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Intestate succession

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This article is written by Jagdish Kaisare and further updated by Upasana Sarkar. It deals with the laws of intestate succession. It gives a detailed and comprehensive understanding about the meaning, concept, and rules of intestate succession. It also states which religion has their own personal laws governing their own intestate succession, and in the absence of personal laws, the Indian Succession Act, 1925, will be applicable.

Table of Contents

Introduction 

The Indian legal system has various laws dealing with the inheritance of properties and assets of the citizens of India. Inheritance laws deal with the properties and assets of a person who dies. It lays down provisions dealing with the succession rights of assets and properties of a deceased person. There are some personal laws that deal with the inheritance rights of the Hindus and Muslims, whereas the Indian Parliament has also introduced the Indian Succession Act, 1925, which is applicable for everyone irrespective of any religion. The Indian Succession Act will be applied in the absence of a personal law of a particular religion. These Acts lay down rules and regulations regarding the distribution of properties and assets in cases of both testate succession (with a will) and intestate succession (without a will). The concept of intestate succession is unknown to most of the Indian citizens. They have grown up with the idea that the property of one’s parents passes to their children. 

Most of the Indian citizens do not have the knowledge about the time and situation when the laws of intestate succession come into play. So, it is very important to understand the role of intestate succession. Laws of intestate succession are useful for identifying and prioritising heirs so that the properties of the deceased person can be distributed fairly, legally, and in an organised manner. A Probate Court, mainly, has the authority to determine the intestacy in case of a deceased person without a will.

Let us understand the concept of intestate succession at length. 

Meaning and concept of intestacy in India 

Intestacy is a situation where a person dies without leaving a last will and testament for the inheritance of his properties and assets. In case a person does not have any will, the deceased person’s assets and properties will be distributed among the successors in accordance with the laws of intestate succession. For distribution of the assets among the successors, mostly the personal laws of a particular religion will govern all the members of that community. Therefore, the laws of intestate succession are very important for outlining the hierarchy of beneficiaries and the proportion of assets that the beneficiaries will enjoy as the owners of those particular properties or assets. 

The rules laid down in the intestate succession laws aim to make an equitable and fair distribution of assets and properties among the heirs of the deceased. However, it might not be consistent with the testator’s explicit wishes and intentions to transfer wealth in a specified ratio among family members based on their needs or to any other individual who could be a distant relative, friend, caretaker, or charity, as it prefers distributing them between the natural heirs. In the absence of a will, it is the duty of the court to determine the distribution of the deceased person’s estate, which mainly establishes a hierarchy, with spouses and other close relatives being first in line to receive the properties and assets. Hence, the meaning of intestate succession is the transfer of the estates of an owner who has died in accordance with the provisions of laws of intestate succession. 

Key terms in intestate succession

There are a few important key terms that are used in the case of intestate succession. These terms are frequently used while dealing with the succession laws. So it is very important to understand their meanings. Some of the key terms are as follows:

Heir

The term ‘heir’ means a person who inherits the property of a deceased person in absence of a will or testament. In short, it means when a person acquires the property upon the death of another person. A person can inherit one dead person’s property by descent, relationship, will, or testament. The definition of ‘heir’ is mentioned in the Black’s Law Dictionary (9th Edn). According to this dictionary, heir means a person who, under the laws of intestacy, is entitled to receive an intestate descendant’s property. The Oxford English Dictionary (Indian Edn) also defines the expression “heir”.  It means a person legally entitled to the property or rank of another on that person’s death.

Intestate

A person is said to have died intestate if he does not leave a will specifying the distribution of his properties or assets before dying, or the will made is deemed to be invalid or illegal. It means that the person has not written his wishes about how to distribute his properties and assets among his/her heirs.

Decedent

A person is said to be a decedent if he dies, leaving his property to be distributed. It means that the person has died without making a will that denotes who will be given how much of properties and assets. 

Legal heir

A person is said to be an heir of a person when he inherits property from the decedent. A person is a legal heir or not is determined with the help of a valid and legal will or by the particular state’s intestate laws. The legal heirs are classified as follows:

  • Class I: Those persons who belong to Class I heirs come first in the inheritance line, who are the wife, sons, daughters, and the mother of the deceased person.
  • Class II: Those persons who belong to Class II heirs come second in the line of inheritance when none of the Class I heirs are present or alive to claim the inheritance rights. The father, brothers, and sisters are usually considered to be Class II heirs of the deceased person.
  • Agnates: Agnates are said to be those persons who are the relatives of the deceased person related by their male family members. 
  • Cognates: Cognates are said to be those persons who are the relatives of the deceased person related by their female family members. 

Succession

In common parlance, succession means inheritance. Upon the death of a person, succession follows. The Constitution of India, via Entry 5 in List III, recognizes the personal laws and deals with areas like marriage, divorce, adoption, partition, intestacy, succession, etc. Thus, either the State or the Centre is competent to legislate on areas falling within the ambit of personal laws.

The word ‘succession’, in its simple sense, means succeeding the rights of another person. It means passing the legal rights of a deceased person to another person. It can also be defined as taking the rights of a dead person as his/her successor. If a person dies without a will, his or her legal heirs receive the inheritance. Succession is a situation where a person succeeds the property of a deceased person and becomes the successor. In most cases, the Hindu Succession Act, 1956, prescribes the rules relating to succession applicable to Hindus, Sikhs, Buddhists, and Jains. It extends to the majority of the Indian citizens. Another one is the Sharia Law, which is applicable to Muslims. Then comes the Indian Succession Act, 1925, which is basically applicable to Christians and other persons not covered by the Hindu Succession Act and the Sharia Law.

Testate

The expression ‘testate’ denotes the act of having a valid will. A person, in such a case, leaves a written will to govern the disposition of his or her property after death. Such succession is known as testamentary succession.

Probate

The legal method of distribution of the estate of a deceased person is called probate. There are mainly two kinds of courts under this category:

  • Probate Court: The Probate Court has jurisdiction over the estate of a deceased person. This is known as the Circuit, Superior, Common Pleas, Surrogate, or the Orphan’s Court in several states.
  • Probate Estate: The probate estate means where the properties of a deceased person need to go through the probate procedure. However, all of the estate need not, nor will, go through the probate procedure.

Spouse

The expression “spouse” usually means an individual lawfully married to another individual. A person is said to be a surviving spouse when the survivor is legally married to the deceased at the time of that person’s death.

Issue

The term “issue” is used to describe a person who should inherit the estate of a deceased person in the absence of a will. Children and grandchildren are usually direct descendants of the deceased person.

Children

The meaning of the term “children” is known and clear to everyone. But there are some other definitions also that are included in it, which are as follows:

  • Adopted children: Adopted children are not biologically born children of their parents but are adopted through legal means. Most of the states, including India, give the adopted children the same inheritance rights as the biological children.
  • Stepchildren: Stepchildren are children of one’s husband or wife by a previous relationship. Unlike other states, in India, most of the time the stepchildren are allowed to inherit the property of their parents if they are legally adopted by them.
  • Posthumous children: A posthumous child is a child that was conceived before the parent’s death but was born after their death. Like other nations, in India, posthumous children inherit the properties according to the same intestate succession laws as other natural-born children.
  • Children born through artificial insemination: When the woman uses an unknown donor’s semen to become pregnant, the child born is the biological child of the woman alone, not her husband. Therefore, after the death of the husband, the child may or may not inherit property under intestate succession laws in accordance with the laws of that state.
  • Children born outside marriage: Children who are born to unmarried parents need to show some proof in order to inherit the assets of their father.
  • Foster children: Foster children, mostly, do not inherit the properties of the parents unless the properties are gifted to them by a will.

Siblings

The term ‘Sibling’ is used to refer to a sister or brother of a person. In law, it means a birth sibling, or legally adopted brother or sister, step-brother or step-sister. Half-siblings who are adopted by the parents are also included under the expression ‘siblings.’

Will

A will is considered to be a formal statement expressing a person’s intentions regarding the transfer of their assets and property. It may or may not explicitly state the properties or assets and may or may not expressly transfer ownership rights to family members, friends, carers, and others. Section 2(h) of the Indian Succession Act, 1925, defines the term ‘will’, which states that it is the legal declaration of the testator’s intentions regarding his property that he wishes to be carried into effect after his death. 

Personal laws and their applicability in India

In India, personal laws of every religion play an important role in determining the succession rights of the people of a particular community. The Hindus, Buddhists, Jains, and Sikhs are governed by the Hindu Succession Act, 1956, and the inheritance laws of the Muslims are governed by the Muslim Personal Law. There are many other religions that do not have any personal laws for their governance. The Indian Succession Act, 1925, was enacted by the Parliament for governing the succession rights of Christians, Parsis, and individuals belonging to other religions. Therefore, we can find that each of the personal laws has different sets of rules and procedures relating to the inheritance and succession rights, including the intestate succession rights.

Intestate succession in India

According to Section 30 of the Indian Succession Act of 1925, if a person does not make a testamentary disposition for all of their property, they are said to have died intestate. As stated above, a person dying without a will or a valid will shall be governed by the personal laws that will be applicable to the deceased. If under any circumstances a will is found to be invalid, or the valid will has included some balance and left out some others, then the balance properties, that is, the remaining property, shall devolve in accordance with principles of intestate succession. Laws of intestate succession are different for Hindus, Muslims, and Christians, which are mentioned below in detail.

Kinds of succession

India is a diverse country where people of different communities live. So in such a dynamic and diverse country, succession is a very tactful issue. Therefore, different laws of succession are being implemented by the State for protection of the inheritance rights of the individuals. While studying about these succession laws, one gets to know about the different kinds of succession. The two main types of succession in India are as follows:

  • Testamentary succession: It means where a person dies after making a will; or
  • Intestate succession: It means where a person dies without a will.

A will is basically a declaration expressing the desires of a person with regard to his estate and provides for its transfer upon his death. A person is said to have died intestate with respect to an asset that he has not disposed of under a will, or the disposition under the will is not capable of taking effect either on account of an invalid or illegal bequest. Intestacy may either be total or partial.

In the event a person dies intestate, his/her assets are distributed as per the mandate of the Indian Succession Act. The vesting of the assets takes place under the relevant personal laws. However, intense complexities arise when there is more than one heir, given the fact that some assets are more lucrative than their counterparts.

Distribution of joint family property by intestate succession

The acquisition or distribution of property among Hindus as stated above is covered by the Hindu Succession Act, 1956. If the provisions of this Act are applied to Hindus living in West Bengal, Orissa, or Assam, then the inheritance of properties will be governed by the Dayabhaga rules. In this case, the joint family property does not go to the male heirs until their father dies. In the case of people living in other parts of India, their succession will be governed by the Mitakshara rules. The rules under Mitakshara state that the male heirs, from the time of their birth, become co-owners, or coparceners, of the joint family property. 

The joint family property is controlled and managed by the eldest male member of the family, known as Karta. Before the 2005 Amendment, the female members, that is, the wife, daughters, sisters, and daughter-in-law were not allowed to inherit the properties. After the 2005 Amendment, the female members of the family were given the same status as that of male members.

The legal heirs of a coparcener receive their portion of the joint family property upon their death in the following manner:

  • The deceased and their lawful heirs receive an equal share of the family property. The legal heirs of a deceased person include their spouse, children, and parents.
  • The deceased family member’s portion of the property is now regarded as their self-acquired. Their property is distributed to their lawful heirs in accordance with the provisions of succession laws.

Category of intestate succession under Hindu Succession Act

The people belonging to the Hindu, Buddhist, Jain, or Sikh community, or Arya Samaj, will be governed by the Hindu Succession Act, 1956. The principles for inheriting the properties of the deceased are mentioned in various sections of the Act. 

Legal heirs of Hindu male

In case of the deceased male Hindu, the distribution of property takes place among his relatives to the four categories, which include Class I, Class II, Agnates, and Cognates.

Class I heirs of a Hindu male

Class I heirs of a Hindu deceased male are his closest relatives and are entitled to inherit the properties in the first instance before are other distant relatives. The following heirs belong to the Class I category:

  • Sons of the deceased
  • Daughters of the deceased 
  • Widow of the deceased 
  • Mother of the deceased
  • Son of pre-deceased son
  • Daughter of pre-deceased son
  • Son of pre-deceased daughter
  • Daughter of pre-deceased daughter
  • Widow of pre-deceased son
  • Son of pre-deceased son of a pre-deceased son
  • Daughter of pre-deceased son of a pre-deceased son
  • Widow of pre-deceased son of a pre-deceased son
  • Son of a pre-deceased daughter of a pre-deceased daughter
  • Daughter of a deceased daughter of a pre-deceased daughter
  • Daughter of a pre-deceased son of a pre-deceased daughter
  • Daughter of predeceased daughter of pre-deceased son

All the above persons belong to Class I heirs and would inherit the properties of the deceased simultaneously, excluding others heirs who belong to Class II heirs.

Class II heirs of Hindu male

Class II heirs of a Hindu deceased male inherit the properties of the deceased only in the absence of Class I heirs and in such a manner that heirs specified in a particular entry share equally. If more than one heir is mentioned in a single entry, they share the property concurrently and equitably to the exclusion of those specified in later entries. The following heirs belong to the Class I category:

  • Father of the deceased 
  • Son’s daughter’s son of the deceased 
  • Son’s daughter’s daughter of the deceased
  • Brother of the deceased 
  • Sister of the deceased
  • Daughter’s son’s son
  • Daughter’s son’s daughter
  • Daughter’s daughter’s son
  • Daughter’s daughter’s daughter
  • Brother’s son
  • Sister’s son
  • Brother’s daughter
  • Sister’s daughter
  • Father’s father
  • Father’s mother
  • Father’s widow
  • Brother’s widow
  • Father’s brother
  • Father’s sister
  • Mother’s father
  • Mother’s mother
  • Mother’s brother
  • Mother’s sister

Agnates

In case neither the Class I heirs nor the Class II heirs are present to inherit the property of the Hindu deceased person, it will devolve on to the agnates. Agnates are said to be those persons where the two are related by blood or adoption wholly through males. Agnate relationships are limited to blood relationships and do not include relationships through marriage. Agnates also exclude widows of the intestate’s lineal descendants.

Cognates

In case neither the Class I heirs nor the Class II heirs or agnates are present to inherit the property of the Hindu deceased person, it will devolve on the cognates. Cognates are said to be those persons who are related to the intestate by blood or adoption but not wholly through males. Therefore, mother’s brother’s son and brother’s daughter’s son are considered to be the cognates, eligible for succeeding the property of the deceased.

Legal heirs of a Hindu female

The legal heirs of a Hindu deceased female who are entitled to inherit her properties are as follows:

  • Sons of the deceased
  • Daughters of the deceased
  • Husband of the deceased
  • Son of a pre-deceased son
  • Daughter of a pre-deceased son
  • Son of a pre-deceased daughter
  • Daughter of a pre-deceased daughter
  • Any heirs of the husband
  • Mother and father of the deceased
  • Any heirs of her father
  • Any heirs of her mother
  • According to the Act, any estate that a woman succeeds to from her mother or father, in the absence of any daughter or son of the deceased (including the children of any pre-deceased daughter or son), will be passed to her father’s heirs.
  • According to the Act, any estate that a woman succeeds to from her husband or from her father-in-law, in the absence of any daughter or son of the deceased (including the children of any pre-deceased daughter or son), will be passed to her husband’s heirs.

Basic rules of intestate succession under the Hindu Succession Act

Hindu male dying intestate

The Hindu Succession Act lays down the following provisions for inheriting the properties of a Hindu deceased male:

  • Section 8: This Section deals with the provision of devolution of properties in the absence of a valid will. It states that the assets of the deceased Hindu male will be distributed in accordance with the requirements of Chapter II, giving priority to Class I heirs first, then to Class II heirs, then to Agnates, and finally Cognates in the absence of the Class I or Class II heirs or agnates.
  • Section 9: This Section deals with the order of succession for inheritance. For Class I heirs, no case of priority or preference arises as they all succeed at the same time. However, in the absence of Class I heirs, the property passes to the Class II heirs, which is mentioned in the schedule’s nine entries. In Class II heirs, those in the first entry will be preferred over those in the second entry. Similarly, those in the second entry will be preferred over those in the third entry, and so on.
  • Section 10: This Section deals with the provisions relating to Class I heirs. It lays down rules regarding the division of properties in case of intestate succession among Class I heirs, which are as follows:
    • Rule 1: The widow or widows of the intestate together shall receive only one share in the property.
    • Rule 2: The surviving sons and daughters, along with the mother of the intestate, shall receive one share each.
    • Rule 3: The surviving sons and daughters of each pre-deceased son’s widow receive an equal share from the heirs in that branch, and the sons and daughters of the pre-deceased daughter receive an equal share from the heirs in that branch.
  • Section 11: This Section lays down provisions dealing with the distribution of property among the Class II heirs of the Schedule. The property of an intestate shall be divided first amongst the heirs stated in the first entry of the Class II heirs, followed by those mentioned right after the first entry.
  • Section 12: This Section deals with the order of succession among Agnates and Cognates. The agnates and cognates are determined according to the rules specified, which are as follows:
    • Rule 1: Between the Agnates and Cognates, the one who has less or no degrees of ascent is preferred.
    • Rule 2: The heir with fewer or no degrees of descent is favoured when there are the same or no degrees of ascent.
    • Rule 3: In cases where neither the heirs of Rule 1 nor the heirs of Rule 2 can be given preference one over the other, they take simultaneously. Therefore, where the heirs are equal in descent in the same line, they proceed simultaneously.
  • Section 13: This Section lays down provisions dealing with the rules for computation of relationship between the intestate and his heirs belonging to the category of Agnates and Cognates. Using the intestate as the starting point, the relationship is traced from the intestate to the heir in terms of degrees of relationship. Male and female heirs are treated equally and without discrimination.

Hindu female dying intestate

Before 2005, female Hindus were not given equal rights like that of men to inherit family property. This Amendment kept the female Hindus on par with the male Hindus. She is considered the absolute owner of her property, whether she acquired it herself, inherited it, or received it as a gift, because it is considered as the Stri-Dhana of the deceased female.

  • Section 14: This Section states that a female Hindu must have absolute ownership over her properties, as opposed to being a limited owner.
  • Section 15: This Section deals with the general rules of succession of the female Hindus. According to Section 15(1), the rules of devolution of properties of a Hindu female dying intestate are as follows: upon the deceased woman’s sons and daughters, as well as any children of her deceased son or daughter, and her husband;
    1. Upon her husband’s heirs;
    2. Upon the father and mother of the deceased;
    3. Upon her father’s heirs;
    4. Upon her mother’s heirs.

Section 15(2) has laid down the following rules:

  1. According to the general succession rules, it is stated that entries (a) to (e) that have been laid down in sub-section(1). Section 15 will be applicable for all the properties acquired by a female intestate, with the exception of the properties inherited by her from her father, mother, spouse, or father-in-law.
  2. If a female intestate leaves a son or daughter, or a child of a predeceased son or daughter, that is, any issue, all of her property, howsoever acquired, devolves on such issue regardless of the source of acquisition of the property, and such issue takes the property simultaneously; and in case the intestate’s husband is still alive, they take it simultaneously with those issues in accordance with entry (a) as mentioned above. In such a situation, sub-section (2) of Section 15 will not be applicable by any means.
  3. If a female intestate whose husband is alive, but has no issues to inherit her properties, then with the exception of property inherited from her father or mother, which will revert to the father’s heirs, the husband will inherit the remaining of her properties that exists at the time of her death.
  4. If a female Hindu dies intestate without a valid will, the husband’s heirs will inherit any property that she had inherited from her deceased husband or father-in-law, rather than following the sub-section (1) of Section 15 that lays down provisions of the general rules of succession.
  5. If a female intestate dies without any issue, all her properties that she had inherited from her father or mother will return to her father’s heirs who were alive at the time of her death, rather than following the general order of succession laid down in Section 15(1).        
  • Section 16: This Section deals with the rules of distribution of properties among the heirs of the female Hindu intestate. It also lays down provisions specifying the order of succession. The properties will be distributed in the order as mentioned in Section 15, and the intestate’s property will be distributed among them in accordance with the succession rules, which are as follows:
    • Rule 1 of this Section states that the heirs listed in one entry of sub-section (1) of Section 15 will be given preference over those mentioned in any subsequent entry, and those included in the same entry will take it simultaneously.
    • Rule 2 of this Section states that if the intestate’s son or daughter died before the intestate, leaving their own children alive at the time of the intestate’s death, then they will divide the portion that the intestate son or daughter would have received if they had been living at the time of the intestate’s death among themselves.
    • Rule 3 of this Section states that the heirs mentioned in clauses (b), (d), and (e) of sub-Section (1) and in sub-Section (2) of Section 15 shall receive the intestate’s property in the same order and under the same rules as if the property had been the father’s, mother’s, or husband’s, as the case may be, and such person had died intestate in respect thereof immediately after the intestate’s death.

Disqualification of heirs under this Act

With any exception as mentioned in this Act, no person shall be excluded from inheriting any property due to a sickness, flaw, or deformity, or for any other reason. Nonetheless, there are a few circumstances mentioned in this Act that prevent the heirs from receiving the properties of the intestate, which are as follows:

  • Murder
  • Conversion

Intestate succession under the Muslim personal law

The legal heirs of a Muslim deceased who are entitled to inherit the properties are as follows:

  • Husband of the deceased (female): The marriage needs to be legal for claiming inheritance. No undocumented or secret marriage will be considered legal.
  • Wives of the deceased husband (male): In case of Muslim marriages, a man can have more than one wife. All the wives who have been legally married to the deceased are entitled to inherit their husband’s property. A divorced wife is also entitled, but only till the iddat period.
  • Sons of the deceased: No other sons like step sons, adopted sons, and illegitimate sons are entitled to inheritance other than the biological son.
  • Daughters of the deceased: No other daughters like step daughters, adopted daughters, and illegitimate daughters are entitled to inheritance other than the biological daughters.
  • Grandsons of the deceased: In this case, the son’s sons are entitled to inheritance but not the daughter’s sons.
  • Granddaughters of the deceased: In this case, the son’s daughters are entitled to inheritance but not the daughter’s daughters.
  • Father of the deceased: A step-father or illegitimate father is not entitled to the property of the deceased.
  • Mother of the deceased: A step-mother or illegitimate mother is not entitled to the property of the deceased.
  • Grandfather of the deceased: Grandfather means only the father’s father is entitled and not the mother’s father.
  • Paternal grandmother of the deceased: It means the father’s mother is entitled to inheritance.
  • Maternal grandmother of the deceased: It means the mother’s mother is entitled to inheritance.
  • Full brothers: All those brothers who are born to the same parents are entitled to inherit the properties of the deceased.
  • Full sisters: All those sisters who are born to the same parents are entitled to inherit the properties of the deceased.
  • Paternal brothers: All those brothers who share the same father but a different mother. 
  • Paternal sisters: All those sisters who share the same father but a different mother. 
  • Maternal brothers: All those brothers who share the same mother but a different father. 
  • Maternal sisters: All those sisters who share the same mother, but a different father. 
  • Full Nephews: It means only the brother’s son is entitled but not the sister’s son.
  • Paternal Nephews: It means only the paternal brother’s son is entitled but not the paternal brother’s daughter.
  • Full brother’s son’s son
  • Paternal brother’s son’s son
  • Father’s full brother
  • Father’s paternal brother.
  • Father’s full brother’s son
  • Father’s paternal brother’s son.
  • Father’s full brother’s son’s son.
  • Father’s paternal brother’s son’s son.
  • Father’s full brother’s son’s son’s son.
  • Father’s paternal brother’s son’s son’s son

Classes of legal heirs under Muslim personal law

Shias and Sunnis have different personal laws, which are not codified in any statute like the Hindu succession laws. For Sunnis who follow Hanafi Law, which is followed by the majority of Muslims in India, personal law limits legacies to a maximum of one-third of the estate after paying funeral expenses, outstanding wages of domestic servants, and debts, among other things. The heirs inherit the properties of their father. They follow the “Faraid” system, which is based on the procedure stated in the Quran. The share of each of the heirs is defined in it. It basically gives preference to the agnates over cognates. Sunni law allows inheritance of the property of the mother of illegitimate children. Shia laws follow the system of “Ithna Ashari” that differs from that of Sunni laws. In this case, the heirs receive the properties from their mother. 

Under Shia laws, illegitimate children are only taken into account for an intestate succession involving their mother’s assets or properties, not their father’s. It adopts the principle of consanguinity, where a daughter or son’s daughter is a Class I heir and is considered Class I heirs. It excludes the female agnate heirs, including agnatic sisters, from inheriting. Here, the daughter is given preference over the father, as the daughter gets half of the inheritance and the rest is given to the father. Sharers are basically those heirs entitled to a certain specific share, whereas residuaries are those that acquire the remainder of the property. The remaining shares are divided among the following classes of legal heirs:

  • Sharers: This class of legal heirs is entitled to a prescribed share in the deceased person’s estate.
  • Residuaries: This class of legal heirs will receive share in the deceased person’s estate only if there is anything remaining after sharers get their prescribed shares.
  • Distant kindred: This class of legal heirs will get the share only if there are no sharers or residuaries.

Intestate succession of the Christians under the Indian Succession Act, 1925

The legal heirs of a Christian deceased who are entitled to inherit the properties are wife, husband, or kin. According to Section 32 of the Indian Succession Act, 1925, legal heirs who can inherit the properties are as follows:

  • Widow of the deceased
  • Daughters of the deceased
  • Sons of the deceased
  • Mother of the deceased
  • Father of the deceased
  • Sisters of the deceased
  • Brothers of the deceased
  • If there is a direct blood line between a son and his father, grandfather and great-grandfather, and so on in the direct increasing blood line; or between a son and his son, grandson, great-grandson, and so on in the diminishing bloodline.
  • If a person dies intestate and leaves behind solely a great-grandfather, an uncle, and a nephew, but no one with a close kin will receive equal shares under the third degree of kinship.

Consolidation of assets

In cases of intestate death, there are complexities in getting on record all the assets that the person owned. Consolidation of the assets and formulating an effective plan to protect them is a very critical step. Then, the next step is to approach the institutions and get the assets released.

Movable assets

Movable properties are defined in the General Clauses Act, 1897, under Section 3(26), which means those properties that can be easily moved from one place to another. Section 22 of the Transfer of Property Act, 1882, defines “movable property”. It includes every corporeal property, with the exception of land and things which are attached to the earth, or permanently fastened to anything that is attached to the earth. The definition of “moveable property” is also mentioned under Section 2(9) of the Registration Act, 1908. It includes various movable things like standing timber, growing crops and grass, fruit upon and juice in trees, and likewise, excluding the immovable things. Movable assets are basically property of any description except immovable property. They include assets like jewellery, cars, bank balances, and investments made with financial institutions. They follow the law of domicile of the intestate at the time of his/her death.

Process

In the case of bank balances and investments, the KYC form requires a nominee. If the name of the nominee is provided at the time of investment, the financial institutions will release the funds to the nominee mentioned in the form.

A nominee is, by nature, a trustee of the funds, who is entrusted with the responsibility to safeguard the funds till the legal heir is determined. In case there is no nominee, then the person making the claim will be required to produce a succession certificate.

Once the movable assets are consolidated, the letters of administration or succession certificate may be obtained from the competent court by a person making a claim to the assets.

Immovable assets

According to Section 3(26) of the General Clauses Act of 1897, immovable properties mean those that are attached to or permanently rooted in the earth, including land and benefits arising out of land. Section 3 of the Transfer of Property Act, 1882, defines “immovable property”. Under this definition, it does not include standing timber, growing crops or grass. The definition of “moveable property” is also mentioned under Section 2(6) of the Registration Act, 1908. It includes various immovable things like land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries, or any other benefit that arises out of land. Immovable assets are basically property in the nature of land, buildings, and likewise. Therefore, it considers lands, things connected to the earth, things embedded in the earth, things attached to what is embedded in the earth, as well as advantages arising out of land, as immovable property. They follow the law of situs, which is the place where the property belongs. In the event the title is not disputed, the heir can get the ownership changed at the relevant district authority that has jurisdiction over the property.

Process

In the first instance, the heir/heirs will have to ensure that there are no pending debts.

Then, upon confirmation of the ownership of the property, the next step is to apply for mutation of the property. Mutation essentially updates the government records. The application for mutation is made with a local authority. The sub-divisional magistrate would have jurisdiction in case a challenge is preferred. In case of multiple heirs, the mutation order would contain the names of all the heirs. In such a case, in my opinion, it would be better to mark the division of property among them at the time of mutation itself to avoid unforeseen consequences.

Recently, the Delhi High Court in the matter of Harish Chander Gupta & Others vs. Rakesh Gupta & Others (2018) has observed the following; “if a person dies after passing of the Hindu Succession Act, 1956, and there is no HUF existing at the time of the death of such a person, the inheritance of an immovable property of such a person by his successors-in-interest is no doubt the inheritance of an ‘ancestral’ property, but the inheritance is as a self-acquired property in the hands of the successor and not as an HUF property, although the successor(s) indeed inherits ‘ancestral’ property, that is, a property belonging to his paternal ancestor”.

Provisions for intestate succession in different cases

There can be various cases regarding intestate succession, which are as follows:

  • Rights of unborn child in case of intestate succession: An unborn child who is in the womb also has the same right of inheritance as any other members of that family. So, if a woman is pregnant and division of properties or assets takes place, then they are considered to be two separate persons where both of them will get the share in the property.
  • Relinquishing the rights: If a member of a family does not want to receive a share in the property, then he/she must relinquish his/her right clearly in writing.
  • Converting to another religion: In case of claiming the right to inherit property under the Hindu Succession Act, 1956, the person must be a Hindu at the time of the death of the person from whom he will be inheriting the properties. He will be considered a legal heir only if he is still a Hindu at that time. If he has converted beforehand only, he cannot claim any right in the property.
  • No inheritance in case of crimes: If a person commits a crime like murdering a person for inheriting his/her property and his crime is proved in the court of law for which he gets convicted, then he ceases to be a legal heir of the deceased. Though other family members of the convict who were not involved in the crime or knew about the crime would remain as the legal heirs of the deceased.
  • Specific Disqualification: A person would not be able to inherit the properties in case that person is disqualified specifically from inheriting property.
  • Rights in case of disease or disability: If a member of a family is suffering from a disease or is disabled, that person would also have the same rights as other members of the family.
  • In absence of legal heirs: In the absence of any legal heirs to a property of a deceased person, it will be transferred to the government.
  • Remarriage of the widow: In case the widow of a deceased person remarries, she can still claim inheritance rights as a legal heir of the deceased. In case the widow of a son or a brother of the deceased is remarried, she would not have any right to claim inheritance rights in the properties of the deceased.

Succession certificate

A succession certificate is a legal document that is issued by a competent court to identify the rightful heirs of a deceased person, which specifies their rights over the deceased’s assets and possessions. It is granted by a civil court and is essential for the lawful transfer of assets.

A succession certificate may be obtained in the following circumstances:

  • Where probate or letters of administration are not required;
  • Where the deceased is a Muslim or a Christian
  • Where the deceased is a Hindu who has left a will.
  • Where joint family property of a Hindu family is involved.

Procedure for obtaining a succession certificate

  1. Approach a competent district court and file a succession certificate petition.
  2. The petition should contain vital details like the name of the petitioner, the names of all heirs of the deceased, the petitioner’s relationship with the deceased, etc. Generally, a death certificate is attached along with the petition.
  3. The Court reviews the petition and then issues a notice to the relevant parties and also in the news requiring objections to be raised. If, within the time frame allowed, no objections are raised and the court is satisfied, it may pass an order to grant a succession certificate.
  4. In the succession certificate, the Court shall specify the debts and securities contained in the application and may thus authorise the person in whose favour the certificate is issued to either receive interest/dividends or to negotiate/transfer the securities or to do both.

In addition to the succession certificate, a legal heirship certificate may be obtained. It sets for the relationship of the heirs with that of the deceased. It is used for claims relating to pensions, provident funds, or other service benefits of the central or state government. It is not conclusive and has a limited scope. The legal heirship certificate is generally issued by the revenue officers, like tahsildars of talukdars.

Shortcomings of intestate succession 

Lack of control over the distribution of assets and properties

A person who dies without making a ‘will’ will not have control over the manner of distribution of his properties or assets among his legal heirs. When a person dies intestate for inheriting the properties of the decedent, the legal system uses default rules to determine asset distribution and ownership of the properties. The rules mentioned in the succession laws might not align with the intention and wishes of the decedent. The assets and properties might be distributed among those whom he did not intend to give any, whereas individuals whom the deceased intended to get the benefits of his properties might not get any.

Potential delays and legal complexities

Another shortcomings of intestate succession is long delays and complexities in the legal system for distributing the properties and assets of the decedent. In the absence of a will, the process of distribution of properties becomes much more complicated and time-consuming. Depending on the kind of assets left behind, legal heirs of the deceased may be required to go through a complex procedure of obtaining a legal heirship, succession certificate, or letter of administration, which also includes getting approval from the court for the distribution of assets. This might lead to long delays as well as additional expenses for undergoing all these procedures for inheriting the properties and assets and dealing with court proceedings, as it requires appointing legal professionals for this purpose who would look into this matter and do the necessary.

Distributing the properties not in accordance with the actual wishes

In case a person dies intestate without making a will that could have reflected his intentions of distribution of his properties and assets among the members of the family, the default rule is followed. This rule gives preference to the immediate family members or closest relatives of the decedent, which includes spouses, children, parents, and siblings as per ratio defined in laws. Though it might seem fair, the actual intention of the deceased might have been different. It might be a person who does not belong to the category of immediate family who has taken care of the deceased more than his family members. So the deceased might have wanted to give him a share in his property. Therefore, in the absence of a will, a dispute might arise among the members of the family, which could have been avoided if a proper will was executed by the deceased before his death. So, this is another shortcoming of intestate succession where the personal wishes of a person cannot be reflected accurately; instead, the rules of succession would be followed to provide a fair distribution of assets.

Important judicial pronouncements

  • In the case of C. Krishna Prasad vs. CIT (1975), it was found that the term ‘ancestral property’ is not explicitly defined in any statutes. So, time and again, the Indian Courts interpreted its meaning as a property inherited by a person up to four generations of male lineage, that is, his or her father, father’s father, or great-grandfather, as soon as a person is born. The Supreme Court of India observed in this judgement that when a son is born in a family, he becomes a sharer of the coparcenary property. Therefore, the boy would also acquire interest in it. So in accordance with the Mitakshara Law, the right to ancestral property arises from the time as soon as a person is born. A property to become an ancestral property must remain as an undivided property. A self-acquired property, gift, or partition deed is not considered an ancestral property.
  • In the case of Vineeta Sharma vs. Rakesh Sharma (2020), the 2005 Amendment has given full coparcenary rights to the daughters as well as the sons. Though the Amendment was made in 2005, the right to coparcenary property was given to the daughters by birth. The Supreme Court in this landmark judgement stated that the daughter has the same right to the coparcenary property as that of the son, whether their father is alive or not, as of 9th November, 2005, when the 1956 Act was amended. This landmark judgement overruled the judgments of Prakash vs. Phulavati (2016) and Mangammal vs. T.B. Raju (2018), which held otherwise. The Supreme Court upheld the decision that a daughter is deemed a joint legal heir alongside a son and can inherit ancestral property in the same way that a male heir can, regardless of whether the father died before the Hindu Succession (Amendment) Act, 2005, went into effect. This case clearly upheld that both sons and daughters must be treated equally for the purpose of succession as well.
  • In the case of Arunachala Gounder vs. Ponnusamy (2022), the Supreme Court of India stated that if a female Hindu does intestate without leaving any issue behind to inherit her property, then the properties which she had earlier inherited from her father or mother would be transferred to her father’s heirs, and those inherited from her husband or father-in-law would be transferred to the heirs of her husband. If her husband or any issues are alive, then any of the properties that she inherited, whether from her parents or in-laws, would be devolved simultaneously to her issues and her husband in accordance with Section 15(1)(a) of the Hindu Succession Act, 1956. This decision was held by the Supreme Court in order to establish equality between male and female relating to property rights of the female Hindus, where they are considered to have absolute right over their properties. In another recent case also, the Supreme Court upheld the rights of women. It was in the case of Kamla Neti vs. LAO (2023), where the Apex Court observed that equal rights to have shares in a father’s property are also available to tribal women under the Hindu Succession Act.
  • In the case of K.C. Laxmana vs. K.C. Chandrappa Gowda (2022), the court dealt with the matter of a gift of ancestral property. It was seen earlier also that a father, who is Hindu by religion, or any other managing member of a Hindu Undivided Family (HUF), has the power to make a gift of ancestral property only for a ‘pious purpose’, meaning holy or religious purpose. The expression ‘pious purpose’ means something given as a gift for charitable and/ or religious purposes. So it can be stated that a gift of ancestral property made ‘out of love and affection’ cannot be considered a property given for ‘pious purpose’. Therefore, the Supreme Court observed that if the head of the family, that is, the Karta or the Manager of the property, gives the property as a gift ‘out of love and affection’, it can be challenged in any court of law and that transaction can be set aside.
  • In the case of Kattukandi Edathil Krishnan vs. Kattukandi Edathil Valsan (2022), the question raised was whether children born out of a live-in relationship have the coparcenary right to inherit the family’s property. In this case, the family’s property was governed by the Mitakshara inheritance law. The property actually belonged to one Kattukandi, Edathil Kanaran Vaidyar, who already had four sons. Of them, one was married and had a son; the other two did not marry; and the last one, Damodar, also married and had a son named Krishnan. However, the defendants contended that Damodar had never married and so Krishnan, the first plaintiff, cannot claim share in the property by virtue of illegitimacy. The Supreme Court scrutinised the decisions of the Trial Court and Kerala High Court. The Apex Court investigated and observed that though there was no evidence of their marriage, Damodar had a long cohabitation with Chiruthakutty, his wife, and also transferred money, that is, periodical payments had been made. The Court, therefore, held that in case a man and woman live together for a long time as husband and wife, it means that they are married. It can be assumed as per Section 114 of the Indian Evidence Act, 1872 (Section 119 of the Bhartiya Sakshya Adhiniyam, 2023). Since the defendants failed to rebut the presumption in favour of wedlock between them, the Supreme Court upheld the decree of the Trial Court stating that the suit property will be divided into two shares, and one such share was allotted to the plaintiffs.
  • In the case of Manmohan Singh vs. Shital Singh (2024), the sons of the deceased filed a petition against the will, which stated the wife of the deceased husband as the absolute owner. It was observed that prior to the implementation of the Hindu Succession Act of 1956, the property in question was part of the Hindu Undivided Family rather than self-acquired property, as Hindu women became absolute owners of the property under Section 14(1) of the 1956 Act. The question that was raised in this case was about the wife’s absolute rights over her deceased husband’s property. The property in question was the self-acquired property of her deceased husband, where she had no independent rights before her husband’s death. However, during her lifetime, she received lease rentals from the property, which indicated a degree of financial dependence on her. Furthermore, in his will, the spouse designated particular sections of the property to be inherited by his legal heirs following her death. This decision was challenged in the Court, where it was argued that her rights were limited as per the provisions of the Hindu Succession Act. The Delhi High Court analysed the provisions of the Act as well as interpreted the deceased husband’s intentions mentioned in the will. The High Court, therefore, observed that the wife’s rights in the property were limited as per the provisions of the Hindu Succession Act and affirmed the terms of the will of her deceased husband, which stipulated the division of the property among legal successors/heirs only upon the wife’s death. The High Court overturned the judgement of the Trial Court and directed further proceedings in accordance with the decision passed by it.

Conclusion

The laws of intestate succession are very important for the fair and equitable distribution of properties and assets of a deceased person among the members of his family. In the absence of a will, the legal heirs of the deceased can inherit his estates only through this legal process of intestate succession. As stated above, all the religions have their own different set of laws laid down in their personal laws, which provide guidance regarding the rights of inheritance. Those religions that do not have their own personal laws receive the benefits of succession by following the Indian Succession Act, 1925, which is secular legislation. With the advancement of society, uniform rules were made for both Hindu males and females dying intestate without unnecessarily discriminating against the females. As independent India relies significantly on legislation to implement social transformation and eliminate inequality and discrimination, it is crucial to evaluate succession rules that have been enacted and bring the positions of women on par with men. 

