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Understanding government contracts 

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This article is written by Abanti Bose, studying at Amity University Kolkata, India. The article talks about the constitutional validity of government contracts, the essentials of government contracts, the critical role played by the judiciary and various types of government contracts.

It has been published by Rachit Garg.

Introduction

A contract is known as an agreement between two or more parties that is enforceable by law. In order for a contract to be legally binding, there must be an offer and acceptance, it must be expressed or implied, there must be a valid consideration, etc. However, in the case of government contracts, one party to the contract is either the Central or state government. 

Government contracts are the kinds of contracts that are executed by the government for a variety of purposes such as construction, management, manpower supply, maintenance and repairs, IT-based projects, etc. When the central government or the state government gets involved in a contract it is known as a government contract. The party who executes the contract on the behalf of the government is referred to as a contractor. 

Constitutional provisions of government contracts

The Constitution of India recognizes the contractual liability of the Central and state governments. Article 298 of the Constitution clearly lays down the power of the Central and state governments to carry out any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose. It is the executive power of the Union and the states. Similarly, the following Article, that is Article 299 prescribes the mode and manner of such contracts. 

Article 299 of the Constitution of India reads; “All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.”

Thus according to Article 299 the requirements of valid government contracts which need to be fulfilled are:

  1. All the contracts must be expressed to be made by the President in the case of the Central Government and the Governor in the case of state governments.
  2. All the government contracts must be executed on behalf of the President of India or the Governor of the states, depending on the situation. 
  3. All the contracts must be executed by the President or the Governor depending on the situation. 

The use of the word “executed” in the Article means that the government contract must be in writing. An oral agreement between the government and the other party would not be valid for the purposes of Article 299.

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Difference between government contracts and ordinary contracts

In India, the law regarding the formation and enforceability of contracts are governed by the Indian Contracts Act, 1872 but government contracts are governed by the provisions laid down in Article 299 of the Constitution. Article 299 lays down certain provisions concerning government contracts that must be followed.

Government ContractsOrdinary Contracts
According to Article 299, a government contract must be expressed. That is the words, ‘expressed to be made’ clearly mention that a government contract must always be in writing.Whereas ordinary contracts which are formed under the Indian Contract Act, 1872 which states that a valid contract can be expressed or implied.
A government contract must always be executed by an authorised person in order to hold the government in contractual liability. A contract between the government and the other party would be invalid if it is not executed by the authorised person duly appointed by the President or the Governor, as the case may be. An ordinary contract does not require to be executed by an authorised person.
A government contract must follow all the provisions stated under Article 299 of the Constitution.An ordinary contract is bound by the provisions mentioned in the Indian Contract Act, 1872.

How are government contracts formed

Government contracts are formed in the following manner:

  1. Every government contract must be expressed to be made by the President or the Governor.
  2. Every government contract must be executed on behalf of the President or the Governor.
  3. Every contract must be executed by a person authorised by the President or the Governor.

Principles of government contracts

The principles of government contracts are:

Transparency

The principle of transparency guarantees that the state authorities enter into contracts with the other party through a medium which is objective and fair. The authorities must also hold public hearings where proponents can express their doubts and submit questions, clarifications and/or complaints. Furthermore, third party documents and applications are also made public to ensure that the processes are carried out in a fair and equitable manner by the government authorities. 

Economy

In this principle, the selection procedure for government contracts must be arranged in such a manner that only the procedures that are strictly essential and have connected terms and urgent deadlines, the least amount of resources will be used should be focused on by the government. Furthermore, before the selection of the party to a government contract, the appropriate authority must ensure that it has the appropriate financial allocations and preliminary research in place to determine the contract’s aim.

Responsibility

This principle states that the parties to a contract, that is the contractors, state entities, government officials, etc. will be held accountable if any dispute arises out of the government contract. Therefore, they will be held liable for civil, criminal, and disciplinary actions when their acts and/or omissions caused damages or infringed any provision of the contract.

Contractual balance

The principle of contractual balance states that the government contracts must maintain equality between the parties with respect to their obligations, rights and consideration stated during the execution of the contract. Thus, if the balance between the parties is not maintained then necessary steps must be taken to restore the balance between the parties.

Essentials of government contracts and critical role played by the judiciary

The essential elements of government contracts are governed by the provisions of Article 299 of the Constitution of India. It plays a vital role in prescribing the manner in which government contracts are to be executed. The significant requirements of government contracts are mentioned below.

Article 299 is a mandatory requirement when it comes to government contracts

The courts in various judgements have held that Article 299 is based on public policy and the protection of the general public. The courts have stated that the conditions laid down in Article 299 of the Constitution must be met in a government contract. If either party fails to meet any requirement stated under Article 299, then such a contract becomes null and void. Therefore, such a contract cannot be enforced by any of the contracting parties. And the government cannot be sued or held liable for damages for the breach of such a contract. Further, the government cannot enforce such a contract against the contracting party.

In the case of K.P. Chowdhary v. State of Madhya Pradesh (1966), the appellant gave the highest bids for two forest contracts at an auction. One of the terms of the auction was, that if the bidder failed to comply with the terms then his earnest money would be forfeited, and any deficiency occurring was to be recoverable from him as arrears of land revenue. Meanwhile, a dispute arose between the bidder and the forest department and since the dispute was not settled to the satisfaction of the bidder he refused to comply with the terms of the contract. The admitted position was that a contract complying with Article 299(1) has never been signed. The Supreme Court held that under Article 299 the words ‘mandatory terms’ mean there should be no implied contract between the parties. As laid down in Article 299 a government contract must be written and thus failure to follow the provisions indicates that the contract between the bidder and the state government was void.

Written contract 

A contract made under Article 299 of the Constitution must be a written contract. The words ‘expressed to be made’ and ‘executed’ clearly state that the contract must be in writing and not an oral agreement. This is a requirement of law that must be fulfilled. 

Execution by an authorised person

The next requirement under Article 299 of the Constitution is that a government contract can be entered into on behalf of the Government by a person authorised for that purpose by the President or the Governor, as the case may be. If the contract was entered by any person not authorised by the President or the Governor then such contract would not be valid.

In Union of India v. N.K. (P) Ltd. (1972), the Director of Railway Stores was authorised to enter into a contract on behalf of the President. However, the contract was entered into by the Secretary of the Railway Board. The Supreme Court held that the contract was entered into by an officer who was not authorised by the President for the said purpose hence, it is not a valid and binding contract.

Expression in the name of the President or the Governor

The last essential condition is that a government must be expressed in the name of the President or the Governor as the case may be. Even though the contract is entered into by an officer authorised for such purpose, the contract would not be valid or enforceable against the government if it is not expressed to be made on behalf of the President or the Governor.

In the case of State of Punjab v. Om Prakash (1961), a contract was entered into by the executive engineer of PWD, who was authorised to enter into a contract by the Governor, and therefore he accepted the tender for the construction of a bridge by PWD. However, in this case, the letter of acceptance was signed by the executive engineer but it was not expressed in the name of the Governor. Therefore, the Apex Court held that the contract is not valid since it fails to comply with the provisions of Article 299 of the Constitution.

Contractual liability in government contracts

The contractual liability in cases of government contracts of the Union of India and the state governments is recognised in the Constitution itself. Article 298 of the Constitution expressly mentions that the executive power of the Central government and of each state government shall extend to the carrying on of any trade or business and the acquisition, holding and disposal of property and the making of contracts for any purpose. Article 298 reads; “The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose”, thereby, stating the Central and the state governments will be held liable in case of any dispute or issue arising out of the government contracts. 

Significant categories of government contracting

The different types of government contracts are listed below.

Fixed-price contracts

In these kinds of contracts, the payment amount is not dependent on the resources used or the time expended. It is a contract where the predetermined value of the goods or services is already mentioned in the contract. In the contract, several provisions like contract change, economic pricing, or defective pricing are sometimes included. 

The purpose of these contracts are to create agreements for the contractual parties that set a firm price for the goods or services provided. They provide certainty to both parties. 

Cost reimbursement contract

Contrary to the fixed-price contracts, cost-reimbursement contracts are the type of contract where the contractor gets the reimbursement for the cost incurred while carrying out the work as per the contract and receives an additional fixed fee from the company/owner. Therefore, in this type of contract, the contractor can secure the labourer and the materials required for the project without having to fit all of it into a tight pre-fixed budget. This contract guarantees that the contractor will not only be paid solely for the costs but also any additional payments made by him. 

Cost-plus a percentage of cost is a type of cost-reimbursement contract, where the buyer pays the seller the cost incurred plus a percentage of the cost. 

Incentive contracts

These kinds of contracts were presented to motivate the contractors in executing their work, by awarding them with monetary incentives. Here one party promises the other party additional remuneration only if the other party executes the task with outstanding performance. Incentive contracts enable the contractor to put their best efforts to maximise the results and it also prevents inefficiency on part of the contractor. Types of incentive contracts are fixed-price incentive contracts, cost plus award fee contracts, delivery incentives, performance incentives, multiple incentive contracts, and cost-plus incentive contracts.

Indefinitely delivery contract

In this type of contract, the duration to perform the task stated in the contract is known but the exact time of delivery is unknown. This contract ensures the supply of an indefinite quantity of services mentioned in the contract within a fixed period of time. The government enters into this type of contract when the quantity of services is unknown and hence it is difficult to complete the contract within a stipulated period. Types of indefinite-delivery contracts are definite quantity contracts, indefinite-quantity contracts and requirements contracts.

Time and materials contract

It is the last type of government contract. It is carried out when there is the absence of a thorough knowledge of the duration or the cost to be incurred. In this kind of contract, government surveillance is required to monitor the work process and to observe that the parties adhere to the terms laid down in the contract. This type of contract is only used when there is no scope to employ any other contracts. Like fixed-price contracts, time and materials contract also includes a sealing price that the contractor exceeds only at his own risk.

Advantages of government contracts

Certain advantages of government contracts are mentioned below.

  1. In a government contract, the revenue concerning the project stated in the contract comes from a fixed and trusted source, i.e., the government thus enabling more efficiency in the work.
  2. The inclusion of government agencies in one’s portfolio will increase their credibility in the market. 
  3. Indulgence of a government agency in one’s application will increase their company’s reliability which will further help in taking loans from the lenders. 

Conclusion

In order to be a valid government contract, all the requirements laid down in Article 299, must be met; such as a written contract, executed by an authorised person, expressed in the name of the President or the Governor as the case may be. Therefore, a government contract becomes valid and enforceable when all the provisions of Article 299 are complied with. 

Moreover, because of the advantages and the active role played by the judiciary in protecting the interest of the parties in accordance with the provisions stated under Article 299 of the Indian Constitution we can see the growing importance of government contracts.  

References

  1. https://www.indiafilings.com/learn/different-types-government-contracts/#:~:text=Government%20 contracts%20are%20contracts%20 undertaken,makes%20it%20a%20government%20contract.
  2. https://blog.ipleaders.in/government-contracts-constitutional-provisions/
  3. https://www.lawctopus.com/academike/requirement-of-government-contract/

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Indian Evidence Act, 1872 : an exhaustive overview

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Evidence

This article is written by Astitva Kumar, an advocate. The purpose of this article is to examine the nature of the Indian Evidence Act, 1872. The author, through this article, has attempted to elaborate on the definition of evidence law, as well as the scope and features of the Indian Evidence Act.

This article has been published by Sneha Mahawar.

Introduction 

The term “law” is used in various ways. In its most basic sense, it refers to any rule, law, norm, doctrine, or standard to which human beings must adhere. The entire corpus juris (body of laws) is divided into two broad categories:

  • Substantive laws, 
  • Adjective laws. 

The law of evidence does not fall under substantive or procedural law, but rather under the ‘adjective law,’ which describes the pleading and method by which substantive laws are put into operation.

In litigation, the opposing parties produce proof to disprove each other’s allegations. In legal systems, the law of evidence governs this sphere. This is a significant piece of legislation. It applies to both civil and criminal law.  The law of evidence is a prerequisite for any criminal or civil trial. The role of evidence law is to scientifically reconstruct the past events on which the disputing parties disagree. The goal of evidence law is to seek the truth and to be an effective tool in the fact-finding process. The law of evidence has established two fundamental concepts, i) relevancy, and ii) admissibility. In legal terminology, relevance and admissibility are frequently used and both are frequently used interchangeably by legal practitioners in the court of law. Both principles are at the essence of the law of evidence.

Concept of Evidence Law

Before diving into the concept of “evidence law,” it is necessary to first explore the definition of “evidence” in general. The term evidence was derived from the Latin word ‘Evidera,’ which means lucidity, clarity in presentation, and the ability to prove the facts in question.

In its original sense, the word “evidence” refers to the state of being evident, i.e. plain, obvious, or well-known. However, it is used to describe something that tends to produce evidence or proof. The principal fact is the one that needs to be proven, and the evidentiary fact is the one that tends to establish it. To put it another way, it can be said that, evidence acts as the eyes and ears of the  court 

In the words of Sir William Blackstone, evidence “Signifies that which demonstrates, makes clear or ascertains the truth of the facts or points in issue.” Faylor describes evidence as “all means which tend to prove or disprove any matter, fact, the truth of which is submitted to judicial investigation.”

According to Dr. Johnson’s Dictionary, the word evidence signifies “the state of being evident, that is plain apparent or notorious”. Bentham defined “evidence” as “any matter of fact, the effect, tendency or design of which is to produce in the mind a persuasion affirmative or disaffirmative, of the existence of some other matter of fact.”

Wigmore defined ‘evidence’ as representing “Any knowable fact or group of facts, not a legal or logical principle, considered with a view to its being offered before a legal Tribunal to produce a persuasion, positive or negative, on the part of the Tribunal, as to the truth of a proposition, not of law, or of logic, on which the determination of the Tribunal is to be asked.”

According to Stephen, “It sometimes means words uttered and things exhibited by witnesses before a Court of Justice. At other times, it means the facts proved to exist by those words or things and regarded as grand work of inference as to other facts not so proved. Again, it is sometimes used as meaning to assert that a particular fact is relevant to the matter under inquiry.”

Thus, evidence is defined as anything that tends to verify or deny the existence or nonexistence of a stated fact. The party who claims the presence of a fact must prove its existence, whereas the party who denies it must disprove its existence or establish its non-existence.

Definition of evidence under the Indian Evidence Act

As per Section 3 of the Indian Evidence Act, 1872

 ‘Evidence’ means and includes the following:

  1. All statements made before the Court by witnesses about matters of fact under investigation, which the Court permits or requires; such statements are referred to as oral evidence;
  2. All documents (including electronic records) presented for the inspection of the Court; such materials are referred to as documentary evidence.

In the case of Kalyan Kumar Gogoi v. Ashutosh Agnihotri and Anr, AIR 2011

The Supreme Court made the following observations on evidence, the word ‘evidence’  has been used in common parlance in three different senses: as

  1.  Equivalent to relevant,
  2.  As equivalent to proof, and
  3. As equivalent to the material, based on which Courts conclude the existence or non-existence of disputed facts.

Historical background of law of evidence in India

Hindu period

The Hindu Dharmashastras contains a piece of rich information on the law of evidence. The purpose of the trial was to separate the true from the false in the same way that a surgeon removes an iron arrow from the body using his tools. The Dharmashastras acknowledged four categories of evidence.

  1.  Lekhya, i.e. document,
  2.  Sakshi i.c., oral evidence,
  3. Bhukti or Bhog, i.e., use in other words possession, and
  4.  Divya i.e., Divine tests or ordeals.

Lekhya, i.e. document

Sakshi, i.e. oral evidence, was chosen over Lekhya because of its flaws, and Dharmashastris, keeping in mind the flaws of Lekhya Sakshya, created arrangements for their removal. For example, it was stated that a document produced or attested by a corrupt person would be void. Similarly, documents written by women, minors, or dependent people would also be deemed unlawful.

According to Narada, Vishnu Dharmashastra, and Katyayan (even Section 91 of the Indian Evidence Act, 1872 states that documentary evidence is superior to oral evidence), Lekhya-Praman (documentary evidence) is defined as proof that is written in accordance with the rules, beyond doubt, and meaningful. Typically, the attestation by two witnesses was necessary on the Lekhya Praman, but the most important documents required the attestation of more than two witnesses.

Lekliya (Document).-Lekhya was further divided into three.

  1. Rajya Sakshayak: It was a document written in the court by the King’s clerk. It was similar to a registered document.
  2. Sakhshyak: It was a document signed by witnesses and written by a private person.
  3.  Asakhshyak: It was a handwritten paper produced by the parties themselves.

Sakshi 

The rules of Sakshi or oral evidence had a vast difference in civil and criminal matters. Ancient laws contributed a lot to create the norms for governing the capacity of witnesses.  Nyayadhish (Judges) used to interrogate the witnesses and examine their expressions while they answered their questions before deciding their credibility.

Bhukti or Bhog

Bhukti or Bhog, i.e., use in other words possession. Agriculture was the primary source of income in ancient India, and the disputes relating to the possession of the land were known as Bhuktii. Even in ancient India, the law relating to possession was a well-established legal concept. There were two kinds of Bhukti. Bhukti Sagma (with right) and Anagama Agam mean Udgam (origin), which refers to the source of ownership or the basis of the right, such as whether the property was purchased, or received as a gift, or inherited. 

The Agam and prescription, i.e., the use of the property, both weigh each other. According to Narada, a man who only proves the use of the property without Agam, i.e., if the property is Anagama but underutilized, will be punished as a thief, even though he was using the property for over 100 years. Aprask (P. 631-632), Kulluk, and Raghunandan have stated that using a property for 20 years degrades ownership. However, according to Mitakshara which is acknowledged by Vyavaharmayukh and Mitramishra, the usage of the property damages the outcome rather than the ownership. If the property owner sees someone else using his property for twenty years and then disputes it, he will receive his property but not the earnings. Some authors have mandated a relatively short period of bhukti, or use of the property, after which ownership of the moveable and immovable property may end. The explanation has been given that the owner should reclaim his property as quickly as possible unless there are compelling reasons for doing so.

Divya i.e. Divine tests or ordeals

Divya means divine tests or ordeals. Where a man’s evidence fails to lead to a decision, Divya, or divine tests (ordeal), assists in reaching a decision. Such tests were common in ancient India, where the appeal was made to supernatural power to prove the guilt or innocence of a man. 

For example: If a man entered a burning fire or deep water and escaped unharmed, he was either innocent in the eyes of the law. Similarly, if a man who consumed the poison did not die, he was declared innocent. Gradually, Divya was limited to extraordinary circumstances where common types of evidence were unavailable.

In small pecuniary disputes, ‘Kosh’ Divya was recognized. According to Yajnavalkya (2/22), Narada (2/29, 4/239), Brahaspati, Katyayan, and Pitamah Divya should be used only when Manushya Praman i.e., Sakshi, Lekhya, Bhog, or Paristhitijanya Praman (circumstantial evidence) are not available. Different types of Divya were also prescribed for different Varnas. Brahmina was exempt from Vish Divya (ordeal by poison).

‘Kosh’ Divya was acknowledged In small pecuniary disputes. According to Yajnavalkya (2/22), Narada (2/29, 4/239), Brahaspati, Katyayan, and Pitamah Divya should be utilized only when Manushya Praman (circumstantial proof) is not accessible, i.e., Sakshi, Lekhya, Bhog, or Paristhitijanya Praman. For each Varna, a different type of Divya was prescribed. Vish Divya (ordeal by poison) did not apply to Brahmins. 

Islamic period

The rules of evidence were well defined during the Islamic period. The evidence consisted of two types: oral and documented. The oral evidence was further subdivided between direct and hearsay evidence. It indicates that oral evidence was preferred above documentary evidence. Addressing oral evidence, the Quran enjoins as follows:

O You who believe! Stand out firmly for Allah, as a just witness for just (and fair) dealing, and do not let the hatred of others make you lean towards wrong and go away from Justice. Be just: That is next to Piety: And fear Allah, because Allah is Well-Acquainted with all that You do.” (Sura 5-8).

“O You who believe! stand out firmly for justice, as a witness to Allah, even against yourselves, or your parents or your kin, and whether it be (against) rich or poor: Allah protects you both (much) better. So follow not the desires (of your hearts), because you may swerve and if you distort justice, or decline to do justice. Surely, Allah is Well-Acquainted with all that you do.” (Sura 4-135)

Modern period

Introduction to English Law

The Charter of 1726 established english common law and statutory law in the Presidency Towns of Calcutta, Madras, and Bombay. The Courts created by the Royal Charter in these Presidency towns were responsible for enforcing English law. There was no definite law of evidence in the Mofussil territories, i.e. the areas following outside the Presidency Towns. Customs and usages governed the laws of evidence. In terms of admitting evidence, the courts had complete discretion. In the lack of any specific standards governing the law of evidence, the entire administration of justice in the mofussil courts was in complete chaos.

Enactment of the Indian Evidence Act, 1872

The Governor-General established the first Act pertaining to rules of evidence in 1835. 1835 and 1855, a series of Acts were passed to successfully incorporate the reforms proposed by Jeremy Bentham.

Acts 10 of 1855, Act 8 of 1859, Act 25 of 1861, and Act 15 of 1869 were also passed, however, the courts in India followed English law of evidence when delivering judgment, though only a portion of English law was applicable in the Mofussil area and Presidency Towns. As a result, the position was rather unsatisfactory, and the Judges made comments about it in their judgments in the case of Gajju Lal v. Fattehlal, ILR 6 Cal 171

In the words of Richard Garth, C.J.” The law of evidence is not just a fundamental principle governing the process of proof rather it also has a multidimensional purpose of governing the rules relating to the process of proof in court proceedings. So the process of evidencing any facts or proof should be governed by a well-established law to achieve speedy and fair justice…instead of binding the Courts of this country by the strict rules of evidence, it would be more desirable and was in fact the intention of the Evidence Act to render all decrees admissible in evidence “as facts” or “transactions,” leaving it to the discretion of the Courts to attribute to each judgment its due weight. But to my thinking this liberty of action would be extremely unsafe; and I certainly am not surprised to find that the Legislature here was unwilling to leave to the subordinate Courts in this country a discretion, which it has not been thought safe or right to entrust to English Judges”.

Maine Commission

The Law of Evidence was in desperate need of codification. In 1868, a commission was formed to create the Law of Evidence under the chairmanship of Sir Henry Maine, the then-Law Member. But Maine’s bill was rejected since it did not meet all of the requirements at the time.

Stephen Commission

The Stephen Commission was established in 1871 to write the Law of Evidence. On March 31, 1871, Stephen delivered the Council a draft of the Bill, which was then forwarded to the local governments, High Courts, and Advocates for their review. After receiving their feedback, the Bill was submitted to the Select Committee, which made the required changes before presenting it to the Council, which enacted it as The Indian Evidence Act, 1872. (Act No. 1 of 1872). The Act has been amended multiple times since it was enacted.

