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Important legal maxims : meaning, interpretation and judicial decisions

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This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed list of legal maxims and their applications for its readers. 

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

A legal maxim is a well-established legal idea, proposal, or doctrine, generally expressed in Latin. Majority of these Latin maxims date back to the middle ages in European governments that employed Latin as their official language. These principles aid courts across the globe in implementing current laws in a fair and reasonable manner, allowing them to resolve issues before them. Such principles do not have legal force, but when courts use them in determining legal matters or the legislature adopts them in enacting legislation, they take on the shape of law and serve as the foundation for sound judgments.  We refer to it as a single word or a phrase to avoid using extensive definitions. Take, for example, the maxim ‘ab initio,’ which means ‘from the beginning of’ or ‘from the beginning of anything,’ so instead of writing a statement, we can use the word ab initio, which is also useful in practice. Early English philosophers’ attitudes about the application of legal maxims are laudatory. In his work ‘Doctor and Student’, Thomas Hobbes had claimed that legal maxims have the same force as deeds and legislation.

Important legal maxims one should know about

Every piece of legislation or act is written with a certain purpose in mind. The judiciary has an important responsibility of interpreting the provisions in such a way that the legislators’ intent is not thwarted. Legal maxims serve a vital function in assisting the judiciary by giving a method and standards for interpreting the legislation.

Ab initio

Ab initio is a frequently used Latin maxim that signifies ‘from the very beginning’. 

Literal meaning

The literal meaning of ‘ab initio’ is ‘from the very beginning of the law/ act it was wrong’. Such a term is used with respect to laws, agreements, a deed made between parties, marriage, and related matters. When something is described as ‘void ab initio’, it means the thing was never created or void to begin with.

Interpretation of Ab initio

When a court deems anything to be a case of ab initio, it indicates that the court’s decision applies from the moment an act had taken place or the circumstances for the case in question were in place and not from the time the court actually ruled on the subject. In contracts, property, and marriages, the word void ab initio is frequently used. 

Take for example, when a police officer enters ‘A’s property with the authority of a court order that allows him to confiscate a costly painting but along with it he also takes away a beautiful marble sculpture, he is considered to be a trespasser ab initio. This is because he misused the power of the court.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Keshavan Madhava Menon v. State of Bombay (1951)

The Supreme Court of India while deciding on the case of Keshavan Madhava Menon v. State of Bombay (1951) had ruled that Article 13(1) of the Indian Constitution did not apply to the case since the crime was committed before the Constitution was enacted, and so the petitioner’s 1949 proceedings were unaffected. The Court noted that previous and concluded transactions, as well as rights that were already vested under existing laws, would be unaffected by the Constitution’s coming into force, even though the laws would become void under Article 13(1) of the Constitution. The Court had also observed that Article 13(1) did not declare previous legislation that was incompatible with fundamental rights invalid from the very beginning or for all intents and purposes.

“Article 13(1) of the Indian Constitution does not declare existing laws that are incompatible with fundamental rights void ab initio; rather, it renders such laws ineffective and void with regard to fundamental rights exercised on and after the Constitution’s beginning date. It has no retrospective effect, so if an act was committed prior to the commencement of the new Constitution in violation of the provisions of any law that was in force at the time of the act, a prosecution for that act, which began before the Constitution came into force, can be pursued and the accused punished in accordance with that law, even after the new Constitution came into force”.

  1. Delhi Development Authority v. Kochhar Construction Work & Ors (1996)

The Supreme Court of India while deciding on the case of Delhi Development Authority v. Kochhar Construction Work & Ors (1996) used the Latin term ‘ab initio’ to arrive at a conclusion that the proceedings were ab initio faulty since the firm in whose name the actions were initiated was not registered at the time of the institution of the proceedings. The interpretation of Sections 69(2) and(3) of the Indian Partnership Act, 1932, read with Section 20 of the Arbitration Act, 1940, is the subject of the appeal in the present case. The respondent, an unregistered business, filed a complaint in the High Court of Delhi under Section 20 of the Arbitration Act, 1940. The Delhi Development Authority filed a counterclaim, claiming that the proceedings were barred by the statute of limitations. The suit was approved by a learned Single Judge, who also ordered the appointment of an arbitrator. The Respondent filed a first appeal against that ruling before a Division Bench of the High Court. That appeal was dismissed holding that the subsequent registration of the firm cured the initial defect since that was within the period of limitation. Subsequently, an appeal before the Apex Court was filed. 

“The Supreme Court granted the appeal, overturning the High Court’s decision and ruling that the proceedings were ab initio defective since the business in whose name the actions were started was not registered at the time of the institution of the proceedings”.

  1. Shiv Kumar & Ors. v. Union of India (2019)

The issue before the Supreme Court of India while deciding on the case of Shiv Kumar & Ors. v. Union of India (2019) was whether a property purchaser can use the provisions of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013, after receiving notification under Section 4 of the Land Acquisition Act, 1894

The Apex Court had voiced that a purchaser who receives notice under Section 4 of the Land Acquisition Act, 1894 does not acquire any rights in the land and has no right to claim land under the Policy since the sale is ab initio void. Some of the notable paras with respect to the discussed maxims are provided hereunder:

“It has been established that purchasers cannot object to the taking of possession procedures on any grounds. A purchaser who receives notice under Section 4 does not gain any rights in the land since the sale is ab initio void, and he or she has no right to claim land under the Policy.”

“The Act of 2013 does not confer any right on purchasers whose sale is ab initio void. Such void transactions are not validated under the Act of 2013. No rights are conferred by the provisions contained in the 2013 Act on such a purchaser as against the State.”

“A person cannot claim the land or declaration after no title has been bestowed upon him to argue that the land should be handed back to him because void is, ‘ab initio,’ a nullity and is inoperative. By requesting a declaration under Section 24 of the Act of 2013, a person cannot enforce ripe fruits based on a void transaction to begin claiming title and control of the property, this would amount to conferment of advantage not envisioned by the law.”

Actus legis nemini facit injuriam

Actus legis nemini facit injuriam is a well-established Latin maxim that signifies ‘The act of the law does injury to no one’. 

Literal meaning

The literal interpretation of the maxim is that no one is prejudiced by a judicial action and legitimate action does not need any qualifications. There is a prevalent assumption that initiating a lawsuit against another party will not affect the second party (other than a frivolous action). As a result, no one may be harmed by a legal action. An act of legislation should be restricted in its application so that it does not infringe on anyone’s rights.

Interpretation of Actus legis nemini facit injuriam

Particular laws that are in the public interest may be harmful to some people. However, there are no current therapies for such harm, because the law applies equally to everyone, modifications in the law cannot be made to benefit a small number of individuals. When a law-given authority is abused, the law puts the person misusing it in the same position as if they had behaved entirely without authority in the first place and this, it has been remarked, is a just principle based on the maxim that the law wrongs no man.

A tenant whose house is damaged by fire or storm is not obligated to reconstruct the house to the detriment of himself, even if he is not dismissed from his tenancy to the detriment of his landlord. Unless he makes a covenant of commitment to repair and maintain the premises, except in the event of a fire, tempest, or other disasters, he will be required to rebuild if the premises are destroyed by fire or other casualties. If he is a lessee, he must pay the rent until the end of his term, or if he is a tenant, from year to year, until he determines the tenancy by notice. The landlord is also not obligated to rebuild in the event of a fire, even if he may have insured the property and received payment from the insurance company. To protect the renter against all of these hassles, he must include a particular clause in the lease or agreement. The legal maxim, Actus legis nemini facit injuriam, will be applied in this situation.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Baburao Ganpatro Tirmalle v. Bhimappa Venkappa Kandakur (1996)

In the case of Baburao Ganpatro Tirmalle v. Bhimappa Venkappa Kandakur (1996), the Court is obligated to apply the concept of actus legis nemini facit injuriam and render justice to those who have been wronged. The Court must then issue appropriate instructions allowing the tenant to reconstruct the premises in line with the previous decision and, if possible, in accordance with the authorised plan, but only to the degree necessary to accommodate the tenant. The landlord is responsible for covering the costs spent in this regard.

“The lease is still in effect, and the lessee cannot be ejected from the premises by the lessor. When he abuses the Court’s power, it’s as if he never had the jurisdiction to demolish the structure in the first place. In such a case, the Court is obligated to apply the principle actus legis nemini facit injuriam and render justice to those who have been wronged.”

  1. K.Shajahan v. Subramani Gounder (2008)

In the case of K.Shajahan v. Subramani Gounder (2008), the Madras High Court had ruled that the maxim actus legis nemini facit injuriam implies and suggests that no one may protest or allege that he or she had been mistreated by any actions taken by the Court. In this case, the police had laid the police report in terms of Section 173 of the Code of Criminal Procedure, 1973, as against the accused of the offences under Sections 447, 506(2) read with 34 of the Indian Penal Code, 1860. After the accused pleaded not guilty and completed the necessary processes and formalities, the trial began. The accused was eventually acquitted by the learned Magistrate. A revision petition was filed before the Madras High Court challenging the irregularities in the initial decision. 

“Actus legis nemini facit injuriam means that no one may protest or say that he has been mistreated by the Court’s actions. In this case, it is self-evident that one of the prosecution witnesses secured delivery of the property in question by Court procedure, and the Magistrate has made his conclusion to that effect. The Magistrate, however, based on another witness’s statement, came to the judgment that the delivery granted was just a paper delivery, not an actual delivery, and that possession remained with the accused. In reality, the Magistrate approached the case with this in mind and concluded the case with an incorrect decision.”

  1. P.G. Pattabi v. Mythili (2010)

In the case of P.G. Pattabi v. Mythili (2010), the Madras High Court had declared that the latin maxim, actus legis nemini facit injuriam, no one may object to or allege that he or she has been hurt by the Court’s legal actions. In this case, the Court had observed that revision petitioner’s complaints would all amount to finding fault with the Court for following the processes. In such an instance, it must be determined if the revision petitioner suffered any material harm during the execution processes or not.

“The legal maxim Actus legis nemini facit injuriam would imply  that no one could object to or allege that he had been mistreated by the Court’s legal actions. The revision petitioner’s complaints would amount to finding fault with the Court for following the processes. In such an instance, it must be determined if the revision petitioner suffered any material harm during the execution processes. Simply pointing out flaws in the Court’s method will not suffice to have an otherwise valid court order overturned.”

Actus non facit reum, nisi mens sit rea

Actus Reus and Mens Rea are the two main components of criminal law. While the unlawful act is known as Actus Reus, the state of mind that leads to such an act is known as Mens Rea. Mens Rea is the source of the Latin maxim Actus non facit reum nisi mens sit rea. The maxim clarifies the application of Mens Rea in criminal law.

Literal meaning

The literal meaning of the well-known legal maxim Actus non facit reum, nisi mens sit rea is that “an act does not make anyone guilty unless there is a criminal intent or a guilty mind”.

Interpretation of Actus non facit reum, nisi mens sit rea

Actus non facit reum nisi mens sit rea says that any act must be done with a guilty mind in order to be criminal in nature. To convict the defendant, it must be established that the unlawful conduct was committed with the intent to commit a crime. The purpose of the accused to undertake the precise conduct is just as significant as the act itself in proving the accused’s guilt. As a result, the mere commission of a criminal act or a violation of the law is insufficient to create a crime. It should be used in conjunction with the presence of wrongdoing. Furthermore, the mens rea is critical in determining the gravity of the crime committed. 

The blameworthy mental state is the most important component. Its absence might render the responsibility null and void. However, there are several exceptions, such as strict responsibility, to the notion that there is no crime without a guilty mind. It is not essential to prove that a defendant possessed the requisite mens rea for the act committed under strict responsibility. The significance of this maxim may be seen in Section 14 of the Indian Evidence Act of 1872. It indicates that information that reveals a person’s state of mind or intent are important facts in the case.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Brend v. Wood (1946)

In the case of Brend v. Wood (1946), the Court debated whether it was necessary to assume that a conviction for a crime needed proof of mens rea. Lord Goddard CJ had observed that it is important to note that under common law, there must always be a mens rea for a crime to be committed. If a person can establish that he behaved without mens rea, he can defend himself against a criminal charge. Although there are legislation and regulations in which Parliament has deemed proper to create offences and hold persons accountable before criminal courts notwithstanding the lack of mens rea. It is not the court’s responsibility to be acute in determining that mens rea is not a constituent component of the crime.

“It is critical for the protection of the subject’s liberty that a court remember that unless a legislation expressly or by necessary inference excludes mens rea as a component portion of a crime, the court should not declare a man guilty of an offence against the criminal law unless he has a guilty mentality.”

  1. R.Balakrishna Pillai v. State of Kerala (2003)

The appellants in the case of R.Balakrishna Pillai v. State of Kerala (2003) were found guilty under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947, of causing M/s.Graphite India Ltd, Bangalore, to obtain a valuable thing, namely, electricity, by selling it to the said company illegally and abusing their official position as public servants, resulting in a monetary benefit to M/s.GIL of Rs.19 lakhs and odd.

“A man’s criminal culpability would be attached if he broke the law. The norm, however, is not absolute, and it is subject to the constraints set out in the Latin maxim, actus non facit reum, nisi mens sit rea. It means that without a guilty mind, there can be no crime. To hold someone criminally responsible, it must be proven that his actions resulted in an illegal act, and that his actions were accompanied by a legally blameworthy mental attitude. As a result, every crime has two components, a physical element and a mental aspect, which are known as actus reus and mens rea, respectively.”

Actori incumbit onus probandi

Actori incumbit onus probandi, a legal maxim in Latin, states that before a plaintiff at law or a complaint at equity may win their case, they must establish a solid title or claim.

Literal meaning

The literal meaning of the legal maxim is that the burden of proof lies on the plaintiff.

Interpretation of Actori incumbit onus probandi

The broad idea that the party who raises an issue has the burden of evidence is derived from the Latin phrase actori incumbit onus probandi. It is a necessary premise for a fair trial since it requires both the claimant and the respondent to support any factual charges made on them. In a civil case, the court conducts the investigation, but the plaintiff is responsible for completing it and submitting all proof and evidence to the court. Filling out a case is not enough to win a lawsuit, one must also back it up with solid and sufficient evidence to persuade the jury. The prosecutor has the burden of proof in criminal cases. The scope and subject matter of the burden of proof might cover subject matters such as evidence and pleadings.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Sh. Kedar Nath Kohli v. Sh. Sardul Singh (2003)

The decision was made in the case of Sh. Kedar Nath Kohli v. Sh. Sardul Singh (2003) has stated that the rule of law being ‘actori incumbit onus probandi,’ signifies that the plaintiff or the prosecution has to bear the burden of proof. The plaintiff’s case must stand on its own, and the plaintiff cannot claim that his claim is proven because the defendant’s argument is weak.

  1. Kuthalinga Nadar v. D.D.Murugesan (2011)

The legal maxim actori incumbit onus probandi was applied in the case of Kuthalinga Nadar v. D.D.Murugesan (2011) to arrive at a decision. The original plaintiff filed a second appeal, claiming that the suit’s second item property (7 cents) is part of the suit’s first item property. The defendant, according to the plaintiff, interfered with the plaintiff’s enjoyment of the second suit property (7 cents). The plaintiff had the burden of proof to show the same, and as he had failed to do it, the second appeal was denied by the Madras High Court. 

“According to the adage actori incumbit onus probandi, the plaintiff has the burden of proof to show his case, and he cannot poke holes in the defendants’ case and ask them to prove that the plaintiff has no right to the suit property.”

Actus curiae neminem gravabit

This idea that no one should suffer as a result of a court’s error or a delay in the proceedings has been deemed to be important to the system of justice and its application to Indian law. The same has been incorporated by means of the legal maxim ‘actus curiae neminem gravabit’. 

Literal meaning

The maxim ‘actus curiae neminem gravabit’, means that the act of the Court shall prejudice no one.

Interpretation of Actus curiae neminem gravabit

If the Court makes a mistake in providing the information, the litigant’s duty, while not entirely gone, is at least shared by the Court. If the litigant acts on the basis of the knowledge, the courts will not hold him liable for a mistake that he made. There is no greater standard for guiding the Court than that no act of the Court should hurt a litigant, and it is the Court’s bounden obligation to ensure that if a person is harmed by a Court error, he is restored to the position he would have held but for the error. The maxim Actus curiae neminem gravabit appropriately summarises this.

Judicial decisions based on this legal maxim and relevant paragraphs 

  1. Kalabharati Advertising v. Hemant Vimalnath Narichania & Ors (2010)

In the case of Kalabharati Advertising v. Hemant Vimalnath Narichania & Ors (2010), the issue surrounded the appellant, who managed an advertisement hoarding firm in Bombay and had approached a society in 2001 to request permission to install a 40’x20′ hoarding in the society’s yard.

“When a scenario is anticipated in which the Court is under a duty to remedy the injustice done to a party by the Court’s act, the maxim ‘actus curiae neminem gravabit’, which says that the Court’s conduct shall disadvantage no one, comes into play. The above mentioned maxim is to be applied in a case where a party requesting the Court’s jurisdiction has achieved an unearned or unfair advantage that has to be negated.”

  1. Neeraj Kumar Sainy and Ors v. State of U.P and Ors (2017)

The case of Neeraj Kumar Sainy and Ors v. State of U.P and Ors (2017) concerned default in counselling procedures in relation to the test of UPPGMEE-2016. The Supreme Court of India had decided that the legal maxim, actus curiae neminem gravabit cannot be used in isolation. The facts must provide sustenance to it.

“One cannot wallow in the luxury of lethargy, maybe developing the notion that forgetting is a virtue, and then wake up and take refuge behind the dictum ‘actus curiae neminem gravabit’ after the time has passed. It’s simply not acceptable.”

  1. Benignae faciendae sunt interpretationes chartarum, ut res magis valeat quam pereat

Literal meaning

Liberal constructions and interpretations are different, so they have an effect rather than fail.

Interpretation of Benignae faciendae sunt interpretationes chartarum, ut res magis valeat quam pereat

The legal maxim ‘benignae faciendae sunt interpretationes chartarum, ut res magis valeat quam pereat’ signifies that construction of documents are to be made favourably, so that the instrument may rather avail than perish. Put simply, documents must be constructed in such a way that the instrument will serve rather than die.