The legislature understood the importance of fair distribution of assets between both genders and established uniform succession standards for both males and females, which would eliminate discrimination against women in terms of property devolution as well as the source of acquisition. This was made to ensure the removal of inequality and uplifting the women to bring the position of women at par with men. So as to avoid the complications and complexities of intestate succession, the people in India must adopt estate planning. Estate planning has multifold benefits, such as avoiding any dispute within the family, guaranteeing a smooth transition of assets from the deceased to the heirs, protecting the wealth of the deceased, promoting better tax planning, and likewise.

Frequently Asked Questions (FAQs)

How are properties distributed under the intestate succession laws?

The distribution of properties and assets under the intestate succession laws always follows a predetermined succession method of legal heirs. Different religions having different personal laws of their own have their own specific sets of rules for determining the hierarchy. In most of the cases, the immediate family members get priority over the distant relatives while distributing the assets. It is determined on the basis of certain factors like gender and marital status, and the children, spouses, parents, and siblings are given the first priority over other legal heirs. While distributing the assets, the exact proportions are determined by the personal laws and their specific provisions.

Who can inherit properties that pass through intestate succession?

The persons who can inherit properties from the deceased are as follows:

  • A living spouse of the deceased
  • Their biological children
  • Any other adopted children as well
  • Grandchildren of the deceased
  • Surviving parents of the deceased
  • Siblings of the deceased
  • Descendants of deceased’s siblings
  • Descendants of grandparents

What is the procedure to proceed under intestate succession?

While proceeding with the intestate succession laws, the first thing one needs to identify is who is qualified to inherit the properties of the deceased. In the absence of a valid will, a proper and valid document for probate needs to be filled. People who are qualified to inherit the properties must be informed about it, which can be done by simply putting a notice in the local newspaper.

What happens to the assets or properties of a person who dies without a will?

In India, intestate succession laws give heirs no preference one over the other. In other words, when it comes to sharing property, blood relatives and distant relatives have equal rights. This means that in case a person dies intestate, his heirs will receive the full amount due under intestacy. The only exception to this rule is that if a specific individual or group of people is specified as beneficiaries in the will made by the deceased before dying, they will have first claim to the assets in the case of intestacy.

What is the method of division of an intestate estate?

In the absence of a legal will, the deceased person’s assets will be distributed by the process of intestate succession, where the closest relatives, which include the spouse, children, and parents, or others related by blood, will be given preference over others. Therefore, the property would be divided among those who are the closest to the deceased. In case the deceased does not have any relatives, the estate will be divided among the person’s closest in terms of proximity, including his landlord if he had one.

Which assets are not permitted to be inherited through the process of intestate succession?

Some of the assets that are not permitted to be inherited through the process of intestate succession are as follows:

  • The assets or properties that are held in a living trust or an irrevocable trust.
  • The life insurance is payable to a designated beneficiary.
  • The bank accounts that are payable-on-death (POD).
  • The retirement accounts have a named beneficiary.

How much time does it take to distribute the assets of intestate succession?

Laws governing intestate succession are generally simple and easy to understand. This indicates that claiming intestate succession is a very simple process. The only thing remaining is to ensure that everyone who should receive money from the estate of the deceased is informed of their rights and has a legitimate document naming them as beneficiaries. This process can be completed within a few days.

What is the letter of administration?

A letter of administration is an instrument granted by a competent court for distributing the assets of the deceased among his legal heirs. They can be obtained by filing a petition in a district court or a high court.

What is a succession certificate?

A succession certificate is a certificate that is issued to a person for giving him the right to claim the authority to inherit debts, securities, and any other movable assets. A succession certificate states who are the legal heirs of the deceased person. Obtaining this certificate gives the right to distribute the assets of the deceased only to persons concerned under the relevant personal laws.

Reference

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An overview of mergers in India and its types 

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This article has been written by Priyanshu Verma pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Introduction

Currently, we are living in an era where advanced technology and global competition drive the growth of a business. Mergers have emerged as a strategic tool for companies that are seeking rapid profit and growth in their businesses, particularly for a country like India, which has tremendous development opportunities in various sectors like energy, pharmaceutical, telecommunication, and banking. India already has a huge market base but increasing competition in the domestic as well as international markets has made the majority of corporations adopt mergers for the smooth running of businesses rather than starting from scratch in specific areas. Furthermore, mergers not only help in achieving economies of scale but also in acquiring new technologies, expanding customer bases, and enhancing overall market presence. This article aims to provide an in-depth understanding of mergers in India and various other classifications of them.

Understanding merger

In India, the term merger is not defined. However, Section 2(1B) of the Income Tax Act defines the synonymous term “amalgamation” of companies as the merger of one or more companies with another company or the merger of two or more companies to form one company. A merger, in simple words, involves the consolidation of two or more companies into one company. Mergers are usually structured as mutual agreements where both entities combine their strengths and resources, not like acquisitions where one company takes the other company under it. The primary reason why mergers are done is to form a joint entity with enhanced performance and value than when they were working individually. Mergers are most commonly done to gain market share, reduce operational costs, expand to new territories, unite common products, grow revenues, and increase profits. Additionally, they allow companies to leverage shared expertise and innovation, creating a more competitive and resilient business.

Types of mergers

There are various types of mergers; some of the most common types are as follows:

Horizontal merger

Horizontal mergers are a type of merger where companies operating in the same industry or are direct competitors combine their operations. The primary objectives of such mergers are to reduce competition, increase market share, and leverage combined resources to enhance efficiency and profitability.

Horizontal mergers can result in the creation of larger and more dominant players in a particular industry. By combining their operations, the merged entities can achieve economies of scale, streamline production processes, reduce costs, and increase pricing power. This can lead to a more concentrated market with fewer competitors, potentially reducing consumer choice and driving up prices.

Some notable examples of horizontal mergers include:

  • Vodafone India and Idea Cellular (2018): This merger created Vodafone Idea Limited, the largest telecom operator in India. The merger aimed to strengthen Vodafone’s position in the highly competitive Indian telecom market and compete more effectively with Reliance Jio, which had disrupted the industry with its low-cost offerings.
  • Exxon and Mobil (1999): This merger resulted in the formation of Exxon Mobil, the world’s largest oil company. The merger aimed to combine the strengths of both companies in exploration, production, refining, and marketing to gain a competitive edge in the global oil industry.

Horizontal mergers can have significant implications for consumers, competitors, and the overall industry landscape. They can lead to increased market power, reduced innovation, and higher prices. Therefore, such mergers are often subject to regulatory scrutiny to ensure they do not harm competition and ultimately disadvantage consumers.

Vertical merger

Vertical mergers occur when companies operating in the same industry but at different levels of the supply chain combine to form a single entity. The primary objective of such mergers is to optimize the supply chain and enhance efficiency at various stages of production.

One of the key advantages of vertical mergers is the ability to streamline operations and reduce costs. By combining different stages of the production process under one roof, companies can eliminate inefficiencies and minimise waste. This can lead to economies of scale, as the merged entity can leverage its size and resources to negotiate better deals with suppliers and distributors.

Moreover, vertical mergers can enhance quality control and consistency. By controlling the entire supply chain, companies can ensure that raw materials and ingredients meet their standards and specifications. This can result in improved product quality and increased customer satisfaction.

Another benefit of vertical mergers is the potential for increased market share and competitive advantage. By consolidating their operations, companies can gain a larger portion of the market and become more competitive against rivals. Additionally, vertical mergers can help companies expand into new markets and reach a wider customer base.

However, vertical mergers also come with potential challenges and risks. One concern is the increased concentration of power in the hands of a few large companies, which could lead to reduced competition and higher prices for consumers. Additionally, vertical mergers can make it more difficult for smaller businesses to compete, as they may not have the resources to match the scale and efficiency of the merged entity.

To address these concerns, regulatory authorities often scrutinize vertical mergers to ensure that they do not harm competition or create monopolies. Factors such as market concentration, potential barriers to entry, and the impact on consumers are carefully considered before approving or denying a vertical merger.

Overall, vertical mergers can be beneficial in many ways, as they can improve efficiency, enhance quality, and increase market share. However, it is important to carefully evaluate the potential risks and benefits before proceeding with such a merger to ensure that it benefits all stakeholders involved.

Conglomerate merger

Conglomerate mergers are those types of mergers where companies that come together neither work in the same industry nor in the same production cycle. They belong to totally different industries with no overlapping businesses. The main objective of such a merger is to find new growth opportunities and diversification. An example of a conglomerate merger is Reliance Industries Limited (RIL) and Hamleys (2019). RIL is primarily known for its petrochemical and telecom industry; in this merger, RIL acquired Hamleys, a British toy company. This diversified the business of RIL in retail. 

Market extension merger

Market extension mergers are those types of mergers where companies sell similar kinds of products but in different markets combine their operations. The main objectives of such a merger are market expansion for the new entity, targeting a new audience, and enhancing brand recognition on a global scale. An example of a market extension merger is Tata Motors and Jaguar Land Rover (2008). This merger opened the gate for Tata Motors to enter the global luxury car market.

Product extension merger

Product extension mergers are those types of mergers where companies provide different products and services in the same geographical market and tie up with each other. The reason behind such mergers is to use each other’s resources for cost reduction and improve the synergies in the entity. Furthermore, it also establishes great market reach and other financial benefits. An example of a product extension merger is Pepsico and Quaker Oats (2001). This helped Pepsico try new market strategies with its existing products.

Legal and regulatory framework

After the period of LPG (liberalisation, privatisation, and globalization), Indian markets have skyrocketed as India is now presenting and competing with global giants. Due to this, many businesses have merged to stay alive in the dynamic market. So for fair play and to maintain transparency in the market, various bodies and acts were made, including SEBI (Securities and Exchange Board of India), CCI (Competition Commission of India), the Companies Act 2013, the Competition Act 2002, and SEBI (Securities and Exchange Board of India) regulations, among others. They collectively form the regulatory environment and comprehensive structure for outlining the procedure, execution, and approval for seamless mergers in India. Let’s discuss these in detail.

The Competition Act, 2002

The Competition Commission of India (CCI) plays a pivotal role in regulating mergers to ensure that they do not adversely affect market competition. Established under the Competition Act, 2002, the CCI’s primary objective is to maintain fair competition in the market by preventing actions that could lead to the creation of dominance or restrict competitiveness in the market. Following are some of the important and cornerstone functions of the Competition Act:

Prohibition of anti-competitive agreements

The Act restricts agreements, contracts, or arrangements that have an appreciable adverse effect on competition within India. These include regulation or manipulation of prices, control supply of goods and services, bid-rigging, and other collusive practices.

Prevention of abuse of dominant position

The Act prohibits enterprises from abusing their dominant position in the market. This includes practices like putting prices for a product unrealistically high or low for elimination of competition, also called “predatory pricing,” imposing unfair conditions on sales, and leveraging dominance in one market to enter another.

Regulation of combinations

The Competition Act governs mergers, acquisitions, and combinations that can affect competition in the market. The CCI evaluates whether a proposed merger or acquisition may have an adverse impact on competition in the market. And if suitable conditions are fulfilled, CCI approves the amalgamation, or it may prohibit it if it finds that it would have an appreciable adverse effect on competition in the market.

The Companies Act, 2013

The Companies Act is the primary legislation in India that regulates the incorporation, management, and operation of companies. This act sets out the procedure for the consolidation of companies, including the approval of shareholders and regulatory authorities, following are its functions:

Protection of shareholders’ rights

The Act provides mechanisms for protecting shareholders’ rights, including provisions for shareholder voting rights and the right to receive dividends.

Role of regulatory authorities

The Act outlines the procedures for mergers, acquisitions, and amalgamations, including the requirement for approval from the National Company Law Tribunal (NCLT), Competition Commission of India (CCI), and Securities and Exchange Board of India (SEBI).

Investor protection

The Act includes steps and provisions to prevent fraud, protect minority shareholders, and ensure practices that don’t affect the securities market.

SEBI regulations

The Securities and Exchange Board of India (SEBI) Act, 1992, and its associated rules and regulations play a crucial role in regulating the securities markets in India. These regulations aim to protect investors and ensure fair and transparent trading practices.

One of the primary functions of SEBI is to ensure that all participants in the securities market, including listed companies, brokers, and other intermediaries, adhere to prescribed standards and practices. This includes ensuring that companies provide accurate and timely financial information to investors and that brokers and other intermediaries act in the best interests of their clients.

SEBI also has the responsibility to prevent market manipulation and other forms of misconduct that could undermine the integrity of the securities market. This includes taking action against individuals or entities engaging in insider trading, price manipulation, or other illegal activities.

To maintain the proper conduct of intermediaries, SEBI sets forth specific guidelines and regulations that these entities must follow. These guidelines cover areas such as registration requirements, capital adequacy, and ethical standards. SEBI also conducts regular inspections and audits of intermediaries to ensure compliance with these regulations.

In addition, SEBI plays a role in regulating mergers and acquisitions involving enterprises listed on stock exchanges in India. The board’s approval is required for such transactions, and it reviews the proposals to ensure they are in the best interests of investors and the market as a whole.

Overall, SEBI’s regulations and enforcement actions help to maintain the integrity and efficiency of India’s securities markets, fostering investor confidence and promoting economic growth. Some of the primary regulations that allow SEBI to perform its functions properly are:

Conclusion

In conclusion, amalgamation is a common strategy used by companies to achieve growth and uplift their existing position. Mergers and acquisitions can sometimes create a hectic procedure till completion so they are to be pre-organised and done with proper legality. Strategic fit, dynamic management, communication, and leadership are some crucial things that determine the outcome of a merger. Saying that it’s very important that companies should seriously evaluate the benefits and requirements of merger and acquisition. While they can offer significant opportunities for expansion and competitive advantage, if not handled properly, they can create difficulties and challenges. Certainly, merger and acquisition success lies in the objective of the companies that are being merged. If they share similar goals and ideas for creating the best outcome for the shareholders, then it’s halfway reached. Moreover, rules and regulations regarding all types of consolidations are very complex in India. Therefore, parties involved in such transactions need to have legal advice and ensure compliance with the relevant laws and regulations. By performing such actions, the parties can avoid the consequences of non-compliance and ensure a smooth and successful transaction.

References

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Section 194J of Income Tax Act, 1961

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This article has been written by Prity. This article provides a detailed analysis of all the aspects of Section 194J (TDS for professional or technical services) of the Income Tax Act, 1961.  

Table of Contents

Introduction

The budget of 2024 presented by Finance Minister Mrs. Nirmala Sitharaman, in Parliament, became a talk of the town among the general public, particularly the middle-class people or salaried people. It has brought significant changes in the Indian tax system.

In 1962, the Indian Parliament, with the consultation of the Ministry of Law, enacted a law known as an Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’). It came into effect on 1st April 1962 with certain aims and objectives. This Act deals with different modes or methods of collecting the taxes on income and tax deducted at source (shortly referred to as TDS), which is one of those modes or methods.

Chapters XVIIA, XVIIB and XVIIBB of the Act of 1961 in Sections 190 to 206CC deal with the deduction and collection of taxes at source from where incomes generated or payments made as prescribed in the provisions of the Act of 1961 and Income Tax Rules, 1962 (shortly referred Rules of 1962). 

In the beginning, when the Act of 1961 was enforced, there were only four incomes or payments where tax was deducted at source namely: Salary, Interest on Securities, Interests other than Interest on Securities, and Dividends. With time and need, other payments or incomes have been added to the Act of 1961. One of the TDS provisions as Section 194J was added in the year 1995 in the Act of 1961 through Act 22 of 1995. This section deals with the deduction of taxes at the source with respect to professionals and technical services.

This article provides a complete overview of Section 194J of the Act of 1961 along with the recent amendments or changes in this Section. By the end of the article, readers will have a comprehensive understanding of Section 194J of the Act of 1961.

What is Section 194J of Income Tax Act, 1961

As mentioned earlier, there are diverse modes for deduction of taxes at the source in the Act of 1961, and Section 194J of the Act of 1961 is one of them. Section 194J deals with the deduction of taxes at source of payments by the payers in lieu of availing professional and technical services from payee. The person or organisation that avails the professional and technical services after deducting the taxes in a certain percentage transfers the rest of the payment as a fee to the person who rendered such services. The person who deducts the taxes is known as a deductor or payer and whose payment is deducted known as a deductee or payee. Under this Section, it is the responsibility of the deductor to deduct the taxes when they accrue and submit the taxes deducted to the Government on behalf of the deductee. The deductee claims the TDS filed on his behalf while filing his income tax return.

There are 3 clauses in this Section that are further divided into several sub-clauses, proviso, and explanations, which were added through different Amendments in the Act of 1961 with time. This Section itself was added in the Act of 1961 in the year 1995 and came into effect from 1st July 1995. The main purpose behind the addition of this Section was to curb tax evasion by imposing the responsibility to deduct the tax at a source where income is generated rather than at a later date. This provision eases the burden and minimises the cost of collecting the taxes of tax administration besides maximising the revenue collection of the Government. 

Clause-wise explanation of the provision

  • Clause (1) of Section 194J provides that who can deduct the TDS, from whom TDS can be deducted, from whom TDS can not be deducted and who can not deduct the TDS under this clause.
    • Sub-clause (a), or (b) deals with the professionals or technical services rendered on that fee and is deducted as TDS before transferring to the person or organisation that renders such services. 
    • Sub-clause (ba) says that payment made to the director of the company as a remuneration, or fees, or commission whatever name called, except the TDS deducted under Section 192 of the Act of 1961.
    • Sub-clause (c) says that before giving royalty for the use of assets and property of the owner, the person who is giving royalty deducts the TDS and then transacts rest of the payment as a fee to the owner of the assets and property in the cases of copyright, patent, trademark and lease.
    • Sub-clause (d) says that any sum mentioned in clause (va) of Section 28
  • Clause (1) of Section 194J also provides the manner in which the payment is as a fee to be paid to the tax deductee. It also provides how much to be deducted as a tax, meaning what the threshold limit of the deduction is, that we will discuss in detail further under heading, ‘The Threshold Limit of deduction under Section 194J’.
  • The first proviso of Section 194J(1)  under subclauses (A) and (B) deals about the circumstances in that no deduction shall be made under this Section. 
  • The second proviso of this Section states when this Section can apply to the individual or Hindu undivided family, and he or they can deduct sum as a tax before crediting sum from his or their ends. 
  • The third proviso of this Section states that the individual or Hindu undivided family mentioned in second proviso can not deduct the sum as a tax when he or they paid or credit such sums for availing of the professional services for their personal purposes.  
  • The fourth proviso of this Section was inserted by the Amendment Act of 7 of 2017 and came into effect from 1st June 2017. It brought down the rate of TDS deduction from 10 % to 2 % in the case of any payment to the payee engaged only in the business of operation of the call centre.
  • The word ‘or’ in Sub-clause (b) and  Sub-clause (c) and Sub-clause (d) in total were inserted in Section 194J (1) through Amendment Act 29 of 2006 that was effective from 13th July 2006. Sub-clause (ba) was inserted by Amendment Act 23 of 2012 and came into force on 1st July 2012.
  • Sub-sections (2) and (3) were omitted by Act 32 of 2003 from the Section. This Section also provides four explanations that deal with what are the meaning of the professional services, technical services, royalty, and sum mentioned under clause (d) of subsection (1) in clauses (a), (b), (ba), and ( c) respectively.

The headings mentioned below covered in detail all aspects of the provisions of Section 194J of the Act of 1961.

Who can deduct tax under Section 194J

Sub clause (1) of Section 194J states that any entity or person, except an individual or Hindu undivided family, who has the responsibility  to pay,

(a) a fee for availing professional or

(b) a fee for availing technical services or 

(ba) fee, commission, or remuneration to the director of the company other than the payment made under Section 192 of the Act of 1961 or

(c) royalty payment for use of the intellectual assets and property or 

(d) sum referred to in Section 28(va), 

to the resident rendering such services or providing royalty or work as a director or agreeing to the non-compete agreement under Section 28(va) must deduct tax under Section 194J. 

Person

According to Section 2(31) of the Act of 1961 person means:

  • an individual, 
  • a Hindu undivided family, 
  • a company,
  • a firm,
  • an association of persons, or a body of individuals, whether incorporated or not,
  • a local authority, and 
  • every artificial juridical person, not falling within any of the preceding sub-clauses. For example, a university, cooperation, registered society, trust, central government, and state government, etc.

However, this definition of the person is not exhaustive. 

An individual or a Hindu undivided family comes within the definition of person only if their accounts are audited under Section 44AB (a) and (b) or fulfil the requirements of the proviso of Section 194J (1). 

Further, Explanation under Section 2(31) states that association of persons, body of individuals, local authority, or artificial juridical person shall be deemed to be a person whether or not, such persons are formed, established or incorporated with an aim of deriving profits, gains, or income. 

Meaning of person responsible for paying 

Section 204 of the Act of 1961 provides the meaning of the sentence ‘person responsible for paying’ for the purposes of the provisions in Chapter VII B and Section 285. According to Section 204(iii) the person responsible for deducting the TDS under Section 194J is the payer himself, or, if the payer is a company, the company itself, including the principal officer of the company. So, it is the responsibility of the payer or deductor to deduct the TDS before crediting or paying the payments or fees to the payee and depositing the same to the government. 

Rate of deduction of TDS 

In the above-mentioned circumstances, presently the person deducts the TDS at the rate of either 10% or 2% of the payment or fee credited or transferred under Section 194J(1). The rate of deduction of TDS was 5 % when this Section was inserted into the Act of 1961 i.e. in 1995. A substitution to 10 % instead of 5 % took place by the Amendment Act 22 of 2007. In the year 2020, an Amendment as a Financial Amendment Act, 2020 occurred, and the deduction of TDS at the rate of 2% in certain circumstances was inserted in the Act of 1961. The rate of deduction of TDS for professional services is the same as 10% of the payment credited or transferred to the resident rendering the services. The Financial Amendment Act, 2020, reduces the rate of deduction of TDS to 2% in the case of technical services. 

In the case of royalty payment, the rate of deduction will be 2% when the royalty payment is in the nature of consideration for sale, distribution, or exhibition of cinematographic films. In the rest of the royalty payment, the deduction payment rate is 10%. The rate of deduction in the rest of the cases is 10%. For example, commission or remuneration is paid to the director. From 1st July 2021 TDS is to be deducted at a higher rate if the PAN of the deductee is not furnished. Rate of deduction may increase to 20% if PAN of the payee or deductee is not available or not provided to the payer or deductor. Sections 139AA, 206AA, and 206AB of the Act of 1961 and Rule 114 AAA of the Rules of 1962 deals with the higher rate of deduction in case of non-furnished or inoperative PAN.

This section also talks about the rate of deduction of TDS at a rate of 2% in the business of operation of call centres.

Section 197 provides that if the deductee or payee produces the certificate for deduction of taxes at a lower rate than the specified rate, the deductor of the TDS deducts the tax at a lower rate.

The rates of deduction of tax as TDS under Section 194J in tabular form are as follows:

Nature of payments or fees        Rate of deduction of TDS 
Fees for professional services                        10 %
Fees for technical services                           2 %
When the royalty payment is in the nature of consideration for sale, distribution, or exhibition of cinematographic films                          2 %
Rest of the royalty payment                        10%
Commission or remuneration paid to the Director                        10%
Non-compete fees                        10%
Any payment to the payee engaged only in the business of operation of the call centre                          2%
Other payments or fees                         10%
Inoperative PAN                        20% 

Let us understand the above table of deduction with the following illustrations:

Illustration I: ABC company avails the professional services from Mr. G of worth Rs. 45,000 in a single financial year. The TDS in this case will be deducted at 10% as mentioned in the above table. 

So, TDS required to be deducted is 10% on 45,000 = 4,500

The amount actually credited or net payment paid to the account of Mr. G after deducting the TDS is Gross amount – TDS deducted i.e. 45,000-4500= 40500

Illustration II: ABC company avails the technical services from Mr. G of worth Rs. 45,000 in a single financial year. From the above mentioned table it is manifested that the rate of deduction of TDS in such cases is 2%. So, TDS required to be deducted is 2% on  Rs.45,000 =  Rs. 900

The amount actually credited or net payment paid to the account of Mr. G after deducting the TDS is Gross amount – TDS deducted i.e. Rs. 45,000- Rs. 900= Rs. 44,100.

Who is liable to pay TDS under Section 194J 

As per Section 194J(1) of Act of 1961, a resident who is : 

  • rendering professional or technical services mentioned under sub-clauses or 
  • taking royalty payment for use of his/her copyrighted work, patent and trademark, or 
  • work as a director and get payment as a remuneration, fees, or commission for his/her work other than the payment on which tax is deductible under Section 192 of the Act of 1961 or
  • getting non-compete fees under the agreement.

All of the above-mentioned persons are liable to pay TDS.

An individual or Hindu undivided family and TDS

Earlier, under Section 194J(1), an individual or Hindu undivided family was not responsible for deducting TDS. But the proviso of Section 194J(1) inserted by Act 20 of 2002 makes it clear that individuals or Hindu undivided families are also liable to deduct the taxes at source in following circumstances: 

TDS deducted if services were rendered for profession or business 

In the case of business, if in the previous financial year, the total sales, gross receipts, or turnover of the business of an individual or Hindu undivided family exceeds Rs. 1 crore, the individual or Hindu undivided family shall deduct the TDS upon such sums credited or paid to the deductee for professional or technical services availed from him/her in current financial year. For example, Mr. H runs a business, and he avails professional services of Mr. D for his business purposes in the financial year 2023-2024. The turnover or the total sales or the gross receipts of the business run by Mr. H exceeds one crore in preceding financial year i. e. in the year 2022-2023. Mr. H is responsible for deducting TDS on payments credited or paid to Mr. D for rendering professional services in the current financial year.

Similarly, in the case of a profession carried on by an individual or Hindu undivided family whose total sales, gross receipts,  or turnover exceeds Rs. fifty lacs (Rs. 50 lakhs) the TDS for availing professional or technical services must be deducted by the individual or Hindu undivided family.

The monetary limitation of Rs. 1 crore and of Rs. 50 lakhs for deducting the TDS in the case of individual or Hindu undivided family under this Section was inserted by the Amendment Act of 2020, i.e., Finance Act, 2020. Before this Amendment, the monetary limit was associated with Section  44AB of the Act of 1961.

No TDS if services are rendered for personal purposes 

By the Amendment Act 32 of 2003 a third proviso was inserted to this Section that provides that if an individual or members of the Hindu undivided family mentioned in second proviso above avails professional or technical services exclusively for his/her or their personal purposes shall not be liable to deduct TDS from such sums credited or paid by way of fees for such services. For example, Ms. P runs a business, and she builds up her personal home. For interior designing of her home, she avails the service of a professional interior designer Ms. A worth rupees one lakhs fifty thousand. Here, Ms. P has no responsibility to deduct TDS on sums paid or credited to Miss A for her service rendered because services  availed by Ms. P are for personal purposes.

Under this proviso, the use of the word ‘exclusively’ means that professional services must be availed 100 % for personal purposes only. If such services are availed of for business purposes or personal purposes, both then responsibility arises for deduction of TDS. 

What are the services or payments covered under Section 194J

Following are services and payments covered under Section 194J for deduction of TDS:

  • Professional services 
  • Technical services 
  • Royalty payment 
  • Commission, fee, and remuneration paid to the director, excluding salary
  • Non-compete fees 

Explanation of certain terms under Section 194J 

Following are the certain terms used under this Section or other Sections of the Act of 1961:

Professional services

Explanation (a) of Section 194J provides a list of the services that mean professional services. Professional service means a service provided by a person who is an expert in that profession, and has rendered the service in the course of carrying on that profession. Following services come under professional services:

  • Legal
  • Medical 
  • Engineering
  • Architectural 
  • Accountancy
  • Technical consultancy
  • Interior decoration 
  • Advertising 
  • Such other services as notified by the Board 

This list is not exhaustive. The Board [here the Board means Central Board of Direct Taxes (CBDT)] may from time to time for the purpose of this Section or Section 44AA notify other services as a professional service. 

Under Section 44AA, CBDT has notified the following services as professional services:

  • Film Artist
  • Company Secretary 
  • Authorised representatives
  • Information technology 

By authority given under Section 194J, CBDT has notified the below mentioned services as professional services vide Notification No. S.O.2085(E)[ 88/2008/F. No. 275/43/2008-IT(B)], Dated 21/08/2008:

  • Sports Persons,
  • Event manager,
  • Anchor,
  • Umpires and Referees,
  • Physiotherapist,
  • Coaches and Trainers,
  • Team physiatrist,
  • Team physician, and
  • Sports Columnists.

Fees for technical services

Explanation (b) of the Section 194J referred to Explanation 2 to clause (vii) of Sub-section (1) of Section 9 and states that fees for technical services shall have the same meaning as given in the above mentioned provision.

Explanation 2 to clause (vii) of Sub-section (1) of Section 9 says that fees for technical services mean any payment for any managerial, technical, or consultancy services rendered. The payment includes any lump sum payment and services, including the provision of services of technical or other personnel. For example, web designing, software development, data analysis, research and development, and testing certification. 

However, there are some services mentioned in this Section in which any consideration made for rendering of those services do not come under fees for technical services such as consideration for:

  • Construction,  
  • Assembly, 
  • mining, or
  • similar projects undertaken by the recipient 

Considerations or incomes received under the head salaries of the recipient are not to be treated as a fee for technical services.

Remuneration or commission to director 

Sub-clause (ba) of clause (1) of Section 194J was added under the Act of 1961 through the Amendment in the year 2012. This provision does not apply in the case where there is a contractual relationship of employer or employee between the director or the company. This provision will also not be applicable where the director is getting payment for rendering service to the company as a salary, in this case, Section 192 of the Act of 1961 applies. There is no threshold limit for deduction at source (TDS) in this case but rate of deduction is 10 %, which means whatever remuneration or commission the director of the company gets for rendering services to the company, TDS will be deducted at the rate of 10 %. 

Any remuneration, commission, or fees paid to the director of any company by name whatsoever and the relationship between the director and company is of employer-employee will not attract the application of this Section. Sitting fees or fees for attending meetings paid to the director come under the preview of Section 194J. For example, Miss B is a director of a company and gets Rs. 50,000 per month as a fixed salary. She also gets Rs. 25,000 per year as sitting fees for the company’s board of directors meeting. Deduction of TDS under Section 194J, in this case, will be applied on the fees she gets as sitting fees of worth Rs. 25,000. The deduction will be at the rate of 10 %, i.e. Rs. 2,500.

Royalty

Explanation (ba) of Section 194J(1) states that the royalty has the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of Section 9 of the Act of 1961. This was inserted by Amendment Act 29 of 2006.

Explanation 2 to clause (vi) of sub-section (1) of Section 9 provides that royalty means payment paid or made for the following:

(i) conveyance of all or any rights in relation to:

  •  patent, 
  • invention, 
  • model design, 
  • secret formula or process,or
  • trademark, or
  • similar property,
  • it also includes granting of a licence;

(ii) imparting of any information concerning:

  • the working of, or
  • the use of,

the supra-cited intellectual properties or similar property;

(iii)  usage of the above-mentioned intellectual properties or similar property;

(iv) imparting or sharing of any information related to technical, industrial, commercial, or scientific knowledge, expertise, or skill;

(iv-a) use or right to use any industrial, commercial, or scientific equipment except the amount referred under Section 44BB. This clause was inserted through Act 14 of 2001.

(v) conveyance of all or any rights in relation to:

  • any copyright,
  • literacy,
  • artistic,
  • films or video tapes for use of television, or
  • tapes for use of radio broadcasting, 
  • It also includes granting of a licence, 
  • but it does not include payment for the following:
    •  sale,
    • distribution, or
    • exhibition,

of a cinematographic film;

(vi) providing any services in connection with or in relation to the supra-mentioned activities under sub-clauses (i) to (iv), (iv-a), and (v).

Consideration or payment paid or made to the recipient under this provision also includes any lump sum payment but does not include the payment to the recipient as income that is chargeable under the head capital gains. 

There were contradictory views of the judiciary on imposition of taxes or TDS on payment of royalty, particularly on computer software or some other. Therefore, to mitigate these contradictions and to enlarge the scope of royalty, Parliament came up with the Amendment Act 23 of 2012, known as the Finance Act, 2012, and amended the definition of royalty. This Act amended the clause(vi) of Sub-Section(1) of Section 9 and added Explanations 4, 5, and 6 after Explanation 3. These are clarificatory Explanations and have retrospective effects dated 1st June 1976.

Explanation 4 of Section 9(1)(vi) makes it clear that by whatever means or via, the transfer of all or any right in respect of any right, property or information as mentioned in Explanation 2,  includes and has always included transfer of all or any rights for use or right to use a Computer software would amount to the royalty. It also includes granting of licence to use.

Explanation 5 of Section 9(1)(vi) makes it clear that:

  • the term royalty includes and has always included payment with regard to:
    • any right,
    • property, or
    • information,

            irrespective of:

  • the possession or control of the same is with the payer;
  • same is used directly with the payer;
  • the location of the same is in India. 

Explanation 6 of the Section 9(1)(vi) makes it clear that the term process includes, and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, irrespective of such process is secret or not.

Taxation on software purchase under Section 194J 

Central Board of Direct Taxes issued Notification No. 21/2012 [F.No.142/10/2012-SO(TPL)]S.O. 1323(E), dated 13th June, 2012 to avoid the multi-level TDS under Section 194J.

It states that where TDS is deducted on the first transfer of Software either under Section 194J or Section 195, TDS is not required to be deducted in subsequent transfers where the transferor is a resident. By this notification on the following specified  payments, TDS would not be deducted under Section 194J, namely:

  • Payment by a person (transferee) for acquisition of software from another person, being a resident (transferor), where

(i) software is acquired in a subsequent transfer, and the transferor has transferred the software without any modification,

(ii) tax has been deducted

(a) Under Section 194J on payment for any previous transfer of such software, or

(b) under section 195 on payment for any previous transfer of such software from a non-resident, and

(iii) the transferee obtains a declaration from the transferor that the tax has been deducted either under sub-clause (a) or (b) of clause (ii) along with the permanent account number of the transferor.

Examples

Example 1

Suppose Xyz is a foreign company manufacturing software in England. It transferred that software to the Indian company Vimigo Private Limited. Upon this, no TDS is deducted under Section 195 of the Act of 196. The same software was subsequently transferred to another Indian company Sunrise Private Limited. The question is whether responsibility to deduct TDS would arise under Section 194J.

In this case, if tax is not deducted on a previous occasion under Section 195, the benefit of exemption notification would not arise. In fact, tax liability would arise under Section 194J on subsequent transfer of software. 

Example 2

Suppose a foreign company in France manufacturing software. It transferred the software to the Indian company(1) on which tax is deducted by the Indian company. If the Indian company(1) again transfers the software to another Indian company (2) without any modifications. The question is whether TDS responsibility would arise when an Indian company subsequently transferred the software without any modification to another Indian company. 

In the above case, no responsibility arises against the Indian company (2) on subsequent transfer of software provided, the Indian company(2) must obtain a declaration from an Indian company(1) that TDS has been deducted on software payments by Indian company (1) under Section 195, along with the copy of PAN of the Indian company(1).

Example 3

ABC, an Indian company, manufactures software. It transferred software to another Indian company known as PRT. The PRT  paid to the ABC company payment  for the software after deducting the TDS under Section 194J. The PRT company, again without any modification in the software, transferred it to another Indian company known as XYZ. The question here is whether responsibility to deduct TDS would arise again when PRT company retransferred the software to XYZ company. 

In this case, no responsibility arises to deduct the TDS under Section 194J on subsequent transfer or retransfer of software due to exemption provided in the notification issued by CBDT as notification no.  21/2012. To avail of the benefit of this exemption, the Indian company XYZ must obtain a declaration from Indian company PRT that tax has been deducted on software payments by PRT on any previous occasion under Section 194J.  The copy of the PAN of the PRT company also needs to be obtained.

Non-compete fees

Sub-clause (iv) of clause (B) of Sub-section (1) of Section 194J says any sum referred under clause (va) of  Section 28 paid by payer to the payee for the agreement made between them is eligible for the deduction of TDS under Section 194J. 

Clause (va) of Section 28 of the Act of 1961 was added by Act 20 of 2002. It says that any sum either in cash or kind has been received or able to be received in lieu of an agreement for:

(a) barring from carrying out any activities with respect to any business. 

(b) barring from sharing any :

  • know how,
  • patent,
  • copyright, 
  • trademark, 
  • licence,
  • franchise, or
  • any other business or commercial right of a similar nature, or
  • information or technique that is likely to help in the manufacturing or processing of goods or provision for services;  

exceptions are added to the sub-clause (a), which says that the provision of clause (a) shall not apply in the following cases:

(i) if any sum either in cash or kind has been received or able to be received or a non compete fees received or able to be received for the transfer of the right to manufacture, produce or process any article or a thing or right to carry on any business, and that chargeable under the head capital gains, clause (a) shall not apply ;

(ii) if any sum is received as compensation from a multilateral fund under the United Nations Environment Program as a non-compete fees in accordance with the terms and conditions of agreement entered by the Government of India. For example, in the case of Montreal Protocol. 

Explanation (c) of Section 194J 

It says that a sum referred under Section 194J (1) credited to any account, whether the suspense account or by any other name in the book of account of the payer. It will be deemed as credit to the payee. 

Threshold limit of deduction under Section 194J

The threshold limit is the amount of payments upon which no TDS is deducted. When the amount of payments exceeds the threshold limit prescribed in the Section, then only provisions of TDS will be applicable.

Following are the certain threshold limit of TDS under Section 194J:

Clause (A) of the first proviso of Section 194J(1) states that TDS will not be deducted from the above-mentioned payments credited or paid as a fee if such payments have been made before 1st July 1995.

Further clause (B) of the first proviso provides a certain threshold limit of non-deduction of TDS on the above-mentioned fees credited or paid by the deductor to the deductee as follows :

(i) thirty thousand rupees (Rs. 30,000) for professional services mentioned under sub-clause (a) of Section 194J(1) or

(ii) thirty thousand rupees (Rs. 30,000) for the technical services mentioned under sub-clause (b) of Section 194J(1) or

(iii) Nil for the remuneration, fee, or commission paid to the director other than the amount paid and deductible under Section 192 of the Act of 1961 under sub-clause (ba), or,

(iv) thirty thousand rupees (Rs. 30,000) for the royalty payment mentioned under sub-clause (c) of Section 194J(1), or,

(v) thirty thousand rupees (Rs. 30,000) for the sum referred under Section 28(va) or non-compete fees.

The threshold limit of deduction of tax as TDS under Section 194J in tabular form is as follows:

Nature of payments or fees       Threshold Limit 
Fees for professional services          Rs. 30,000
Fees for technical services          Rs. 30,000 
When the royalty payment is in the nature of consideration for sale, distribution, or exhibition of cinematographic films          Rs. 30,000
Rest of the royalty payment            Rs. 30,000
Commission or remuneration paid to the Director               Nil
Non-compete fees            Rs. 30,000
Any payment to the payee engaged only in the business of operation of the call centre            Rs. 30,000
Other payments or fees             Rs. 30,000
Inoperative PAN            Rs. 30,000

Threshold limit of thirty thousand rupees (Rs.30,000) in the above-mentioned fees was substituted by Amendment Act 14 of 2010 instead of twenty thousand rupees (Rs.20,000). It was effective from 1st July, 2010. The threshold limit for royalty payment and non-compete fees were inserted in the Act of 1961 by Amendment Act 29 of 2006. In all the above-mentioned services, if the transaction of payments exceeds the threshold limit, i.e., Rs. 30,000 in the financial year for each of the services, then only there will be a deduction of TDS. The threshold limit of  Rs. 30,000 applies to each service or payment independently. There is no threshold limit for remuneration, fee, or commission paid to the director excluding salary. It means in the case of remuneration paid to the director other than the salary TDS will be deducted even if the payment of the transaction is below Rs.30,000 at the rate of 10 %. 