The Indian Evidence Act of 1872 is based on English evidence law, but it includes several provisions adapted to the Indian realities and needs. Even though flaws in the Act have been pointed out from time to time, the Act’s drafting is an example of the best draftsmanship skill. It is very important to note that the Law of Evidence, which was enacted in 1872, continues to be applicable with the least amendments possible over more than 140 years.

Scope of Indian Evidence Act, 1872

The Indian Evidence Act of 1872 consolidates, defines, and amends the law of evidence in India. It extends to the whole of India. The Act applies to all judicial proceedings in or before any Court in India, including Courts-martial (except those convened under the Army Act, the Naval Discipline Act, or the Indian Navy Discipline Act, 1934, or the Air Force Act), but not to affidavits presented to any Court or officer, or proceedings before an arbitrator.

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Important provisions under the Indian Evidence Act, 1872

In nutshell, the “Law of Evidence” can be defined as a set of principles for determining disputed facts in court proceedings

Preamble- Interpretation clause and presumptions

The first part comprises the preamble of the act and chapter one. It provides definitions for the terms used in the Act. This section is known as Preliminary.

Relevancy of facts

The second portion of the act is titled ‘the Relevancy of facts’. This section contains 51 sections starting from Section 5 to Section 55.

The sections that have been discussed in the second part are listed below:

  1. The relevance of facts that are part of the same transaction (Section 6);
  2. Facts that constitute the occasion, cause, or effect of the facts in issue (Section 7);
  3. Facts showing motive, preparation, and conduct, previous and subsequent (Section 8):
  4. Facts required establishing the facts in issue, etc. (Section 9);
  5. Things that are said or done by conspirators in regard to a common design (Section 10);
  6. Facts not otherwise relevant (Section 11);
  7. Facts that allow the Court to determine damages (Section 12);
  8. Facts that establish a right or custom (Section 13);
  9. Facts showing the existence of the state of mind, or of the body or bodily feeling (Section 14);
  10. Facts bearing on the question of whether an act was accidental or intentional (Section 15);
  11. The facts illustrating the course of business (Section 16);
  12. facts that amount to admission (Sections 17 to 23 and 31);
  13.  Facts which are confessions of the accused persons (Sections 24 to 30);
  14. Facts made by people who cannot be called  as witnesses in certain circumstances (Sections 32 and 33);
  15. Facts are statements, under certain circumstances (Sections 34 to 38). When any statement for which evidence is given is part of a longer statement, a conversation, or a portion of an isolated document, or is contained in a document that is part of a book, or is contained in part of an electronic record, or is contained in part of a connected series of letters or papers, evidence shall be given of only that portion of the statement, conversation, document, electronic record, book, or series of letters or papers that the Court considers necessary in that particular case. (Section 39);
  16. Judgments of Courts (Sections 40 to 44);
  • It is based on the following two Latin maxims:

Nemo Debet Bis Vexari Pro Una Et Eadem Causa: States that no one can be punished twice for the same offense.

Interest Republicae Sit Finis Litium : Says that it is in the best interests of the state to put an end to litigation. It is based on public policy and ensures that lawsuits do not go on for too long.

  1. Establishes the relevance of third-party opinions, which is usually referred to in  day-to-day activity as an expert’s opinion (Sections 45 to 51);
  2. Characteristics of the parties to a lawsuit (Sections 52 to 55).

Different Types of Evidence

Section 59 states that if evidence of any is to be given, it must be either oral or documentary. Section 60 requires direct oral evidence. Section 61 specifies that the contents of a document may be proven using either primary or secondary evidence. Sections 62 to 66 deal with primary and secondary evidence and specify that primary evidence of documents must be provided before mentioning the cases in which secondary evidence may be given. Then there are provisions for submitting oral evidence to prove the authenticity of a document (Sections 67, 67-A, 68, 69, 71, and 72). Sections 73 and 73-A deal with determining the term of a deed. Section 100 forbids the Chapter from being applied to the provisions of the Indian Succession Act dealing with the drafting of wills.

Manner of proof-Burden of proof- Presumption without calling for proof

Part II dealt with the issue of factual proof; Part III of the Act addresses how the proof is to be generated. This section is divided into five chapters. Chapters VII-XI. Sections 101 to 114-A of Chapter VII addresses the issue of burden of proof. They state that in certain cases, the burden of establishing a fact falls on a certain person. Sections 112 and 113 deal with cases involving conclusive evidence. Section 114 provides that the Court may presume the existence of certain facts that should occur in the normal course of natural phenomena, human action, and public and private business without requiring proof.

Section 111-A establishes a presumption of guilt for certain offenses. Section 113-A provides for a presumption of suicide abetment if a married woman commits suicide within 7 years of her marriage and has been subjected to abuse by her husband or his relatives. Section 113-B establishes a presumption of dowry death. Section 114-A provides for a presumption of lack of consent in some rape prosecutions.

Estoppel

Sections 115 to 117 of Chapter VIII deal with the issue of estoppel, another rule of leading evidence. These provisions prohibit a person from giving false evidence by preventing them from making contradicting statements in a Court of Law.

Competency, comparability, examination, and cross-examination of witnesses and impeachment of witness credibility

Chapters IX and X deal with competency, comparability, examination and cross-examination of witnesses, impeachment of the credit of testimony of the witnesses, and the use of previous writings of witnesses for refreshing their memory and also using their previous statements for corroboration of their statement in Court.

A witness is considered competent when there is nothing in the law that prevents him/her from appearing in Court and presenting evidence. The capacity of a witness to understand and respond rationally to the questions posed to him determines whether or not he is competent.

The competency of those who can testify as witnesses are covered under Sections 118, 119, 120, and 133. A witness may be competent but not compellable, which means that the Court cannot compel him to testify. A court cannot compel foreign ambassadors and sovereigns to appear before it to testify.  A court cannot compel foreign ambassadors or sovereigns to attend the court to testify. A witness may be competent and compellable, but the law may not compel him to respond to specific questions. Restricted comparability, often known as a privilege, is the term used to describe this situation. This privilege is addressed in Sections 122132. The quantum of evidence is covered in Section 134. The examination, cross-examination, and re-examination-in-chief of witnesses are covered in Sections 135 to 139. Sections 140 to 153 cover the types of questions that can and cannot be asked during cross-examination of witnesses. Evidence contradicting a witness’s cross-examination replies is not allowed under Section 153. Under Section 154, the Court may, at its discretion, allow the person who calls a witness to ask him any question that the other party might ask during cross-examination. Section 155 talks about the impeachment of a witness. Section 158 of the Act deals with giving evidence to contradict, impeach, or corroborate the credibility of someone who gave evidence under Sections 32 and 33 of the Act. Sections 159 to 161 allow a witness to recall his memory by reviewing the previously produced record. Sections 165 and 166 define the scope of the Judges and jury’s rights to examine witnesses.

Admissibility of evidence

There is only one section in Chapter XI, Section 167, which states that there will be no new trial for the improper admission or rejection of evidence.

Judicial pronouncements with respect to the Indian Evidence Act, 1872

State Bank of India v. Om Narain Agarwal, AIR 2011 

In the above case, the Court highlighted that the main feature of the rule of evidence is to limit the scope of the dispute before the Court to those facts that have logical evidentiary value in determining a fact and to prevent giving judgments based on illogical conclusions or prejudices, as well as to aid in the administration of justice.

Vijendra v. State (NCT of Delhi), 1997 

In the light of the above case, the Hon’ble Supreme Court ruled that the prosecution cannot record the accused’s statement since it violates the provisions of Cr. P.C., which states that a statement made before a police officer during an investigation cannot be used for any purpose unless it falls under the provisions of section 27 of 32 (1) of the Evidence Act.

Emperor v. Aftab Mohd. Khan, 1939

In this particular case, the learned court explained the objective of Section 162 of the Indian Evidence Act. The purpose of the provision and its proviso is to protect the accused from false statements made by witnesses during the investigation. The Court reasoned that the remarks provided by witnesses may have been influenced by the police officers investigating the case and that admitting such statements as evidence would be prejudicial to the accused.

Suresh Budharmal Kalani Alias Papppu Kalani v. State of Karnataka,  AIR 1998 

The Supreme Court has ruled that a confession made by an accused is inadmissible as evidence and that a presumption can only be established from the facts, not from other presumptions, through a process of probable and logical reasoning.

Kishore Chand v. State of H.P, AIR 1990 

The burden of proof in a murder case is strict when it has to rely on circumstantial evidence, and all circumstances from which a conclusion of guilt is to be drawn must be fully established, and any circumstance consistent with the accused’s innocence will entitle him to the benefit of the doubt, and confessions made in violation of sections 25 to 27 of the Evidence Act cannot be relied upon.

Adambhai Sulemanbhai Ajmeri v. State of Gujarat  2014

In the above case, the Hon’ble Supreme Court has clearly ruled that when the prosecution relies on a subsequent statement recorded after the accused was detained, such material cannot be considered sufficient material on record even for arresting a person.

SK. Yusuf v. State of West Bengal, 2011 

The accused was charged with murdering a girl and later burying her body – The trial court convicted him based on his extrajudicial confession, absconding for a few days after the occurrence, and the fact that he was last seen at the location of the incident. While the appellant argued that his last scene at the place of occurrence and abundance would not raise any presumption of guilt and that the extrajudicial confession could not be trusted.

The court determined that there was no evidence that the deceased was last seen with the accused right before her death. His sheer presence at the place of occurrence at the likely time of occurrence would not raise any adverse presumption. Extrajudicial confessions were also corroborated, and there were substantial discrepancies. The mere fact of agreement could not be construed as a negative element against the appellant. The appellant was acquitted because the chain of circumstantial evidence was not complete.

List of amendments

  1. The Indian Evidence (Amendment) Act, 1872 (18 of 1872)
  2. The Indian Evidence Act, 1872 Amendment Act, 1887 (3 of 1887).
  3. The Indian Evidence Act, 1872 Amendment Act, 1891 (3 of 1891)
  4. The General Clauses Act, 1897 (10 of 1897).
  5. The Indian Evidence Act, 1899 (5 of 1899).
  6. The Repealing and Amending Act, 1914 (10 of 1914).
  7. The Repealing and Amending Act, 1919 (18 of 1919).
  8. The Indian Evidence (Amendment) Act, 1926 (31 of 1926).
  9. The Repealing and Amending Act, 1927 (10 of 1927).
  10. The Repealing Act, 1927 (12 of 1927).
  11. The Amending Act, 1934 (35 of 1934).
  12. The Government of India (Adaptation of Indian Laws) Order, 1937
  13. The Repealing Act, 1938 (1 of 1938)
  14. The Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.
  15. The Repealing and Amending Act, 1949 (40 of 1949).
  16. The Adaptation of Laws Order, 1950.
  17. The Part B States (Laws) Act, 1951 (3 of 1951) (w.e.f. 1-4-1951).
  18. The Criminal Law (Amendment) Act, 1983 (43 of 1983) (w.e.f. 25-12-1983)
  19. The Criminal Law (Second Amendment) Act, 1983 (46 of 1983) (w.e.f. 25-12-1983).
  20. The Terrorist Affected Areas (Special Courts) Act, 1984 (61 of 1984) (w.e.f. 14-7-1984).
  21. The Dowry Prohibition (Amendment) Act, 1986 (43 of 1986) (w.e.f. 19-11-1986)
  22. The Information Technology Act, 2000 (21 of 2000) (w.e.f. 17-10-2000),
  23. The Indian Evidence (Amendment) Act, 2002 (4 of 2003) (w.e.f. 31-12-2002).

(This Act was repealed by the Repealing and Amending Act, 2015 (17 of 2015), (w.e.f. 13-5-2015). The Repeal of this Act shall not affect the validity, invalidity, effect, or consequences of anything already done or suffered, or any right, title, obligation, or liability already acquired, accrued or incurred, or any remedy or proceeding in respect thereof, or any release or discharge of or from any debt, penalty, obligation, liability, claim or demand or any indemnity already granted, or the proof of any past act or thing.)

  1. The Criminal Law (Amendment) Act, 2005 (2 of 2006) (w.e.f. 16-4-2006 & 5-7-2006).

(This Act was repealed by the Repealing and Amending (Second) Act, 2015 (19 of 2015 (w.e.f. 14-5-2015). The Repeal of this Act shall not affect the validity, invalidity, effect, or consequences of anything already done or suffered, or any right, title. obligation or liability already acquired, accrued or incurred, or any remedy or proceeding in respect thereof, or any release or discharge of or from any debt, penalty, obligation, liability, claim or demand, or any indemnity already granted, or the proof of any past act or thing)

  1. The Information Technology (Amendment) Act, 2008 (10 of 2009) (w.ef 27-10-2009).
  2. The Criminal Law (Amendment) Act, 2013 (13 of 2013) (w.r.e.f. 3-2-2013).
  3. The Criminal Law (Amendment) Act, 2018 (22 of 2018) (w.r.e.f. 21-4-2018).
  4. The Jammu and Kashmir Reorganisation Act, 2019 (34 of 2019) (w.e.f. 31-10-2019).

Conclusion 

The term ‘evidence’ refers to the state of being evident, i.e., plain, evident, or notorious. However, it is used to describe something that tends to produce evidence or proof. We can define evidence as a process that deals with both the right and the procedures.

The Indian Evidence Act contains a number of provisions governing, examination, relevancy, admissibility, and evidence of facts. Confessions, character relevance, the burden of proof in criminal trials, dying declarations, expert opinions and various stages in the witness examination. 

References


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All you need to know about a Bill of Exchange

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This article is written by Amulya Bhatia, currently pursuing BBA.LL.B from Symbiosis Law School, NOIDA. This article discusses all the necessary details of a bill of exchange along with the scope of its use domestically and internationally to facilitate trade transactions. 

This article has been published by Sneha Mahawar.

Introduction

Trade transactions are essential to the growth of an economy. The amalgamation of all domestic economies into a global economic system in terms of trade transactions is one of the most important aspects for the overall development of a country. In today’s world, countries don’t just exchange final products, but also exchange resources to create the final products. Even though globalisation and trade transactions are important and present new opportunities, it has seen multiple challenges. One of the most crucial challenges is inefficient and inadequate infrastructures for various aspects of the trade such as transportation, customs, and even the most important, payment methods.  

One of the major risks that businesses face internationally, is the risk associated with payments. Most businesses wish to give out products or services on credit, but can’t, due to the fear of non-payment. This is where negotiable instruments play a key role. Negotiable instruments hold great value for the economy of any country since they allow you to continue with your business activities with the certainty of receiving money for the goods and services without actually transferring any money. 

Bills of exchange are the negotiable instruments that are used widely, both domestically and internationally, to carry out trade transactions. India has seen the usage of negotiable instruments like bills of exchange, ever since the concept of trade transactions was first introduced. But the question is, how relevant are these instruments in the 21st century? This article will therefore, discuss in detail the different aspects of a bill of exchange and decipher the scope of its use in India as well as internationally. The article will also delve into whether these instruments are important for trade transactions. 

What is a bill of exchange

A bill of exchange is a mode of payment that can be utilised for the purpose of making credit payments. It is a written order that imposes liability on a party to pay a definite amount of money to another party on a pre-decided date. A bill of exchange is usually used in international trade. In simple language, a seller provides a credit period to the buyer on account of either selling goods or providing any service. This document derives its legal validity via Section 5 of the Negotiable Instruments Act 1881.

Section 5 of the Negotiable Instruments Act, 1881 states that a “bill of exchange” is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or the bearer of the instrument

Let us understand the concept of a bill of exchange with the help of an example, ‘R’ purchases goods worth ₹20,000 from ‘S’. ‘S’ draws a bill of exchange for ‘R’ to pay ₹20,000 within 120 days from the date of the bill. This bill is duly accepted by ‘S’. The said bill of exchange will contain a specific date on which ‘S’ would be required to pay ₹20,000 to ‘R’. On this specific date, the bill is said to be matured. 

Features of a bill of exchange

A bill of exchange must bear the following features:

  • It has to be a document in writing.
  • The written document must contain the names of all relevant parties. 
  • The bill of exchange must be a confirmed order to make a payment on a specific date. 
  • The document has to be addressed from one party to another. 
  • It must contain the signature of the party that is giving the bill.
  • The time and date when the payment is due must also be specified. 
  • The bill should also outline the amount of money that is due.
  • The payment of the bill must be demanded to be paid in the legal currency of the country.
  • The amount that is to be paid must either be payable or demand or within a stipulated time.
  • A bill of exchange may or may not be transferable.

Parties to a bill of exchange

The following three parties are essential for the execution of a bill of exchange:

  • Drawer: The drawer refers to the party that writes the bill and orders for money to be paid. In another language, it is the person whose name is indicated on the bill. 
  • Drawee: This is the party that is required to pay the amount as specified on the bill. 
  • Payee: Payee refers to the beneficiary of the bill, meaning that according to the bill, the amount that is due is to be paid to the payee. 

The following parties are not essential to every bill of exchange and are circumstantial:

  • Holder: Holder is the person who is in possession of the bill of exchange. This is generally the payee of the bill or any other person to whom the bill is endorsed. 
  • Endorser: The drawer or holder may transfer the bill to another person to whom he owes money. The person who transfers the bill is known as the endorser. For example, ‘A’ drew a bill in ‘B’s favour amounting to Rs. 2000 at 5 months and the same was accepted by ‘B’. Now assumingly, there is another person ‘C’  who is the creditor of ‘A’ for the amount of Rs. 1500 to ‘A’, ‘A’ may endorse the bill in ‘C’s favour for the amount ‘A’ owes him. A is the endorser.
  • Endorsee: Endorsee is the party to which the bill of exchange is endorsed. Referring to the above example given in the explanation of an endorser, ‘C’ would be the endorsee.
  • Acceptor: This is the person who accepts the bill, meaning accepts the obligation of the bill.

Sample format of a bill of exchange

NOTE- The following format is only for reference and an actual BOE may differ with facts and circumstances.

Bangalore 20th November 2021

Rs. 50,000

Three months after the date, pay to me or my order, the sum of Rupees Fifty Thousand Only, for value received.

STAMP

Accepted 

        (Sign)

  Raja Ram Mohan Roy

        117, Sarita Vihar New Delhi 110025                                                                                                                                                                                                                                                                 

Advantages of a bill of exchange

The following are the advantages of a bill of exchange that make it an extremely convenient instrument of credit transactions with a guarantee of payment as it is legally binding:

  1. Legal relationship: Since a bill of exchange is a valid legal document, issuing the same establishes a lawful relationship between the creditor and the debtor. In case of non-payment, refusal to make the payment, or any kind of dispute between the parties involved, a bill of exchange serves as conclusive proof before the eyes of the law. 
  2. Terms and conditions: A bill of exchange includes all the necessary terms and conditions regarding the payment that is due to be paid such as the amount of payment, date when it is due, place of payment, etc. Since all the terms and conditions are duly specified, it becomes easier for the parties to oblige to the same.
  3. Mode of credit: A bill of exchange has been defined under the Negotiable Instruments Act, 1881 as a negotiable instrument that serves as a convenient mode of payment. The party that either buys any good or avails of any service can do this on credit and pay the respective amount on a stipulated date in the future. The provisions of a bill of exchange are so flexible that the drawer has the option of discounting the bill of exchange from the bank instead of taking the money from the other party in case of urgency.
  4. Easy transferability: We know that a bill of exchange can be endorsed further by another party. For example, if ‘B’ owes money to ‘A’ via a bill of exchange for 3 months. If ‘A’ owes money to another party, ‘C’, ‘C’ may receive the said money from ‘B’ on the stipulated date specified on the bill of exchange when ‘A’ endorses the bill in favour of ‘C’ This shows that a bill of exchange is easily transferable and is a convenient way of making credit purchases. The delivery and endorsement of the bill gives to the other party a valid title over the bill.
  5. Wider acceptance: Foreign bills of exchange will be discussed in the latter part of this article. However, from the name, it can be understood that such a bill is used internationally. Now since there is scope to buy goods or take services on credit internationally via a foreign bill, this shows that there is wider acceptance of this sort of payment. The scope of making and receiving payments has widened and become far easier after an increase in the usage of a bill of exchange.
  6. Mutual accommodation: A bill of exchange caters to the financial needs of all parties involved in the process. It allows the drawee to purchase a good or avail any service on credit, and pay the amount in the future. It also allows the drawer to continue his business with a guarantee of payment in the future. Therefore, it can be said that a bill of exchange is mutually accommodating.

Disadvantages of a bill of exchange

The following are the disadvantages of a bill of exchange:

  1. A bill of exchange is usually only used for availing short term services and are not considered a good option for long term services. 
  2. The drawee is responsible for paying the dues before or by the due date.
  3. In case of discounting of a bill, the drawee has to bear an additional burden.
  4. It is an unsuitable medium for banking services. 

Types of bills of exchange 

The following are the different types of bills of exchange that are used in India:

Inland bills

A bill of exchange would be called an inland bill under two circumstances:

  1. When it is drawn within Indian territory and is payable within India as well.
  2. When it is drawn by an Indian resident within India but maybe payable outside Indian territory.

Eg. ‘A’, a seller draws a bill in Delhi on a buyer, ‘B’ in Washington (US) but is made payable in Punjab) is an inland bill

Foreign bill

A foreign bill is one that can be paid outside of the Indian territory. Foreign bills have different rules and regulations that govern them, unlike the other bills. Generally, there are two types of foreign bills, namely, export bills and import bills. 

  1. Export bill: A bill drawn by an exporter for a party outside India.
  2. Import bill: A bill drawn by an exporter outside India. 

Demand bill

A demand bill refers to a bill that is required to be paid on demand. Such a bill does not have a specific due date or a stipulated time in which it is to be paid. The payment is to be made when the bill is presented.

Eg. ‘A’ draws a bill on ‘B’, but the said bill has no specific date of payment. The bill is payable whenever ‘A’ asks for the money.

Usance bill 

When a bill of exchange mentions the specific time frame within which the payment for the credit purchase is to be made by the buyer to the seller, such a bill is known as the usance bill. A usance bill is generally referred to as the time-bound bill because of its features.

Eg. ‘A’ draws a bill on ‘B’ which is to be paid after 3 months.

Documentary bill of exchange

A documentary bill of exchange is supported by all the relevant and necessary documents in order to prove the genuineness of the trade transaction that took place for which the bill of exchange was formed. The purpose of this is to confirm that a transaction took place between the seller and the buyer. Examples of this bill include documents against acceptance of bill and documents against payment of a bill. 

  1. Documents against acceptance bills (D/A): A D/A bill includes documents that are given in exchange for accepting a bill. 
  2. Documents against payment bills (D/P): A D/P bill includes documents that are presented in exchange for payment of a bill. 

Clean bill

A clean bill is the opposite of a documentary bill. In such a bill, there is no evidence via documents of the trade transaction between the buyer and the seller. Since there is no proof of the trade transaction, a clean bill usually charges a higher rate of interest.

Trade bill

When a bill of exchange is drawn with the purpose of settling a trade transaction and is further accepted, it is known as a trade bill. This is usually between a seller and buyer to enable the buyer to make the purchase on credit. 

For example, when Rita sells a bike to Radha, she may draw a bill for Radha, for her to make the payment of the bike at a later date.