Judicial decisions based on this legal maxim and relevant paragraphs 

  1. Harihar Banerji and Ors. v. Ramsashi Roy and Ors (1918)

The Bombay High Court while deciding on the case of Harihar Banerji and Ors. v. Ramsashi Roy and Ors (1918) was considering an appeal in which ejectment was brought not by landowners or occupiers against trespassers, but by landlords of a specific piece of land against their former tenants in order to reclaim possession on the grounds that their tenancy had been decided by an effective notice to leave validly that was duly served.

“That the test of their sufficiency is what they would mean to tenants presumably familiar with all the facts and circumstances concerning the holding to which they purport to refer, not what they would mean to a stranger ignorant of all those facts and circumstances; and, further, that they are to be construed ut res magis valeat quam pereat, not with a desire to find faults in them that would render them defective.”

  1. Bhailal Jagadish v. Additional Deputy Commr. and Ors (1952)

The case of Bhailal Jagadish v. Additional Deputy Commr. and Ors (1952) that appeared before the Madhya Pradesh High Court concerns issues surrounding the termination of tenancy. The Court was involved in interpreting a written document and its scope. 

“An instrument should be interpreted ‘ut res magis valeat quam pereat’, not with the intent of finding a flaw in it that would render it faulty. A written document should be accorded a broad interpretation and given such meaning as would carry out and execute the parties’ desire to the maximum degree possible. This rule applies to the interpretation of a statute’s text.”

Delegatus non potest delegare

Literal meaning 

According to the doctrine of delegatus non potest delegare, “one who is delegated, cannot further re-delegated i.e. a delegate cannot further delegate.”

Interpretation of Delegatus non potest delegare

The maxim ‘delegatus non potest delegare’ is a rule of construction that states that a discretion conferred by a statute is prima facie intended to be exercised by the authority on which the statute has conferred it and no other authority, but that this intention may be negated by any contrary indications found in the statute’s language, scope, or object.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Hemdard Dawakhana v. Union of India (1959)

The present case of Hemdard Dawakhana v. Union of India (1959) that appeared before the Supreme Court of India concerned whether conferment of power on the executive to add to diseases falling within the mischief of statute amounts to a delegation of legislative power or not.

“The Supreme Court ruled in this case that the delegation of legislative power by the legislature to the executive is not prohibited by our constitution. However, it is now generally established that the legislature cannot transfer fundamental legislative powers to the executive. It indicates that legislative policy must be established by the legislature and that the legislature cannot form a parallel legislature by handing this role to the administration. Delegation of legislative authority does not imply a waiver of important legislative tasks”

  1. Ultra Tech Cement Limited v. The Union of India and Ors (2014)

The issue before the Kerala High Court while deciding on the case of UltraTech Cement Limited v. The Union of India and Ors (2014) was the constitutionality of Section 30 of the Railways Act, 1989 which stated that the powers provided under the provision cannot be further delegated to railway officers. 

“The Kerala High Court in the present case had observed that sub-delegation entails a second delegation of the same authority, which was first given by the legislature. The controlling premise is that the delegate’s legislative rights must be exercised by him alone. A delegate can only delegate his power farther if the parent legislation allows it. The doctrine delegatus non potest delegare, which states that a delegate cannot delegate farther, comes into play in the given scenario. Thus, if a law grants the Central Government the right to create regulations, it cannot transfer such authority to any other official unless the parent law expressly authorised the Government to do so.”

Damnum sine injuria

Damnum sine injuria is a maxim that refers to damage sustained by the plaintiff but no violation of a person’s legal rights.

Literal meaning

Damnum sine injuria literally translates as ‘loss or damage in terms of money, property, or any physical loss that occurs without breach of any legal right.’ Even if the conduct was purposeful and done with the aim of inflicting injury to someone else but without infringing on the person’s legal rights, it is not actionable in law.

Interpretation of Damnum sine injuria

Damages without injury, or damages in which there is no infringement of a legal right, are what this legal maxim alludes to. In the instance of damnum sine injuria, there is no basis of action because there is no breach of a legal right. There is an unspoken legal concept that there are no remedies for any moral violation until and unless a legal right is violated. Even though the wrongdoer’s behaviour was intentional, the court may refuse to award any damages.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Gloucester Grammar School case (1410)

In this case, the defendant was a teacher at the plaintiff’s school who had quit his position after a brawl and opened a new school in the neighbourhood. Because of the teacher’s popularity, many students followed in his footsteps and enrolled at his competitor school. As a result, the plaintiff sustained financial damages, prompting the filing of an indemnity lawsuit in a court of law. The issue before the court was whether the defendant may be found accountable under the doctrine of ‘damnum sine injuria’ or not.

“The decision was made under the legal maxim of damnum sine injuria. It was solely based on the idea that a person who has not been the victim of a legal wrong is not entitled to compensation. In certain circumstances, compensation is sought on an arbitrary basis. However, in other cases, this philosophy appears to be incorrect, as many of the true criminals go unpunished, resulting in the loss of innocent people. Law conceptions change with time, and new notions are accepted as needed. Before judging a case, it is required to consider various additional factors in order to implement this approach. Before detaining a person, the backdrop, circumstance, and purpose must all be examined.”

  1. Ushaben v. Bhagyalaxmi Chitra Mandir (1978)

In this instance, the plaintiff claimed that the persistent sounds of religious invocation were infringing on her religious feelings, and she requested a judicial injunction. The plaintiff’s request was refused because the court ruled that any harm to religious sensibilities cannot be viewed as a breach of legal rights.

“The plaintiffs and other Hindus may feel veneration for the Goddesses in question, but what legal right do the defendants deny them by screening the video in the exercise of their prima facie legal right?  The defendants exhibit the film which is certified and they do so in exercise of their legal right. No legal right of the plaintiffs is infringed.”

Ejusdem generis

There are certain general principles of interpretation that have been applied by the courts from time to time and one of them is the construction ejusdem generis.

Literal meaning

Ejusdem generis is a Latin phrase that means ‘of the same kind’. It is used to interpret legislation that is written in a haphazard manner. When a law mentions certain classifications of people or things before referring to them in general, the general assertions only apply to the same people or things who are expressly named. For example, if legislation mentions automobiles, trucks, tractors, motorcycles, and other motor-powered vehicles, the term ‘vehicles’ does not include aircraft since the list is limited to land-based transportation.

Interpretation of ejusdem generis

Words of a comparable type are referred to as ejusdem generis. The rule is that if two or more words have a similar quality (e.g., they belong to the same class), any subsequent generic terms should be interpreted as referring to that class only. Unless the context dictates otherwise, generic terms should be given their natural meaning like all other words. However, when a general term is followed by particular words from a different category, the general word may be assigned a more limited meaning from the same category. As the legislature has revealed its aim to that effect by employing the particular terms of a separate genus, the general statement draws its meaning from the preceding special expressions.

The principle of ejusdem generis does not apply everywhere. If the context of law precludes the use of this rule, it has no bearing on how broad phrases are interpreted. The concept of ejusdem generis is based on the premise that if the legislature wanted generic terms to be employed in an unlimited meaning, it would not have chosen specific words at all.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Thakur Amar Singhji v. State of Rajasthan (1955)

The legitimacy of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 was challenged in Thakur Amar Singhji v. State of Rajasthan (1955). It was claimed that the holders of one of the tenures, known as Bhomichar tenure, were not jagirdars.

“We do not reach this conclusion on the basis of the argument that the word ‘Jagir’ in Article 31-A of the Constitution should be read ejusdem generis with ‘other similar grants,’ because the true scope of the ‘ejusdem generis’ rule is that words of a general nature following specific and particular words should be construed as limited to things of the same nature as those specified, and not the other way around, that specific words that precede are controlled by the general words which follow.”

  1. Lilavati Bai v. Bombay State (1957)

The petitioner in Lilavati Bai v. Bombay State (1957) was the widow of a tenant of certain property, which she had deserted. The respondent requisitioned the premises after discovering that it was unoccupied under Section 6(4)(a) of the Bombay Land Requisition Act, 1948, for the public purpose of housing a government officer.

“The rule ejusdem generis, which was sought to be articulated in support of the petitioner, may or may not apply. When the legislature used the words ‘or otherwise,’ it appeared to cover other situations that may not fall within the scope of the previous sections, such as a situation where the tenant’s possession has been terminated due to trespass by a third party. The legislation wanted to address all potential scenarios in which a vacancy may arise for whatever cause. As a result, rather than utilising the words ejusdem generis in conjunction with the previous sentences of the explanation, the legislature used them in a broad meaning.”

Functus officio 

Literal meaning 

The doctrine of functus officio (that is, having done his job) states that once an arbitrator makes a judgment on the matters before him or her, he or she has no ability to reconsider it. This idea has a long history in international arbitration and is recognised by many national legislation

Interpretation of Functus officio

A losing litigant frequently tries to re-engage the court by bringing up an overlooked point or new evidence. This is due to their lack of understanding of a judicial decision’s finality. With the Judicature Act, 1873, this idea was introduced into common law practice in order to give finality to the current ruling and allow for appeals to a higher authority. The disputes would never come to an end and justice would never be administered if judicial judgments were not final and could be reopened at the request and application of all dissatisfied plaintiffs. As a result, once a decision is made, the judge no longer has the ability to decide on it.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. State Bank of India & Ors v. S.N. Goyal (2008)

In the case of State Bank of India & Ors v. S.N. Goyal (2008), the Supreme Court of India was considering an appeal against a judgment of the Punjab and Haryana High Court, that was filed by the defendant employer (State Bank of India). The employer’s removal from his service was challenged before the Apex Court in this case. 

“The learned counsel for the respondent contended that the Appointing Authority became functus officio once he passed the order dated 18.1.1995 agreeing with the penalty proposed by the Disciplinary Authority and cannot thereafter revise/review/modify the said order.”

  1. Re: VGM Holdings Ltd (1942)

After the First World War, Parliament voted to criminalise the granting of financial assistance by a firm for the aim of acquiring its own shares in reaction to infamous scandals and widespread unhappiness created by asset strippers’ speculative actions. The case of Re: VGM Holdings Ltd (1942) concerned this ratio. 

“The Court had ruled in this case that once a judge signs an order that is recorded in the register, he becomes functus officio. This means that he won’t be able to change the terms of his order after that. Only a higher court has the authority to alter the order.”

Ignorantia facti excusat; ignorantia juris non-excusat

Literal meaning 

The Latin maxim ignorantia juris non excusat means ignorance of the law is no excuse and the Latin maxim ignorantia facti excusat means ignorance of fact is an excuse. 

Interpretation of Ignorantia facti excusat; ignorantia juris non-excusat

The west will be present wherever the east is. It denotes the presence of an opposing object at all times. As a result, where there is knowledge, there will also be ignorance. Ignorantia facti excusat is a Latin aphorism that states that knowing a fact or making a factual mistake is an excuse. It can be used in both civil and criminal proceedings. It states that if a person accused with an offence may claim that he or she is uninformed of the fact, ignorance will be deemed an excuse. Ignorantia can be translated as both ignorance and mistake, and the two concepts are interchangeable. According to this maxim, when a person is unaware of the existence of a significant truth or commits illegal conduct for which he/she could not anticipate or intend the unlawful consequences, he/she is immune from criminal and civil liability.

There are many different sorts of law, such as family law, civil law, criminal law, contract law, and so on. It is commonly known that anyone who disobeys any of these laws will be held accountable. The maxim ignorantia juris non excusat explains this principle. It is a Latin maxim that states that ignorance of the law, lack of understanding, or legal error regarding legal requirements is not an excuse, and so liability arises in such instances. Ignorance of the law refers to a person’s lack of knowledge of the laws that he or she is required to know, regardless of whether or not they are complete. These errors might be of two types: they can be errors in Indian laws or errors in foreign laws. If the mistake is of Indian laws, then the ignorance of the law is not an excuse.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. R v. Tolson (1889)

In this case, the appellant married in September 1880, and her husband went missing shortly after. He was said to be on a ship and had gone missing. She married again after seven years, assuming her spouse was dead, but her husband turned up and accused her of bigamy. It was determined that she was not guilty, and this was a factual error, as her husband was presumed to be deceased. 

“Despite the lack of terms like “knowingly committing bigamy” or “deliberately committing bigamy,” which would have excused her, the appeal court stated that Ms. Tolson was protected in this scenario by an old common law norm. The court found that a “honest and reasonable belief” in the existence of circumstances that, if true, would render the accused’s actions innocent was a valid defence.”

  1. Ashok Kumar Sharma v. State of Rajasthan (2013)

The issue that appeared before the Supreme Court of India in the 2013 case of Ashok Kumar Sharma v. State of Rajasthan (2013) was whether the empowered officer, acting under Section 50 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) is legally obliged to apprise the accused of his right to be searched before a Gazetted Officer or a Magistrate and whether such a procedure is mandatory under the provisions of the Act. 

“In this regard, we can consider the general principle “ignorantia juris non excusat” and if, in such a case, the accused could claim ignorance of the method outlined in Section 50 of the NDPS Act. Because a person is supposed to know the law, ignorance does not generally provide a defence under criminal law. Unquestionably, ignorance of the law occurs in reality, even if it is true, though as a general proposition, it is true that knowledge of law must be imputed to every person.”

Injuria sine damno

Literal meaning

Injuria sine damno refers to the cases of infringement of an absolute private right without any actual loss or damage. Put simply, injury suffered without any sign of damage. 

Interpretation of Injuria sine damno

Injuria sine damno is an infringement of a legitimate right that does not result in any mischief, misfortune or harm to the offended party, and whenever a lawful right encroaches, the person who owns the right is qualified to bring an action. Each individual has an unalienable right to their property, to their invulnerability, and to their freedom, and any infringement on this right is serious. An individual whose lawful right has been infringed upon has a reason for action, with the goal of bringing the reason for action even if the lawful right has been infringed upon on purpose. 

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Ravi Yashvant Bhoir v. District Collector, Raigad (2012)

In the case of Ravi Yashvant Bhoir v. District Collector, Raigad (2012), that appeared before the Supreme Court of India, concerned the action taken against the appellant (Ravi Yashvant Bhoir), an elected as member of Uran Municipal Council under Section 55 B of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965.

“A legal right is a claim of entitlement based on the law. It is, in fact, a right granted to a person by the rule of law. As a result, a person who has been injured legally can only challenge the act or omission. There may be some harm or loss that is not unjust in the eyes of the law since it does not result in injury to the complainant’s legal right or legally protected interest, but this type of harm is known as damnum sine injuria. The complaint must show that he has been denied or deprived of a legal right, as well as that he has suffered harm to any legally protected interest. He cannot be heard as a party in a list if he does not have a legal peg for a justiciable claim to cling on to. A fictitious or sentimental grievance may not be sufficient to give the individual locus standi to sue. There must be an injury, or a legal grievance that can be understood, rather than a claim with no justification, known as a stat pro ratione voluntas.”

  1. Bhim Singh v. State of Jammu & Kashmir (1985)

In the case of Bhim Singh v. Province of Jammu and Kashmir (1985), Mr. Bhim Singh, an MLA from Jammu and Kashmir, was apprehended and held in police custody, which prevented him from attending meetings of the authoritative bodies. However, the person to whom he needed to cast a ballot won, and his right to vote was taken away. The case involves an invasion of individual liberty in which the police get remand of the arrested individual but fail to bring him before the judge within the required time frame. Under Articles 21 and 22 of the Indian Constitution, there was a flagrant violation of privileges.

“It was decided that there was a capture with a devilish and malevolent intent, and the offended party was entitled to remuneration of Rs. 50,000 because an individual from the administrative gathering was kidnapped while en route to the authoritative gathering, making it difficult to attend the looming gathering meeting. In the case of Injuria Sine Damnum, the court has the authority to compensate the victim by awarding reasonable monetary compensation.”

Lex fori

Literal meaning

Lex fori signifies the law of the court in which a proceeding is brought.

Interpretation of Lex fori

Lex fori refers to the choice of law. It specifies that the law of the jurisdiction or venue in which a legal action is filed applies if relevant. The law of the forum, or lex fori theory, is a method of addressing the problem of characterisation. The notion of characterization governs the issue of legal disagreement. The notion of characterization enables a court to determine which law will apply in a given situation. It will be difficult to apply the proper conflict of law rule until and unless the same is resolved. According to the theory, a particular issue should be classified in accordance with both the applicable domestic laws and the foreign norms of law in accordance with their nearest and closest domestic law.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Ogden v. Ogden (1907)

In England, a French man (defendant) married an English woman (plaintiff). He did not, however, acquire his parents’ consent before marriage. According to French law, there is a rule which requires parental consent to marriage. As a result, this marriage was annulled by a French Court decision, based on the fact that the parent’s consent, as needed by French law, had not been acquired. After that, the defendant married a Frenchwoman in France. Later, the plaintiff filed a suit in England seeking to dissolve her marriage to the defendant due to his adultery and abandonment.

“After analysing the French requirement as a question of forum, the English Court adopted the English conflict rule, stating that the venue of marriage celebration is England. As a result, the Court declared the French law requiring parental consent to be unconstitutional and maintained the validity of marriage. However, when determining the validity of the same marriage, a French court used the French conflict rule. The Court pronounced the marriage null and void while outlining the requirement for parental authorization to marry. It’s up to the lex loci contractus to win and therefore the defendant’s subsequent marriage was bigamous and must be cancelled.”

  1. Re Berchtold (1922)

In the present case, a Hungarian man died and left behind a will that dealt with his English estate. He devised and gave all of his freehold estate, all of his other real estate, and all of his personal estate in the United Kingdom to his trustees on trust for sale and conversion in that will. He was domiciled in Hungary, and thus, under English intestacy laws governing movable property, the law of domicile, that is Hungary, would apply. 

“In determining movable and immovable property, the court elected to apply the lex situs rule, treating the freehold as money. When a person domiciled in another country dies intestate and leaves an interest in the proceeds of sale of English freeholds held in trust but not yet sold, that interest is immovable, and the succession to it is governed by the lex situs.”

Lis pendens

Literal meaning

Lis pendens, literally means ‘pending litigation’ or ‘pending suit’. It is derived from the maxim “Pendente lite nihil innovature,” which states that nothing new must be introduced while litigation or suit is pending.

Interpretation of Lis pendens

The doctrine of Lis pendens states that when there is current litigation on the title or any rights arising directly from it regarding immovable property, the transfer of property is restricted. The litigation begins when a complaint is filed or when procedures in the relevant court begin, and it will end when the Court issues an order.

