidency, or the Head of the Court, is formed by 3 judges who are elected by a majority of 18 judges. The Presidency is responsible for catering to the proper functioning of the Court and acting as the face of the ICC in global stature. 

There are three judicial divisions in the court, namely, pre-trial, trial, and appeal, and these functions are fulfilled by the 18 judges who form the Chambers. They are entrusted with the responsibility of carrying out a fair and expeditious trial, and further have to decide the admissibility of the case before the court. Additionally, they protect the rights of both the accused as well as the victim.

The Office of the Prosecutor is an independent body of the Court and is responsible for analyzing the information received on potential crimes that are within the jurisdiction of the ICC. They are to determine the validity of the information received and accordingly conduct an investigation and pursue the case before the Chamber of the Court.

The last organ of the ICC is the Registry which is required to support the Court in carrying out its functions.

Process followed by International Criminal Court

The process that is followed by the ICC to perform its role as an international judicial mechanism is as follows:

Step 1: Determining the validity of information received

The purpose of the ICC is to ensure justice when domestic courts are unable to do so. Therefore, any state may request the office of prosecutor to carry out an investigation on a specific matter that would come under their jurisdiction. Additionally, such a state is not required to mandatorily be a party to the Rome Statute in order to seek the assistance of the ICC in particular cases. The United Nations Security Council also has the authority to ask the ICC to examine specific matters. Following this, the prosecutor may initiate an investigation after a primary examination of the information received. This is better known as the process of referrals.

Step 2: Analysis of information received

On receipt of information either by any state or by the UN Security Council, the prosecutor is required to decipher whether the case would fall within the jurisdiction of the ICC or not and also determines whether the case would be considered under the four core international crimes, as explained above. After understanding the validity of the referral so received, the ICC will further inform the relevant state parties about the initiation of the investigation.

Step 3: Conducting the investigation

After verifying the information received, the prosecutor commences the process of investigation which involves the collection and examination of evidence. The state parties may also assist in this process. After a preliminary investigation, based on the findings, the prosecutor may approach the judges of the ICC to either issue a warrant of arrest or a summon to appear.

Step 4: Arrest

Now, a warrant of arrest or even a summons can only be issued after obtaining prior permission from the pre-trial chamber. These are only issues either for the appearance of the accused, or to prevent the accused from committing further crimes.

Step 5: Charges before trial

Once the suspect appears in Court, the Chambers have 3 options:

  1. Confirm the charges,
  2. Adjourn the proceedings due to lack of evidence and give instructions accordingly, or
  3. Decline the charges in their entirety.

If the first option is opted for, the trial chamber begins the trial, specifying all the issues that shall be considered thereof.

Step 6: The trial

The first step in this process is asking the accused whether he pleads guilty or not. If there is an admission of guilt, it is the responsibility of the trial chamber to fully inform the accused of the consequences of such admission which is followed by their conviction,
However, if there is no admission of guilt, the trial then proceeds wherein the burden of proof of the charges is upon the prosecution and material evidence is required to be produced.

Step 7: Judgment

Once both the parties are heard, witnesses are examined, and the entire proceeding is conducted in a free and fair manner, it is upon the judge to determine the conclusion of the trial, and accordingly either punish with a fine or any other manner or acquit the accused. It is to be noted that the maximum sentence the ICC can award is 30 years and a life sentence can be awarded in special cases. The imprisonment of the accused is governed by the respective state.

Step 8: Appeal

All the parties involved have the right to appeal the judgment given by the trial chamber to the appeal chamber. Such appeal may lie against any procedural errors or wrongful conviction or acquittal. The role of the appeal chamber is to come to the conclusion of whether the judgment by the trial chamber is to be reversed, altered, or upheld.

High-profile ICC cases

The following are some of the first and most significant cases that the ICC has tried:

The Prosecutor v. Thomas Lubanga(2012)

The first hearing conducted by the ICC was in 2006 when the question before the Court was whether to charge Thomas Lubanga. He was accused of recruiting child soldiers in the Democratic Republic of Congo. The ICC held that the accused was guilty of the offense in 2012 and a 14-year sentence was imposed on him.

The Prosecutor v. Abdel Raheem Muhammad Hussein (2012)

The ICC also issued an arrest warrant on December 2, 2011, for Sudan’s defense minister, Abdelrahim Mohamed Hussein, for 7 crimes against humanity and 6 war crimes in total that were committed in Darfur from August 2003 to March 2004.

The Prosecutor v. Omar Hassan Ahmad Al Bashir (2009)

A similar warrant as in the above case was issued against Sudanese President, Omar Hassan Ahmad al-Bashir for genocide in Darfur and this was the first time the Court issues a warrant for a head of state.

The Prosecutor v. Ahmad Al Faqi Al Mahdi (2016) 

In September 2016, the Islamic Militant, Ahmad al-Faqi al-Mahdi was sentenced to nine years of prison after pleading guilty to war crimes which included the destruction of religious historic monuments in Mali. 

The Assembly of State Parties

The Assembly of State Parties (“the Assembly”) is a legislative body that consists of representatives on behalf of all states who are party to the Rome Statute and are responsible for managerial oversight of the ICC. Article 112 of the Rome Statute governs the structure and functioning of the Assembly of State Parties. According to Article 112 of the Rome Statute, the Assembly is required to meet at the headquarters of the Statute or UN Headquarters in New York once a year, and may even convene a meeting in special circumstances. These annual sessions are held for discussing basic matters such as the budget of the court, audit reports, activities of the court, regulation of Trust funds for victims, etc. Moreover, the election of judges and other members of the ICC is also upon the Assembly.

The most recent session of the Assembly was held from 6th December 2021 to 10th December 2021 which was the Assembly’s twentieth session; the next session is to be held from 5th December 2022 to 10th December 2022.

The Twentieth session witnessed the adoption of five resolutions which included:

  • Budget for 2022;
  • Cooperation;
  • Review of the ICC and the Rome Statute system to make it more effective;
  • Strengthening the ICC and Assembly of State Parties;
  • Outcome of work of the Study Group on Governance

Structure of the Assembly of State Parties

The Assembly of State Parties consists of five organs for the effective and efficient functioning of the body:

  1. Secretariat of the Assembly of State Parties: The Assembly adopted a Permanent Secretariat of the Assembly at its second session.
  2. Bureau of the Assembly: The bureau consists of a President, two Vice-presidents, and 18 members that are all elected by the Assembly for a three-year term.
  3. Committee on Budget and Finance: The Committee on Budget and Finance of the ICC was established in April, 2003. It is responsible for managing the financial and budgetary functions of the Court. This 12-member committee consists of experts in international financial matters.
  4. Oversight Committee on permanent premises: It was only in December 2007 that the Assembly decided that the ICC must be built on a permanent premise. For this purpose, the Oversight Committee was established to provide strategic oversight of this project. In 2015, the ICC was provided with a permanent premise in The Hague, the Netherlands.
  5. Board of Directors of the Trust Fund for Victims: The Trust Fund for Victims is discussed in the next part of this article. However, for its regulation, a five-member board is elected by the Assembly for a term of three years. This board is responsible for the activities and projects of the fund.

The Trust Fund for victims under Article 19 of the Rome Statute

The Trust Fund for Victims (TFV) has a separate status from the ICC and was established by the Assembly of State Parties in 2004 by virtue of Article 19 of the Rome Statute.

The TFV was established to assist those who are the victims of the crimes and cases that are being dealt with by the International Criminal Court. The purpose of the Rome Statute is to hold those accountable who are responsible for the commission of serious crimes and further help those who have suffered in this process’ TFV enhances this objective.

The victims of genocide, war crime, and crimes against humanity are given a voice through this platform to increase awareness about the same in the global sphere. Additionally, multiple self-help projects are also built to ensure that the victims are given another chance to better their lives after being subjected to heinous crimes.

Purpose

The Rome Statute has established a system to provide retributive as well as a restorative mechanism of providing justice to victims through TFV. The Assembly of States Parties (ASP) created the Trust Fund for Victims, “for the benefit of victims of crimes within the jurisdiction of the Court, and the families of such victims”. The basic objective of the TFV is to promote empowerment, hope, and dignity of those who are most vulnerable since they are victims of the worst possible crimes and to help them rebuild their lives. Merely punishing those who commit the crimes is not enough; the victims should be allowed to go back to a dignified life, one that they deserve. This fund plays a significant role in ensuring that the international promise for justice with which the Rome Statute was established is fulfilled. 

How does the Trust Fund for victims help them?