Accommodation bill

In a situation where there are no trade transactions, meaning that there is no sale or purchase of any goods or services, an accommodation bill is used. The purpose of this bill is the mutual benefit of both the parties involved with the intention of providing financial support to one another. In this bill, the bill is signed by the party that acts as a guarantor. This party would be liable for the bill in case the acceptor is unable to make the payment on the date of maturity. The idea of this bill is to allow a party to raise funds on credit without any consideration.

For eg. For her own convenience, ‘R’ drew on ‘C’ a bill for three months. ‘R’ had the bill discounted on a similar date with a bank around the completion of three months. Prior to the due date, ‘R’ sent the sum to ‘C’, who honoured the bill on the due date.

Supply bill

A bill that is drawn for the purpose of supplying goods to any government department by a supplier or a contractor is known as a supply bill. 

insolvency

Elements of a bill of exchange

The following are some important aspects of a bill of exchange:

  1. Discounting: What happens in a situation where the payee of a bill of exchange is in need of the credit amount before the stipulated date? This is where discounting of a bill of exchange comes into play. Discounting of a bill of exchange refers to the encashment of a bill from a bank before the date the amount is actually due. The bank in this process deducts certain charges, which is referred to as a discount in this case. The bank recovers the amount from the drawee on the due date, as specified in the bill of exchange.

To understand the discounting of a bill of exchange, let us take the help of an example, Rani purchases goods from Raja, and instead of immediate payment, a bill of exchange is drawn specifying the date of payment to be 3 months later. However, Raja is in need of money 1 month after the bill is drawn. In such a situation, he may present this bill to the bank for discounting. The bank will deduct certain charges from the amount specified on the bill and pay the remaining amount to Raja. When the bill matures, i.e. on the date specified on the bill, Rani will give the payment to the bank. This process is known as discounting of a bill of exchange and is a common practice in India.  

  1. Retirement: Retirement of a bill of exchange also allows for the drawer or holder of the bill to receive the payment before the due date. If the drawee of the bill wants to pay the amount of the bill before the date of maturity, they may ask the drawer or holder of the bill for the same. If the drawer or holder agrees to pre-payment, this is known as the retirement of bills of exchange.

When the payment of the bill is made before the maturity of the bill, the drawer allows to the drawee some discount which is known as a rebate. Rebate is basically a concession allowed to the drawee for making an early payment.

For example, if ‘A’ purchased goods from ‘B’ whereby ‘B’ drew a bill of exchange on ‘A’ which was to be paid after a duration of 3 months. One month after the bill was drawn, ‘A’ had surplus funds and offered to pay ‘B’ the amount due early, at a 5% rebate. If ‘B’ accepts this offer, it would be known as the retirement of the bill of exchange.

  1. Dishonour: Dishonour of bill refers to a situation where the drawee is unable to make the payment on the date of maturity of the bill. There are two ways in which a bill can be dishonoured:

Non-acceptance: According to Section 91 of the Negotiable Instruments Act, 1881, a bill is said to be dishonoured by non-acceptance when there is a default on behalf of the drawee to accept the bill. The bill is duly presented but is not accepted within customary time. This would also apply when the drawee is incompetent to accept the bill.

Non-payment: As per Section 92 of the Negotiable Instruments Act, 1881, when the drawee is unable to make the payment required on the date of maturity of the bill, it is referred to as dishonour of a bill of exchange because of non-payment. There is a default on behalf of the drawee to make the payment by the stipulated date.

It is important to note that in both these situations, the liability of the acceptor to make the payment is restored which means that the holder of the bill can still recover the amount. 

  1. Renewal of a bill of exchange: In a situation where the drawee is aware that being able to meet the payment obligation would not be possible, the drawee may contact the drawer and request for an extension for the time to make the payment. If the drawer accepts this request, the old bill is cancelled and a new bill with the requested changes comes into effect after being duly presented, accepted, and delivered. The drawee may be required to pay interest on this delayed payment. 

For example, Nihar sells goods to Asim on 7th March 2015 amounting to ₹50,000. To facilitate the transaction, a bill is drawn for 2 months which is duly accepted by Asim. On the due date, Asim is unable to meet his liabilities and requests Nihar for an extension of time for another 2 months at an interest of 10%. Asim agrees to pay the interest immediately and this is accepted by Nihar. This is known as the renewal of a bill of exchange. Now Nihar has agreed and accepted a new bill in favour of Asim.  

Legal interpretation of bills of exchange

To understand the scope and use of bills of exchange, it is necessary to understand its functioning at both a domestic and international level:

India

Since time immemorial, instruments of credit have been used in India to facilitate trade transactions and are popularly known as ‘Hundies’. With evolution and advancements, these instruments are now called bills of exchange or promissory notes. In India, a bill of exchange as a valid form of payment was legalised through the Negotiable Instrument Act, 1881 which came into impact on 1st March 1882. The main objective of the Act is to allow easy trade transactions. The Act facilitates easy settlement of payments in businesses by allowing credit transactions with a guarantee of payment. The Act protects all parties partaking in a transaction involving a negotiable instrument and provides rules of law that are to be followed. 

The definition of a bill of exchange, its features, types, and different elements including dishonour, renewal, and retirement have all been incorporated in this Act and are followed when parties engage in a trade transaction that is settled through a bill of exchange.

International perspective of bills of exchange

A bill of exchange derives its legal validity from the Negotiable Instruments Act, 1881 in India. However, this cannot govern international transactions. We have the United Nations Convention on International Bills of Exchange and International Promissory Notes for this purpose. 

The United Nations Convention on International Bills of Exchange and International Promissory Notes (the UBNC or ‘Convention’, hereinafter) is the culmination of work by the United Nations Commission on International Trade Law (UNCITRAL). It was adopted by the General Assembly of the United Nations on 9 December 1988.  

The Convention presents an option for international transactions and establishes a set of rules and regulations for the use of an international bill of exchange with the purpose of allowing easy trade transactions. In the first session, in 1968, special emphasis was placed on making international payments a priority to expand globalisation. During its formulation, the inputs and comments of governments, banks, and other interested parties were taken into consideration. 

The Convention aims to facilitate international trade and finance. The basic idea behind the introduction of this Convention is to get rid of the multiple disparities and uncertainties in terms of negotiable instruments that may be used for international payments. Some important articles of the Convention include its own definition of the terms “bill of exchange” and “promissory note”. Furthermore, the conditions that would make a bill of exchange or a promissory note an international instrument are explicitly stated. 

As per Article 3 of the Convention, a bill of exchange is a written document that, 

a) contains an unconditional order whereby the drawer directs the drawee to pay a definite sum of money to the payee or to its order; 

b) is payable on demand or at a definite time; 

c) is dated; and 

d) is signed by the drawer.

The most important aspect of the Convention is the idea of unifying this field of law. International trade has numerous benefits such as the availability of international products, better living conditions, an increase in employment, etc. International trade would automatically increase if the medium to make international payment is simpler and uniform. This Convention enables international payments in a much more convenient manner and further promotes uniformity in the observance of good faith in international transactions. 

Conclusion

It is clear that a bill of exchange serves as an important instrument in order to carry out trade transactions. It is a security that gives a guarantee of payment as the rules and regulations associated with this instrument are specifically laid down in the Negotiable Instruments Act. It is no surprise that trade credit is an essential tool for the growth of any as it effectively puts less pressure in comparison to what immediate cash payment would have on any business. Therefore, a bill of exchange plays a major role in the execution of a credit system of payment and performs as a substitute for money. What can be done to incorporate the bills of exchange and other negotiable instruments in today’s age of technology is to digitise these instruments in order to increase their usage. 

A bill of exchange has both advantages and disadvantages that have to be taken into consideration when opting for this form of payment method. However, the use of bills of exchange is growing internationally and its pros such as uniformity in international payment, guaranteed payment, and legal validity are most certainly outweighing its cons.

References


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

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

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Section 41 of Transfer of Property Act, 1882

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The article is written by Tejaswini Kaushal, a student at Dr. Ram Manohar Lohiya National Law University, Lucknow. This article talks about the rights of ostensible owners regarding the transfer of property as specified under Section 41 of the Transfer of Property Act, 1882.

It has been published by Rachit Garg.

Introduction

‘Property’ acts as one of the most indispensable needs of human life. In India, the right to property was provided as a fundamental right under Article 31, but it was abrogated by the 44th Constitutional Amendment Act, 1978 and subsequently replaced by Article 300A, which made it a constitutional right instead.

Possession, contract, title documents, and other methods can be used to transfer properties from one person to another for consideration. Various laws have been created to guarantee the seamless transfer of property, whether it be movable or immovable. The Transfer of Property Act (‘the Act’) was enacted in 1882 to codify and harmonise all of the existing customary rules regarding the transfer of property. It solely deals with the transfer of property inter-vivos, that is, between living persons. 

The transfer of property by way of gifts, succession, inheritance, or testamentary is not covered by this statute. The Act establishes clear legislative regulations that govern the rights of the real owner, ostensible owner, and third party concerning the transfer. The goal of the Act was to make the transfer of land and property convenient and hassle-free for the general public. This Act establishes certain broad guidelines for the transfer of property that must be observed.

The principle of an ostensible owner performing the transfer of property was established to defend the rights of innocent third parties against actual property owners, it is codified under Section 41 of the Act. Innocent third parties’ rights are protected by this principle. It also discusses the different components and requirements that must be met in order for the plaintiff to profit from this concept, as well as its implementation in several case laws both before and after India’s independence.

What is Section 41 of Transfer of Property Act

The transfer of property to an ostensible owner is dealt with under Section 41 of the Transfer of Property Act, 1882. According to it, when a person acts on the express or implied consent of a person who is vested in a certain immovable property, that person is deemed the ‘ostensible owner’ of that property.

Necessary conditions for the application of Section 41 of Transfer of Property Act

To make use of this Section, one must meet specific prerequisites. They’re as follows:

  1. The most fundamental criterion is that the individual transferring the property must be the ostensible owner.
  2. The actual owner’s consent, which might be implied or expressed, is necessary.
  3. In exchange for the property, the ostensible owner must be compensated.
  4. The transferee must use reasonable caution over the transferor’s power over the property, and whether the transferee acted with bona fide intention.
  5. This section, needless to say, does not apply not to the transfer of movable property, and only to that of immovable.

An exception to the ‘Nemo Dat Quod Non Habet’ rule

The rule enunciated in Section 41 acts as an exception to the general principle that a person cannot transfer a superior title to property than what he holds i.e. ‘Nemo Dat Quod Non Habet‘. Section 41 is a well-accepted exception to this general principle. If the real owner, for example, entrusts a particular person with the title papers in any reasonable manner and makes him an ostensible owner, then a third party who (after appropriate investigation) trades with such an ostensible owner in a bona fide manner might obtain a valid title to the property as against the real owner.

Can the property be transferred to an ostensible owner 

The term ‘ostensible’ refers to what seems to be real. Therefore, the ostensible owner of a property is not the real owner. To third parties, he just portrays himself as the legitimate owner. Without really owning the property, an ostensible owner has all of the rights to it. By the explicit or implied consent of such an owner, he obtains these rights from the real owner. The real owner is the qualified owner of the property, whereas the ostensible owner is the full yet unqualified owner.

Persons who are not ostensible owners include:

  1. A self-proclaimed manager or agent
  2. A mortgagor is someone who has a small stake in a property and works as a servant.
  3. A co-sharer in occupation in a jointly shared family property of residence.
  4. The trustee or manager of the idol, because the idol is neither conscious nor capable of providing consent.

The ostensible owner is not the real owner, but he might pretend to be the real owner in such transactions. He obtained that right as a result of the real owner’s intentional neglect or acquiescence, making him an ostensible owner. The concept of assigning an ostensible owner is a universally applicable rule of natural equity, that if one man lets another hold himself out as the owner of a property, and a third person acquires it for value from that ostensible owner under the impression that he is the real owner, the person who thus allows the other to hold himself out must not be authorized to reclaim his ‘secret title’, unless he can overturn the purchaser’s arguments by proving that the third party had a direct notice, or constructive notice, of the genuine title, or that there should’ve been proper circumstances to prompt him to conduct an investigation which could have led to the discovery of true ownership.

‘Indicia’ of ownership

The facts of each case determine what an indicia of ownership is. Possession, for one, acts as a form of ownership evidence. Possession is ostensibly an act of ownership, but it is not necessary, because the real owner may not be capable of handling his own property. He could hire a manager to look after his estate. Although management implies possession, the manager may be hired to conduct additional management tasks such as leasing, collecting rentals, and overseeing the estate assigned to his care.

Involuntary transfer and partial transfer 

Transfer of property ownership might be involuntary or voluntary.  It is a voluntary transfer when the owner of the property transfers it willingly. It might be accomplished in the following ways:

  1. In exchange for consideration, such as a mortgage, sale, lease, or exchange, 
  2. As a gift, and 
  3. By will

When a court seizes a person’s property, it is known as involuntary transfer or involuntary alienation. This approach may also alienate the joint family’s assets or a co-undivided partner’s participation in the estate. The provision under Section 41 of the Act only pertains to voluntary transfers. It is not applicable upon coercive, involuntary, or legally compelled transfers, such as judge-ordered auction sales. 

Benami transactions

The Benami Transaction (Prohibition) Act of 1988 states that when the transfer of a property is done benami (that is, under the name of some other person), the person who holds the property becomes the real owner. The benamidar is only a trustee for the real owner and merely acts as a representative. If a property is acquired in the guise of a benamidar and the indicia of ownership are entrusted to him, the real owner can only overcome the impact of alienation by demonstrating that it was done without his consent and that the buyer was aware of it. No litigation, actions, or claims to enforce any right concerning the property held benami against the person in whose name the property is held, or any other person claiming to be the real owner of the property, is allowed under the Act.

In other words, following the implementation of the Act, the real owner is no longer able to reclaim the property from the benamidar by instituting any legal suit. The argument of being the real owner is likewise unsustainable. 

However, the Act offers certain exemptions when the provision of Section 41 do not apply:

  1. When the person in whose name the property is held acts as a coparcener and that property is being held for the benefit of all coparceners in the Hindu Undivided Family, or
  2. Where the person in whose name the property is held is a trustee or some other person acting in a fiduciary position, and the property is held for the benefit of another person towards whom he acts as a trustee or in a similar capacity. Excluding the cases where he is a coparcener in a Hindu Undivided Family or a trustee acting in a fiduciary capacity, an ostensible owner or benamidar will become the real owner. Therefore, except if benamidar is a coparcener or a trustee acting in a fiduciary position, the provision established by Section 41 of the Act stands to be modified.

The Supreme Court noted in Jayadayal Poddar v. Bibi Hazara (1974) that whether a person is an ostensible owner is a subjective matter that depends on specific facts and circumstances. When determining whether a person is an ostensible owner or not, the following factors must be considered: 

  1. Who paid the price, or who paid the purchasing money? 
  2. Who held possession following the purchase, i.e. who owned the property? 
  3. The motive for acquiring the property in a benami fashion i.e. why was the property acquired in the name of someone else? 
  4. Relationship between the parties, i.e., whether the real and ostensible owners were familiar with each other or not?
  5. The parties’ conduct in managing the property, i.e. who used to look after, oversee and manage the property? 
  6. Who had custody of the title deeds?

Requirements of transfer by an ostensible owner 

The following are the main requirements for a lawful transfer by an ostensible owner: 

  • The individual must be the ostensible owner of the property. 
  • He must hold the property with the express or implied consent of the real owner.
  • The transferee must acquire the property for consideration from such an ostensible owner. 
  • The transferee must take reasonable precautions before accepting the transfer to ensure that the transferor has the authority to make the transfer, i.e., he must act with bona fide intentions. 

The transferee would not be entitled to derive the benefits of this Section if any of the foregoing requirements were not met. If all of the following requirements are met, the actual owner’s stake will be taken away.

  1. The transferor must be an ostensible owner

When it has already been proven that the transfer was performed with the real owner’s permission, the real owner will be estopped from making a claim on the property. It will be applicable even if the transferee had performed no investigations to see if the transferor had the authority to make the transfer, which is otherwise essential for this section to apply. Hence, the transfer itself does not need to be done with the approval of the real owner for this provision to apply. It is sufficient if the transferor is the ostensible owner with the approval of the real owner at the moment of transfer.

  1. The real owner’s consent is essential for ostensible ownership

Unless the ostensible ownership of the transferor has been formed, allowed, or acquiesced in by him, the real owner will not be barred under this provision. This can be done by:

  • express words of consent, or 
  • acts or behaviour that indicate consent, so that the real owner establishes or enables the impression of ownership or acquiesces in it. 
  1. Express Consent:

The consent is said to be express when: 

  1. the owner clearly says using words, spoken or written that: 

(a) he has no interest in the property or

(b) that another person has an interest in the property; or 

  1. The owner performs any act that demonstrates that he has no interest in the property, such as attesting a deed stating that he has no interest in the property, or that a third party has an interest in the property, such as getting the property mutated in the name of another and disclaiming his interest. Unless there is a responsibility to speak, or the inactivity or silence is comparable to speaking, mere inaction or silence is not material. 
  2. Implied Consent: 

Implied consent refers to consent that can be inferred from a person’s actions or behaviour. If the real owner is aware that someone else is handling his property and agrees to it, his silence or inaction might imply consent.

However, prior to such a consent being inferred, it must be established that the person delivering the consent was cognizant of his right, interest or title to the property and that despite that knowledge, he provided the consent. His act or conduct at a time when he was unaware of his own right does not preclude him from pursuing his own claim against the transferee.

  1. The transfer must be for consideration 

A transferee can only profit from Section 41 of the Act if he can show that he received the property in exchange for something. There should be a quid pro quo in the transaction.

  1. The transferee must take reasonable precautions 

The clause states that a transfer made by an ostensible owner is not voidable because the transferor was not allowed to perform it, as long as the transferee was:  

  • Taking reasonable precautions to ensure that the transferor has the necessary authority to effectuate the transfer, and 
  • Acting with bona fide intention. 

If a transferee does not have constructive knowledge of the real owner’s title and no means to investigate the real title-holder of the property, he may be protected under this clause.

  1. Degree of Care: In order to determine whether the transferee has the authority to affect the transfer, the following requirements to ensure a certain degree of care must be met: 
  2. Ordinary Prudence and Reasonability: Whether the transferee took reasonable care to ensure that he had the authority to make the transfer must be decided in light of the facts of each instance. The test for the same is to see whether the transferee acted 

(a) like a reasonable man, and 

(b) with ordinary prudence.

  1. Standard of diligence: The conventional standard of diligence for determining whether the transferee has the power to affect the transfer is requesting and examining the title under which he claims to be the owner. If in the document itself, that is produced as the title deed for the transferee’s examination, there is any indication to put the transferee on enquiry with respect to the possibility of some other document or improper ownership of title, then the matter needs to be investigated further.  

2. The transferor must demonstrate that he has conducted the usual title search: The proviso states that the transferee must have taken reasonable care to ascertain that the transferor possessed the power to make the transfer, and this is an essential requirement for the provision to apply. Therefore, the transferee must demonstrate that he conducted the standard title investigation. He would not have been granted the benefit of the clause if he had not done so.

3. If the title is obvious, no inquiry is necessary: In case the title is obvious, no inquiry may be carried out. When a person appears to be in possession of the property, is documented as the owner, retains the property’s title deeds, and talks with a third party about it, there is nothing to establish that the third party acted with mala fide intentions in dealing with him about the property.

4. Impact of a lack of reasonable care: If this aspect of lack of due care used to determine the true fact is missing the transferee cannot enjoy the benefits of the Section.

  1.  The transferee must act in Good Faith 

It is essential for the transferee to act with a bona fide intent.  It is possible that there may be investigation without good faith as well as good faith without investigation. The real owner will not be affected by the transactions being entered into by the ostensible owner in either of these scenarios. This provision requires honesty as “good faith.” A person may commit a mistake, but he must do so in good faith. A transferee cannot claim protection under this clause simply because he was unaware of the actual owner’s title. He must not close his eyes and make a hasty purchase from an ostensible owner without first determining whether the transferor has the authority to make the transfer. The mere fact that the buyer’s name was registered in the revenue papers at the required period is insufficient to establish that he was a genuine buyer. He must conduct a reasonable investigation into both the transferor’s title and his authority to sell.

Rule of estoppel under Section 41 of Transfer of Property Act 

The law of estoppel argues that when the real owner of property depicts some other person as the owner to third parties, and the latter act on that depiction, the real owner cannot rescind his representation. This provision establishes an estoppel rule against the real owner. The rule of Section 41 of the Act, 1988 is derived from Section 115 of the Indian Evidence Act, 1872, which defines the law of estoppel. The House of Lords articulated this concept in Cairncross v Lorimer (1860) as, a party, either by words or conduct, representing to consensually perform or abstain from doing an act, and the other party acts on that representation, the former will have to stick to his representation.

Burden of proof 

The burden of proof for the transferee seeking immunity under this provision is on the transferee to show that he or she was an ostensible owner. He must establish that the transferor is the property’s ostensible owner or that the transaction is a Benami transaction. He must also show that he took reasonable precautions to protect his interests. The burden of proof transfers to the other side if the other party claims to have evidence leading to a starting point of inquiry that, if pursued or studied, would have led to the disclosure of truth. If a person claims ownership of property that has been transferred to another person, he must prove it.

The essential legal principle is that unless the legitimate owner has done something to fool innocent purchasers or pledges into assuming that the immediate possessor is the actual owner, his rights should be protected prima facie. He would have to show that the real owner has forfeited his right to reclaim possession as a result of his actions or omissions.

Non-applicability of the provision under Section 41 of Transfer of Property Act

If during the pleadings, it is not mentioned that the transferor was an ostensible owner with the voluntary consent of the real original owner of the property, the plaintiff’s claim for the title to the property as a result of a transfer of land by an individual besides the owner to him would be dismissed. The cancellation order can be appealed on the merits by subsequent purchasers, but the sale in their favour is not protected by Section 41 of the  Act. The following vendor can only request compensation or refund from his seller. Section 41 cannot be used to create a transferee pendente lite since he wouldn’t be a bona fide transferee without notice.

Landmark case laws concerning Section 41 of Transfer of Property Act 

1. Ramcoomar Koondoo v. John and Maria McQueen (1872)

The notion of transferring property by an ‘ostensible owner’ was developed to defend the rights of innocent third parties against property owners, which was initially used by the Judicial Committee in the landmark case of Ramcoomar Koondoo v. John and Maria McQueen, and then subsequently reflected as Section 41 in the Act.

Facts

The land, which was perpetually leased at a set rate, was sold to Bunnoo Bebee, mistress of Alexander Macdonald by deed of sale by the then landlord. It could not be said with certainty that the father, Macdonald, had possession of the property. In any case, the evidence does not indicate that he ever lived on the land, yet there is sufficient evidence of Bebee’s residence upon the land.