This doctrine is necessary because it prevents the transfer of title to any disputed property without the consent of the court, otherwise, endless litigation will ensue, and it will be impossible to bring a lawsuit to a successful conclusion if alienations are allowed to prevail and covenants are not imposed. The ‘Transferee pendente lite’ is bound by the verdict in the same way as they would be if they were a party to the claim, and the transfer will be made contingent on the outcome of the pending lawsuit.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Koyalee v. Rajasthan District (2008)

The land in dispute was originally registered in the name of the Plaintiff’s spouse in the matter of Koyalee v. Rajasthan District (2008). Following his death, his brother, knowing that the deceased wife was still alive and the sole legal heir, filed a lawsuit to obtain the Khatedari rights, and the wife was forced to contest that she was the sole legal heir of the recorded Khatedar. The brother then proceeded to transfer the land notwithstanding the current case since he did so without first getting authorization from the court.

“Thus, from the decisions referred, it is clear that during the pendency of the suit, a transfer or alienation of property without the leave of the court is hit by the doctrine of lis pendens as envisaged under Section 52 of the Transfer of Property Act, 1882 and the purchaser is bound by the decree between the original litigating party and subsequent purchaser during pendency is neither a necessary nor proper party.”

  1. Ashok Kumar v. Govindammal and Anr (2010)

The case of Ashok Kumar v. Govindammal and Anr (2010) explains the Court’s positions on the pendente lite-transfers issue. In this case, the Supreme Court of India confirmed that a pendente lite cannot be transferred for a property whose title is in dispute.

“Even though the sale by the second respondent in favour of appellant on 11.4.1990 was barred by the theory of lis pendens, we believe the claim should not have been dismissed in its entirety. Because she was found not to be the exclusive owner in the pending partition matter, the second respondent cannot escape the sale she made. As a result, instead of dismissing the appellant’s claim, the lower courts should have decreed it in part, based on the portion of the suit property that fell to the share of the second respondent.”

Nemo debet bis vexari pro eadem causa

Literal meaning

The literal meaning of the maxim Nemo debet bis vexari pro eadem causa is that nobody should be vexed for the same act twice. This is a Latin proverb that reflects what is known as the rule against double jeopardy in criminal law, i.e. the idea that a person should not be “vexed” or forced to answer for oneself by being tried or punished more than once for the same accusation.

Interpretation of Nemo debet bis vexari pro eadem causa

In general, the principle has two rules that are widely used in jurisprudence. First and foremost, 

  1. The first trial’s verdict should be legal. 
  2. Second, it isn’t applicable if fresh evidence is discovered after the initial trial or if the original verdict was gained through fraud. 

Most recent interpretations of ‘double jeopardy’ incorporate this Latin maxim. Article 20 (2) of the Indian Constitution, for example, states that “no person shall be prosecuted and punished more than once for the same conduct.” This is a situation in which you are in double jeopardy. When an accused individual is tried, he or she faces the risk of being found guilty.

In a broad sense, the maxim also considers the interests of society and the State. Judicial rulings must be acknowledged as correct, otherwise, if a suit could be brought indefinitely for the same cause of action, the existing court would be unable to deal with the ever-increasing number of suits. Endless content or permanent litigation disrupts society’s tranquillity and leads to chaos and uncertainty. As per Section 11 of the Code of Civil Procedure, 1908, “no court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a previous suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided.”

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Duchess of Kingstone case (1776)

In this case, Elizabeth Chudleigh, Dowager Duchess of Kingston, Countess of Bristol, was tried and found guilty of bigamy in the House of Lords in 1776.

“These two deductions seem to follow as generally true from the variety of cases relating to judgments being given in evidence in civil suits: first, that a judgement of a court of concurrent jurisdiction directly speaking on the point is, as a plea, a bar, or as evidence, conclusive between the same parties on the same matter, directly in question in another court. 

  1. M/S. Deepak Grit Udyog And Others v. State of Haryana And Others (1995)

The petition was a futile attempt by the wealthy to enlist the help of the Punjab and Haryana High Court in order to sacrifice the human health and welfare of thousands of people whose health, safety, and lives have been repeatedly jeopardised by the petitioners (M/S. Deepak Grit Udyog and Others) and others. 

“The facts outlined above led us to the conclusion that the present writ petition is precluded by the concept of res judicata. The aforementioned principle has been recognized as being based on equity, fairness, and good conscience, and is designed to provide conclusiveness of decisions as to the matters decided in any later litigation between the same parties. The principle of res judicata is based in part on the Roman jurisprudence maxim interest reipublicae ut sit finis litium. It concerns the State that lawsuits come to an end — and partly on the maxim nemo debet bis vexari pro una et eadem causa — no man should be vexed twice for the same cause. In the absence of such a regulation, there is a good chance that there will be a lot of litigation, with no end in sight, and people’s rights will be entangled in endless ambiguity, with a lot of injustice done under the guise of the law.”

Nova constitutio futuris formam imponere debet, non praeteritis

Literal meaning

Nova constitutio futuris formam imponere debet, non praeteritis means a new law has to be prospective and not retrospective in its operation. Hence, a new statute of law has to affect the future, not the past.

Interpretation of Nova constitutio futuris formam imponere debet, non praeteritis

The maxim can be best understood by means of an example. For instance, new tax law cannot impose a tax on previous earnings, but it can impose a tax on future earnings. The discussed maxim states that, except in exceptional circumstances, new legislation should be written in such a way that it interferes as little as possible with existing rights. It included a special rule of establishment that applies only when the wording of a parliamentary Act is unclear. As a result, if a retrospective enactment is required, it must be interpreted.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Amireddi Raja Gopala Rao v. Amireddi Sitharamamma (1965)

The issue that appeared before the Supreme Court of India while it was deciding on the case of Amireddi Raja Gopala Rao v. Amireddi Sitharamamma (1965), was whether a child born out of a Brahmin woman and a Sudra father will be affected by the Hindu Adoption and  Maintenance  Act, 1956. It was held that the child was entitled to maintenance under the 1965 Act.

“However, it is assumed that the legislature does not aim to stifle the trend toward the retroactive application of some statutes. New statutes are typically understood to apply only to events or facts that arise after their enactment. It is also established that no statute may be deemed to have retroactive effect unless such enactment appears very clearly in the terms of the acts or emerges by necessary and distinct inference.”

  1. Reid v. Reid (1989)

In the present case, the couple had four children and had been married for 19 years. They had marital problems, went through fruitless counselling, and the wife left the marital house. The wife filed for divorce two months later, claiming constructive desertion. The lower court granted the parties a no-fault divorce and spousal support to the wife. The husband appealed the commissioner’s recommendation that the husband and wife be refused a divorce on fault grounds, that a no-fault divorce decree be recorded, and that the husband pay child and spousal maintenance, a monetary award, as well as the wife’s expenses and attorney’s fees.

“As a logical corollary of the general rule that retrospective operation is not taken to be intended unless it is manifested by express words or necessary implication, there is a subordinate rule that a statute or a section of it may not be construed to have a larger retrospective operation than its language permits.”

Nemo tenetur accusare se ipsum nisi coram deo

Literal meaning

The literal meaning of the maxim Nemo tenetur accusare se ipsum nisi coram deo is that no man is obliged to accuse himself except before God. This maxim is old and is used in modern times as well. This maxim is interpreted by many jurists in many cases.

Interpretation of Nemo tenetur accusare se ipsum nisi coram deo

This is a maxim that involves banning mandatory self-incrimination. 

  1. ‘Nemo’ signifies ‘no’ 
  2. ‘Tenere’ meaning holds,
  3. ‘Ipse’ meaning is him/her/its-self, 
  4. ‘Accusare’ means accuse/indict. 

Similar phrases include: 

  1. Nemo tenetur armare adversarium contra se (no one is bound to arm an opponent against himself): meaning that a defendant is not obligated to in any way assist the prosecutor to his own detriment.
  2. Nemo teneture dere instrumenta contra se (no one is bound to produce documents against himself): meaning that a defendant is not obligated to provide materials to be used against himself (this is true in Roman law and has survived in modern criminal law, but no longer applies in modern civil law).
  3. Nemo tenere pro dere se ipsum (no one is bound to betray himself): meaning that a defendant is not obligated to testify against himself.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Miranda v. Arizona (1966)

Miranda was apprehended at his house and escorted to a police station, where the complaining witness identified him. He was then questioned for two hours by two police officers, culminating in a signed, written confession. The jury saw the oral and written admissions during the trial. Miranda was convicted of kidnapping and rape and sentenced to 20-30 years in jail on each charge. Miranda’s constitutional rights were not violated in getting the confession, according to the Supreme Court of Arizona on appeal.

“The maxim nemo tenetur se ipsum accusare arose from a protest against the inquisitorial and manifestly unjust methods of interrogating accused persons, which had long prevailed in the continental system, and [were] not uncommon even in England until the Stuarts were expelled from the British throne in 1688, and additional barriers for the protection of the people against the exercise of arbitrary power were erected. While prisoner admissions or confessions have always ranked high on the scale of incriminating evidence when made voluntarily and freely, if an accused person is asked to explain his apparent connection to a crime under investigation, the ease with which the questions are asked may take on an inquisitorial tone.”

  1. Selvi & Ors v. State Of Karnataka & Anr (2010)

The legal question that appeared before the Supreme Court of India in this present case in a batch of criminal appeals related to the involuntary administration of certain scientific techniques, namely narco analysis, polygraph examination, and the Brain Electrical Activation Profile (BEAP) test for the purpose of improving investigation efforts in criminal cases.

“The maxim nemo tenetur seipsum accusare arose from a protest against the inquisitorial and manifestly unjust methods of interrogating accused persons that had long prevailed in the continental system, and were not uncommon even in England until the Stuarts were expelled from the British throne in 1688, and additional barriers were erected to protect the people against the exercise of arbitrary power.”

Prior tempore potior iure / lex posterior

Literal meaning

The literal meaning of the legal maxim, Prior tempore potior iure, is that it is a legal principle that older laws take precedence over newer ones. Another name for this principle is lex posterior.

Interpretation of Prior tempore potior iure / lex posterior

This legal maxim can be interpreted as he who is first in time, is stronger in a claim. A legal principle is that older laws take precedence over newer ones.

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Pick ‘n Pay Retailers (Pty) Ltd and Others v. Eayrs No and Others (2011)

The present case of Pick ‘n Pay Retailers (Pty) Ltd and Others v. Eayrs No and Others (2011) concerned a dispute between the holder of a right of pre-emption and the purchaser of shares in and claims against a company.

“The right to keep the right of pre-emption in existence beyond 30 days had thus, in my opinion, not vested at the time the Sale of Shares Agreement was concluded on 22 April 2010, and accordingly, on the application of the rule qui prior est tempore potior est jure, the rights acquired by the [purchaser] in respect of the extended period are of greater force than those acquired later by the [franchisor].”

Pacta sunt servanda

Literal meaning 

Pacta sunt servanda is a Latin term that signifies that agreements must be kept. It can be found in both domestic and international law. It means that under international law, every treaty is binding on the parties and must be carried out in good faith. A true intention to carry out responsibilities without malice is referred to as good faith. The parties to this treaty must do everything in their power to keep their commitments and fulfil their duties.

Interpretation of Pacta sunt servanda

States are asked to refrain from doing anything that would jeopardise the treaty’s result, according to Article 18 of the Vienna Convention on the Law of Treaties, 1969. This is subject to the condition that it has signed and approved the treaty in question. This is until it has made its intentions clear that it does not want to be a party to the treaty. This is also contingent on its inclusion into the treaty not being unnecessarily postponed. As a result, if the treaty does not violate a basic law, the countries must follow the treaty’s requirements, even if they are not enforceable under their domestic laws. 

Judicial decisions based on this legal maxim and relevant paragraphs

  1. Nuclear Test Case, Aust v. France (1973)

On May 9, 1973, Australia and New Zealand each filed a lawsuit against France over nuclear weapons tests that France planned to conduct in the South Pacific region’s atmosphere. France declared that it did not attend the public sessions or file any pleadings because it believed the Court lacked jurisdiction. On the request of Australia and New Zealand, the Court issued two orders on June 22, 1973, indicating temporary measures, including that France should avoid nuclear tests that result in radioactive fallout on Australian or New Zealand territory until its judgment. Australia and New Zealand were not satisfied with the public statement as nothing stopped France from changing its minds and continuing atmospheric nuclear testing. The International Court of Justice denied their second appeal saying that the French declaration has already achieved what Australia wanted, that is an end to nuclear testing.

“The Court used the doctrine of Pacta Sunt Servanda to determine the trustworthiness of the French statement (i.e Promises must be kept). Trust is fundamental in international cooperation, particularly in an age when cooperation in a variety of disciplines is becoming increasingly important. As a result, interested States may take notice of unilateral pronouncements and repose their trust in them, and they have the right to demand that the obligation so formed be respected.”

  1. All Pakistan CNG Association v. Pakistan State Oil Company Ltd. (2015)

In the present case, the parties entered into CNG Licence Agreements and as per Clause 17 of the said agreement, APCNGA referred the dispute to the Arbitrator, duly appointed with consent of the parties, who after hearing the objections of the parties and affording a proper opportunity of adducing their evidence finally announced the award, after which petitioner filed a petition for making the same as the rule of the Court, whereas, respondents being aggrieved of the said award filed Arbitration Petition No. 20/2010 for setting aside of the same.

“Pacta sunt servanda indicates that agreements must be honoured if private contract clauses are the governing law between parties and should be upheld to the greatest extent possible. Every effort must be taken to maintain the contract’s sanctity.”

Vigilantibus non dormientibus iura subveniunt

Literal meaning 

This legal maxim means that law aids those who are alert about their rights rather than those who are unaware. It implies that individuals who are irresponsible with their rights will not be helped by the law. To claim that one is exercising their right, one must also be aware of those rights. After the statutory term, a person who chooses to keep silent throughout the statutory period will be unable to claim enforcement of their rights.

Interpretation of Vigilantibus non dormientibus iura subveniunt

The Limitation Act, 1963 is the clearest manifestation of this concept. Essentially, if an offence is believed to have been committed, the person who has been aggrieved must take legal action within a ‘prescribed period,’ as defined by the Limitation Act, 1963. Otherwise, the complaint may be dismissed. In legal parlance, people who assert a legal right must be cautious in exerting it. The opposite is also true, people who claim they have been wronged should file their claims as soon as possible. For example, if X has been exposed to mistreatment by her husband and family because of dowry, she cannot seek redress after seven years of marriage. 

Judicial decisions based on this legal maxim and relevant paragraphs 

  1. Contract Forwarding (Pty) Ltd v. Chesterfin (Pty) Ltd and Others (2002)

In light of the working of a concursus creditorum, which crystallises the insolvent’s position by preventing a creditor from advancing its own position to the detriment of other creditors, the issue in the present case concerns the effect of a supervening liquidation on a provisional order permitting a creditor to perfect a general notarial bond over movables.

“If I may use some Latin, vigilantibus non dormientibus iura subveniunt, which means that the rules benefit those who are vigilant rather than those who sleep. (Both the concepts are more reliable guides to the correct conclusion than the Court below’s ‘fair and equitable’ principle.) The fact that the vigilant person perfects his rights first is ‘fortunate,’ but this does not render the deed unjust or inequitable.)”

Conclusion

Many distinct legal maxims are employed on a regular basis in various court processes and other sectors. As a result, a legal maxim is defined as a statement that clarifies a legal principle, proposition, or notion. There are hundreds of legal maxims that are adopted with respect to the circumstances they are to be applied in. Although this article does not mention all the legal maxims that are existing presently, it intends to cover the significant and often used ones.

References 


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CIF contracts : all you need to know

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This article is written by Michael Shriney from the Sathyabama Institute of Science and Technology. This article summarises the CIF contract, including the buyer and seller’s obligations, the contract’s relevance, nature, important elements, constituents, and the differences between CIF and FOB contracts. A sample format of a CIF contract has also been added to the article at the end for reference purpose only.

It has been published by Rachit Garg.

Introduction

A CIF contract, which stands for Cost, Insurance, and Freight, is a form of sale of goods contract in which the price is based on cost, insurance, and freight to the specified selling location. CIF, which is one of the Incoterms, was created by the International Chamber of Commerce (ICC). According to the International Chamber of Commerce (ICC), a CIF signifies that a seller will send goods abroad through a ship and that the danger of damages and losses to the products will be passed on to the buyer when the items are transported on board. The cargo seller will create a contract and pay the freight and costs associated with transporting the items to the specified location. The seller will additionally negotiate a contract for insurance to cover the buyer’s risk of damage to the items while onboard a ship. The seller’s contract covers only the minimum necessary coverage. If the buyer wants more insurance than the minimum amount necessary for the goods they carry, they must agree on the amount with the dealer and arrange their own insurance agreements.

What is a CIF contract

The term CIF stands for Cost, Insurance, and Freight. A CIF contract is a contract for the sale of goods carried by ship in which the buyer’s payment includes not only the cost price of the products but also freight costs and insurance, which must be paid. The seller must either transport the products onboard via a vessel or procure goods that have already been delivered in this manner. When the goods are loaded on board through the vessel, the risk of loss or damage to the goods shifts to the shipper. The seller will enter into a contract in this respect and pay the fees and freight charges associated with transporting the products to the final destination address. 

As per Article 141 of the UAE Commercial Transactions Law Federal Law (18) of 1993, a CIF contract is one in which the price of the goods sold, marine insurance charges, and freight via vessel until the destined port, the expenses are all paid in one lump sum amount. The products will be considered sold to the buyer once the vessel has completed its shipment, and the buyer will be responsible for any perishing from that point on. The sale will be regarded as a cost and freight sale if the seller fails to offer insurance coverage.