The victims of crimes that come under the jurisdiction of the ICC require support not just by way of reparation, but as well as material support such as rehabilitation. While the ICC is responsible for the former, the TFV deals with the latter and provides the victims support in a three-fold manner:

  1. Physical rehabilitation: Victims who have suffered physical injury are assisted so as to help them recover and resume their roles as responsible members of society.
  2. Mental Rehabilitation: Cost-effective psychological, social, and other health benefits are given to the victims who have suffered mentally and are helped to recover.
  3. Material Support: This entails providing education and economic support to the victims and helping them create employment opportunities.

Conclusion

In 2014, United Nations General Assembly President, John Ashe stated, “Stability and peace are essential enablers of sustainable development, just as violence is one of its greatest obstacles”. We are living in 2022, and this statement holds more relevance now than ever. The importance of dealing with conflict and violence has become necessary, given the unprecedented times we are living in, owing to the pandemic. Social stability allows all individuals in a society to align their personal goals with the broader goals of the world, without disruption. In this process, the protection of all individuals becomes necessary. Apropos of this, the value of the Rome Statute cannot be enhanced further. 

The Rome Statute provides stability to the nations by allowing them to approach a resolution mechanism when states are unable to deal with certain matters. There is a need for a larger platform to discuss issues that impact all nations in the long run, and the Rome Statute is the answer.

Frequently Asked Questions (FAQs)

What is the purpose of the Rome Statute?

The Rome Statute aims at establishing an international platform to deal with the worst possible crimes and ensure that justice prevails.

Who is bound by the Rome Statute?

The states that have signed the Rome Statute are party to it, and thus, bound by it as well. There are a total of 123 states that have signed the Rome Statute. Out of them, 33 are African States, 19 are Asia-Pacific States, 18 are from Eastern Europe, 28 are from Latin American and Caribbean States, and 25 are from Western European and other States.

Why was the ICC established?

The ICC serves as the common platform for all nations which can be approached for the investigation of serious crimes, and thereon fulfils the purpose of the Rome Statute.

How does the Rome Statute help in getting justice?

There are three main organs of the Rome Statute, namely, the International Criminal Court which is the foremost adjudicating authority to hold the accused accountable, the Assembly of State Parties which is a legislative body and also held in regulating the management of the ICC, and the Trust Fund for Victims that helps the victims in the restoration of their lives after being subjected to an atrocity.

References

  1. https://www.abc.net.au/news/2012-03-14/cases-before-the-icc/3888680
  2. https://www.icc-cpi.int/tfv
  3. https://www.hrw.org/news/1998/12/01/summary-key-provisions-icc-statute
  4. https://asp.icc-cpi.int/sessions/documentation/20th-session
  5. https://www.icc-cpi.int/about/how-the-court-works

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

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

https://t.me/lawyerscommunity

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

Download Now

Difference between Memorandum of Association and Articles of Association

0
memorandum of association

This article is written by Ritika Sharma, pursuing B.Com. LL.B. (Hons.) from the University Institute of Legal Studies, Panjab University. The article discusses salient features of the Memorandum of Association and Articles of Association and aims at marking all the differences between the two.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction 

The law related to companies was brought to India by the Britishers and it has been evolving since then. Various modifications were made to the company laws via amendments. The establishment of the Companies Act of 2013 was a major success as it incorporated the provisions with respect to disclosure, accountability, and corporate governance. The Act was developed to bring Indian companies on the same pedestal as the companies in the global market. The two significant elements of the Companies Act, 2013 are the Memorandum of Association and the Articles of Association.

A significant question arises as to how these documents are different from each other. While the former lays down the structure of the company and contains the clauses which define the company’s acts, the latter consists of the rules and regulations with which the company works. Apart from their contents, both of these instruments differ from each other in several aspects like registration, procedures regarding alteration, position, binding force, etc. 

The following article aims at highlighting the salient features and differences between the two.

Memorandum of Association : the skeleton of a company

Meaning of Memorandum of Association

A Memorandum of Association is the most important document which presents the structure of the company with the help of five clauses as specified under Section 4 of the Companies Act, 2013. It consists of:

  • Name clause,
  • Registered office clause,
  • Objects clause,
  • Liability clause,
  • Capital clause.

Section 2(56) of the Companies Act, 2013 lays down the meaning of the word memorandum’. It reads, “memorandum means the Memorandum of Association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act”. 

Purpose of Memorandum of Association

A Memorandum of Association is a charter on which the framework of a company is based. The main objective behind the framing of the memorandum is to lay down the scope and ambit of powers of the company within which it can function. Anything done outside its ambit is considered void by the application of the doctrine of ultra vires. Therefore, it keeps a check on the powers of the company. The relations of a company with outsiders are defined by this instrument. Also, as the Company Act, 2013 guides this instrument, its contents should conform to the provisions of this statute. 

Features of Memorandum of Association

Owing to its significance for the corporations and ambiguous definition under Section 2(56) of the Companies Act, several questions regarding the clauses, the possibility of amendments, binding force, and the consequences for deviating from the memorandum arise. The critical aspects and intricacies of the Memorandum of Association are briefly discussed as follows:

‘Undesirable’ names not allowed

Section 4 specifies that the name of the company should not match with the names of companies already registered and should not nearly resemble them. For instance, in British Diabetic Association v. Diabetic Society Ltd. (1995), the British Diabetic Society Association had to change its name as it was sufficiently similar to another company’s name ‘British Diabetic Society’.  Further, in the case of Society of Motor Manufacturers and Traders Ltd v. Motor Manufacturers and Traders Mutual Insurance Co. Ltd. (1925), it was observed that with the registration, a corporation gets a monopoly over its name which excludes every other company to adopt a name similar to it. 

Change of name of a company

A company can change its name with the approval of the Central Government and by following the mandates provided under Section 4 and Section 13 of the Company Act, 2013. 

Change of registered office

The information regarding the exact place of the registered office should be given to the registrar within 30 days of incorporation or commencement of the business, whichever is earlier. As the alteration in place of registered office could affect several parties such as shareholders, creditors, employees, etc., any change in the place of registered office requires a special resolution and sanction of the Central Government.

Objects of the company

The memorandum contains the objects of a company that should not be against the law and the provisions of the Companies Act. If the company performs functions that are beyond the scope of its objects and powers then the doctrine of ultra vires comes into the picture. For example, in London County Council v. Attorney General (1902), according to the objects and powers clause, the Council had the power to work tramways. Therefore, its act of running omnibuses, even in connection with the tramways, was considered to be ultra vires. 

Liability of members

The limited liability of the members could be inferred from the company’s name. The liability of the members can be limited by shares or limited by a guarantee. In the former, members cannot be called to pay anything more than the nominal value of their shares, while in the latter, the members themselves take a guarantee so as to contribute to the assets of the company in the event of its winding up.

Capital of members

The fifth clause requires that the memorandum should state the nominal capital of the company and the divisions and value of shares. 

Articles of Association : rulebook of a company

Meaning and purpose of Articles of Association

It is a document containing the rules and bye-laws of a company. Section 2(5) of the Companies Act defines articles as, “articles means the Articles of Association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act”. Articles of Association consist of paragraphs that are signed by every subscriber. The companies can either frame their own articles or adopt Table F from Schedule 1 of the Companies Act. Table F is applicable to a company limited by shares. 

Purpose of Articles of Association

The purpose of this document is to smoothen the internal operation of the companies. The rules and regulations specified under the articles help in managing the companies’ internal affairs.

Features of Articles of Association

The following points highlight some of the glaring features of the Articles of Association:

Provisions of entrenchment

According to Section 5 of the Companies Act, the articles may contain provisions regarding retrenchment. They can be added while framing the article or after the formation of the company via amendment.

Alteration

 The Articles of Association can be altered with the help of a special resolution. Section 14 of the Companies Act grants this discretion to the companies to alter their articles which includes the power to make alterations with respect to changing a private form of the company into a public company and vice versa. This power is almost absolute with the conditions that the alteration must neither be violating the provisions of the Act nor be abrogating the clauses contained in the Memorandum of Association.

Doctrine of indoor management

 The doctrine simply implies that the outsiders are contracting with the company and act with the presumption that the directors of the company are working lawfully. This rule protects the outsiders from the company’s indoor management. This rule was described in the case of Royal British Bank v. Turquand (1856) in the following words, “if the directors have power and authority to bind the company, but certain preliminaries are required to be gone through on the part of the company before that power can be duly exercised, then the person contracting with the directors is not bound to see that all these preliminaries have been observed. He is entitled to presume that the directors are acting lawfully in what they do”. 