Examples

For example, ABC company credited or paid a fee of Rs. 20,000 for availing professional services and Rs. 25,000 for availing technical services by Mr. G in a financial year. The total amount to be credited or to be paid to Mr. G in a financial year is Rs. 45,000. TDS will not be deducted in this case because payment of fees in each service does not exceed the threshold limit of Rs.30,000. 

Similarly, in the above case, if ABC company avails the professional services of Mr. G in a single financial year worth Rs. 20,000 and again worth Rs. 25,000, aggregate of Rs. 45,000 liable to deduct the TDS. 

ABC company avails the professional services of Mr. G in a single financial year of Rs. 35,000 and the technical services of worth Rs. 25,000. In this case the TDS will be deducted for the professional services only not for the technical services. 

ABC company paid to the Director of the company a remuneration of worth Rs. 25,000 in a single financial year. TDS will be deducted at the rate of 10 % in this case because there is no threshold limit for remuneration paid to the director other than salary under Section 192 of the Act of 1961.

Modes of payment and time of deduction under Section 194J

Sub-clause (1) of Section 194J talks about different modes of payment of fees or sums. It says that the person or entity who is responsible for paying the fees or sums as payment can make the payment as follows:

  • by credit of the fees or sums in the account of the payee, or 
  • by payment of fees or sums in cash, or 
  • by issue of cheque, or 
  • by issue of draft, or, 
  • by any other method. 

The deductor of the TDS deducts the taxes at the source either at the time of credit of the payment as a fee or at the time of making out the actual payment to the payee through any of the above mentioned different modes, whichever is earlier.

TDS should be deducted from the very beginning of the payment made for availing the services mentioned in Section 194J even though the first installment of payment does not reach the threshold limit if there are chances that the payments paid in installment or total payment made exceed the threshold limit within a single financial year. 

For example, if an ABC company hires freelance writers for blog writing. The company entered into a contract with them. The services rendered by the freelance writers amount to professional service. Rate of deduction of TDS for this service is 10% and the threshold limit is Rs.30,000 in a financial year. The freelance writer completed the project worth Rs. 10,500 and there is likely that the total payments for blog writing will exceed the threshold limit of Rs.30,000 during the single financial year. In this case TDS at the rate of 10% will be deducted upon the payment of Rs. 10,500 which is due to pay for the completed project. 

So, TDS required to be deducted is 10% on Rs. 10,500 = Rs. 1050. The amount actually credited or net payment paid to the account of the freelance writer after deducting the TDS is Gross amount – TDS deducted i.e. Rs. 10,500 – Rs. 1050 = Rs. 9,450.

Important case laws on Section 194J 

Following are the few cases in relation to Section 194J:

Engineering Analysis Centre Of Excellence Private Limited vs. The Commissioner of Income Tax and Anothers (2021)

In this case, the Supreme Court went through the analysis of Explanations 4, 5, and 6 added through Amendment Act 23 of 2012 in Section 9(1)(vi). The Court, with respect to Explanation 4, held that it could not apply to any right for the use of or the right to use Computer software even before the term Computer Software was inserted in the Act. 

Further, with respect to Explanation 6, the Supreme Court, in the case in hand, held that it is illogical to insert this explanation in Section 9(1)(vi) with retrospective effect Since, technology related to satellite, optic fibre, or other similar technology was started to be regulated for the first time by the Parliament through the Cable Television Networks (Regulation) Act, 1995, that was much after 1976. 

ITO, Ward 6 (4), New Delhi vs. M/s. Mikroz Infosecurity Pvt. Ltd. New Delhi ( 2018)

In this case, the assessee was into the business of sales of software and services. The assessing officer from the financial statements of the assessee, found that it had purchased software from various parties worth Rs.1,73,72,817/- but has not deducted tax under Section 194J. The assessee contended that out of worth Rs.1,73,72,817/- an amount of Rs.1,52,60,159/- was spent in purchasing hardware and the software purchased embedded with hardware. The assessee further contended that it had not retained any copyright but sold the same as received from the manufacturer. The question for determination before the Income Tax Appellate Tribunal, New Delhi was whether software embedded in hardware purchased by the assessee and the payment made for purchase of such software could be considered as payment towards royalty so as to attract provision of Section 194J. The Tribunal cited the case laws of Delhi High Court that were similar in nature to the case in hand, such as Commissioner of Income Tax vs. Dynamic Vertical Software India Pvt.Ltd.(2011) and The Principal Commissioner of Income Tax-6 vs. M. Tech India Pvt.Ltd.(2016). Tribunal observed that when the hardware embedded with software has been purchased by the assessee having no copyright nor having the right to transfer the copyright, the software has no separate entity. Furthermore, hardware embedded with software is billed to the customer through a single invoice classified as goods with DVAT/CST leviable on sale price. So, the same can not be classified as software. Therefore, payment for such embedded software can not be considered as royalty payment to attract the provisions contained in Section 194J. 

C. I. T.- 4, Mumbai vs. M/S Kotak Securities Ltd. (2016)

In this case, payer paid transaction charges to Bombay Stock Exchange for transacting business of sale and purchase of share. The question before the Supreme Court for the determination was whether the transaction charges paid by payer to Bombay Stock Exchange would be qualified as a fee for technical services in accordance with explanation 2 to Section 9 (1) (vii) and liable for deduction of taxes under Section 194J or not.

The Supreme Court cited its previous landmark judgement of Commissioner of Income Tax vs. M/S Bharti Cellular Ltd. (2010) to understand what technical services are. The Supreme Court observed that, in this case that technical services come in between the words managerial and consultancy services, therefore, must involve services rendered by human efforts. The court further observed that it is a consistent view of the courts with respect to the technical services. Since there is tremendous development in science and technology that has blurred the efforts or involvement of humans from technical services. Nowadays, mostly such services are fully automated. Therefore, a need arises to search for a more effective or efficient basis to determine the technical services. The Supreme Court, in this case, determined the test for services rendered by the service provider to be technical services. The services rendered must be specialised, exclusive and individual or specific or customised requirements of the customer, or a person who avails the service or may approach to such service provider for such service. The court observed that the services provided by the Bombay Stock Exchange are fully automated and available to all members of the stock exchange. The court further observed that technical services like managerial or consultancy services would fulfil the special or customised need of the consumer or user. It is not available already. It is provided or made available when the need arises. Though services provided by the stock exchange are services but do not fall in the expression of technical services and are merely facilities. These are common services; there is no exclusivity to the services rendered by the stock exchange. 

Hence, the court said that due to the above reasons we held that the view taken by the Bombay High Court that the transaction charges paid to the Bombay stock exchange for services rendered by the Bombay stock exchange are fees for technical services is not an appropriate view. Hence, Section 194J will not be attracted to such payments or fees.

Vipul Medcorp TPA Pvt. Ltd. and Others vs. Central Board of Direct Taxes and another’s (2011)

In this case, petitioners were the Third Party Administrator (TPA). They discharge the liability of the insurance company under the insurance contract entered into between the insurance company and policyholder (patients). For providing support insurance services, the petitioner company has got a licence from the Insurance Regulatory and Development Authority of India (IRDAI). 

Petitioners had challenged the Circular No. 8/2009 issued by Central Board of Direct Taxes. The said circular required TDS under Section 194J of the Act of 1961 when the TPAs make the payment to hospitals to settle the bill of the policyholders on behalf of the insurance company. The petitioners challenged the said circular on four grounds:

  • Firstly, Section 194J will not be applicable on the payment made to the hospitals because such payments do not come under the expression of professional services as defined under explanation (a) of Section 194J of the Act of 1961.
  • Secondly, petitioners or TPAs neither avail of any professional services nor make payments for any professional services. TPAs are not patients. So, Section 194J does not apply on the payment made by TPAs to the hospitals.
  • Thirdly, payments made by the TPAs and petitioners in this case are in discharge of the liability of the insurance company under the contract of insurance. These do not come under Section 194J. 
  • Fifthly, under Section 194J, policyholders are not required to deduct TDS. But as per circular, TPAs would be liable to deduct TDS under Section 194J when they make payment. According to the circular, TDS has to be deducted when TPAs make payments to the hospital, but TDS will not be deducted when TPA or insurance companies make payments to the policyholders. 

Delhi High Court divided Explanation (a) of Section 194J into two parts:

  • services rendered by a person, or
  • in the course of carrying on 

Services rendered by a person

Delhi High Court said that in the present case for the purpose of deciding the case, the explanation (a) would be read as ‘professional services means service rendered by a person in the course of carrying on medical profession. If we take the definition of person from Section 2(31) of the Act of 1961 the recipient need not be only an individual who carries on the medical profession or other professions given under explanation (a) of Section 194J. Hence, if payment is made to the recipient for providing services in case of carrying on the medical profession (in the case in hand) or other stipulated profession, TDS has to be made. It is immaterial whether the recipient is an individual or firm or artificial person. 

In the course of carrying on

Delhi High Court said that the above part of the explanation (a) of Section 194 related to or refers to the specified services on which TDS is to be deducted. The court further said that the words ‘in the course of carrying on’ do not mean that the person who rendered service and is paid must be a professional. The above words denote that services rendered and paid for in the course of carrying on profession as stipulated or, in this case, medical profession, are covered under Section 194J and require TDS deduction. The court also said in the case in hand the words ‘in the course of carrying on’ are used with the intention to include incidental, ancillary, adjunct or allied services connected with or relatable to medical services. 

The scope of explanation (a) of Section 194J is not limited only to payments made to medical or other professionals, but services rendered in the course of carrying on the specified or stipulated profession. Court further said that it is not necessary that the person who renders service and is paid should himself or herself carry on the specified profession or medical profession.  

Commissioner of Income Tax New Delhi vs. M/S Bharti Cellular Limited (2010)

In this case, the leading question was whether TDS is deductible by M/S Bharti Cellular Limited or not when it paid interconnect charges/access to BSNL. In this regard, the question is to determine whether the manual intervention is involved in the technical operation or services. In this case, the Supreme Court held that payment for interconnect is not liable for TDS deduction under Section 194J of the Act of 1961. The Supreme Court observed in this case as follows:

“Right from 1979, various judgments of the High Courts and Tribunals have taken the view that the words “technical services” have got to be read in the narrower sense by applying the ‘rule of noscitur a sociis (it means knowing with association)’ particularly, because the words “technical services” in Section 9(1)(vii) read with explanation 2 comes in between the words “managerial and consultancy services”.

Assistant Commissioner of Income Tax, Circle 50(1), New Delhi vs. Indraprastha Medical Corporation Ltd ( 2009)

In this case, the assessee is in the business of running a hospital called Apollo Hospital. Besides salaried medical professionals,  the hospital allowed other medical professionals to give their services to the patients within the premises of the hospital by providing them with a consultation chamber and the hospital staff to collect consultation fees on behalf of those doctors and that were handed over to them on the same day. 

In this case, there is no relationship between the service provider or the service recipient between the consultant doctors and the hospital. Nothing insured for the benefit of the hospital or assessee. In this case, the rendering of professional services by medical professionals does not arise according to Section 194J of the Act of 1961.

Therefore, in this case, it was held by Income Tax Appellate Tribunal that Section 194J is not attracted and the assessee or hospital is not liable to deduct TDS under Section 194J. 

Other important aspects of Section 194J

When the deducted TDS is submitted to the Income Tax Department 

Once the TDS is deducted by the payer, it must be deposited to the Central Government within the prescribed time provided under Section 139(1) of the Act of 1961.

The time limit for deposit or submission of TDS to the Income Tax Department (shortly referred to IT Department) is as follows:

Deduction made by non-government organisations 

In the case of deduction made by non-government organisation, TDS will be deposited to the IT Department as follows:

  • If the payment is made before March, then the 7th day from the end of the month or 
  • If the payment is made in the month of March, then till 30th April.

Deduction made by Government organisations 

In the case of deduction made by government organisation, TDS will be deposited to the IT Department as follows:

  • If the payment is made before the month of March, then the 7th day from the end of the month or
  • If the payment is made in the month of March, then TDS is made on the pay day of the technical or professional fees to the payee. 

TDS statement issued under Section 194J 

The payer or deductor shall issue a TDS statement known as Form 16 to the payee or the person whose TDS is deducted within the prescribed time limit provided in the Act of 1961.

Time limit to file TDS return under Section 194J 

After the deposition of the TDS to the government by the deductor or payer, the deductee or payee must file a quarterly TDS return in Form 26Q within a specified time limit. 

Tax Deduction Account Number 

It is mandatory for every person who is responsible for deducting TDS to obtain a tax deduction account number (TAN) from the Income Tax Department. It is a 10-digit alphanumeric code.

Challan 281

It is mandated that TDS deducted under Section 194J be deposited to the Government through Challan 281. In the Challan, all details of TDS deducted, name of the deductor or deductee, PAN, and TAN must be filled.

Consequences of default in timely deduction and deposition of TDS 

A deductor of a TDS will face the following consequences if he/she fails to deduct the TDS or is late in deposition of TDS deducted to the appropriate authority:

Consequences of non-deduction of TDS 

According to the Section 201(1A) if a person or an organisation fails to deduct the TDS due as a whole or in part in accordance with the Act of 1961, he or it shall be liable to pay a simple interest as a penalty at the rate of 1 % per month, 

If a person or an organisation does not deduct the TDS due as a whole or in part within the specified time period, a penalty will be levied under Section 221(1) of the Act of 1961. Penalty under this Section is based on the amount of TDS that should have been deducted or owed. However, the total penalty amount does not exceed the amount of tax in arrears. Imposition of penalty is in addition to the amount of the arrears and the amount of interest payable under Sub-section (2) of Section 220. According to the proviso of Section 221(1), before levying such penalty, the defaulter shall be given a reasonable opportunity of being heard.

Non-deduction of TDS also invokes the penalty provided under Section 271C.

Consequences of late deposition of TDS 

Similarly if a person or an institution deducts the TDS on the prescribed manners and within the prescribed time limit but fails to deposit it to the IT Department or Government, in accordance to the Act of 1961, an interest is charged at the rate of 1.5 % per month in accordance with Section 201(1A).

If a person or an organisation fails to deposit the TDS, the provision of Section 221(1) is applied and a penalty will be imposed on the defaulter and it is in the addition of the amount of the arrears and the amount of interest payable under sub-section (2) of Section 220.

Prosecution 

If there is a default in deduction or deposition of TDS, a prosecution under Section 276B or Section 276BB may be imposed on the defaulter. Imprisonment ranging from 3 months to 7 years with a fine can be imposed in the deliberate default. 

Disallowance of expenses and TDS defaults

If there is default in timely deduction or deposition of TDS under Section 194J, such payments are disallowed in accordance with Section 40(a)(ia). This provision is added through Finance (No.2) Act, 2014

Section 40(a)(ia) states that in the case of payment to the resident if before paying fees, tax is not deducted or it is deducted but not deposited to the Central Government within the prescribed time limit or manner provided in other provisions of this Act [Section 139(1)], attracts 30 % disallowance of such income while computing the taxable income the heads ‘Profits and Gains from Business or Profession’. It means such payments or expenses are remittable, and tax will be imposed on it. 

Section applies to the payment made as salary, or on interest, or payment made as a professional fees, technical fees, royalty payment, non-compete fees, commission to the director, brokerage, rent etc. There is an exception to this provision. If the deductor proves that the payment upon which TDS is not deducted has been mentioned by the payee in his returns of income and paid the tax due on such payments. 

Unfurnished PAN or inoperative PAN 

Section 139AA – Quoting of Aadhaar number 

Amendment Act 7 of 2017 inserted this Section in the Act of 1961 with an objective to achieve a digitised and unified tax system. This Section makes it mandatory to link the Aadhaar with PAN. It came into effect from 1st July 2017. It also includes consequences of non compliance of this Section. 

Section 206AA -Requirement to furnish PAN 

This Section was added through Amendment Act 2 of 2009 effective from 1st April 2010. This Section makes it mandatory for every deductee to furnish his valid PAN to the deductor. Non compliance of this Section leads to higher rate of TDS deduction under Section 194J as follows:

  • at the rate specified in Section 194J for specified services, or 
  • at the rate in force, or 
  • at the rate of 20 % 

whichever is higher. 

This Section also imposed an obligation on the deductor of TDS under Section 194J. Non compliance of this Section leads to an assessee in default under Section 201(1) of the Act of 1961. Penalty under Section 221 and Section 271C (1)(a) has been invoked and Section 40(a)(ia) of the Act of 1961 applied.

Rule 114 AAA – Manner of making PAN Inoperative

CBDT through Notification  No.11/2020/F.No. 370149/166/2019 dated 13th February 2020 added Rules 114 AAA in Rules of 1962. It provides the manners for making PAN inoperative. 

CBDT through Order No. F.No. 370142/14/2022-TPL dated 30th March 2022 provides the consequences of not linking PAN with Aadhaar. It applies from 1st April 2023. A late fee range from Rs. 500 to Rs.1000 would be charged if there is delay in or non linking of PAN with Aadhaar.

CBDT through a press release dated 30th March 2022 prescribes fees charged for not intimating  the Aadhaar No. to concern authority for PAN Aadhaar linking before 31st March 2023.

Compliance of other provisions of Income Tax Act, 1961

It is mandatory for the deductor of TDS to comply with all other provisions of the Act of 1961 as given under the same.

Ambiguity in between Section 194C or Section 194J and recent Amendment proposed 

Existing confusion 

Section 194C governs the TDS on payment to contractors, and Section 194J deals with the deduction of TDS on fees for technical or professional services. There is an ambiguity in the application of these sections that leads to under deduction or over deduction of TDS due to deduction of TDS under wrong Section. It creates compliance issues and potential disputes between taxpayers and tax authorities. 

It states that ‘any person responsible for paying any sum to any resident (here contractor) for carrying out any ‘work’ in accordance with the contract entered  amidst the contractor and specified person shall liable to deduct TDS at the time of crediting the sum into his account or paying in cash, cheque or draft, whichever is earlier at the rate…’

The term ‘work’ under the explanation (iv) of Section 194C includes the following activities:

(a) advertising, 

(b) broadcasting and telecasting

(c) carriage of goods or passengers by any modes of transport except railways

(d) catering

(e) manufacturing or supplying a product as per the requirement of the customer by using materials purchased from such customer, but does not apply when material is not purchased from the same customer who has specified or is required to manufacture or supply a product.

Similarly, Section 194J has also provided explanations for the professional or technical services rendered under this Section that require deduction of TDS. However, the Act of 1961 does not explicitly provide that the deductor of TDS under Section 194J is exempted from deducting the TDS under Section 194C or vice versa. There is an overlap of activities or works between these sections, which causes confusion for taxpayers and enhances litigation. Due to these overlapping activities or works or services, the assessee deducts TDS under Section 194J while he has to deduct TDS under Section 194C or vice-versa. Because of all these contradictions, it is proposed, through the Financial Bill, 2024, to amend these Sections to clear the vagueness. 

Proposed Amendment 

Explanation (iv) of Section 194C, which defines work and includes a list of activities that are known as work from sub-clauses clauses (a) to (e). Through Financial Amendment Bill, 2024, it has been proposed to amend the explanation (iv) of Section 194C to clear the ambiguity or overlapping of activities or services provided under Section 194C and Section 194J. The proposed Amendment will come into effect from 1st October 2024. This Amendment proposes the changes in subclause (e) of clause (iv) of Explanation of Section 194C as follows: 

But it does not include:

  • (B) any sums referred to in sub-section (1) of Section 194J. 

It means that any sum or payments or fees credited or paid for the services mentioned in sub-section (1) of Section 194J does not come under or apply on the list of works for the purposes of TDS under Section 194C. 

Analysis and suggestions

To make the taxation system of India more strong, fair, and smooth in application, Parliament has made several legislations related to tax laws.  For example, Goods and Services Tax Act (GST), Property Tax, Custom duty, Income Tax Act,1961, etc.

To reduce or control the tax avoidance or tax evasion due to ambiguity or loopholes in the laws, the legislature or the concerned authorities from time to time make changes in the tax laws through substitution, omission, or insertion of old laws or new laws respectively. 

One of the examples of addition of such new provisions is Section 194J in the Act of 1961 which was added in the year 1995 to enhance the revenue generation or make collection of taxes more fair, easy and efficient. By going through this article, it is clear how the addition of this provision made compliance of tax laws compulsory or more effective and smoother. This article also gives insight on further amendments made in Section 194J to make the provisions of TDS under Section 194J more effective and efficient. This article lays down a comprehensive understanding of Section 194J by clarifying the legal implications in case of default. From this article, it is clearly manifested that how the legislature, executive, and judiciary by amending the provisions of the Act of 1961, by issuing circulars or notifications, and by changing the test laid down in its previous decisions respectively keep themselves up to date with change in science, technology and other fields. 

Therefore, by going through this article, a reader will familiarise himself/herself with the nuances of the provision of Section 194J, the recent Amendments happen, and decisions came out to the same.  Since compliance with the TDS regulations is very crucial for any businesses or for both payer or payee of the TDS as non-deduction, wrong deduction, late deduction, half deduction or even deduction under wrong heads in the Act of 1961 leads to penalties and litigation. 

Frequently Asked Questions (FAQ’s)

What does the rule of noscitur a sociis mean?

It is a latin phrase that means it is known by its associates. This phrase is also part of a longer Latin maxim “noscitur ex socio qui non cogiiositur ex se” which is to be understood as “he who cannot be known from himself may be known from his associates.” It is a rule of interpretation used in the legal arena to understand the legal text if there is any ambiguity or vagueness with the meaning of the legal words or legal phrase. It says that if there is a vagueness or ambiguity in any legal word or phrase in a legal document, the meaning of the ambiguous word can be taken out from the words or sentences used around or surrounded by the ambiguous legal word or sentence. The relevant case law is here.

What does an individual mean?

An individual means a natural person.  A human being, whether a male or female or major or minor and a lunatic or idiot. 

What does a Hindu undivided family (HUF) mean?

The definition of Hindu undivided family is not given under the Act of 1961. It is a relationship created among the members of a Hindu family who are lineally descended from a common ancestor. A main person under the Hindu undivided family is known as Karta, and its members are coparceners. Not only the Hindu families, even Buddhist, Jains, and Sikh families can form Hindu undivided families. Before 2005, only male members of the family could be coparceners, but now a female can be a coparcener in the family. In 1917, for the first time, Hindu undivided family was recognised as a separate entity for tax purposes. 

What does a resident mean?

According to Section 2(42) of the Act of 1961, residents are a person who is resident in India within the meaning of Section 6 of the Act of 1961.

What does a firm mean?

According to Section 2(23)(i) of the Act of 1961, firms shall have the meaning given under Indian Partnership Act,1932. According to Section 4 of the Partnership Act, persons who have entered into partnership with one another are called individually partners and collectively a firm.

It also includes a limited liability partnership as defined in the Limited Liability Partnership Act, 2008. This Act also mentioned the Indian Partnership Act,1932, for the definition of a firm under Section 2(k)

What does an artificial juridical person mean?

Section 2(31)(vii) of the  Act of 1961 says that if an assessee is not covered under any of the categories of Section 2(31) (i) to (vi) in the definition of the person then it is regarded as an artificial juridical person. It is an entity that is not a natural person but a different entity in the eyes of law. 

What does the Association of Persons (AOP) mean?

It is not defined under the Act of 1961. Association of Persons is a combination of two words, association and persons. Here, association means a group of persons having common objectives or interests. Persons means as defined under Section 2(31) of the Act of 1961. Persons include both natural or artificial persons. AOP can be formed by two or more than two persons having common objectives or interests to earn an income. For example, Co-heirs.

What does the Body of Individuals (BOI) mean?

Body of Individuals means group or collection of individuals that are doing the same activity with the aim of earning an income.

What does suspense account mean?

An account that is used to store such transactions temporarily upon which there is uncertainty about where they should be recorded is a suspense account.  

Does Section 194J apply to non-residents?

Section 194J is not applicable to non-residents. However, Section 195, read with Section 115A of the Act of 1961, is applicable in the case of non-residents.

What are non-compete fees?

It is a fee paid for an agreement to not compete. It is used in commercial transactions. 

Do non-compete fees apply on relinquishment of the right to sue?

No. Fees received in lieu of relinquishment of the right to sue are not covered under fees for non-compete. Such provisions do not come under Section 28 (va) of the Act of 1961.

References


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Ubi jus ibi remedium

2

This article is written by Arya Mishra and further updated by Navya Jain. The article discusses the meaning of the maxim, ubi jus ibi remedium, which has significantly shaped the law of Torts. It breaks down the various aspects and essentials of the maxim, as well its limitations. It also illustrates instances of its application. 

Introduction

Justice Pollock said that right and wrong are contrary to each other. If any wrong is committed, then the law provides a remedy for it. Right actions refer to those which are prescribed by moral rules, whereas wrong actions are those which are not prescribed by moral rules or which are prohibited by law. A legal right is protected by a corresponding legal duty. Any deviation from such a duty is regarded as wrong action.

In the words of Lord Justice Holt, “to imagine a right without a remedy is very difficult”. Ubi jus ibi remedium is the foundational principle for every remedy provided under the law of Torts. It exuberates the common man to have faith in the judicial system. The inherent principle behind ubi jus Ibi remedium implies that a person who has suffered any wrong, will be provided with a remedy under the due process of law. Thus, no wrongdoer can be allowed to get away with their wrong actions, without having to bear consequences for the same. Let us understand this maxim from scratch as to how it was applied in common law and how it operates in Indian jurisdiction. We shall also learn about the relevant exceptions or limitations, wherein it ceases to apply. 

Meaning of ubi jus ibi remedium 

The word jus means legal authority to do something or to demand something. The word “remedium” means that the person has the right of action in a court of law. Ubi jus ibi remedium is a Latin maxim which means that where there is a wrong, there is a remedy.  The maxim is based on the premise that where a man has a right, there must be means provided to him/her to ensure proper exercise or enjoyment of such rights. It is useless to imagine and think of a right without a remedy. However, such a right must be legally recognised by the statues. For instance, there are several moral and political wrongs which are neither actionable nor pose sufficient reason to take legal action. In such a scenario, there shall be no valid basis for raising damages by the aggrieved. Thus, to say that there is a legal remedy against every wrong action may not be entirely true.

With that being said, it is only the aggrieved who may seek the remedy. It is not permissible in the law to permit another party to file for damages on behalf of the aggrieved. In other words, it is up to the parties to convince that a legal right has been breached. Once they succeed in doing so, the court shall rightfully provide a remedy for the damage. If the court is convinced of the damage caused to the aggrieved, it shall examine the legal sanctity of the remedy. Therefore, one must be cautious of seeking legally valid damages. It is appropriately said by Justice Stephen, that this maxim would be correctly stated if it were reversed to say “where there is no legal remedy, there is no legal wrong.”

In the case of Leo Feist vs. Young (1943), the plaintiff sought relief against the copyright infringement of his musical composition. The court observed that in the event where a wrong has actually occurred, and the aggrieved has approached the right forum, the court shall not commit the sin of sitting as a mute spectator. There is no such wrong action that may go unaddressed without an appropriate remedy. 

Similarly, in the case of Donoghue vs. Stevenson (1932), the plaintiff sued the defendant for serving a beer bottle contaminated with a dead snail, thereby causing illness. The court stepped up in favour of the plaintiff stating that the defendant owed a duty of care to the plaintiff, which stood breached. It was much enforceable that serving infected products would cause harm to the plaintiff. Thus, the court provided remedy to the aggrieved in the form of costs levied on the defendant.

Origin of ubi jus ibi remedium 

The maxim owes its origin to the common law case of Ashby vs. White, (1703), wherein the court opined that for every right vested in the plaintiff, there must also exist means to protect it. Should there be any injury or harm in exercising or enjoying the said right, there must be a remedy to rectify the same. Thus, no wrong should be allowed to go without any compensation if it can be redressed by a court of law. Similarly, the court reiterated this maxim at a very nascent stage in the case of Marbury vs. Madison (1803) as well, mandating the need to have a remedy for every wrong done to a party. 

Essentials of ubi jus ibi remedium 

When a party’s rights are infringed, the aggrieved has the option of resorting to a civil suit in order to claim damages. To succeed, the plaintiff must establish the constitution of a tort. Thus, some of the essential ingredients required to be fulfilled by the plaintiff are as follows: 

  • The maxim ubi jus ibi remedium can be applied only where a right exists and that right is recognized by the court of law;
  • Existence of a wrongful act or omission: in order to hold a person liable for damages, she/he must constitute some tort, that is, violate the legal right of a person. it is not necessary that only a wrongful act towards the existent right will constitute infringement. Even omission to perform certain actions may constitute infringement. As far as a wrongful act is concerned, mere social or moral wrong will not amount to a tort. It must involve the existence of a legal duty and failure to perform that duty or unreasonable interference with the legal right. For example, let us assume that Mr. Kabir has entered Mr. Ram’s land without his permission. This would amount to trespass, making Mr. Ram entitled to seek remedy against him. However, if we consider an example that Raju saved a drowning child or Rama failed to help a starving street beggar, it would not constitute a tort. Hence, no remedy can be sought for such actions. 
  • There must be some legal damage: This means that a liability shall arise with respect to a person only if there is a violation of a legal right of the plaintiff. As long as there is no violation of a legal right, there is no right or even need to seek the remedy. The inherent principle behind this maxim is to bring the person back to his position before the legal damage was caused. However, where there is no damage, there is no remedy.

Sometimes, there are certain situations where the plaintiff may experience a violation of his/her legal right. However, there is no loss or harm caused per se. In such a scenario, it is the behaviour of the person that becomes actionable. This situation is known as injuria sine damnum. The other way around, there may also exist situations where the plaintiff may suffer a loss or harm, but no legal right of his has been violated in the process. This is known as damnum sine injuria.

Injuria sine damnum

The term “injuria” means injury to the legal right. ‘Damnum’ means substantial harm, loss or damage and the term ‘sine’ means without. Thus, collectively speaking, injuria sine damnum  means injury caused without any damage. This legal maxim means that the plaintiff has suffered no damage, but only a legal injury. In other words, the plaintiff has not undergone a physical or mental injury, but only a legal injury in terms of infringement of his legal rights. Therefore, the plaintiff need not prove the damages, but he is required to prove that some legal injury has been caused to him by the act of the defendant. In such cases, the court generally awards the plaintiff with nominal damages. Let us examine a few cases to understand it better. 

For instance, in Ashby vs. White (1703), the plaintiff was a qualified voter, but the defendant wrongfully refused to take his vote. The party to whom he wanted to vote had won the election and the plaintiff filed a suit against the defendant, stating that since he was detained from giving a vote, his right to vote was infringed. He also claimed a certain amount of compensation for the damage caused to him. The defendant stated that the party to whom he wanted to vote had won the election and therefore, no damage and injury was caused to him.In this case, the plaintiff did not suffer any physical damage. Instead, he only suffered an infringement of his legal right to vote. 

In Maretti vs. William (1803) the defendant was the owner of the bank, and the plaintiff’s fund was deposited in the defendant’s bank. Despite the plaintiff having sufficient balance in his account, the defendant refused to honour his cheque. The court held that the defendant was liable for the loss caused to the plaintiff. The maxim ubi jus ibi remedium was applied as the plaintiff’s legal right was violated and the defendants were liable to pay damages.

Damnum sine injuria 

Damnum sine injuria means that the plaintiff has suffered actual loss or substantial loss, but there has been no violation of any legal right. Since there is no violation of a legal right, no case shall lie against the defendant in such a scenario. Such cases generally arise as a result of the exercise of one’s legal right, clashing with the other’s legal right. Thus, these can also be regarded as moral or social wrongs, which are not actionable per se. Resultantly, no remedy shall be available against such damage. 

The following are some instances of damnum sine injuria:

  • Loss inflicted by one trader upon the other by competing practices. 
  • Damage caused by a person to defer the infliction of greater evil. For instance, Ram breaks into Radha’s house in order to save a child locked inside. Herein, although Ram has committed a tort of trespass by wrongfully entering Radha’s house, the same shall not be punishable because it has been caused to prevent greater evil. 
  • Where harm is too trivial or too difficult to prove.
  • Where harm caused is of such nature that it is considered to be more appropriate to pursue criminal proceedings. For instance, in matters involving death or public nuisance, it is much more appropriate to initiate criminal proceedings than civil proceedings. 
  • There is no right of action for damages for contempt of court.

Let us also look into a few cases to better understand this maxim.

In the Gloucester Grammar School’s case, (1410) the defendant was a schoolmaster. He established a school as a rival to the plaintiff. Owing to the competition stirred in the market, the plaintiff’s school reduced their fee in order to retain their marketplace. The plaintiff filed a suit against the defendants for the same. The court utilised the principle of damnum sine injuria and opined that the defendant was not liable. Albeit the fact that the plaintiff had suffered monetarily, due to the reduction in the prices, there was no infringement of his rights. Thus, the court refused to provide a remedy to the plaintiff. 

In the case of Richards vs. Richards (1859), the plaintiff was a landowner running a mill on his own land. For about six years of operation, he had been obtaining the water for his mill, from the stream nearby. One day, the defendant dug a well on his own land with the intent of supplying water to the inhabitants of the district. As a result, the stream water percolated into the well of the defendant and the plaintiff was cut off from the supply. Therefore, the plaintiff was not able to use this water for running his mill. The plaintiff sued the defendant for damages. The court held that the defendant indeed caused hardship to the plaintiff, but he was not in violation of any legal right. Thus, the court refused to award any damages to the plaintiff. 

Ubi jus ibi remedium in common law 

There are several cases depicting the usage of the principle in common law. For instance in the case of Airone Charters Pvt. Ltd. vs. Jetsetgo Aviation Services Pvt. Ltd., (2021) wherein the High Court of Delhi emphasised on the legal right to seek redressal. Although there may be certain bars to seek redressal such as limitation period or res judicata, nevertheless, it does not outlaw the right to seek remedy. This is a fundamental right and it cannot be compromised. 

Similarly, in Anita Kushwaha vs. Pushap Sudan (2016), the court reiterated that there is a long line of decisions wherein the court has upheld that the right to access to justice or ubi jus ibi remedium is a basic human right and is recognised in all the systems and all forms of societies. It is so basic to human existence that it cannot be ignored or denied to anybody in any law.

The court has time and again iterated that the entire justice system is based on the fundamental principle of providing justice to the wronged party. Every aggrieved party has the right to approach the court as long as his legally enforceable right is remediable in law. Selvaraj v. Koodankulam Nuclear Power Plant India Limited,( 2021).

Limitations of ubi jus ibi remedium

Some of the limitations of ubi jus ibi remedium, are as follows: 

  • The maxim ubi jus ibi remedium does not apply to moral and political wrongs which are not actionable.
  • This maxim is not applied to cases in which proper remedy is given in case of breach of right under common law.
  • If there is no legal damage that has been caused to any person, this maxim will not be applicable.
  • No remedies are available in case of breach of marriage vows or personal commitment, as these are promises made without consideration and are based on trust.
  • This maxim is not applicable where the plaintiff is negligent or there is negligence on the part of the plaintiff.

Application of ubi jus ibi remedium in Indian jurisdiction 

Sardar Amarjit Singh Kalra vs. Promod Gupta & Ors. (2002)

In S. Amarjit Singh Kalra (Dead) by L.R.s vs. Promod Gupta & Ors. (2002), the court deliberated upon a question concerning the condonation of delay in filing the application for substitution with respect to a respondent who had passed away during the pendency of the appeals. It examined whether failure to bring the legal representative on record of the deceased member in a timely manner would result in abatement of all the clubbed appeals.

The court held that it was an undeniable fact that the rights and liabilities attached to an individual are independent of each other’s existence. Death of a respondent’s rights will only affect his rights and liabilities and none of the others’. The death of a joint respondent will not bar the court from interfering or pursuing the matter. 

The maxim of ubi jus ibi remedium was recognised as a basic principle of the theory or philosophy of law. The Supreme Court also held that it is the duty of the courts to protect and maintain the rights of parties and to help them instead of denying them relief.

Vishnu Datt vs. Board of High School and Intermediate Education (1980)

In the case of Vishnu Datt vs. Board of High School and Intermediate Edcuation (1980), the principal of the school misunderstood a regulation. As a result, he failed to maintain the attendance register as per the regulations of the Board, due to which the plaintiff was detained from giving the exam. Thus, the plaintiff lost a year. The plaintiff sued the principal, seeking damages for the same.

The court opined that there was no duty cast upon the principal to maintain the register. A mere fault in understanding the regulation cannot pose to be an actionable wrong. Thus, the court refused to provide a remedy against the same. 

D.K. Basu vs. State of West Bengal (1996)

In D.K. Basu vs. State of West Bengal (1996), Mr. D.K. Basu, who was working as the Executive Chairman of Legal Aid Services, West Bengal (a non-political organisation registered under the Societies Registration Act, 1860), wrote a letter addressing the Chief Justice of India, telling him about certain news that was published in newspapers, namely the Indian Express and The Telegraph, regarding the death of a person in police custody.

The Supreme Court issued some guidelines that need to be followed during the arrest of an accused person. The court further said that a mere declaration of violence in police custody or judicial custody as a legal wrong was not sufficient. Referring to ubi jus ibi remedium, victims and their families should be provided with compensation in case of injury or death of the victim. The quantum of compensation should be decided considering the circumstances of the case.

Bhim Singh vs. State of J&K (1985)

In Bhim Singh vs. State of J&K (1985), the petitioner was a member of the Jammu and Kashmir Parliamentary Assembly. While he was on his way to attend the parliamentary session, he was wrongfully arrested by a police officer and he was restrained from attending the parliamentary session. Additionally, he was not presented before the Magistrate in time. He had a legal right to attend the meeting. His fundamental right under Article 21 of the Constitution was also violated. At last, the Supreme Court held that the defendants were to be held responsible for the losses he faced due to not attending the meeting, as well as for his unlawful detainment. Accordingly, he was awarded Rs.50,000, as compensation.

Shivkumar Chadha vs. Municipal Corporation of Delhi (1993)

In Shiv Kumar Chadha Etc. Etc vs. Municipal Corporation of Delhi and Ors. (1993), the court examined the question of whether the court is barred from entertaining the disputes vide Section 343 of the The Delhi Municipal Corporation Act, 1957 with respect to the orders passed for demolition of constructions made without sanctioned plans.

The Supreme Court held that where statutory enactments do not provide any remedy, but only create rights and liabilities, if any person complains of his rights being violated or wrongly affected, such a person can approach the civil court, on the basis of the principle of legislation that where there is a right, there is a remedy.

C. Veera Thevar vs. The Secretary To Government (2010)

The case of C.Veera Thevar vs. The Secretary To Government,(2010) dealt with the abuse of powers by police officers against two villagers one of them being, sexual abuse against a female. The petitioner had filed a writ petition before the court to restrain the defendant from initiating any criminal prosecution. 

The court held that there is no wrong without a remedy. The laws say that in every case where a person is wronged, injury should be provided. Mere declaration of an action as invalid or recognising death in lockup, custodial violence, etc., does not provide any remedy to a person whose fundamental right to life has been violated. More tangible actions are required. Hence, the petitions were dismissed.

Conclusion

From an in-depth analysis of the maxim, ubi jus ibi remedium, we understand that the intent behind the formulation of this principle was not just namesake. When a person whose rights are violated approaches the court, she/he expects justice. This is where this maxim comes into play. Rather than keeping their hands tied, it empowers the court to provide justice. With that being said, it is crucial for the court to first examine and identify the infringement of a legal right, because not every wrong ought to be remedied. The court has very aptly opined in the case of Shiv Shanker Dal Mills Etc. Etc vs. State Of Haryana & Ors, (1979) that the primary objective of courts is to ensure that justice is given to those who are wronged, which is fulfilled by this maxim.

Frequently Asked Questions (FAQs)

Which Article of the Constitution of India represents ubi jus ibi remedium?