Responsibilities of a seller

The seller must be responsible for a number of things under the CIF contract including-

  • The CIF contract covers all items and business invoices provided by the seller, as well as the collection and expense of any and all export licences and other official authorizations, as well as the expenses of transportation and insurance coverage. 
  • The seller must obtain export licences for the items and check them as well.
  • The seller is responsible for the delivery of goods carried overseas by ship to the planned port and within the specified time frame, the risk of missing or damaged products up until the time of dispatch, and the split of freight, customs, and other associated charges.
  • The seller is responsible for any charges or fees associated with shipping and loading the products at the seller’s port, as well as packing expenses associated with exporting the cargo.
  • The seller is responsible for all expenses associated with exporting, including customs clearance, duty, and taxes.
  • The seller is responsible for the expense of shipping the freight via waterways from the seller’s port to the buyer’s port of destination.
  • The seller is responsible for insuring the shipment until it arrives at the buyer’s port of destination.
  • Furthermore, the seller shall just provide the buyer with adequate evidence of delivery with proper notice of delivery including several other fees, spent in shipment, as well as meet any other need that is the obligation of the seller.
  • He must also cover the cost of any products that are damaged or destroyed.

Responsibilities of a buyer

The buyer is responsible for all costs involved with importing and delivering the products after they arrive at the buyer’s destination port. The buyer must be responsible for a number of things under the CIF contract including-

  • unloading the product at the port terminal, 
  • transferring the product within the port and to the delivery site, 
  • custom duty and associated costs of importing the goods, 
  • charges for transporting, unloading, and delivering the products to their final destination
  • paying the cost of the goods they have committed to acquire,
  • the presence of the essential permits and licences including other authorizations,
  • taking delivery of products and transferring risk at the time of delivery,
  • at that moment, the buyer assumes responsibility for any including all damages or losses to the items,
  • Also, the buyer is responsible for the distribution of goods-related costs, such as duties, taxes, customs, and other government fees, as well as the payment of pre-shipment inspection fees, for the conveyance of goods, the buyer is not compelled by any contract.

Importance of CIF contracts

The limitations of global commerce and the ability to work on a CIF contract have become extremely valuable. Because of the distances between buyers and sellers, there were considerable delays in the delivery of products sold at their end destination, durations during which the commodities were often unavailable for economic transactions of any type. The CIF contracts are used to provide the required solutions. All costs, insurance, and freight are included in the contract. The papers pertaining to the transactions have a similar origin and may be easily retained together throughout their phases. The seller is able to finance the transaction more simply and quickly since the security provided by the attached papers helps the negotiation of bills of exchange and is required for the use of recent letters of credit. In turn, the buyer receives an early right of disposal over the items that he has purchased. Under normal situations, the paperwork comes in advance of the product, and after he has accepted them in compliance with the requirements of the specific contract, the buyer is able to resell or promise as effectively as if goods were physically present.

Nature of CIF contracts

The CIF documents play a vital part in the delivery of products till they reach their final destination. For example, when parties engage in a CIF contract that includes terms & conditions of specified goods that are on a ship from their port of origin to a specified port of destination, the seller has custody of the relevant documentation, which he sends to the buyer. The parties were ignorant that the vessel had already been declared a total loss before the agreement was made. This issue was addressed in the case of Couturier v. Hastie (1856). Here, the buyer obtained the shipping documentation with the seller’s rights and interests, but the argument was rejected by the House of Lords on the grounds that the parties anticipated the existence of the goods. As a result, while a CIF contract involves the original shipping of goods, it does not always mean that the commodities exist at the time the contract is signed.

Arnhold Karberg & Co v. Blythe, Green Jourdain & Co. (1915)

Facts of the case

In this case, there were two CIF contracts for the shipment of beans from a Chinese port to England. Each contract specified that the payment must be made in total cash in London when the products are delivered. The payment was to be made within three months after the date of the bills of lading. The beans were delivered by German ships in July 1914, but when war broke out between Germany and England, both vessels carrying the beans were diverted to refugee ports, where the ship stayed.  After three months from the date of the bill of lading, the sellers provided the purchasers with the shipping documents. It was a German bill of lading and English insurance coverage in one case. In the other case, it was a German bill of lading and German insurance coverage. The buyers rejected the seller’s offer of the documents.

Issue

The question is whether the buyers had the right to decline the shipping documentation given by the vendors.

Judgement

The Court ruled that the buyers hesitated to purchase the shipping paperwork. After the conflict broke out, the seller’s offer became null and void. Accepting the offer and carrying out the obligations would imply that customers were getting into contractual connections with the king’s enemies. The Court ruled that a CIF contract is not a sale of goods but instead a sale of documents included in a shipment connected to goods.

Essential features of CIF contracts

  • The seller ships the agreed products to the buyer at the stated shipping port and issues a bill of lading for the items to be sent to the destination under a CIF contract.
  • The seller must take out an insurance policy that is accessible for the buyer’s benefit, create a commercial invoice, and then offer these documents to the buyer, who bears the cost of the shipping items. 
  • The goods’ title is either for shipping or on submission of the documentation in this scenario. Risk passes on as soon as the items are loaded onto a ship for delivery, but real possession does not transfer until the documentation representing the commodities, such as the bill of lading, is exchanged for money.
  • The buyer pays in exchange for a fresh bill of lading that includes the products to be sold, an insurance policy, and an invoice that shows the amount.
  • The seller will give the buyer all the required documentation. The documentation will be delivered along with the bill of lading.

Important elements of a CIF contract

Necessary documents

There are three necessary documents: an invoice, a bill of lading, and an insurance policy.

The invoice

The seller should issue an invoice in regular commercial type, paying back the buyer with the products at the agreed-upon price, which can be indicated as a lump sum amount or by specific indications of the different cost, insurance, and freight elements.

The bill of lading

The basic aim of the transaction is supported by the bill of lading, which grants the owner ownership rights in the relevant commodities as well as contract obligations under the contract of carriage. The bill of lading must be or can be proof of a valid carriage contract. The papers must be in connection to the items and only the goods that must be included in the contract between the buyer and seller, with terms and conditions which must not be inconsistent.

The policy of insurance

The CIF contract’s insurance policy completes the buyer’s protection for the products against loss or damage by providing security in cases in which the carriers would be freed from duty. The insurance must cover the shipment as well as the products covered by the contract of sale for an amount equal to the fair prices of the goods at the time the contract was signed. The buyer is subject to the advantage of any excess insurance performed by the seller and protected by the policy issued between both the buyer and seller, however, the parties may agree otherwise.

The delivery

There are three methods for delivering in a CIF transaction:

  • by surrendering the items to the carrier; 
  • in ordinary commerce by a subsequent offer of the documentation representing the products; 
  • by physically delivering the goods themselves upon arrival at the named port of destination.

Risks in transit

Contracts signed under the CIF state that the buyer is responsible for paying for insurance, which is an important component that the seller offers with the assumption that hazards may develop. If an inconsistent burden emerges, the seller will complete his obligations by taking out and transmitting the documentation that represents the products, he will also be charged with voyage risks. The seller is unconcerned about the products’ arriving at their destination. As a result, the buyer bears all transportation risks. Weight certifications or quality certificates are provided by the seller as part of the transaction. The goal of these certificates is to provide sufficient verification of the products during shipping, allowing the seller to satisfy the potential burden of proving an appropriate shipment in advance.

Special considerations

When the buyer considers that the risk occurs only after the cargo has been placed onto the vessel, the CIF contract may not be suitable in certain circumstances. For example, when a godown or a room is loaded with containerized cargo shipments, the items may sit in the container for several days before being transferred onto the vessel at the seller’s port. The customer would be at risk under CIF since the goods would be uninsured while they are kept in the container waiting to be put onto the vessel. CIF agreements, in reality, would not be suitable for shipments, including containerized material.

Difference between CIF contracts and FOB contracts

CIF contractFOB contract
1.Cash, Insurance and Freight contract is the abbreviation for CIF contract.Free on Board contract is the abbreviation for FOB contract.
2.Under this contract, the seller will bear all transportation expenses and hazards until delivery, at which point the buyer will accept responsibility.Under this contract, the seller will pass all costs and risks to the buyer after the shipment is put on board the shipping vessel.
3.The CIF contract is preferred by the buyers.The FOB contract is preferred by the sellers.
4.The CIF contract is expensive.The FOB contracts are cheaper and more cost-effective.
5.In CIF contracts, the seller has more control as they choose preferred shippers who may be more costly.In FOB contracts, the buyer has more control over choosing shippers and insurance limitations.
6.The CIF is considered a better way to buy goods for those who are new to international trade.The FOB is considered a better way to buy goods for those who are familiar with international trade.
7.The seller makes profits from the freight services.The buyer makes profits from buying FOB. This is advantageous in buying this contract.

Mistakes to be avoided while drafting a CIF contract

The mistakes to be avoided while drafting CIF contract are as follows: 

Incorrect modes: There are various modes of transportation to choose from. The contract terms used to ship goods by sea and inland waterways, such as FAS, FOB, CFR, and CIF must be properly mentioned. If the contract specifies the wrong means of transportation, one of the parties will be held responsible for the deal.

No named place: Another common mistake is missing or forgetting to use a designated named place, which leads to disagreements over the duties. There must be no confusion in the contract, as well as the appropriate address and location must be specified.

The contract does not mention the title of goods: Under this contract, the title of the goods must be defined in the contract by the parties to ensure that the buyer and seller’s responsibilities are clear when those goods are to be delivered and who is responsible for the cost of those goods.  However, forgetting to specify the title of the goods leads to a dispute in the contract, which is a mistake. The goods’ title must be mentioned individually and clearly in the contract.

Understanding the roles and duties of customs: Both parties make mistakes and have issues in recognizing their roles and responsibilities of customs. The contract clearly outlines the roles and responsibilities for export and import procedures in the contract. It is the parties’ obligation to conduct these formalities appropriately, but parties do not follow the contract’s terms and do not grasp their duties and responsibilities.

Insurance issues: When selecting a CIF contract, the contractors must ensure that they are selecting the proper amount of insurance to match the contract’s criteria. The price of insurance that the seller must declare for the items in the contract should be sufficient to cover the consequences that may arise.

CIF contract FAQs

Who pays CIF freight?

The seller is responsible for all freight transfer and shipping charges, as well as cargo insurance, until the goods are delivered to the buyer’s port.

Does CIF include duty?

Duty charges for exporting the goods from the seller’s port of destination are the seller’s responsibility. Duty charges at the buyer’s port of destination, i.e. import duties, are, therefore, the buyer’s responsibility.

When should I use CIF?

CIF is only used when transporting products by waterways, hence it cannot be used for air freight. CIF is a good option for buyers who don’t want to deal with the stress of getting insurance, paying freight charges, and taking full responsibility for foreign delivery.

Sample format of CIF contract

NOTE: This sample format is only for reference and understanding, an actual contract may vary with the facts and circumstances

Agreement for Sale of Goods (C.I.F. Basis)

This Agreement is made at ______ this ______ day of ______ between M/s.___________., a company registered under the (English) Companies Act and has its registered Office at ____________ London. Hereinafter referred to as the ‘Seller’ of the one part and M/s.___________, a Company registered under the (Indian) Companies Act, 1956 and having its registered office at ______________ hereinafter referred to as ‘the Buyer’ of the other Part;

  1. The Seller agrees to sell to the Buyer and the Buyer agrees to buy from the Seller, ______________ (type of goods) of ___________ tons ________ quantity at the price of ___________ sterling per ton (hereinafter referred to as the said ‘goods’) C.I.F. for December – January shipment.
  2. The Seller- will engage space in a ship at the port of shipment and intimate the name of the ship and her expected date of arrival in any port in India.
  3. The Seller will enter into a contract of affreightment with the owner of the ship for transporting and delivery of the said goods at the port of _____________ in India. The Buyer shall also obtain a Policy of Insurance for the value of the said goods upon the current terms and make out an invoice.
  4. The Buyer shall open a Letter of Credit through its Bankers for the agreed price of the goods and including the freight, insurance and other charges in favour of the Seller’s Banker viz..
  5. The Seller shall ship the goods in the ship and dispatch the documents relating to the said goods namely the contract of affreightment, insurance policy, invoice. bills of lading etc. to its Bankers at the port of arrival.
  6. The said documents duly endorsed in favour of the Buyer will be handed over to the Buyer’s Bankers against encashment of the Letter of Credit and the Buyer will receive the same from its Bankers to enable the Buyer to get the goods cleared at the port of arrival. Such delivery of documents will be deemed to be delivery of the goods to the Buyer and thereafter the goods will be at the risk of the Buyer.
  7. If the said goods are short delivered or are not according to the quantity or quality agreed upon by the Buyer, he will be entitled to claim compensation for the loss suffered by it due to short delivery or breach of warranty and the Seller will be liable to make good the loss.
  8. If the goods are not shipped by the Seller within the shipment period mentioned above, the Buyer will have the option either to cancel this contract or to extend the period. If the contract is not cancelled within two weeks from the last date of shipment, the Buyer shall be deemed to have agreed to an extension of a reasonable period for shipment.
  9. It will be the responsibility of the Buyer to obtain a licence for the Import of the goods In its country and to pay all the customs duties, import duties and other clearance charges for clearing the goods from the ship and carrying them to its factory or godown.
  10. Similarly, it will be the responsibility of the seller to take out an export licence if required by the law of its country and to pay all charges for transport and shipment of the said goods.
  11. The seller shall enter into the contract at its own expense for the carriage of the goods to the port of destination namely – by the usual route In a seagoing ship for the transport of the said goods.
  12. The seller shall obtain at its own costs cargo Insurance for the price of the goods plus 10% so that the buyer shall be able to claim directly from the insurance and provide the buyer with the Insurance policy or other evidence of insurance cover. The insurer shall be of good repute and the Insurance shall be in accordance with a maximum cover of the cargo clauses embedded by the institute of underprescribed writers. The declaration of the insurance shall be from the delivery of the goods on board the ship at the port of shipment namely ____________.
  13. The seller shall be responsible for all the risk of loss or damage to the goods until such time as they have passed the rail of the ship at the said port of shipment. The seller shall also bear the risk to the goods until they have been delivered as aforesaid including costs of loading the goods on a boat or a ship and charges for unloading at the port of discharge which may be levied by the shipping line when contracting for carriage and also pay all customs charges for exportation as well as all duties taxes and other Government charges payable on exportation.
  14. The seller shall give sufficient notice that the goods have been delivered on board the ship as well as any other notice required to allow the buyer to take measures necessary to enable him to take delivery of the goods.
  15. The buyer shall pay all costs relating to the goods from the time they have been delivered to the ship and pay all costs and charges relating to the goods whilst in transit until her arrival and other charges and duties and taxes payable at the port of discharge.
  16. If any dispute arises between the parties in respect of this contract of whatsoever nature or if any claim by one against the other is disputed the same will be referred to arbitration under the Bye-laws of the ___________ Association in London.

_______________                                                                                          

Signature of Seller

________________                                                                                     

Signature of  Buyer

Conclusion

As a result, under a CIF contract, the seller agrees to be liable for transportation and insurance to a specified destination point, while the buyer agrees to pay not against delivery of the goods, but against an offer of the shipping documents. It is a deal with the shipping industry all over the world. Only products carried through waterways are subject to costs, insurance, and freight. The buyer will hold the seller liable for the shipment under this contract. The seller will be covered by the insurance coverage for any loss or damage that occurs during the travel prior to payment. In comparison to FOB (Free on Board) terms, the cost is higher in CIF terms.

References

  1. https://sklawyers.com.au/dictionary/cif-contract/#:~:text=A%20%E2%80%9CCost%2C%20 Insurance%2C%20 Freight,are%20 known%20as%20%E2%80%9CIncoterms%E2%80%9D.
  2. https://lawtimesjournal.in/cif-contracts/
  3. https://www.investopedia.com/ask/answers/020215/what-difference-between-cif-and-fob.asp
  4. https://www.advocatekhoj.com/library/agreements/sale/36.php
  5. https://www.investopedia.com/terms/c/cif.asp 

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Crime of passion : causes, examples and case laws

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This article is written by Michael Shriney from the Sathyabama Institute of Science and Technology. This article covers crime of passion, examples, causes, including differences between a crime of passion and premeditated crimes, and case law.

It has been published by Rachit Garg.

Introduction 

A crime of passion is a defendant’s justification for committing a crime out of sudden hatred or heartbreak in order to avoid the requirement of premeditation. This frequently occurs in murder or attempted murder cases, when a spouse or a lover discovers his or her beloved having sexual relations with someone else and shoots or stabs one or both the coupled pair. To make this type of claim, the defendant must have committed immediately upon the outbreak of passion, with no time for thought or blood cooling. It is also referred to as the ‘Law of Texas,’ since jurors in that state are said to be tolerant of wronged lovers who seek their own punishment. The advantage of removing premeditation is that it reduces proven murder to manslaughter, which carries no death sentence and has a shorter jail term. An emotionally charged judge also might convict the impassioned defendant. The crime of passion will be described in a larger perspective as follows.

What is a crime of passion

A crime of passion, as contrasted to a premeditated or deliberate crime, is one done in the ‘heat of passion’ in reaction to provocation. Provocation can be used as a partial defence to manslaughter because, while it does not totally acquit the offender, it can reduce the severity of the offence and hence the corresponding punishment. The provocation defence accepts that some emotions might be triggered spontaneously, without providing the time to reflect on one’s behaviour. The provocation for the crime of passion must be sufficient to awaken the passions of a sensible man.

Extreme violence on the defendant, for example, or the unexpected disclosure of spousal cheating, has generally been considered enough provocation. Some countries use the criteria of severe emotional disturbance as a substitute for the heat of passion test. When a murder is ‘committed under the influence of extreme psychological or mental disturbance for which there is acceptable explanation or justification,’ it is lowered to manslaughter, according to Section 210.3 of the Model Penal Code. While this test is more liberal than the provocation test, it still falls within the scope of the reasonable person criteria.

In New York, a murder charge can be reduced to manslaughter if it is shown that the defendant behaved in a fit of anger, eliminating the element of intent necessary for murder. The concept of ‘heat of passion’ involves analysing whether the offender was ‘obscured or disturbed’ by a passion to the extent that a reasonable person would act on emotion rather than judgement. Furthermore, a defendant must have been subjected to sufficient provocation in order to act in the heat of passion. California has developed standards that include a subjective factor. In particular, the offender must not only have been sufficiently aroused into a fit of anger, but the killing must also have occurred in reaction to the provocation. This criterion denies the defence to individuals who kill for revenge or for reasons irrelevant to the provocation.