Differences between Memorandum of Association and Articles of Association

Memorandum of Association, Articles of Association, and prospectus are the most important documents of a company. However, there has always been a great deal of confusion around the differences between memorandum and articles. As already discussed, the memorandum is the skeleton of a company as it carries the five important clauses on which each company is structured and, the articles are the rulebook containing the regulations and bye-laws of a corporation. These two also differ on various other grounds. Let’s delve deeper into those with the help of forthcoming points. 

Definition and meaning

Definition of MoA

The meaning of a memorandum is defined under Section 2(56) of the Companies Act, 2013 which does not actually define a memorandum and just calls it something which is originally framed or altered from time to time. Section 4 is the most significant provision with regard to the memorandum which truly defines it by stating its contents.

Definition of AoA

On the other hand, the provision regarding the definition of articles is under Section 2(5) of the Companies Act, 2013. It is interesting to note that this definition matches the definition of memorandum as discussed under Section 2(56), however, Section 5 states that articles contain the regulations for the management of the company and shall also contain any additional matters pivotal to the company’s management. 

Position or status

Status of MoA

Since, the Memorandum of Association forms the structure of a company, it is treated to be on a higher pedestal than the articles. It is crucial for the functioning of a corporation. However, it is subordinate to the Company Act, 2013 as specifically stated under Section 6 of the Companies Act. In simple terms, all the clauses contained in the memorandum should comply with the provisions of the Companies Act. For example, the objects stated in the memorandum should not be in contradiction with its provisions.

Status of AoA

On the other hand, the articles of association are subordinate to both the memorandum and the Companies Act, 2013. Thus, articles must not include anything which is against the memorandum. In the case of Bryon v. Metropolitan Saloon Omnibus Co. (1858), the Court stated that “this (the fact that the articles are subordinate to the memorandum) is so because the object of the memorandum is to state the purposes for which the company has been established, while the articles provide the manner in which the company is to be carried on and its proceedings disposed of”. Furthermore, the contents of the articles must be in accordance with the provisions of the Companies Act. 

Section 14(3) expressly specifies that in case of the alteration of the articles, the changes are subject to the provisions of the Act. In the case of Madhava Ramchandra Kamath v. Canara Banking Corporation (1940), a company’s Articles of Association contained a provision regarding the expulsion of a member if he/ she unjustly or unlawfully has recourse to law in any matter.  A clause was added in the articles which authorised the selling of shares belonging to the expelled member to any third person without any valid instrument. This was held to be in contravention with the Companies Act, 1956, and thus, invalid.  

Compulsory filing at the time of registration

It is mandatory to register a memorandum at the time of incorporation. It is a compulsory document that is to be submitted to the registrar. However, filing of the Articles of Association is optional at the time of registration. 

Major contents 

Major contents of Memorandum of Association

The five clauses, specified under Section 4, form the structure of the memorandum. These are discussed below:

Name clause

Every memorandum should consist of the name of the company. A company, being a legal person, requires a name and it should conform to certain guidelines. Firstly, the name should not be identical or undesirable, in the opinion of the central government. Secondly, the name should not show a connection with the patronage of the central government. Thirdly, the name should not lead to illegal consequences. Fourthly, limited companies should add the word ‘limited’ and private companies should add the word ‘private’ in their names. 

It is essential that the name of the company should be painted outside the offices of the company and the companies should use this name on every business document. In Nassau Steam Press v. Tyler (1894), the name of the company was ‘Bastille Syndicate Ltd.’, however, the directors and secretary of the company accepted the bill of exchange by writing it as ‘The Old Paris and Bastille Ltd.’ The Court held that the name was not properly mentioned and the directors and secretary of the company could be made liable. Also, it is pertinent to note that the name of the company should not be regarded as ‘calculated to deceive’. 

Registered office clause

Section 12 stipulates the provisions regarding the registered office of the company. The place of the registered office is to be informed to the registrar within 30 days of incorporation of a company and it should be painted outside the office of the company and other conspicuous places. Section 12(9) states that in case the registrar has reasonable cause to conclude that the company is not carrying on any business operations, he/ she can conduct the inspection of the registered office of the company. 

Objects clause

The corporations are free to choose their objects unless they are unlawful or contrary to the Companies Act. The reason behind the framing of the objects clause is to inform the shareholders regarding the purposes for which the capital contributed by them is being invested. It also grants the feeling of security to the creditors as they make sure that the capital is spent only on the projects which are connected to the company’s objectives. Therefore, it prevents the diversification of capital. 

This gives rise to the doctrine of ultra vires which declares the activities of the company invalid if they are not in consonance with the objects clause. Ashbury Railway Carriage and Iron Co. Ltd. v. Riche (1875) is the first case in which the doctrine was applied. In this case, the objects clause of the company stated “make or sell, or lend on hire, railway carriages, and wagons and all kinds of railway plants, etc, to carry on the business of mechanical engineers and general contractors”. But, the company contracted to finance the construction of a railway line. According to them, this would be within the meaning of ‘general contractors’. However, the House of Lords held that the contract was ultra vires and made an important observation regarding the objects clause which said that there are two functions of the objects, primarily to stipulate the powers of a corporation and secondly to define a boundary within which these powers could be exercised. Further, in the case of Attorney-General v. Great Eastern Railway Co. (1880), it was observed that the objects should be reasonably understood and applied and in the matters concerning the application of the doctrine of ultra vires, the case should be fairly regarded as against the objects clause.

In Re Lee, Brehens & Co. Ltd. (1932), three tests were devised regarding the application of this doctrine. 

The Court, in this case, observed that “the validity must be tested by the answer to three pertinent questions: 

  • Is the transaction reasonably incidental to the carrying on of the company’s business? 
  • Is it a bona fide transaction? 
  • Is it done for the benefit and to promote the prosperity of the company?” 

In order to avoid the limited scope with respect to freedom of taking actions, the ‘main objects’ rule of construction is applied by the courts while considering the question of ultra vires actions. The consequences of the ultra vires transactions include:

  • injunction which can be granted to restrain the ultra vires acts of a company; 
  • when capital is used by the directors in ultra vires transactions then they are personally liable to replace it; 
  • in case of breach of warranty, the agents or directors are liable to the third party; 
  • in case any property is acquired as a result of the ultra vires transaction, the company has the right over such property as it was held by the Madras High Court in the case of Ahmed Sait v. Bank of Mysore (1930) that even though, a company has acquired property outside the scope of its objects, it cannot be forced to give away the right in such property; 
  • the ultra vires contracts, being outside the scope of objects, are considered null and void. 

Liability clause

Section 4(1)(d) of the Companies Act stipulates that the memorandum should state the liability of the members. In the case of companies with limited liability, the clause must state whether the liability is limited by shares or by guarantee. 

Capital clause

Section 4(1)(e) of the Companies Act requires that the nominal capital of the company is to be specified in the capital clause. Furthermore, according to Section 4(1)(f), in the case of one person company, this clause should contain the name of the person who is to become a member of the company after the death of the subscriber. 

Major contents of Articles of Association

The contents of the articles can be formulated at the discretion of the subscribers to the memorandum of the company, according to the company’s requirements. This can include the provisions that guide the relations between the members inter se or members and the company. But, again, anything stipulated in the Articles of Association should not breach the provisions of the Companies Act. For instance, in the case of Re. Peveril Gold Mines Ltd. (1898), it was held that the shareholders’ right to petition for winding up of the company, as provided under Section 82 of the Company Act, 1862, cannot be taken away by the articles. The articles of a company should be framed with the utmost care, keeping in mind the interests of the stakeholders and the functioning of a corporation. Following are some of the essential contents of the Articles of Association:

Share capital

All the rules regarding the payment of share capital are specified under the articles. The important dates of issuance of certificates, payment of unpaid share capital, etc are mentioned under this clause. Furthermore, it consists of the rights of shareholders.

Lien

In the event of non-payment of the declared amount by the shareholder, the company exercises the option of lien with which the amount already paid by the shareholder is retained by the company. This clause contains the rules regarding the lien on shares. For example, rules specifying an extension of lien to dividends and bonuses, sale of shares retained on a lien, etc are stipulated under this clause.

Transfer of shares

Transfer of shares is executed by the transferor as well as the transferee. This clause contains the provisions regarding the procedure and registration of the transfer of shares. Furthermore, it stipulates the rights of the nominees in case of transmission of shares.

Alteration of capital

The capital can be altered by an ordinary resolution. An ordinary resolution is passed to consolidate and divide share capital into shares, to convert and re-convert fully paid shares into stock, to sub-divide the shares into shares of a smaller amount, and to cancel the shares. All these provisions are mentioned under the alteration of the capital clause. 