Subsequently, Bebee died and the plaintiff (Ramdhone, Ramcoomar Koondoo’s father), inherited the property, discovered that Bebee had previously acquired the property in her name, and then sold it to a third party (John and Maria McQueen) by convincing them that he possessed sufficient title to the land. The entire transaction was a benami transaction, which meant that only the individual who sold the land knew about it. John and Maria McQueen, who lived on the property but failed to pay rent, were sued by the plaintiff for recovery of the possession of the land. The Calcutta High Court ruled in Mcqueen’s favour, prompting Ramcoomar (who had filled in for his father following his death) to file an appeal with the Privy Council.

Issues

  1. Whether or not the property belonged to Macdonald?
  2. Whether Maria McQueen received it by his will?
  3. Whether the appellants acquired bond bonds without notice for a good sum?

Judgement

The appellants’ response is that their father acquired Bunnoo Bebee’s estate without being aware of the benami title, and therefore they are entitled to keep it, despite the fact that there was initially a resultant trust in favour of Macdonald. In such a circumstance, they bear a disproportionate amount of the burden of proof, and hence they must first prove that the purchase was done on Macdonald’s behalf and with Macdonald’s money. The proof for this was not produced by the respondent. Furthermore, Bunnoo Bebee treated the land as part of Macdonald’s inheritance following his death. The appellants proved their right to keep the property against the benami title, according to their Lordships.

It’s unlikely that the buyer was aware that the title was not the same as or similar to the one that appeared. There is no indication in any of the paperwork that the transaction was not what it looked to be. All of the documentation, on the other hand, point to Bunnoo Bebee making the transaction herself or for her benefit. Even if Macdonald was the real owner and Bunnoo Bebee was merely an ostensible owner, the Privy Council held that because Macdonald had given implied consent to Bunnoo Bebee to hold herself out as the real owner. Therefore, the plaintiff or his representatives couldn’t recover the title unless they could prove that they were the real owners. It was then decided that the plaintiff could not reclaim the property from the third party and in the eyes of the law, the transfer was held to be legally sustainable.

2. Md. Shafiqullah Khan v. Md. Samiullah Khan (1929)

Facts

In this case, regardless of the fact that they were legally unqualified to possess the land, the owner’s three illegitimate sons (Nuhullah, Hakimullah and Halimullah) got it after his death. The genuine heir, the defendant Muhammad Shafiqullah Khan who is admittedly his son, filed a lawsuit to assert his inheritance rights. The possessors, on the other hand, kept control of the property and sold it to a third party (Samiullah, the defendant) while pretending to be the legitimate owners. 

Issues

Whether the illegitimate sons were ostensible owners under Section 41 of the Act? 

Judgement

On the issue of the benefit of Section 41 of the Act, the lower court found that Samiullah had no knowledge of Shafiqullah’s suit, that he acted in good faith and took the property from Nuhullah and others believing they had the title, and that this belief was induced in his mind by Shafiqullah Khan’s previous conduct, which had allowed the names of Nuhullah and others to remain in the revenue papers. Hence, he determined that the mortgagee Samiullah was protected under Section 41 of the Act and that Shafiqullah Khan was barred from establishing his own title. 

The Allahabad High Court, however, stated that this legal situation would not satisfy the requirement for Section 41 because ownership was not obtained with the express or implied consent of the lawful owner. Hence, they were not deemed to be the ostensible property owners.

3. Niras Purbe And Anr. v. Musammat Tetri Pasin And Ors. (1915)

Facts

In the instant case, while on pilgrimage, a husband registered his land in the revenue records under his wife’s name. He then permitted her to take out a mortgage on the property. When the husband moved out, the wife sold the property to a third party, who paid off the mortgage. He claimed to recover the land from these defendants on the ground that his wife had no power to sell it to them. 

Issue

Whether the husband can reclaim the title of the property?

Judgement

The court ruled that the spouse could not reclaim or redeem the land from the buyer if the buyer acted in good faith and took reasonable steps to verify the land’s ownership, as had been done. 

Conclusion

Section 41 of the Transfer of Property Act has done a decent job of safeguarding the interests of the unsuspecting third party. Although the section may appear to be prejudiced in favour of the third party, this is only the case if the real owner is at fault. No one can simply claim that he now owns the property and therefore cannot be evicted. The third party must use extreme caution when acquiring the property, and these criteria were imposed by law to prevent the ostensible owner and the third party from abusing this provision. In a manner, this also protects the real owner’s interests.

In a nutshell, Section 41 of the Act, specifies the powers of the ostensible owner and discusses the nature of his transactions. The power provided by the property owner to enter transactions on his behalf is the most noticeable feature of the ostensible owner. The consent for this authority might be expressed or implied, as defined by several landmark case laws. Additionally, consent cannot be obtained by deception. Also, once done, a property transfer is irreversible at the owner’s discretion. This includes partial transfers such as mortgages and leases, as well as complete transfers of rights such as sales and exchanges. Furthermore, the law sets the burden of proof on the transferee to show that the transferor is the ostensible owner. He must also act with bona fide intention and make appropriate investigations about the progress of the transfer of property while being sufficiently cautious.

References


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All about revenue courts in India

0

This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article discusses revenue courts in India (state-wise), their jurisdiction, powers, functions, and other related aspects, in detail. 

This article has been published by Sneha Mahawar.

Table of Contents

Introduction 

In each district of India, there are various types of subordinate or lower courts. Subordinate courts have a very consistent structure and operation across the country. The names of the courts denote their functions. Civil courts, criminal courts, and revenue courts are the three types of such courts. These courts consider civil, criminal, and revenue cases, respectively. 

As per the powers bestowed on them, these courts deal with civil and criminal matters. These Courts were primarily derived from two significant Codes regulating, namely, the Code of Criminal Procedure, 1973, and were further enhanced by local statutes. A revenue court is one that has original jurisdiction under this Code to try suits or proceedings relating to the rent, revenue, or profits of land used for agricultural purposes. It does not include a civil court that has original jurisdiction under this Code to try such suits or proceedings as civil suits or proceedings.

Revenue courts in India 

Revenue courts deal with cases of land revenue in the state. The Board of Revenue is the district’s highest revenue court, followed by the Commissioners’, Collectors’, Tehsildars’, and Assistant Tehsildars’ Courts. The Board of Revenue is in charge of hearing final appeals from the lower revenue courts. The primary goal of these courts is to address all issues relating to land revenue, as well as issues affecting agricultural land boundaries and tenancy. Suits referred to here include succession, land transfer, the partition of holdings, demarcation of boundaries, removal of encroachments, eviction of trespassers, and declaratory suits (specifically in Uttar Pradesh) in several states. In any case, such lawsuits do not fall under the jurisdiction of civil courts. 

The different types of revenue courts are provided hereunder;

  1. Board of Revenue
  2. Commissioner’s Court
  3. Collectors’ Court
  4. Tehsildar’s Court

A uniform designation has been brought about in the subordinate judiciary’s Judicial Officers all over the country, by means of: 

  1. District or Additional District Judge, Civil Judge (Senior Divisions) and Civil Judge (Junior Division) on the Civil side, and 
  2. On the criminal side, Sessions Judge, Additional Sessions Judge, Chief Judicial Magistrate and judicial magistrates made in existing posts by indicating their equivalent with any of these categories by all state Government/Union Territories Administrations.

The administrative control over members of the subordinate judicial service is vested in the concerned high court under Article 235 of the Indian Constitution. In addition, in the execution of the powers entrusted to the appropriate designated individual, the state government shall create rules and regulations in consultation with the high court exercising jurisdiction in connection to Article 309 read with Articles 233 and 234 of the Constitution.

Constitution of revenue courts

The constitution of revenue courts varies from one state with another other. The general composition of revenue courts has been listed hereunder: 

  1. Board Members (Both admin and judicial): This board usually consists of a Chairman and any other members are chosen by the state government. The principal duty of this board is to act as the ultimate decision-maker in instances involving disposition, appeals, or modification. Also, in all other issues provided in separate state codes, subject to the supervision, direction, and control of the state Government.
  2. Commissioners or Additional Commissioners: Each division will have a commissioner nominated by the State Government. One or more extra commissioners may be appointed by the State Government in one or more divisions.
  3. Collectors or Additional Collectors: The person in charge of revenue administration is known as a collector. As a result, a state government must appoint a commissioner in each district, as well as one or more additional commissioners in one or more districts.
  4. Assistant Collectors: The state Government has the ability to appoint as many people as it sees fit for the positions of first and second-class assistant collectors. In addition, if necessary, the state government may designate an assistant-collector first class to serve as extra sub-divisional officials for one or more tehsils in a district.
  5. Chief Revenue Officers: A revenue inspector’s job is to ensure that village records are properly maintained, supervised, and corrected, among other things. Each district’s collector has the authority to designate one or more tehsils.
  6. Settlement Officers and Assistant Settlement Officers: They have generally involved settling disputes between parties to a suit. 
  7. Record Officers and Assistant Record Officers: These officers are responsible for maintaining all official records that are required in day to day activities of the revenue board or courts in general. 
  8. Tahsildars and Tahsildar (Judicial): A tax officer accompanied by revenue inspectors is known as a tehsildar. They are responsible for collecting taxes on land revenue from a tehsil. A tehsildar is often referred to as the tehsil’s Executive Magistrate.
  9. Naib Tahsildar: The state Government has the authority to appoint as many Naib Tehsildars as it sees fit in each district.

Powers of revenue courts in India 

Although powers of revenue courts in India varies from one state to that of the other taking into account the distribution and subject matter of the concerned work, a list of general powers that are vested on revenue courts in India have been provided hereunder: 

  1. Power to ask for records: The board or commissioner has the authority to request any records relating to any kind of suit or proceeding that is being judged by any subordinate revenue court in which no appeal has been filed, or even if an appeal has been filed, it is to be deemed that the same has not been filed yet. The purpose behind the same is to ensure the satisfaction of board members, legality or propriety, of any such order passed in a particular suit or proceeding referred to by the Board member.
  2. Power to review: A revenue board has the power to review any of the order passed by itself or pass any such order as it may think fit on the basis of any applications made to it by an interested party or board can do so, of its own motion.
  3. Power to transfer cases: A revenue board has the authority to transfer cases from one revenue court to another revenue court of a higher or equivalent rank, in the same district or any other district, but only if it is convenient and practicable for the goals of justice.

Jurisdiction of revenue courts in India 

Generally, the revenue codes of respective states expressly provide that revenue courts or the board have complete jurisdiction on the matters that they are empowered to deal with and that no civil court would have such jurisdiction to entertain suits related to such subject matters. If a civil court is allowed to entertain, the same will be provided in the state code itself. 

Jurisdiction of civil courts vis-a-vis revenue courts

The question of whether a civil court has jurisdiction over suits challenging agricultural land transfer deeds on the grounds that they are defective or voidable and seeking cancellation has been a difficult one. Section 49 of the U.P. Consolidation of Holdings Act, 1954 deals with res judicata, both actual and constructive, and the bar of civil or revenue court jurisdiction (could or ought). If a claim could be made during consolidation operations but it was not done then thereafter it cannot be raised in any court including a civil court.

Where any revenue court is governed by the provisions of any state code in those matters of procedure where no special enactment applicable to them is silent, the State Government may declare, by notification in the Official Gazette, that any portions of those provisions not expressly made applicable by the state code shall not apply to those courts, or shall only apply to them with such modifications as the state government may prescribe. A revenue court means, a court vested with the original jurisdiction to try suits or proceedings relating to the rent, revenue, or profits of land used for agricultural purposes, as have been mentioned before as well, but not a civil court with original jurisdiction to try such suits or proceedings as civil suits or proceedings.

In the case of Jai Prakash Singh v. Bachchu Lal (2019) which appeared before the Allahabad High Court, the issue related to the jurisdiction of the civil court and revenue court. 

The question that the Court had framed to be answered was “in which court, civil or revenue, would the suit reside if the prayer in the suit is for the cancellation of a sale deed of agricultural property?” In another form, the question before the Court, in this case, was “under what conditions would a suit for cancellation of a “sale deed” of agricultural property sit in the civil court or the revenue court?”. The Court opined that the averments stated in the plaint revealed that the plaintiff had sought for the cancellation of the sale deed by the non-executants of the sale deed and therefore the same was involving declaration of right/title/interest. Taking this into account, the Court held that as the civil court had no jurisdiction to grant the main relief of declaration of title and coparcenary right of agricultural land, it was the revenue court who had jurisdiction in this matter.

Appeals in revenue courts

In order to understand appeals in revenue courts, it is necessary to know the highest and the lowest revenue courts in India. It is to be noted that the highest revenue court in the district is the Board of Revenue. Under it are the Courts of Commissioners, Collectors, Tehsildars and Assistant Tehsildars. The Board of Revenue hears the final appeals against all the lower revenue courts under it. Further, the Tehsildar’s Court which handles the cases that deal with the assessment of land revenue and property tax is the lowest revenue Court in India. Along with this, we need to also take into account different state codes concerning revenue courts which lays down provisions for appeals in revenue courts in their own way. The same has been discussed in the latter part of this article. 

A common query that can arise when we talk about appeals in revenue courts is whether high courts of respective states can have appellate jurisdiction to try appeals that originated from revenue courts or not. In this regard, we must consider an early case of Burla Appanna And Anr. v. Anala Latchayya And Ors (1923), where the Madras High Court had opined that “subordination of courts is determined according to Section 195 of the Criminal Procedure Code, by the fact that appeals ordinarily lie from one court to another. In no case does an appeal lie to the High Court from the decision of the Board of Revenue.”

A state-wise list of revenue courts and their functioning in India

As revenue courts, their structure, powers, functions and jurisdiction is different for each state, a state-wise list of revenue courts and their associated aspects have been discussed in detail hereunder.

Revenue courts in Uttar Pradesh 

Revenue Court means all or any of the following authorities in Uttar Pradesh, as defined by Section 4(16) of the Uttar Pradesh Revenue Code, 2016;

  1. The Board and all members thereof, 
  2. Commissioners, 
  3. Additional Commissioners, 
  4. Additional Collectors, 
  5. Assistant Collectors, 
  6. Settlement Officers, 
  7. Assistant Settlement Officers, 
  8. Record Officers, 
  9. Assistant Record Officers, 
  10. Tehsildar and Naib Tahsild

The primary goal of these courts is to address all issues relating to land revenue, as well as issues affecting agricultural land boundaries and tenancy. Suits referred to here include succession, land transfer, the partition of holdings, demarcation of boundaries, removal of encroachments, eviction of trespassers, and declaratory suits in several states, including Uttar Pradesh. In any case, such lawsuits do not fall under the jurisdiction of civil courts.

The goal of computerising all of the state’s revenue courts is to ensure 100 percent transparency in the revenue courts’ proceedings and to make information related to cases, such as due dates, court orders, and all information about the court’s proceedings, available to litigants, advocates, and the general public. 

Presently, 15.58 million cases have been adjudicated by the revenue courts across Uttar Pradesh, among which 13.82 Million have been disposed of, while 1.76 million cases are pending. The revenue court list with the level and name of the court located in the largest State of Uttar Pradesh are listed hereunder: 

  1. Name of the District: Mau
  • Magistrates 
  • Additional District Magistrate, Finance and Revenue 
  • Additional District Magistrate (Judge) 
  • Chief revenue officer 
  • Assistant Inspector General, Stamp 
  • Town magistrate
  • Additional deputy collector
  1. Name of Tehsil: Maunath Bhanjan
  • Sub-collector Tehsildar 
  • Tehsildar, judicial 
  • Naib Tehsildar 
  • Naib Tehsildar, Maunath Bhanjan
  1. Name of Tehsil: Ghosi
  • Sub-collector Tehsildar 
  • Tehsildar, judicial 
  • Naib Tehsildar
  1. Name of Tahsil: Madhuban   
  • Sub-collector Tehsildar 
  • Naib Tehsildar
  1. Name of Tahsil: Mohammadabad Gohana   
  • Sub-collector Tehsildar 
  • Naib Tehsildar.

Revenue Court Computerised Management System

Revenue Court Computerised Management System is a website developed by the NIC Uttar Pradesh State Unit to facilitate transparency in all proceedings of computerised revenue courts in the state by providing vital information to litigants and advocates such as hearing dates, court orders, and other court proceedings. There are 2275 courts in the state, ranging from the Nayab Tehsildar Court to the Board of Revenue Courts. All revenue case proceedings, such as the next hearing date, court order, cancellation, and filing, can be easily viewed ‘online’ using this web portal. It is no longer necessary for plaintiffs and their other beneficiaries to seek information on the status of their cases.

Uttar Pradesh Revenue Code, 2006

To consolidate and update the law relating to land tenures and land revenue in the State of Uttar Pradesh, the Uttar Pradesh Revenue Code, 2006 was enacted. Amendments to the said Code were required in order to ensure smooth availability of land for the purpose of industrialisation, to reduce the amount of fine for regularisation of an acquisition or purchase done without obtaining prior approval of the state government, to promote investment in the state, remove difficulties in the establishment of industries, and for better implementation of government schemes. It was determined to revise the aforementioned Code to include the aforementioned changes. Since the state legislature was not in session and immediate legislative action was necessary to implement the aforesaid decision, the Uttar Pradesh Revenue Code (Amendment) Ordinance, 2020 (UP Ordinance no. 22 of 2020) was promulgated by the Governor on December 28, 2020.

Powers of the revenue courts in Uttar Pradesh

Under U.P. Revenue Code, 2006 following powers are available to revenue courts:

  1. Power to call for the records (Section 210): According to this Section, the board or commissioner has the authority to request any records relating to any kind of suit or proceeding that is being judged by any subordinate revenue court in which no appeal has been filed or, if an appeal has been filed, it has not been filed yet. The purpose of this is so that board members can satisfy themselves as to the legality or propriety of any such order passed in a particular suit or proceeding being referred to them and if such subordinate courts appeal to have:
  • Exercised any such jurisdiction not empowered to it by law; or
  • Failed to exercise any such power vested by law;
  • Also, if it is discovered that such jurisdiction has been exercised illegally or involves material irregularities of any kind, the appropriate commissioner or board member, whoever appears fit to the situation, may issue whatever order they deem or agree to be valid in the particular scenario.
  1. Power to restrict applicants from applying(Section 210): If a person has already filed an application with the board of directors or the commissioner, that person will not be allowed to file another application with any of the revenue court members.
  2. Power to refuse from hearing (Section 210): No further orders shall be heard under this section after 30 days have passed from the introduction of the Code or from the date of the order sought to be changed.
  3. Boards power of review (Section 211): 
  • This clause gives the court the authority to examine any of its own orders or to make any other order it sees fit on the basis of any applications submitted to it by an interested party or on its own motion. 
  • Only those orders that fall under the following grounds will be reviewed under subsection 1 of Section 211: 
  1. If any new or significant information or evidence is discovered; 
  2. Any type of error or omission seen on the act of record; and 
  3. Any other justification is sufficient.
  • Orders that have been passed on review will not be reviewed again.
  1. Power to transfer cases (Section 212): 
  • Under this provision, a board has the authority to transfer cases from one revenue court to another revenue court of a higher or equivalent rank, in the same district or any other district, but only if it is convenient and practicable for the goals of justice.
  • It also gives the Commissioner, the Collector, or the Sub-Divisional Officer the authority to delegate any case or class of cases arising under the provisions of this Code or any other enactment in force, for a decision from his own file, to any revenue officer subordinate to him and competent to decide such case or class of cases, or to withdraw any case or class of cases from any such revenue officer and deal with such case or class of cases himself.

Members of the Uttar Pradesh Board of Revenue 

The Board of Revenue is made up of a Chairman and two administrative members, as well as seven judicial members. It is in charge of overseeing and controlling all administrative and judicial land records, settlement, and revenue proceedings in the state.

Jurisdiction of revenue courts

Section 206 of the U.P. Revenue Code, 2006 discusses the jurisdiction of civil courts and revenue courts in the State of Uttar Pradesh. It states the following:

  1. No civil court shall entertain any suit, application, or proceeding to obtain a decision or order on any matter which the state government, the Board, any revenue court, or any revenue officer is empowered to determine, decide, or dispose of by or under the 2006 Code, notwithstanding anything contained in any law currently in force, but subject to the provisions of the aforementioned Code.
  2. Except as otherwise specifically allowed by or under this Code, and without prejudice to the generality of the provisions of sub-section (1): 
  • Any of the matters listed in the Second Schedule is outside the jurisdiction of a civil court; and 
  • Any suit application or procedure indicated in Column 3 shall be heard by the revenue Court or the revenue officer specified in Column 4 of the Third Schedule.
  1. Any appellate, revisional, or executing court shall not entertain an objection that a Court or an officer mentioned in sub-section (2)(b) had or had no jurisdiction with respect to any suit, application, or proceeding, unless the objection was brought before the court or officer of first instance, at the earliest opportunity, and in all cases where issues are settled at or before such settlement, and unless there has been a finding of fact.

First appeal (Section 207)

  1. If a party is dissatisfied with a judgement or decree entered in a suit or proceeding specifically mentioned in Column 3 of the III Schedule, it may file a first appeal with the court or the officer specified against it in Column 5, provided that such an order or decree is entered by the court or the officer specified against it in Column 4.
  2. First appeal may also be filed against the order of the nature specifically mentioned:
  1. In Section 47 of the Code of Civil Procedure, 1908;
  2. In Section 104 of the U.P. Revenue Code, 2006;
  3. Also, in Order XLIII of the I Schedule of U.P. Revenue Code, 2006

Second appeal (Section 208)

  1. If a party is aggrieved by a judgment or decree entered in a first appeal filed under Section 207 of the said Code in any suit, application, or action listed in Column 3 of the III Schedule, that party may file a second appeal in the court listed in Column 6.
  2. The appellate court will only hear a second appeal if they consider there is a special reason or if they are persuaded that the issue raises a serious point of law.
  3. There is a time restriction for filing an appeal, according to this provision, the time limit is 90 days from the date of the order or decree being appealed against.

Bar against certain appeals

No appeal can be made against an order or decree, regardless of what is stated in Sections 207 and 208:

  1. Enacted under Chapter V of the U.P. Revenue Code, 2006.
  2. Granting or denying a request for a delay condonation under Section 5 of the Limitation Act of 1963.
  3. An application that has been turned down for evaluation.
  4. When a request for a delay is granted or denied.
  5. Transferring the case to a lower court.
  6. Where the nature of order or decree is interim.

Revenue court in Chhattisgarh 

All the courts from Collector to Naib Tehsildar are registered in the revenue courts in Chhattisgarh. Provision for online uploading of all proceedings from registration of cases to final disposal such as the writing of order letter, marking of evidence and passing of final order etc, are available in the official website itself. Other facilities that can be availed through this website are:

  1. Arrangement to give acknowledgment to the applicant by registering all the applications received in the revenue court online.
  2. Updates on the proceedings being conducted in their cases are available to the parties online.
  3. Information on the case under consideration and measles available.
  4. Provision of communication of information to the parties through SMS of the date of the next hearing after the hearing. 
  5. Provision to make the litigation list of each court available online. 