Examples

Individuals make decisions based on their emotions or reasons. When emotions take control, people may react emotionally rather than listening to the reasonable voice in their brain that tells them what they are about to do is wrong. Because people have strong emotions tied to their friends, loved ones, and family, crimes of passion are so common. There are various reasons why crimes of passion are common, including the fact that they are motivated by emotions such as fear, revenge, anger, and jealousy. Those accused of murder may use this defence to claim they were insane at the time of the crime. If a man shot his ex-wife in a furious rage because he discovered her cheating on him with another man, it would be a crime of passion is an example of crime of passion.

Background of a crime of passion

In simple terms, a crime of passion or crime passionnel derived from French refers to a violent crime, particularly homicide, in which the culprit executes the act against someone out of a strong grudge, such as sudden passion, rather than as a premeditated crime. The defence in the crime of passion challenges the mensrea element by stating that there was no malice in premeditated murder and that the crime was done in the ‘heat of passion,’ lowering the accusation from first-degree murder to manslaughter or second-degree murder. A violent pub-goer who hits another person after an argument, or a wife who finds her husband is having an affair and attacks or murders him or his lover is an example of a crime of passion.

In the United States, crime of passion accusations have generally been linked with defences of unsoundness of mind or provocation. After killing his wife’s lover, Philip Barton Key, a U.S. Congressman Daniel Sickles of New York utilised this defence for the first time in 1859. During the 1940s and 1950s, it was employed as a defence in murder trials. Historically, such defences were employed as complete defences for a variety of violent crimes, but they gradually were largely utilised as a partial defence to a murder accusation; if the court accepted temporary insanity, a murder charge may be reduced to manslaughter.

Crime passionnel was a legal defence against murder accusations in various nations, most notably France. Some of these incidents resulted in a two-year prison sentence for the killer in the nineteenth century. Paternal jurisdiction over family members was abolished once the Napoleonic Code was modified in the 1970s, decreasing the number of cases where crime passionnel could be charged. “Abrupt, impulsive, and planned acts of violence performed by individuals who have come face to face with an incident undesirable to them and who are made incapable of self-control for the time of the act,” according to the Canadian Development of Justice.

Feminists and womens’ rights organisations have fought hard in the recent decades to modify laws and social practices that allow crimes of passion against women. UN Women has urged states to review legal defences of passion and provocation, as well as other similar laws, to ensure that they do not lead to impunity in cases of violence against women, stating that such laws  These defences should be stated clearly in laws that do not include or apply to crimes of ‘honour,’ adultery, domestic assault, or murder. There are differences between crimes of passion, which are frequently impulsive and executed by and against both genders, and honour murders, which are usually intentional, well-planned, and premeditated acts whereby a person kills a female relative certainly to protect his honour. Widney Brown, Human Rights Watch’s advocacy director, stated, “murders of passion have a similar dynamic in that women are murdered by male family members and the crimes are seen as excusable or acceptable.” Some human rights activists claim that crimes of passion are punished leniently in Latin America.

Crime of passion in India

The Nanavati case of 1962 was the first in India to involve a crime of passion. Cases of a crime of passion involve ex-lovers attempting murder and suicide in the state’s capital and its neighbouring districts. It is usually done out of jealousy or anger and is committed to someone without hesitation. It is as terrible as homicide, with the culprit acting on uncontrollable anger and impulse. Kiran Bedi highlighted that crimes of passion have been committed in India and that prisons are full of women and men who have committed these crimes, such as throwing acid on a woman after being rejected to love someone with the intention to hurt her. 

In the Tandoor Murder case of 1995, a woman named Naina Sahni was murdered, chopped, and burned in a tandoor by her husband, a Congress member named Sushil Sharma, who suspected his wife of having an illegal affair. In India, this was a landmark case in which DNA evidence and a second autopsy were used to prove the accused’s guilt. The punishment was life imprisonment given by the Delhi High Court.

Madhumita Shukla, a rising poet, was killed murdered at her home in the Madhumita Shukla Murder Case of 2003. Madhumani Tripathi, wife of politician Amarmani Tripathi, who disliked Shukla’s involvement with her husband, planned the murder as a contract killing. Both the conspirator and the murderers were given life imprisonment.

In the Neeraj Grover Murder Case of 2008, the television executive was stabbed to death in Kannada actress Maria Susairaj’s home by her fiancé, and the actress was imprisoned to 3 years in jail and the fiancé was sentenced to 10 years in prison. The Mumbai Sessions Court decided that the murder of Neeraj was not planned. The court interpreted it to fall under the fourth exemption to Section 300. If a person kills someone with the purpose to kill but does so in a state of anger or in a sudden argument, he will be charged with culpable homicide not amounting to murder.

A sudden passion is described as a state of mind caused by and growing out of a trigger with the victim; occurring in the middle of a fight and not dependent on a previous fight, according to the Indian Penal Code, 1860. This is one of the preventative factors recognised by the legal system when a murder sentence is reduced to voluntary manslaughter. The throes of passion are a usual justification for killing someone or escaping premeditation charges by claiming temporary insanity.

Section 300 of the Indian Penal Code, which defines murder, outlines four exceptions to the rule that culpable homicide is not murder. It states that culpable homicide is not murder if it is done without premeditation in the heat of passion during a sudden fight and without the offenders taking undue advantage or acting in a cruel or unusual manner, regardless of who started the first assault. The point is whether the penalty imposed on these individuals was properly investigated.

States with highest rate of crimes of passion

In India, the states with the highest rates of crime of passion in 2016 are shown below.

StateIllicit relationshipLove affairsTotal 
Uttar pradesh284398682
Bihar195187382
Tamil Nadu123180303
Madhya Pradesh168104272
Maharashtra18481265
Gujarat55133188
Andhra Pradesh1389147
Karnataka7056126
Chhattisgarh7252124
Telangana 10413117

Crimes in India from 2010-2020 statistics:

YearsPercentage of total murders
20107.3%
20117.9%
20127.4%
20137.2%
20147.2%
20159.2%
201610.4%
201710.9%
201811.2%
201911%
202010.4%

In India, the states with the highest rates of crime of passion in 2020 are shown below.

StatesNo. of murders
Uttar Pradesh462
Maharashtra 299
Madhya Pradesh298
Bihar285
Tamil Nadu249
Gujarat231

Some signs can indicate a tendency for crimes of passion

In order to gain a better understanding of the crime of passion, identifying criminals is important. This includes some signs that can indicate a tendency for the crime of passion:

  • A history of sexual abuse, assault, or conflict between the offender and the victim; 
  • The previous acts of violence that may have been quieted by the family; 
  • A background of professional and personal functioning that can remove the false impression that such violence is foreign or new to the character of the person involved; 
  • Anger and threats are a past impact as a habitual response to life’s conflicts; 
  • Overindulgence in sex, alcohol, or food; 
  • The crime of passion is committed in the ‘heat of agony,’ at random and unexpectedly.

Difference between crimes of passion and premeditated crimes

Crime of passionPremeditated crime
1.Crimes of passion are decided to commit in the heat of passion.Premeditated crimes have been committed with malicious intentions.
2.A crime of passion is not a planned and intentional crime.Premeditated crime is an intentional crime.
3.A crime of passion is committed out of heartbreak without intending to murder someone.Premeditated crime is committed out of rage and with the intent to murder someone.
4.A crime of passion is a murder committed on the spot without a second thought.Premeditated crime is a long-term planned murder.
5.A crime of passion is one committed as a result of heartbreak or betrayal against the victim.Premeditated crime is a type of crime committed while holding a grudge.
6.Crimes of passion are punished less harshly than premeditated crimes.When compared to the crime of passion, premeditated crime receives a harsher punishment.
7.It seeks to eliminate or reduce certain punishments based on valid evidence in the case.It does not eliminate or reduce specific punishments related to the case.

Judicial pronouncement

K.M. Nanavati vs. the State of Maharashtra, 1962

Facts of the case

  • In this case, K.M. Nanavati worked as the second commander of the Indian Navy’s “Mysore.” 
  • In 1949, he married Sylvia in a registry office in Portsmouth, England. They have three children from their marriage: a nine-and-a-half-year-old boy, a five-and-a-half-year-old girl, and a three-year-old boy. 
  • Because of Nanawati’s employment, the couple had to live in various areas after their marriage. They eventually relocated to Bombay. In 1956, Agniks, a mutual friend of Nanavati and Prem Ahuja, died (victim). 
  • Prem Ahuja and his sister were introduced to Nanavati by Agniks. Prem Ahuja is a 34-year-old guy who was single at the time of his death. Nanavati, regularly left Bombay on his ship, leaving his wife and children at home. 
  • Initially, Ahuja and Sylvia had a friendly connection that evolved into an illicit intimate relationship. Following Nanavati’s return from work, Sylvia changed her behaviour, becoming indifferent and unresponsive toward him. 
  • When Nanavati approaches Sylvia on April 27, 1959, she confesses being in love with and having an affair with Ahuja. He drove his family to the cinema. 
  • He left them and promised to pick them up after the show. In the heat of the agony, He drove immediately to his ship, took his semi-automatic revolver and six bullets, and kept them in his brown packet on the false pretax. 
  • He drove to Ahmednagar at night. He went to Ahuja’s office but couldn’t locate him. So he went straight to his flat and into his bedroom. Nanavati was attempting to convince Ahuja to marry his wife and take care of his children. 
  • As result, Ahuja criticised her wife, asking, “Am I married to every woman I sleep with?” Nanavati’s irritation boiled over, and he had a serious fight and argument with him.
  •  In this quarrel, his revolver got loaded and shot Ahuja dead. He confessed to the nearby police station. 
  • The Case was filed against K.M. Nanavati. He was arrested in due course under 302 Section of IPC.

Issues involved in this case

Whether Nanavati shot Ahuja in the ‘heat of an argument’ or if it was an attempted murder?

Judgement of the case

Sylvia’s statement, or any occurrence in Ahuja’s bedroom, or both, did not constitute a significant and unexpected threat. Nanavati had the burden of establishing that it was an accident rather than a culpable homicide raised in the High Court. Nanavati was found guilty of murdering Ahuja and sentenced to life in prison by the High Court. Within hours, the Governor of Bombay suspended the sentence. A few months later, the Supreme Court overruled the Governor’s decision, and Nanavati was imprisoned. Then  he was given medical parole, and a year later, he was forgiven by the new Bombay Governor and Jawaharlal Nehru’s sister Vijayalakshmi Pandit.

Talhotbond case (The chat room murderer)

Facts of the case

  • Thomas Montgomery, a 46-year-old Marinesniper who was married and the father of two children, was the victim of a crime of passion in 2005. 
  • He entered a teen chat group posing as a young, attractive Iraq-bound Marine and played the popular game ‘Pogo.’ He pretended to be an 18-year-old kid when a girl called Talhotblond on her account started instant-messaging him. He began speaking with her in the hopes of not trying to confront her, and he continued to play games with her. He begins to flirt with her, which develops into a romantic relationship. 
  • When she discloses her actual name, Jessi, a softball player in high school whose age is 18, She began to show him her pictures. Jessi was also interested in seeing his photos, so he sent her his photos from marine boot camp which was a long time ago. They began dating and exchanged gifts, phone calls, and love letters. Jessi began to call him as Tommy. he started to lose his touch with reality.  
  • His daughter became aware of the chat and affair of her father, and she alerted her mother. She enclosed a family photo with a note informing Jessi that she was talking with a 46-year-old man. Jessi’s relationship with him was broken as a result of this. Jessica had sent a 22-year-old machinist, a co-worker of Mr. Montgomery and a college student called Brian Barrett who is also to find the truth.
  • After a few days, Jessi and Brian began to develop a romance, and Montgomery became jealous and threatened Jessi with killing Brian. Despite the fact that Jessi was chatting with Brian, Montgomery was angry. Jessi, on the other hand, was having a connection with Montgomery as well. 
  • Then one day, Brian planned to meet Jessi at her house, which Montgomery was aware of. He, too, went to Jessi’s house and shot Brian dead with three shots from a military rifle in the parking lot of Jessi’s house. 
  • The police came and were aware of the fact  of a love triangle on the internet. They investigated Jessi about the incident and discovered that Jessi’s mother was the culprit behind this cyber life. 
  • The real Jessi was unaware of this cyberlife since her mother posted her own image. Mary Shieler was the name of the imposter Jessi.

Judgement of the case

Montgomery was later charged for Brian Barrett’s murder and pleaded for guilty. In return for his plea, he was sentenced to 20 years in jail. The police were unable to charge Shieler with any crime as a result of her involvement in this cyberlife.

The State v. Sushil Sharma, 1995 

Facts of the case

Naina Sahni (wife) was killed by her spouse, Sushil Sharma, in this Tandoor murder case. In 1992, Sushil Sharma, the President of the Delhi Youth Congress, was over a suspicion of his wife having an extramarital affair. The incident took place in their Delhi residence. Sharma chopped her body and placed it into a tandoor on the roof of a famous restaurant owned by his friend. When police monitoring the neighbourhood noticed smoke rising from the restaurant, they went to investigate the possible fire. Sharma was caught when the body of a 29-year-old woman was found through an investigation of the restaurant manager.

Judgement of the case

Even guilty prisoners have fundamental rights, the Delhi High Court observed, and ordered his immediate release. Sharma was sentenced to life in jail under the Code of Criminal Procedure after his case was appealed to the Supreme Court.

Conclusion

A crime of passion is a crime committed in a state of severe wrath or emotional disturbance known as ‘heat of passion.’ Something triggered the defendant, who committed the crime in the heat of passion. When a murder is committed in the heat of passion, it is done without premeditation, effectively reducing it to voluntary manslaughter. When a crime of passion happens, the defendant pleads a provocation defence in order to reduce the charge’s severity. A person who finds his / her spouse in bed with another man or woman is a simple case. In the ‘heat of passion,’ the person takes out their revolver and kills either one or both the involved parties, to death. It is an example of a crime of passion. In most areas, including California, this killing is regarded as voluntary manslaughter rather than murder.

References 

  1. https://www.law.cornell.edu/wex/crime_of_passion#:~:text=In%20criminal%20law%2C%20a%20 crime,that%20was%20premeditated%20or%20deliberated 
  2. https://www.thetexastrialattorney.com/blog/is-crime-of-passion-a-legal-defense/ 
  3. https://www.lacriminaldefenseattorney.com/legal-dictionary/c/crime-of-passion/ 
  4. https://www.wise-geek.com/what-is-a-crime-of-passion.htm 
  5. https://www.bonobology.com/crime-of-passion-emotions-take-over/
  6. http://indpaedia.com/ind/index.php/Crimes_of_passion:_India 

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Detailed analysis and lessons for India from the Australian Cartel case involving ANZ, Deutsche Bank and Citigroup

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This article is written by  Bikramjit Chaterji pursuing a Diploma in Law Firm Practice: Research, Drafting, Briefing, and Client Management.  This article has been edited by Ruchika Mohapatra (Associate, Lawsikho). 

This article has been published by Sneha Mahawar.

Introduction

In June 2018, ANZ, Deutsche Bank and CitiGroup were prosecuted for knowingly being concerned in cartel conduct. This case began when ANZ decided to raise 2.5 billion dollars’ worth of shares through institutional investors in August 2015. Senior Executives of CitiGroup, Deutsche Bank and JP Morgan had a discussion about what to do with the remaining unsold shares. There were about 790 million dollars’ worth of shares or 1/3rd shares which managed to stay unsold which was highly unlikely. However, it was only ANZ, Deutsche Bank and CitiGroup who were prosecuted because JP Morgan was the one who blew the whistle against this case of insider tradingThis case seemed like a really important case in the history of Australia because this was the first time an Australian Bank was involved in criminal cartel charges. This was Australia’s biggest white collar criminal case and the Australian Competition and Consumer Commission (ACCC) is the one who has brought charges against these financial giants, their clients and their current and former executives. This matter led to a two-year investigation by the Australian Competition and Consumer Commission (ACCC). This article talks about the various ways in which market manipulations take place and how they can be prevented. It also highlights the ways in which India can prevent something like this happening in their soil.  

Brief History about the banks  

History of ANZ

ANZ is one of the four major banks in Australia with the likes of the Commonwealth Bank, National Australia Bank (NAB) and Westpac sharing the same mantle. The ANZ Bank had actually been founded in 1951 after two banks: Bank of Australasia and the Union Bank of Australia, which were established in the year: 1835 and 1837 respectively decided to merge with each other. However, the current corporate entity of ANZ was established on 1st October, 1970 when ANZ merged with the English, Scottish and Australian Bank (ES&A) and it was the biggest bank merger at that time. As of this moment, Australian operations make up most of ANZ’s business, with it dominating in commercial and retail banking. ANZ along with its subsidiaries provides employment to about 51,000 employees and serves around 9 million customers worldwide. In Australia alone, the bank serves around six million customers operating out of their 570 branches. 

History of Deutsche bank

Deutsche Bank was founded in Berlin in the year 1870 as a specialist bank that mainly concentrated on financing foreign trade and promoting German exports. It actually played a huge part in developing Germany’s industries as their business model focused on providing finance to mostly industrial customers. The bank’s statute was adopted on 22nd January, 1970 and on the 10th of March, 1870, the Prussian Government granted Deutsche Bank their banking license. 

History of CitiGroup

CitiGroup or earlier known as City Bank of New York was actually chartered by the state of New York on 16th of June, 1812 with 2 million dollars in capital. Initially serving a group of only New York merchants, the bank opened for business on 14th September of that same year. Later, the name of the bank was changed to The National City Bank of New York after it joined the new U.S National Banking System in the year 1865. Subsequently, it became the largest American bank by the year 1895 and it also became the contributor of the Federal Reserve Bank of New York in the year 1913 and the very next year, it opened its first overseas branch in Buenos Aires, Argentina. 

What is a Cartel

A cartel is an organization created by either formal or informal agreement between a group of investors or traders from the stock market to regulate the supply of a specific security or stock or asset to manipulate the price for their own benefit. A cartel is mostly formed to eliminate competition and control the price to churn bigger profits in the future. Tactics used by cartels mostly include: 

  1. Reduction of Supply – Decreasing the supply of a specific asset or security to control and manipulate its price of it on a later date. 
  2. Price Fixing – Fixing the price of an asset or security by controlling major shares of that asset. 
  3. Collusive Bidding – Jointly bidding against or for a security or asset. 
  4. Market Carving – Cartel members may collectively agree to break up a market into regions or territories and not compete in each other’s territory.  