General meetings

This clause covers the information regarding general meetings and extraordinary general meetings. All the points regarding the calling and functioning of a general meeting are specified. The meetings of the Board of Directors are held for the conduct of the business and in order to adjourn or regulate the meetings of a company. 

Directors

The remuneration, powers, and functions performed by the Directors of a company are stipulated under the Articles of Association. Also, it contains the specification with respect to the proceedings of the Board of Directors.

Capitalisation of profits

The rules related to the capitalisation of profits also form an essential element of the Articles of Association. The profits can be utilised for distribution to the shareholders in the form of dividends. Table F states that “the company in general meeting may, upon the recommendation of its Board, resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the company‘s reserve accounts, or to the credit of the profit and loss account, or otherwise available for distribution”. 

Voting rights

It contains voting rights and restrictions on the members of a company. There are different voting rights of the members owing to their age, joint ownership, mental capacity, etc. All these details are specified under this clause. 

Winding up of company

All the rules and procedures that guide the winding up of a company are covered under the Articles of Association. The assets of the company are divided amongst the members and trustees. The articles lay down the procedure and extent of division of these assets at the time of winding up of the company.

Additionally, Table F of the Company Act, 2013, contains the format of articles for a limited liability company. It consists of the following clauses:

  • Interpretation,
  • Share capital and variation of rights,
  • Lien,
  • Calls on share,
  • Transfer of shares,
  • Transmission of shares,
  • Forfeiture of shares,
  • Alteration of capital,
  • Capitalisation of profits,
  • backBuyback of shares,
  • General meetings,
  • Proceedings at general meetings,
  • Adjournment of meeting,
  • Voting rights,
  • Proxy,
  • Board of directors,
  • Proceedings of the Board,
  • Chief Executive Officer, manager, company secretary or Chief Financial Officer,
  • The seal,
  • Dividends and reserve,
  • Accounts,
  • Winding up, and
  • Indemnity.

Mandatory drafting

It is mandatory to draft a memorandum of the company as it is the essential document of a company that presents its layout. 

Regarding the Articles of Association, a private limited company has to draft articles while a public limited company can adopt Table F which contains a comprehensive structure of articles. Some of the elements of Table F include share capital and variation of rights, lien, transfer of shares, forfeiture of shares, voting rights, proceedings of the board, accounts, and winding up. 

Alteration

The definitions of memorandum and articles are given under Sections 2(56) and 2(5) of the Companies Act respectively, giving them permission to alter these. 

Alteration of MoA

The clauses under the memorandum can be altered in accordance with Section 13 of the Act. Section 13(1) stipulates that a memorandum can be altered by passing a special resolution. Additionally, there are different conditions for the alteration of each clause of the memorandum. 

Alteration in name clause

In case of alteration of name clause, the conditions stipulated under sub-section (2) and (3) of Section 4 are to be complied with. It also requires the approval of the Central Government. A fresh certificate of incorporation is issued to the company by the registrar after the change of name. In the case of Malhati Tea Syndicate Ltd. v. Revenue Officer (1972), a company filed a writ petition with its old name, even when its new name was entered into the register of joint stock companies. The Court held their petition to be incompetent on this ground alone. 

Alteration of registered office clause

The registered office clause of a company can be altered with the approval of the Central Government. The fact that such alteration is taking place with the consent of the stakeholders of the company is taken into account before the approval. In case of a change of registered office from one state to another, the company has to file the certified copy of the order of the central government with both the states. In Mackinnon Mackenzie & Co, re (1966), the company filed a petition to change its registered office from West Bengal to Bombay. 

However, the state contended against such a petition on the ground that it would lead to a loss of revenue. The Court while rejecting this contention observed, “there is no statutory right of the state, as a state, to intervene in applications under Section 17 of the Companies Act with regard to change of registered office. If notice has been directed by the court to the State, the State appears pursuant to the notice. If notice is given to secure whether revenues have been paid or not, the court in exercising its discretion sees that a company before removing its office from one State to another does not leave liabilities to the State undischarged. The court in making an order can impose terms to secure discharge of such liabilities”. 

Alteration of objects

In case of filing of alteration in objects clause, a special resolution is to be passed by conducting a general meeting. The copy of the special resolution is filed with the registrar who has to certify the same within the span of 30 days. Earlier the approval of the Company Law Board or Central Government was essential, but now the procedure has become much more liberal and it just requires the passing of a special resolution. 

Alteration in liability clause

Section 13(11) specifically makes the alteration in the capital void, if the company’s capital is limited by a guarantee and it, via alteration, intends to grant any person (except its members) the right to participate in the divisible profits.

Alteration of AoA

The Articles of Association can be altered in accordance with Section 14 of the Companies Act by a special resolution. It can convert a public company into a private company or vice versa. Additionally, the conversion of a public company into a private company requires approval from the Tribunal. It is also pertinent to note that in case any private company, via alteration, excludes the limitations and restrictions which are significant to include in the articles, then that company would cease to be a private company. The errors in the Articles of Association can also be corrected by altering these. The following points are to be taken into consideration during the process of alteration of the Articles of Association:

  • Board of Directors should be informed and a Board meeting is to be organised. The date and time of the general meeting are decided and notice informing the same is sent to the members of the company. According to Section 101 of the Companies Act, a general meeting is called by giving a 21 days’ notice to the members. 
  • The notice is given to the auditors, directors, and all the members of the company.
  • A special resolution is passed in the meeting with a two-thirds majority of the members. 
  • Within 30 days of the passing of the special resolution, its copy is to be presented before the registrar.
  • Alteration should not be unlawful.
  • It should not violate the provisions of the Company Act, 2013, and the Memorandum of Association. 
  • The alteration should not result in the increase in the liability of a company.

The alteration of articles cannot justify the breach of contract. In the leading case of Southern Foundries (1926) Ltd.  v. Shirlaw (1940), a person was appointed as the director of the company in the year 1933 for 10 years, however, in 1935 after the amalgamation of the company, it adopted new articles and the person was removed from the post of director. This was challenged and the Court held it to be a breach of agreement and awarded damages to the plaintiff. 

Relations

The memorandum contains the conditions which are the basis of the operation of a company and therefore, it handles the relations of the corporation with outsiders like creditors, shareholders, and the public. On the contrary, the articles are the internal regulations and these manage the internal affairs of a company. 

Breach 

Section 10 of the Companies Act lays down that both memorandum and articles bind the company and its members. However, this Section expresses the contractual force of these two instruments. 

Breach of MoA

The acts done beyond the scope of the memorandum are void. The doctrine of ultra vires in the case of the objects clause is the perfect example. The ultra vires acts of the directors, make them personally liable. Also, the court can grant an injunction as to the effect of such ultra vires alteration in the contract. 

Breach of AoA

The Articles of Association, being an instrument for managing the internal affairs of a company, have a binding force in cases of agreements between the members inter se and between the members and the corporation. In the case of Wood v. Odessa Waterworks Co. (1889), according to the articles, the directors of the company were required to pay dividends to its members. Then, a resolution, to grant them debenture bonds instead of dividends, was passed. This was held to be a breach of articles as the articles provided for the dividend, i.e., to be paid in cash. Therefore, an injunction was granted and the directors were restrained from acting in this way.

Key differences between Memorandum of Association and Articles of Association

The following points reflect the key differences between these two instruments:

  • Memorandum of Association consists of the conditions which are necessary for the registration of a company. On the other hand, the Articles of Association contain the bye-laws of the company.
  • Memorandum of Association has an overriding effect over the Articles of Association. Therefore, in the cases of inconsistencies between the two, the memorandum prevails over the articles. 
  • Memorandum has to be drafted in accordance with Section 4 of the Companies Act, however, there is discretion in formulating the articles of a company.
  • The memorandum is to be compulsorily registered at the time of incorporation while there is no such mandate in case of the Articles of Association. 
  • Doctrine of ultra vires is applicable in the cases where a company functions outside the ambit of its memorandum. This makes the said acts void. However, any activity outside the scope of the Articles of Association can be performed with the consent of the shareholders. 

Tabled summary of distinction

S No.BasisMemorandum of AssociationArticles of Association
1Definition and meaningThe definition of MoA is provided under Section 2(56). It contains the layout of a company in the form of five clauses. The definition of AoA is provided under Section 2(5). It consists of the regulations and bye-laws of the company.
2Position/ statusIt is supreme legislation but is subordinate to the provisions of the Companies Act.Articles are subordinate to both Memorandum of Association and the Companies Act.
3Registration/ FilingIt is mandatory to register a memorandum at the time of incorporation.It is not mandatory to file articles at the time of incorporation.
4Major contentsIt contains five clauses which are name, registered office, objects, liability, and capital clause.The contents of articles differ from one company to another. However, Table F can also be adopted.
5Mandatory draftingIt is compulsory to draft a memorandum.A private company has to formulate the Articles of the Association while a public company can adopt Table F of the Companies Act.
6AlterationAlteration of five clauses of the memorandum has different conditions in addition to a special resolution.Articles can be altered with a special resolution.
7RelationsIt manages relations of a company with outsiders.These instruct the internal management of the company.
8BreachAnything done in contrast to the memorandum is void and the doctrine of ultra vires is applicable.It has a binding force only in respect to the matters between the members inter se and between the members and the company.