This legal maxim is represented by Article 226 and Article 32 of the Constitution of India. These provisions allow one to approach the High Courts or the Supreme Court, in case of a violation of any of their rights, in order to make sure the same is enforced.

In which case was the maxim of ubi jus ibi remedium first opined?

The maxim of ubi jus ibi remedium was first recognised in the case of Ashby vs. White (1703)

References 

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Why do we need a Constitution

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Constitution

This article is written by Adhila Muhammed Arif and further updated by Adv. Devshree Dangi. It seeks to explain what a constitution is and its relevance in the modern-day world. It also describes the objectives of a Constitution. It further analyses the Constitutions of various nations and the effect of technology on the Constitution.

Table of Contents

Introduction 

In the words of B.R. Ambedkar, “Constitution is not a mere lawyer’s document; it is a vehicle of life, and its spirit is always the spirit of age.” The presence of a Constitution has become extremely relevant in the modern-day world. It is extremely rare to find a country, particularly a democratic one, that functions without a Constitution. In every country, the interests of the citizens must always be given their due weight and protected from the arbitrary actions of those in power. A country must have its sovereignty intact to have political stability. That is, the relationship between the states and the subjects and also among the subjects, and the subjects should be properly defined. A constitution is essentially a tool to ensure the political stability of a state. 

What is a Constitution

A Constitution is essentially the aggregate of the basic principles and laws of a political community, which is either a nation or a state, that determines the powers and duties of its government and the rights guaranteed to its citizens. It determines the structure and operation of government bodies and the political principles of the system. According to Lord Bryce, “the Constitution of a state or a nation consists of laws or rules that determine the form of its government and respective rights and duties of it towards the citizens and citizens towards the government.” Generally, all other laws are subordinate to the Constitution. That is, all other laws must conform with the Constitution to be valid. 

When a government is fully operating and limited according to the Constitution, we could say that the system of that political society is constitutional. The concept of a government limited by a Constitution is called Constitutionalism. Constitutional systems are not always necessarily democratic, as even non-democratic nations can have their Constitutions and abide by them. A political system that is non-democratic but practises constitutionalism is called Constitutional oligarchy. 

History of Constitutions

The idea of having a Constitution, a supreme law establishing the state and governance system, dates back to earlier periods. Nevertheless, the idea of laws and government was already developed in ancient Greece and Rome, though the notion of the Constitution as a written document appeared only in later centuries. The United States Constitution adopted in 1787 is often cited as a defining document of progress in this process. It also set the system of a federal government and a system of checks and balances and came up with ideas such as federalism and judiciary. Due to this, other nations followed the success of the US Constitution in adopting written Constitutions. India, a large and multicultural country, is another example. Indeed, its Constitution, formulated in 1950, is one of the longestt and most exhaustive in the world. It incorporates some aspects of other systems, such as the British parliamentary system, America’s federal system, and Ireland’s Directive Principles of State Policy. The modern Constitution contains provisions that define the organisation of the state, the rights of citizens, and the country’s fundamentals. While these documents vary widely in their specific provisions, they all share a common goal: that they will offer directions for justified and appropriate management. That is why the Constitutions of countries such as South Africa, Canada, and Germany are considered to be very effective, as they include a wide range of human rights and also focuses on the social and economic differences between people.

Objectives of a Constitution

To lay down the basic structure of government 

A Constitution is the framework within which a nation is to be governed. The Constitution plays a key role in explaining the framework of government and demarcating the powers of various arms and branches of government, such as the parliament, presidency, and judicial system. It also outlines the status of the central government and how it can be connected to other sub-national segments, like states or provinces. It helps to prevent the accumulation of power in one place and for a clearer definition of competencies and jurisdictions. 

To safeguard one’s rights and freedom 

The protection of rights and freedoms is one of the most vital roles that a Constitution plays. It protects basic civil liberties such as freedom of speech and religion, association, and equal protection. They also serve as a barrier against state excesses and prevent unfair treatment of individuals and groups. Thus, when these rights are incorporated into the Constitution, they cannot easily be violated since they are constitutionally protected. 

To ensure that everyone gets justice and equal rights are granted

Taking the concepts of the Constitution to a supreme level is a means of establishing a fair society. It also protects the rights of all citizens by ensuring that they are all treated equally without discrimination. It sets out the primary principles of due process and the rule of law and provides a formal basis for equal access to justice. Also, it prescribes certain affirmative action or other things meant to remedy caste discrimination and injustices in society and infringement of fundamental rights of others.

To establish a foundation for the central and state laws 

The Constitution works as the framework within which all other laws are enacted. It defines the framework within which the legislature can make laws. The judiciary can declare any law that conflicts with the Constitution to be unconstitutional. This signifies that all laws are aligned to the foundational principles and governance values contained in the Constitution. 

To create a stable political environment and limits

It is considered that a well-constructed Constitution helps to maintain political stability because it establishes the framework of political competition. It provides for the means of transfer of power in a peaceful manner, ensures that authorities do not overpower other authorities, and contains methods for conflict solutions. It minimises the possibilities of political crises and changes since it offers a consistent guide on governance. Moreover, it sets checks and balances in the powers of the government by limiting its authority. 

Types of Constitution

The following are some of the different categories by which constitutions may be classified: 

Written and unwritten

A Constitution is usually codified in a single document or in different documents that can be collectively called the Constitution. Most Constitutions in the world are written, or codified in a single document. The Indian Constitution is a written constitution, i.e., it is codified into a single document. These are formal written documents that comprise the frameworks of the nation’s central laws, forms of government, and legal authorities for the citizens of that country. Some of the other countries with a written Constitution are the United States, France, and Germany. Unwritten Constitutions are not written down, and therefore they are not compiled in a single document. The rights, on the other hand, are dynamic and are not set in stone but rather develop over time through precedents, culture, usage, case laws, and statutes. Although these principles are not written, they are regarded as constitutional since they cover the governance of the country.

Some nations have unwritten or uncodified Constitutions, for instance, the Constitution of the United Kingdom. The United Kingdom has long been regarded as the world’s best example of a country with an uncodified Constitution. In the United Kingdom, historical constitutional documents, judicial precedents of constitutional significance, parliamentary statutes of constitutional status, and constitutional customs and conventions are what collectively represent its Constitution.  Other countries that partly have features of the unwritten constitutions include New Zealand, Israel, and Saudi Arabia. However, it must be stressed that even the existence of the written Constitution in the majority of countries is combined with components of the unwritten constitutional tradition. For instance, the political parties and their functions concerning governance, while not spelt out in the Constitution are now considered critical ingredients of many political systems. On the other hand, some of these countries may not fully have a written Constitution but then, they will have some laws or some documents that set down specific parts of their constitutional system. 

Rigid and flexible 

Rigid Constitutions are extremely difficult to amend, while flexible Constitutions are not. The amendment procedure for rigid Constitutions is not the same as amending an ordinary law. Constitutions that are difficult to amend are said to be rigid, while those that can be amended easily are said to be flexible. The rigid Constitution is challenging to amend as seen in the United States and India and has special provisions for altering its provisions, thus offering protection of fundamental rights. On the other hand, flexible Constitutions which are illustrated by the United Kingdom, can be altered through the legislative procedures and hence can be changed to fit the current evolving times. However, most of the Constitutions, including the Indian Constitution, are considered to be balanced between both flexibility and rigidity, that is while insulating the fundamental rights, the amendments are allowed to be made to infer that the ideal Constitution is a blend of both features. The constitutional amendment procedure in India, though separate, is not too hard. It simply requires a two-thirds majority of all the votes in the parliament.

Unitary and federal

A Constitution is categorised into unitary or federal based on how the government’s powers are divided and the degree of centralisation of powers. In unitary systems, the central government is supreme and all the powers of the lower governments are delegated to them by the central government. In federal systems, on the other hand, there is a clear division of powers between the central government and the lower governments. The central government in a federal system cannot take away the powers of the lower governments. The Indian Constitution designed the Indian political system to be quasi-federal, i.e., there is a clear division of powers between central and state governments, with the Central Government being visibly much more powerful. 

Parliamentary and presidential

Most countries in the world either have parliamentary or presidential forms of government, which are decided by their Constitutions. In presidential governments, the executive branch is completely separate from the legislature, whereas in parliamentary governments, the executive branch is connected to the legislature. The Indian Constitution has designed India to have a parliamentary form of government. 

Prescriptive and procedural 

Constitutions can also be classified into procedural and prescriptive based on nature and purpose. Procedural Constitutions define the legal and political structures of government institutions and set out the limits of the government’s power. This is done to protect democratic processes and fundamental rights. In situations where the Constitution-makers cannot reach a consensus on the values that the State must identify with or work towards, it is better to limit the Constitution to a procedural document. An example of a procedural Constitution is the Canadian Constitution, 1982. The Constitution of Canada does not envision a good society. It merely commits itself to settling disputes and policy issues. Prescriptive Constitutions do not touch upon the concept of nation-building. Prescriptive Constitutions, on the other hand, emphasise the state’s identity and goals. The Constitution-makers envision some common values and aspirations and impose them on the State. The State must consider these values and goals while legislating on socio-economic matters. The South African Constitution, 1996 is an example of a prescriptive Constitution. A Constitution doesn’t need to fit into any single category alone. Many Constitutions have both prescriptive and procedural features. The Indian Constitution seems to contain both prescriptive and procedural elements. 

Functions of a Constitution 

The following are some of the functions of a Constitution: 

Defining boundaries of the political community

A Constitution defines the geographical and extra-territorial boundaries of the nation or state. It can also define and set criteria on who can be called a ‘citizen’ of that nation. It, thus, defines the geographical territory of the nation-state and its control over the land, natural resources, and people. 

Furthermore, through the Constitution, the limit of power of the government is established. It defines who is covered by its authority and is subject to its laws and regulations. Here, concepts like citizenship, resident status, and the degree of sovereignty of the state over a specific territory are considered. These parameters as provided for by the Constitution help eliminate territorial disputes as well as produce a clear map of political jurisdictions. 

Defining the basic structure of authority of the political community

There are some essential characteristics of the political community, such as the form of government that is set out by its Constitution, that are fundamental to its working. For instance, the Indian Constitution sets out the basic structure on which the Indian political system functions, which constitutes the secular nature of the Constitution, separation of powers, federalism, democracy, a welfare state, etc. 

Defining authority of the political community

Most Constitutions also declare on whom the sovereignty of the political community rests. The Indian Constitution, in its Preamble, has declared that the sovereignty of India rests on its people. The role of a Constitution is to play a preliminary role in determining the sovereignty of a political community through providing the formation of governments and the allocation of powers. It defines the structures of government, especially the legislature, the executive and the judiciary, the three arms of government, and their functions. 

In addition, it establishes the power basis of the government—from the people, an authorised monarch, or divine providence. It also lays down the conditions under which government actions may be taken and endeavours to curb the discretion of the government and protect the rights of individuals. Due to this, the Constitution eliminates the ambiguity in the structure in terms of authority, hence leading to responsibility, visibility, and order. 

Defining ideals of the political community

There are certain ideals that the Constitution makers of a political community aspire for their land, such as justice, equality, fairness, etc., which are declared in the Constitution. For example, the basic principles declared in the Indian Constitution are secularism, socialism, equality, etc. A Constitution represents the ideals, goals, and principles of a political society. Proclaimed as a constitutional law, it is the primary legal code that describes the basis on which the state progresses. These are usually based on the nation’s history, culture, and philosophy. 

For instance, a Constitution may provide for liberal democracy, human rights, justice, and the rule of law. It can also be used to further specific social and economic objectives, as in welfare, the environment, or gender issues. Thus, by identifying these common values, the Constitution helps to establish unity of purpose among the citizenry. 

Defining the identity of the political community

Some Constitutions may also define the national flag, anthem, emblem, and symbols that represent the nation-state. Since it is a fundamental document of a political society, the role of a Constitution is to establish and maintain the identity of that society. It is an embodiment of the character, values, and of the nation and its people. In this respect, the Constitution plays a crucial role in establishing the history of the nation, an appreciation of cultural heritage, and a sense of nationhood among the citizens. 

Additionally, it can positively respond to various forms of diversity within the nation, thus supporting multicultural policies. For instance, it might recognise indigenous people and their rights, language minorities, or religious communities, thus adding many layers to the nation’s identity. 

Declaring and defining the rights and duties of the citizens

Most Constitutions declare certain fundamental rights that are available for the citizens of the country. These are drafted to restrain the power that the State has over its subjects and its responsibility to protect their dignity as individuals. Generally, they are basic liberties that are essential in a democracy. For instance, freedom of speech, freedom of religion, right to life, etc. Some Constitutions have even declared rights that are specific to marginalised communities. Part III of the Indian Constitution declares and defines the fundamental rights guaranteed to all the citizens in India. 

Establishing and regulating political institutions

Constitutions define the different organs of the government, their composition, their powers, the relationship amongst them, etc. It designs the legislature, the executive, and the judiciary, and how they should operate. There can also be institutions that ensure free and fair elections, transparency of the government, etc. It could also provide for elections and the impeachment of those in power and their procedures. 

Deciding on the division of powers between different levels of government

Constitutions design the form of government to be either unitary or federal. Many Constitutions have declared their forms of government as federal or quasi-federal. In such political systems, it is necessary to have a fixed list of subjects for each level of government, so that the political system is stable and the central government does not overshadow the lower levels of the government. 

Declaring the State’s relationship with religion

Most Constitutions declare their nation-states as secular or as associated with a particular religion. The Indian Constitution has declared India to be a secular country. That is, the State does not favour any religion. In theocratic states, religious law decides on personal status and disputes between individuals. 

Declaring the State’s commitment to certain socio-economic goals

The Constitution-makers may also include certain developmental goals for the State to work towards for the welfare of its people. Part IV of the Indian Constitution contains the Directive Principles of State Policy, which essentially aims at ensuring that the people of India receive socio-economic justice. 

Why do we need a Constitution 

The following are some of the reasons why it is good to have a Constitution: 

Preventing despotism 

A Constitution gives a foundational structure for its political community. It decides what form of government it should follow and its roles in the political community, along with the limitations on its authority. This helps in preventing the government from acting arbitrarily. This would prevent those in power from getting too powerful and oppressive. Constitutionalism is the opposite of despotism. Despotic governments are governments that are not bound by any higher law or a constitution. Such governments govern with the intent of securing their selfish interests, even at the cost of the basic human rights of their subjects. 

Balanced government

A Constitution helps in separating and distributing power or authority among the institutions of the government. It ensures that all these institutions are restricted in their power and also check and restrain each other. This prevents the domination of any institution over others. It prevents the exercising of unchecked political power. 

Constitution as a social instrument

Another crucial purpose of a Constitution is to provide a framework for socio-economic development. Many Constitutions across the world, particularly the Indian Constitution, have been significant in ensuring that marginalised groups receive equality and justice. The Directive Principles of State Policy in Part IV of the Indian Constitution have motivated the government to create laws that serve as instruments for protecting the environment, upholding labour rights, promoting free access to education for children, etc. 

Stable government and protecting sovereignty

Since a Constitution serves the purpose of setting the social and political basis for a political community, it ensures political stability and keeps the community’s sovereignty intact. If a nation does not have a strong political structure, it is more vulnerable to the attacks of external powers. Thus, political communities that do not practise constitutionalism are more likely to crumble.  

Upholding human rights and democratic values

Constitutions are of great importance in the modern democratic world. The Constitutions in many democratic nation-states serve the purpose of ensuring that the procedure of selecting those in power is uncorrupt and fair. It also grants people their right to vote and the freedom to express their criticism of those in power. Elections, representative government, and the right to criticise those in power are the fundamental characteristics of a democratic society. Constitutions also serve the purpose of guaranteeing the fundamental human rights of citizens. This is essential to ensure that the government does not function in a way that compromises the interests of its subjects. 

Role of the Constitution in protecting individual rights 

The Constitution remains the foundation on which the government protects people’s civil liberties. This important role is underlined in the United Nations Development Programme (UNDP) document entitled “Protecting Human Rights in Constitutions”. Constitutions typically achieve this protection in several ways: 

Socio-Economic rights 

These are the rights that are based on one’s dignity and value as a human person. Different Constitutions include the freedoms of receiving education, medical treatments, shelter, and a decent living. While some may be legal to be implemented in some countries but not in others, nevertheless, their inclusion shows a state’s preparedness and capacities to protect and promote social justice. For instance, the provisions of the Indian Constitution have provided for the Directive Principles of State Policy for these rights, although they are not justifiable. 

Environmental rights 

This link between human rights and environmental rights has been very popular in the recent past, so many Constitutions have addressed non-environmental rights. Some of these rights include the right to clean water and a sanitised atmosphere, the right to equal access to information on the environment, and the right to access the environment and have his or her input considered. In this respect, the Constitutions help advance sustainable development as well as the concept of intergenerational responsibility. 

Minority rights 

  • Cultural and educational rights: Minors’ rights may be enhanced through the Constitution based on culture, worship, and use of language. This may consist of the right to education in the minority language, the right to access establishments and schools, the right to have religious celebrations, and the right to establish ethical organisations. (Example, Article 29 and Article 30 of the Indian Constitution). 
  • Political participation: Although equality and protection of human rights are a universal right, some Constitutions request state affirmative action so that minorities are given sufficient representation in the government. This could mean that there will be a separate bench in parliament for the minority or an acceptable quota of minorities in the civil service. 

Women’s rights

  • Equality before law: The Constitution can entitle women to equal rights with men in every way; this is in political activism, in owning property, and even in the issue of succession. This undermines the legal frameworks that have historically conferred superiority to men. 
  • Non-discrimination: Constitutions can outlaw discrimination based on sex so that people get equal treatment in education, jobs, and access to health services. 
  • Reproductive rights: Some progressive Constitutions should recognise women’s right to control their bodily integrity and reproductive decisions.

Indigenous peoples’ rights 

  • Land rights: Since Constitutions acknowledge indigenous peoples’ rights to their territories, the latter may be protected from alienation or may be granted ownership or use rights to the land. This shields them from forced eviction and resource depletion. 
  • Cultural preservation: Constitutions can also recognise and safeguard indigenous people’s cultural rights, including their cultures, languages, and knowledge systems. This may encompass the conditions for the protection of cultural property, such as the sacred grounds of the native communities or provisions on the usage of their native languages in schools. 

Rights of persons with disabilities

  • Accessibility: Promoting the general welfare since the Constitution may require that structures that are easily accessible should be established for the benefit of the disabled, so they can be able to participate in society. 
  • Reasonable accommodation: Institutional and organisational policies and legal policies may compel employers and institutions to make accommodations for those with disabilities and end the exclusion of such individuals from education and/or jobs. 
  • Anti-discrimination: As in other groups, Constitutions can bar discrimination of disability in the workplace, education, and access to social services. 

National unity and integrity

Constitutions can be described as the core legal documents that define the unity and integrity of the countries. In this respect, they help the communities define the ways of governance, share the power, and protect individuals’ rights as a universal guide for these societies. From the codified principles of the French Constitution to the evolutionary framework of the British Constitution, these documents provide a common vision for the people; this way, they build a nation. Based on the US Constitution, we can illustrate how the Constitution should be written, taking into consideration both the federalism principles as well as the national sovereignty. India’s Constitution being a secular one and which fares strongly on values of social justice is a good example to demonstrate how a Constitution can allow for cultural and religious diversity while encouraging assimilation. However, the issues of economic disparity as well as disparities across the regions are still present. Constitutions act as a guide on how such issues are to be tackled through institutionalised means of governance, countering argument(s)/dispute, and provision for social well-being. Finally, Constitutions are not set for eternity as societies are dynamic; they are works in progress that are remodelled in due time to embrace the progress of the nation as well as mirror the nation’s vision of unity, justice, and progress.

Comparative analysis of different constitutional systems

Federalism 

Federalism is a principle of government where ultimate power vests in the central authority, which is responsible for the administration of the country, while the other sources of authority are constituted states. Federalism is considered to be the most prominently represented by the United States of America. Decentralised powers are clearly stated in the Constitution between the federal government and the state governments. These include a federal system of government in which the Senate is based on states’ equality while the House of Representatives is based on population. The Tenth Amendment in the Bill of Rights provides that any powers not hence expounded or given to the Federal authority revert to the states or the people. Thus, this system is effective in balancing the power relations within the country as well as within the regions. 

India is another notable federal country, although the country leans more towards cooperative federalism. The Constitution provides a highly centralised government with broad powers while at the same time acknowledging the principle of state rights, especially in such areas as criminal justice, farming, and schooling. Indian federal structure enjoys a feature of cooperative federalism as well as competitive federalism because of the distribution of powers between the centre and the states. 

Germany offers an interesting case of federalism that relies primarily on cooperative federalism. This means the powers are distributed between the federal government and the Länder (state). While the ultimate powers are vested with the federal government, it is crucial to understand that the Länder (state) states also have significant autonomy in many areas. Nevertheless, one must state that the Länder has a large amount of independence in many policy fields. Germany has a bicameral parliament in which the second house, known as the Bundesrat, is representative of the Länder/states and holds a key position in the decision-making process. 

The United States offers an example of a country that has a highly developed focus on state rights alongside a central government, while India can be described as a country with powerful central authorities and references to the states as cooperative. Germany, for its part, develops the principles of both federal and unitary systems but, at the same time, contributes to the cooperation. These nations differ not just in the level of centralisation, the position of the second chamber, fiscal relations, and the state of exceptional measures. Comparing the structure of political systems, the US is closer to the model of dual polity; however, India and Germany are more centralised. Even in these different federal systems, the distribution of financial resources as well as the degree of centralised control during crises differ. 

Parliamentary system 

The parliamentary system involves a strong relationship between the legislative and the executive branches of the government. While, in presidential systems, the branches of the government are distinct and separate, parliamentary systems combine certain elements of all of them. The head of government, usually a Prime Minister, is a member of the legislative branch and is appointed based on the votes within the parliament. This system is common in the United Kingdom, Canada, India, Australia and New Zealand. 

The United Kingdom, which is associated with the origin of the parliamentary system, has a constitutional monarchy in which the monarch acts as the head of state without much power. The Head of Government is the Prime Minister, who is in turn the head of the party with the most seats in the House of Commons. Canada is a federal parliamentary democracy and while it has many similarities to the UK, it is largely characterised by provincial autonomy with relatively more powers delegated than in the latter. India is the largest democracy in the world that runs the parliamentary system that amalgamated some features of the Westminster model with the federal system. Another country with strong Britain roots as well as a parliamentary federal system is Australia; New Zealand also has strong Britain links but demonstrates the unitary system with much attention to social policies. 

These nations, while sharing the core principles of parliamentary democracy, exhibit variations in terms of federalism, constitutional structures, and the role of the monarch or president. These differences reflect the unique historical, cultural, and political contexts of each country. 

Semi-presidential system 

Semi-presidential system can be defined as a system of government where features of both presidential and parliamentary systems are observed. This political system has a president who is directly elected and shares power with the Prime Minister and the cabinet, as well as other organs of government that are responsible to the legislature. This system of dual executives can create complications in the distribution of power and shifts in the power relations between the president and the Prime Minister. 

Some of the nations that apply a semi-presidential system include France, Russia, Poland, and Romania, among others. The French model, which is often used for discussion, gives the president rather vast powers, among which there is the right to dissolve the parliament. But the Prime Minister, as the chief of the executive branch, is involved in day-to-day administrative functions and requires the confidence of the legislative arm. This relationship of sharing the same executive branch by the president and Prime Minister can cause forming different parties, hence may cause problems in governing the nation. 

Unitary system

Unitarism refers to that type of governance where political authority is exercised by the central government only. It refers to those nations that have distributed some of their authority to regional or local governments but the central control remains superior. In the unitary system, most of the policies are under the jurisdiction of the central government and these encompass defence policies, foreign policies, economic policies, and police or law enforcement policies. 

Decentralised unitary states include the United Kingdom, France, Japan, and China. These nations might be divided into prefectures, provinces, or departments, but they are subnational, and therefore their structure and jurisdiction can be changed or removed by the central government. One may consider unitary systems as beneficial for the coordinating effect and the policy uniformity but at the same time, they may not be as favourable for the regions’ requirements and demands. 

Separation of Powers

Originally, the principle is an essential part of numerous modern Constitutions; it is an effort to avoid power concentration in one governmental branch. It requires that the functions of government be separated into different branches, each of which has its own powers and jurisdiction. Usually, they include the branches of a parliament, which are the legislative, executive, and judicial branches. 

The United States of America remains a classic example in this respect, an element of their Constitution. The executive branch of government is the presidency, while the judiciary branch of government is made up of the Supreme Court and other lower courts. The leaders of this branch of the government are the President, with the role of enforcing laws and conducting foreign affairs. The judiciary, which is headed by the Supreme Court, applies and interprets the laws and resolves legal matters. This division also makes it impossible for any particular branch of the government to dominate the other two since the system of checks and balances is inherent. 

What can be observed is that the United States gives a vivid example of the separation of powers; however, the degree to which this principle will be implemented is also measured in different countries at different times. Therefore, even in France, which is a semi-presidential republic, the relationship between the president and the head of government, the Prime Minister, involves a lot of sharing of powers. In parliamentary systems like the UK and Canada, the government emanates from the legislative branch, making it hard to entirely separate the executive from the legislative branch. 

India, Brazil, and Germany, like many federal systems, have adopted a dual structure of power distribution. The structure of Indian governance is federal, which complicates the consideration of the division of power even at the stage of the analysis of the sphere of separation of power: it is necessary to use and determine the distribution of power between the central government and the state. In this respect, it is quite extraordinary that the political process of Brazil has been influenced by the United States so much. Brazil has quite a severe system of checks and balances, while Germany, being a parliamentary country, seems to have a rather more liberal approach to the concept of separation of powers. 

Amendment process 

The amendment process relates to the procedure of changing a Constitution. It is one of the structural elements of any nation’s governance system; hence, it deals with addressing aspects of stability but efficiency in responding to dynamic contexts. 

Referring to amendments, Constitutions can be distinguished concerning the degree of openness of the amendment regulation. Strong constitutions take lengthy procedures, which in most cases involve a two-thirds majority in the legislative organ or via a popular vote. The process of the amendment differs a lot between countries; for instance, it is nearly impossible in the United States of America. This means that the Constitution is a framework document that cannot afford to be changed at short intervals. 

Thus, as mentioned beforehand, flexible constitutions enable amendments due to the means of ordinary legislation and therefore are more versatile. The United Kingdom, being a common law country, has an uncodified constitution and therefore, the rules of its constitution can be changed by an act of Parliament. On the one hand, this opens the possibility for change to be made and the Constitution to be adapted to the current context; on the other hand, it creates the grounds for weakening the key constitutional tenets. 

Between these two poles, there are a number of the so-called intermediate systems containing elements of both the rigid and the flexible systems. India for example, has a constitution with numerous provisions for amendment, which include simple majority, special majority, and those that require state ratification. This approach aims at achieving the stability that is required while at the same time possessing the ability to change. 

Judicial review 

Judicial review is the act of a court to decide on the validity of a law, and political acts and decisions. It plays the oversight role to the legislative and even the executive branch to see to it that they act within the provisions of the Constitution. 

The United States is therefore often accredited for the concept of judicial review. Marbury vs. Madison (1803) is the case in which the Supreme Court won its authority to declare certain laws unconstitutional. This power has somewhat marked the growth of American constitutional law. 

However, the level of this constitutional measure called judicial review, though exists to some degree in most nations including the United States, does not necessarily have to be as extensive in other countries. Some nations’ judiciaries are empowered with broad competence for examining legislative and executive conduct, whereas, in other nations, capabilities for judicial review are restrained. For example, the UK legal system is still reputed to have parliamentary sovereignty and as such, has always been known to have a less stringent form of judicial check. Nonetheless, the reception of the European Union law has caused an expansion of the degrees of judicial review in the United Kingdom to some extent. 

Delivering justice to the vast population, India has social justice along with a strong Judiciary enjoying the power of judicial review. The Indian Supreme Court has been central in the defence of fundamental rights as well as the implementation of the Constitution. However, the balance between the judiciary and the other arms of government has remained contentious, especially in the United States of America. 

However, it should also be pointed out that the use of judicial review has its critics. Critics claim that it grants too much power to the representatives of the judiciary, who can repeal the decisions of the people’s deputies. Some people argue that it is needed as protection against encroachment by the central government. This is always a rather delicate question: how much legislative authority should be limited by the judiciary over-concentration is another crucial topic that defines constitutional law and governmental systems globally. 

Constitution as a living document 

The Constitution could refer to a system of rules, laws, or legal proceedings governing a particular state or country, but here the word carries more than that; it defines the framework of a society and constitutes a document that evolves with the society it serves. It describes the idea of the document as a living one, thereby emphasising the issue of development and learning within the framework of constant changes in socio-political and economic landscapes. 

Therefore, because of the mentioned factors, the Constitution can be regarded as possessing a living character. To begin with, it is important to note that the overall assessment of values, norms and expectations among the members of a society are ever-evolving. A rigid Constitution is suitable for setting out what is necessary to maintain a general framework that may not work well to support changes in a society’s needs. Second, there may be new circumstances, such as technological, global, or other situations that are unprecedented in society, or we may need to formulate a new constitution to address such situations. 

Indeed, as a part of the common law system, the judiciary also plays the role of interpreting the Constitution and therefore impacts the content of the Constitution in this way. Hence, by interpreting the Constitution about current events, the judiciary alters the Constitution without the express permission of the legislative branch on the mode of amendment. This interplay between the judiciary and the constitution ensures that this document applying this work as a source of law operates in a dynamic society. 

Then there is the theory of a living Constitution, which asserts the fact that societies are not static entities. The requirements for the Constitution that should be democratically enacted need to be sufficiently liberal to address the needs of future generations. This indicates relative freedom, which allows the document to expand without losing those fundamental ideas. 

Thus, a Constitution is not just a piece of paper given only for a period of time but a living document learning and growing with society. This dynamism requires the Constitution to remain effective in the performance of the tasks over the roles in the evolving society.

How technology can affect the Constitution

The challenge of originalism in a digital age 

Originalism is a type of constitutional interpretation that aims to return to the meaning that the Constitution had at the time it was written. However, new challenges and situations emerged as a result of the fast rate of development in technology. This is a major problem when it comes to how originalist jurisprudence should approach issues such as freedom of speech on the internet, privacy in the digital age, and regulation of artificial intelligence. 

Judicial discretion and changing norms 

Ever-evolving tolerance is one of the legal theories that need to be used concerning the Constitution. Despite the advantages of using this approach to address and adapt to contemporary situations, critics argue that the approach has issues of bias and judicial activism. Thus, it is critical to adequately establish guidelines concerning occasions and methods of applying the use of emerging standards in light of technology to preserve the Constitution’s sanctity. 

The need for long-term constitutional principles 

The Constitution is intended to remain the governing framework of the nation across generations. With the rapid advancement in the use of technology in society, it becomes pertinent to discover the basic constitutional values as applied to modern society. Thus, concentrating on such general guidelines, a wide variety of courts might outline the approach to handling the Constitution that will be consistent with the framers’ intentions and perspective. 

Privacy issues in the modern world 

Improvement in technologies used in surveillance and data collection has remained a core issue in the issue of personal privacy. Protection of public interest and privacy are two major concerns in modern society: giving the government authority to investigate private citizens’ matters is crucial for public safety, but it poses a threat to personal sovereignty in the digital age. 

Cyber liberty and its controlling principles 

This phenomenon can be largely attributed to social media platforms, which have done much to change the current trends of public discourse. Some constitutional issues in this area include whether the government can control the use of these platforms and the extent to which it can promote the protection of free speech. Liberal values such as freedom of speech, when applied to modern technology, need to be considered depending on each issue, such as fake news, racism, abuse, etc. 

Artificial intelligence and constitutional implications 

The creation of artificial intelligence more radically challenges the well-thought-out structures of the workforce, economy, and society. Constant advancements in the systems raise the question of how they will influence the constitutional rights of individuals in every nation. Concerns over algorithms being decision-makers or decision-aids, the use of autonomous weapons, and AI entities’ recognition under the law present new legal and constitutional challenges. 

Critical analysis 

The Constitution constitutes the framework of democracy in as much as it outlines the limits of the power of the government and protects the freedom of the people. It ascertains legal prerogatives to curb hasty decisions and actions by the rulers that are normally presumptuous. Some rights are contained in the Constitution, and they include socio-economic, environmental, and minority rights, which depict a nation’s zeal for social justice. For instance, environmental rights within the Constitution emphasise the issue of sustainable utilisation and those for future generations.

Guarantees of minority rights include cultural and educational rights that enhance the protection of minorities as well as sustainable democratic initiatives. Various provisions concerning women’s rights, constitutionalised, seek to eliminate gender discrimination and empower females, and provisions concerning the indigenous people try to protect their land and cultural functioning as well. Persons with disabilities rights help in the realisation of their needs and integration into society without discrimination.

Constitutions also define ruling systems given that there are federal systems that divide power between the central and state governments and unitary systems, although they concentrate power at the centre of states. The principle of separation of powers, which is illustrated by the United States, is meant to avoid absolute power by defining the line of work of the legislative, the executive arm, and the judiciary branch. Judicial review also plays another role in ensuring that laws passed by the legislature are in line with the Constitution; hence, we have constitutional supremacy and protection of rights.

More to the point, the idea of the Constitution being a ‘living’ document is pivotal to change. In this respect, judicial interpretation has a very critical role in ensuring that constitutions can adapt within such facets of change to make them relevant within change-oriented societies. This flexibility only speaks volumes for the relevance of the Constitution today, in the protection of rights and in government.

Conclusion 

The provision of the Constitution is also very important in any modern democratic state to ensure that the principles of democracy are upheld in any instance. Through Constitutions, there is a declaration of the government’s power and the division and distribution of power among different arms of the government, as well as the formation of a stable government. They are the leaders of socio-economic development and the realisation and facilitation of individuals’ rights. Therefore, besides the legal acts, the Constitutions are the documents of the social contract specifying the people’s expectations in a given society. They provide ways of challenging the injustice and being oppressed, hence creating a feeling of security and belief in government. Thus, holding all actions of the government, Constitutions protect the legal base and people’s rights.

Moreover, one has to bear in mind that the concept of a Constitution is not a concept of a paper document that cannot be altered but of an effective document that can be changed in the given circumstances, introducing changes since it is intended to respond to the requirements of the society where it has been implemented. This is important and renders them relevant and capable of steering the nations through social, economic, and political changes. Thus, it seems quite logical to conclude that the Constitution is one of the most significant instruments to create a society with rights and freedoms and political and economic equalities for the people aimed at their decent and integrated lives.

Frequently Asked Questions (FAQ’s)

How are individual rights protected in the Constitution?

Constitutions protect liberties by enumerating the constitutional rights that are important liberties of the individual, such as freedom of speech, religion, and assembly. It legalises measures that do not permit discrimination and also arbitrary decisions to be made by the government. For example, where the judicial systems of nations allow for judicial activism, the judiciaries ensure that laws and all actions of the governments are per the Constitution to safeguard people’s liberties.

What exactly do socio-economic rights mean and how can they be protected under the Constitutions?

Socio-economic rights are human rights that concern people’s lives and directly impact their quality of life, such as rights to education, health, housing, and adequate food. These rights are usually written into Constitutions as a way of indicating a state’s adherence to social justice. Although not always practically actionable in all nations, such principles’ adoption demonstrates a state’s desire to adhere to these principles when shaping governmental policies in the field of improving socioeconomic conditions among its population.

In what ways does the Constitution regulate aspects of checks and balances?

It is common in Constitutions to set up checks and balances to ensure that a given arm of government is not dominant. This is attained through the separation of powers of the executive, legislative, and judicial arms of government. In today’s world, it was adopted so that we could have a check and balance system so that every branch of government has the power to check the other branches of the government.

In what way does the judiciary participate in the protection of the Constitution?

Judicial review involves legal scrutiny whereby a court assesses the compatibility of legislation and actions of the government with the Constitution. Thus it checks whether all legislation and administration procedures adhere to constitutionalism. This oversight function assists in the safeguarding of individual rights by nullifying laws and entities’ actions that transgress the Constitution.

In what manner does the incorporation of constitutional amendments depict the constant change of a Constitution?

Constitutional amendments therefore refer to alterations made to the Constitution to adapt to the current face of society. The amendment process here enables the drafting of the Constitution to assume a different aspect while changing times without negating the basic ascribed principles. This process illustrates how the Constitutions stay current and active through updates or revisions, as seen in this process.

References


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Building a stellar portfolio: showcasing your accounting achievements for US employers

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This article has been written by Preeti Agarwal (Chartered Accountant, Bengaluru) pursuing an Executive Certificate Course in US Accounting and Bookkeeping from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Meaning of stellar portfolio

“Stellar” means exceptional and “Portfolio” denotes a compilation of professional work that exemplifies your skills and experience. A great portfolio is a tool to help you set up your pathway to success, as it provides the user with evidence of your problem-solving abilities, creative thought process, and multi-facets of your professional front. US employers seeking accounting services typically look for a combination of technical skills, soft skills, time management, and adaptability to new accounting practices, software, and regulations to ensure the candidate can effectively manage financial tasks and contribute to the financial health of the organisation.

Why is it required

It enhances the credibility to go beyond basic job responsibilities and deliver measurable results. It gives more visibility to the employer on the work you performed, your dedication and consistency, and the growth you were able to achieve with those experiences. In a competitive market, achievements differentiate you from other candidates who have similar qualifications. It shows the potential contribution that you carry for the upcoming work as well.

Digital transformation in accounting practices

The COVID-19 pandemic brought about a paradigm shift in the way businesses operate, compelling organisations to rapidly adapt to remote work arrangements. This sudden transition accelerated the adoption of virtual collaboration tools and cloud-based accounting systems. As the world grapples with the aftermath of the pandemic, it has become imperative for accountants to embrace this new normal and stay updated with the various tools and platforms available to them.

Virtual collaboration tools, such as video conferencing, instant messaging, and project management software, have revolutionised communication and teamwork. These platforms facilitate seamless collaboration among team members, irrespective of their physical location. Accountants can leverage these tools to conduct virtual meetings, share documents, and collaborate on projects in real-time. By embracing virtual collaboration, accounting professionals can enhance their efficiency, reduce travel expenses, and foster a more inclusive and flexible work environment.

Cloud-based accounting systems, on the other hand, provide accountants with the ability to access and manage financial data remotely. These systems offer numerous advantages, including improved accessibility, enhanced security, and real-time data synchronization. By utilising cloud-based accounting software, accountants can streamline their workflows, automate tasks, and gain valuable insights into financial performance. This enables them to make informed decisions, identify trends, and provide timely advice to clients.

Moreover, the pandemic has highlighted the need for accountants to develop a broader skill set to adapt to the changing landscape. In addition to technical accounting knowledge, accountants must possess strong digital literacy and analytical capabilities. They should also be adept at communicating complex financial information effectively and concisely. By embracing continuous learning and upskilling, accountants can position themselves for success in the post-pandemic era.

In conclusion, the COVID-19 pandemic has accelerated the adoption of remote work and digital tools, transforming the accounting profession. Accountants must embrace this change by leveraging virtual collaboration tools, cloud-based accounting systems, and developing a diverse skill set. By doing so, they can stay competitive, add value to clients, and drive organisational growth in the years to come.