The Chhattisgarh Land Revenue Code, 1959

The Chhattisgarh Land Revenue Code, 1959 which received assent from the President on 15th September, 1959 is an Act to consolidate and alter the law of Chhattisgarh related to land revenue, Revenue Officers’ powers, landholders’ rights, and responsibilities to the state government, agricultural tenures, and other matters relating to land and liabilities incidental thereto. 

The Act extends to the whole of Chhattisgarh. But nothing in this Code, except the provisions relating to the liability of land for payment of land revenue, assessment of land revenue with reference to the use of land, realisation of land revenue, and all provisions ancillary thereto, shall apply to such areas as may be constituted as reserved or protected forest under the Indian Forest Act, 1927, from time to time.

Powers of revenue officers and Revenue Board

  1. Powers of Superintendence of Board (Section 8)
  2. Power to alter, create or abolish divisions, districts, sub-divisions and tehsils (Section 13)
  3. Power to appoint commissioners of division and Additional Commissioner(Section 14 and Section 15)
  4. Power to appoint Collector and Additional Collector (Sections 16 and 17)
  5. Powers exercisable on transfer (Section 25)
  6. Power to enter upon and survey land (Section 28)
  7. Power to transfer cases (Section 29)
  8. Power to transfer cases to and from subordinates (Section 30)
  9. Powers of Revenue Officers to require the attendance of persons and production of documents and receiving evidence (Section 33)
  10. Compelling attendance of witness (Section 34)
  11. Power to award costs (Section 37)
  12. Power of Board to make rules (Section 41).

Jurisdiction of revenue officers, boards and courts 

Section 7 of the 1959 Code provides that the Revenue Board shall exercise the powers and perform the functions conferred on it by or under this Code, as well as such functions of the state government as the state government may specify by notification in that regard and such other functions as have been conferred or may be conferred on the Chief Revenue Authority or the Chief Controlling Revenue Authority by or under any Central or State Act.

By notification, the State Government may confer upon or entrust to the Board or any member of the Board additional powers or tasks entrusted to the State Government by or under any enactment currently in force, subject to such restrictions as it may judge reasonable.

Procedure of revenue courts

Chapter IV of the 1959 Code deals with the procedure of revenue officers and revenue courts. The chapter is spread over from Sections 27 to that 43. Important takeaways about the procedure adopted by the revenue courts of Chattisgarh are listed hereunder:

  1. Section 27 provides that no Revenue Officer shall enquire into, or hear, any case at any place outside the local limits of his jurisdiction. 
  2. Section 28, 29, and 30 vests the power to enter upon and survey land, power to transfer cases, power to transfer cases to and from subordinates, on revenue officers and revenue inspectors.
  3. Section 31 clarifies that the jurisdiction to decide any question arising for determination between the state government and any person or between parties to any proceedings, solely vests on revenue courts. 
  4. Section 32 lays down the inherent power of the revenue courts to make such orders as may be necessary for the ends of justice or to prevent the abuse of the process of the court.
  5. Section 38 lays down the manner of executing an order to deliver possession of the immovable property, the same involves: 
  1. Serving notice on the person or persons in possession, or
  2. By removing or deputing a subordinate to remove any person who refuses vacation of property, 
  3. The Revenue Officer shall hold a summary inquiry into the facts of the case if the officer who is on duty to carry out a vacation of property, is obstructed.
  4. Section 43 provides that the Code of Civil Procedure,1908 is to be applicable for implementation of the Code of 1959, unless otherwise expressly prohibited. 

How to submit an application in the revenue court of Chhattisgarh

The link to submit an application to the revenue court online in Chhattisgarh is available here. The steps involved in the same have been provided hereunder: 

  1. Give the correct information of Sections 1, 2, 3 and 4 respectively.
  2. Be sure to create a PDF of the required documents related to the application that you have available and upload it in Section 1.
  3. Fill in the applicant and non-applicant information correctly.
  4. Select mobile number to get OTP Clicking on the Get OTP button will get 4-digit revenue OTP.
  5. Enter the OTP received on the mobile and click on the Save button
  6. View the status of your application through a computer-generated number

What does the monthly progress reports of revenue courts in Chhattisgarh have to say

  1. The highest number of cases that has been disposed of (as of March 2022) is 2349 by the revenue court of district Fort, Chhattisgarh. Whereas, the lowest number of cases that has been disposed of (as of March 2022) is 1 in Surguja divisional level, Chhattisgarh. 
  2. The highest number of pending cases that have been restored till date has been 180 in both Raipur and the Fort districts of Chhattisgarh. An interesting thing to note in this regard is that both these districts have a huge number of pending cases as of the current revenue year. While Raipur stands with 14814 pending cases, Fort district embraces 9547 pending cases. If the number of pending cases existing and those restored in these two districts are viewed parallelly, it is quite clear that the same is not proportionate and therefore more work is required in the same. 
  3. The Raipur district revenue court champions in the number of cases registered with it till January in the current revenue year as the same reached 14003. 
  4. While Raipur divisional level and Narayanpur have restored only 6 out of 1596 pending cases, Bilaspur divisional level with 2974 pending cases have restored none till the current date. 

Revenue courts in Madhya Pradesh

The Board of Revenue was established by ordinance in 1948 in the former Madhya Bharat State. Similarly, the Board of Revenue in Vindhya Pradesh was established by order in 1948. Madhya Pradesh Board of Revenue was established through the Central Provinces Board of Revenue Ordinance,1949. The state of Rajasthan, from which the Sironj region had migrated to Madhya Pradesh, had its own revenue board. Only Bhopal was such a state, with no such institution and the state government was exercising all appeal and review powers. These powers were thereafter transferred to the Assistant Chief Commissioner by the State Government. 

The Board of Revenue was established shortly after the creation of the State of Madhya Pradesh by Rajpatra Extraordinary dated November 1, 1956, which exercised power under several regional acts. The State Government ceded appellate and revisional powers of the Assistant Chief Secretary to the newly formed Board of Revenue by Notification no. 12-1-A dated November 1, 1956. By amending the Madhya Pradesh Land Revenue Code, 1959 (MPLRC) in 2011, the Government of Madhya Pradesh vested all revisional powers with the Board of Revenue.

The State Government has appointed Gwalior as the Principal Seat of the Board of Revenue. In Addition to this circuit courts of revenue board are being held at Rewa, Indore, Jabalpur, Bhopal, Ujjain & Sager Divisional headquarters. Revenue Board has been constituted under Madhya Pradesh Land Revenue Code 1959. It is the highest court of appeal/ revision in revenue cases. In addition to this, under Acts like M.P. Excise Act, 1915 and Indian Stamp Act, 1899, etc. separate Revenue Boards have also been appointed to act as the Chief Revenue Controlling Authority.

Madhya Pradesh Land Revenue Code, 1959

An Act to consolidate and alter the law of Madhya Pradesh related to revenue, the jurisdiction of Revenue Officers, the rights and responsibilities of holders of land from State Government agricultural tenures, and other subjects relating to land and liabilities incidental thereto.

Constitution of Board of Revenue 

Section 3 of the Madhya Pradesh Land Revenue Code, 1959 provides that there shall be a Board of Revenue for Madhya Pradesh which will be composed of a President and two or more other members as the state may deem appropriate from time to time. The provision further states that the existing Board of Revenue for the various regions of this State immediately before the coming into force of the Code, referred to as the existing Board, shall be deemed to be the Board of Revenue for Madhya Pradesh constituted under this section, with effect from the date of coming into force of the Code. The current Board’s President and members will be the first President and members of the Madhya Pradesh Board of Revenue, respectively.

Jurisdiction of the Board 

Section 7 of the Madhya Pradesh Land Revenue Code, 1959 provides that the Board shall exercise the powers and perform the functions conferred on it by or under the 1959 Code, as well as such functions of the State Government as the State Government may specify by notification in that regard, and such other functions as have been conferred or may be conferred on the Chief Revenue Authority or the Chief Controlling Revenue Authority by or under any Central or State Act. Further, by notification, the State Government may confer upon or entrust to the Board or any member of the Board additional powers or tasks entrusted to the State Government by or under any enactment currently in force, subject to such restrictions as it deems appropriate.

Powers of Superintendence of Board

A.  The powers conferred by the Madhya Pradesh Land Revenue Code, 1959

  1. Powers of superintendence (Section 8): On all subjects subject to its appellate or revisional jurisdiction, the Board shall have supervisory authority over all authorities insofar as such authorities deal with such matters and may issue returns.
  2. Power to make rules (Section 9 & 41): The Board may establish rules for the exercise of its powers and functions by benches made up of one or more of its members, and all decisions made by such benches in the exercise of such powers or functions are deemed to be Board decisions. The Board may create regulations governing the Board’s practice and procedure, as well as the procedure approved by other revenue courts, from time to time, in accordance with the requirements of this Code.
  3. Power to transfer cases [Section 29(1)]: The Board may direct that any individual matter be transferred from one Revenue Officer to another Revenue Officer of equal or superior rank in the same district or any other district whenever it appears to the Board that an order under this section is necessary for the ends of justice.
  4. Power to hear appeals (Section 44): An appeal shall lie from every original order under the Code or the rules made thereunder and the power to hear such appeals rests solely on the Board, as guaranteed by Section 44. 
  5. Revisional powers (Section 50): The Board, on its own motion or on the application of any party, or the collector or the settlement officer, on his own motion, may request the record of any case that has been decided or proceeding in which an order has been issued by any revenue officer subordinate to it or him and to which no appeal lies.
  6. Powers of review (Section 51): The Board and each revenue officer may examine any order passed by itself or any of its predecessors in office and pass such order in reference thereto as it sees suitable, either on its own initiative or on the application of any person concerned.

The remaining powers that have been mentioned here are self-explanatory and therefore have not been explained in detail. 

B. The powers conferred by the Indian Stamp Act, 1899

  1. Power to hear appeals (Section 47)
  2. Power of review (Section 56)

C. M.P. Excise Act, 1915

Power of appeals, revision, review (Section 62)

D. The powers conferred by the M.P. ceiling on Agricultural Holdings Act -1960

  1. Power to hear appeals (Sections 4(3) and 41)
  2. Revision power (Section 42).

Revenue courts in Jharkhand

The revenue department interacts with the general public on a regular basis. Every individual is required to visit the revenue office on a regular basis for a variety of reasons. The departments, which serve as a planning, monitoring, and administrative apex level organisation, are based in Jharkhand’s state capital. The revenue department’s goal is for every landlord to be able to use their land peacefully, as well as for those who impede landlords from doing so.

The State of Jharkhand has 24 districts where revenue courts are located. The district of Ranchi ranks highest when it comes to the total number of cases being attained by it (43914), the total number of cases disposed of and pending (23986 and 19928 respectively). Revenue court in Hazaribagh district has a striking difference between the number of pending cases and those that have been disposed of. While 6606 cases have been disposed of by this revenue court, 5891 still remain pending.  Districts like Sahibganj, Latehar, Koderma, West Singhbhum have been entertaining very less revenue cases because of which the rate of pending and disposed cases are comparatively less.  As per the CNT 49 Report released by the Jharkhand revenue courts’ website, district Dhanbad has the highest number of cases waiting before it (238 to be precise). 

Online filing of cases in revenue courts of Jharkhand 

Online case filing has become an everyday activity in revenue courts across the nation.  By means of the Revenue Court Monitoring System, the revenue courts of Jharkhand has systematically arranged application received district wise followed by a list of disposed and pending cases and a list of maximum and minimum time of disposal of the cases received have been provided by the website as well. By this means, it becomes easier for individuals to keep track of their case, enjoy the fruits of speedy disposal of cases and get a taste of justice secured by them.  The online facilities that are available under the Department of Revenue, Jharkhand are: 

  1. All revenue & registry records digitised.
  2. Integration of revenue & registry offices. 
  3. Online mutation of lands
  4. Online payment of lagan. 

Process of e-filing of cases

  1. Visit https://erevenuecourt.jharkhand.gov.in/cnt49_report and click on the online portal option in the upper right corner of the website.
  2. If you are new to the online portal, you have to first register yourself by creating a new account with User ID and password. 
  3. After submitting your credentials, you have to login to the portal once again to file a case. 
  4. For filing CNT49 Act Permission in DC Court, refer here.
  5. To file mutation and demarcation cases in CO/LRDC court, refer here.

Revenue courts in Punjab

The Revenue Court Management System of Punjab (RCMSPB) provides that the Department of Revenue, Rehabilitation & Disaster Management of the Government of Punjab currently has 447 active courts with total cases numbering up to 83545. 46599 cases have been pending so far while 35320 cases have been disposed of.  The RCMSPB provides a dashboard for tracking the status and disposition of court matters. The dashboard displays detailed statistics on the overall number of cases, their status, and their disposition. These details can be seen month by month or year by year. The dashboard allows a top-level officer to keep track of the status of all the courts under his authority.

The Punjab Land Revenue Act, 1887

The Punjab Land Revenue Act, 1887 is an Act to amend and declare the land revenue law of the Punjab. The Act fulfils the necessity to alter and declare the law in force in Punjabi with respect to the creation and maintenance of land records, the assessment and collection of land revenue, and other things connected to land and the obligations that come with it.  Section 1 of the Act that provides the title, extent and commencement of the Act, provides that, the legislation extends to the territories administered by the State Government of Punjab, but not so as to affect otherwise than as expressly provided by this Act. 

Chapter II of the 1887 Act deals with revenue officers. The classes of officers as have been provided under Section 6 of the Act includes:

  1. The Financial Commissioner.
  2. The Commissioner.
  3. The Collector.
  4. The Assistant Collector of the first grade, and
  5. The Assistant Collector of the second grade.

Section 8 and 9 of the Act states that commissioners, deputy commissioners, assistant commissioners, extra assistant commissioners, tehsildar and naib-Tehsildars, shall be appointed by the state government.

Powers of the revenue officers and financial commissioner under the Punjab Land Revenue Act, 1887

  1. Powers of revenue-officers (Section 10): The provision states that the state government may, by notification, determine the functions to be executed under this Act by any class of Revenue-officers, except where the class of Revenue-officers to be dismissed is specified in this Act.
  2. Power of superintendence of the financial commissioner (Section 11): Section 11(2) states that The general superintendence and control over all other revenue officers shall be vested in, and all such officers shall be subordinate to the financial commissioner.
  3. Power to distribute business and withdraw and transfer cases (Section 12): By written order, the financial commissioner, a commissioner, or a collector may disperse any business cognizable by any revenue officer under his authority in any manner he sees fit. Any case pending before any revenue officer under his control may be withdrawn by the financial commissioner, a commissioner, or a collector, and either dealt with by himself or referred to another revenue officer under his control by writing order as well.
  4. Power to call for examination and revise proceedings of revenue officers (Section 16): Any revenue officer subordinate to the financial commissioner may request the record of any matter pending before or disposed of by him at any time. Any case pending before, or disposed of by, any revenue official under his control may be requested by a commissioner or collector. If a commissioner or collector has requested a record and believes that the processes or ruling should be amended or overturned, he shall report the case to the financial commissioner with his view.
  5. Power of revenue officer to summon persons (Section 19): A revenue officer has the authority to call any individual whose presence he believes is required for the transaction of any matter before him as a revenue officer. A person who has been called is required to attend in person, or, if the summons allows, by his recognised agent or a legal practitioner, at the time and location specified in the summons. The person who appears in response to the summons is obligated to tell the truth about any subject about which he is interrogated or makes remarks, and to produce any documents or other items relevant to that matter that the revenue officer may require.

Procedure adopted by the revenue courts in Punjab

Sections 17 to 22 of the Punjab Land Revenue Act, 1887 lays down the procedure to be adopted by the revenue courts while entertaining cases. The same has been listed below: 

  1. Under Section 17, the state government may make rules consistent with the Act for regulating the procedure of revenue officers under the Act.
  2. Section 18 provides that parties themselves or by their recognised agents or a legal practitioner, can appear and apply before and to the revenue officers. 
  3. Section 19 which has been discussed previously deals with the power of revenue officers to summon persons.
  4. The modes of service of summon as provided under Section 20 include personally on the person to whom it is addressed or failing him to his recognised agent or an adult male member of his family usually residing with him.  If this does not happen then the summons may be served by posting a copy of it at the person to whom it is addressed as usual or last known place of residence, or, if that person does not reside in the district in which the summons relates has to reference to land in that district, by posting a copy of the summons on some conspicuous place. 
  5. Section 21 deals with the mode of service of notice, order of proclamation, or copy thereof.  The mode prescribed in Section 20 will be applicable in this provision as well.
  6. Section 22 states that when a revenue officer issues a proclamation relating to any land, it shall be published by the beat of drum or other customary methods, as well as by posting a copy of the proclamation in or near the land to which it relates, in addition to any other mode of publication prescribed in any provision of the Punjab Land Revenue Act, 1887. 

Revenue Court Management System of Punjab

RCMS-Punjab is a web-based Revenue Court Handling System that simplifies the management and monitoring of revenue court cases. It was created exclusively for the state’s revenue courts, which include the Financial Commissioner, Divisional Commissioner, Director Land Records, Deputy Commissioner, SDM, Tehsildar, and Naib Tehsildars. The details of properties under litigation, as well as Petitioners and Respondents, are captured by RCMS-Punjab from the land registry database. 

Aside from summons notices, the system also generates a date-by-date cause-list for various courts, which is accessible to residents. You can upload any case-related documents, such as interim orders and final judgments. All parties can also receive SMS alerts for significant events such as case establishment, hearing date, and hearing date postponement, among others. Citizens can obtain data of any case, as well as case status, using the portal, which does not require any credentials or registration.

It is a necessary precondition for the implementation of the RCMSPB at any type of Revenue Court. It captures information such as the type of court, the name of the court (in English and Punjabi), the officer’s details, the date from which the officer is holding the charge, the court address, and the authority who will be signing the summons.

How to start the application

The application can be used on any computer that has access to the internet. In order to use the application, go to https://rcms.punjab.gov.in/Index.aspx in your browser.

Features

  1. RCMSPb application is Role-based and is extendable horizontally as well as vertically.
  2. Each user has access to different master data as per their jurisdiction.
  3. Facilitates case institution, capturing the Petitioner/Respondent details.
  4. Details about the property in question, as well as information from a previous case (if any).
  5. Date(s) of hearing and provision for an update.
  6. The ability to keep track of the case’s progress is available (s).
  7. Summons of several types are generated.
  8. The creation of a Cause List and its accessibility to the general public.
  9. It’s possible to construct a cause list based on the parameters you provide.
  10. Various types of documents, such as interim orders, final orders, and so on, can be uploaded.
  11. General documents, summons.
  12. FCR dashboard with state-level parameters.
  13. Senior officers’ dashboard.
  14. Daily cause lists and court orders are available on the website for the convenience of the general public, the department, and advocates.

User management 

  1. State-level admin user: Responsible for the overall construction of numerous courts, as well as master details such as Act, capacity details, officer, and designation details, as well as the creation of admin users for various courts. The activity detail include:
  1. Defining Officer details.
  2. Creation of court details for the court for which implementation is to be initiated.
  3. Creation of Administrator user for the court.
  4. Administrator user: It will be in charge of creating users within his jurisdiction and will have access to a dashboard for monitoring courts within his jurisdiction.
  1. Creation of Reader user.
  2. Creation of advocates details.
  3. if it is not already available in RCMSPb.
  4. Reader user: It will be in charge of entering new case information, Petitioner Information, Respondent Information, Property Information, Previous Case Information, and Numberdari/ Chowkidari Candidate Information. It will be in charge of updating the next hearing date, daily procedures, Summons creation, uploading key documents, updating personal information, noting attendance, and postponing hearing dates. 
  1. Reader users can start the data entry for revenue court cases.
  2. Can allocate the first hearing date.
  3. Can update the hearing details.
  4. Can upload the various types of documents like interim order/final order, Summons, etc.
  5. Can generate various types of reports like summons to litigants, and summons to the lower court for producing records.

Conclusion 

Revenue courts excels in managing suits may be related to succession, transfer of land, the partition of holdings, demarcation of boundaries, removal of encroachments, eviction of trespassers, and declaratory suits. The fact that matters in the jurisdiction of revenue courts are barred from the jurisdiction of civil courts has a lot to speak of in itself. The responsibility of handling matters related to land revenue, and, by extension, into matters of tenancy and boundaries of agricultural land have been solely vested on revenue courts with a two-layer purpose: 

  1. The revenue court can execute the given responsibilities successfully as they are dealing with specific matters only. 
  2. Revenue courts by executing its functions will reduce the burden of other courts, specifically the high courts when it comes to the matters of appeal. 

The keeping of papers in an electronic format is superior for increasing operational convenience. It also cuts down on the time it takes to send a document across institutions. Rather than depending on physical copies, lawyers and judges can easily refer to pleadings and related papers from electronic copies. Payment of court fees, filing fees, and other associated transactions can help the judiciary achieve operational ease at the departmental level if done online. An ODR system provides significantly more transparency and privacy because processes are easily accessible and cannot be tampered with. Most of the revenue courts in the nation have adopted online mode for the application of cases and related judicial works for common individuals. This has helped in the functioning of the revenue courts as well.

Moving to an e-filing system for pleadings would also eliminate the need to visit a notary and/or a court registry. When the document being notarized is in an electronic or digital format, Remote Online Notarization (RON) can be employed. The paper is signed electronically by the notary from a distance. To accommodate the shift to digitization of records and e-filing of pleadings, changes to the procedural legislation governing the filing of pleadings should be made. Blockchain technology can be used to prevent e-evidence from being tampered with, resulting in tamper-proof evidence storage. Revenue courts of Jharkhand, Chhattisgarh, Uttar Pradesh have already adopted these means for increasing their performance efficiency. Therefore, revenue courts have an immense contribution to the Indian judiciary system and thus should be looked after by means of providing adequate resources for its functioning and infrastructural support system. 

References 


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Turnkey contracts : what you need to know

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This article is written by Vihanka Narasimhan, currently studying law at Jindal Global Law School, O.P. Jindal University. This article attempts to explain the concept of turnkey contracts with an aim to throw some light on the components of such a contract, its types, advantages and disadvantages.

This article has been published by Sneha Mahawar.

Introduction

The Oxford Dictionary defines the term ‘turnkey as a thing that is ‘complete and ready to use immediately’. Just as stated, when this term is applied in the context of project development, a turnkey contract can be perceived as a project which is designed, developed and equipped with all facilities by one company to another as specified under the contract. The term “turnkey” is based on the concept of only needing to turn the key to unlock the doors to begin operations. To be fully considered a turnkey solution, the business must function correctly and at full capacity from the moment when it is initially received. Basically, a turnkey contract is a contract in which a company is given full responsibility to plan and build something that the client must be able to use as soon as it is finished without needing to do any further work on it themselves. Further, the contents of such a contract contain clauses that deal with the cost, estimated time to complete, breach policy, etc. The seller in a turnkey contract is responsible for the design, fabrication, installation, aftermarket support and technical service for the project which they receive. This type of contract is most often confused with design and build contracts. In order to ensure proper execution of such a contract let us understand the concept in detail.