Conclusion

Today, corporations are instrumental in a country’s growth as they provide a boost to the economy. After several major as well as minor amendments in the company laws, the legislation is guiding the companies in managing their businesses. Time and again, new concepts such as corporate social responsibility are introduced so that a balance could be maintained between the working of companies and societal interests. 

Both, Memorandum of Association and Articles of Association, are important for a company’s functioning. While one handles the relations of the company with the outsiders such as creditors and other stakeholders, the other regulates internal management. However, articles have always been subordinate to the memorandum. The fact that articles are to be framed in consonance with the five clauses of the memorandum exactly validates this point. Additionally, unlike Articles of Association, the memorandum is to be compulsorily registered at the time of incorporation.

Frequently asked questions (FAQs)

What is the doctrine of constructive notice?

The memorandum and articles are considered to be public documents and therefore, every person who engages with the company, in one form or the other, is required to go through these documents.

The rule of constructive notice simply means that, in addition to having read the company’s documents, any person dealing with the company must have understood its contents in the correct manner. This doctrine is applicable to all the documents of the companies, for example, memorandum, articles, resolutions, etc. 

What are the exceptions to the doctrine of indoor management?

This rule protects the outsiders against the company. According to this rule, if the authorities work within the ambit of the articles of the company, then the outsiders contracting with the company can not be made liable on the basis of any irregularity. In the case of Royal British Bank v. Turquand (1856), it was observed that “if the directors have power and authority to bind the company, certain preliminaries are required to be gone through on the part of the company before that power can be duly exercised, then the person contracting with the directors is not bound to see that all these preliminaries have been observed. He is entitled to presume that the directors are acting lawfully in what they do”. The five basic exceptions to this doctrine are knowledge of irregularity, suspicion of irregularity, forgery, representation through articles, and acts performed outside apparent authority. 

How a special resolution is passed?

For the alteration of the Memorandum of Association and Articles of Association, a special resolution is passed. It is passed by the voting of two-thirds of members present in the general meeting. The alteration of the Articles of Association can be made restrictive by including an entrenchment clause. The provisions under the entrenchment clause cannot be altered merely by a two-thirds majority. 

References

https://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf


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

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

https://t.me/lawyerscommunity

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

Download Now

Liberal nationalism

0
Jurisprudence

This article is written by Michael Shriney from the Sathyabama Institute of Science and Technology. This article explores liberal nationalism from all aspects including its characteristics, history, and critics and whether liberalism and nationalism can coexist is also covered, along with frequently asked questions.

It has been published by Rachit Garg.

Introduction

Liberal nationalism is a commitment that deals with principles of freedom, tolerance, equality, and individual rights. Liberal nationalism stands for several things, including the inviolability of private property, individual freedom, equality before the law, representative government, and the Constitution. The right of all nations to self-determination is the most crucial component of liberal nationalism. The right to self-determination is embedded as a standard in the administration of every liberal democracy and a desire to choose one’s geographical limits continues to be an extremely powerful force in international affairs.

Liberal and nationalist views are two different and distinct ways of understanding when politics and society are involved. If nationalism were to expand, liberalism would decline, and on the contrary motion, it would be true. Liberal nationalism acknowledges that culture and belongings are communal qualities that can only be fully appreciated in a community with people who share the same values. Thus, the right to culture includes the right to a public sphere where people may communicate in their native language, remembrance of their ancestors, honour their heroes, and lead full lives as citizens of their country. Liberal nationalists agree that choosing one’s national identity is necessary.

An overview of liberal nationalism

At beginning of the 19th century, liberal nationalism promoted individual freedom and racial equality. Liberal nationalism emphasized the idea of getting consent from the government but from a political perspective. Liberal nationalism is primarily intended for Europe’s middle class. Economic liberalism, which is demanded by the middle class, stands for independence of markets and the elimination of state limitations on the flow of commodities and capital.  

In the early 19th century, concepts of ideology and national unity were closely related to liberalism. According to a political declaration, each person is endowed by their creator with certain unalienable rights. The idea of liberal nationalism was based on people having inherent rights that are absolute and inherent. This liberalism supported the new middle class’s desire for independence, individualism, and equality. Since the French Revolution, liberalism has stood for the abolition of autocracy and clerical privileges, the establishment of a Constitution, and the establishment of representative government through parliament. Let’s discuss its history, importance, characteristics, and people engaged, as well as its critics and needs of liberal nationalism.

What does liberal nationalism stand for?

Liberal Nationalism is also known as civic nationalism or civil nationalism, a term used by political theorists who support an all-inclusive, non-ethnocentric nationalism. The Latin word ‘liber’, which means free, is a source of the word ‘liberalism.’ The term “nationalism” is commonly used to describe two phenomena: an attitude that members of a nation have when they think about their national identity and activities that people of a nation perform while attempting to achieve or retain self-determination. Equal protection under the law did not always ensure universal suffrage. Suffrage refers to the ‘right to vote’. In a liberal democracy, only males who owned property could vote and hold elective office before liberal nationalism. 

All women and men without property were denied to get political rights. Women and non-propertied men organized opposition groups throughout the nineteenth and early nineteenth centuries, seeking equal political rights. The rise of the middle classes made a strong demand for economic liberty during the nineteenth century. Professors, school teachers, clerks, and members of the commercial middle classes made up an educated middle-class aristocracy to which liberal nationalists belonged. 

Three spheres of liberalism

There are three spheres of liberalism, which are as follows-

  1. Social sphere
  2. Political sphere
  3. Economic sphere

Social sphere

In the social sphere, liberalism fought for individual freedom and equality before the law. Socially, they seek to help society with class biases and birthright. They also requested that bonded labour be abolished. This sphere is meant to solve economic and social challenges such as poverty, welfare, infrastructure, healthcare, education, and climate through government intervention while simultaneously emphasizing individual rights and autonomy. When it comes to liberalism and democracy, social sphere and Constitution are examined, which control economic well-being and social equality.

Political sphere

In the political sphere, liberalism stood for equality, freedom, establishment and operation of government by consensus. It primarily focused on the concept of government by consent. It is intended that middle-class liberals demand abolition of monarchy and establishment of a republic in which individuals can freely express themselves. It also refers to individuals having the ability to choose their government. Politically, they wanted a Constitution with national unification, a nation-state with a codified Constitution, and a parliamentary government.

Economic sphere 

Liberalism promoted free markets and restrictions on the elimination placed by the government on the flow of capital and goods in the economic sphere.  For each state, the Napoleonic regime established unique money, weights, measures, and customs fees. A single economic space was what liberals favoured. Nationalism was reinforced by economic nationalism and unity. In contrast to excessive government control, liberal nationalism places more emphasis on individual freedom. The political, economic, and social spheres all bore witness to it.

History of liberal nationalism

Monarchies ruled people in ancient times; there were no distinct states or governments. The French artist Frédéric Sorrieu created four prints in 1848 that depicted his idealised vision of a future with democratic and social republics. In his first print, individuals from America and Europe were seen marching in the direction of the statue of liberty, which is in form of a woman, carrying torches of enlightenment and the charter of the rights of man. In the form of broken pieces of symbols that were lying on the ground, he had also shown the destruction of monarchical rule. He also showed how individuals come from other nationalities and how they dress and display their flags. People from the United States and Switzerland crossed the Statue of Liberty, visualizing the development of those states into nation-states. In his perspective, France may also become a nation-state in his print. 

The French Revolution of 1789 was the first example of nationalism. Under the absolute monarch’s reign, France was a fully developed territorial state. The French monarchy’s authority was transferred to a body of French citizens as a result of political and constitutional reforms that followed the French revolution. The concepts of la Patrie (fatherhood) and le Citoyen (citizen) emphasized the idea of a united community having equal rights under the Constitution. On Prussia’s proposal, most of the German states joined Zollverein, or customs union, formed in 1834. Developing a railway network increased mobility and transformed economic interests to promote national unity. Zollverein’s mission was to economically unite the German people. 