How to build a great portfolio

  1. Identify goal: Is it for obtaining freelance work, a job, or showcasing skills for building impression.
  2. Cohesiveness in presentation: Have consistency in format, colours, fonts, and have an overall visual professional appeal to it. Divide your portfolio into sections such as accounting, financial reporting, taxation, auditing, consulting, etc.
  3. Look back and pick your best work: Out of your past experience, formulate the best value additions that you made that made an impact that matters. Try to bring in variety to hold onto the interest of the target audience. Include examples of financial reports, budgets, audits, tax returns, etc. that you would have contributed. Quantify achievements wherever possible (e.g., cost savings, revenue increases, budget optimisation).
  4. Avoid sharing confidential information: Ensure that you are in compliance with privacy and confidentiality policies at all times, unless it is publicly available or sensitive information.
  5. Make it detailed yet interesting: Set the context of the task, your role, and the outcome. Also include the tools used during the process (e.g., Excel, PPT, SAP, Quickbooks). If possible detail further (e.g., Macros, PowerBI).
  6. Top up with certifications and workshops: Do include the certifications (e.g., CPA, CA, CMA, etc.) and courses completed to enhance the qualifications, for example, attending a workshop on AI in accounting and use of generative AI, Start up spheres conducted by ICAI, upgrad course on upskilling with Tableau.
  7. Highlight the testimonials: Showcase what you believe would give you an edge through the actual word of clients speaking about their experience with you and include endorsements given to you.
  8. Customise to client-to-client requirements, if need be: If your experience has been vast, you may wish to bring it down to tailor to customer needs. For example, if a client is looking for setting up accounting software like Xero, highlight the kind of clients you have serviced in the past for similar service and their feedback if you wish to.
  9. Include professional CV and contact information: Add an updated resume. Include your email, phone number, and LinkedIn profile.
  10. Portfolio enhancement: Portfolio building is not a one time activity. Keep on adding new projects and removing outdated ones. Seek feedback from the users and make upgrades based on real-time experience.

Expectations of US vs. global employers

The expectations from accountants can greatly vary between US and other parts of the world primarily because of the below reasons:

  1. Regulatory and reporting requirements: The US expects familiarity with US generally accepted accounting principles (GAAP), the Sarbanes Oxley Act (SOX), securities and exchange commission (SEC requirements, and Internal revenue service (IRS) regulations. However, other global employers expect international financial reporting standards (IFRS), which are mostly used outside the U.S., familiarity with local tax laws, etc.
  2. Accounting software knowledge: US primarily uses Quickbooks, Xero, Zoho, Wave, Netsuite, SAP, etc. These softwares vary in complexity and features, catering to different business needs and sizes. Some are known for robust reporting and scalability, while others are good for small to medium businesses for expense tracking, project management, inventory management capabilities, etc. However, global employers prefer software like SAP and Tally in India.
  3. Cultural differences: US employers emphasise individual performance, direct communication, proactive approach, and ability to work independently. Whereas globally, there may be more emphasis on teamwork, hierarchical respect, and adaptability to local business culture, along with adherence to established business practices.
  4. Technological advancement and flexibility: US employers are more tech savvy and are pacing faster towards new faster software and tools. However, in global, some regions might prioritise more traditional accounting practices, while others could be similar to the US in fast adoption.

Showcasing accounting achievements

There could be multiple use cases where you could have played a pivotal role in contributing to your employer’s success. Some illustrations are as below where you could have suggested and incorporated:

  1. Implemented a new accounting system resulting in a 30% reduction in time and increased accuracy.
  2. Correction in revenue presentation in compliance with ASC-606 Revenue Recognition whereby the revenue could be shown as gross, thereby helping the start up to enable increased valuation of the company where the basis is multiples of revenue.
  3. An inclusion of a right sales tax rate when the client was unaware of the new exemption rules for some products.
  4. Identified some cost centres in a company where multiple markup methods were used, like a mix of cost plus markup and transactional net margin method being used, wherein certain cost centres were missed from markup in earlier years, hence helping the company to be able to charge more to its parent companies.
  5. Deep dived on the application of ASC-480 free standing equity and equity-linked instruments on the convertible equity shares, where the accounting of the liability vs. equity portion was critical and hence, you could ensure adherence to accounting regulation in the US.
  6. Preparing a memo on differences in loyalty points accounting in the US and the rest of subsidiaries across the globe for start-up companies to enable decision-making.
  7. Enabling the demerger accounting of the company wherein multiple stakeholders were involved and ensuring a smooth transitioning end to end.
  8. Contribution to the accounting and tax articles on your own blog page, if any.
  9. Helping the clients set up the Quickbooks and Xero accounting software by establishing the chart of accounts and conducting training sessions for their employees to gain overall confidence.
  10. Reduction of the lead time taken in payroll accounting due to macro work performed, which led to automatic data pull and save for multiple stakeholders and arranging in a format that was readily usable, which reduced 35 hours per person, leading to an increase in the bandwidth of existing resources.
  11. Improved financial reporting by streamlining monthly financial close processes, reducing the close time from 10 days to 5 days, along with maintaining accuracy, reliability, and compliance.
  12. Implemented new procedure for accounts receivable collections by integration with generative AI, thereby getting customised reports for analysis of high priority collectibles and reducing the average collection period from 45 days to 32 days, thereby improving cash flow.

Ideal portfolio size

The concept of an “ideal” portfolio size is a myth. The size of your portfolio should be tailored to the specific context and purpose it intends to serve. Prioritising quality, relevance, and clarity is crucial in creating an effective portfolio that showcases your accomplishments to the intended audience.

Here are some key factors to consider when determining the size of your portfolio:

  1. Audience: Who is the intended audience for your portfolio? If you’re applying for a job, your portfolio should be tailored to the specific requirements of the position and the industry you’re targeting. If you’re showcasing your work to potential clients, your portfolio should highlight your most relevant and impressive projects.
  2. Purpose: What is the purpose of your portfolio? Is it to showcase your skills and experience for job applications, to attract new clients, or to simply share your work with others? The purpose of your portfolio will influence the size and content of the pieces you include.
  3. Medium: Consider the medium you’ll be using to present your portfolio. If you’re creating a digital portfolio, you’ll have more flexibility in terms of size and format. However, if you’re printing your portfolio, you’ll need to be more mindful of the physical constraints.
  4. Content quality: The quality of your work is more important than the quantity. Include only your strongest pieces that effectively demonstrate your skills, creativity, and problem-solving abilities. A smaller portfolio filled with high-quality work will be more impactful than a large portfolio with mediocre content.
  5. Relevance: Choose projects and pieces that are directly relevant to the context and purpose of your portfolio. Edit out any outdated or irrelevant work to keep your portfolio focused and cohesive.
  6. Clarity and organisation: Ensure that your portfolio is well-organised and easy to navigate. Group similar projects together, use clear and concise captions, and provide context for each piece. A well-organised portfolio will make it easier for viewers to understand your work and appreciate your accomplishments.

Remember, the size of your portfolio is not as important as its quality and relevance. By focussing on the key factors outlined above, you can create a portfolio that effectively showcases your skills and accomplishments to the intended audience.

Going above and beyond

To enhance your contribution, you can further do the below:

  1. Publishing articles that are relevant to the existing and potential clients.
  2. Making videos of your own to showcase your extrovert quality and build a stronger, long-lasting impact on the minds of the audience.
  3. Publishing your podcasts with the interaction of key speakers related to the profession of accounting and bookkeeping.
  4. Keeping Linked in updated with all the above and including as links part of the digital portfolio.

Conclusion

Building a great portfolio requires a strategic combination of strong educational credentials, technical proficiency, commitment to continuous learning and, not to mention, relevant practical experience. By keeping the content interesting and relevant, you can not only stay relevant but also master the success in this industry. Setting clear goals and creating a roadmap to achieve them is a critical step for your career planning. This roadmap starts with being open to opportunities and developing a great portfolio to open doors to possibilities and innovation.

References

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Corporate governance reporting for CXOs: best practices and compliance

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Reverse Piercing

This article has been written by Prabhakar Alagarsamy pursuing an Executive Certificate Course in Corporate Governance for Directors and CXOs from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

Corporate governance is the system of rules, processes, and practices that govern the operations of a company. It encompasses the relationship between the company’s management, board of directors, shareholders, and other stakeholders. The primary objective of corporate governance is to ensure that the company is run in a fair, transparent, and accountable manner, while also protecting the interests of all stakeholders.

One of the key aspects of corporate governance is the separation of ownership and management. In most companies, the shareholders are the owners of the company, but they do not directly manage the day-to-day operations. Instead, the board of directors is responsible for overseeing the management of the company and ensuring that it is run in accordance with the company’s bylaws. The board of directors is typically composed of a mix of inside directors (who are also managers of the company) and outside directors (who are not employed by the company).

Another important aspect of corporate governance is the role of shareholders. Shareholders have the right to vote on certain matters, such as the election of directors and the approval of major corporate transactions. Shareholders also have the right to receive information about the company, such as its financial statements and annual report.

Significance

The implementation of corporate governance in an organisation holds paramount importance as it has a profound impact on improving performance, fostering business growth, and instilling strong moral principles into the company culture. By establishing a robust corporate governance framework, organisations can reap numerous benefits that contribute to their overall success and sustainability.

  1. Enhancing performance: Corporate governance provides a structured system of policies, processes, and controls that guide the organisation’s decision-making and operations. This framework ensures that resources are utilised efficiently, risks are managed effectively, and opportunities are capitalised upon. As a result, organisations can optimise their processes, enhance productivity, and achieve improved financial performance.
  2. Promoting business growth: Good corporate governance practices create an environment conducive to business growth. By fostering transparency, accountability, and ethical conduct, organisations attract investors, partners, and customers. The confidence instilled by sound corporate governance practices enables organisations to access capital more easily, form strategic alliances, and expand their market reach, thereby driving sustained business growth.
  3. Instilling strong moral principles: Corporate governance plays a vital role in shaping the ethical foundation of an organization. By establishing clear values and principles, organisations can instill a culture of integrity, honesty, and social responsibility among their employees. This strong moral compass guides employees’ decision-making and actions, ensuring that they act in the best interests of the organisation and its stakeholders.
  4. Mitigating risks: Effective corporate governance practices help organisations identify, assess, and manage risks proactively. By implementing robust risk management frameworks, organizations can minimise the impact of potential threats and seize opportunities that arise from changing market conditions. This proactive approach enables organizations to remain resilient in the face of uncertainty and maintain their competitive advantage.
  5. Encouraging ethical behaviour: Corporate governance emphasizes the importance of ethical conduct at all levels of the organization. By establishing clear policies against bribery, corruption, and conflicts of interest, organisations can create an environment where ethical behaviour is expected and rewarded. This fosters a culture of trust and respect among employees, customers, and other stakeholders, strengthening the organization’s reputation and brand value.
  6. Empowering employees: Sound corporate governance practices empower employees to take ownership of their roles and responsibilities. By providing clear lines of authority, transparent decision-making processes, and opportunities for professional development, organisations can create a workforce that is engaged, motivated, and committed to the organisation’s success. This sense of empowerment enhances employee morale, productivity, and innovation.
  7. Ensuring compliance: Corporate governance ensures that organisations comply with legal and regulatory requirements. By adhering to established laws, regulations, and industry best practices, organisations can avoid costly penalties, legal disputes, and reputational damage. This compliance-focused approach protects the organisation’s interests, safeguards its assets, and builds trust with stakeholders.

Understanding corporate governance

Scope

Corporate governance is to make sure that the organisation is effectively managed and ethically guided in a way that maximises the shareholder values and protects the interests of stakeholders.

Principles

Fairness

It represents shareholders, employees, vendors, all are equal in the view of the board of directors.

Transparency

The company’s financial information, interests, and risks of shareholders need to be addressed precisely in time by the board.

Responsibility

The board has to act in the interest of investors and company growth. It should be able to oversee the corporate affairs and management decisions.

Accountability

The board should have knowledge about any management decision and outcome of that action. It must communicate important issues to shareholders.

Role of CXOs

CEO

The CEO means Chief Executive Officer, and their role is to define the company’s long-term goals, strategic direction, and public image. They interact with investors, shareholders, and official bodies. They should provide timely information about the company’s operations and financial conditions to the board.

CFO

The CFO means Chief Financial Officers and their role is to define the company’s financial matters, managing cash flow, financial planning and investments. They should know about a company’s financial strength and weakness and work to improve the margins and revenue growth.

COO

The COO means Chief Operating Officers and their role is to define the daily operations of the company, and they may act on the CEO’s behalf when they are absent.

Best practices in reporting

Hold regular meetings

  • Schedule frequent board and shareholder meetings to keep everyone involved and engaged in company activities.
  • Ensure that these meetings have a clear agenda and that minutes are taken to document decisions and discussions.
  • Encourage open communication and participation from all attendees.
  • Use these meetings as an opportunity to review company performance, discuss strategic initiatives, and make decisions.

Practice transparency

  • The board should be transparent in all of its reporting and activities.
  • This means providing clear, concise, and accurate information to shareholders and other stakeholders.
  • Avoid using jargon or technical language that could be confusing to non-experts.
  • Be honest about the company’s strengths and weaknesses, and disclose any material risks or challenges.

Conduct annual performance reviews

  • Regular board reviews are an opportunity to collect feedback from internal stakeholders and external shareholders.
  • These reviews should assess the board’s effectiveness in carrying out its duties and responsibilities.
  • They should also identify areas for improvement and make recommendations for changes.
  • The results of these reviews should be used to improve the board’s performance and ensure that it is meeting the needs of the company and its stakeholders.

Adopt ongoing reporting

  • Ongoing reporting on key insights allows the board to change its decisions as needed.
  • This could involve amending governance practices or taking different decisions for the company’s future.
  • Ongoing reporting helps the board to stay up-to-date on the latest developments and to make informed decisions.

Utilise technology

  • Technology can help boards automate their routine tasks, centralize data, and provide insights into multiple entities.
  • This can free up time for directors to focus on more strategic issues.
  • Some examples of technology that boards can use include board portals, data analytics tools, and video conferencing software.

Compliance requirements

Compliance in business refers to adhering to every law, regulation, and ethical guideline that applies to the company. It involves various aspects that aim to protect investors, ensure transparency, and maintain ethical standards.

  • Regulatory frameworks:

Regulatory frameworks, such as the Sarbanes-Oxley Act (SOX) of 2002 and SEC regulations, play a crucial role in compliance. These frameworks are designed to safeguard investors from fraudulent accounting practices and corporate corruption. They establish rules for financial reporting, corporate governance, and internal controls to ensure accuracy and transparency in financial statements.

  • International Standards

International standards, such as the Corporate Governance G20/OECD Principles, provide guidance to policymakers in evaluating legal guidelines, regulatory norms, economic stability, financial growth, and sustainable improvement. These principles aim to promote transparency, accountability, and fairness in corporate governance practices around the globe.

  • Role of audits

Internal audits are essential to improve the processes, operations, and policies of a company. They help management identify areas for improvement, assess risk management strategies, and ensure regulatory compliance. External audits, conducted by independent auditors, provide an objective assessment of the company’s financial information and records. These audits ensure that financial statements are prepared in accordance with applicable accounting standards and that any financial irregularities are identified and addressed.

  • Challenges in compliance

Compliance across jurisdictions involves several challenges. Rapidly changing regulatory frameworks, language barriers, ethical and cultural differences, data privacy concerns, cyber security threats, resource constraints, and supply chain disruptions can make it difficult for businesses to meet compliance requirements effectively.

To overcome these challenges, companies need to establish a robust compliance management system that includes regular monitoring, training, and risk assessment. They should also work closely with legal counsel and compliance professionals to stay updated on evolving regulations and best practices. By prioritising  compliance, businesses can minimise legal risks, build trust with stakeholders, and maintain a positive reputation in the market.

Key metrics and indicators

Metrics

The effectiveness of governance structures and processes is measured through critical metrics called Key Performance Indicators (KPIs). These KPIs serve as benchmarks to assess the organisation’s performance and progress toward its strategic goals. They provide a quantitative and qualitative evaluation of the governance framework.

KPIs are designed to measure various aspects of governance, including the board of directors’ composition, diversity, independence, and engagement in decision-making. They evaluate the effectiveness of company committees in fulfilling their oversight responsibilities, such as audit, risk management, and compensation. KPIs also assess the adequacy of internal control systems and compliance with regulatory and legal requirements.

For instance, a KPI might measure the percentage of independent directors on the board or the average tenure of board members. It could also track the frequency and duration of board meetings and the level of engagement and participation by individual directors. Another KPI might assess the number of audit committee meetings held annually or the timeliness and thoroughness of financial reporting.

The board of directors and company committees rely on KPIs to make informed decisions and monitor the organisation’s performance. These metrics help them identify areas for improvement and ensure that governance practices align with the organisation’s mission, values, and risk appetite. They also assist in evaluating the effectiveness of management and the overall health of the organisation.

Overall, KPIs play a vital role in enhancing transparency, accountability, and decision-making within an organization. By providing measurable and comparable data, they enable stakeholders to assess the effectiveness of governance structures and processes and make necessary adjustments to improve organisational performance.

Indicators

  • Transparency in business practice.
  • Ethics and integrity in business.
  • Active participation of stakeholders in decision-making.

Stakeholder engagement

The company’s business is not only focused on profit margins. It looks beyond building relationships with those who have a found interest and established network in your operations.

Communication

Stakeholder communication in governance reporting can help organisations understand stakeholder needs and goals, build stronger relationships, and manage risks more effectively. It can also help inform and improve governance and decision-making.

Communication can help build trust, accountability, and transparency between stakeholders and the board. It can also help organisations actively listen to stakeholders and encourage feedback, which can improve project outcomes.

Stakeholders can provide valuable knowledge and interests that can inform internal practices. Communication can help organisations gain stakeholder support for business growth and development.

Strategies

Investors are providing the money required for business growth, innovation, and successfully running the company. They can be included in consultations and an external advisory body to give valuable ideas. They are the key persons in any business. This process will enable trust, transparency, and achieving the business goals with investor expectations.

Suppliers occupy a unique position in a company’s growth with their timely delivery of resources in a precise manner. They are considered external stakeholders due to their high level of engagement. Supplier development programs and joint initiatives build trust and transparency. These efforts will make sure long-term success.

Any business should concentrate on end users who are going to use the product. From designing the product to marketing, the customer viewpoint is necessary to succeed in the business. They are the key persons for any product failure or success. They have to be involved in personalised marketing to enhance relevance and gather insights about the product values.

Employees of the organisation are considered internal stakeholders. Their opinions and ideas about the product add value to the end results. Because they are involved from the product conceptual stage to the design, operation, testing, and marketing of the product. The employees should be engaged in open communication, professional growth, and make sure that their work environment is pleasant.

Crisis management

Leadership in crisis response

Crises like bad reputation of the company, data leakage, and natural disasters are the scenarios that need to be handled by organisations. Leadership has to take care of the company’s reputation and build trust among customers. They play an important role in crisis management.

Challenges

The governance challenges could be difficulties faced in areas such as natural resources management, decentralisation, and transparent public financial management.

Lessons from failures

When there is no transparency or no ethical standards in the company’s operations, corporate governance fails. This happens due to the importance given to short-term profits instead of ethical behaviour. This will create serious damage to the company’s image and reputation.

In the early 2000s, the Enron scandal is an example of a lack of transparency. Enron was considered one of the successful companies in the U.S. power sector. They are involved in malpractices in financial operations to hide their debt and that leads to false profit figures. This ultimately resulted in the company’s collapse. This happened due to a lack of transparency.

Volkswagen (VW) emissions scandal is an example of no ethical standards. VW is one of the biggest car makers in the world; they programmed in their vehicles to give false results from emissions tests. This is the act of cheating regulators and resulting in a bad image about the company for consumers and billions of dollars in fines and legal settlements.

Actions needed

The detailed information about the ethical standards needs to be followed to be communicated to all employees frequently. This will make sure that they adapt in their behaviour. Employees who report unethical behaviour are called whistleblowers. They need to be protected and encouraged to openly communicate about governance failures in the company. Audits at particular time intervals will make sure the accounting statements and corporate practices are correct and transparent. To know about unbiased perspectives and any irregularities, external auditing needs to be considered.

Future trends and innovations

Emerging technologies

Human life has become easier due to cutting-edge technologies like 5G, AI, etc. Artificial intelligence (AI) has already changed the way we live and are involved in our daily activities.

Adopting new technologies in our work will reduce the work execution time and boost our economy. Now-a-days it has become essential for any organisation’s success. It involves conceptual design to marketing strategy of product.

ESG

ESG represents environmental, social, and governance factors. These factors will be considered while making investment decisions. Our main aim is to integrate these considerations into the investment process. Investment focusses on improving financial performance and promoting sustainable practices.

Predictions

The company has to face heavy fines if it is involved in financial crime, whether it is intentional or not. Danske Bank A/S is an example for anti-money laundering cases due to their inability in transaction monitoring. This resulted in a fine of €1,820,000 in 2023.

Goldman Sachs Asset Management is an example of failing to predict environmental impact and not maintain accuracy in reporting about environmental, social, and governance. This resulted in a fine of €3,778,800 in 2023.

FTX’s bankruptcy is an example of bad governance. FTX was a Bahamas based cryptocurrency exchange. It went bankrupt in 2022 due to its owners misusing customer funds.

Conclusion

An innovative approach to restructure their governance practices is necessary for board of directors success. The proper planning and timely execution of actions leads to finding solutions for any important problems. The board of directors is required to meet frequently to make sure the company practices on the right track. The board of members has to adapt emotional and behavioural flexibility as they focus on the future.

Consistent improvement encourages organisations to experiment with new ideas and seek innovative solutions. This can help companies stay ahead of the competition by constantly improving their offerings.

References

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Regulating Act, 1773 and Act of Settlement, 1781

6

This article is written by Aditi Srivastava and further updated by Sneha Arora. This article dives into the concept of the Regulating Act, 1773, and the Act of Settlement, 1781. It provides an in-depth analysis of the historical context, key provisions, and the impact of both of the Acts on the governments of the British territories in India. This article highlights how these acts introduced important administrative reforms. It examines the limitations of these Acts and their long-term influence on British colonial policy.

Introduction

In the early 1770s, the Indian population faced extreme hardships due to the financial crisis within the East India Company, marked as the pivotal moment in India’s history, prompting significant changes in colonial governance and law. By that time, the company had fallen into a deep financial crisis and was forced to ask for a loan of 1 million pounds from the British Government in order to prevent it from collapsing. Allegations of corruption, nepotism, and mismanagement were rampant against the company’s officials, further deteriorating its reputation. Moreover, the rise of catastrophic famine in Bengal in 1770 had devastated the region, leading to the deaths of millions. 

The company’s dual system of administration, introduced by Robert Clive, where it held diwani rights, was deeply flawed. In reality, both powers were controlled by the company, which was primarily focused on maximising its profits at the expense of the local population. As a result, these increasing complexities led to lawlessness and emerged to be a standing issue.

Furthermore, the company’s military defeat at the hands of Haider Ali in 1769 led to increased complexities. The British government, alarmed by these developments and the companies inability to exercise effective governance, set the stage for the introduction of the Regulating Act of 1773. This Act was the major step of the British Government in regulating the affairs of the company, aiming to address corruption and its inefficiencies. It was the first legislation to introduce significant reforms in administration and justice. 

Subsequently, the Act of Settlement of 1781 was implemented to address the shortcomings of the previously enacted law. It limited the exercise of powers of the Supreme Court, ensuring that British law did not conflict with the local customs and practices, especially in matters of taxation and revenues. Both of these Acts laid the foundation for the British legal administrative control over India. 

In order to gain a thorough understanding of these Acts, let’s discuss them in detail. 

Regulating Act, 1773

The Regulating Act of 1773 was a landmark legislation enacted by the British parliament to resolve and address the growing administrative and financial needs within the British East India company.  That introduced several key reforms, most notably the creation of the positions of the Governor-General and the Council, with Warren hasting being the first Governor-General. Though it was an important step in bringing the East India Company under the control of the British government, it had several limitations. Let’s discuss it one by one.

Circumstances prior to the Act, 1773

Earlier, the company primarily focused on trade and commerce in India but gradually evolved into political matters and territorial gains to create their autonomy. In 1759, Lord Clive wrote to Pitt, suggesting that the crown should take or exercise control of the territories held by the company while ensuring they remain undisturbed. After the happening of this event, the parliament, on the basis of three points of view, took several steps in its furtherance as follows: 

  • The first point of view was that the company’s rights and authorities must remain intact.
  • The second was that the crown should take full sovereignty over the company’s territorial holding in India to facilitate further development. 
  • The third view suggested that the crown could enter into a partnership with the company, taking on the role of the controlling partner in all key matters. Additionally, it was accepted by the British Parliament, and it eventually made every effort to realise its relevance.

In 1767, the company started with its new spirit of bargaining, when the British permitted the company to retain its territorial powers for two years, provided that the company paid the crown a sum of £400,000 annually in return. 

Furthermore, the demand of the parliament continued increasing gradually, and the company’s revenues started declining and it started falling into debt. Despite the company’s worsening financial situation, parliament saw benefits and sought to assert its rights to sovereignty over the Indian territories. Throughout this gradual process, the following factors emerged as the key causes for taking over the company:

  • The increasing amount of corruption among the servants of the company 
  • Growing public opinion against the company 
  • The absence of efficient and effective administration and a central authority to oversee and direct the company’s operations.
  • The company’s defeat in 1769 at the hands of Haider Ali of Mysore 
  • The complex administrative structure and problems of dual government.
  • The company’s request for a loan of one million pounds in 1772. 

Need for the enactment of the Regulating Act, 1773

There were many circumstances that made it necessary for the enactment of the Act. It was the first direct interference of the British Government in overseeing the operations of the East India Company. 

  • Firstly, the concept of the dual form of administration instituted by Robert Clive was complicated and brought trouble to the people of India. Under this system, the company had Diwani rights in Bengal and the Nawab had Nizamat rights (judicial and policing rights). Behind the curtains, Nizamat rights were also in the hands of the company, as the Nawab acted as an agent of the company. This all only led to the suffering of the people, as they were being exploited by both the Nawabs and the company.
  • Secondly, the happening of the terrible famine in Bengal, due to which a large part of the population perished, led to severe economic decline, social unrest, and long-term instability in the region.
  • Thirdly, a major reason for the enactment of this Act was the financial crisis that arose in the company by 1773, and the company requested a loan of 1 million pounds from the British Government in 1772.
  • Fourthly, the company, through an earlier charter, had only been given trading rights by the British Parliament. But, gradually, as it started acquiring more territories, it started acting like a ruling body. In England, the British Parliament found this situation unacceptable and sought to put an end to the company’s growing influence. And, to put an end to this tendency of the company, i.e., using the political powers in the name of trading rights, the company thought it was necessary that these territories should be brought under the control of the Crown. At that time there existed three presidencies of Bengal, Madras, and Bombay in the country. But all these three towns were independent of each other, and there was no availability of any centralised authority in India to control them. Thus, it became necessary to bring uniformity to the administration of these three towns.

These circumstances forced the British Government to pass the Regulating Act of 1773 to oversee the operations of the British East India Company.

Lord North (Prime Minister of England at that time) chose to reform the East India Company through the Regulating Act, and so in May 1773, Lord North presented a bill in the British Parliament that, when passed, was known as the ‘Regulating Act of 1773’. An interesting point to note here is that by this Act the British Parliament only ‘regulated’ the affairs of the company but didn’t take all power completely to itself.

Objectives of the Regulating Act, 1773

The Regulating Act of 1773 was presented by Lord North in the House of Commons on May 18, 1773, as the Regulating Bill, outlining three key objectives: 

  • To amend the company’s constitution
  • To reframe the companies government in India 
  • And to offer the remedies for actions and misconducts carried out by the company’s employees in India. 

This Act focuses on changing the company’s constitution and implementing changes to the structure of the Government of India. However, it does somewhat ineffectively establish a ministry to oversee the company. The bill faced severe criticism in the House of Commons; however, it was enacted by a significant majority on June 10, 1773, and subsequently approved by the House of Lords, receiving royal assent on June 21, 1773.

The basic objectives of implementing the Regulating Act of 1773 are listed below.

  • To control and regulate the political and administrative affairs of the East India Company
  • To remove the political power from the hands of the trading company
  • To provide new administrative reforms which were provided by a Central Administration System
  • To improve the despotic state of affairs (situation) of the company
  • To sort out the chaos created by the introduction of the system of dual government
  • To bring anti-corruption practices via the medium of the act by prohibiting the servants of the company from engaging in any form of private trade and from accepting bribes, gifts, and presents from the people.

Salient features of the Regulating Act, 1773

This Act marked the beginning of parliamentary oversight in Indian affairs. The provisions of this Act were made in furtherance of the first and second objectives, which were as follows: 

Election for directors

The Regulating Act introduced important changes to the companies constitution in England. Under Section 6, directors were elected for a four year term, with one-quarter of them retiring each year. Retiring directors were also ineligible for re-election. 

Control over correspondence

The director was required to present the correspondence of civil and military matters with the Indian authorities; this was done with the main purpose of asserting all the powers from parliament to the company. All revenue-related matters in India had to be submitted to the treasury in England to ensure the crown’s oversight.

Governor-General and Council 

Under Section 8 and Section 9, in Calcutta, a Governor-General and Council inclusive of four councillors were selected. All  the decisions of the Council were taken by the majority opinion. In cases of equal division, the Governor-General, and in his absence, the most senior councillor, would have a casting vote.

Control of Madras and Bombay

The governments of the Madras and Bombay presidencies were subject to the authority of the Governor-General and the Council, which meant they could not engage in hostilities, declare war, or conclude peace treaties with any Indian Princes without prior consent from the Governor-General and the Council. However, in cases of emergencies, imminent necessity, or specific orders from the company, this requirement for prior consent could be waived. 

Powers and duties of the Council

All civil and military administrations, including the oversight and governance of territorial acquisitions and revenues of the presidencies of Calcutta, as well as the provinces of Bengal, Bihar, and Orissa, were entrusted to the Governor-General and the council. 

Legislative power of the Council

The Governor-General and Council were vested with the power to make any regulations, rules, and ordinances that they thought justified and fair for the good governance and maintenance of Calcutta. In case of breach of any such rules, they could impose punishments. However, there were some restrictions with concern to these powers: 

  • The rules and regulations must not be repugnant with the rules and regulations made by the law of England. 
  • They would not be considered valid until they were officially registered in the Supreme Court with the required approval and consent. 
  • The rules, regulations, and ordinances were registered only after 20 days had passed since their public announcement or posting. 
  • The rules, regulations, and ordinances could be set aside or repealed by the King and Council if any of the applications are presented to the Supreme Court within 60 days of their registration. The King in Council had the power to set aside and repeal such laws if they were considered defective (Section 36).
  • The Governor-General and the Council were required to submit copies of all the rules, regulations, and answers to the Secretary of State in England, which completely depends upon the discretion of the King or Crown.
  • Company officials were forbidden from participating in private trade and from receiving any gifts in any form. English courts were granted the authority to prosecute British citizens for crimes committed while serving under the company in India. 

These qualifications were imposed to safeguard the interests of the British individuals and to scrutinise the historical actions of the Governor-General and Council in controlling and maintaining the oversight over them. In other words, the aim was to strip the company of its political powers in India and certainly transfer that authority to the parliament. 

Establishment of the Supreme Court of Judicature

Section 13 of the Regulating Act outlines provisions for the establishment of the Supreme Court in Calcutta, authorised by King George II. This section granted the crown the power to create a Supreme Court of Judicature at Fort William in Calcutta through the Charter of 1774. The object behind making this provision was to eradicate the flawed conditions of the judiciary as it operated under the 1752 charter. The Supreme Court is composed of a Chief Justice and three Puisne judges, all of whom must be barristers with at least 5 years of experience. 

The court was entitled with the powers and authority to exercise all civil, criminal, admiralty, and ecclesiastical jurisdiction. Furthermore, it was authorised to form such rules for the subordinate courts that relate to the administration of justice and the proper execution of all powers specified in the Charter and were formally recognised as a Court of Record. 

The jurisdiction of the Supreme Court was restricted to specific categories of individuals as defined in the relevant Act. It also extended to all British subjects residing in Bengal, Bihar, and Orissa, thereby granting authority to address complaints concerning crimes and injustices. Section 38 empowered the Governor-General, members of the Council, and the judges of the Supreme Court to act as justices of the Supreme Court in Calcutta, with appointments made by Lord Bathurst, the chancellor, upon the recommendation of Thurlow, the then Attorney-General.

Jurisdiction of the King’s Bench over Governor-General, Councillor, Judges, Company servants, and British subjects

All these individuals could be tried at the King’s Bench in England if they were accused of any crimes against the Act. This meant that they could be prosecuted under the English law, regardless of where the event took place, so as to ensure strict enforcement of laws. The extraterritorial reach of this provision was intended to maintain control and discourage any violations of the Act across the colonies. 

Important provisions of the Regulating Act, 1773

Provision Explanation
Governor general of BengalWarren Hastings was the first governor general of Bengal, his work was to assist the executive Council of 4 members who functioned according to majority rule.
Centralisation of the powerThe governors of Madras and Bombay presidencies are considered to be subordinate to the governor general of Bengal, therefore establishing centralised authority.
Supreme Court at CalcuttaFort William, in Calcutta, Supreme Court was established with a chief justice and three judges subordinate to him, in order to administer British legal principles.
Reporting requirementsThe court of the directors was asked to report on revenue and civil military affairs in order to strengthen the British government’s control over India.
Control over companies officialsAll the servants of the company were prohibited from private trade or accepting any bribes to curb corruption.
Financial regulationThe company’s dividends were restricted to 6% until government debt was settled, and the term of court of directors was restricted to 4 years.

Impact of the Act on Indian legal history

  • This enactment is considered to be a landmark enactment as it brought a lot of dynamic and significant changes in the structure of the judiciary in the country. 
  • The Act came up with several changes in the Constitution of the Court of Directors (COD).
  • For the first time, the political and administrative functions of the company were recognized.
  • This Act also established the groundwork for central administration in the country. .
  • This Act established the Supreme Court in Calcutta for the first time. There, by creating a formal judicial system and regulating the judiciary to some extent. It also marked the introduction of learned judges from England as members of the Supreme Court in India. 
  • It restricted the personnel of the Governor-General and the Council, ensuring that the actions of the company’s servants would now be monitored by individuals with a personal interest in properly governing the district, who were free from the class biases of the company’s servants. 
  • This Act replaced a court of King’s judges and legal professionals with a court composed of company servants, who could be dismissed by their peers. 

Limitations and criticisms of the Regulating Act, 1773

Although the aims and objectives of the Regulating Act were well-intentioned, several flaws emerged over time. These issues stemmed from the policymaker’s inexperience with Indian affairs and shortcomings in drafting the provisions of the Act. The Regulating Act was notably vague in many respects. On one hand, the Governor-General often clashed with the members of his Council, while on the other hand, the Supreme Court. 

Conflict between Governor-General and Councillors

The Regulating Act appointed a Governor-General and four members of the Council, with the expectation that this new setup would enhance efficiency compared to the previous state of affairs. However, the British Parliament made the mistake of sending three councillors– Clavering, Monson, and Francis– who were entirely new and experienced in Indian affairs. They arrived in India at the behest of the politically influential leaders in England and were notably biassed against Warren Hastings and the company’s officials. This led to ongoing disputes between the Governor-General and the Council members, along with various others. 

Imminent necessity undefined

The Regulating Act empowered the Governor-General of the Calcutta presidency to exert control over the other two presidencies, Bombay and the Madras, which resulted in conflict among them. It was a mistake to grant power while simultaneously imposing limitations. These restrictions, along with the main provisions, allowed the presidencies of Bombay and Madras to make independent decisions in cases of imminent necessity. Unfortunately, the Act failed to define what such a necessity was; leading to the lack of coherence and coordination between presidencies.

Company’s positions were undefined

The company held its power in India under the British crown and the Mughal emperor, functioning as the Diwan for the Mughal code. This situation made the British Parliament hesitant to ascertain complete sovereignty over India, leading the crown to grant sovereignty based on the companies rights. The parliament declined to recognise the sovereignty of the Mughal Emperor in the regulating act, especially as it was awarded Mughal power was diminishing. The parliament’s attempt to assert its sovereign rights over the company’s Diwani lands could only occur after the complete extinction of Mughal sovereignty which they preferred to see. Moreover, the Act failed to address the concerns of the Indian natives, who were the ones truly suffering.

Disputes between judiciary and executive

After the establishment of the Supreme Court under the Charter of 1774, the Governor-General and the Council were constituted by another Act from the Crown. This led to serious conflicts between the functioning of the judiciary and the executive, as each claimed superiority over the other. There was considerable criticism and confusion regarding the powers and jurisdiction of the Supreme Court. 

Indistinct terms and wide interpretations

The jurisdiction of the Supreme Court was influenced by the perspective of the British subjects, who were ignorant of native inhabitants. The use of broad legal terms allowed the judges to interpret their powers expansively, thereby extending their jurisdiction beyond what may have been appropriate for the local context. 

Conflicts between company’s courts and the Supreme Court

The framers of the Regulating Act failed to lay down any provision addressing the relationship between the Companies Court and the Supreme Court, which was established by the crown. As a result, the jurisdiction of the Supreme Court was partially concurrent with that of the Adalat, without clarifying the sources of sovereignty from which each derived its authority. 

Therefore, this can be reflected in the post-regulating period from 1774 to 1780, which gave rise to a series of disputed problems and situations. Several influential figures, such as Raja nand Kumar, Patna case, Raja of Kassijurah, Kamal-ud-din, Rani of Burdwan, etc., highlighted the deficiencies in the provisions of the Regulating Act. Lord Macaulay described the role of the Supreme Court during the period of 1774 to 1780 as a “Reign of Terror”.

Subsequent acts and case laws

Charter of 1774 and the Supreme Court at Calcutta 

The Regulating Act 1773 included a series of provisions from the Charter of 1753, granting the crown the power to establish a Supreme Court. Under Section 13 of the Act, King George III, signed a Charter on March 26, 1774, which established the Supreme Court at Calcutta. The charter appointed Sir Elijah Impey as the first Chief Justice, with Stephen C. Le Maistre, Robert Chambers, and John Hyde served as three Puisne judges. 

The court was further authorised to establish the rules of practice and procedure and had the power to appoint the necessary subordinate staff, regulating the court with the consent of the governor general. The Charter granted civil jurisdiction to the Supreme Court, allowing it to hear cases where the action exceeded 500 rupees. 

Additionally, the Supreme Court could repeat the decision of the Mofussil Court. Furthermore, if the valuation of the suit exceeds 1000 Pagoda, an appeal could be made to the King in Council within 6 months of the Supreme Court’s decision. 

Regarding criminal jurisdiction, the Supreme Court was designated as the Court of Oyer and the Terminer and Gaol-Delivery for the town of Calcutta, Fort William, and the associated subordinate factories. It was empowered to supervise the Court of Collector, the water sessions, and the court of request and could issue writs of certiorari, mandamus, error, prohibition and Procedendo to these courts. 

Additionally, the Supreme Court was granted the powers of a court of equity and the court of admiralty for Bengal, Bihar and Orissa, and other territories and islands under the company’s jurisdiction. Consequently, the Supreme Court was vested with four distinct types of jurisdiction: civil, criminal, ecclesiastical, and admiralty. Thus, the Supreme Court of Calcutta enjoyed the widest jurisdiction and held significant powers in its domain. 

Landmark case laws

The Regulating Act establishing the Supreme Court worsened the situation due to the defects mentioned above. Even two years after the opening of the Supreme Court, one of the members, namely, Philip Francis, noted that the crucial question of sovereignty remained unsolved. The conflicts and the atmosphere of terror during the period can be exemplified through a critical analysis of several landmark cases in the legal history of India. These cases reflect the challenges faced by the Supreme Court and highlighted the tensions between the judiciary and the other authorities during this tremendous time. 

Trial of Raja Nand Kumar (1775)

This case is also known as the judicial murder and has gained great significant historical importance, as it formed an integral part of the charges on which Warren Hastings and Impey were impeached by the House of Commons following their return to England. The controversies surrounding the Supreme Court’s operation and the clashes between its jurisdiction and the company underscored the governance issues and complexities in colonial India, ultimately leading to significant political repercussions for Hastings and Impey.

Background of the case

This case wandered around the two parties, one Raja Nand Kumar and the other was Governor-General Warren Hastings. 

Rajanand Kumar was a Hindu Brahmin, a prominent zamindar, and an influential figure in Bengal. He served as the governor of Hooghly and was recognised as a lawyer and trustworthy member of the British East India Company, earning the nickname “Black Colonel” due to his close association with the company and his role in its administration. His position and influence made him a significant player in the complex dynamics of colonial governance in India.