What is a turnkey contract

According to the free dictionary by Farlex, a turnkey contract has been defined as “A contract in which an independent agent undertakes to furnish for a fixed price, all materials and labour, and to do all the work needed to complete a project”. In a nutshell, one can say that a turnkey contract is simply an agreement that takes place between a builder and business wherein the builder agrees to complete a project which is in turn readily available to use for the company.  It seems that the term ‘turnkey’ has originated from the oil and gas industries in the United States and gradually got imparted in international trade.

The idea behind getting into a turnkey contract is for the contractor to do jobs in relation to engineering, procurement and construction after which the required works once deemed ready for operations are handed over to the buyer so that business operations starts. To put it bluntly, a contract whereby the contractor provides whatever is necessary for a certain purpose can be construed as turnkey. These are sometimes also referred to as ‘Lump Sum Turnkey’ or ‘LSTK’ which gives out the apparent bargaining nature of the parties, with responsibilities delegated to the contractor to deliver the project on time and at an acceptable performance level in return for payment of a fixed price. A lump-sum turnkey price will include contingency allowances to hedge against the risk of things costing more or taking longer to deliver and the owners expect to pay a premium for a turnkey contract. 

In such contracts, the responsibility of a contractor is limited to the point the project is in the process of being fully equipped and operational. Turnkey contracts are highly specialised in nature. In general, there are three types of businesses that partake in such projects. They deal in the manufacturing of engineering equipment, construction and consulting. A simple example of a turnkey contract can be undertaking activities such as building ventures such as the construction of airports, office buildings, malls, skyscrapers, etc. The parties involved in a turnkey contract work in accordance with the terms and conditions agreed upon between both the parties. There are three types of enterprises that take part in turnkey business activities. They are as listed below:-

  1. Manufacturers of engineering equipment;
  2. Construction companies; and
  3. Consulting firms.

Basic elements of a turnkey contract

Turnkey contracts basically have three major elements. They are as follows: –

Design

The first and most important aspect of a turnkey contract is the design of the project. It is the duty of the project manager of such a contract to work on the detailed design. It is, however, crucial to note that such a contract can only be made with reverence to the design established or agreed upon by both the parties in the preliminary contract and does not exceed its scope.

Technology

This element of the contract is seen in action after the design of the contract has been laid out in the form of patents, know-how, etc. This element deals with the completed project. In some cases, provisions have already been laid down in the preliminary contracts as per the request of the buyer which allows the project manager to use the buyer’s own technology without any formalities or difficulties.

Supplies and construction

One of the major parts of the completion of a project is supplies, construction and erection are done in keeping to the project which will fulfil the buyer’s end goals. In order to do this, the buyer may have the project manager acquire materials required from a specified sub-contractor or limit the choice of materials. This is a common practice in such contracts as it ensures the employer that the quality is up to the mark and also allows the buyer to negotiate the prices directly of the material required. 

Process of fulfilling a turnkey contract

Step 1: Defining the project

This is the preliminary stage of the formation of a turnkey contract. In this stage, the project manager usually focuses on the needs of the buyer and on its basis, creates a plan of action. This evaluation leads to the revelation of a few challenges and a project design in accordance with the requirements. This phase can also be called the conceptual design phase as the feasibility of all aspects of the project are considered to fulfil the needs of the buyer.

Step 2: Focusing on the design

The second phase is concerned with the actual design of the project. This is also known as the proposal stage. The design of the project is concerned with the details regarding the scope of work, development specifications, delivery, documentation, determination of vendors and suppliers etc. Basically, in this stage, the terms and conditions from both the buyer and the project manager marks the beginning of a turnkey contract.

Step 3: Construction and erection

After all the preparation has been made, the implementation process of the project takes place. The project manager finalises the manufacturing and application processes and also conducts the final testing for the smooth functioning of the project. This step is important as it revisits the problems encountered in the first place and ensures that a solution is delivered to it.

Step 4: Delivery of the project

The final phase of the project is making its delivery. Once the project manager is sure that all the production processes are satisfactory and fulfil the needs, the project is deemed to be completed. After this step, the liability of the project passes on from the project manager to the buyer.

Obligations of both the parties involved in a turnkey contract

In a turnkey contract, there are many obligations which have to be fulfilled by each party involved. There are mainly two parties: The buyer (the one who is seeking a project to be done) and the project manager (the one who is doing the project). They have been discussed below: –

Obligations of the buyer:

  • Granting access to the project manager to the site where the project is to be completed.
  • Assisting the project manager with obtaining licences and permits.
  • Ensuring proper payment has been made in accordance with the contract.

Obligations of the project manager

  • Obtaining the necessary permits and licences required to complete the project.
  • Making a plan with regard to the design of the project.
  • Providing the buyer with the required operation and maintenance manuals.
  • Providing the buyer remedy to the problems faced in accordance with the contract.

Important clauses in a turnkey contract

Project design

There should be a clause in the contract with regard to the product design. The key responsibility of the project manager is to ensure that the layout or the design of the project is taken into consideration so as to meet performance guarantees. The design should be complete, adequate and sufficient. It is important to take note that the main objective of the project design is to determine whether the construction has taken place in accordance with the initial plan irrespective of the quality and performance of the final product.

Place of construction

There should be a clause in the contract with regards to the construction site. It includes the location, access, availability of resources at the agreed site, etc. These aspects are often things which come under the purview of the buyer. However, it is essential that the project manager specifies his requirements regarding these things. The main point of discussing this aspect is that it prevents conflict between both parties.

Duration for completion

There should be a clause in the contract with regards to the time it will take to complete such a project. It includes the competition date, installation periods at various stages, etc. This ensures that the buyer gets his project on time and further, the buyer’s own production programme and the coordination of the contract by the project manager so it may require strict devotion towards completion of time.

Price and payments

There should be a clause in the contract with regards to the price and payments. In general, turnkey contracts are done in a lump sum which contains a list of unit prices that serve for the valuation purposes and also as a measure that determines the progress of the project. The basis of milestones of the project can be determined by payments made on dates of placing orders to suppliers, achievement of certain stages in the process of manufacturing, packing of equipment, shipment, arrival at the site, etc. 

Performance guarantees

There should be a clause in the contract with regards to the project manager’s obligations to meet his promises made in the preliminary stages of the project. Failure in obligations which include defects in approved design and variations in the specifications ordered by the buyer can lead to consequences. Generally, the performance guarantees of a clause agreed upon by the project manager are on the basis of certain assumptions regarding the quality of raw materials or operating conditions such as climatic conditions, availability and regularity of supplies, etc.

Governing law                   

There should be a clause in the contract with regards to the law governing the contract. The law helps in determining elements of contract law such as contractual rights and obligations of the parties, the interpretation of the contract and subject to some reservations, its formation and validity. Apart from these basic laws, turnkey contracts can deal with intellectual property rights and monetary transactions which in case of disputes may need resolution usually possible through arbitration and mediation methods. The laws applicable to such dispute settlement procedures can take place in different countries often involving different countries with different laws. It is hence crucial to determine the rules regarding this aspect.

Advantages of a turnkey contract

Price evaluation

One of the major perks of getting into a turnkey contract is that there is a possibility to accurately calculate the value of the cost of the finished product. This further helps in analysing the Return on Interest (ROI) by the buyer. It diminishes the scope of uncertainty as observed in the case of traditional methods which determine the cost only after the bid of the design.

Fixed timeline

The seller assures the buyer a specified timeframe within which the project will be completed. This in turn guarantees the buyer of the time it will take to receive the project and make decisions on further business decisions relating to it.

Judicial use of resources

When a buyer enters into a turnkey contract, there is optimal use of the business resources. This can be said in the sense that the buyer is able to divert his costs efficiently in a space without disrupting the internal balance of the business.

Transfer of risk

Turnkey contracts are entered into to reduce the risk on the buyer’s part. Conveniently, the risk associated with construction and completion from scratch transfers from the buyer to the project manager till the period the project has been completed. This implies that the buyer does not have to worry about the contingencies may be caused during this period. The project manager is held responsible for the schedule, cost, and performance of the project.

Disadvantages of a turnkey contract

Even though there are a couple of advantages of turnkey contracts. They also have a few disadvantages which are along the following lines: –

Defining the scope of the project

In a turnkey contract, it is crucial that the scope of the project is strongly defined before making the designs for the project. This means that in cases where something has been missing in the initial stages, it is very hard to include it in the processes after the scope has been defined. In order to successfully complete the project, changes should not be made when construction, procurement, and planning activities have already commenced.

Based on trust

This contract is fiduciary in nature. This implies that there should be trust between the buyer and the project manager. In order to successfully complete the project, it is crucial that the goals of both parties align with each other with regard to budget, engineering and construction, etc.

Possibility of incurring higher costs

Even though turnkey contracts have a clause which specifies the cost prior to the design, construction and installation phase, the amount only serves as an estimate. This implies that there may be a change in price, usually higher than the estimated value due to unpredictable changes in budget requirements, inflation, government laws, labour, etc. This in turn can lower the ROI of the buyer which was calculated at the beginning of the project.

Difference between an engineering, procurement, construction contract and a turnkey Contract

BasisEngineering, Procurement and Construction contractTurnkey Contract
MeaningAn engineering, procurement and construction contract is a type of construction contract between parties where the contractor is responsible for all the engineering, procurement, and construction activities. It is a type of turnkey contract.A turnkey contract is one under which the contractor is responsible for both the design and construction of a facility.
ScopeIt has a limited scope as it only deals with engineering, procurement, and construction.It has a wider scope as it deals with various things in a project from the beginning to the end.
Role of contractorThe responsibility of undertaking commissioning and start-up lies with a third party.The contractor is responsible from start to finish that is from performing construction work, commissioning, start-up and taking over of the plant to the employer.
RiskThe onus does not lie on the contractor.The onus lies on the contractor.
GuidelinesSpecific guidelines are followed by the contractor.General guidelines are followed by the contractor.

Conclusion

Turnkey contracts can be regarded as a useful tool for businesses looking forward to expanding their operation without using any additional resources. Turnkey contracts are generally suitable for such businesses which want to concentrate on their core operations or which cannot afford to invest in resources for development and construction saving time, money and effort. This type of contract should be made with the aim to have a clear understanding of the project which has been given by the buyer to the project manager. In conclusion, one can say that a turnkey contract is basically the equilibrium of the rights and obligations between the employer and the contractor which serves to buffer risks.

References


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Article 46 and 47 of the Indian Constitution

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This article has been written by Meera Patel, a B.A. L.L.B student from the Maharaja Sayajirao University, Faculty of Law, Vadodara. This is an exhaustive article that covers everything you need to know about Article 46 and Article 47 of the Indian Constitution. 

I has been published by Rachit Garg.

Introduction

We come across terms such as reservations in schools/colleges, seats for the backward class students, Right to Education, quotas, etc. in our daily lives. These terms are a few constitutional provisions to uplift the people who belong to the scheduled castes, scheduled tribes, and other backward castes. Several provisions have been given out in the Constitution that helps the government promote and safeguard not only the interests but more importantly the rights of the scheduled castes and the scheduled tribes which will eventually help them tear out of the orthodox environment they were shoved in and join the national mainstream.

To understand Article 46 and Article 47 deeply, we must first understand the concept of Directive Principles of the State Policies.

The entire concept of the Directive Principles of the State Policies (DPSP) has been put down in our Constitutions after borrowing it from Article 45 of the Irish Constitution which was originally borrowed from the Spanish Constitution

Out of the 25 Parts of our Constitution, Part VI of the Constitution deals with the DPSP. The Directive Principles of the State Policies in literal terms mean they are guidelines or principles that direct the state when it makes policies for the people of the country. These principles were created to make sure that there is socio-economic justice for everyone in the country so that everyone’s welfare is considered. 

The phrase ‘We the people’ describes the fact that to become a citizen and to enjoy the rights of a citizen of a country, the citizens must take their responsibilities towards the state seriously because the rights and the responsibilities of a citizen are interwoven. The fundamental duties of the citizens are like moral responsibilities of all the citizens and these duties make sure that a spirit of patriotism is spread around the country so that a sense of unity is spread too. Fundamental rights and the DPSP are essential parts of the Constitution as they contain the fundamental obligation, duties, and rights of the citizens of the state. 

Even though both of these provisions are vital to the Constitution and the fact that they go hand in hand, DPSP is considered a positive direction as they ensure socio-economic justice whereas the fundamental rights are considered negative as they are known to put constraints on the state. 

The relationship between Fundamental Rights and Directive Principles of the State Policies is simple. A fundamental right is a right that is granted by the state to the citizens of India for their welfare, betterment, protection, etc. by the Constitution of India. These provisions are given to every individual regardless of caste, gender, sexuality, race, religion, place of birth, etc. These fundamental rights are also known as basic human rights for the citizens of the country.

On the contrary, the Directive Principles of the State Policies as mentioned above mean that they are mere guidelines that are provided to the states by the Constitution that can be used to frame the laws for the respective states. The difference between these provisions and fundamental rights is that the DSPS is not enforceable in courts. Similar to the Directive Principles of the State Policies, the Fundamental Duties are not enforceable by the courts as they are relative to the individual and not the entire nation.

Various Articles fall under the Directive Principles of State Policies. All these articles are classified under three types of principles. Listed below are the DPSP based on:

new legal draft

Socialist Principles

Article 38 of the Indian Constitution

Article 38 states that the State shall promote the welfare of the people by securing a tightly knit social order and the state shall strive to minimize all kinds of inequalities that may affect the status. Facilities and opportunities amongst every single citizen of the country.

Article 39 of the Indian Constitution

Article 39 states that the State shall direct these policies towards securing an adequate livelihood, equal distribution of resources to avoid concentration of wealth, rights of the laborers such as equal wages and protection of everyone regardless of their gender, caste, race, sexuality, age, etc.

Article 41 of the Indian Constitution

Article 41 states that the State shall provide the following rights to people in cases of old age, unemployment, disability, or sickness: 

  • Right to work
  • Right to education
  • Right to public assistance

Article 42 of the Indian Constitution

Article 42 states that the State shall make sure that the working conditions for all the laborers are human and maternity friendly.

Article 43 of the Indian Constitution

Article 43 states that the State shall strive to secure minimum wage as well as a proper standard of living for all workers.

Article 47 of the Indian Constitution

Article 47 states that the State shall make sure to raise the level of public health by paying attention to the lifestyle of the citizens especially on their level of nutrition and their standard of living which will as a result help improve the health of the citizens at large.

Gandhian Principle

Article 40 of the Indian Constitution

Article 40 states that the State shall take steps to make sure that the citizens know what self-government systems to increase the organization of more village panchayats

Article 43 of the Indian Constitution

Article 43 states that the State shall strive to promote cottage industries, cooperative bases in rural areas to promote local business amongst the citizens.

Article 46 of the Indian Constitution

Article 46 states that the State shall religiously use its power to promote educational and economic interests of the weaker sections of the society which includes the people of the Scheduled Tribes as well as the Scheduled Castes

Article 47 of the Indian Constitution

Article 47 under the Gandhian principle states that the State shall try its best to improve public health and prohibit the consumption of intoxicating substances that are extremely dangerous to the human body.

Article 48 of the Indian Constitution

Article 48 states that the State will not allow anyone to slaughter cows, calves, or any other milch to improve their breeds.

Liberal and intellectual principles

Article 44 of the Indian Constitution

Article 44 states that the State shall secure a uniform civil code for the country.

Article 45 of the Indian Constitution

Article 45 states that the State shall make sure to provide proper early childcare support as well education for every child till they turn six.

Article 48 of the Indian Constitution

Article 48 under this principle states that the State shall strive towards organizing agriculture as well as animal husbandry to see progress based on modern scientific progress.

Article 49 of the Indian Constitution

Article 49 states that the State shall at any cost protect every monument/place which holds a historic or artistic significance.

Article 50 of the Indian Constitution

Article 50 states that the State shall take all the necessary steps to separate the judiciary from the executive in the context of the public services of the state.

Article 51 of the Indian Constitution

Article 51 states that the State shall strive towards achieving international peace and security and to achieve this goal, the state shall undertake the following responsibilities:

  • Maintain proper and just relations with the nations 
  • Fulfill duties towards international laws and treaties
  • Always encourage arbitration as a solution for international disputes

Constitutional Provisions for minorities

Before explaining Article 46 and article 47 in detail, one must know the following Constitutional provisions that have been helping the weaker sections of the society:

  • Article 15 (1) and (2) protects the people from any discrimination against the citizens on the grounds of caste, sex, religion, etc.
  • Article 16 (1) and (2) states that all citizens have the right to ‘equality of opportunities’ in the context of education and jobs at any institution which falls under the jurisdiction of the State. This article also states that discrimination when it comes to giving out educational and vocational opportunities shall not be entertained. 
  • Article 25(1) states that people of this country have the freedom of conscience and the right to freely practice and pursue any religion they want but at the same time, when one practices the religion of their choice, they must make sure their practices are subject to public order, morality and other Fundamental Rights.
  • Article 26 is a fundamental right given out to the people of India states that people have the right to create and practice various religious denominations but again the practices must be within limits in order to secure the public order, morality and health. 
  • Article 28 is made to make sure that the state recognises people’s freedom to attend religious worship places present in educational institutions is maintained, recognised and aided by the State.
  • Article 29(2) is a provision that makes sure that no educational institution which is maintained, recognised or aided by the state shall turn down people’s admission on the biases of their caste, race, sex, religion, etc.
  • Article 30(1) states that all the people from the religious and linguistic minorities have the right to establish and administer educational institutions of their choice and will.
  • Article 30(1A) provides State laws for mandatory acquisition of property of the minority’s educational institutions and it shall ensure that the compensation amount shall never determine, restrict or abrogate the rights guaranteed above..
  • Article 30(2) states that the freedom of the educational institutes managed by the minorities shall face no discrimination in the context of recieving aid from the State whenever necessary.

Article 46 of the Indian Constitution

As per the definition given in the Constitution of India, Article 46 talks about the “promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes, and other weaker sections. The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitations.

In simpler terms, this Article explains that the State is responsible to provide special attention in the context of educational as well as economic interests of the weaker sections of the society. The steps that shall be taken because of this provision if the Constitution shall help the people of the SC, ST, and OBC communities to seek justice and get rid of the social injustice and all the other forms of exploitations they have faced in the past years and which they still do. 

Article 46 whose original draft was supposed to be known as Article 37 focuses on the educational and economic interests of the people who belong to the SC/ST and Other Backward Class communities and this draft article was discussed by the members of the Parliament on 23rd November 1948. While discussing the development of this article, the scope of the word “Scheduled Castes” became a topic of interest amongst the member of the parliament as a member pointed out that the term ‘Scheduled Castes’ must be replaced with the term ‘Backward Communities of any class and Religion’ while keeping the fact that the definition of the ‘Scheduled Castes is quite restrictive and it does not cover various backward class communities belonging to the Sikh, Ramdasies, Balmiki, Odes and Chamars religion. Even though the point made sense at that time, other members of the Parliament rebutted that the amendment was uncalled for at that moment as that could be discussed at a later stage therefore, the Assembly adopted Article 46 on 23rd November 1984 without any amendments.

The entire concept of reservations is based on this Article. The second word for reservations as people like to call it is ‘preferential treatment’ which has now become a dispute for many citizens as people from the general category have now started to feel neglected. The motive behind this concept was to again secure socio-economic justice for the downtrodden and vulnerable sections of the society. People from these communities were not only denied access to resources, religious places but they were denied access to fundamental rights such as education, sanitation, jobs, etc and that is why the concept of reservations was introduced by the Constitutent Assembly so that the citizens of the country can see equality prevail amongst everyone. As a result, the policy of ‘preferential treatment for the weaker sections of the society was adopted. 

Case laws related to Article 46 of the Indian Constitution

In the case, State of Madras v. Smt. Champakaran Dorairajan (1951), the State of Madras reserved seats for the weaker sections of the society as per the numerical strength for the admission into all the government-based medical and engineering colleges but it was challenged as unconstitutional. The government defended its actions using Article 46 of the Constitution which was created so that the states can help the people of the weaker sections secure education and jobs without discrimination but this decision was struck down as it violates the fundamental right (Article 15) that guarantees equality. The Apex Court also stated that the Directive Principles of the State Policies cannot overrule the fundamental rights. 

In the case of Indira Sawhney v. Union of India (1992), the Apex Court stated that the reservation limit is up to 50% of total seats for the backward classes and shall not exceed that. This case is famously known as the Mandal case. The interesting thing about this case is that even though it was decided that 50% is the limit, in 2019 as per the 103rd Amendment to the DSPS, the Honorable Supreme Court stated until now the sole criteria that will be considered to make reservations would be social and educational backwardness but now after the Amendment, the economically weaker sections of the society will also be allowed to access these reservations and thus the limit was pushed up to 60% of the total seats. The Supreme Court looked into the case and examined this case from various aspects. They reviewed the reservation system under Article 15(4), 16(4) and 340 of the Indian Constitution. The Supreme Court stated that the concept of reservations is not about not letting meritorious students in the background. The whole point is to make our society more egalitarian. There are various positions which are meant for students with merits therefore it cannot be said that the concept of reservations is anti merit.

To keep everyone’s interests in mind, there was an Amendment made where ‘Clause 4’ was added to Article 15 which stated that the governments are now allowed to create special reservations/ provisions that will help uplift the weaker sections of the society economically as well as education-wise. After this Amendment, the government started to make reservations in educational institutes by invoking the aforementioned clause.

The Apex Court in the case T.M Pai Foundation v. the Union of India (2002) stated that the government cannot interfere with the administration of private educational institutes and thus the government cannot make reservations in private institutions. Once again, this petition was countered in the court in 2005 in the case P.A Inamdar v. State of Maharashtra (2005). In this case, the Parliament added Clause 5 to Article 15 by the 93rd Amendment. This Amendment enabled the government to allow the reservation of seats even in private educational institutes even though they are aided by the government or not. This was a milestone that was achieved by India and the validity of this Amendment was proven in the case Ashok Kumar Thakur v. the Union of India (2008).

Controversies related to Article 46 of the Indian Constitution

Even though the policy of reservations was created to ensure social justice for every citizen of this country, the general public has a very distinctive opinion for the same. Yes, ten years ago this policy was really necessary but now the status of the minorities is a little different. With time, the policies need to change but as it is not, it has been brewing frustration and angst among the citizens as they are being deprived of educational or vocational opportunities that they might get on the basis of their merit but don’t due to the reservation policies.

Many have criticized the reservation system by stating that not only are these reservations showing bias, they have also become the source of relief for the minorities. Many now feel that the minor communities now depend on these reservations rather than to work harder for their merit. The entire concept of reservations was to spread the knowledge of equality but these policies surpass the purpose. Special privileges, additional protection, etc for weaker sections of the society violates the spirit of democracy. 

Discrediting the merit system laid down by learned people, the quality is compromised when employers, educational institutions are forced to make an appointment on the basis of the caste and not the merit. Not only that but this policy has motivated the rise of the politics of casticm on our political system. Therefore, reservations are what people call ‘reverse casticm’ these days. 