There were no tariffs and just two currencies in a Prussian customs union, to which several German states also joined. The development of a railroad network increased mobility and promoted national unification by attracting economic interest. A confederation of 39 states was formed by Napoleon’s administrative policies from countless small principalities. Each of these had different weights and measures for their money. A merchant was required to go through 11 customs checkpoints and pay tax at each one. An emerging commercial class, who campaigned for the establishment of a united economic region permitting unrestricted movement of products, people, and money, saw such circumstances as a barrier to economic trade and prosperity. The formation of a customs union resulted in removal of tariff barriers and a decrease in the number of currencies for more than thirty to two. 

Features of liberal nationalism 

  • The most significant aspect is that in the 19th century, liberalism and nationalism stood for the freedom of an individual and the equality of a nation.
  • In terms of politics, it must focus on the idea of consent-based government.
  • Liberal values, such as individual freedom and equality for everyone were important to the middle class in Europe.
  • In economic liberalism, the middle class desired to encourage market freedom and abolish state restrictions on the flow of capital and goods.
  • All equality before the law is expressed by liberal nationalism.
  • The rights over property and voting were mainly focused on.
  • The abolition of state-imposed restrictions on the movement of goods, as well as free trade and markets.
  • This is focused on the removal of autocracy, aristocratic privileges, and clerical privileges.
  • Political, economic, and social spheres were all important to liberal nationalism.
  • This rejects hereditary monarchy and supports democratic government.

What were the critics of liberal nationalism

  • An important target of liberal nationalist criticism was censorship laws that were intended to control the press.
  • Their other main concerns included maintaining a church, having a modern army, and having an effective bureaucracy.
  • The criticism came from liberal nationalism, which believes that the former was created specifically to oppose the latter.
  • The German country of early times was known for its internal schisms, particularism and provincialism, but he was led to believe that it could only be preserved by subordinating people or local units as a whole. The criticism came from liberal nationalism, which believes that the former was created specifically to oppose the latter.
  • Another criticism was directed towards an individualist tradition for failing to create acceptance criteria for determining membership in a state.

Why do we need liberal nationalism

Liberal nationalism should be accompanied by democracy to achieve its functions. Liberalism must perform efficiently and successfully in the presence of democratic institutions. When nation-state residents feel empowered to participate in civic life and have an impact on politics, the liberal nationalists’ goals can be achieved. In order to achieve the State’s goals, it must uphold minority, women and civil rights as well as acknowledge national identity as a force for societal cohesion. Giving people the freedom to live their life as their choice while enabling them to support themselves financially is the goal of this liberal nationalism. The core idea of liberal nationalism is the right of all nations to self-determination. The main objective is to establish a world community of independent nation-states.

Rise of liberal nationalism in Europe

The rise of nationalism as a political and intellectual force in Europe throughout the nineteenth century led to significant developments in both. In Europe, there were multinational dynastic empires, which led to the birth of nation-states. Ideals and practices of a modern state, which were evolving over a lengthy period of time in Europe, took place over the centralization of power exercised by sovereign authority over a clearly defined region. Under autocratic monarchs of eastern and central Europe, different people resided. There was no common identity among them. The area was populated by many individuals who spoke various languages and belonged to various ethnic groups. The loyalty of the people to a single monarch served to unify them. 

On the continent, aristocracy was a dominating class due to social and political factors. These class members had a common way of life that crossed geographic boundaries, binding them together. Industrial output and trade increased throughout western and portions of central Europe. Towns grew as a result, and new commercial classes appeared. The production of market served as a foundation for this new class’s existence. There were new social groupings formed. It was thought that the monarchs of Europe might be strengthened by the development of a modern army, effective administration, a vibrant economy, and the elimination of serfdom and feudalism. In 1815, representatives from Britain, Russia, Prussia, and Austria met in Vienna to propose a settlement for Europe, which is known as the Treaty of Vienna.

Conclusion

Individual freedom, equality before the law, representative democracy, the rule of law, and the inalienable right over private property were just a few of many ideas that liberal nationalism fought for. There is market freedom by functioning liberal nationalism. The application will lead to an ideal situation where men and women live in peace with an understanding that they are one, and there is a feeling of community that surrounds that country. All states imposed limitations on the flow of capital and products which they aimed to abolish. Essentially, this is a political identity that is based on and shared by residents of the state. People need a sense of national identity in order to have a successful and independent life. Liberal nationalism relies on both political devotion and cultural unity. This idea understands a component of an ideal thought concerning state formation. However, it might be challenging to accomplish in the absence of control originating from a centralised authority.

Frequently Asked Questions (FAQs)

Who were called liberal nationalists?

Professors, school teachers, clerks, and members of the commercial middle classes were among the educated middle-class individuals that made up liberal nationalists. There were members of the new middle class who adhered to liberal principles.

How did liberal nationalism develop in Europe?

In many parts of Europe, such as Italy and Germany, as well as the provinces of Ottoman Europe, Ireland, and Poland, liberalism and nationalism were increasingly connected with revolution.  These revolutions were guided by educated middle-class liberal nationalists. The people believed in liberal nationalism and intended to fight for it.

What is the difference between liberal nationalism and national liberalism?

  • Liberal nationalism is similar to civic nationalism, which is based on ideas, freedom and culture that help to build national identity. But it is opposed to ethnic nationalism, which is based on racism and other reasons. 
  • National liberalism refers to the freedom of international unions and organisations. This is an idea of national freedom and sovereignty.

What is the other name for liberal nationalism?

Liberal nationalism, commonly known as civic nationalism, is characterised by classic liberal values such as freedom, tolerance, equality, individual rights, and absence of ethnic nationalism. It upholds the importance of national identity by stating that people require a national identity in order to function correctly.

References


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

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

https://t.me/lawyerscommunity

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

Download Now

Section 133 CrPC

0

This article is written by Vedika Goel of OP Jindal Global University, Haryana. This article provides a detailed analysis of Section 133 of the Criminal Procedure Code 1973 which allows the Magistrate to pass an order to protect the community against public nuisance.

It has been published by Rachit Garg.

Introduction

Section 133 of the Criminal Procedure Code, 1973 is a condition order to remove nuisance. This provision is usually used in urgent cases where public nuisance needs to be removed. Nuisance, in simple terms, refers to any physical inconvenience or discomfort that interferes with the ordinary comfort of a human being. It is the basic duty of our government to ensure that law and order is maintained at all times. This directly leads to the protection of property, life, and even religious beliefs of the people by the State. Proceedings under the Criminal Procedure Code are directed to protect the public at large. It does not serve to protect people against private disputes. Therefore, for the Criminal Procedure Code, 1973 to function, a wide section of society must be involved. Sections 133 to 144A under Chapter X of the CrPC are devoted entirely to regulating public nuisance.

This article will analyse Section 133 CrPC in detail along with its essential ingredients and some of the landmark judgements governing this Section.

Public nuisance vs. private nuisance

In order to understand the essential ingredients of this provision, it is first important to understand the difference between public nuisance and private nuisance. Public nuisance is defined under Section 268 of the Indian Penal Code, 1860. Accordingly, when any offence is committed against the public that causes an injury, harm, or even annoyance to a larger public who occupy a common area, it is termed “public nuisance.” Therefore, it is a crime against society and not just against an individual or a group of people. For instance, polluting water streams, obstruction of highways, and storing explosives are examples of public nuisance. Private nuisance, on the other hand, does not affect the public at large but only affects a few individuals.

Section 133 CrPC and its meaning

According to the provision, a District Magistrate, a Sub-Divisional Magistrate or even any other Executive Magistrate as specified by the State Government is empowered to do the following provided sufficient evidence has been presented:

  • That any nuisance causing any obstruction should be removed from any public place, channel or river that lawfully belongs to the public.
  • That conducting a trade, occupation, or possession of certain merchandise has a direct negative impact on the physical comfort of the public and, in consequence, the carrying out of such a trade, occupation or possession of such merchandise must be prohibited.
  • That the construction of any property or the disposal of substances in connection with such construction is likely to result in an explosion and therefore must be stopped or prevented.
  • That any building, tree, or structure is likely to fall and cause damage, and therefore the repair, removal, or support of such a building, tree or structure becomes necessary.
  • That any dangerous animal must be confined or disposed of as the case may be.
  • That any well, excavation or tank that causes any obstruction to the public shall be accordingly removed to prevent any danger to the public.

Therefore, as per Section 133 CrPC, a magistrate can take action if any information regarding any nuisance is received through either a police report or any other credible source. It is also interesting to note that an order made under this provision cannot be challenged before a Civil Court and is therefore considered to be a rigorous remedy against public nuisance. Moreover, the provision also clarifies that a “public place” includes property that belongs to the State, camping grounds, or even grounds that are left unused for sanitary or recreational activities.