Facts about the case

This case began when ANZ decided to raise 2.5 billion dollars’ worth of shares through institutional investors in August 2015. Senior Executives of CitiGroup, Deutsche Bank and JP Morgan had a discussion about what to do with the remaining unsold shares. There were about 790 million dollars’ worth of shares or 1/3rd shares which managed to stay unsold which was highly unlikely. However, it was only ANZ, Deutsche Bank and CitiGroup who were prosecuted because JP Morgan was the one who blew the whistle against this case of insider trading. However, this case seemed like a really important case in the history of Australia because this was the first time an Australian Bank was involved in criminal cartel charges.

This was Australia’s biggest white-collar criminal case and the Australian Competition and Consumer Commission (ACCC) is the one who has brought charges against these financial giants, their clients and their current and former executives. They have been accused of flooding the market with new shares and stopping the price from falling at the same time. This is a classic case of market manipulation because as the number of shares increases, the price of the shares must go down. This happens due to simple economics where if the demand is lower than the supply, then the price of the product/service must fall. 

But what these three banks did jointly is, they decided to buy up all the shares and make sure that the price of the shares don’t go down creating a delusion for investors to invest in the stock. Their end game was to sell the stocks on a later date when they would have successfully made a profit on their initial investment leading to a huge cash out with the banks walking away with millions in profit and a substantial drop in the share prices resulting in the average retail investor to lose out on their invested amount, life savings or worse.    

Charges against the companies

The charges for companies involved in criminal cartel charges is a maximum of 10 million dollars or three times the total benefits that have been earned, whichever is higher and these are reasonably attributable for the commission of the offense. However, the ones who were prosecuted were former ANZ senior executive Richard Moscati who was one of the six high-profile bankers who were charged for allegedly forming a cartel which they did to manipulate the share prices of the four banks in 2015. On the other hand, Citigroup Global Markets Australia and Deutsche Bank AG were also facing a combined 12 criminal charges on the basis of anti-cartel laws. ANZ was also facing three charges for aiding and abetting the contravention of the anti-cartel laws. However later, the charges against Richard Moscati and ANZ were dropped and it’s not clear as to why it happened. After the charges were dropped, the focus of the case shifted on John McLean and Itay Tuchman of Citigroup Global Markets Australia and Michael Ormaechea and Michael Richardson of Deutsche Bank AG.

For individuals, the maximum sentence is up to 10 years in prison or a fine up to $420,000 or both.    

Effects of the case

After this case came to light, several countries and financial experts started following this case very closely as a scam of this scale was the first to happen, especially with three banks involved in the scam. However, this was not the first time CitiGroup was involved in a scandal or manipulating the financial market for their own benefit. CitiGroup had been caught up in several scandals in the past.

What is Market Manipulation

Market Manipulation refers to the method with which the price of securities and assets can be artificially increased or decreased. The reason why it is artificial is because the manipulators try to skew the supply and demand to change the price of the securities for their benefit. While supply and demand of an asset can change at any point of time because of other fundamental analysis factors, including news announcements, earning reports and investors decision process, manipulation of the securities market mostly involves illegal means such as spreading false news, trying to influence price quotes or posting fake orders. Market manipulation can be explained with the help of a case law: Montgomery Street Research Wash Trading Lawsuit where in late 2014, the Securities and Exchange Commission (SEC) brought an enforcement action against an equity firm Montgomery Street Research. The firm’s owner allegedly manipulated the market for a publicly-traded stock for which he was soliciting investors. After a company hired Montgomery to assist in two private placement offerings, the firm owner allegedly engaged in wash trading, which involves the near-simultaneous purchase and sale of a security to make it appear actively traded, without any actual change in ownership of the securities. 

The SEC alleged that Montgomery conducted approximately 100 wash trades where the sell order came within 90 seconds of the buy order for the securities. The price and quantity of securities bought and sold were nearly identical for all buys and sells, says the SEC. The stock was otherwise rarely traded. Thomas Krysa, an Associate Director of Enforcement at the SEC, explains that wash trading obscures whether there is truly market interest in the stock: “Wash trading is an abusive practice that misleads the market about the genuine supply and demand for a stock.” Utilizing wash trading, the SEC says that Montgomery Street Research raised more than $2.5 million from investors. 

Examples of Market Manipulation 

  1. ChurningChurning refers to the practice where a trader places a buy and sell order at the same time. This is done so that the trade volume goes up and it looks like more people are buying the stock. This increases the interest of the other investors, making them want to buy the stock, in turn increasing the price. 
  2. Painting the TapePainting the Tape refers to a practice where a group of traders creates activities or rumors to increase the price of the stocks. 
  3. Wash TradingWash Trading refers to the practice of selling and reselling the same security to generate false activity and in turn, increase the price. 
  4. Bear RaidingBear Raiding refers to the practice of selling or short selling a stock heavily to decrease the price of the stock.  
  5. CorneringCornering refers to a practice where a single trader or a group of traders buy the majority of the stocks of a particular company to control the supply of that stock which in turn helps them to set the price of the stock as and when they desire. 
  6. Insider TradingInsider Trading refers to the illegal practice of insiders of a company who have access to confidential information misusing it to buy or sell stocks of their own company to avoid losses or make quick profits. Often they even sell this information to people looking to buy insider information for a good sum of money to help them make a quick profit or avoid heavy losses.  

What can India do to prevent this from happening in India

So how can India prevent a scam of this scale in its financial market? To battle this, in 2019, the Reserve Bank of India (RBI) came out with guidelines to prevent misuse of price sensitive information by participants. The Reserve Bank of India made sure that no one is able to undertake any action so as to manipulate the calculation of a benchmark rate or reference rate. However, if any party is caught misusing price sensitive information, they will be denied access to the markets in one or more instruments for a period that may not exceed 1 month at a time.  The Reserve Bank of India also said that this new guideline would not apply to banks or the Central Government if it is for the furtherance of monetary policies, fiscal policies or public policy objectives. This can lead to market manipulation and banks getting away with financial frauds as they can disguise their wrongdoings as policies for furtherance of monetary policies, fiscal policies or public policy objectives. However, this can be avoided by the Securities Exchange Board of India by:

  1.  Regulating stock exchanges and other intermediaries in the stock market such as brokers, sub-brokers, merchant bankers, venture funds, mutual funds, FII, etc.
  2.  Educating the investors about malpractices in the market and making them aware of their rights and duties.
  3. Ensuring that the market has systems and practices that make transactions safe and this they have achieved through a screen-based trading system, dematerialization of securities, T+2 rolling settlement and framed various regulations to regulate intermediaries, issue and trading of securities, corporate restructuring, etc., to protect the interests of investors in securities. 
  4.  Grievance Redressal Mechanism which answers to the grievances of investors against intermediaries and listed companies.

But even after so many policies and checks and balances, there will always be someone or a group of people who will be able to outsmart SEBI. For those situations, the regulatory body will have to be prompt and quick on their toes to identify and take action when such discrepancies come to light.

Conclusion

Finally, Australian authorities had withdrawn the cartel lawsuit against Citigroup, Deutsche Bank, ANZ and several former executives over a $1.8 billion share issue, a staggering amount that could have resulted in this case being the biggest white-collar criminal trial in India. After nearly fighting in packed courtrooms for 4 years, the federal prosecutors said that there was no evidence leading to a reason for conviction. But the fate of several top executives hangs in the balance with the former treasurer of ANZ being sacked. On the other hand, Citigroup Global Markets Australia and Deutsche Bank AG were also facing a combined 12 criminal charges on the basis of anti-cartel laws. ANZ was also facing three charges for aiding and abetting the contravention of the anti-cartel laws. However later, the charges against Richard Moscati and ANZ were dropped and it’s not clear why it happened. After the charges were dropped, the focus of the case shifted on John McLean and Itay Tuchman of Citigroup Global Markets Australia and Michael Ormaechea and Michael Richardson of Deutsche Bank AG. For individuals, the maximum sentence is up to 10 years in prison or a fine up to $420,000 or both. To make sure that such a thing doesn’t happen on Indian soil, in 2019, the Reserve Bank of India (RBI) came out with guidelines to prevent misuse of price-sensitive information by participants. The Reserve Bank of India made sure that no one is able to undertake any action so as to manipulate the calculation of a benchmark rate or reference rate. However, if any party is caught misusing price-sensitive information, they will be denied access to the markets in one or more instruments for a period that may not exceed 1 month at a time. However, the Reserve Bank of India also said that this new guideline would not apply to banks or the Central Government if it is for the furtherance of monetary policies, fiscal policies or public policy objectives. This can lead to market manipulation and banks getting away with financial frauds as they can disguise their wrongdoings as policies for the furtherance of monetary policies, fiscal policies or public policy objectives.  


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The doctrine of double jeopardy

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This article is written by Michael Shriney from the Sathyabama Institute of Science and Technology. The article describes double jeopardy, including its origin, basics, case laws, and international perspective. It also discusses how double jeopardy is applied.

It has been published by Rachit Garg.

Introduction

The doctrine of double jeopardy is a legal defence that protects an accused/defendant from being tried again for the same accusations and facts after a lawful acquittal or conviction. Double jeopardy is a doctrine from the Indian Constitution, specifically Article 20(2), which deals with and specifies the meaning of the double jeopardy doctrine. It has been incorporated as a part of our basic right by the founders of the Indian Constitution under Part III. The criminal justice system works on the assumption of some principles where no compromise is acceptable, such as the double jeopardy principle, in which values are defended by the system.

In general, Article 20 of the Indian Constitution deals with the protection from criminal convictions. There are three safeguards in place to keep an accused person from being convicted, namely, ex post facto law [Article 20(1)], double jeopardy [Article 20(2)], and self-discrimination [Article 20(3)]. 

The Fifth Amendment to the United States Constitution includes a double jeopardy provision. Double jeopardy is exclusively used in criminal courts, and does not prohibit defendants from being charged in a civil court for the same offence. The origins, essentials, circumstances under which this doctrine cannot be applied, international perspective with other nations, and case laws are all covered in detail in this article.

Protection against a conviction 

Article 20 of the Indian Constitution deals with protection in the case of a conviction for a crime. It relates to the right to freedom, which is one of the fundamental rights granted by the Indian Constitution. Articles 19, 20, 21A, and 22 protect the right to liberty. Article 20 is a part of the right to freedom, as it establishes three types of safeguards for accused criminals, which are as follows:

Ex post facto law [Article 20(1)]

An ex post facto legislation is one that imposes punishments or convictions on already committed offences and increases the punishment for such acts. This is based on the Constitution of the United States of America. It also has a retrospective effect. It means when a law enforces a penalty or punishment for an act that was not subject to punishment at the time of the commission of the offence, or enforces an extra penalty to what was prescribed at the time of the commission of the offence, or when there is a change in the rule of evidence or procedure that requires conviction.

Double jeopardy [Article 20(2)]

The doctrine of double jeopardy is a rule that states that no one should be put twice in peril for the same offence. “No individual shall be arrested and punished for the same offence more than once,” the Indian Constitution said in article 20(2). The doctrine evolved from the Fifth Amendment of the United States Constitution, however, there are differences between the United States and England. In India, the scope of protection is restricted. The doctrine existed in India prior to the Constitution of India, as evidenced by the General Clauses Act of 1897, Sections 26 and 300 of the Criminal Procedure Code of 1973.

Self-discrimination [Article 20(3)]

Self-discrimination is prohibited because “no person accused of any offence will be compelled to be a witness against himself,” according to the law. It is based on the maxim ‘Nemo tenetur prodere accusare seipsum,’ which says that no one is obligated to blame oneself. It relates to the admissibility of confessions made under pressure, which are not allowed to be used as evidence. Furthermore, no one will be required to make remarks against oneself that are considered self-harming or confessional statements.

Grounds for applicability of the doctrine of double jeopardy 

In legal terms, jeopardy refers to the danger that defendants in criminal cases suffer, such as jail time or penalties. In three situations, double jeopardy has been stated as a valid defence:

  1. First and foremost, the individual must be charged with a crime. In the General Clauses Act of 1897, the term ‘offence’ is defined. Any act or omission that is criminal under the law in force at the time.
  2. Before a court or a judicial tribunal, the investigation or proceeding must have occurred.
  3. In the prior process, the person must have been arrested and punished.
  4. The offence must be the same as the one for which he was previously convicted and sentenced.

Conditions where the doctrine of double jeopardy does not apply

The double jeopardy clause’s protection may not always be applicable. The courts have evolved some principles for determining the application of double jeopardy as a valid defence, mostly through legal interpretations over history.

  • Civil lawsuit: Double jeopardy is a defence that can only be used in criminal court and cannot be used in civil court. The defendant cannot defend himself against punishment in civil court for the same crime committed in criminal court. For example, if ‘A’ killed ‘B’ in a drunk and drive case, ‘B’s family can sue in both civil and criminal courts. They can sue in civil court to recover the ‘B’s financial damages. In a civil proceeding, ‘A’ cannot defend himself with double jeopardy to protect him from punishment for his crime. However, he could use double jeopardy to defend himself in criminal court.
  • Jeopardy must begin: The executive authorities must first put the defendant in jeopardy before applying the double jeopardy doctrine. This requires that defendants must be tried first before claiming double jeopardy doctrine as a defence. After the trial jury is called in, jeopardy begins or attaches to the case.
  • Jeopardy must end: Jeopardy must begin and conclude in the same way. To put it another way, before the double jeopardy doctrine may be utilised to prevent the defendant from being arrested and punished for the same offence, the case must come to a conclusion.  When a judge enters an acquittal judgement before submitting the matter to the jury or when the sentence has been served. When the court renders a decision, jeopardy is usually over.

Origin of the doctrine of double jeopardy

The word ‘double jeopardy’ comes from the English common law rule ‘Nemo bis punitur pro eodem delicto,’ which means “no one should be punished twice for the same offence.” The word ‘double jeopardy’ comes from the common-law rule ‘Nemo debet bis vexari,’ which means “a man must not be put in peril twice for the same offence.” In simple terms, it implies ‘penalty twice’ or “punishment given more than once for the same offence.”

There is no specific origin for this doctrine, which is mentioned in one court and appears to be part of the common law in England in addition to every other system of jurisprudence, concluding that it does not have a beginning and has always existed. The doctrine of double jeopardy was known to the Greeks and Romans, and it was eventually acknowledged in Justinian’s Digest as the rule that the governor should not allow the same person to be charged for a crime for which he had previously been tried and convicted. The criminal procedure at the time was different from what we have now, with the defendant subject to arrest by the prosecutors within 30 days following acquittal. 

The doctrine of double jeopardy in the Magna Charta has not been discussed, nor can it be interpreted by implication. Continental and English systems have drawn the doctrine of double jeopardy from the shared source of Canon law. As early as 847 A.D., Canon law stated that no one, not even God, can be judged again for the same offence. This idea has been incorporated into Roman law through the Justinian Code. 

Double Jeopardy was also recognised as a constitutionally protected right in a number of nations, including the United States, Canada, Mexico, and India. In India, double jeopardy existed in the form of Section 403 (1) of the old Code of Criminal Procedure, which has now been replaced by Section 300 Amendment, and Section 26 of the General Clauses Act of 1897. This doctrine existed before the formation of the Indian Constitution. Article 14(7) of the International Covenant on Civil and Political Rights, Article 4(1) Protocol 7 of the European Convention on Human Rights, and Article 50 of the European Union Charter of Fundamental Rights are all recognised as international documents.

If a person has been tried for an offence in the United States or England, he cannot be tried for the same offence twice, whether or not he was acquitted in the first trial. However, in India, a person who has been convicted and acquitted might be prosecuted and punished again under Article 20(2). If he or she was prosecuted and convicted for an identical crime, he or she might use Article 20(2) as a defence. Article 20(2) of the Constitution provides protection against double jeopardy. It states that no one shall be arrested and punished more than once for the same offence.

Judicial perspective on the doctrine of double jeopardy

The courts in India have made certain observations relating to the doctrine through their judgements in various cases, the courts state that the doctrine of double jeopardy is embedded the maxim, ‘nemo debet bis vexari si constat curiae quod sit pro una et eadem causa’, which means that no one should be vexed twice if it appears to be for the same cause. The court declared this in the case Union of India v. P.D. Yadav (2001). There were certain details of the concept that the courts examined and defined in later decisions.

The judgements make it clear that an investigation is not the same as a prosecution. This was asserted in the case Venkataraman v. Union of India (1954), where the accused was subjected to an investigation by the inquiry commissioner after being fired from his job. Following his discharge, he was accused of violating the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. He argued double jeopardy, but the Supreme Court decided that the investigation conducted by the inquiry commissioner to end his employment was not prosecution and therefore the charges may be brought, and the defence of double jeopardy was dismissed.

The doctrine of double jeopardy, on the other hand, may only be used when the punishment is for the same offence. The doctrine cannot be applied if the offences are of a different nature, as mentioned in the case Leo Roy v. Superintendent District Jail (1957), where the Supreme Court stated that even though the person had been tried and convicted under the Sea Customs Act, 1878 they could be put on trial again under the Indian Penal Code, 1860 because there were two distinct charges and offences.

In the case of a continuous offence, each day when a person commits a crime is considered as a separate crime, and the accused may be punished separately for each one. This does not constitute double jeopardy, as the High Court of Judicature at Allahabad determined in the case of Mohammad Ali v. Sri Ram Swaroop (1963).

Case laws regarding the doctrine of double jeopardy

Maqbool Hussain v. State of Bombay, 1953

Facts of the case

In this case, the Petitioner, an Indian citizen, travelled from Jeddah to Bombay’s Santa Cruz Airport. He didn’t indicate that he had taken 1250.361 grams of gold with him when he landed, but when he was searched, he was discovered in violation of the Indian government’s notification. The gold was seized by the Customs Authorities under Article 167, Clause (8) of the Sea Customs Act VIII of 1878. The gold owner, however, had the option of paying a fine of 12,000 rupees, which had to be paid within four months of the order’s date. The Appellant received a copy of the order, but no one came forward to claim the gold. The Supreme Court of India ordered that the plea be considered by the Bank of the Constitution, together with Criminal Appeal , because the same issue was made in reference to “autrefois convict” or “double jeopardy.”

Issues involved in the case

The question is whether the Sea Customs Act, 1878 and the order of Court or the Judicial Tribunal can be used to support a plea of double jeopardy.

Judgement of the Court 

The prosecution under the Foreign Regulation Act, 1947 was upheld because the previous detention under the Sea Customs Act,1878 did not constitute a judgement or order of a court or judicial tribunal to support the argument of double jeopardy.