Article 47 of the Indian Constitution

As per the definition given in the Constitution of India, Article 47 talks about, “Duty of the State to raise the level of nutrition and the standard of living and to improve public health. The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavor to bring about prohibition of consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.”

In simpler terms, this article posed an obligation on the state to make it their responsibility to provide proper healthcare by raising the level of nutrition and the standard and making improving the level of public health as it should be their primary duty looking at the mortality rate in India once faced. A lot has changed and the mortality rate of the citizens has been dipping ever since.

The draft of Article 47 was Article 38 which was under debate in 1948. Other than the primary purpose of this article, it was also discussed that consumption of intoxicating drugs, substances, and drinks is also injurious to health therefore the state shall strive towards prohibiting all these substances except if used for medicinal purposes. These factors were constituted in Article 47 to make sure a society that strives towards its betterment is seen by the coming generations. This Article was constituted while keeping in mind various factors such as betterment of aged people, maternity benefits, proper working conditions, etc.

Various social development programs have been introduced by the government such as the National Health Mission, Mid Day Meals Schemes, etc., which are specifically made for women, children, and the weaker sections of the society and this has been adopted by the DPSP. These programs are not just used to help improve the health and the standard of living of the citizens but are also used as an incentive to promote schools and education in the weaker sections of society. 

The main purpose of this article is to improve public health and this depends on the fact that the right to health is considered a fundamental right and a healthy lifestyle is an integral part of life. When we say the standard of living, it means that the state shall pay attention to some really serious issues and work towards creating concrete rules that will eradicate the issues such as child labor, poverty, better and try to bring about a change that makes this society safer for everyone.

Standard of living 

A good standard of living constitutes the right to food that is enshrined under Article 21 which is eventually fulfilled under Article 47 of the Indian constitution. The government strives towards making sure that there is enough food in the country for everyone and to make sure that happens, the state is advised to set up food regulators so the standard of living can be monitored. 

Liquor

Most liquor bans are justified using Article 47 only. The topic that is still the center of attention that is related to this Article is whether the government should ban intoxicating substances, drugs, and alcohol completely or not. The Supreme Court has not given a clear answer as the Court is still not clear where the law stands in the context of liquor trade being a Fundamental Right. The entire State is debating whether liquor should be banned or not. For example, In the year 2016, Bihar’s government passed a ban on liquor, and the entire state wasn’t allowed to consume or own liquor. Four days later, in the case Shailesh Kumar Sinha v. the State of Bihar (2016) the Patna High Court unanimously passed out an order which lifted the liquor ban in Bihar. One of the judges on the Bench argued that access to liquor was only up to the government and not the courts as he was referring to Article 47 of the Directive Principles of the State Policies. By imposing a liquor ban, the State justifies that they are just abiding by Article 47 of the Indian Constitution.

The DSPS deals with the state’s duties to raise the standard of living and that is why while talking about banning alcohol, they also mentioned that the state must endeavor to bring a ban on intoxicating substances, drugs, and alcohol except for medicinal purposes.

Case laws related to Article 47 of the Indian Constitution

Vincent Panikurlangara v. Union of India (1987) is a landmark case in which the Apex Court opined that public health should be considered as the higher priority of the state as it is the main factor that will be held responsible for the betterment and growth of the society which will eventually help in building the nation. 

As per the case State of Punjab v. Ram Lubhaya (1998) it has been highlighted that since the right of one person is interwoven with the duty of another citizen, the right to health is directly related to the duty that the state owes to its citizens. Similarly, in the case of Ratlam Municipal Corporation v. Vardichand (1980), it has been stated that the state is under an obligation to make sure that the standard of living of the people is hygienic. This gives the public the power to point out any authoritative figure/ government if the people of the country are deprived of any resources that deprive them of public sanitation or if it injures the living conditions of any community.

In the Ugar Sugar Works Ltd. v. Delhi Administration and Others (2001), the three-judge bench of the Apex Court of India discarded all the arguments related to the argument demanding the ‘fundamental right to liquor’. With all its powers, the bench held that there is no fundamental right that will support the trading of intoxicating substances such as alcohol. This case was cited in various other cases with facts on the same lines such as State of Bombay v. F.N Balsara (1951), Khoday Distilleries Ltd. State of Karnataka (1994), etc.

Article 47 is considered ambiguous 

In the case State of Tamil Nadu v. K. Balu (2017), the Honorable Supreme Court gave out a judgment where it issued a country-wide ban of liquor on the state and the national highways for ‘500 meters’. This judgment immediately faced criticism as the public stated that this is another issue of judicial overreach and that Article 47 is a Directive Principle so the citizens felt that this ban was not fair is directive principles are applied upon the discretion of the current government therefore the Supreme Court had to eventually modify the issued notice because of the resistance. Plus there is a whole industry that depends on manufacturing, sales, and production of liquor which were affected in the process. The modification by the Supreme Court stated that now the ban was only limited to ‘220 meters’ and more important states such as Sikkim, Himachal Pradesh, Meghalaya where the population is limited to or less than 20,000 were spared from this ban.

As per the above modification of the notice, it is clear that the power to use the DSPS is upon the state therefore when the Supreme Court passed the order, it was exercising the powers that broke the spirit of Separation of Powers and that is the reason why it struck a nerve amongst the public. They started to call a judicial overreach and various jurists started to call out Article 47. People started to call this Article unconstitutional as it was violating the Right to liberty and thus, people started to consider it ambiguous.

Another reason why the question of banning intoxicating substances, drugs, and alcohol is still in the air is that the drugs can be injurious and beneficial at the same time. The keyword here is dosage. The thin line between benefits and injury is the amount of dosage and the frequency. The opposition to the liquor ban policy argues that this is the exact reason why there is still ambiguity in the air. The common misconception prevails that liquor is injurious to health. Thus, the ambiguity continues.

Conclusion

The fundamental rights, duties, and the Directive Principles of the State Policies are known to be the two sides of the same coin. The reason behind this saying is that even though they are related and have their differences, they serve a single purpose that is the interest of the citizen.

To sum up, the main point that ties Article 46 together is that these provisions are mere enabling provisions and the government is not under any obligation to provide any reservations to the society. Even though the question related to banning alcohol all over India lingers over our heads, it still can not change the fact that the state has given no Indian citizen the fundamental right to consume and trade liquor. Fundamental is the keyword here. Only the state governments of the respective states have the upper hand over the monopoly of the liquor markets in India. It is known to be one of the highest revenue-generating industries of the country and thus, one of the most necessary evils of the country too.

References


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Child Marriage Restraint Act, 1929

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This article is written by Ishan Arun Mudbidri from Marathwada Mitra Mandal’s Shankarrao Chavan Law College, Pune. This article talks about Child Marriage Restraint Act and the current child marriage scenario in India.

It has been published by Rachit Garg.

Introduction

Child marriage in India has been a perennial problem. Girls are the main victims of this practice. Child marriage has a lasting impact on them. They are deprived of their autonomy and face many other issues such as early pregnancies(and health problems arising out of them), illiteracy, social-financial dependence, etc. Hence, to avoid this the Child Marriage Restraint Act was enacted in 1929. This Act laid down the legal marriage age for men (21 years) and women (18 years). This article talks about the legal provisions relating to child marriages in India and also touches upon the recent Amendment Bill introduced by the Indian government to increase the marriage age for women.

History of child marriages in India

Child marriage is the practice where underage kids, i.e., girls below the age of 18 years and boys below the age of 21 years get married with or without their consent(mostly without). This is usually a forced affair where parents, due to some difficulty, get their children married. This practice has been prevalent in India since the pre-colonial era when young women did not have the same status as men and were often considered a burden to the family as a result of which, they were forced to marry.

Lower caste families used to get tempted to marry their daughters to an upper caste boy in return for their own financial and personal gains. Girls marrying at the age of 8 or 9 was common. Another form of marriage that was prevalent during these days was parents fixing their child’s marriage at a future date. 

With the advent of the Europeans, the western mindset came into the picture. However the Europeans used this as an agenda to expand their dominance, influencing the minds of the people that it was because of them new changes were taking place. Indian social reformers like Raja Ram Mohan Roy stepped up and defended Indian culture. Due to their contribution, women actively took part in the National Freedom Struggle and helped India gain independence. However, even after attaining independence, these social evils still prevailed on a large scale.

Causes and effects of child marriages

Mentioned below are some of the common causes and consequences of child marriages:

Causes

Poverty

Young girls in rural areas are barred from access to basic resources because their family is poor. Hence they are considered a burden to the family and as a result, forced into child marriages.

Lack of education

High levels of education can make girls aware of the situation and avoid forced child marriages. However a girl is considered a mother and a housewife, so schooling and education get neglected. Even if some families want their girls to learn and educate themselves, they can’t afford those expenses.

Tradition

Tradition is one of the most common cause of child marriages. Parents have a fear of what other families might think if the girl has sex before marriage or if she’s not married as a child. They are also worried that girls might never be able to marry if they are not married at a young age.

Effects

Health complications

Child marriages can lead to early pregnancies, as a result of which the girl is at risk of death or long-term health problems. Moreover, these young girls may not have proper knowledge and awareness of sex education as sex is a taboo topic in India.

Domestic violence

Girls getting married at a young age are more exposed to sexual assault, rape, and, physical and mental torture.

Deprived of their future

Child marriages deprive girls of a bright future and a professional career ahead. They are confined to household work, while the male child is given every opportunity to achieve his dreams.

Age difference

Most child marriages have a huge age gap between spouses. And generally, the girl is the child and not her husband. Hence this makes it easier for the husband to control her, and have a lasting influence on every small thing in her life.

Sex trafficking

Forced child marriages and sex trafficking are considered two separate illegal practices however, as child brides have no say in the marriage and is an exploitation of their rights, it can be considered as a form of sex trafficking.

The Child Marriage Restraint Act, 1929

Can anyone imagine a 5-year old girl getting married! Even thinking something like that might give you goosebumps. Unfortunately, such horrific events have happened. A girl child used to get married off for a number of bad and unnecessary reasons. After getting married, the girl is not educated and is forced to blend into a household that she has absolutely no idea about. She then faces the problem of early pregnancy. Now when she herself is still a child, not educated, and doesn’t even know all the basic values and morals, how can she possibly serve the purpose of being a mother? As sex was more like a recreation in those times, the above-mentioned scenario looks even more likely.

It was the British era in India when the need to end this practice of child marriage was felt the most. But Indians were already dealing with pushing the British away from the country, so pressing for the need to end child marriages seemed like a daunting task. The death of an 11-year-old girl child after getting raped by her adult husband was the trigger. This incident was one of the factors that led to a call for regulating child marriage in India. However, as it was the British who were ruling the country they were more concerned about their personal interests rather than listening to us Indians. Hence despite staunch opposition from the British and after rejecting a number of Bills and memorandums, Rai Sahib Haribilas Sharda introduced his Hindu Child Marriage Bill in 1927. This Bill was referred to a committee known as Joshi Committee in 1929. On the recommendations of this Committee, the Bill was passed by the Imperial Legislative Council of India in 1929. This Act was known as the Child Marriage Restraint Act and also the Sharda Act of 1929. The main feature of this Act was to increase the legal marriage age. For the boys, it was 18 years, while for the girls it was 14 years. Further, the punishment for a male adult above 21 years of age, marrying a minor child was three months of imprisonment and a fine whereas, for a male adult below 21 years the punishment was 15 days and a fine up to Rs. 1000

Later in 1978, an Amendment to this Act was introduced. The Amendment was passed to increase the age of marriage for boys to 21 years and girls to 18 years. This Act was the first social reform in India dealing with the issue of child marriage. Hence this Act looked promising.

Drawbacks of the Child Marriage Restraint Act

As effective as this Act looked in reality, it proved to be a failure. The punishment provisions only extended up to a couple of months and the fine was also minimal. A complaint had to be filed against the offenders to be liable to get punished under this Act.

Further, this Act does not completely abolish the practice of child marriage. The Act nowhere mentions child marriage as void. It only makes child marriage voidable after it is declared so. Till then the practice is valid.

The Act further violates the child rights provisions under Article 21 of the Indian Constitution and also violates Article 16(2) of the Convention on Elimination of Discrimination against Women (CEDAW), which states that a child marriage shall not have legal effect.

Prohibition of Child Marriage Act, 2006

The Child Marriage Restraint Act 1929 was the first of many reforms, however, this Act never really flourished as it was during the British Raj, so no one bothered to create awareness about it. Hence this Act was repealed.

The Supreme Court in 2006, asked the Law Commission to help in certain matters relating to child marriages in India. The main task before the Law Commission was to recommend a single uniform definition of a child so that the legal age can be decided. The Law Commission in its 205th Report in 2008 came up with certain recommendations. Child marriage below 18 years shall be prohibited, below 16 years, the marriage shall be void, and it is mandatory to register the marriage.

The Supreme Court apart from requesting the Law Commission for certain recommendations came up with a new legislation.

Important provisions of this Act

The Prohibition of Child Marriage Act 2006 was an improvement to the 1929 Act and brought certain notable changes. Some of the important features of this Act are as follows:

  • Firstly the Act prohibits child marriages in the whole country.
  • Section 2(a) of the Act defines a child as a boy who has not completed the age of 21 years, and a girl who has not completed the age of 18 years.
  • Section 2(b) states that child marriage is that kind of marriage in which either of the parties is a child.
  • Section 3 states that a child marriage shall be voidable at the option of the party who was a child at the time of the marriage.
  • The Act further allows for the maintenance and residence of the girl child till she remarries from the male’s side.
  • The punishment provisions have been increased. The punishment for child marriage for a boy below 18 years is 2 years jail time and a fine of Rs. 1 lakh.
  • The Act also introduces Child Marriage Prohibition officers in the state to prevent such marriages.
  • The Act has maintained the principle of gender equality and granted the right to get out of a forced marriage to a male child.

Where to report

The PCA 2006 has introduced the provision to appoint Child Marriage Prohibition Officers by the state government. Such officers have been empowered to provide legal aid and other necessary help to the victims of child marriages. The CMPO also has the power to produce such victims before a Judicial Magistrate of the First Class or before the Child Welfare Committee. The victims can also report to the nearby police station or the child helpline number which is 1098.

Who can file a petition

The petition to end a child marriage can be filed in court only by the girl or the boy, who is below 18 years at the time of marriage. However, a guardian with the help of CMPO can file a petition on behalf of the minor child

Drawbacks of this Act

Apart from increasing the duration of punishment for child marriages, this Act fails to provide much impact. Child marriage is still not void. It is voidable at the option of the child, hence making it a burden for the minor. Many times child marriages are arranged by the parents, so why will they allow the child to go against them and make the marriage voidable?

Further, the 1929 Act required registering a complaint against child marriage and then the punishment shall be imposed. This Act doesn’t differ much. It is necessary to report a case of child marriage to make it voidable.

Further registration of marriage is also not compulsory throughout the country. In the case of Smt. Seema v. Ashwani Kumar (2006), it was held that registration of marriage is important and compulsory registration should be adopted in all parts of the country.

Hence again this Act has its own shortcomings which need to be fulfilled.

Case laws

In the case of Hardev Singh v. Harpreet Kaur & Ors. (2019), the parties to the case had married each other without the consent of their parents. The respondent’s father passed an order under Section 9 of the Prohibition of Child Marriage Act 2006, stating that the appellant was 17 years old as per his school records, but he had stated his age as 23 years. Hence, the Supreme Court observed that the appellant was below the age of 18 years and according to Section 9 of the PCA 2006 if the male is below the age of 21 years and the female is above 18, and they get married, then the male child shall be punished and not the female. The Court also stated that the reason for punishing male adults who contract child marriages is to protect minor female children.

In the case of Nargis & Anr, v. State of Punjab & Ors, (2021), a Muslim girl aged 17 years had married a Hindu who was 33 years old, against the wishes of their families. The couple felt threatened by their families and thus filed a writ petition under Article 226 of the Constitution. The Court stated that as the girl was Muslim, her marriage shall be governed by the Muslim Personal Laws. The book “Principles of Mohammedan Law”, states that a girl who is 17 years old is a major and hence can marry the person of her choice. Hence a minor’s marriage is invalid under Muslim Law but in this case, the girl was a major so the marriage shall be valid.

Is raising the age of marriage for women the only solution to end child marriages

Prohibition of Child Marriage Amendment Bill, 2021

new legal draft

After 15 years, a provision was introduced to amend the PCA 2006. Seeing the rise in child marriage cases despite the PCA, the government decided to amend certain provisions of the Act.

A 10-member NITI AAYOG task force put forth certain recommendations to look into the legal age of marriage on key parameters like infant mortality ratio, child sex ratio, fertility ratio of children, etc.

Owing to this, the Prohibition of Child Marriage Amendment Bill was 2021 was introduced. Key features of this Amendment Bill are:-

Hence this Bill seeks to promote gender equality and aims at reducing miscarriages, early pregnancies, etc.

Critical analysis of this Bill

The recently introduced Amendment Bill on child marriage in India if enacted, shall apply to all communities and also amend the existing enactments which I mentioned above. However, this Bill had to be referred to a Parliamentary Standing Committee due to major criticism. Many pointed out that before this, for 15 years the legal age of marriage for a girl child was 18 years and there was still a huge rise in child marriage cases. So is increasing the age by 3 years, going to drastically reduce such incidents? Some pointed out that, in a country where after turning 18, a girl can vote, is considered an adult, can enter into sexual intercourse, but cannot marry? Experts observed that increasing the age for marriage might increase criminal cases against women.

The present scenario

The recent Amendment Bill was introduced a few months back in 2021, seeing the rise in child marriage cases even during the COVID-19 lockdown. So let me show you the state-wise number of child marriage cases in India in 2020, compiled by the National Crime Records Bureau (NCRB) and the Women and Child Department.

STATENUMBER OF     CASES
MAHARASHTRA130-140
KARNATAKA184
ASSAM138
WEST BENGAL98
TAMIL NADU77
TELANGANA62

A total of 785 cases were registered last year, which was topped by Karnataka State. Now one may argue that the bigger the State, the larger the population, and the greater the divide between rural and urban areas. So more cases are bound to be from rural areas, right? This argument is absolutely false. Yes, it’s true that there are cases from the rural areas, but if you look at the city-wise distribution of cases in Karnataka, Mysore, and Belgaum which are two major cities in the State, have contributed to around 60-70% of the cases.

Age is just a number

The recently introduced Bill on Child marriage in India is very women-centric and aims at gender equality. In a National Family Health Survey of 2005-06, it was seen that 45% of women, mostly from rural areas, were married before the age of 18 years. This number might be seen as an old one, but that’s not the point. Will increasing the age to 21 years reduce something which has been on the rise since 15 years when the age was 18? The gender-equality argument is fair and true, but increasing the age might not stop women from marrying early due to family issues and social stigma. Further, the existing provisions are not that stringent to avoid child marriage cases. They nowhere mention that child marriage is void. Even this proposed Bill doesn’t mention it. Moreover, a report has to be filed to register a case of child marriage. Thousands of COVID-19 positive cases have gone unnoticed, so why will people bother to report a case of child marriage.

Girls don’t drop out of schools or colleges due to marriage, it is because of family pressures and other social issues. Hence accessible education throughout the country should be provided to each and every girl. In the years 2019-20 according to the Ministry of Education, the Gross Enrollment Ratio in Education has increased by 27%, as compared to 2001. Hence there is a willingness among girls to study and empower themselves. So will increasing the age of 21 years have an impact on this?

Women’s groups such as the All India Democratic Women’s Association mentioned that the political establishment must look at improving women’s empowerment, rather than increasing the marriage age. Hence there is a need to improve the existing reforms on child marriage, make them more stringent and effective to protect women.

Conclusion

The Supreme Court in the case of  Independent Thought v. Union of India (2017), had held that a man committing sexual intercourse with his wife who is less than 18 years of age, will amount to rape under Section 375 of the Indian Penal Code, 1860. This judgment proved to be a landmark one in terms of child marriage and girl brides. Hence as the government is trying to improve the child marriage scenario, stringent reforms of this sort are the need of the hour.

References


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Comparative study on Competition Law and Intellectual Property Rights in present-day economy

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This article is written by  Poonam Gulati pursuing LLM in Corporate laws and/or Intellectual Property laws and Media and Entertainment laws Course at lawSikho.  This article has been edited by Ruchika Mohapatra (Associate, Lawsikho). 

This article has been published by Sneha Mahawar.

Introduction

The general notion qua the relationship of Competition Law with Intellectual Property Rights at the first glance seems tangled considering the fact that IP law creates and protects the monopoly rights while the Competition Act seeks to exclude monopoly in the market. It is pertinent to note that Section 3(5) in the Competition Act, 2002 provides exclusion to IP Laws to facilitate their enforcement and it must be understood that IP rights are not per se violative of provisions of competition. The administration of Competition Law in India is in its infancy and quite a few cases reflecting the interface between the two laws have come before the CCI & Courts. But lack of enough case laws & jurisprudence qua the same brings no choice but to study jurisprudence in the US and EU and bring it to use in the Indian judicial system. A comparative study of Competition Law and IP Rights, discussed in this article, requires a basic understanding of the intention and objectives behind the design of the two regimes. It includes the study of the effects of one law over the other, their independent ambit, and the interface of the two and other relevant complementary & supplementary laws in the present-day economy.

Indian Competition Law

The Indian Parliament enacted comprehensive competition legislation to prevent appreciable adverse effects on competition {AAEC} which simultaneously regulates business practices in India, called the Competition Act 2002{Competition Act}. This legislation succeeded the Monopolies and Restrictive Trade Practices Act 1969 {MRTP Act}, a prior regulatory regime that was required to be done away with post-economic liberalization in1991. This Act had no provisions whatsoever concerning mergers & acquisitions. The Competition Act has been amended in 2007, to include provisions that fulfill its objectives and suit the changed business conditions in India. The Act created enforcement authorities, the Competition Commission of India (CCI) & Competition Appellate Tribunal & {COMPAT}.  An SLP before the Supreme Court of India is the last resort.

Competition Law is the codification of rules designed to promote and sustain market competition. These laws are prevalent across the globe with active enforcement & advocacy functions. The aim that the competition policy strives to achieve is to ensure fair competition by way of regulatory provisions upon the market. It does not in any way intend to create restrictions that detriment their growth. In fact, it aims at promoting healthy competition for the growth of society by prohibiting unethical practices that make the smaller or new businesses difficult to enter and/or survive in the market. Examples of a few anti-competitive practices are price-fixing, predatory pricing, bid-rigging, dumping, etc.

The Competition Act primarily is premeditated to control three categories of competition in the market:

  • anti-competitive agreements;
  • abuse of a dominant position;
  • combinations (mergers, acquisitions, and amalgamations). 