Warren Hastings (G-G), and his four members: Francis (oppose), Clavering (oppose), Monson (oppose), and Barewell (favour). The primary factions of Francis, Clavering, and Monson urged Nand Kumar to file accusations of bribery and corruption against Warren Hastings before the Council. 

Facts of the case

Shortly after Nand Kumar was charged and arrested for the conspiracy at Hastings request, he fabricated another forgery case against him to tarnish the reputation of Raja Nand Kumar. 

As a result, the Supreme Court sentenced him to death under an Act of the British Parliament. Despite numerous petitions requesting the rescue and preservation of Raja Nand Kumar’s life, all denied by the court, which ultimately sentenced him to death by hanging on August 5, 1775.

Hence, Hastings managed to eliminate Raja nandkumar with the help of a friend, Sir Elijah Impey, who was the Chief Justice of the Supreme Court of India at that time. .

Critical appreciation of the case

The trial of Raja Nand Kumar was considered a judicial murder, and it was held that the facts and witnesses were manipulated. But Sir Elijah Impey justified the trial of Nand Kumar for the offence of forgery under the Forgery Act, 1728 of the British Parliament, on the various provisions.

Judgement of the case

In the case of Raja Nand Kumar, the Supreme Court of Calcutta, convicted him of forgery in 1775, under British law. He was sentenced to death by hanging, despite widespread belief that the charge was politically motivated and the punishment inflicted was excessively harsh. The court, led by Sir Elijah Impey, refused to interfere despite a request for mercy. Raja Nand Kumar was executed on 5th August 1775, marking one of the first controversial legal cases in the British history of India. 

Cossijurah case 

The case of Cossijurah refers to a significant legal dispute that emerged in the late 18th century in British India, highlighting the complications of colonial governance and the legal framework established by the Regulating Act of 1773. 

Kashinath Babu was a principal merchant and brought an action against the Council. Raja of Cossijurah was deeply in debt to the merchant. 

Kashinath Babu, having failed to recover his debts through the recovery mode of the Council at Calcutta, filed suit in the Supreme Court for the recovery. He filed a Writ of Capias.

Facts of the case

Raja Sundernarayan was a zamindar of Cossijurah in the district of Midnapore in the State of Orissa. He was to pay the company a fixed sum of money as land revenue annually. One Kashinath Babu was a principal merchant, and he was a surety of Raja Sundernarayan.

Raja was deeply in debt to Kashinath Babu upon two bonds, which he had executed in Calcutta in favour of Kashinath Babu. Having failed to retrieve the funds from the Raja via the Revenue Board in Calcutta. Kashinath filed the debt suit against the Raja in the Supreme Court of Calcutta on 13th August, 1779.

The Supreme Court issued a writ of Capias, which means the warrant of arrest against Raja Sundernarayan. The Collector of Midnapore reported the matter to the Governor-General and Council, complaining that the revenue collection was being adversely affected due to this action of the Supreme Court against the Raja. 

Furthermore, Warren Hasting and his Council consulted with the Attorney General on his advice; the Supreme Council instructed the Zamindar (Raja) not to obey the process of the Supreme Court. The first writ having been returned unexecuted, the Supreme Court issued another writ against the Raja, and 60 men along with the sheriff of the court were sent to execute the writ.

Later, the Raja alleged that the sheriff’s men entered his house, injured his servants, and forcibly broke up the door. Thereafter the Supreme Council directed the officer commanding the troops to arrest sheriff men.

Finally, the collector of Midnapore arrested the sheriff and his men, kept them in confinement for 3 days, and then sent them to Calcutta as prisoners. The sheriff and his men were finally released by the Supreme Council, but the governor general resisted them from issuing any for the writ of the Supreme Court.

Aggrieved by the action of the Supreme Council in interfering with the case, Kashinath Babu further bought an action against the governor general in the members of the Council, alleging that they assaulted the sheriff and his men and took back the property seized so as to deprive him of the recovery of his debt from Raja.

Critical appreciation of the case

The main issue involved in the Cossijurah Case was whether the zamindars were subject to the jurisdiction of the Supreme Court or not. The case of Cossijurah widened the differences between the Supreme Court and the Supreme Council. It became clear that the judiciary and executive were working in opposition to each other. 

Judgement of the case

The judgement in the Cossijurah ruled that the Supreme Court of Calcutta’s jurisdiction did not extend to areas outside the city like Cossijurah. The local authorities, under the East India Company, were not bound by the court’s order, marking a clear distinction between the company territories and the court’s authority.

“Radha Charan Mitra” case 

The Radha Charan Mitra case is a landmark Indian legal case related to the interpretation of Hindu succession law and the rights of the widows under Hindu law. This case highlights the widows’ rights to inherit her deceased husband’s property in the absence of male heirs. It set a significant precedent in clarifying the inheritance rights of the Hindu widows under traditional laws.

Facts of the case

After the Sadr Faujdari Adalat was relocated from Calcutta to Murshidabad in 1775, the administration of criminal justice was shifted under the exercise of Nawab Mubarikuddoaula. Regarded as a sovereign prince free from any kind of interference by the Supreme Court. Consequently, Warren Hastings lost a conspiracy complaint against several individuals, including Radha Charan and the Nawabs Attorney. However, members of the Council informed the Supreme Court, arguing that Radha Charan, as the Nawab’s vakil, was entitled to the rights and several immunities granted by national laws. 

Judgement of the case

This case was followed on 28th June, 1775, where arguments were presented contending the Nawab’s status as a sovereign prince with authority over criminal justice, royal mint, and true regulations. 

Nevertheless, the court rejected these claims, supporting the arguments made by the governor general for Warren Hastings and others, stating that the Nawab was fully under the control of the company and was not granted the authority to maintain troops or operate a royal mint. The court further contended that the Nawab could not perform any acts of sovereignty.

According to Jain, this case serves as a precursor to the notably recognised case of Raja nandkumar. Radha Charan was condemned to death in 1765 for forgery, illustrating the detrimental effects of introducing English law into India. 

Act of Settlement, 1781

The Act of Settlement was amending legislation enacted by the British Parliament on July 5, 1781, aimed at addressing the shortcomings of the Regulating Act 1773. It is also known as the Declaratory Act, 1781.

Circumstances that led to the passing of the Act of Settlement

Though the Regulating Act of 1773 brought a great level of change both in the regulation of affairs and judiciary, there were some significant loopholes that this Act failed to resolve. In order to eliminate the defects of the Regulating Act of 1773, the Act of Settlement 1781 was enacted.

  • Firstly, there were several significant issues with the Warren Hastings administration. Notable examples include the Patna case, the Cossijurah case, and especially the Raja Nandkumar case, in which Nandkumar was executed. These incidents led to widespread criticism of the Hastings administration.
  • Secondly, there was a big tussle between the Supreme Court and the Governor-General in Council, which disturbed the balance of administration to a great extent.
  • Also, there was interference in the personal laws of the communities, which had agitated the people.

Also, in the year 1777, a complaint was made by the directors of the company against the Supreme Court, as for them it was difficult to run the administration. To address this complaint, the House of Commons appointed a committee to investigate the administration of Bengal, Bihar, and Orissa. The committee came to be known as the Touchet Committee.

The report of this committee led to the enactment of the Act of Settlement of 1781.

Salient features of the Act of Settlement,1781

This Act was enacted to address the detrimental effects of the regulating Act. Its objective was to grant relief to certain persons present at Calcutta under a judgement of the Supreme Court and also to reimburse the Governor-General and Council and all officers who acted under their orders or authority. The Act of 1781 was aimed at clarifying and amending provisions of the regulating Act. Some of the important provisions and features of the regulating Act were: 

  • The Act announced that the Governor-General and Council can exercise the authority and jurisdiction of the Supreme Court for all things done or ordered by them in India with regard to public capacity and acting as Governor-General and Council. However, no power was granted before the English courts to the Governor-General and the Council or any other person acting on account of them.
  • Under Section 17 of the Act, English law was not applicable to the native Hindus concerning their personal laws, preserving they are laws related to succession and inheritance of lands, rents, and goods, as well as the matter of contracts and dealings between the parties. 
  • In cases where the party is brought under a different religion, the cases must be dealt with according to the laws and uses of the defendants. 
  • The Supreme Court was entrusted to have jurisdiction in actions for the wrongs to trespass and then civil cases where parties had agreed in writing to submit their case to the Supreme Court. 
  • It was also listed that the Supreme Court would not entertain any cases against any person holding judicial office in any courts for any wrong done by the judicial decision; Section 24 states that individuals working under the authority of judicial officers are also exempted from this provision. 
  • This Act reversed the policy of the Regulating Act and gave important recognition to the civil and criminal provincial courts. 
  • Further, the Court of Appeal was determined as Sadr Diwani Adalat. It was recognised by the Court of Records.
  • The Act of 1781 authorised the Governor-General and Council to formulate regulations for the provincial courts and councils. Additionally, the Act recognises the rights of a family, the head or the manager, to impose punishments on the members of the family.
  • The Act recognises the concept of indemnity. It also stipulated that the Governor General, Council, Advocate-General, and all other individuals acting under their orders would be indemnified and held harmless from any actions or prosecutions arising from their compliance with the orders of the Supreme Court. 
  • The servants of the company who were previously subject to the jurisdiction of the Supreme Court were now exempt from it. With the enactment of this Act, the Court’s geographical jurisdiction was limited to Calcutta. The Court could no longer exercise authority over the revenue related matters, allowing the government to operate independently of the court’s control in these matters. 
  • The appellate jurisdiction was transferred to the Governor-General and the Council. Consequently, appeals now move from the provincial courts to the Governor General in Council.

Important provisions of the Act of Settlement, 1781

ProvisionExplanation
Governor-General and the CouncilThe public actions of the Governor-General and the Council were not under jurisdiction of the Supreme Court 
Immunity from Criminal and Civil LiabilityIndividuals following written orders from the governor general and the Council were immune from Civil and criminal liability
Changes in Jurisdiction of Supreme Court Supreme Court jurisdiction excluded revenue matters and actions related to revenue collections. Furthermore, land owners and renters weren’t under the jurisdiction of the Supreme Court solely due to property.
Jurisdiction in Civil cases Company employees and British subjects weren’t automatically under Supreme Court jurisdiction in civil cases 
Authority of Supreme Court The Supreme Court had authority over the residents of Calcutta.
Immune to judicial officers Judicial officers were protected from the lawsuits for wrongful action from their  judgement and court orders.
Functioning of Sadr Diwani Adalat Sadr Diwani Adalat were recognised, handling civil appeals and references, with decisions appealable to her majesty. 

Aim of the Act of Settlement,1781

The main objectives of the enactment of this Act were 

  • To remove ambiguity in the provisions of the Regulating Act and the charter that create a division between the judicial system and the government.
  • To ensure the lawful and effective administration of Bengal, Bihar, and Orissa to facilitate smoother revenue collection. 
  • To maintain and safeguard the laws and customs of the local population. 

Defects of the Act of Settlement, 1781 

The Act of Settlement was a landmark statute passed by the English parliament. While it played a significant role in shaping modern constitutional monarchy, it also had several defects. Which includes its exclusionary provisions based on religion and its limited reach regarding parliamentary sovereignty. The major defects of the Act of Settlement are as follows: 

  • The British recognised that in order to acquire territory in India and establish the British Empire, it was essential to support the Governor-General and the Council. They refused to allow the Supreme Court to operate independently, which undermined the English principles of independence and the rule of law in India. This ultimately led to the inefficiency in the rule of law by favouring the executive branch.
  • Though the Act of 1781 succeeded in addressing many defects of the Regulating Act, some issues persisted. Even after the Act of Settlement, conflicts continue to arise in the relationship between the Indian territories and the British crown.
  • Both Acts contained unclear terminology regarding “British subjects”, leaving it ambiguous whether Indian natives were included under this term. This conflict suggested that both Hindu and Muslim inhabitants were excluded from the definition of “British subjects”.
  • One more defect of the Act of Settlement of 1781 was that there was no clarification regarding the question of whether the Provincial Courts were to have concurrent jurisdiction with the Supreme Court or an exclusive one. 

Impact of the Act of Settlement,1781

The major impacts of this Act were :

  • The Act granted superior authority to the council over the court, thereby favouring the council in matters of governance.
  • This Act strengthened the position of the council. Allowing it to maintain and regulate effective control over the Indian Empire. 
  • It marked the first attempt to separate the executive from the judiciary by clearly separating their respective areas of jurisdiction. 

Still, the Act failed to give a vibrant impact and to remove all the flaws of the Regulating Act of 1773.

Conclusion

These two enactments brought significant changes in the system of administration and justice. The Regulating Act of 1773 was a significant step in the British government’s intervention in east India’s company affairs. It aimed to address issues of corruption and inefficiencies by introducing a centralised administration in India with the establishment of the position of the Governor-General of Bengal and the Council. This Act marked an efficient step in the beginning of British parliamentary control over company affairs, signifying a move towards more regulated governance. 

Similarly, the Act of Settlement of 1781 was introduced to address a legal complexity and dispute arising out of the regulating Act. It gives clarification to the jurisdiction of the Supreme Court. Thereby reading in resolving the disputes between the company authorities and Indian subjects. The Act aimed to protect Indians from judicial overreach by the British court and ensured the separation of judicial and executive power. 

These Acts laid down the foundation for more structured governance in British-controlled India, with the regulating act initiating the refining of legal administration, thus further consolidating British control.

Frequently asked questions (FAQs)

What was the Regulating Act of 1773?

This Act was the first legislation by the British Parliament aimed at regulating the affairs of the East India Company. It introduced administrative reforms and established a centralised governance structure in India.

What prompted the enactment of the Regulating Act?

The growing corruption within the East India Company, financial difficulties, and the need for better governance in the territories held by the Company, particularly after the Bengal famine and military defeats.

What were the main objectives of the Regulating Act?

The main objectives are amending the company’s constitution, reforming governance in India, and addressing misconduct by company officials.

How did the Act of Settlement of 1781 amend the Regulating Act?

The Act of Settlement aimed to rectify the defects of the Regulating Act by clarifying the jurisdiction of the Supreme Court and providing immunity to the Governor-General and Council for actions taken in their official capacity.

What impact did these Acts have on Indian governance?

These Acts laid the groundwork for British parliamentary control over the East India Company, introduced a centralised administrative system, and established a formal judicial framework in India.

What were some criticisms of the Regulating Act and the Act of Settlement?

The following are the major criticisms of the Acts:

  1. That both Acts are vague in nature.
  2. Lead to conflicts between the executive and judiciary. 
  3. They also failed to adequately address the rights and concerns of Indian natives.

How did these Acts influence future British policies in India?

The Regulating Act and the Act of Settlement set precedents for further legislative measures and reforms, ultimately shaping the governance structure of British India and influencing subsequent laws and policies.

References 

  • V.D Kulshrestha, Constitutional History of India 
  • Rama Jois, Legal Constitutional History of India 
  • “The Making of Modern History: From Marx to Gandhi”: by R.C. Dutt
  • 13645.pdf (ijfmr.com) 
  • IJRTI2304156.pdf 

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105th Amendment of the Indian Constitution

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This article is written by Shreya Patel. This article discusses the 105th Amendment of the Indian Constitution and explains the background and the key provisions which were inserted, altered and modified under the 105th Amendment of the Indian Constitution. The need, the key events which led to such an amendment, the reason behind this amendment, Union Government’s corrective course and the impact of the amendment are also discussed in depth in this article. 

Introduction 

The Constitution of India, is the supreme law of the land. It is vital for the Indian Constitution to be responsive to the changing situations and needs. Article 368 of the Indian Constitution, is the provision that gives the Parliament the power of making amendments in the Constitution. Amendment means the procedure of making changes like variation, addition, or repealing of provisions in the Constitution. 

The amendments are made in the Constitution of India, so that the fundamental principles are upheld and the Constitution becomes adaptive to the changing circumstances. As the Constitution is a living document, the amendments are necessary to keep it relevant with the passage of time. All the provisions related to the amendment of the Constitution are laid down in Part XX under Article 368 of the Indian Constitution. This provision provides details on the scope and process of amending the various Articles of the Constitution. 

Amending the Constitution has multitudinous significance, such as, it helps with adaptability of governance, aids in bringing social reforms, accommodates novel rights, helps in evolution of new rights, addresses the emerging issues etc. The power to amend the Constitution of India rests solely with the Parliament. There are three types of majorities which have to be secured in the Parliament. In order to amend the provisions of the Constitution a special majority is to be secured. The types of majorities are:

  • Simple majority of parliament
  • Special majority of parliament
  • Special majority of the parliament and consent of half states.

With the 102nd Constitutional Amendment (2018), the power was given to the Parliament along with the Central Government to curate a list of Other Backward Classes (OBCs) in the year 2018 to provide the reservations. The lists compiled by both the State and Central Government did not match, which led to much complexity in providing the reservation. The 127th Constitutional Amendment Bill, 2021 was passed on August 11th, 2021 to restore the rights of the states to prepare such a list which shall be considered to provide reservation.

This bypassed the Supreme Court ruling of 2021 in the case of Jaishri Laxmanrao Patil vs. The Chief Minister And Ors (2021), which gave power to notify the educationally and socially backward classes only to the Central Government and not to the State Government. The 105th Amendment of the Constitution in 2021 again restored the right of the State Government to curate a list of people belonging to OBCs and provide them with reservations. 

Historical background

In India, the educationally and socially disadvantaged classes are always recognised by the State Governments. Preference is given to these educationally and socially disadvantaged classes when it comes to education and public jobs. In 1992, on the basis of the Mandal Commission’s recommendation, the Union Government of India established a new system for recognising the Socially and Economically Backward Classes (SEBCs) in a central list. A system was created where reservation will be granted in relation to public employment and educational institutions on the basis of age criteria and as per the backward classes. The Supreme Court in the landmark judgement of Indra Sawhney Etc. Etc vs. Union Of India And Others, Etc. Etc (1992) determined that both the State and the Union Governments will have the authority to grant and recognise reservations for the SEBCs. 

The Parliament also established the National Commission for Backward Classes (NCBC), as a legislative body in 1993 which was responsible for advancement, development and the welfare of SEBCs. The 102nd Constitutional Amendment was passed by both the houses of the Parliament in 2018. In the case of Indra Sawhney, the Supreme Court had directed the creation of a permanent body which would entertain, recommend, and examine the exclusion and inclusion of the backward classes. In pursuance of this direction, the NCBC was established by the Parliament. Article 338B was inserted through the 102nd Constitutional Amendment of the Constitution of India, which gave NCBC the constitutional status. 

On the same note, Backward Class Commissions were also established by the State Governments, for assessing backwardness and taking affirmative measures for the same. The 127th Constitutional Amendment Bill was introduced in the Parliament’s Upper house for voting and discussion on 11th August, 2021, where the bill was discussed and passed on the same day itself. 

The Bill had received 380 votes in the Lok Sabha in favour of it, while no one had opposed the same. The President of India was also provided with an authority for recognising the communities for economically and socially disadvantaged classes under a special provision. 

Key events which led to 105th Amendment of the Indian Constitution 

Event Importance
Mandal Commission Report (1980)The recommendation for reservation in public jobs and education for OBCs was made. 

Indra Sawhney Etc. Etc vs. Union Of India And Others, Etc. Etc. (1992)
The recommendations of the Mandal Commission were upheld, and a fifty percent cap on the reservation was introduced. The “creamy layer” of the OBCs was excluded. A legal precedent was set by this case, which played a key role in influencing the 105th Amendment.
The Maharashtra State Reservation (Of Seats For Admission In Educational Institutions in The State and for Appointments in The Public Services and Posts under The State) for Socially And Educationally Backward Classes (SEBC) Act, 2018.Under SEBC, the government of Maharashtra gave reservations to Marathas. This Act threw the spotlight on the need to amend the power given to states for determining the SEBCs. 
Jaishri Laxmanrao Patil vs. The Chief Minister And Ors (2021) (Maratha Quota Case)In this judgement, the Supreme Court struck down the Maharashtra SEBC Act, 2018. The court stated that the identification of SEBC cannot be done by the states after the 102nd Amendment Act of the Constitution of India. With this case, the need for the 105th Amendment with restoration of powers to the state was seen. 
127th Amendment Bill – IntroductionThe 105th Amendment Bill was introduced in the Lok Sabha, with the motive for amending the Constitution in order to restore the rights of the states in identifying the SEBCs. 
127th Amendment Bill – PassingThe 127th Amendment Bill was passed in both the houses. 
Presidential ApprovalThe 127th Amendment Bill got the approval from the President of India and the power to identify the SEBCs was restored in the states again.

One of the key cases which led to the 105th Amendment of the Indian Constitution was the Maratha Quota case. Let’s take a look at the facts of the case, the issues raised and what was the judgement given by the Apex Court of India.

Understanding the concept through the Maratha quota case [Jaishri Laxmanrao Patil vs. The Chief Minister And Ors (2021)]

Facts of the case

  • The Maratha community was chosen as a SEBC, by the government of Maharashtra, in November, 2018, which granted them preference in public employment as well as education. 
  • An ordinance granting a 16% reservation in both public employment and education was promulgated by the Maharashtra Government to the maratha community.
  • An interim order was issued by the High Court of Bombay for staying of such an ordinance.
  • The challenge to the interim order was dismissed by the Supreme Court.
  • The Bombay High Court put a stay on the implementation of the Socially and Educationally Backward Classes Act, 2014 enacted by Maharashtra to grant a 16% reservation in employment and education. 
  • Maharashtra State Backward Class Commission was established and chaired by Justice Gaikwad. This commission recommended a 12% reservation in educational institutions and a 13% reservation in public employment.
  • The Socially and Educationally Backward Classes Act, 2018 (SEBC Act, 2018) was passed based on the commission recommendations. A 16% reservation was granted, which exceeded the quotas that were recommended. 

Issues raised

  • Whether the Maharashtra state has the power to identify SEBCs after the 102nd Amendment?
  • Whether the SEBC Act, 2018 violated the Article 15(4) and Article 16(4) of the Constitution? 
  • Whether the 50% ceiling limit set by the Indira Sawhney case be exceeded?

Judgement of the case

In the landmark case of Jaishri Laxmanrao Patil vs. The Chief Minister And Ors (2021), in May 2021, (also known as the Maratha Quota Case) the Supreme Court gave its judgement that the fifty percent ceiling limit on reservation should not be reconsidered and the 50% limit should not be exceeded in any circumstances. If the limit of 50% is exceeded it will be held unconstitutional.The SEBC Act, Bombay High Court and the Gaikwad Commission could not explain how the marathas fall under the extraordinary situation, to fall within the exception to the limit of reservation. 

There were many challenges that took place after such a decision was taken by the government of Maharashtra. Designating the Maratha community as SEBC, when such power of the states was cut down by the 102nd Amendment, was one of the main challenges.  The Supreme Court bench by a 3:2 majority held that the states had no power. As per the majority, the correct understanding of the 102nd Amendment was that only the Central Government had the power to recognise and identify the SEBCs. The restoration of the power to the States was pushed by many political parties. The Union also requested a review on the same, which was denied, later leading to introduction of the 127th Constitutional Amendment Bill, which was then passed and became the 105th Amendment of the Constitution. 

Need for the 105th Amendment of the Indian Constitution

The 105th Amendment of the Indian Constitution was enforced after the decision of the Apex Court through its judgement in the Maharashtra reservation case which upheld the 102nd Amendment of the Indian Constitution. It was stated by the Supreme Court, that the President would decide which communities would be included in the OBC state list as per the recommendation of the NCBS.

The main objective of the 105th Amendment of Indian Constitution was to restore the power of the State Government, so that they can recognise the classes that are educationally and socially disadvantaged. The main purpose of the 102th Amendment as stated by the Union Government was to make a Central List which will be exclusively used by only the Central Government and their institutions. It had nothing to do with the power of the State Government in categorising the backward communities and the state lists of the backward classes. 

With the 105th Amendment all the confusion related to the 342A Article were cleared by adding clause 3 and amending clause 1 and 2 of the Article. With the restoration of power back to the states about 671 OBC communities will get benefits which they would have lost if the powers of the state to make OBC list were abolished and they would have lost access to reservation in educational institutions and employment. The measure to restore the power back to states promotes a social balance. 

Provisions of the Constitution (105th Amendment) Act, 2021

Section 1

This section states that the Act will be known as the Constitution (One Hundred and Fifth Amendment) Act, 2021. This act will come into force when the Central Government notifies through the Official Gazette. 

Section 2

This Section states that a proviso will be added in the Article 338B clause (9) of the Indian Constitution. The proviso states that – (provided that) nothing in clause (9) will apply for the purpose of clause (3) of Article 342A of the Constitution which talks about socially and educationally backward classes. The clause 9 of Article 338B states that every State Government and Union shall consult the NCBC on all the policy matters that affect the SEBCs. 

Section 3

This Section states that in the Article 342A of Indian Constitution –

  1. The “the socially and educationally backward classes which shall for the purposes of this Constitution” was substituted with “the socially and educationally backward classes in the Central List which shall for the purposes of the Central Government” in the clause (1);
  2. An explanation, stating that – the expression “Central List” for the purposes of clauses (1) and (2), will mean the list of SEBCs which was prepared and maintained by and for the Central Government – was also inserted after the clause (2);
  3. A subsection (3) was also added which stated that – notwithstanding anything contained in clause (1) and (2), every Union and State may by law, maintain and prepare a list of SEBCs for their own purposes and these entries can be different from that of the Central list. 

Section 4

This Section states that “socially and educationally backward classes” means such backward classes as are deemed under article 342A for the purposes of the Central Government or the State or Union territory, as the case may be, substituted in the  Article 366 of the Indian Constitution, as the clause (26C).

Article 338B of the Indian Constitution

Article 338B states the composition and powers of the National Commission for Backward Classes (NCBC). It is provided that the NCBC shall consist of a chairperson, one vice chairperson, and three other members. The President shall decide on the tenure and conditions of service of these members. The commission’s duties include:-

  • To monitor and investigate all the matters relating to protecting SEBCs under the laws established along with the Constitution of India;
  • To conduct investigation on inquiries made in relation to deprivation of rights of the SEBCs;
  • To present the reports of the working, annually or whenever required, to the President;
  • To make reports on the recommendations that are made on the measure that are to be taken by the State and the Union; and
  • To work for the welfare, development and protection of the SEBCs.

The reports submitted to the President can be laid in the Parliament for further recommendations. The Commission shall have the powers of a Civil Court when conducting an investigation or inquiring about a complaint made. The NCBC can summon a person, enforce a person’s attendance, require the production of any document or discovery, receive evidence on affidavits, can ask for a copy of any public record from any office or court, and can also issue commission for examining documents or witnesses.  

Article 342A of the Indian Constitution

Article 342A of the Constitution of India empowers the President to make decisions in relation to which communities will be listed as SEBCs in a Union Territory or State. When it comes to taking the decision in case of a state, the President will have to consult the Governor of the State and then publicly notify about the same. From the Central list of SEBCs, the Parliament can include or exclude the classes. The Central list is recognised by the Central Government and is the official list for the SEBCs. This article further states that despite having a central list of minorities, all the Unions and States can maintain their own lists for their own purposes which can vary from the Central list. 

Key points of 105th Amendment to the Indian Constitution

  • The 105th Amendment of the Constitution of India came into force on the 5th of  August, 2021.
  • The 105th Amendment was one of the components of the 127th Constitutional Amendment Bill (2021). 
  • The main articles which were amended under this amendment were Article 338B, 342A, AND 366 of the Indian Constitution. 
  • The 105th Amendment restores the power of the Union Territories and State Government to identify the SEBCs.
  • The National Commission for Backward Classes (NCBC) with the 102nd Amendment Act, 2018 was provided with constitutional status. The main objective of 102nd Amendment was not to strip the power of the States to recognise the SBECs. 
  • The Maharashtra Government in 2019, granted the Marathas a sixteen percent reservation. The decision was invalidated by the Supreme Court, stating that the reservation limit which was set in the Indira Sawhney case, was crossed. 
  • All the Articles which were inserted by the 102nd Amendment, were amended by the 105th Amendment. These included Article 338B and Article 342A. The power of the States was restored again to list SEBCs. The clauses 1 and 2 of the Article 342A were amended and a new clause 3 was also added in relation to restoration of power. 
  • The Article 366 (26C) was also added in the 105th Amendment, which consists of the definition of Socially and Educationally Backward Classes (SEBC). The definition states that “socially and educationally backward classes” means all the backward classes as deemed under the Article 324A. 

Corrective course of the 105th Amendment of the Indian Constitution

It was asserted by the Union Government that the 102nd Amendment was exclusively for the Central Government. There was no clause specifically that stated that took away the powers of the State Government to define socially and educationally backward classes. This led to confusion at various stages whether the state had the power or the Central Government had the sole power. It was agreed by all the majority of the states, that the states should be given their power again. The parties moved to overturn the decision to the Supreme Court. Both Houses of the Parliament without any opposition, passed the Bill for the 105th Amendment, which led to giving the states the power to recognize the SEBCs again. 

The corrective course was taken to maintain the balance of power between both the Central and State Government. Many SEBCs lost their rights to reservation, when the power of recognising the SEBCs was solely with the Central Government. Hence, in order to remove such imbalance and protect the rights of all SEBCs, the 105th Amendment was introduced. 

Impact of 105th Amendment of the Indian Constitution

  • One of the biggest and the most important impacts of the 105th Amendment of Indian Constitution has been the benefits to the OBCs. 
  • With this amendment, approximately 650 communities were benefited and since then are getting empowerment and representation. 
  • All the requirements which are socio-economic in nature can be heard and resolved quickly by the states. 
  • The social status of these communities can also be enhanced by providing them opportunities in employment and education, which will lead to an inclusive development. 
  • There has been an ongoing debate on constitutional reservation for years, and with this amendment, a perfect balance has been created. 
  • The main objective of the government and the society is to create equal rights for all, eradicating the discrimination and prejudice. 
  • The 105th Amendment is an effort made to establish a more egalitarian society. 
  • The 105th Amendment of the Indian Constitution gave the states their rights back to compile a list of OBCs and provide reservations to them. 

Conclusion

The 105th Amendment of the Indian Constitution is one of the crucial amendments made in the Constitution. With this amendment, a balanced approach was established in the powers of both State and Central Government in identifying and establishing the SEBCs and providing them reservations. The Amendment of Article 342A was carried out under this constitutional amendment, which states the President’s power to specify SEBCs in each Union Territory and State. 

The power of the states was restored back to them to identify the SEBCs in their states. A clause was also added to Article 342A. The clause (3) was added that both Central and State Governments will have the power to specify and identify SEBCs. The interpretation given under the Maratha Quota case was overridden by the 105th Constitution Amendment Act. The 105th Amendment is a positive shift towards empowering the States but also keeping an eye to prevent the misuse of the powers in order to uphold the inclusivity and equality in the Constitution. 

Frequently Asked Questions (FAQs) 

What is the latest amendment in the Constitution of India?

The latest Amendment in the Constitution of India is the 106th Amendment. The 106th Amendment took place in September, 2023. With the 106th Amendment, 1/3rd of all the seats were reserved for women in State Legislative Assemblies, Lok Sabhas and the Legislative Assembly of the National Capital as well. 

How many amendments have been made in the Constitution of India?

As of September of 2023, there are in total 106 Amendments made in the Constitution of India.

The presentation of the 105th Constitutional Amendment in the Parliament of India was given by which Cabinet Minister?

Dr. Virendra Kumar, the Minister of Social Justice and Empowerment, was the Cabinet Minister who introduced and presented the 105th Constitutional Amendment Act.

How is the Constitution of India amended?

There are different processes for making different types of changes in the Constitution of India. A bill has to be introduced in the parliament and get passed in both the houses with majority in order to make amendments in the Constitution of India.

What sets apart the other laws and amendments on SEBCs from the 105th Constitutional Amendment Act?

The 105th Constitutional Amendment Act is different from other amendments that have been made in the Constitution over the years, because it was not opposed by any Lok Sabha member. The authority of deciding the definition of educationally and socially underprivileged sectors was also given back to the State Governments. 

What does the 102nd Amendment of the Indian Constitution specify?

The 102nd Amendment gave the power to the President to identify the OBCs in all unions and states. The Amendment was made in 2018, after both the houses passed the same bill along with the assent from the President. The Articles 338B and 342A were added via this amendment. The National Commission for Backward Classes (NCBC) was given constitutional status under this Amendment. 

Reference


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An overview of Hindu Marriage Act, 1955 (HMA)

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This article has been written by Oishika Banerji and further modified by Shubham Choube. This article discusses the Hindu Marriage Act of 1955 at its length and explores each of its provisions while also discussing relevant case laws.

Table of Contents

Introduction 

The Hindu Marriage Act, 1955 is a historic legislation that sets the legal provisions for marriage among Hindus in India. This Act was enacted by the Indian Parliament and was a departure from the traditional and customary approaches to marriage that dominated Hindu culture for many generations. It was undertaken during the post-independence process of legal reforms in India looking into the codification of personal laws adhering to modern norms of justice, equality and individual rights. 

Prior to the commencement of the Hindu Marriage Act, there were almost no codified provisions to govern the institution of Hindu marriage and the related rights and duties of the spouses. This created confusion and ambiguity in the law on marriages, the rights of couples, and children in society. These problems were to be solved by enacting the Hindu Marriage Act which aimed at laying down legal provisions detailing the conditions and formalities for a valid Hindu marriage, grounds for divorce and judicial separation and the rights as well as liabilities of the married couple.

The Hindu Marriage Act, 1955 is a landmark legislation in India that sought to reform and systematically codify the Hindu personal laws on marriage. The Hindu Marriage Act, 1955 (hereinafter referred to as ‘HMA’) not only aims to preserve marriage as a sacred institution but also as legislation that protects the rights of women and individuals in their marriage. It also mirrors the changing dynamics of Indian society towards a better understanding of justice in laws ensuring that the legal system is inclusive of traditional law and customs. The present article gives an overview of the HMA, 1955, alongside explaining current developments in the same.  

Structure of HMA, 1955

The HMA is an Act of the Indian Parliament that was approved on May 18, 1955. The HMA, 1955 was enacted to safeguard the legal position of the Hindu female and male who are legally married. The kind of ceremony that has to happen has not been prescribed by law since there are several ways that a man and a woman can get married as per the Hindu rites.

The HMA, 1955 is divided into six chapters, consisting of 29 Sections in total. The layout of the same has been provided hereunder:

  1. Chapter I: Preliminary
  2. Chapter II: Hindu Marriages
  3. Chapter III: Restitution of conjugal rights and judicial separation
  4. Chapter IV: Nullity of marriage and divorce
  5. Chapter V: Jurisdiction and procedure
  6. Chapter VI: Savings and repeals

Governance of Hindu Marriages before HMA, 1955

It is noteworthy that until the enforcement of the HMA in the year 1955 the marriages under the Hindu Law were controlled and regulated not only by customs, rites and rituals but also by different practices prevailing in different provinces and among different castes and communities. The institution of marriage has always been regarded as highly sacred in the Hindu tradition and has been always viewed as a sacramental bond. Some significant rites and rituals performed during marriage were ‘Saptapadi’ (taking seven steps together) and ‘Kanyadaan’ (giving away the bride). 

The legal framework prior to the year 1955 was rigid and dominated by the Manusmruti and the other Dharmashastras which specified the rights and responsibilities of the husbands and the wives. In these texts, women were portrayed as inferior beings, who were always in need of male support in all aspects of their existence. Divorce was a very rare and uncommon occurrence; separation was even more uncommon and considered sinful. 

However, despite the sacredness of marriage in society, there were several vices that were common, namely child marriage, polygamy as well as dowry system. Wives in marriage had little rights and were severely restricted by law and custom when it came to marital conflicts. It was at this time that there was no universal code meaning that there were injustices and inequalities in marital laws and relations. 

This pre-1955 situation emphasised the need for the codification of laws to eliminate such discriminations and bring the age-old customs to par with modern legal norms of justice and equality leading to the codification of HMA in 1955.

Need for uniform law to govern Hindu marriages in India

There was a growing necessity for having a uniform law dealing with the subject of Hindu marriages in India prior to the enactment of the HMA in 1955. Before this, Hindu marriages were regulated by numerous regional practices, ceremonies and the edicts of the sacred texts resulting in both legal disparities and confusion. This led to a lack of standardisation, which in turn frequently meant that unfair practices could be employed by a man against a woman, and there was often little or no legal redress. 

Among all the proposed reasons for the need for a uniform civil law, one of the most persuasive was the need to encourage gender equality and to be protective of women’s rights. In the previous practices, women were restricted in terms of marriage, divorce and even property rights. To address these injustices, a uniform law meant to protect women from practices such as polygamy, child marriage, and dowry was observed. Thus, the HMA attempted to formalise marriage laws and offer women the right to seek divorce on reasonable grounds as well as maintenance. 

Another compelling factor was the necessity to make a range of socially significant changes and, in particular, improve the legal framework. The differences in customs and practices resulted in confusion and contradictory laws and therefore problems in resolving matters regarding marriage fairly. A uniform law served the purpose of giving legal marriage, divorce, and other related issues a sound connotation which can be administered legally without the chances of exploitation and injustice dominant in previous society. 

Still, it is necessary to note that the transition to a unification of the law was motivated by the set aim of social transformation. Independent India needed a progressive legal framework to embrace the new era of values like equality, justice, and human rights which were nonexistent during British rule. The HMA, 1955 was a progressive step towards this change, which began the process of establishing justice in society by synthesising customary norms with progressive-oriented legislation. 

Thus, the necessity to establish the common law for Hindu marriage was attributed to the interests to protect the rights of an individual, to promote gender equality and to provide the legal framework to reflect the mutating nature of the social structures of the newly emerged independent India.

Purpose of Hindu Marriage Act, 1955

The Act’s principal goal was to update and codify the law governing marriage between Hindus. The following are the purposes of the HMA, 1955:

  1. To bring about unity and standardisation in the laws regarding Hindu marriages thereby enabling the government to enact laws in a more efficient manner. This eradicated issues of ambiguity and inconsistency that result from disparate customs and practices. 
  2. To ascertain the legal framework through which Hindu marriages could be accepted and legitimised. The Act stipulated various procedural formalities and formalities that had to be met in order for a marriage to be rendered valid. 
  3. To address the challenges of gender inequality within the institution of marriage. The Act was intended to safeguard women in various aspects, including marriage, divorce, and maintenance so that they would be given the same legal standing as a man. 
  4. To reform and check conventional practices socially undesirable and inhumane like Child Marriage, Polygamy, Dowry etc. The Act also defined the permissible age of marriage and prohibited bigamy among Hindus. 
  5. To give legal remedies to marital disputes and issues. The Act brought provisions of judicial separation, divorce, and restitution of conjugal rights to give legal remedies to people having marital issues. 
  6. To bring traditional Hindu marriage practices in conformity with the principles of social justice, human rights and equality. The Act aimed at liberalising the nature of marriage to ensure that marriage adapted to the current dynamics of the socio-economic state of India. 
  7. To protect each of the two spouses within a marriage by acknowledging their individual autonomy. It outlined what the husband and wife should do and was aimed at safeguarding the rights of both parties. 
  8. To ease the process of marriage registration and to make the legal proceedings of marriage more efficient. The Act helped in defining clear guidelines and procedures in the legal process and made them more understandable and comprehensive.