Kalawati v. State of Himachal Pradesh,1953

Facts of the case 

In this case, the accused (plaintiff) murdered her spouse (defendant) in order to protect her from the cruelty. The fact is that she was attempting to protect herself from cruelty after being abused by her husband. In this instance, the accused killed her husband in reaction to his harassment. She was acquitted owing to a lack of evidence. However, the state eventually filed an appeal against her at the Higher Court.

Issues involved in the case

The question is whether the right to appeal under Article 20(2) of the Constitution violates this case.

Judgement of the Court

The Supreme Court decided that the appeal is a continuation of the prior trial rather than a new trial for the same offence, and that the appeal against the acquittal judgement would not be subject to Article 20(2) as there was no penalty in the earlier trial. Thus, an appeal against an acquittal order in a murder trial would not violate Article 20(2) of the Constitution.

Thomas Dana v. State of Punjab, 1959

Facts of the case

In this case, the two petitioners were detained by the police while attempting to smuggle a large amount of Indian and foreign currency as well as other illegally imported goods out of India, and the Collector of Central Excise and Land Customs issued orders confiscating the seized goods and enforcing heavy personal penalties on both of them. The Additional District Magistrate convicted and punished the petitioners. This resulted in an appeal to the Supreme Court.

Judgement of the Court

The Supreme Court decided that in order to request protection under Article 20 (2), the following requirements must be met.

  1. That there was a previous prosecution.
  2. As a result of this the accused was punished.
  3. That the punishment was for the same offence.

International perspective of the doctrine of double jeopardy

All common-law nations contain double jeopardy provisions in their laws, though some have made it essential to include it in their Constitutions, while others have included it in their legislation. Though its origin is so common, it has been discovered that its interpretation and execution have been varied.

England

After the murder of Stephen Lawrence, the Macpherson Report suggested that the double jeopardy rule be repealed in murder cases and that it should be permissible to retry an acquitted murder suspect if “fresh and valid” new evidence becomes available later. In its report ‘double jeopardy and Prosecution Appeals’, the Law Commission eventually backed this conclusion in 2001. If “new, compelling, reliable, and significant evidence” is discovered that was not previously known and comes to knowledge later, the accused suspect might be tried afresh under the new circumstances.

Germany

The doctrine of double jeopardy is mentioned in Article 103(3) of Germany’s Constitution, which prevents penalties for the same offence committed more than once under general legislation.

Japan

Article 39 of the Japanese Constitution deals with the doctrine of double jeopardy. It stated that no one can be held criminally punished for an act that was legal in the first place it was performed or for which he was acquitted, and that no one can be put in double jeopardy.

United States

The doctrine of double jeopardy is defined by the Fifth Amendment of the United States Constitution, which covers continued prosecution after acquittal, conviction, certain procedural errors, and repeated penalties in the same accusation. The double jeopardy rule prevents the government from ‘punishing’ someone twice or seeking to ‘punish’ someone criminally for the same offence. 

Conclusion

After a conviction, every accused individual has the option of at least one appeal.  If the conviction is found unconstitutional due to a lack of evidence in an appeal, it is termed an acquittal, and no further prosecution is allowed. The doctrine of double jeopardy is dealt with under Article 20(2) of the Indian Constitution, which does not restrict the holding of a departmental inquiry either before or after the start of criminal prosecution. As a result, after a person has been convicted and punished, this doctrine is highly important to our judicial system. The doctrine has been incorporated into legal systems all across the world.

References

  1. https://lexforti.com/legal-news/doctrine-of-double-jeopardy/ 
  2. https://lawtimesjournal.in/doctrine-of-double-jeopardy/
  3. https://www.thoughtco.com/what-is-double-jeopardy-4164747
  4. Lectures on Constitution law- I, Dr. Rega Surya Rao.

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The Rowlatt Act : everything you need to know

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This article is written by Sujitha S, pursuing law at the School of Excellence in Law, Chennai. This article tries to explain the legal perspectives and significance of the Rowlatt Act, popularly known as the “Black Act” in the Indian freedom movement during the British period.

This article has been published by Sneha Mahawar

Introduction

The Imperial Legislative Council passed the Anarchical and Revolutionary Crimes Act, 1919, widely known as the ‘Rowlatt Act,’ in February 1919. This Act gave the British government the power to imprison any person accused of conspiring their overthrow, for up to two years without trial and to execute them summarily without a jury. It replaced the Defence of India Act (1915), enacted during the First World War, with a permanent statute that granted the British additional control over Indians, based on the recommendation of a commission led by Justice S.A.T. Rowlatt. People and Indian leaders, including Mahatma Gandhi, were outraged by the Rowlatt Act, usually known as the “Black Act” or “Black Bill,” which sparked the horrific Jallianwala Bagh massacre in April 1919 and the ensuing the Non-Cooperation Movement. In March 1922 we, the British colonial administration abolished the Rowlatt Act, the Press Act, and twenty-two other laws after adopting the recommendations of the Repressive Laws Committee.

Need for the Rowlatt Act

The British government had been concerned about the rising tide of Indian nationalism. They might have instilled fear in the minds of the government even before the war, but in the midst of the German threat, they did not care to take any further steps.  The situation had altered after the war. The British were then determined to put an end to the Indian uprising before it got powerful enough to drive them out of the country. At this point, all Indian hopes were shattered when the British proclaimed the dishonest Montagu-Chelmsford “reforms” and enforced the draconian Rowlatt Act in response to the Rowlatt Commission’s recommendations.

Role of the Rowlatt committee in the enactment of the Act

The Rowlatt Committee was a “sedition committee” formed by the British Indian Government in 1917, presided by Sidney Rowlatt, an Anglo-Egyptian judge. The Rowlatt Committee was formed to assess political terrorism in India, particularly in the Bengal and Punjab provinces, as well as its impact and connections to the German government and the Russian Bolsheviks. It was established at the end of World War I, at a time when the Indian revolutionary movement was particularly active and had gained significant recognition, potency, and pace. The Rowlatt Act, an expansion of the Defence of India Act (1915), was enacted in response to the threat in Punjab and Bengal, based on the committee’s recommendations. This Act was intended to restrict the press by imprisoning political activists without trial and arresting any person accused of sedition or treason without a warrant. The major grounds for the Act’s enactment, according to the committee, are:

  • Difficulty in obtaining proof for the possession of weapons and arms, and evidence to satisfy the ordinary courts.
  • Inadequacy of police investigation, and facilities enjoyed by the criminals.
  • Uselessness of confessions
  • Protracted nature of trials due to cross-examination on unimportant matters.
  • A large number of acquittals as compared to convictions
  • Vilification campaign in the press

Significance of the Rowlatt Act

Protests erupted all around the country in response to the Act. Freedom of press and freedom of expression were equally restricted. When the nationalists realised that they had almost no opportunity of obtaining self-rule from the British, they began waging a relentless campaign against the British government. The situation in Punjab deteriorated further since hundreds of people were imprisoned for minor offences as a result of this legislation. Gandhiji and others believed that constitutional opposition to the Act would be futile, therefore on April 6, a “hartal” was organised in which Indians would cease all businesses and fast, pray, and attend public gatherings in protest of the “Black Act,” as well as offer civil disobedience. It was known as the “Rowlatt Satyagraha”.  

The success of the Delhi hartal on March 30 was overshadowed. However, by growing tensions, it culminated in riots in Punjab and other provinces. The protest movement in Punjab was particularly strong, and two congress leaders were detained on April 10th. People from neighboring villages assembled for Baisakhi Day celebrations and to protest the deportation of two prominent Indian leaders to Amritsar, which ended in the 1919 Jallianwala Bagh massacre. Gandhi brought an end to the resistance as he realized that Indians were not ready to take a stand in accordance with the ideal of nonviolence. Mahatma Gandhi’s first all-India movement was the Rowlatt Satyagraha. The Rowlatt Act was essential in bringing Gandhiji into the forefront of India’s independence movement and ushering in the Gandhian Era of Indian politics.

Features of the Rowlatt Act

  • In February 1919, two laws were submitted to the central legislature based on the committee’s recommendations, which was chaired by Justice Rowlatt. The bills were labelled “black bills”.
  • They provided the police with extensive rights to search an area and arrest anybody they want without a warrant.
  • One well-known description of the legislation at the time was: No Dalil, No Vakil, No Appeal, which meant no pleas, no lawyer, and no appeal.
  • The legislation was enacted to suppress the country’s increasing nationalist movement.
  • This legislation essentially provided the government with the right to detain anybody accused of terrorism in the British Raj for up to two years without a trial, and it also gave the imperial authorities the power to deal with all cases of revolutionary activities in the British Raj.
  • It granted the freedom to imprison suspects indefinitely without trial and to conduct in-camera trials for prohibited political activities without a jury, as well as stricter press restrictions and the capacity to make arrests without a warrant.
  • The undertrials were also denied access to information about their accusers’ identities and the nature of the evidence provided against them for their claimed offences.
  • After their sentences were served, the offenders were required to deposit security to assure their good behaviour and were barred from participating in political, religious, or educational activities.
  • The Act mandates that individuals apprehended be tried by special tribunals formed for that purpose.
  • This legislation also upheld the declaration of possession of treasonable literature as a punishable offence.

Overview of the Rowlatt Act

This Act, comprising 43 Sections, extends to the whole of British India. It is divided into five parts. Offences under Sections 121, 121A, 122, 123, 124, and 131 of the Indian Penal Code (1860) and any other offence under IPC that in the government’s opinion is connected with any anarchical or revolutionary movement are punishable under this Act.

Part I of the Act

According to Part I, if any local government is of the opinion that the trial of any person accused of promoting a scheduled offence should be held in accordance with the provision of this part, it may order any officer to submit written information to the Chief Justice against this person. This Part covers 17 Sections. Following this, initiation of proceedings by the chief justice will be done according to Section 4. Section  5 allows the Chief Justice to nominate three judges of the high court for the constitution of the Court. 

According to Section 9, if a charge is framed, the accused is entitled to an adjournment for the extent of 14 days. Section 12 deals with the examination of the accused. According to this section, after the prosecution, the accused is given a chance to defend himself on oath. Once he proceeds as a witness, no general questions related to the case can be asked. 

Other provisions of Part I are

  • Section 13: Right of the final reply lies with the prosecution in cases of examination of witnesses called by the accused. 
  • Section 14: In case of difference of opinion, the majority opinion prevails.
  • Section 15: An accused may be convicted of any offence referred to in the schedule. 
  • Section 16: Any sentence authorised by law can be given. No death sentence can be passed if there is a difference of opinion regarding his guilt among the members of the Court.
  • Section 17: The judgment of the Court is final and no further appeal is allowed. However, discretion lies with the Governor-General and Local government to make orders under Sections 401 and 402 of the IPC.
  • Section 18: Special rules of evidence such as the admission of a statement by the witness in cases of death, disappearance, incapacity and depositions under Section 512 of the Code of Criminal Procedure (1973) as evidence.
  • Section 19: Witnesses can be recalled in cases of reconstitution of the Court.
  • Section 20: Power of the Chief justice to make rules.

Part II of the Act

  • According to Part II, if any local government is of the opinion that the trial of any person accused of actions likely to lead to the commission of a scheduled offence, should be held in accordance with the provision of this part, then, this part comes to force. Section 22 confers powers to be exercised when Part II is in force, and accordingly, an order can be passed against such person. Such order shall remain in force only for a period of one month. 
  • By virtue of Section 26, an investigating authority will be appointed to give a concise statement by conduction of inquires. Based on the report given by the investigating authority, the local government is empowered to pass the order by Section 27.
  • In case of disobedience to the order, a penalty of imprisonment for six months or a fine of 500 or both can be imposed, according to Section 28.
  • Section 31 allows for the formation of visiting committees to report upon the welfare and treatment of persons under restraint.

Part III of the Act

According to Part III, if any local government is of the opinion that the trial of any person accused of actions likely to endanger public safety in pursuance of a scheduled offence, should be held in accordance with the provisions of this part, this comes into force. This part comprises 6 Sections. Further, Section 34 confers powers exercisable when part III is in force. In the light of this Section, the opinion of a judicial officer is considered before passing the order under Section 22 against the person. 

For the persons prosecuted under this Part, the Court has the power to arrest the person without a trial and also to search their premises under Sections 35 and 36 respectively. Moreover, the procedure under Part II, enshrined in Section 23-27 are also applicable for the order passed under this Act. In case of disobedience to any order, the Court can impose a penalty of imprisonment extending to one year or a fine of a thousand rupees or both.

Part IV of the Act

Part IV of the Act deals with persons already under executive control. According to Section 39:

  • Person under Rule 3 of the Defence of India(Consolidation) Rules, 1915 will be deemed to be a resident in an area in which notification under Section 21 is in force and the provisions of Part II shall apply.
  • Person in confinement by provisions of Bengal Prisoners Regulation,1818, will be deemed to be a resident in an area in which notification under Section 33 is in force and provisions of Part III shall apply subsequently.
  • Person under Section 2 of Ingress into India Ordinance, 1914, will be deemed to be a resident in an area in which notification under Section 21 is in force and the provisions of Part II shall apply.

Part V of the Act

Part V of the Act deals with the enforceability of the orders under other Parts. The provisions are:

  • Section 40: When a notification under Sections 3,21,33 is cancelled, any trial or investigation or order proceeded will be continued and enforced as if such notification has not been cancelled.
  • Section 41: Orders made under Part II and III outside notified areas are valid and enforceable.
  • Section 42:  Orders under this Act cannot be called in question by the courts.
  • Section 43: Powers conferred are not derogative of other powers conferred by any other enactment. 

Shortcomings in the Rowlatt Act

  • Many Indian leaders and the general people were outraged by the Act, pushing the government to adopt oppressive actions.
  • The Act gave the government the authority to detain anybody suspected of any revolutionary activities for up to two years without charge or trial.
  • It also made it possible to detain and arrest someone without a warrant for an indeterminate period of time. Other provisions were no-jury trials for political conduct that were outlawed.
  • Following their release, convicted persons were expected to deposit securities and abstain from participating in any political, religious, or educational activity.
  • The Rowlatt Act also severely restricted freedom of press.
  • This Act is in violation of basic human rights and legal rights.
  • This legislation sought to encourage arbitrariness, rendering huge discretionary powers in the hands of the government.
  • On account of its legal perspective, it is short of the procedural aspects in a number of provisions. 

Impact of the Rowlatt Act

Jallianwala Bagh Massacre

The demonstrations became increasingly strident and militant when the Rowlatt Act was passed in March 1919, especially in Punjab, where trains, telegraphs, and communication networks were damaged. The demonstrations had erupted by the end of the first week of April, and Lahore, in particular, was on fire. Dr. Satya Pal and Dr. Saifuddin Kitchlew, two of the most prominent faces of the protests and proponents of the ‘Satyagraha’ movement, were hauled into jail by the police and illegally transported away. On April 12, 1919, the leaders of the ‘hartal’ in Amritsar convened to issue resolutions against the Rowlatt Act and protest against the arrests of Satya Pal and Kitchlew.

They also resolved to hold a public protest gathering at Jallianwala Bagh, the next day. On the morning of April 13, 1919, the day of the traditional holiday of ‘Baisakhi,’ the acting military commander, Colonel Reginald Dyer, placed many restrictions on people’s mobility and assembly, anticipating greater agitation and bloodshed. The regular people on the other hand, paid little attention to it or comprehended the ramifications, and continued to assemble at Jallianwala Bagh. While there were some demonstrators, many were simply returning home after praying at the Golden Temple, and others were celebrating the harvest festival ‘Baisakhi’ after the local horse and cattle show had finished early. Colonel Dyer came with his forces in Jallianwala Bagh at 5.30 p.m., an hour after the planned protest meeting had begun, and ordered indiscriminate fire on the peaceful and unarmed crowd without warning.

The British administration tried all they could to keep the news of the massacre from getting out, but the story quickly circulated throughout India, causing tremendous resentment. The specifics of the tragedy, however, did not reach Britain until December 1919. Colonel Reginald Dyer was hailed as a hero by some, but his evil conduct was criticized by others. Later, the Hunter Commission found an unrepentant Dyer, guilty of severe negligence, but took no action against him. He was afterwards punished, passed over for advancement, and freed of all Indian responsibilities. Mahatma Gandhi was outraged by the Jallianwala Bagh massacre and lost all trust in the British to be reasonable. This ushered in a period of non-cooperation and nationalism.

Hunter Commission

Following the tragic massacre at Jallianwala Bagh on April 13, 1919, the Indian government’s Legislative Council established the Hunter Commission to investigate the incident. The investigative committee was directed by Lord William Hunter. The commission was established on October 29, 1919. The members include

  • Chairman : Lord William Hunter (ex- Solicitor-General).
  • W.F. Rice (Additional Secretary to the Government of India, Home Department).
  • Justice G.C. Rankin (Judge of the Calcutta High Court).
  • Major General Sir George Barrow (Commandant of the Peshawar Division).
  • Sir Chimanlal Setalvad.
  • Pandit Jagat Narayan.
  • Sardar Sultan Ahmed Khan.

It began hearing testimony in November and lasted 46 days. On November 19th, General Dyer appeared before the commission. He claimed that he intended to fire at the gathering not just to disperse them, but also to have a moral impact to avert a mutiny. He also stated that he had intended to employ machine guns and armoured vehicles and that he would have utilised them if given the opportunity.

On May 26, 1920, the commission submitted its report.The majority of the members criticized Dyer for having a misinterpreted sense of duty.  It was found that the gathering was not the result of an Indian conspiracy. Punjab’s declaration of martial law was legitimate. It also found that Dyer’s firing at the mob was justified, with the exception that he should have issued a warning first and that the fire time should have been reduced. (He had authorised 10 minutes of fire.) The Indian members of the panel issued a minority report, questioning the need for martial law at the time and disputing the intensity of the riots.The then-government provided Rs. 15000 to the families of those murdered in the Bagh and Rs. 12000 to the families of those died in Punjab villages after the panel presented its findings and completed its work.