Remedies under Section 133 CrPC

A Magistrate on receiving such information can direct a conditional order with the following remedies-  

  • To immediately remove the interference or disturbance within a reasonable time period.
  • To either stop the construction of such a building or completely dispose of such a building.
  • To remove or repair the building or the trees, tents or structures.
  • To fence the pits, tanks or excavations.
  • To eliminate or dismantle the animal causing any danger to the public.
  • To stop or control the functioning of any trade/activity by either ordering the removal of goods or services or managing the storage of such goods in a prescribed manner.

Punishment under Section 133 CrPC

Section 268 to 294A of the Indian Penal Code, 1860 provides for the punishment for offences pertaining to public nuisance. The offence of public nuisance is punishable except for the offences laid down in Section 290 of the Indian Penal Code, 1860. Under this provision, the fine can be extended up to Rs. 200. The offence under this Section is bailable, non-cognizable and non-compoundable.

Difference between Section 133 and Section 144 CrPC

Section 133 CrPC is often confused with Section 144 CrPC. Therefore, it becomes critical to understand the difference between the two provisions. Section 133 CrPC is a specific provision that deals with offences pertaining to public nuisance. However, Section 144 CrPC is used to keep a check on the presence or formation of unlawful assemblies that can be a danger to public tranquillity and human life. It can also be used when there is any anticipation of a riot or danger or annoyance to human life. This provision can be used even when there is merely an anticipation of danger, provided that such anticipation is based on material facts.

Firstly, while Section 133 is a more specific provision, Section 144 is a generic and broader provision. Secondly, the order made under Section 133 is conditional, and on the other hand, the order made under Section 144 is absolute. In the case of State of M.P. v. Kedia Leather and Liquor Ltd. and Others (2003), the Court elaborated on the differences between the two provisions comprehensively. The Court noted that  proceedings under Section 133 CrPC are of a summary nature and the offences under this provision are classified as public nuisance. However, the offences under Section 144 CrPC are classified as ‘urgent cases of nuisance and apprehended danger’. The Court further clarified that proceedings under Section 133 CrPC are civil in nature, whereas the proceedings under Section 144 CrPC are mostly criminal in nature.

The differences are summarised below:

Section 133Section 144
It is a specific provision only dealing with offences pertaining to public nuisance.Section 144 CrPC is a general provision.
The order made is conditional.The order made is absolute.
Proceedings are civil in nature.Proceedings are mostly criminal in nature.

Important case laws

In the case of Ram Autar v. State of U.P (1962), the Supreme Court clarified that Section 133(1)(b) CrPC can only be used when the trade/occupation is causing an imminent danger to the health and physical comfort of the public. Therefore, the noise caused due to the auctioning of vegetables on private property will not constitute an offence under this Section since there was no danger to the health or physical comfort of the locality or community. 

Further, the Supreme Court in the case of M/s. Nagarjuna Paper Mills Ltd. v. Sub-Divisional Magistrate and Revenue Divisional Officer(1987) held that a Magistrate could not make an order to remove pollutants from water discharged due to industrial waste on account of preventing water pollution. This is because other laws, such as the Water (Prevention and Control of Pollution) Act, 1974, are exhaustive and were enacted to specifically deal with such issues. Further, while the remedies provided under Section 133 CrPC are remedial, the remedies given under the Act are preventive. Therefore, the powers of a Sub Divisional Magistrate to make an order under Section 133 CrPC are taken away.

In the case of the State of M.P. v. Kedia Leather and Liquor Ltd. and Others (2003), the Allahabad High Court clarified the ambiguity regarding the scope of the term “public nuisance”. The Court held that the term “public nuisance” cannot be given a precise definition and the only qualifying factor to constitute an offence under Section 133 CrPC is to see whether there is any “imminent danger” to the general public at large. The Court also clarified that the true role of Section 133 CrPC is in urgent matters wherein any failure to prevent nuisance by the magistrate can result in irreparable damage to the public. It was further held that this section can only be applied when the nuisance exists and therefore cannot be used in any potential case of nuisance.

In another important judgement, the High Court of Madras in the case of the Manager v. the Sub Divisional Magistrate (2008) gave out some important guidelines pertaining to Section 133 CrPC. These are-

  • Any order made under Section 133 CrPC must be based only upon material factors.
  • The restrictions imposed under such an order must be reasonable and fair.
  • Proceedings under this Section cannot be used for the settlement of private disputes.
  • An order under Section 133 CrPC can be passed only if there is any imminent danger to the physical comfort of the public.
  • This imminent danger must lead to public nuisance.
  • An order made under Section 133 CrPC cannot be substituted with civil proceedings.
  • The provision only comes into play when there is a sense of urgency and not when the nuisance has been in place for a long period of time.

In another development, the Jammu and Kashmir High Court in the case of Girdhari Lal v. State of Jammu and Kashmir (2018) once again emphasised that Section 133 CrPC cannot be used to settle private disputes and must be used only to protect the public from any nuisance.

In a recent Karnataka High Court judgement, the Court in the case of Achut D. Nayak and Ors v. the Sub Divisional Magistrate and Anr. (2022) held that a Magistrate exercising power under Section 133 CrPC must do so only after providing the party with a reasonable and sufficient opportunity of being heard and recording evidence in order to arrive at a conclusion that the actions of the person/party caused any kind of public nuisance. It was also held by the court that by not recording evidence and taking the necessary material on record, there could be a serious miscarriage of justice and abuse of the law.

Conclusion

Section 133 CrPC attempts to protect the community from public nuisance. It must be appreciated that the provision is rigorous as it clearly states that an order made by the Magistrate cannot be challenged before the civil court. Further, the Courts from time to time have removed ambiguities regarding the scope, nature as well as applicability of this provision. At the same time, the Courts have also ensured that the power given to the Magistrate under this provision is not used excessively or in an unreasonable or unfair manner by clearly instructing the authorities to consider material factors before passing any orders. Not only this, but the Courts have also ensured that trivial matters such as raising the volume in private property do not bear the consequences of public nuisance. It is important that the provision is used fairly and for the right reasons. It is noteworthy that the courts have always ensured that the provision serves its purpose.

Frequently Asked Questions (FAQs)

Can an order under Section 133 CrPC be passed against private individuals?

As per Section 133 CrPC, an order can only be passed where there is a nuisance against the public at large. This means that only those offences that are committed against the public and cause an injury, harm, or annoyance to a larger public who occupy a common area can be actionable.

Who can pass an order under Section 133 CrPC?

An order under Section 133 CrPC can be passed by a District Magistrate, Sub- Divisional Magistrate, or even any other Executive Magistrate as specified by the State Government.

What kind of proceedings are conducted under Section 133 CrPC?

The proceedings under this Section are always civil in nature. 

What is the main difference between Section 133 and Section 144 CrPC?

Section 133 CrPC is a specific provision that deals with offences pertaining to public nuisance. However, Section 144 CrPC is a general provision and is used to keep a check on the presence or formation of unlawful assemblies that can be a danger to public tranquillity and human life. 

References


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

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

https://t.me/lawyerscommunity

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

Download Now

Condemning to death – is ipso facto condemnable!

0
Punishment

This article is written by Varun Ranganathan studying at Government Law College, Coimbatore, pursuing a Paralegal Associate Diploma at Lawsikho. This article has been edited by Ojuswi (Associate, Lawsikho). 

This article has been published by Sneha Mahawar.

Introduction

The Judiciary in pursuance to maintain law and order in the state and enforcing the law of the land adopts the penal provisions. Capital Punishment is the highest and most controversial among the other penal provisions prescribed by the law. In India, capital punishment is still prevalent though is granted particularly to certain heinous offences and brutal crimes, yet paves the way to a long-standing, frequently debated question regarding its justification.

Human beings are the greatest achievement of the evolution process so far. Similar to the evolution of human beings, the laws invented by them are also being evolved along with them over time. So, whether to deprive the life of the ‘greatest achievement’ is justifiable simply because it is permissible by law which in itself is subject to change?

The object of this article is:

● To comprehensively analyse the death penalty.

● To critically advocate against the death penalty for its inconsistency with the principles of morality and laws of human rights.

Meaning and definition of capital punishment

The term “Capital Punishment” stands for the most severe form of punishment. It is the punishment that is to be awarded for the most heinous, grievous and detestable crimes against humanity. While the definition and extent of such crimes vary from country to country, state to state and age to age, the implication of capital punishment has always been the death sentence. By common usage in jurisprudence, criminology and penology, a capital sentence means a sentence of death. 