Essential features of Hindu Marriage Act, 1955

The following are the features of the HMA,1955:

  1. Forbidding bigamy: The law prohibits a man from having many wives at one time. Section 5 of the Act outlines bigamy, which refers to keeping two living wives at the same time. It means that one cannot marry another person without first dissolving one’s marriage (divorce). If he does the act, then it is unlawful and he will be penalised under Sections 494 and 495 of the Indian Penal Code, 1860 (hereinafter referred to as ‘IPC’).
  2. Marriageable age prescribed: The age of marriage is defined in the statute. Section 5(iii) of the HMA of 1955 states that the bridegroom should be at least 21 years of age and the bride should be at least 18 years of age when they tie the wedding knot. Marriage that is not performed is considered null and void and has no legal force whatsoever. 
  3. Act of 1955 intends to protect the party’s marriage: The restitution of conjugal rights is provided under Section 9 of the HMA, 1955. Restitution of conjugal rights means the right of the parties to cohabit. Conjugal rights means rights arising out of a marital relationship. Section 9 addresses the fact that the marriage partner has the right to occupy the premises in question and protect his marriage. 
  4. Focus on the mental stability of parties getting married: This means that if a person was mentally ill at the time they got married, then their marriage will not be considered valid. The individual must also provide legal consent before becoming wed. The conditions for Hindu marriage regarding mental health and capacity are mentioned in Section 5(ii)(a), (b), (c). 
  5. Significance of ceremonies involved in marriage: This means that if two people get married through the customary rituals and rights then they are legally married. The father has a responsibility to look after and protect any children born after marriage because they have the legal right to exist. 
  6. Registration of Marriage: The Section 8 of the HMA,1955 provides that The registration of marriages is not mandatory but recommended for legal purposes and as proof of the marriage. It aids in legal recognition of the marriage, which is important for several reasons including legal identification and services such as passports, visas, the ability to inherit property and proving or ending a marriage. It affords legal evidence that can avoid litigation of issues pertaining to the legitimacy or existence of a marriage. 
  7. Judicial Separation and Divorce: This Act affords grounds for the parties seeking a separation without an actual legal severance of the marriage under Section 10 of the HMA,1955. These are adultery, cruelty, desertion for a period of not less than two years, and mental disorders.  The concept of divorce was alien to the Hindu traditional law. This Act prescribes the grounds for divorce under Section13; these are adultery, cruelty, desertion for two or more years, change of religion, lunacy, and consent. Every ground has its legal conditions that must be supported by evidence in court. 
  8. Maintenance and Alimony: This Act enables either of the spouses to ask for financial assistance while legal processes like divorce or judicial separation are ongoing under Section 24. This guarantees that the dependent spouse should be financially stable until a decision is made on the case. This Act  under Section 25 also makes provisions for the financial maintenance of the spouse who is unable to maintain themselves post-divorce. Permanent alimony depends on factors like the earnings and the requirements of both spouses, as well as the lifestyle they enjoyed during the subsistence of the marriage. 

Changes brought by Hindu Marriage Act (HMA), 1955 

The following changes were brought in by the HMA, 1955 concerning the way marriages in India were perceived during the time of colonialism under the Britishers: 

  1. Hindu marriages today are less focused on religion. In contrast to being sacramental, it is more the outcome of mutual accord [Sections 5(ii), (iii), 11 to 13, and 7].
  2. Hindu, Jain, Sikh, and Buddhist unions are now legally recognised as legitimate Hindu unions (Section 2). This is considered a positive step for the cause of national unity and integration and towards the establishment of common civil codes for the whole of India.
  3. The difference between the Mitakshara and Dayabhaga schools about the phrase “prohibited degrees of relationship” for the purpose of marriage has been eliminated per Section 3. The Smritis’ strong prohibition on marriage inside the bounds of a Sapinda relationship has been greatly loosened. There have also been a few new degrees of kinship added. So, one can no longer wed someone who was the wife of the other’s brother.
  4. The Act marks the first time monogamy has been practised among Hindus. The Indian Penal Code, 1860 has a penalty for bigamy. The provisions of Sections 5 and 17 of the HMA, 1955 show how significantly the rules and prerequisites for a legitimate marriage have been simplified. 
  5. Now that caste factors for inter-caste and inter-community marriages have been rendered irrelevant, all prohibitions thereto have been lifted.
  6. Although the ancient Hindu law did not specify an age limit for marriage, it is now a requirement that both the bridegroom and the bride have reached the age of 18. (Section 5).
  7. The Act now establishes requirements for legal marriage and does not recognise any specific type of Hindu marriage (Section 5).
  8. The Act does not specify a specific ceremony for a legal Hindu marriage. According to Sections 5 and 7, such a marriage may be performed in line with the customary rights and rituals of either one of the parties.
  9. For the first time, a provision for registering Hindu marriages has been made (Section 8).
  10. Before the Act, a variety of marital arrangements were popular. They are now irrelevant, and the only type of marriage recognised by the parties as being prevalent in their culture will be marriage (Section 7).
  11. The Act provides for judicial separation, divorce, and marriage annulment while removing prohibitions based on gotra, pravara, and Sapinda relationships (Sections 10 to 14).
  12. Provisions for recovery of the parties’ marital rights (Section 9).
  13. Following a legal divorce, either spouse may remarry (Section 15).
  14. Provisions for the validity of children born from unions may later be deemed null, void, or voidable (Section 16).
  15. Provisions for spousal maintenance pendente lite and for court costs (Section 24).
  16. Permanent alimony and support (Section 25).
  17. The care, support, and instruction of young children while legal processes are pending as well as after a ruling has been made (Section 26).
  18. The Act no longer distinguishes between a maiden’s marriage and a widow’s marriage.

Applicability of the Act

Section 2 of the HMA of 1955 provides that the Act applies:

  1. To anyone who practises Hinduism in any of its manifestations, including Virashaivas, Lingayats, and adherents of the Brahmo, Prarthana, or Arya Samaj;
  2. To anyone who practises Buddhism, Jainism, or Sikhism as a religion; and,
  3. Unless it is demonstrated that any such person would not have been subject to Hindu law or to any customs or usages that are part of that law in respect of any of the matters dealt with herein if this Act had not been passed, it shall apply to any other person residing in the territories to which this Act extends who is not a Muslim, Christian, Parsi, or Jew by religion.

The Act was recognized as conservative because it included other religions (Jains, Buddhists, or Sikhs) based on Article 44 of the Indian Constitution while also applying to everyone who is Hindu in any form. Nonetheless, Sikhs have their distinct law for marriage in the wake of the Anand Marriage (Amendment) Bill, 2012. Therefore, unless it can be shown that such persons are excluded from the Act under the customs and usage, this Section applies to Hindus of any form, and those Hindus within the broad interpretation of the word such as Buddhists, Jains, or Sikhs. Indeed, it covers all such persons resident in India who are not Muslims, Christians, Parsis or Jews. The Act only applies to the Hindus who are residing in the Indian territory and who are not otherwise. 

Hindus by religion 

Followers of Hindu religion

Hindus by religion signify the following: 

Those who practise the original religions of Buddhism, Judaism, Hinduism, or Jainism

Any person who is a Hindu, Jain, Buddhist, or Sikh by religion is a Hindu if:

  • He practises, professes, or follows any of these religions; and,
  • He continues to be a Hindu even if he does not practise, profess, or follow the tenets of any one of these religions. 

This was correctly stated by the Supreme Court in V. T. S. Chandarasekhara Mudaliar vs. Kulandaivelu Mudaliar And Others (1962). In other words, even if a person becomes an atheist, rebels against the key doctrines of Hinduism, fails to adhere to standard practices, assimilates a western way of life, or eats beef, the person remains a Hindu. 

Those who had previously converted to the religions of the Hindus, Jain, Sikhs, or Buddhists

A person who loses their Hindu identity by converting to a non-Hindu religion will regain their Hindu identity if they revert to one of the four Hindu religions.

It is also to be noted that a non-Hindu can become a Hindu by means of conversion in the following ways:

  1. If he goes through the official conversion or reconversion ritual required by the caste or group to which he converts or reconverts.
  2. If he exhibits a sincere desire to convert to Hinduism and acts in a way that makes that desire clear, as well as if he is accepted as a member of the group he was welcomed into.

Furthermore, if a person genuinely says that he adheres to the Hindu faith without any ulterior motives or intentions, this amounts to his acceptance of the Hindu understanding of God. When he converts, he becomes a Hindu.

Hindus by birth

A person shall be a Hindu by birth under contemporary Hindu law if:

  1. He was raised as a Hindu by one of his parents who is a Hindu; or,
  2. Both of his parents are Hindus.

Regardless of whether the child is legitimate or not, they are Hindu. If both or one of the parents convert to a different religion after the child is born, the child will still remain a Hindu unless the parents decide to exercise their parental rights and also convert the child to the new faith. 

In Maneka Gandhi vs. Indira Gandhi (1984), the Apex Court determined that Sanjay Gandhi was a Hindu for the following reasons:

  1. His mother was a Hindu, one of the parents; and,
  2. He was raised as a Hindu openly.

If the Central Government does not specify differently by publication in the official gazette, nothing in this Act shall apply to members of any Scheduled Tribe (even if they are Hindus). The majority of the scheduled tribes still follow their traditional laws.

Converts and re-converts

A convert is someone who has converted to Hinduism from another religion other than Jain, Buddhist, or Sikh. A re-convert is someone who was once a Hindu who then converted to another faith before returning to Hinduism. The Act recognises such individuals as Hindus, and their marriages are governed by the HMA’s provisions.

Explanation of Section 2 of the HMA states, “any person who is a convert or reconvert to the Hindu, Buddhist, Jain, or Sikh religion.” 

In other words, the Act also embraces converts and reconverts to the Hindu religion meaning their legal rights and duties are as equally valid as those of Hindus by birth. The categorization extended the Act’s coverage to converts and reconverts. It is meant to ensure that marital issues are legally addressed as comprehensively as possible since the nature of religious identity in India is dynamic. It equally protects the rights of converts and reconverts to Hinduism that those who choose to embrace or come back to the religion of Hinduism are subjected to the same laws as other Hindus with regard to issues of marriage, divorce and others related to it.

Scheduled tribes

The provisions of the HMA, 1955 are not exhaustive as far as the scheduled tribes are concerned. While the Act regulates marriage among Hindus and those who follow Buddhism, Jainism or Sikhism, its applicability to the Scheduled Tribes depends on some conditions. Section 2(2) of the Act excludes members of the Scheduled Tribes from its ambit unless the central government otherwise directs. Proper customs, traditions and personal laws of STs are provided in this exclusion. But if a woman belonging to the Scheduled Tribe wishes to marry under the HMA, or if the personal laws of a particular tribe are in accordance with Hindu law, then the Act would be applicable. This flexibility is expected to accord with the cultural diversity of Scheduled Tribes as well as give a legal framework to those who opt for it.

Important definitions under the Act

Custom and usage

As per Section 3(a) HMA, “custom” and “usage” mean any rule which, having been in force for a long time, is recognized as law in any local area, tribe, community, group or any Hindu family. This is so because for a custom or usage to be recognized under the Act, it must be certain, reasonable and not contrary to public policy. In addition, it should have been consistently practised and perpetrated for a relatively long time to show that it has been accepted as authoritative within the particular group it applies to. It means that although the Act aims at regulating Hindu marriage, it also recognizes that there are differences in practices in different societies. This way it permits recognition of customs and usages as part of the legal system, if they comply with the laid down requirements, enabling the continuity of the culture and traditional practices as part of the Hindu law system within this large structure.

Sapinda relationship

The term “sapinda relationship” has been defined under Section 3(f) of the HMA, 1955 which lays down the relationship up to the third generation through the mother’s side and up to the fifth generation through the father’s side making one a sapinda of another. Specifically, sapinda relationships are calculated as follows:

  • Through the father: Up to the fifth degree of the ascending line.
  • Through the mother: To the third generation in the line of ascent.

For instance, one is a sapinda with their great-great-grandfather on the father’s side and with their great-grandmother on the mother’s side.

Degree of prohibited relationship

Section 3(g) of HMA, 1955 categorises the prohibited relationship in the context of Hindu Hindu marriages. From this Section, it can be deduced that two people are in a prohibited relationship if one is in a direct line to the other or if a wife or husband of a person is in a direct line to the other or third generation to it at least. This implies that marriages within the prohibited degrees are prohibited, including the marriage of parents and children, grandparents and grandchildren, great-grandparents and great-grandchildren, etc. Furthermore, any relationship that is forbidden by law including marrying one’s siblings or half-siblings, uncles marrying nieces, aunts marrying nephews among others are also examples of prohibited relationships under this definition. Restrictions like these are meant to preserve the sanctity of marriage and disallow marriages, which are culturally and socially undesirable within Hindu culture.

Marriage as a concept under Hindu Marriage Act, 1955

Marriage is a sacrosanct and lawful bond between two individuals. It regulates marriages amongst Hindus, Buddhists, Jains and Sikhs and lays down the essentials and formalities for a legal marriage in the country. It focuses on consent, the capacity of the parties involved and compliance with cultural practices and traditions. According to the Act, marriage should be monogamous and people must meet a certain age and should not marry close relatives to uphold societal and ethical standards. Also, the Act covers the area of the rights and responsibilities of the spouses with legal remedies for dealing with marital conflicts and dissolution of marriage, it covers issues of judicial separation, dissolution of marriage, and maintenance. 

Nature of Hindu marriage

Hindu marriage is defined as “a religious sacrament under which a man and a woman enter a permanent union for the physical, social, and spiritual purpose of dharma, procreation, and enjoyment of sexual pleasure.” There are three characteristics of this sacramental nature: 

  1. Permanence: The relationship that a husband and wife have is permanent, and in some cultures, it is said that they will even be married in the afterlife. 
  2. Indissolubility: In essence, once the marriage tie is set, it cannot be undone, making a statement of marriage as a bond that cannot be severed. 
  3. Religious Rites: The union must be sealed through religious rites and practices, thereby establishing a reason as to why it is referred to as holy matrimony. 

Marriage therefore is a highly sacred sacrament in Hindu Indian tradition. In ancient times, the bride did not have any say in the marriage issue; the father just went ahead to choose a suitable man for her. A marriage that was contracted by the parties who were underage or had an unsound mind at the time it was entered into was not declared void. However, in modern laws, the consent of both parties and the sanity of the parties involved are considered to be valid ingredients of a Hindu marriage. Without these, the marriage can be annulled or deemed as never having existed in the first place, therefore not valid. 

Contemporary Hindu marriage involves some contractual aspects that have been tailored with concepts of equality and liberty borrowed from the West. Both the man and the woman must consent to the marriage, which highlights the fact that modern marriages are contractual. Therefore, Hindu marriage today is something in between a sacrament, which is a sacred ceremony and a contract which has more secular aspects involved. It remains religiously sacred but also respects the modern concepts of consent and equality, combining the old-world religion with the new-world laws.

Essentials of a valid marriage

The conditions for a valid marriage under Hindu law have been provided hereunder: 

Both the parties to the marriage should be Hindu

According to section 5 of the HMA of 1955, there are legal requirements and conditions for Hindu marriage, one of which is that the parties to the intended marriage must be Hindus. If one of the partners is a Christian or a Muslim, then this marriage will not be valid under the HMA of 1955. Thus, under the HMA, 1955, a lawful marriage cannot be solemnised if both parties are not Hindus. In Yamunabai Anant Rao Adhav vs. Anant Rao Shivaram Adhav (1988), it was made clear that Section 5 of the Act only permits marriages to be performed between two Hindus.

The parties to the marriage should not suffer from unsoundness of mind, mental disorder, or insanity

Thus, in a Hindu marriage, consent must meet legal requirements as required by Section 5(ii)(a) of the Act of 1995. If the couple cannot provide valid consent due to mental disability, then the other party can consider the marriage annulled. The Act provides in Section 5(ii)(b) that a marriage can be dissolved at the instance of the other party if one of the parties, although capable of giving legal consent, is suffering from a mental disorder in so far as the party is unfit to marry or to have children. 

In Smt. Alka Sharma vs Abhinesh Chandra Sharma (1991), the wife expressed that she became frozen, scared, shrunk and cold on the first night of marriage. She refused to perform the sexual act. She failed to meet the needs and demands of the family members and failed to provide a reason why she had wet the verandah in the presence of the entire family. Hence, the husband sought a legal remedy to bring an end to the marriage. The marriage was annulled by the court. 

It is also worth noting that under Section 5(ii)(c) of the Act, where one of the partners has been subjected to recurrent episodes of insanity, the other partner has the right to seek a divorce. The Marriage Laws (Amendment) Act, 1999 changed this section of the HMA, 1955, and the word “epilepsy” does not exist. For this reason, in the current society, if a person who is involved in a marriage has frequent seizures, the marriage is still valid, and the person has no right to dissolve it. 

The marriage should be monogamous

According to the HMA, 1955, Section 5(i) requires that at the time of marriage, neither party has a living spouse. The marriage is considered void if any of the parties had a spouse who was alive at the time of the marriage. Bigamous marriage is therefore outlawed. A second marriage can be a legal one if the first one has come to an end by death or divorce. 

This Section stipulates that any marriage that has been entered by two Hindus before the coming of legislation is null and void if either of them is already married or has a spouse at the time of marriage. Moreover, if a person marries another person while his first marriage is still subsisting then he can be prosecuted and punished under Sections 494 and 495 of the IPC. 

The parties to the marriage have attained the majority

Section 5(iii) of the Act states that the bride must be at least 18 years of age and the husband must be at least 21 years of age at the time of marriage. Any marriage that is solemnised opposite to these standards shall not be void or voidable. Furthermore, anyone who performed such a marriage could be arrested under Section 18 of this Act with a stiff penalty of up to two years in prison, a fine of up to one lakh rupees, or both. 

The marriage that was performed in violation of the age provisions of Section 5(iii) was held not to be void or voidable in the case of Pinninti Venkataramana vs. State (1976). Nevertheless, Section 18 of the HMA of 1955 makes violating the terms thereof unlawful. 

The parties to the marriage should not be related as Sapindas

A marriage between two people who are associated as Sapindas is void, according to Section 5(v) of the HMA, 1955, if it is solemnised. To put it another way, the husband and wife shouldn’t share the same ancestry. According to Section 3(f) of the HMA of 1955, a Sapinda relationship is one in which a person extends as far as the third generation (inclusive) in the line of descent through the mother and the fifth generation (inclusive) in the line of descent through the father, the line in each case being traced upward from the individual in question, who is to be counted as the first generation. 

Even though the marriage between the Sapindas is null and void, it may still be lawful if there is a valid custom or usage that governs each of them and allows for such a union. Such custom should not be opposed to public policy and immoral. This is because the right to marry is not an absolute right and is subject to certain conditions which maintain the sanctity of the marriage. Otherwise, incestuous relationships may emerge in society. Prolonged practice of a custom does not give it the enforcement of the law if it is immoral. By virtue of Section 18 of the Act, a marriage solemnised between two parties related to Sapindas is void and the parties are subject to punishment, which may include both simple imprisonment for a month and a fine of Rs. 1,000.

The parties should not come under the degree of prohibited relationships

The parties should not be considered to be in a banned relationship under Section 5(iv) of the Act unless their respective cultures’ traditions allow for marriage between them. According to Section 3(g) of the HMA, 1955, two people are considered to be in a banned relationship if they are:

  • If one is the other’s lineal ascendant or
  • If one was married to or had a descendant from the other’s lineal ascendant;
  • If one was the spouse of the other’s brother, father, mother, grandpa, grandmother, or any other relative; or
  • If one of the two is a brother or sister, an uncle or niece, an aunt or nephew, a child of a brother or sister, or the children of two brothers or sisters.

A marriage between two individuals is deemed to be absolutely null where it is within the prohibited category of relationship. However, marriage is lawful so long as there is a lawful custom or usage in accordance with the law regulating both parties. The usage or custom that is being practised should be certain, reasonable and must not be against the public policy. Several cultural practices that make marriage legitimate in the context of prohibited relationships are prevalent in India. For example, marrying off the offspring of siblings is still a common tradition in the region of Kerala. 

In Balu Swami Reddiar vs. Balakrishna (1956), the court held that it was unlawful and against public policy, for a man to marry his daughter’s daughter as was customary among the Reddiars who were well known in the state of Madras. Solemnization of marriage between two persons who are in a prohibited degree of relationship is considered null and void under Section 18 of the Act and the offenders are liable to a fine of one thousand rupees or to imprisonment for one month or both according to the gravity of the crime.

The marriage should be solemnised in accordance with the customary rites and ceremonies

Section 7 of the Act states that a Hindu marriage governed under the provision of the HMA, 1955 is valid if the marriage is performed as per the customs of either party to the marriage. If such rituals and ceremonies include Saptapadi and binding then marriage is considered to be complete once the seventh step is performed. 

As seen in the case of Bibbe vs. Ram Kali (1982), the court declared that performing these ceremonies with the intention of making the couples married does not qualify as performing the legal ceremonies. The ceremonies may vary depending on each person’s traditions. For example, one of the most important non-sacramental rites observed by the Nair caste in Kerala is the giving of a piece of cloth to the bride (pudava kodukal). 

Guardianship under Hindu Marriage Act, 1955 

The guardianship for marriage is outlined in Section 6 of the HMA, 1955. When a bride is required by this Act to get a guardian’s consent for marriage, the following individuals are qualified to do so:

  1. The bride’s mother, 
  2. Father,
  3. Paternal grandpa,
  4. Paternal grandmother,
  5. Brother by full blood,
  6. Brother by half-blood, etc. 

Following the passage of the Child Marriage Restraint Amendment in 1978, guardianship for marriage was abolished. In order to discourage child marriages, this amendment raised the legal minimum age for marriage.

Ceremonies to validate a Hindu marriage

Section 7 of the HMA, 1955, is a crucial provision that addresses the ceremonies required for the solemnization of a Hindu marriage. According to section 7 of the HMA, 1955, certain ceremonies are mandatory for a valid Hindu marriage. It also acknowledges the fact that marriage ceremonies could differ from one community or another within the Hindu religion. Section 7 provides that a Hindu marriage can be entered into according to the customary rites and ceremonies of either party. Such rites and ceremonies normally entail significant rituals that are characteristic of Hindu marriages. 

One of the most recognizable things associated with these ceremonies is the ‘Saptapadi,’ or seven steps. This Section defines that where the Saptapadi is present as part of the marriage rites, the marriage is complete and valid on the taking of the seventh step. This is a ceremony whereby the bride and groom walk around a sacred fire seven times as a symbol of the promises they make to each other as husband and wife with each step signifying a particular promise each party makes to the other. 

Section 7 recognizes that different communities have their own customs and practices with regard to Hindu practices by permitting variations in practices. This gives flexibility to the understanding and implementation of the law to favour different cultural and religious diversities of Hindu groups. 

Registration of marriages under the HMA, 1955

Section 8 of the HMA, 1955 deals with the procedure of the registration of Hindu marriages. Although the Act does not compel marriage registration, it recommends it for legal purposes and record keeping. The Section allows the state governments to make rules with respect to the registration of marriage, which may encompass the appointment of marriage registrars and the process of registering marriage. 

Pursuant to Section 8 of the Act, the state government may make provisions regarding the registration of Hindu marriages under which the parties to any such marriage may cause the particulars of their marriages to be recorded in the Hindu Marriage Register in the manner and subject to the conditions as may be prescribed. This registration is being done to simplify the process of proving Hindu marriages. Any rules made under this provision may be presented to the state legislature. The statements that are made in the Hindu Marriage Register shall be deemed to be true and the Register should be produced before the concerned authorities at the appropriate times. 

The main reason why marriages are registered is to offer legal recognition of marriage which may be useful in circumstances that may involve legal issues of marriage, succession, or rights. It also assists in legal matters where one may need to present formal records such as passports and visas which might call for marital proof. Section 8 seeks to ensure that only valid claims are registered when it comes to marriages hence limiting the number of fake claims that can be made regarding partnerships, which accord legal recognition to marital relationships and ensure that the rights and interests of both spouses are protected. Although registration is not compulsory, it is advisable for legal and administrative reasons due to several reasons. 

The case of Seema vs. Ashwani Kumar (2006) was another historic decision by the Supreme Court of India on the need to make marriage registration mandatory for all religions in the country. The Court further ordered the central and state governments to make rules for the registration of all marriages and said that it is a necessary step in the protection of the rights of women and children, and stopping child marriage, bigamy, and trafficking. The judgement also emphasised that established marriages cause legal problems and no legal recognition of spouses and children. The ruling was intended to give legal certainty, exercise autonomy, enforce marital rights, and enhance responsibility in marital relations.

Restitution of conjugal rights under Hindu Marriage Act, 1955

The HMA of 1955 recognises the restoration of conjugal rights under Section 9 of the act. Regarding conjugal rights, the right to the consortium as provided under Section 9 of the aforementioned Act is recognized and protected by the courts, where a spouse can sue to defend the right. One of the important relief available to the injured spouse under Section 9 of HMA, 1955 is the power to seek maintenance under Section 25 of HMA, 1955. 

The role that conjugal rights play in marriage is well acknowledged in several provisions of Indian personal law. In the narrowest sense of the term, marriage rights mean being entitled to live together with the marital partner and engaging in sexual activity. The wife and husband have to respect each other and have to cohabit, which is perhaps one of the fundamental duties of the marriage. “Restitution of conjugal rights” is a legal provision which allows the offended spouse to compel the partner who walked out of the marriage to resume cohabitation. It is usually associated with the idea of maintaining marriage if any. Marriage sets out a number of marital duties and confers upon each spouse’s legal capacities under all marital laws. It took a long time to complete the clause in the Act because the constitutionality of the Act annexed debates room for contention.

Essentials of Section 9

The HMA, 1955 also defines restitution of conjugal rights as any legal remedy of a spouse living separately from the other spouse without adequate cause under Section 9. Here are the three requisites of Section 9: 

Withdrawal from society 

The first prerequisite for application of section 9 is that one spouse must have withdrawn from the society of the other. This implies there is a deliberate and arbitrary exclusion from the marital bond. The withdrawal can be physical (spatial) in the sense that one of the partners leaves the marriage household, or emotional in the sense that a partner refrains from fulfilling their marital obligations. 

Lack of reasonable cause

For the petition to be successful, the withdrawal has to be proved to be without just cause. Reasonable causes can be cruelty, adultery, or any other misconduct that renders it unbearable for the spouse to live with the other. The party that brings the petition (the aggrieved spouse seeking restitution) bears the burden of proving that the other spouse had no reasonable cause. 

Court’s satisfaction

The court is to be convinced of the bona fide nature of the petition and the reasons for the withdrawal. The court also assesses the circumstances put forward by the parties and whether there is sufficient merit in the application and whether there was any reasonable cause for withdrawal. If the court is satisfied that the withdrawal is actually without lawful cause, the court can order the restitution of conjugal rights with the effect that the respondent has to resume living with the petitioner. 

Purpose and impact of Section 9

The restoration of conjugal rights is useful to maintain the marriage relationship, as well as promote the possibility of the spouses’ reunion. But it has been criticised for fearing that it will be used as a way of compelling women, especially into sexual intercourse. Judges have also focused on the fact that the decree for restitution should not be granted if it is seen as oppressive or unjust. However, the Act also provides other grounds for divorce which includes refusal to comply with a decree of restitution. 

In essence, Section 9 is a statutory provision that fulfils the goal of preserving the sanctity of marriage and offering legal means through which the marital bond between the couple can be re-established in case the withdrawal was unjustified.

Constitutional validity of Section 9

While it was developed to protect the parties in a marriage bond, this clause has been challenged and criticised in many ways. The constitutionality of the provision was an issue of debate in the T. Sareetha vs. T. Venkatasubbaiah (1983) case before the Andhra Pradesh High Court. This lawsuit also shows that the plaintiff alleges that Section 9 of the HMA violates the provisions of Articles 14 and 21 of the Constitution. The Court considered that this clause was especially wild and inhuman to women. This forced cohabitation deprives her of her right to her own body and her freedom in deciding on the matter of sexual conduct. Thus, it can be concluded that a decree of restitution of conjugal rights will infringe upon her rights under Article 21 which guarantees her right to privacy. As cohabitation in marriage is a matter of privacy between the spouses, the aforementioned provision was considered unlawful by the court in 1983. Thus, the state should not interfere with such private choices. 

Nevertheless, the Delhi High Court was of a different opinion regarding the said judgement. The court also pointed out that there are a number of misconceptions regarding Section 9 and that the constitutionality of the Section was an issue that has led to debates. The court has opined that marriage is a religious institution and attempts have been made by the law to preserve the sacredness. Thus, the restitution of the conjugal rights clause was introduced to keep the husband and wife together by removing the power of dissolution from the parties in their marriage. The protection of the marriage tie between two individuals is the main goal of the regulation hence should be considered when ascertaining its constitutionality. 

Thus, the Court concluded that Section 9 does not violate Articles 14 and 21 because it was added as a new reason to file for divorce. Sexual activity should not be considered as the summum bonum because it is one of the elements of the marriage institution, which is based on cohabitation and consortium. 

The Supreme Court’s ruling in the case of Saroj Rani vs. Sudarshan Kumar Chadha (1984) put an end to all disputes. The Delhi High Court’s judgement was accepted in this instance, and the Andhra Pradesh High Court’s decision was overturned. According to the Court, the relevant clause “serves a societal purpose as an assistance to the avoidance of marriage breakdown” and functions as a remedy. Although this remedy may be antiquated in nature, its purpose is to serve as a basis for divorce should the parties in question refuse to make such reparation. In addition, the Court believed that it was up to the legislature to repeal Section 9 as a remedy, not the courts. Thus, in this historic decision, Section 9 was found to be constitutionally legitimate. The judgement stressed that whilst Section 9 aims at preserving marriage, it cannot be so used as to compel an uninterested spouse. The Court emphasised that enforcement of conjugal rights must not be crude and oppressive bearing in mind the contemporary social trends and the doctrines of liberty and personal freedom as enshrined under the Constitution of India. 

Finally, while affirming the constitutional provisions of Section 9, the Supreme Court highlighted that the implementation of Section 9 should correspond to the principles of fairness, reasonableness and the fundamental rights enshrined in the Constitution. The Court advised that decrees for restitution of conjugal rights are not a formality and should uphold and review the circumstances or reasons for withdrawal from matrimonial society to determine justice and equity in matrimonial cases. This judgement highlighted that there is a need to strive for harmony in recognizing the principles of marital unity and the rights of individuals under Hindu law.

Judicial separation under Hindu Marriage Act, 1955

The HMA of 1955 under Section 10 offers a legal remedy specifically to those spouses who do not want a divorce but want to live separately. While divorce is the legal proceeding that severs the marital tie, judicial separation permits the couple to be physically separate while still technically being married. This legal status acknowledges the fact that there may be circumstances when the partners can no longer live together, but they are not quite ready or willing to dissolve their marriage completely. 

Grounds for seeking judicial separation 

Section 10(1) stipulates that a decree of judicial separation can be sought on all the grounds on which the decree of dissolution of marriage i.e. divorce can be sought. The following are grounds for seeking judicial separation:

  1. Cruelty: One of the causes of judicial separation is cruelty. This includes physical or emotional abuse that makes it almost impossible or dangerous for one partner to continue living with the other. Courts define cruelty in a liberal sense to encompass any unlawful violent conduct or mental abuse perpetrated by one partner on the other partner. 
  2. Adultery: If one of the spouses had consensual sexual intercourse with another person outside of marriage, the aggrieved party seeks judicial separation. Infidelity is viewed as a violation of the marriage covenant and as such it can cause severe harm to the marriage. 
  3. Desertion: Abandonment is where one spouse leaves the other without reasonable cause or permission. The desertion has to be for a continuous period as provided for in the law governing judicial separation. 
  4. Conversion: In case one of the spouses adopts another religion and thus ceases to be a Hindu, then the other spouse can seek a decree of judicial separation. 
  5. Unsoundness of mind: These cases include a situation where one of the spouses is incurably of unsound mind or has been suffering continuously or intermittently from a mental disorder of such a kind and to such an extent that the petitioner cannot reasonably be expected to live with the respondent. 
  6. Renunciation of the world: If a spouse renounces the world by joining a religious order.
  7. Presumption of death: If a spouse has not been heard of in seven years or more by people who would normally hear of the respondent if they were alive.

Given below are further grounds that are available to the wife only and not the husband:

  1. Pre-Act polygamous marriage 
  2. Rape, sodomy, or bestiality
  3. Non-resumption of cohabitation and repudiation of marriage

Effects of judicial separation

By getting judicial separation under the HMA, 1955, various repercussions occurred on the marriage relationship and the parties. First of all, it provides the legal acknowledgement of the spouses’ desire to stay apart while remaining married. This allows either of the partners to seek maintenance ensuring that there is economic support during the time of separation. 

Secondly, judicial separation establishes the rights of custody of the children taking into consideration the welfare and well-being of the children. Thirdly, it restricts remarriage, as no one can marry another person in this case as both are legally married to each other. Judicial separation does not end the marriage, it does offer a legal structure to deal with marital conflicts and the impact of the separation. In other words, it is a legal remedy under the HMA that addresses the need for bona fide spouses to be separated while at the same time recognizing some rights and duties of spouses.

Petition of judicial separation

Under Section 13 of the HMA, 1955, any spouse can file a petition for judicial separation to the family court. This petition should contain basic information like the names and addresses of both spouses, the date and place of marriage, and details on why the marriage should be annulled like adultery, cruelty or desertion among others. The alleged grounds must also be stated and be accompanied by details of such incidents or any other evidence the petitioner may have. 

Also, it should specify the relief prayed which may be judicial separation, and any related orders for maintenance or custody of children. Besides the petition, an affidavit confirming the truth of the allegations must be attached to it. Upon filing, the court shall consider such a petition and the evidence produced before deciding to grant a decree of judicial separation.

Void and voidable marriage under Hindu Marriage Act, 1955

Void marriages

As we have seen, Section 11 of the HMA, 1955 provides the circumstances under Section 5(i),(iv) and (v) in which a marriage is considered a nullity, that is, it did not exist in law. Understanding these grounds is crucial as they delineate circumstances where a marriage is legally invalid from the outset. 

Grounds for void marriage

Bigamy

In section 5(i), it is stated that a marriage is void if either of the parties has another living spouse at the time of marriage. Bigamy refers to the state of getting married to another person when the first marriage is still valid and legal and it is an offence in India. This section seeks to defend monogamy in Hindu marriages and avoid legal complications and unfairness associated with multiple legitimate marriages. 

Prohibited Relationship

Section 5(iv) holds marriage null and void if such marriage is within the prohibited relationship as defined in Section 3(g) of the Act. It is illegal to intermarry with close relatives such as ancestors and descendants, siblings, uncles and nieces, and aunts and nephews. These relationships are known as incestuous and are not allowed to be practised in order to uphold order and morality within Hindu society. 

Sapinda Relationship

Section 5(v) requires that a marriage be deemed null and void if the parties to the marriage are within the sapinda relationship as provided in the Act under Section 3(f). Sapinda relationships refer to consanguinity which involves degrees of relationship by blood from the father’s side up to five generations and three generations from the mother’s side. Marriages within these restricted degrees are considered void to discourage consanguineous marriages that cause genetic problems or social issues. 

Effect of void marriages

When a marriage is declared void under Section 11 of the HMA, 1955, it has several significant effects:

Nullity of Marriage

An invalid marriage is one that is null and void ab initio, which simply means that the marriage was never legally valid from the beginning. The two parties are held to never have been lawfully married, and therefore their status does not change. 

Legal Consequences

There are no marital rights or duties that either party can claim as the marriage is considered void from the outset. 

Children’s Status

In India, the children born out of the void marriage are recognized to be legitimate. They have had legal recognition and claim to inheritance, succession and other privileges that children of valid marriage receive. 

No Need for Divorce

It is to be noted that while valid marriages require dissolution through divorce, a void marriage does not mandate a legal separation. The parties can simply go to court and decide that the marriage was null and void and therefore does not require a formal divorce.

Voidable marriages

According to Section 12 of the HMA, 1955, there are grounds on which a marriage can be declared voidable, which means that the marriage is initially legal but can be dissolved at the instance of either spouse by petition to the court. A voidable marriage is a marriage the parties are legally capable of performing unless one of the parties has filed for annulment and received a decree of divorce. 

Voidable marriages, on the other hand, are recognized as marriages until annulment is sought through legal action. This provision enables an individual to annul a marriage on account of grave difficulties that adversely affect the validity of consent and capacity, thus providing legal redress for the nullification of marriage without compromising the legitimacy of children from the union. 

Grounds of voidable marriages

Unlike void marriages, voidable marriages are technically valid until a court nullifies them. Below are the grounds specified in Section 12(1): 

Non-consummation due to impotency

If any of the parties has failed to perform the marriage due to impotence then it may be considered a reason for the marriage to be annulled. Also, it should be noted that impotence must be at the time of marriage and that it cannot be cured. In this context, the word impotence is used in its legal sense, meaning that one of the partners is physically unable to consummate the marriage through sexual intercourse. This ground appreciates the fact that consummation is one of the important ingredients of marriage and lack of this aspect can be grounds for annulment. 

The petitioner needs to prove the case of impotence which if proven then the court can pass a decree of nullity which means the marriage was never valid. They give an individual an opportunity not to be confined in a marriage that lacks one or the other requirement.

Mental disorder

If either party to the marriage is affected by a mental disease to such an extent so as to be incapable of sexual intercourse and propagation of offspring, the marriage can be annulled. The HMA, 1955 particularly prohibits those with severe, incapacitating, and persistent mental illnesses from getting married since they would be unsuited for marriage and childbearing. Additionally, it states that the person must be unable to provide legal permission as a result of mental disease. A marriage that deviates from the norm, however, can only be annulled at the request of the other party, who must file a petition for nullity and bear the burden of establishing the other person’s mental condition.

Consent by force or fraud

This means that the marriage can be annulled if either party did not validly consent to the marriage because of coercion, fraud, or was of unsound mind when entering into the marriage. In cases where the consent to the marriage was forced, influenced by force or fraud, the marriage may be declared voidable. As per Section 5(i)(c), the marriage is voidable where the petitioner’s consent was obtained by force or fraud as regards the nature of the ceremony or any other part of the marriage with the respondent. 

The coercive force consists of the threat to use force and the use of force. The main element of fraud is deceit. Relevant information means all the facts and circumstances which can be liable to influence or convince a party to grant or withhold consent to the marriage. Therefore, simple lying is not a fraud. Likewise, not all falsehood or deceit is fraudulent in nature. Therefore, the grounds for annulling a marriage according to Section 12 are not limited to concealing the fact that the husband has been married to another woman. 

Prior pregnancy

If the wife was pregnant with another man’s child at the time of the marriage and the man did not know about it, then it can be considered as a reason for annulment of the marriage. According to the HMA, 1955, pregnancy by another man at the time of marriage is considered a valid ground for annulment of marriage. If the wife was pregnant by another man at the time of the marriage and the husband had no knowledge of it, he can approach the court to have the marriage annulled. This has the effect of guaranteeing that the consent to the marriage by the husband was not induced by fraud in regard to such a matter. 

These grounds are aimed at securing the rights of the individuals who agree to enter into marriages and guarantee that marriages are voluntary and suitable for the co-parties. Voidable marriages, on the other hand, are valid until declared null and void by a court of law through the application of the injured party. It is imperative that people seeking legal redressal concerning the annulment of marriage under the HMA comprehend these grounds.

Section 12(2) of the HMA, 1955, outlines circumstances under which the court will not entertain any petition for annulling a marriage. Firstly, in cases referred to in clause (c) of subsection (1), no petition may be presented to the court after the expiration of one year from the termination of coercion or the discovery of the fraud, or if the petitioner cohabited with the spouse against his or her will after the expiration of the coercion or the discovery of the fraud, respectively. 

Second, for reasons listed in clause (d) of subsection (1), a petition will not be entertained unless the court is satisfied that the petitioner had no knowledge of the facts set out in the petition at the time of marriage, the proceedings were commenced within one year of the Act coming into force for marriages before the Act and for those married after the Act within the one year from the date of marriage and there has been no cohabitation with

Effect of voidable marriages

In the case of a voidable marriage under Section 12 of the HMA, 1955, the marriage is initially treated as legal but can be dissolved by the court on an application by either party. The effects of voidable marriages are given as follows:

Conditional Validity 

As long as the marriage has not been dissolved in a court of law, then the marriage remains legal. This means that till the time of annulment, the parties are in a legal marriage and may have some of the marital benefits/accompanied by marital responsibilities. 