Anti-competitive agreements

Powerful enterprises come together and make horizontal or vertical agreements with each other to influence the market conditions to their benefit. The organizations exert joint power by making such agreements of colluding instead of competing by forming a single firm and creating a position of dominance in the market. Section 3 in the Competition Act, 2002 prohibits agreements, which cause or is likely to cause an “appreciable adverse effect on competition” within India. However, the advantage may be taken on account that ‘appreciable’ quantum is not prescribed and ‘adverse effect on competition’ is not defined in the act thus open to interpretation.

Abuse of dominant position

The term abuse of dominant position refers to anti-competitive business practices carried out by a dominant organization to maintain or increase its dominant position in the existing market.  Section 4 in the Competition Act, 2002 expressly provides that ‘no enterprise shall abuse its dominant position’, but the term ‘dominant position’ is not clearly defined under the Act however such position that enables it to- 

  1. operate independently of competitive forces prevailing in the relevant market; or 
  2. affect its competitors or consumers or the relevant market in its favor.

Practicing such as price-fixing, vertical integration, market sharing, etc are considered illegal under the Act.

Combinations 

The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises and persons or enterprises is defined in Section 5 in the Competition Act, 2002  The purpose of the combination decides the form of the combination, which may be a merger, amalgamation, acquisition of shares, voting rights or control over an organization. The Competition Act explicitly allows the commission to examine a combination effect inside and outside India and pass orders against it provided that such combination has an adverse effect on competition in the relevant market in India.

Intellectual Property Rights

According to the World Intellectual Property Organization (WIPO):

“Intellectual property (IP) refers to creations of the mind: inventions; literary and artistic works; and symbols, names, and images used in commerce. IP is protected in law by, for example, patents, copyright, and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish”. 

“IP is the creative work of the human intellect. Like any other property right, it gives the owner the sole right to benefit from their creation, for a specified period. Article 27 of the Universal Declaration of Human Rights provides for the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions” {VK Ahuja, Law relating to Intellectual Property Rights (2nd edition, LexisNexis 2013) 3}. It becomes necessary to protect the intellectual property of a country as it is associated with the progress of the nation in several fields such as art, science, technology, etc. Intellectual property includes trademarks, copyrights, patents, designs, geographical indications, etc.

IPR and Competition Law

From a bird’s eye view, it may seem that COMPETITION LAW & IPR operate against each other because all forms of intellectual property have the potential to violate the competition law. It is pertinent to note that IPR Laws do not make any reference to Competition laws and their effects on IPR, however, that does not imply that IPR laws can be applied in isolation from Competition laws. Indian Competition Act treats IP like any other tangible property. The relationship between the objectives of both laws must be understood to comprehend the effect of the former upon the latter and vice-versa.

Competition Law focuses to minimise monopoly power and maximizing healthy competition and growth in the economy while IP laws protect the IP holder and an exclusive right for a specific period for commercial gains. This is an exclusive right but not absolute, it is a preventive right held by the IP holder but cannot be used as a grant of monopoly status. This is where the Competition Law comes into the picture and expressly provides that anti-competitive practices at the instance of the IPR holder, it is subjected to competition law. The concept of anti-competitive practice is clear from Sec 3 of the Competition Law. Further reasonable use of IPR is exempted from the purview of Competition law expressly in Section 3(5) in the Competition Act, 2002 thus protecting IPR.

Section 4(2) in the Competition Act, 2002    provides that abuse of IP rights

 IP holders are actionable under the ICA. Section 3.

of this Act prohibits anti-competitive practices, but this prohibition does not restrict “the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights” which have been conferred under IPR laws like Copyright Act, 1957, Patents Act, 1970, the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999), the Designs Act, 2000 and the Semiconductor Integrated Circuits Layout-Design Act, 2000. This implies that no unreasonable restrictions towards production, distribution, exclusivity conditions, restricting quantities and prices, patent pooling, and tie-in arrangements, can be included while licensing IP as it would be violative of Competition Policy.

Conflicting grounds between IPR and Competition Law 

Abuse of dominant position

Section 4 of the Competition Act, 2002 expressly states that ‘no enterprise shall abuse its dominant position’. This ground brings in litigation related to IPR and Competition Law. In the case of Aamir Khan Productions Private … vs Union Of India on 18 August 2010  the court ruled that the competition commission (CCI) has the power to deal with intellectual property cases. CCI further said that IP laws do not have an absolute overriding effect on Competition Law.

Refusal to license

IPR involves the right to grant a license to the right holder to exploit the same in return for benefits that fall within the licensed period. Due to this right, its holder can prevent others from exploiting the same but cannot prohibit development in its garb. Here it overlaps the purview of Competition Law. In the case of Super Cassette Industries Ltd. vs Entertainment Network (India) … on May 16, 2008, it was held that ‘the owner of the copyright exercises freedom of monopoly, but with unreasonable terms, it would amount to refusal”. This refusal to license was viewed as anti-competitive.

Tying agreements

Section 3(4) of Competition Law prohibits tying agreements that involve the selling of a combo of a highly usable product or service with a lesser important product or service, wherein the seller refuses to sell them separately. The landmark Case of the European Union (EU) against Microsoft for alleged antitrust abuse. European Union Microsoft antitrust case | Microsoft Wiki | Fandom Microsoft case of anti-competitiveness originated in December 1998, when the complainant Sun Microsystems alleged that Microsoft, due to a beneficial horizontal agreement, was refusing to supply their company with interoperability information that was essential for interoperating with Microsoft’s dominant PC operating system. Later the Commission examined the tying of Microsoft’s Windows Media Player to its Windows 2000 version.

Excessive pricing & predatory pricing

The concept of excessive pricing & predatory pricing falls within restrictive trade practices. Overpricing of patented goods does not violate provisions of Competition Law in all cases as the CCI observed that different pricing according to the kind of licenses is a common practice and is acceptable. However, it is important to strike a reasonable balance between IP protection and competition-related policies in the market to promote innovation & wealth maximization keeping in mind the welfare of the society. 

IP law grants negative preventive rights in favor of the holder and restrictions upon others in the light of infringement. Sec 3(5)(i) facilitates the rights conferred by the IP laws. The rights that get protection are those which are mentioned in the IP laws themselves, nothing beyond that. This concept may be better understood In the case of Shamsher Kataria v. Honda Siel Cars India Ltd. CCI Case No. … (Automobile spare parts case), the CCI dealt with the IPR exemption under s 3(5). In this case, the original equipment manufacturers (OEMs) entered into agreements with original equipment suppliers (OESs) for the procurement of some components. The designs, technical specifications, tools, etc. were given by the OEMs and the agreement prohibited OESs to trade in the outside market with third parties or aftermarkets without the consent of the OEMs. The OEM contended that this agreement fell within the ambit of ‘reasonable condition’ under S 3(5)’.

The CCI states that it is not that a ‘reasonable condition’ imposed would not be in contravention to Sec 3 of Competition Law but that any ‘unreasonable condition’ would be in its contravention. The CCI has a clear list of practices that would be in contravention to Section 3 of the Act.

Practices in contravention include

Patent Pooling

This practice becomes restrictive when persons or businesses decide not to grant licenses to outside parties.

Tie-in Arrangement

This practice is restrictive on behalf of the patentee who alone supplies goods to the third party.

Price-fixing

A practice wherein the licensor fixes the price at which the licensee shall sell the goods, amounts to restrictive practices.

Royalty

Any agreement to pay royalty beyond the expiry period of the patent is in contravention of fair practices.

Recommendations to avoid or overcome conflicts

Keeping in mind that IPR cannot be isolated from provisions of competition Law and IPR have to comply with them it is recommended that

  • The CCI and IPR authorities must coordinate to resolve the potential issues from time to time because aggressive IP laws shall increase transaction costs and simultaneously decrease social welfare.
  • Compulsory licensing is a solution to issues of ‘refusal to deal’
  • The regimes & implications must be assessed before defining the market policies within the country.
  • To determine the grounds of granting compulsory licenses of IPRs, the guiding principles of the TRIPS agreement must be taken into account for counter-balance.
  • A tougher approach is needed towards monopolization & abuse of dominant position to deal with cases like the Microsoft case. (microsoft.fandom.com/wiki/European_Union_Microsoft_antitrust_case)
  • IP Licensing practices must have clear & strict guidelines as followed in the US and EU.
  • With over 100 countries practicing Competition Law & about 159 developing their IP laws, authorities of both sects have a significant role to play.
  • The legal framework, guidelines, and jurisprudence developed by the US &EU along with the base provided by the TRIPS agreement with respect to technology licensing and transfer may be the guiding path in the formulation of dynamic and effective IP & Competition policy in our country.

Conclusion

From the above discussion, it is concluded that IPR & Competition Law are complementary to each other as they share certain important objectives thus Competition policy of the market has to consider the IP rights of innovations that bring consumer welfare and boost the market. They jointly supplement and contribute towards economic rationale and innovative market conditions, favorable to public policy and resulting in the economic development of countries all over the world. Competition policy is an effective counterbalance to protecting intellectual property rights and controlling its abuse. 

The TRIPs Agreement provides a basic framework of intellectual property protection as well as enforcement of anti-competitive licensing practices in intellectual property, there is no doubt that IP is gaining huge importance in the era of globalization. However, certain questions such as the standard of practices under which actionable abuses may be determined are left unanswered by the TRIPS. Competition Law in India was enacted in 2002 and amended in 2007 to give it full force and to adapt to the changes in the Indian business/economic scenario. Nevertheless, it still needs to get more teeth so that it may efficiently deal with IP abuses because the competition policy in India is not fully evolved to develop the necessary jurisprudence on the subjects of conflict between the two laws. India requires more guidance in terms of the legislative framework with the background of available jurisprudence in the US and the EU which can be supportive in IP and competition policy formulation. The interface of intellectual property rights and competition law has grown massively, owing to the expansion and strengthening of intellectual property on a large scale. While IP law attributes exclusive control rights to a person over his assets, competition law seeks to promote innovation by checking market barriers for the benefit of consumers and encouraging competition among a multiplicity of suppliers of goods, services, and technologies. Two main concerns that dominate this IPR/competition law interface is the potential abuse of monopoly pricing, especially in developing countries where active substitutes to IPR-protected products may not be readily available. Second, competition law seeks to draw the line between permissible business strategies and abuse of IPRs -a line which is often blurred by horizontal agreements, exclusionary licensing restrictions, tie-in agreements, excessive exploitation of IPRs, and other selling practices. However, at a conceptual level, the lines are clear. The monopoly rights granted by IPR are not anti-competitive but become so when exercised beyond their intended scope of exercise.

References


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Secondary evidence under the Indian Evidence Act, 1872

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This article is written by Neha Dahiya, a law student at Dr. B.R. Ambedkar National Law University, Sonipat. This article explains the concept and types of evidence as mentioned under the Indian Evidence Act,1872 with special emphasis on secondary evidence and its elements. It also outlines the difference between primary and secondary evidence and the circumstances in which secondary evidence is used in the place of primary evidence. 

This article has been published by Sneha Mahawar.

Introduction

Evidence forms an integral part of the justice delivery system. It is with the help of the evidence that the alleged facts are proved in a court of law and the right decision is taken. Evidence has been dealt with in detail in the Indian Evidence Act,1872. One of the important forms of evidence mentioned in the Act is secondary evidence which plays a significant role in proving the alleged facts in cases wherein the original document, i.e. the primary evidence is not available due to exceptional circumstances. The Act contains elaborate elements of secondary evidence that outline what forms of documents can fall in this category. 

What is evidence 

The word ‘evidence’ has been derived from the Latin expression ‘evidens evidere’ which translates to “to show clearly; to make plain, certain or to prove.” Whenever a case is presented before the court, it has to go through a lot of facts and information given by the contesting parties. A court of law is expected to examine the truth of those facts and deliver justice. This is where the role of ‘evidence’ comes into the picture. Evidence is that support provided to the facts presented that prove the genuineness of those facts. It is all about giving proof of something before the court. 

As per Section 3 of the Indian Evidence Act,1872, evidence means and includes:

  1. Oral evidence- It includes all the statements that are allowed or need to be presented before the court by the witnesses in relation to the matters of fact under inquiry. 
  2. Documentary evidence- This includes such documents, including any electronic records that are presented before the court for examination. 

Oral evidence 

Oral evidence basically implies words of mouth that are credible enough to be adequate to prove a particular fact without the support of any documentary evidence. According to Section 60 of the Indian Evidence Act, 1872, oral evidence must have the following requisites:

  1. It must be personally seen or heard by the witness. 
  2. If it is gathered from the perception of any other sense, then it must be proved by the witness who claims to have perceived it from that sense.
  3. If it refers to an opinion or the grounds on which the opinion is held, then it must be given by the person holding that opinion or the grounds of that opinion. 
  4. If it refers to the existence of material other than a document, then the court can also order the presentation of that material for inspection. 

Though hearsay evidence is not acceptable in a court of law, Section 32 of the Indian Evidence Act, which talks about the cases in which a statement of relevant fact by a person who is dead or cannot be found, etc. is relevant, and Section 33 of the same Act which covers relevancy of certain evidence for proving, in the truth of facts that are presented, form the exceptions of this rule. 

Documentary evidence 

Whenever any evidence is presented to prove certain facts that contain the matter expressed or described upon any material by way of letters, marks, figures, or by more than one such method by which such expression can be made materially, it is called documentary evidence. Thus, it refers to evidence in physical or tangible form. 

Now as per Section 61 of the Indian Evidence Act, documentary evidence could either be primary or secondary. 

Primary and secondary evidence 

According to Section 3 of the Indian Evidence Act, a document refers to “any matter expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter.” Now, this may include printed, lithographed, or photographed words, a map or plan, a caricature, or even an inscription on a metal plate or stone. 

Section 61 states that the contents of a document can be proved in two ways. They are as follows:

  1. Primary evidence- It is covered by Section 62 of the Evidence Act and is considered the highest class of evidence. As per Section 62, when the document itself is produced for the inspection of the court, it is called the primary evidence. If the document is in parts, then each part forms the primary evidence. The copies of a common original do not form the part of primary evidence, where they are all made by one uniform process. It is majorly produced before secondary evidence. In fact, secondary evidence is presented in the absence of primary evidence. It is the best evidence that absolutely establishes the proof of the fact alleged. 
  2. Secondary evidence- It is generally presented in the absence of primary evidence and is not the best form of evidence. Secondary evidence is covered under Section 63 of the Evidence Act.

Section 63 of the Indian Evidence Act, 1872

According to Section 63, secondary evidence means and includes the following:

  1. Certified copies as per the provisions mentioned hereinafter;
  2. Copies that are produced from the original by mechanical processes which ensure the accuracy of the copy, and copies compared with such copies;
  3. Copies produced from or compared with the original;
  4. Counterparts of documents as against the parties who had not executed them;
  5. Oral accounts of the contents of a document given by the person who has himself seen the document. 

Illustrations for Section 63

  1. A photograph of the original document- If it is proved that the thing photographed was original, the photograph is considered secondary evidence of its contents, even though the two may not have been compared.
  2. Copy of letter made by the copying machine- If it proved that the copy of the letter was made from the original with the help of a copying machine, then the copy as compared with the original letter shall be admissible as secondary evidence of its contents.
  3. A copy transcribed from a copy- A copy transcribed from the copy is admissible as secondary evidence, only when it is afterwards compared with the original. 
  4. Oral account- Oral account of the copy compared with the original and oral account of a photograph or machine copy of the original are not considered to be secondary evidence. 

Comments on Section 63 

  1. Sobha Rani v. Ravikumar (1999) – In this case, the admissibility application was moved to seek permission to lead secondary evidence on the grounds of loss of the original document. The Court gave its permission. The presence of the document was proved from the facts. The Punjab and Haryana High Court held that allowing secondary evidence was not illegal. 
  2. K.S. Mohan v. Sandhya Mohan (1993) – In this case, the honorable Madras High Court held that a tape-recorded statement was admissible as secondary evidence. 
  3. K. Shivalingaiah v. B.V. Chandrashekara Gowda (1993) – It was observed in this case that certified copies of the money lender’s licenses are admissible as evidence. 

Elements of secondary evidence 

Certified copies were given under the provisions contained therein

Section 76 of the Evidence Act describes the certified copies. It lays down that every public officer having the custody of any public document, in relation to which any person has a right to inspect, shall give a copy of that document on demand and on payment of the requisite fee. At the feet of such copy, a certificate must be affixed declaring that it is a true copy of the said copy. The date of the copy, the name and official title of the officer who has subscribed to such copy, and the seal of the officer must also be affixed on that copy.

In the case of Kalyan Singh v. Smt. Chhoti and Ors. (1989), it was observed that the genuineness of certified copies that are referred to in Section 63(1) is presumed under Section 79 of the Evidence Act. But this is only for the certified copies. For other copies, proper evidence must be provided to prove it. Thus, the certified copy of a registered sale deed shall be admissible as secondary evidence but not any ordinary copy. 

Copies that are produced from the original by mechanical process

For this particular provision, elaborate guidelines were issued in the case of Surinder Kaur v. Mehal Singh (2013). It was observed:

  1. A photocopy of the original document can be allowed to be presented as secondary evidence only in the absence of the original document. 
  2. When a photostat copy is presented as evidence, it is on the party producing it to prove that the original document existed and is lost or is in possession of the opposite party who failed to produce it. Mere assertion is not sufficient to prove it. 
  3. After the photocopy is produced in the court as evidence, the opposite party must raise its objections regarding the non-existence of such circumstances or foundational facts at the earliest. 
  4. When any such objections are raised, the authenticity of the copy must be determined as every copy produced from the mechanical process might not be accurate. 
  5. Mere production of copy as the evidence does not amount to its proof. Its correctness has to be evaluated and proved independently. It has to be shown that it was made from the original document at a specific time and place. 
  6. In instances where the photostat copy is itself suspicious, it is not to be relied upon, unless the court is satisfied that it is genuine and accurate. 
  7. The genuineness of the copy is to be proved on oath by the person who made the copy or who can vouch for its accuracy, to the satisfaction of the court. 

Copies produced from or compared with the original

This provision is further elaborated by the illustration attached with Section 63. It states that a copy transcribed from a copy is admissible as secondary evidence only when compared with the original. If the copy is not compared with the original, it is not considered to be secondary evidence, even though the copy from which it was transcribed was compared with the original. 

Counterparts of documents as against the parties who had not executed them

This provision states that the counterparts of documents are admissible as secondary evidence against the person who had not executed it. 

Oral accounts of the contents of a document given by the person who has himself seen the document

Oral accounts of a person about the content of a document must be closely examined. Not examining the informant or not presenting the report of that person is fatal and such a person’s report cannot be relied upon in such a case. 

Difference between primary and secondary evidence 

Primary evidence Secondary evidence 
It is defined under Section 62 of the Indian Evidence Act. It is defined under Section 63 of the Indian Evidence Act. 
It consists of the original document that is presented in the court for inspection. It consists of documents other than the original like the copy or others, as enlisted in Section 63. 
It is considered the best form of evidence. It is not the best form of evidence and is usually presented in exceptional circumstances such as, the absence of primary evidence.
Presenting primary evidence is the general rule to prove a particular fact. Presenting secondary evidence is the exception to the general rule. 
No notice is required to be served before the presentation of primary evidence.A notice must be served before presenting secondary evidence. 
It is the main source of evidence.It is the alternate source of evidence. 

Circumstances in which secondary evidence is admissible in place of primary evidence 

Section 65 of the Indian Evidence Act enlists the circumstances under which secondary evidence is admissible in place of primary evidence. They are as follows:

  1. In the instance where the original document is shown or appears to be in the possession of or power of- 
  1. The person against whom the document is sought to be proved; or 
  2. The person who is out of reach or not subject to the process of the court; and 
  3. The person who is legally bound to produce it but has not done so despite a notice being served under Section 66. 

B.  In the case where the contents, existence, or contents of the original document have already been proved to be admitted in writing by the person against whom it is proved or his representative interest.

For example, in the case of Sharda Talkies (Firm) and Anr. v. Smt. Madhulata Vyas and Ors. (1995), it was held that in a case where the defendant himself had admitted to having made the payment under the cheque, the absence of the cheque as primary evidence can be dispensed with and this would not vitiate the suit. 

C. In a situation, wherein the original has been lost or destroyed, or the party who is presenting the evidence cannot present it in reasonable time due to any reason other than his default or neglect; 

D. In case where the original document is not of such nature that it is not movable so as to be presented before the court for inspection; 

E. In an instance where the original document is a public document within the meaning of Section 74

F. In a situation where the original is a certified copy that is permitted by this Act or any other law in force in India to be given in evidence; 

G. In the case where the original consists of numerous accounts or documents which cannot be conveniently all examined by the court, or the fact which is to be proved is the general result of the whole collection. 

In cases ‘A’, ‘C’, and ‘D’, secondary evidence of the contents of the document is admissible. In the case of ‘B’, only the written evidence is admissible. In the case of ‘E’ or ‘F’, only the certified copy of the document shall be admissible as secondary evidence. Lastly, in the case of ‘G’, evidence to be presented as the general result of the documents collectively must be given by a person who has examined them and is skilled in the examination of such documents. 

Circumstances when notice is not required to render secondary evidence 

As per Section 66, in the following circumstances, there is no need to render a notice for the presentation of secondary evidence:

  1. When the document to be presented itself amounts to notice;
  2. When it is evident from the case that the adverse party should itself realize that he will be required to create it;
  3. When it is proved that the opposite party has gotten the ownership of the first by fraud or force;
  4. When the adverse party or his representative has already submitted the original in the court;
  5. When the adverse party or the representative has accepted the loss of the document; and
  6. When the individual having the possession of the report is far away or is covered under the jurisdiction of the court. 

Examples of secondary evidence 

The following are some common examples of secondary evidence presented in the courts:

  1. Newspaper reports- Newspaper reports have been admitted to be hearsay evidence. Hence, they cannot be relied upon unless proved by concrete proof. Supporting evidence must be presented to prove the facts alleged in newspaper reports. 
  2. Judgments- Judgments can be presented as secondary evidence but their use is limited. Many times, the judgment not only contains the ratio decidendi but also a lot of ancillary information based on documents submitted by parties that can be relied upon to prove certain facts stated in a particular case. 
  3. Photographs- They are admissible as secondary evidence in the court of law, but only on oath either by the person who took the photograph or the one who can testify to its accuracy. Even X-ray photographs are admissible to prove the extent of injury caused. 
  4. Birth certificates- In instances where the original birth certificate is lost or cannot be presented, then any similar certificate which is issued by the school principal is admissible as secondary evidence. Voters’ lists can also be presented in a similar way. 

Conclusion 

Secondary evidence is not considered to be the best form of evidence. It is usually presented in exceptional circumstances where primary evidence is not available. However, this cannot belittle its significance in proving certain facts. There are a number of instances wherein the presence of primary evidence is not possible. In such circumstances, secondary evidence plays a crucial role in proving the facts before a court of law and helps in the delivery of justice. The Indian Evidence Act covers the concept of secondary evidence elaborately, including its meaning, what can be included under it, and when it can be presented in place of primary evidence. 

References


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

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

https://t.me/lawyerscommunity

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

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