The Britannica Dictionary defines “Capital Punishment” as:

punishment by death;

the practice of killing people as punishment for serious crimes.

insolvency

Historical background of capital punishment in India 

The practice of sanctioning of death sentence has been a part of the Indian justice system and has a history since time immemorial. However, the references to practice can be traced back to the texts of The Manusmriti, an ancient source of law wherein:

“The capital punishment was sanctioned for theft of more than 10 Khumbhas”

                                                                                                          – Manu 8, verse 320

The death penalty is also referenced in the ancient epic of Mahabharata when the Pandavas decided that the death sentence was too kind for the heinous massacre committed by Ashwatthama.  In Tamil Nadu, During the reign of Cholas, the king Ellalan who is portrayed as the symbol of unprejudiced justice was awarded the title of “Manu Nidhi Cholan” (The Chola who follows justice) for executing his own son to grant justice to a cow. Only after the establishment of prison systems capital punishment was considered to be an alternative form of punishment.

The long history of capital punishment has undergone several changes throughout the course of history from being the primary penalty to a punishment granted particularly for the rarest of rare cases. The paradigm has slowly shifted towards liberalizing its usage. Now, it is high time to do away with its existence.

The Intention behind the death penalty – justifiable? 

The intents to penalize with death are three folded:

Preventive approach wherein the offender is punished to death so that crimes can be prevented from occurring any further

The intent of such a preventive approach may be genuine but that does not justify the method in which it is approached. Crimes ought not to be prevented by executing the offenders but rather by obliterating the root cause which is the intention to cause such crime.

Deterrent approach, which imposes severe penalties to create a deterrent over other subjects

The fear-causing intent might have been well suited during the times of monarchy but in recent years, democracy is the form of government that prevails. This approach contravenes the very principles of democracy as much as it contravenes morality. In other words, people are the ultimate authority in a democratic nation; they should not be controlled with a deterrent effect. 

Retributive approach, which inflicts the wrongdoer the pain which is similar to his crime. 

The approach perse is vindictive in nature. This approach instead of paving the way to harmony in society leads to an autocratic state tormenting its subjects. 

Capital punishment in India – The doctrine of “rarest of rare cases”  

The sentence of death is provided for various offences under distinct sections, nevertheless, the convention of sanctioning death as a punishment is not applied as a general rule but only to “the rarest of rare cases”.

The Doctrine of “rarest of rare case” was first proposed in the case of Bachan Singh V State of Punjab, the supreme court held that the death penalty should be awarded only in the rarest of rare cases. This perspective of the Supreme Court was welcomed as it aimed at decreasing the use of Capital Punishment. Although this doctrine has significantly restricted the usage of the death sentence, the complication in this doctrine is the term “rarest of rare case” is not defined by the legislation or The Supreme court. The definition of a rule of law removes the ambiguity and constructs it with certainty, which becomes inevitable in matters relating to literally the grave punishment as it is certainly not revocable and such a definition is almost unachievable and impractical.  

International scenario

Nations across the world are leaning toward the leniency of sanctioning the death penalty for at least the last decade. At the end of 2014, 98 countries abrogated the death penalty; 35 countries abolished such practices and unexpectedly 58 countries that retain the penalty of death have not granted it in the recent past. 

The International Non- Governmental Organisation Amnesty International holds that the death penalty breaches human rights, in particular the right to life and the right to live free from torture or cruel, inhuman or degrading treatment or punishment which are protected under the Universal Declaration of Human Rights, adopted by the UN in 1948.

The second optional protocol to the international covenant on civil and political rights is aiming to abolish the death penalty “believing that abolition of the death penalty contributes to the enhancement of human dignity and progressive development of human rights.”

The member states of the Council of Europe by virtue of ratifying the protocol to the convention for the protection of Human Rights and Fundamental freedoms have agreed to the abolition of the death penalty. 

Arguments against capital punishment

The opposition against capital punishment can be categorized on moral, practical and constitutional grounds:

Moral grounds

Value of human life

Human Life deserves to be esteemed. Human life takes around 9 months merely to be created and many more years to attain complete growth. Such life ought not to be taken away within moments, such an act is nothing but a disregard for the value of the precious life. In fact, Human Life is extremely valuable even if the offender with the worst conduct does not deserve to be deprived of his life for all or any crime that he has committed.

Retribution is immoral

Retribution is not an ideal way of punishing an offender and is purely a sanitised form of vengeance. The concept of retribution obliterates the object of establishing justice by exactly doing the act of killing through the law which is not supposed to be done because it is prohibited by law. Following retribution as a part of a nation’s justice system sows the seeds of revenge in the minds of the subjects and further leads to more harm than good by increasing the number of crimes committed. 

Cruel and inhumane

Capital punishment regardless deserving or not causes enormous pain and is a cruel, inhumane and tormenting act that not only inflicts pain on the offender but also on the near and dear ones of the offender. 

Practical grounds

Irrevocable

The most obvious and common argument against the death penalty is its irreversible nature. Every other punishment, if it comes to light that such punishment was granted out by mistake, can be reversed and/or at least compensated for any damages suffered. Though the advanced Justice system would strive towards not letting such an event occur, there exists a possibility of executing an innocent person which cannot and must not be ruled out.

Violent remedy

The principle of the state is to comply with its obligations in the least invasive and harmful way possible. Capital punishment is more often associated with an act of violence. The justice system involving capital punishment as a remedy for preventing criminal violence ultimately makes the law dependent on grounds of violence which is unacceptable. 

Unnecessary

Capital punishment is not the exclusive form of punishment available to establish an orderly society. In fact, it can be substituted with other effective punishments such as life imprisonment, rigorous imprisonment, etc. 

Constitutional grounds

Right to Life

The Right to Life under the constitution must be provided unconditionally and absolutely and must not be restricted by procedures established by law because the right to life is not merely a constitutional right vested by the sovereign over its subject but it is an inherent and inalienable right vested to all humans irrespective of their conduct.

Justice. V. R. Krishna Iyer in the case of  Rajendra Prasad vs State of Uttar Pradesh states that:

“The special reason must relate, not to the crime but to the criminal. The crime may be shocking and yet the criminal may not deserve the Death Penalty”.

Deterrence is not consistent with the ideology of democracy

The notion of controlling the subjects of a state from committing a crime by way of causing a deterrent effect in a democratic state is self-contradictory as in a democratic state the people are the ultimate authority and the idea to achieve a crimeless society by threatening the authority is not ideal. This ideology impairs the relationship between the state and its subjects.

“Power is of two kinds. One is obtained by the fear of punishment and the other by acts of love. Power based on love is a thousand times more effective and permanent than the one derived from fear of punishment.”

                                                                                                                     – Mahatma Gandhi.

Suggestions

The deterrent and retributive approach must be replaced with a reformative approach. The sanctions of punishment besides being based on crime must also be based on the reformation of an offender. Life imprisonment and rigorous imprisonment are two of the common substitutes which can be used in lieu of the death penalty for heinous offences. Community service punishment which is to force the offender to work for the public good must be regularised in addition to other forms of punishment. The offender must work for community service during a part of his sentence. The offender must be made aware to realise the consequences of his criminal act instead of making him feel the same pain and suffering for his criminal act as a consequence.

Conclusion

Laws are enacted for the well-being of humans and to improve their quality of life and not to take them away. The belief and practice of “an eye for an eye” theory might have prevented us from visualizing the cruel and inhumane side of capital punishment in the past. But presently, Nations across the world are realizing the ill effects of the death penalty and are abolishing it considering its detrimental effect on humanity. Now it is for us to fight tooth and nail against the concept of “tooth for a tooth” and abolish the condemning act of condemning to death for a better future.

References

Books

  • Subash C Gupta, Capital Punishment In India (1986) 
  • C K Thakker ‘Takwani’ and M C Thakker, Criminal Procedure (4th Edition, 2014)
  • K N Chandrasekharan Pillai, Criminal Procedure (7th Edition, 2021)
  • Navin Kumar, Criminal Psychology (1st edition, 2015)

Websites


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

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

https://t.me/lawyerscommunity

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

Download Now
logo
FREE & ONLINE 3-Day Bootcamp (LIVE only) on

How Can Experienced Professionals Become Independent Directors

calender
28th, 29th Mar, 2026, 2 - 5pm (IST) &
30th Mar, 2026, 7 - 10pm (IST).
Bootcamp starting in
Days
HRS
MIN
SEC
Abhyuday AgarwalCOO & CO-Founder, LawSikho

Register now

Abhyuday AgarwalCOO & CO-Founder, LawSikho