Annulment Process

For the purpose of annulling a voidable marriage, one of the parties has to petition the court in writing, referring to one of the following grounds in Section 12. The court will then ascertain the evidence and circumstances to determine whether to nullify the marriage.

Legal Consequences

When a marriage is annulled, it is as if the marriage never occurred in the eyes of the law. This implies that any privileges or responsibilities that are associated with marriage including owning property, inheriting property or a spouse’s status are discharged. 

No Need for Divorce

Indeed, while divorce proceedings involve the termination of a once valid marriage, annulment of a voidable marriage is actually the rendering of what has never legally existed at all. Hence, one does not need to go through the process of filing for divorce in order to dissolve the marital bond. 

Understanding these effects is important for people who are in marriages, which fall under the category of voidable marriages as defined in the HMA. This brings out legal procedures enabling the annulment of marriage based on the grounds provided under Section 12 in order to enhance legal compliance and conservation of rights in marriage.

Divorce under Hindu Marriage Act, 1955

Divorce is a concept that does not need any preface in today’s world. It refers to a bitter and ugly dissolution of a marriage. It should be noted that while divorce has been defined as the legal process by which marriage is dissolved or terminated, the process entails much more of that. 

Today, it is rather common to hear that many couples decide to divorce, and it is rather surprising that most of them do it rather soon. In the early Vedic Hindu civilization, marriage was considered more of a ceremony than a contract between two individuals. It was deemed so moral, or as if it emanated from the gods, to have such a certain end and beginning. Hence, divorce or separation of the partners in a marriage was not allowed by the ancient Hindu law in India. 

The provisions for divorce were introduced through the HMA that was passed in the year 1955 and it was the first time that Hindu law recognised divorce. In this case, there was no law concerning divorce before the statute was made. It defines the circumstances under which any spouse may apply for the nullity of marriage upon proving the grounds. 

Hindu law does not allow any person to seek a divorce unless the court has permitted it. Section 10 of the HMA of 1955 provides for the grounds for judicial separation as well as Section 13 for divorce. It was found that some marriages are null and voidable under Sections 11 and 12 because the marriages in question did not meet the requirements under this Act for the legal validity of marriage or contained the defects stipulated in Section 12. 

In India, the HMA of 1955 specifies that eight grounds for divorce are available in Section 13, which are fault-based. Some of them include adultery, desertion, cruelty, insanity, venereal disease, and conversion or rejection of the world which are based on guilt theory and are considered as divorce fault grounds. To obtain a divorce, either party must prove at least one legal ground for dissolution of marriage.

Divorce based on fault is another matrimonial relief contained under Section 13(1). The opposite party may seek dissolution of the marriage if they can prove any form of misconduct from the side of the other party. The HMA of 1955 was amended in 1964 by introducing Section 13(1A) which provides an opportunity of divorce to both the husband and the wife. The law relating to marriage was amended in 1976 and made the grounds specified for judicial separation and for divorce similar to each other. 

Furthermore, Section 13B incorporated in the Marriage Laws Amendment Act, 1976 provides that the parties to the marriage could seek divorce on the basis of mutual consent meaning the couple could seek a divorce without having to prove fault of either of the parties as to be proved under Section 13. It is thus relevant to find out how legislation on marriage and divorce impacts those two legal procedures. The introduction of the concept of irretrievable breakdown of marriage thus poses questions as to its necessity and importance in divorce legislation. 

Grounds for divorce 

A matrimonial relationship (marriage) cannot be ended or dissolved for a reason not included in the HMA of 1955, the Court said in Rajender Bhardwaj vs Mrs Anita Sharma (1992). The grounds for divorce under the HMA, 1955 have been provided hereunder:

Adultery

The HMA, 1955 recognizes adultery as a ground for divorce under Section 13(1)(i). If a husband or a wife willingly has intimate relations with another individual other than the spouse, the aggrieved spouse can legally seek divorce on the basis of adultery. The petitioner must provide clear evidence that the respondents have been involved in an adulterous affair. Adultery violates the sanctity of marriage whereby both parties promise to be loyal to each other. This ground emphasises the importance of loyalty and fidelity in marital relationships, providing a legal remedy for those affected by such betrayal.

Cruelty

According to the shifting social and economic conditions, the legal definition of cruelty has changed over time and from society to society. Cruelty is a significant basis for divorce under Section 13(1)(ia) of the HMA, which also lists other grounds. Cruelty is one of the 12 grounds for divorce listed in the Special Marriage Act, 1954 and one of the eight grounds listed in the Muslim Marriage Dissolution Act, 1939 for a woman who has been married to a Muslim male to receive a divorce. 

The Supreme Court noted in the case of Ravi Kumar vs. Julmidevi (2005) that cruelty has no definition and cannot be defined. It can come in an unlimited variety, much like in marital situations. In other words, the definition of cruelty is highly individualised. It may change depending on the setting, the time, and the economic and social circumstances of the people. Cruelty is not a static notion that’s why there can be no straight jacket formula to define the same. What is cruelty today may not be considered cruelty after some time. It is a subjective notion and depends on each person’s level of tolerance.

Desertion

Desertion is defined as the willful permanent forsaking and abandonment of one spouse by the other without the other’s permission and without reasonable cause by Sub-section (1)(ib) of Section 13 of the HMA of 1955. It is a complete rejection of the marriage’s responsibilities. In order to commit the crime of desertion, the deserting spouse must meet two requirements:

  1. The factum of separation; and,
  2. The intention to bring cohabitation permanently to an end (Animus Deserendi).

Conversion

Under the HMA of 1955, conversion implies that one has adopted some other major religion that cannot be regarded as a Hindu religion. Only a divorce order based on one of the grounds listed in Section 13(1)(ii) of the Act may dissolve a legally binding marriage, whether it was performed before or after the Act’s implementation. The other person “has ceased to be a Hindu by conversion to another religion” is one of the grounds under Section 13 (1)(ii). A marriage consummated in accordance with the Act may not be annulled other than on the grounds permitted under Section 13 of the Act.

Insanity

In Smt. Sona vs. Karambir (1995), a board of doctors stated that the wife had intermediate-range mental retardation, that her mental unsoundness was incurable, that she was unable to fulfil her marital responsibilities, and that she offered completely false and nonsensical responses to questions. Her case was determined to be covered by Section 13 (1)(iii) of the HMA of 1955.

Leprosy

In accordance with the HMA of 1955, one spouse may seek a divorce on the grounds that the other suffers from “virulent and incurable” leprosy. The duration of “virulent and incurable leprosy” has been removed by means of the 1976 Amendment to the HMA, 1955. 

This Sub-section has been omitted by the Personal law (Amendment) Act, 2019, reflecting changes in societal attitudes and medical advancements in the treatment and management of leprosy.

Venereal disease 

Venereal diseases are those diseases that are most easily transmitted through sexual contact, including anal, oral and vaginal intercourse. Therefore, the current matrimonial laws of the majority of Indian groups and the HMA under Section 13(1)(v) recognise venereal disease as a ground for divorce and judicial separation. It comprises several communicable diseases that are predominantly acquired through sexual contact. 

Renunciation of world 

According to Section 13(1)(vi), if one spouse joins a religious order and renounces the world, the other spouse may submit a petition for divorce. For filing for divorce on this ground, the following two requirements must be met:

  1. The respondent must have given up on life in general (Sanyasa),
  2. He must have joined a religious organisation.

A person is considered to have joined a religious order when they participate in certain rituals and ceremonies that are required by their religion, according to the ruling in the case of Sital Das vs. Sant Ram and Ors (1954)

Presumption of death 

According to Section 13(1)(vii) of the HMA, 1955, if a person has not been reported as being alive for at least seven years, they are deemed to be dead. Under all matrimonial laws, it is the petitioner’s responsibility to show that the respondent’s whereabouts have not been known for the required amount of time. Sections 107 and 108 of the Indian Evidence Act of 1872′s presumption of death premise serve as the foundation for this clause. In Nirmoo vs. Nikkaram (1968), it was decided that if a person marries someone else without obtaining a divorce decree after supposing their husband has passed away, their spouse may later contest the validity of the second marriage.

Wife’s special grounds for divorce 

Besides the grounds that are available to both the husband and the wife, the Hindu woman has been provided with few extra grounds for divorce or judicial separation under the HMA of 1955. Two special grounds for divorce were first provided to wives under Section 13(2) of the HMA of 1955. Wives gained two new reasons for blaming under the Marriage Laws The Amendment Act of 1976. Therefore, only a Hindu woman can sue for dissolution of marriage on any of the four special causes.

  1. Pre-Act polygamous marriage.
  2. Rape, sodomy or bestiality.
  3. Non-resumption of cohabitation after a Decree/Order of Maintenance, and
  4. Repudiation of marriage.

Irretrievable breakdown of marriage under Hindu Law

As described in legal terms, when two married people no longer have affection for each other, they can no longer bear any good or bad feelings toward one another; in other words, the marriage has irretrievably disintegrated. There is no sign of acceptance, love, worry and respect anymore. When both partners do not desire to stay together, where there is no relationship between them, and where there cannot be any chance of them coming back together, it can be said that the marriage has irretrievably broken down. However, it is a noteworthy fact that Hinduism as a religion never approved of the concept of divorce till the HMA was enacted in 1955. 

Today, every person who is married has the legal capacity to seek a divorce on one of the established grounds. Various causes of divorce are ones that are fault-based, no-fault, and mutual consent. Yet, the matter in question is the dissolution of a marriage by the utter and irreparable destruction of the marriage by one party, which is, again, a no-fault basis. This aspect is provided under Section 13(1A) HMA to judicial separation and non-restitution of conjugal relationships. However, it still has not been enumerated as a ground for divorce. 

“We are absolutely convinced that the marriage between the parties has irretrievably broken down because of incompatibility of temperament,” the court stated in Sangamitra Ghose vs. Kajal Kumar Ghosh (2007). In fact, the emotional foundation of the marriage has completely vanished. Because there is no possibility of saving the marriage and the matrimonial link between the parties is beyond repair, it is in everyone’s best interests to acknowledge this truth and proclaim what is already defunct de facto defunct de jure.

In the case of Navin Kohli vs. Neelu Kohli (2006), the Supreme Court argued for the legislature to include an irretrievable breakdown of marriage as a basis for divorce under the HMA. It stated, “undoubtedly, it is the obligation of the Court and all concerned that the marriage status should, as far as possible, as long as possible, and whenever possible, be maintained, but when the marriage is totally dead, in that event, nothing is gained by trying to save it. The emotional foundation of the marriage has completely disappeared in the current instance. The marriage is beyond repair, and it is in everyone’s interests and the public’s to acknowledge this truth and declare what is already defunct de facto to be defunct de jure. Maintaining the fake encourages immoral behaviour and may harm the public interest more than dissolving the marriage contract does.”

Exercising of inherent powers under Article 142 of the Indian Constitution by the Supreme Court on matters of divorce

According to Article 142 of the Constitution, the Supreme Court has the inherent authority to see that justice is served, and no court is barred from rendering justice to parties that come before it due to a lack of jurisdiction or legal authority.

In many cases, the Supreme Court has used its inherent authority. For example, in Manish Goel vs. Rohini Goel (2010), the court declared that “the marriage is totally unworkable, emotionally dead, beyond salvaging, and has broken down irretrievably even if the facts of the case do not provide the ground in law in which the divorce could be granted.”

In Rishikesh Sharma vs. Saroj Sharma (2006), the court held that there was no point in compelling the appellant and respondent, a married couple, to live together if they had been apart for more than 17 years.

In Sukhendu Dass vs. Rita Mukherjee (2017), the husband’s application for a divorce was rejected because he failed to prove cruelty by his wife. Other than setting aside the appeal, the top court held that an irretrievable breakdown of a marriage cannot be a basis for dissolution. The wife never presented herself before the trial court after filing a written statement. She was also absent from the High Court and the Supreme Court hearings as well. The Court noted the aforementioned behaviour from her and stated that it suggested she was not interested in cohabitating with her husband. Referring to the Samar Ghosh vs. Jaya Ghosh (2007), the bench stated that refusing to take part in the divorce process and compelling the appellant to remain in a dead marriage would both be considered acts of mental cruelty.

The Supreme Court alone has the authority to grant a divorce order based on the irretrievable dissolution of a marriage, and no other court has this authority, the court further held. It is clear from the judgments above that the Supreme Court of India and the Law Commission of India have periodically advised the legislature to change the HMA of 1955 to include an irretrievable breakdown of marriage as a reason for divorce.

From 28th September 2022 onwards, the 5-judge bench headed by Justice S.K. Kaul along with Justices Sanjiv Khanna, A. S. Oka, Vikram Nath and J. K. Maheshwari commenced with the hearing of Shilpa Sailesh vs. Varun Sreenivasan (2022), where its indulgence is requested to evaluate the scope of its authority to dissolve marriages under Article 142 of the Constitution of India. The case remains ongoing. 

Alternate relief in divorce 

Section 13A of the HMA, 1955 offers an alternate relief in divorce cases. When a party has applied for a divorce on any of the grounds enumerated in Section 13 and the court determines that it is in the best interest of the parties to grant judicial separation instead of divorce except in cases mentioned under Section 13(ii), (vi), (vii). This provision makes it possible for the court to provide some form of redress to the petitioner even in circumstances where the court will not have sufficient reasons to grant a complete dissolution of the marriage as it permits judicial separation which is a legal process that separates the parties while remaining married. 

Judicial separation allows the parties to resolve their needs and situation with respect to the maintenance and custody of children without dissolving the marriage. This Section seems to be less rigid when it comes to marital disputes, as it acknowledges that in some instances, it would be best for the couple to part ways but remain legally married.

Divorce by mutual consent

The HMA was passed in 1955 and was amended in 1976 the amendment introduced Section 13B which was the ground for divorce by mutual consent. As per Section 13B(1) it is mandatory for the parties to present the petition for divorce together. As is the case with Section 13B(2) which provides that both parties must serve the motion for hearing. 

However, under Section 13B of the HMA of 1955, it is important to note that a plea for divorce under Section 13 of the said Act may be converted to a petition for divorce by mutual consent of the parties. Even at the appellate level, the court may permit the divorcing parties to amend a petition for relief under Section 13 or any other section to be turned into a petition for divorce by mutual consent. These conversions of petition cases include Padmini vs. Hemant Singh (1993) and Dhiraj Kumar vs. State of Punjab (2018). In these cases, the court recognised that both parties had later consented to seek a divorce with mutual consent. The court permitted the change of the original Section 13 petition to a Section 13B petition. The decision emphasised the necessity of mutual agreement and both spouses’ willingness to end the marriage amicably. The court emphasised that such a conversion is acceptable to enable a smoother and less contentious separation, consistent with the spirit of the 1976 amendment.

Other important provisions related to divorce under the Act

Section 14

Section 14 of HMA, 1955 deals with limitations for filing for a divorce. This Section limits the number of times one can file for divorce stressing the need to preserve marriages. It provides that a party cannot file a petition for divorce without having been married for a period of not less than one year. The purpose of this provision is to allow the couple adequate opportunity to attempt to reconcile and solve their marital problems before deciding to dissolve the marriage permanently. The reason behind this condition is to protect the institution of marriage and give couples the impetus to seek all possible ways of solving marital problems. 

Section 14 deals with the prevention of improper use of divorce petitions by people who may want to dissolve their marriages hastily. The rationale for fixing a minimum period of marital duration before filing for divorce mainly centres on the need to ensure stability in marriage and discourage people from filing for divorce on trivial or hasty grounds. This Section highlights that the Act has a more extended goal of safeguarding the institution of marriage and promoting family stability by making it clear that divorce cannot be sought casually but as the last resort when marriage has proven beyond fixing.

Two exceptions to this rule are where the proposed marriage can reasonably be regarded as an exceptional hardship and the marriage has reached a point where it cannot be salvaged. This approach represents the tone of the Act that seeks to uphold the sanctity of marriage while at the same time recognizing legal ways through which the union can be dissolved upon meeting certain conditions. 

Section 15

Under the HMA, 1955, Section 15 deals with circumstances under which the parties whose marriage has been dissolved can get remarried. This Section states that where a marriage has been dissolved legally through a decree of divorce and there is no right of appeal against the decree or where there is a right of appeal but the time for appeal has elapsed without filing an appeal or if an appeal has been filed and has been dismissed, then either party can marry another person. 

It makes sure that a person who has been divorced in any marriage cannot be confined in the legal boundaries and he/she is free to remarry. In so doing, it ensures that the dissolution of the first marriage is complete and that no subsequent legal proceedings can interfere with the status of the parties concerned. This clarity also assists in the recognition of the legal rights of the new spouse and any children from the new marriage. 

In other words, Section 15 serves as an enabler to divorced people of re-marriage in the stipulated legal conditions that effectively and conclusively discharge any responsibilities of the previous union before entering into a new union. This provision upholds the principle of finality of divorce while respecting the rights of the involved individuals to remarry and start anew.

Legitimacy of children born out of void and voidable marriages

Section 16 of the HMA, 1955 deals with the question of the legitimacy of children born out of void or voidable marriage. It provides that children born of a marriage that is declared void or voidable under the Act are still legitimate children and are protected. In particular, Section 16(1) states that it does not matter whether a marriage is void or voidable, the children of such marriages are legitimate if the marriage was conducted in good faith. This provision is very important because it protects the status of children and their rights and ensures that they do not suffer due to the annulment of a marriage of their parents. 

Section 16(2) confirms this by saying that even if the marriage was annulled, the children born out of it are still legitimate. It also makes certain that children born of such a marriage will be considered to be legitimate and have the same status as children born of a valid marriage even if the marriage was later declared to be invalid. The Section reinforces the idea that children’s welfare should not be made to suffer because of the legal status of the parent’s marriage and calls for children’s right to inheritance and social recognition. 

Altogether, Section 16 is comprehensible as the manifestation of the compassionate approach to family law, which aims at preventing children from void or voidable marriages from becoming outcasts or deprived of their rights equal to the children with parents who are married validly.

In Revanasiddappa vs. Mallikarjun (2011), a special bench of the Supreme Court composed of Justices G.S. Singhvi and Asok Kumar Ganguly made the observation that regardless of the relationship between parents, the birth of a child out of such a relationship must be viewed independently of the relationship between the parents. There is no doubt that a child born from such a relationship is innocent and is entitled to all the rights and privileges accorded to a child born from a legally binding marriage. Section 16 of the Hindu Marriages Act of 1955 (amended) is based on this principle. 

While noting that Section 16 of the HMA of 1955 declares children of a void or voidable marriage to be legitimate but expressly states that they are only entitled to claim the property of their parents and not of any other relation, the Supreme Court ruled that such children shall be considered on an equal footing with the legitimate offspring of valid marriages without any discrimination and be entitled to all rights in the property. The only restriction is that such children are not permitted to request partition prior to their parents’ passing.

Bigamy under HMA, 1955

According to the HMA, 1955 bigamy means entering into a second marriage while the first marriage is still existing and the spouse is alive. Section 5(i) requires that the parties do not have any living spouse at the time of marriage. This condition makes sure that any marriage entered under the Act will be of one man to one woman and such a man or woman cannot be in another marriage simultaneously. 

The reason for having such stringent provisions is to maintain the sanctity and institution of marriage among Hindus. Bigamy is not only a violation of marital trust but also a criminal act that erodes the stability of society. By making the law very rigorous it aims at preventing people from practising polygamy which is deemed as having many wives or husbands at the same time. 

Hence, the HMA is void of bigamy following the monotheistic principle of Indian culture. The legal consequences are very severe for violators and include imprisonment and fines, according to the Indian Penal Code. This legal framework strengthens the adherence to one spouse, keeping marriage moral and socially acceptable.

Punishment for bigamy

The penalty is stipulated under Section 17 of the HMA, which deals with the penal Sections 494 and 495 of the IPC. These Sections address the consequences of bigamy:

Section 494 IPC

This Section provides that any person who marries another person during the lifetime of his or her spouse shall be subjected to imprisonment of up to seven years and shall also be liable to a fine. The second marriage must take place while the first marriage is still in existence and has not been annulled, the accused must have knowledge that their spouse is still alive. 

Section 495 IPC 

This Section applies where the second marriage is entered into with intent to conceal the existence of the first marriage. The punishment is more severe, with imprisonment of up to ten years with concurrent liability to a fine. This Section gives a description of how when there is deception, the crime is considered more serious. 

Maintenance under Hindu Marriage Act, 1955

The HMA, 1955 also shows that the topic of spousal maintenance is very complex indeed. Often some women are accused of trying to swindle money out of their husbands by asking for alimony. As stipulated in Section 24 of the HMA of 1955 either party can seek inter alia maintenance pendente lite, that is support during litigation. Furthermore, Section 25 of the Act highlights the conditions under which permanent alimony can be granted. The amount of money that a husband is legally required to give his wife under some circumstances is known as maintenance. 

Maintenance may be required to be paid during the subsistence of the marriage but also during a divorce. The first condition of the maintenance is to determine whether the party receiving the maintenance cannot provide for him or herself. Unlike some of the Indian matrimonial laws, none of these acts give the amount to be paid as maintenance or the expenses to be incurred for this purpose except the Divorce Act, 1869.

Section 24 of the HMA, 1955 

Section 24 of the HMA, 1955 pertains to maintenance pendente lite and expenses of proceedings. If either spouse cannot maintain himself or herself during the pendency of the case they may be granted maintenance pendente lite and costs under Section 24 of the HMA of 1955. 

Section 24 empowers the court to direct any of the spouses who are unable to pay for their own expenses to contribute towards the cost of the proceedings and also interim maintenance. It can be relied upon in any Act procedure, including one aiming to get a decree of nullity referred to in Section 11 of the HMA, 1955. 

Other expenses relevant to the proceeding include the cost of the attorney and other monies for postage, clerical work, and travel expenses. Before making an order under Section 24, the court shall regard the financial means of both parties. Regardless of whether such a spouse features as the primary applicant in the main proceeding, this rule remains relevant. The only criterion that has to be considered before determining the maintenance pendente lite is whether the claimant is capable of maintaining himself or not.

As was observed in the case of Chitra Lekha vs. Ranjit Rai (1976), the purpose of Section 24 is to give financial support to the indigent spouse so they can maintain themselves (or themselves) while the proceedings are ongoing and have enough money to defend or continue the litigation so that the spouse does not disproportionately suffer in the conduct of the case due to a lack of funds.

Under Section 24 of the HMA, 1955, the court cannot refuse to award interim maintenance and the cost of the proceedings on the grounds that the applicant is unlikely to prevail in the dispute. Section 24 envisions a brief investigation rather than a thorough trial. According to the proviso attached to Section 24, the application for the payment of interim maintenance and proceeding expenses must, in most cases, be resolved within sixty days of the date notice was served on the party.

Section 25 of the HMA, 1955

Whenever a decree of restitution of conjugal rights, judicial separation, divorce or annulment of marriage is passed under the Act, 1955, if the parties are unable to support themselves, they may be awarded maintenance and permanent alimony under Section 25 of the HMA, 1955. 

The provisions under Sections 9 to 13 of the HMA, 1955 contemplate that before a person could be entitled to alimony and maintenance under Section 25, then the necessary court order must have been issued. The Supreme Court of India in Chand Dhawan vs. Jawaharlal Dhawan (1993) held that the words “making any decree” mean that an order for perpetual alimony can be passed only when the judgement is passed under the Act wherever any other substantive relief is given and not when the main petition is dismissed or withdrawn. The term “decree” refers to a ruling made under Sections 9 to 13 of the Act that affects the marital status of the parties. 

It must be noted that the relief of alimony and maintenance cannot be granted under Section 25 if the relief under any of the sections hereinabove mentioned has been rejected. If the main proceedings are a failure and a spouse fails to get any relief under Section 25 then the spouse can claim maintenance under Section 18 of Hindu Adoption and Maintenance Act. 

As mentioned under Section 25(2) of the Act, the court may vary or rescind any order for permanent alimony where it is seen that there has been a change in the circumstances of the parties. However, a gross-sum payment order is a simple payment and therefore cannot be amended or altered in any way. In addition, Section 25(3) provides that in the event of the following two events, maintenance under Section 25(1) may be revoked if the party in whose favour the order is granted has:

  • Got married again.
  • In the case of the wife, she has broken her vow of celibacy.
  • In the case of the husband, he has engaged in sexual activity with any woman not related to him.

Other important provisions

Jurisdiction of divorce petition

These include the provisions of Section 19 of the HMA, 1955 which highlights the places where a petition for divorce can be presented. Section 19 of the act aims at flexibility and convenience by providing various jurisdictions over the petition of divorce. This provision addresses the issues that are considered in the matrimonial cases and strives to achieve a rational and efficient approach to legal proceedings as much as possible for both parties.

A husband or wife can initiate the petition for divorce in the district court within the local jurisdiction where the marriage was consummated, as the court must have a nexus to the marriage. This provision assists in the arrangements for witnesses and evidence that may be required to support the allegations in the petition. 

Moreover, the petition may be presented to the district court in which the respondent resides at the time of the petition. This helps so that the respondent is not strained and has to attend court proceedings, thus maintaining fairness and justice. This provision is especially important if the respondent is not living within the jurisdiction of the court where the marriage was celebrated so that the case can proceed smoothly. 

In circumstances where the respondent has moved away from the matrimonial home and currently resides beyond the territorial jurisdiction of the court in which the marriage was celebrated or where the petitioner resides, the petition can also be presented in the district court of the area where the petitioner is living when presenting the petition. This is especially important in cases where one spouse has been abandoned or decided to live in different residences because of marital conflict. 

Additionally, the petition may be filed in the district court where the two last resided if both of them are in agreement. This ensures that whichever court has primary jurisdiction over the aspects of life the couple most significantly shared will hear the case. Where the respondent is living outside India, the petition may be presented in the district court of the place where the petitioner resides. 

In-camera proceedings

Section 22 discusses in-camera proceedings which are basically hearings that are conducted in court but are not open to the public and the press. The HMA, 1955 allows in-camera proceedings in matrimonial cases to protect the privacy and dignity of the parties involved. This guarantees that issues of cruelties, adultery or any other sensitive issues are handled behind closed doors to avoid public embarrassment. In-camera proceedings are meant to enable the parties to express themselves in a safe environment and sometimes this can result in better justice for the parties.

Custody of children

As envisaged under Section 26 of the HMA, 1955, the court is empowered to pass orders relating to the minor children such as their custody, maintenance, and education. The first determinant is the best interest and welfare of the child. In this case, the court may award custody to either of the parents or to a third party as the circumstances warrant. When a child reaches an acceptable age to express a wish, the factors that determine the custody include the child’s age, their level of affection towards their parents, and the parents’ ability to fulfil their requirements. The court can also grant orders for visitation or access and temporary physical custody pending the hearing of the case.

Disposal of property

Section 27 of the HMA of 1955 covers the occasion when property, which may be in joint ownership of both the husband and the wife, is presented at or about the time of marriage. This comprises items like jewellery, gifts and other personal properties that were used in the course of the marriage and are jointly owned. The court has the jurisdiction to make such orders in relation to the disposal and division of such property to the benefit of the parties.

Stridhan means that the property which a woman acquires in her life at any period of her life, but mostly during her marriage, is owned by her only. This includes gifts, jewellery and other forms of wealth that need to be protected for her by her parents, relatives and even her husband. Stridhan still belongs to the woman and she has control over it. During a divorce, the woman can keep her stridhan and the husband has no rights over it. To protect the financial independence and the rights of the woman, the court ensures that the stridhan is returned to her.

Appeals 

Section 28 of the HMA, 1955 details the grounds and procedures through which appeals can be filed against the judgments of the courts. Any party that feels dissatisfied with the decision of the district court has the legal option of appealing the decision in the High Court. The appeal must be filed within a particular timeframe, which is thirty days from the date of the decree or order. 

The appellate process entails a reconsideration of the judgement of the lower court with the High Court with an analysis of the grounds of the appeal as well as the adduced evidence. The appellate court has the power to affirm, reverse or remand the decision of the trial court in light of such findings. This makes it possible for there to be added judicial review to help correct or punish any irregularities or unfairness that may have been perpetrated at the first trial. 

Also, the Act permits any person aggrieved by an order under the Act to appeal to the Supreme Court of India on any significant questions of law. It also guarantees the availability of the ultimate appellate court in the country dealing with significant legal matters in matrimonial disputes hence enhancing the provision of justice and equity.

Customary divorce

Section 29(2) of the HMA of 1955 deals with the issue of customary divorce among Hindus. Here, this provision recognizes that, besides the formal law and the Act, there are those customary law divorce practices among certain communities where they may not strictly follow the legal processes of the Act but are nevertheless legal within their custom law domain. 

The Section enables the recognition of divorce that is granted under the special customary law of certain Hindu societies. This means that if a divorce is done in accordance with the culture of any given community and such culture is approved by the said community, the divorce is legal under this provision. It comes with the requisite condition that no such custom is against the provision of the Act, meaning that customary practices have to be in tune with the general legal framework provided by the HMA.

Live-in-relationship and Hindu Marriage Act, 1955

The current issues of India’s recent generation associated with Hindu marriages include live-in relationships. In cultures where this form of cohabitation is acceptable, a live-in relationship is seen as a liability-free way of living because it sparks controversy over the institution of marriage. However, the institutional and legal requirements to solve this problem are also inadequate. There is no reform to the Hindu marriage laws of 1955 for this system. 

It is important to recognize the Agni and the seven-step ceremony as two major components of traditional Hindu weddings in India as described in the HMA of 1955. The sentiment outlined here sums up the essence of the wife in the marriage according to the Brahma culture. The groom concludes by saying ‘vivaah’ to the bride and then makes seven intentions for the rest of their lives, saying after each, “as you are with me, my thoughts and actions; many children blessed with longevity.” 

The world today still has the perception of India as a country where marriage is still considered sacred in both theological and pragmatic sense. But with the change of time, the traditional concept of marriage has also changed gradually, and we are gradually moving from forced marriage to living together to same-sex marriage. Even though there has been a change and legalisation of some gay or live-in relationships, these types of relationships are still considered to be immoral in our culture. The partners in such types of relationships often face problems as there is no law in India which deals with live-in relationships. Last but not least, the judiciary was considered as the ultimate recourse to address these issues.

A live-in relationship is one where the two individuals are cohabiting in a manner that closely resembles marriage without actually being legally married and has been socially accepted in India over the years in the past century. Even though these relationships are not recognized by the HMA, 1955 or other traditional personal laws of India, they have been given legal recognition through various case laws. 

The case of Indra Sarma vs. V. K. V. Sarma (2013) is a very important judgement that defines the legal position and status of women in live-in relationships in India. This reinforces the court’s attempt to harmonise conservative values with today’s relationship dynamics, and give women in such a relationship institutional re-course and protection, as well as establish the parameters of a qualifying live-in relationship.  The Court also affirmed that women in live-in relationships are protected under the Protection of Women from Domestic Violence Act, 2005. This was a significant step towards the recognition of women in non-marital relationships who can now approach the courts for maintenance as well as protection orders for abuse. The judgement also highlighted the shift in social structure in India and how the law needs to respond to the new trends in relations. It gave a progressive perspective on embracing other forms of family formations other than the traditional nuclear family. In the decision, the Court was adamant that even though live-in relationships are not equivalent to marriage, they deserve legal protection. The judgement emphasised the legal necessity to differentiate between strategic business partnerships and brief associations when it comes to the abuse of provisions. 

Landmark judgements surrounding HMA, 1955

Courts across India have time and again interpreted the provisions of the HMA, 1955 so as to make the legislative intent clear, thereby achieving the purpose behind the statute. Some of the landmark rulings alongside ratio decidendi have been discussed hereunder. 

Lily Thomas vs. Union of India (2006)

In the matter of Lily Thomas vs. Union of India (2006), a question regarding the status of the first marriage was raised through a Supreme Court petition where the non-Muslim converted to the ‘Muslim’ faith, albeit without changing their belief or divorcing the first wife. It was decided that unless a divorce is obtained, a marriage of a couple could not be annulled under the Hindu law for the reason of conversion.

Issues 

  • If a non-Muslim converts to the ‘Muslim’ faith without experiencing any real change in faith or belief and only in order to avoid an existing marriage or enter a second marriage, will the marriage he enters after such conversion be void?
  • Is the Respondent subject to bigamy prosecution under Section 494 of the IPC?
  • Whether having a Uniform Civil Code would be a good idea?

Judgement 

Any marriage that the husband enters into during the subsistence of that marriage regardless of his conversion to another religion would be a crime that can be prosecuted under Section 17 of the HMA of 1955 read with Section 494 of the IPC since bigamy is unlawful and has been turned into an offence. Any marriage between two Hindus is deemed null and void if the following criteria are met:

  • If either partner had a spouse who was still alive at the time of the marriage; and,
  • The ceremony took place after the Act’s implementation.

A person could face prosecution under Section 494 of the IPC if they enter into a second marriage while their first marriage is still active. This second marriage would also be illegal under Sections 11 and 17 of the HMA, 1955. The case of Robasa Khanum vs. Khodadad Irani (1946) was also brought up, in which the learned Judge ruled that the behaviour of a spouse who converts to Islam must be evaluated in accordance with the principles of justice, right, or equity, as well as good conscience.

Although uniform legislation is highly preferred, doing it all can sometimes harm the integrity of the nation. In a democracy under the rule of law, it should lead to progressive change and order in the long run. Because of this, it would be unreasonable and unfair to expect that all laws could be made to be the same at one instance. However, the legal system must be able to correct a mistake or a flaw that may emerge in the course of its operation. As for the Uniform Civil Code, Justice R. M. Sahai, the other honourable judge on the Bench suggested certain measures which the government should take to spare religion from misusing by such people who were found to be polygamists though claiming that they had converted.

Joydeep Majumdar vs. Bharti Jaiswal Majumdar (2021) 

In the recent case of Joydeep Majumdar vs. Bharti Jaiswal (2021), the Supreme Court observed that the wife had started levelling false allegations against the husband which not only harmed his reputation but could affect his job as well which would be a clear example of mental cruelty. The respondent was a professor in a government college and a PhD holder while the appellant was an army officer and an M. Tech. They got married on September 27, 2006, and had been living together only for a short span in Visakhapatnam and Ludhiana. However, ever since the marriage started, the parties were often involved in disagreements, and from September 15, 2007, the couple decided to live separately. 

During the divorce, the appellant argued that the respondent had made several false allegations against him that negatively impacted his career, tarnished his image, and amounted to mental cruelty. The respondent, however, stated that her husband had left her without sufficient cause in her petition for the annulment of the conjugal rights and, therefore, sought advice from the appellant to restore married life. 

The Supreme Court has also indicated that for any marriage that is to be considered for dissolution at the instance of the spouse who alleges mental cruelty, the consequence of mental cruelty must be such that it becomes impossible to continue with the marriage relationship. Thus it is unreasonable to expect the victim of a wrong to support the behaviour in question while continuing to be married to the perpetrator. 

This ruling was also contested and the Court stated that there was reasonable evidence that warrants a reversal of the High Court decision and the order given by the Family Court because the respondent had been cruel to the appellant. Consequently, the respondent’s prayer for restitution of conjugal rights was dismissed and the appellant was held to be entitled to a decree of divorce. 

Amarjeet Singh vs. Union of India (2022)

During the divorce proceedings, the appellant stated that the respondent had provided numerous false statements against him that negatively impacted his career, tarnished his reputation, and subjected him to mental cruelty. The respondent for his part argued that he had left her without any reasonable cause in a case involving the application of conjugal rights and hence prayed to the appellant on how she could go back to a married life. 

As per the averments made in the petition, there are various provisions in legal statutes like Section 125 of the Code of Criminal Procedure 1973, the Protection of Women from Domestic Violence Act, the HMA, etc. where the payment of maintenance may be allowed. This resulted in a complex situation that adversely affected the parties required to make maintenance payments. 

The writ petition stipulated that all accommodation be provided under one broad category. In the case of Rajnesh vs. Neha  (2021), CJI Lalit pointed out that the issue had been settled. The aforementioned judgement provides suggestions to address the problem of conflict of jurisdiction, prevent inconsistency in the decision in different proceedings and maintain coherence in the functioning of the family courts and the district courts as well as the magistrates. The rules state the following:

  1. When a party makes multiple claims for maintenance under various statutes, the court will take into account an adjustment or set-off of the amount given in the prior hearing(s) when deciding whether to award any additional amount in the next case;
  2. Disclosure of the prior proceeding and any orders issued therein in the future process by the applicant is mandated;
  3. Any modifications or variations to the orders issued in the prior process(s) must be made in the same proceeding.

General recommendations for Hindu Marriage Act, 1955

Ideally, the ages of marriage should be the same for both sexes because in order to become a graduate in any stream such as medicine, law or engineering, one has to do so before attaining 21 years of age in India. Why does gender discrimination exist when it comes to marriage, yet at eighteen, a young person can choose their legislator? Once people attain the age of 18 in India they are considered major and capable of getting a licence, an Aadhar card and a PAN card regardless of gender. But why does the marriage age differ? A shift in the marriage age alters the outlook on the girl child in the society as soon as they are born while a girl child in a household experiences discrimination from birth. 

Marriage is widely considered the most important institution in human society. It occurs frequently. It has been the foundation of human civilization. Marriage entails the creation of new forms of social relations and reciprocal rights between the married couple. Once the children are born, they are given rights and placed in some certain status. Each community has its own known procedures for developing such relations and rights. It also refers to the recognition of a new status with new entitlements and duties which are recognized by others. Marriage is a socially accepted form of relationship that is universally acknowledged in all societies. Marriage is one of the deepest and most complex cooperation between two people. 

The conventional concept of Hindu marriage in terms of legal and moral implications is based on compassionate religious beliefs and is based on the principles of psychobiology. But in the recent past, self-assertiveness and an individualistic outlook have created tension and friction in a marriage and have given rise to a variety of conflicts. 

In contemporary society, one can devise social and legal frameworks to safeguard this important institution of marriage. Both proactive and reactive measures should be taken. At the heart of the strategy, there is nothing more effective than educating the new generation from an early age. Morality should be taught in high school as well as in college curriculum. 

In order to preserve this sacredness of Hindu marriage for the benefit of couples, families, children and society in general, it is imperative that public education intervenes. The media especially the print and the electronic media should be encouraged to conform to cultural etiquette. An independent educational programme for marital counsellors which is not rooted in western psychology and is social, psychological, and legal in structure based on Hindu culture should be formulated at the university level. Instead of horoscopes, the system of marital counsellors should be spread across society.

Conclusion 

The HMA, 1955 is a legislation that re-enacts and consolidates the  laws relating to Hindu marriages. So, as per the given Act, not all Hindus can marry. Section 5 of the Act sets out the elements constituting Hindu marriage and Section 13 provides for several matrimonial remedies such as restoration of conjugal rights, declaration of marriage as null and void, judicial separation, and divorce. However, there are certain restrictions concerning marriage in the case of mental disorders.

Today, marriage is for the most part, a legal relationship and it is no longer as sacred an institution as it used to be. Furthermore, it is clear that the legislators realised that if social standards and perceptions, such as child marriage, persisted, the statutory instrument would be rendered completely meaningless. Hence, even though child marriages are prohibited, they are not considered to be legally null and void until the court is presented with such a petition. There is a provision for registration in order to make it easier to provide proof for Hindu weddings. However, the custom of non-registration of Hindu marriages still prevails in India even after almost 70 years of the enactment of the Act. 

Frequently Asked Questions (FAQs)

When was the Hindu Marriage Act of 1955 approved?

The President of India assented to the Hindu Marriage Act, 1955 on May 18, 1955.

What is the objective of the Hindu Marriage Act of 1955?

The Hindu Marriage Act of 1955 aims to codify and modify Hindu marriage rules, creating a consistent legal foundation for marriage among Hindus and allied religious communities. It governs topics like marriage, divorce, restitution of conjugal rights, judicial separation, and other marital difficulties.

Can a Hindu marriage be registered under the Act?

Yes, a Hindu marriage can be registered under the Hindu Marriage Act, 1955. The Act provides for the voluntary registration of Hindu marriages.

References


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