Role of Rowlatt Satyagraha

The Rowlatt Satyagraha was the first complete all-India anti-colonial uprising (the Rebellion of 1857 failed to involve the whole of the country). While the demonstrations varied greatly in size, intensity, and character, one thing remained consistent: the exhibition of Hindu-Muslim unity. Historians of Indian nationalism and biographers of Mahatma Gandhi are both fascinated with the Rowlatt Satyagraha. However, the one-and-a-half-decade phase beginning with the Rowlatt Satyagraha in 1919 and concluding with the Civil Disobedience Movement in 1934 is the most crucial part of India’s freedom movement. 

In the aftermath of the Rowlatt Satyagraha, Gandhi emerged as the most powerful leader of the independence movement. Gandhi was little recognised and had little political support in India prior to the Satyagraha. He was not even regarded as an Indian National Congress politician. The country’s political awakening in general, as well as Gandhi’s rise as a revolutionary leader, were two major elements that shaped the path of the succeeding years of the independence struggle, finally bringing the country to freedom. Rowlatt Satyagraha was directly responsible for the early twentieth-century Non-Cooperation Movement. During the Satyagraha, Gandhi led the movement on the ground that had been prepared by the political awakening. The merger of the Khilafat and Non-Cooperation Movements gave the latter tremendous momentum.

The fifteen-year struggle for independence, which began with the Rowlatt Satyagraha in 1919 and ended with the Civil Disobedience Movement in 1934, did not bring in independence, but it did lay the groundwork for it. During this time, all key events associated with the independence movement, including the Rowlatt Satyagraha, Khilafat Movement, Non-cooperation Movement, Simon Commission, and Civil Disobedience Movement, took place, culminating in the country’s independence.

Repeal of the Rowlatt Act: Repressive Laws Committee

The Resolution was passed on 14th February, 1920 by the Governor-General in Council to examine the repressive laws on the statute book and to report whether all or any of them should be repealed or amended. The Repressive Laws Committee was constituted for the above-mentioned purpose. The Anarchical and Revolutionary Crimes Act, 1919 was one of the Acts for examination before the committee. Other Act are

The Repressive law Committee analyzed a large amount of documentary evidence in the shape of reports of disturbances, confidential reports on the political situation, speeches delivered at public meetings, debates in the legislative council, the exercise of power under these Acts and the proceedings of the previous committee including the sedition committee. According to its report, the retention of the Rowlatt Act is not necessary or advisable. The power to restrain personal liberty without trial conferred by this Act is not consistent with the policy inaugurated with the constitutional changes. The report demanded the immediate repeal of the Act. It further added that though there has been a slight improvement in the situations concerning the anarchical movement, strong measures may be needed for the suppression of any organized attempt at widespread disorder. In this regard, the committee left this contingency to be dealt with when something of this nature arises, rather than retaining a statute that is regarded as a stigma on the good name of India. Moreover, it stated that the required provisions for the movements of anarchical or revolutionary nature are embedded in the Indian Penal Code. Finally, in 1922, following the recommendations made by the Repressive Laws Committee, the Rowlatt Act was repealed in India.

Rowlatt Act : basis of preventive detention laws

The British enacted the “Black Act” to suppress patriotism and prevent freedom fighters from enlisting others in the battle for independence. They also passed other Preventive Detention laws to put a stop to seditious acts. Preventive Detention is the practice of detaining criminals before trial for the purpose of preventing them from committing another crime or damaging society in any manner. To keep the freedom fighters under control, the British introduced a few similar regulations to fulfil their aims. Here are a few statutes:

After independence, however, the stated rules were included into the new Constitution to deal with sedition in India. While it is true that the objective of drafting such a legislation was to prevent anti-social forces from interfering with the society’s functioning and smooth government, these laws directly influence people’s basic rights and liberties, which are protected by the Indian Constitution. The problems that arise as a result of the law’s negligent execution can take up a lot of the judiciary’s time, as well as the life of the person who is held. In developed democracies, preventive detention laws are unnecessary, especially as a peacetime policy.

The court held in the A.K Gopalan case (1950) that the legislature has the authority to adopt laws regarding preventive detention, and that any legislation enacted by the legislature for preventive detention is unquestionable since it is protected by Article 22. The detention, in this case, was found to be legal since it was carried out according to the procedure established by law.  Personal liberty, on the other hand, was ignored by the court. On considering the pros and cons, preventive detention should only be used in the case of a serious national emergency, not in times of peace or normalcy.

Conclusion

Before independence, the British passed a number of restrictive laws. Among these was the Rowlatt Act, which was enacted to combat the rise of nationalism in the country. Unfortunately, it culminated in the Jallianwalla Bagh massacre, which has left an indelible mark on Indian history. On the other hand, this piece of law provided the necessary momentum for the beginning of the independence movement. The Rowlatt Satyagraha has its own significance in the Indian freedom struggle. Due to its enlarged darker side, this has been later repealed by the Repressive laws Committee. Its current relevance can also be linked to the present preventive detention laws. The safeguards for holding a person should be scrupulously implemented, and preventative detention should be interpreted with extreme caution. It should be assured that a person’s liberty is not jeopardised unless his case fits fully within the limits of the applicable legislation.

References


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A review of India’s new draft e-commerce policy : issues and challenges

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E-Commerce

This article is written by Kamar Alimi pursuing an MBA with a Specialisation in Data Protection and Privacy Management from the Swiss School of Management. This article has been edited by Zigishu (Associate, Lawsikho). 

This article has been published by Sneha Mahawar. 

Introduction 

The Draft National e-Commerce policy (“Draft Policy”) was issued by the Department for Promotion of Industry and Internal Trade (“DPIIT”) on 23 February 2019, This is an exhaustive regulation framework for the already existing and rapidly growing e-commerce industry in India and globally. Statistics show that the e-Commerce market in India is worth $38.5 billion, a 17% growth over the previous year. 

The Draft Policy aims to create a framework for achieving holistic growth of the e-commerce sector along with existing policies of Make in India, Startup India, Skill India and Digital India. This is in synchronization with the recently updated industrial policy which regulates the underlying brick-and-mortar economy. Potentially, the inclusive growth of this sector will act as a catalyst for achieving economic growth and other public policy objectives. The Draft Policy is all-encompassing; it covers the various dimensions of e-Commerce, including data, consumer protection, intellectual property and competition, details of which would be discussed subsequently.

The objective of this Draft Policy is to enable India to benefit from digitization by creating a governance framework for various stakeholders and strategies for data localization, consumer protection and promotion of micro, small and medium enterprises (MSMEs) and start-ups. The strategies envisaged should provide a basis for unlocking productivity, generating new-age jobs, protecting critical personal information, enhancing consumer awareness and facilitating the onboarding of domestic producers, manufacturers, traders and retailers.  

There are many positive sides of this document. Internationally, the Draft Policy is recognized as the first exclusive E-commerce policy for India. This makes India one of the few countries in the world to be moving toward advanced E-commerce legislation. China and the U.S. have similar legislations and policies.

However, in trying to address all these many aspects of E-commerce, the Draft Policy has become equivocal and vague, raising questions about whether it is intended to be an internet policy or a specific E-commerce policy.

There are several areas of the Draft Policy that reflect these concerns, namely the definition of e-Commerce, data ownership, shortcomings in consumer protection, excessive liabilities on the platform, lack of clarity on implementation and regulation, etc. These areas would be sufficiently addressed and suggestions proffered accordingly. 

Overview of the draft National E-commerce policy

The Draft Policy deals with issues in 6(six) broad themes, viz: i) data; (ii) infrastructure development; (iii) e-commerce marketplaces; (iv) regulatory issues; (v) stimulating domestic digital economy; and (vi) export promotion through e-commerce. It critically identifies aspects of the issues listed and lays out strategies to achieve the Government’s vision. These strategies take into account the needs and expectations of all stakeholders and accord the interests of startups, small manufacturing, trading and service enterprises a high consideration. 

E-commerce was defined to include buying, selling, marketing or distribution of (i) goods, including digital products and (ii) services; through electronic networks. Delivery of goods including digital products, and services which may be online or through the traditional mode of physical delivery. In the Draft Policy, E-commerce was used interchangeably with ‘digital economy,’ this has been highlighted as one of the major issues of the Draft Policy.

Some major suggestions in the draft policy are as follows:

Data

A significant part of the Draft Policy focuses extensively on data. It identifies data as a critical driver of growth and success in the e-commerce market which will assist the government in creating a strategy to promote electronic commerce in India among vendors, consumers, intermediaries, etc. and integrating existing Indian logistic service providers operating in the physical world with the digital economy.

It also acknowledges access to data as an essential input to competing in the online retail industry. It recognizes the use of data in tailoring online advertisements and understanding consumer preferences. Furthermore, it mentions that the use of artificial intelligence requires access to vast amounts of data, in order to train the algorithm to maximize profits. Without similar access to vast troves of consumer data, Indian businesses would not be able to compete and innovate at the scale achieved by ‘first-movers’ in the business. 

The Draft Policy goes a step further to make an analogy with the natural resources, particularly oil. Accordingly, it states that “just like oil or any other natural resource, it is important to protect data, prevent its misuse, regulate the use and processing of data and address the concerns related to privacy and security.” However, unlike in the case of oil, data flows freely across borders. It can be stored or processed abroad and the processor can appropriate all the values. It is proposed that India’s data should be used for the country’s development. Indian citizens and companies should get economic benefits from the monetization of data. Given that India is likely to become one of the largest sources of commercially exploitable data, it seeks to ensure that the benefits to be accrued from such data are available to Indian businesses as well.

On the issue of privacy, which was not broadly talked about under the Draft Policy, as a more comprehensive framework for protecting the privacy of Indian citizens has been given credence under Draft Data Protection Bill, the Draft Policy identifies several forms of commercially exploitable consumer data, such as details of communication over mobile apps, physical location, financial details, browsing and searches history. It states that an individual owns her data and such data cannot be used without the individual’s express consent – citizens must be given control over their data. However, at the same time, the Policy states that “data of a country, therefore, is best thought of as a collective resource, a national asset, that the government holds in trust” and accordingly, non-Indians cannot be allowed the same rights to exploit the data as Indians. As such, the Policy seeks to put in place a legal and technological framework to restrict the cross-border flow of data. First, it proposes the sharing of anonymous community data collected by devices installed in public places, such as traffic monitors, with private entities for research and development.

Secondly, it states that a business entity that collects or processes ‘sensitive data’ in India and stores it abroad, cannot share such data with other business entities not located in India, for any purpose, even if the consumer consents to such data sharing. Thirdly, such data cannot be made available to any foreign government, without the permission of Indian authorities. However, any request for data from any Indian authority must be complied with immediately. If this is interpreted in a broad manner, any data pertaining to Indian individuals or communities or collected in India should be preferentially used by Indian companies (potentially without foreign investment). This would, however, be unnecessarily prohibitive to the operation of business in India, especially by multinational companies. Further, a business entity located outside India can contract to send data to an Indian entity located in India.

Infrastructure development

This is another very vital policy recommendation on e-commerce; for a digital economy to thrive, a strong physical structure must be put in place to support the country’s development.  The Draft Policy recognizes this fact, it therefore proposes that the three core components of the ‘Digital India’ to wit: (i) the development of secure and stable digital infrastructure; (ii) delivering government services digitally; and (iii) universal digital literacy, be taken into cognizance to actualize the policy framework as envisaged in Draft document. Secondly, steps would be taken to develop capacity for data storage in India, this will include creating a time frame of three years to transition to data storage within the country; this would enable industries to adjust to the data storage requirement.

Furthermore, data centers, server farms, towers and tower stations, equipment, optical wires, signal transceivers, antennae etc. will be accorded ‘infrastructure status’, thereby facilitating achieving last mile connectivity across urban and rural India, this is in consonance with the ‘Digital India’ initiative through its medium- The Harmonized Master List of Infrastructure –sectors is specifically meant for that purpose.

E-commerce marketplaces

The Draft policy acknowledges the numerous benefits e-commerce marketplaces have on both consumers and sellers alike. They have provided sellers with a means to cross geographic boundaries and reach customers in any corner of the country and even across the globe. However, at the same time, it pointed out that there has been large scale ‘capital dumping’ into e-commerce marketplaces, allowing them to sell at losses – threatening the existence of smaller businesses.

Accordingly, the Policy clearly distinguishes what constitutes an ‘inventory-based’ and ‘marketplace’ model of sale and distribution. It therefore recommends prohibiting Foreign Direct Investment  (“FDI”) in ‘inventory-based models’ and only allowing FDI in ‘marketplace models.’ An e-commerce platform, in which foreign investment has been made, therefore, cannot exercise ownership or control over the inventory sold on its platform. This part of the Policy has already been implemented with a revision of the FDI rules for E-commerce. The revised policy allows FDI in “an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller” while prohibiting FDI in “an e-commerce activity where inventory of goods and services is owned by e-commerce entities and is sold to the consumers directly.” 

It further provides that a vendor’s inventory would be considered to be under the control of a marketplace if the marketplace or its group companies account for 25% of the vendor sales, or if the marketplace or its group companies own equity in the vendor or exercise control over its inventory. Principally, the changes to the FDI policy are aimed at curbing potentially anti-competitive practices by marketplaces such as giving their in-house branded products preferential treatment over third-party seller products, by abusing their market power by their dual role as both a platform and a seller. Finally, the policy also calls for regulating advertising charges imposed by social media platforms and search engines, as a facet of e-commerce. The Policy notes that the market power possessed by such social media platforms and search engines allows them to charge monopoly prices which poses a problem for small businesses and new entrants who are trying to reach customers, and has the potential to become a barrier to entry. 

Regulatory issues 

The Draft Policy proposed a mixed bag of strict regulatory and protectionist policies related to data governance and privacy – largely premised on the rationale that “India’s data should be used for the country’s development. Indian citizens and companies should get the economic benefits from the monetization of data.” Thus, the existing statutes and laws especially the Information Technology Act and Rules, the Competition Act, the Consumer Protection Act etc. need to evolve to take into account the changing ways of doing business and changing business models. This includes IoT, network effects, latest technologies, modes of delivery, treatment of data, online placing of orders, online marketplaces, free ancillary services like logistics etc. In like manner, the Standing Group of Secretaries on E-commerce (SGoS) shall give recommendations to address E-commerce policy challenges.

Privacy remains a very important aspect of the Draft Policy. To ensure this, it is imperative that law and order be maintained. Thus, it was suggested that Participants of the digital economy that have access to the data of Indians must nominate a local representative to be responsible for the affairs of the company in India.

For the purpose of integrating small firms and start-ups into the digital sector, it was therefore recommended that they be given ‘infant-industry’ status. By doing so, the benefits of an ‘infant industry’ status could be accorded to such firms and start-ups and access to data could be at the centre of this approach. This would ease the process of onboarding, for MSMEs and to provide the best practices, and platforms, where they already exist.

The concept of ‘significant economic presence’ which was introduced in the 2018 Budget was significantly reiterated in the Draft Policy, the basis for this is to determine the ‘permanent establishment’ for the purpose of allocating profits of multinational enterprises between ‘resident’ and ‘source’ countries and expanding the scope of ‘income deemed to accrue or arise in India’ under Section 9(1) (i) of the Income-tax Act, 1961. Also, the current practice of not imposing custom duties on electronic transmissions must be reviewed in light of the changing digital economy and the increased role that additive manufacturing is expected to take. These regulatory approaches would help prevent the loss of the country’s revenue.  

Consumer protection issues 

The Draft Policy laid emphasis on the following consumer protection issues:

  • genuine reviews and ratings;
  • anti-counterfeiting and privacy measures by ensuring disclosures by sellers; and
  • e-Courts for grievance redress

From a data collection perspective, the Policy recommends that e-commerce entities should be mandated to disclose the purpose for which data is being collected, in a simple and easy-to-understand manner.

The Draft Policy also mandates that an e-commerce entity operating in India needs to have a business entity registered in India, to ensure compliance with laws in India. Thus they need to ensure that their algorithms are not biased.

 To enhance consumer protection on such e-commerce platforms, the Policy also proposes anti-counterfeiting measures and suggests that platforms should take measures to combat fraudulent ratings and reviews, as well as providing speedy redressal of consumer grievances.

Stimulating the domestic digital economy

The key recommendations under this theme are as follows:

  1. The need to formulate and facilitate domestic industrial standards for smart devices and IoT devices to meet the goals of the country including, inter alia, consumer protection, secured transactions, enhanced interoperability, and ease-of-use interface. National standard-setting organizations will be involved in this exercise along with other stakeholders. 
  2. The incorporation of Artificial Intelligence (AI) into the logistic sector by means of automation, including the services provided by the Department of Post. This would facilitate prompt delivery of Government services digitally.
  3. Online Customs clearance will be facilitated by adopting Customs Electronic Data Interchange (EDI) platform, integrating all the departments concerned such as the Department of Posts, DGFT and RBI, and other stakeholders, eliminating manual processes under ease of doing business. Additionally, the provision will be made to source Export Data Processing and Monitoring System (EDPMS) data from RBI for confirmation of payments, instead of Bank Realization Certificate. 
  4. Customs validation will be enabled where required to benefit from schemes like duty drawbacks, DGFT being given access to the data, thereby minimizing procedure, documentation and facilitating online processing. This will be supported by permitting all international airports and other export/ manufacturing hubs to accept e-commerce export shipments in order to facilitate and promote e-commerce exports from India. 
  5. Creating awareness on procedural formalities by conducting cluster-specific programmes for exporters (to be undertaken by the Department of Post and DGFT). The following steps were proposed to be taken to prevent the violation of existing rules to circumvent customs duties: – Mandating shipper KYC by providing a unique code and national repository to identify foreign exporters and to track suspicious activities, such as sample shipping, gifting etc.; – Capping samples or gifts to a certain value per shipper per month, with any value above the threshold being subjected to duties. 
  6. The inclusion of E-commerce in the National Integrated Logistics Plan being prepared by the Department of Commerce, which would focus on faster delivery with emphasis on lower costs. 

Export promotion through e-commerce

Electronic commerce has been widely considered as an avenue to minimize costs of marketing, advertising and improving outreach. E-commerce provides opportunities to sellers or traders and consumers to communicate and connect beyond the limitations of geography and time. However, most domestic manufacturers, traders, sellers, MSMEs and start-ups, which operate or intend to operate on a digital platform, continue to struggle with compliances and costs which reduce their competitiveness and sustainability in international markets. This is as a result of burdensome administrative compliances and increased costs related to exports especially if the proceeds from exports are insignificant compared to these compliances and costs. To further enhance the outreach of these Indian entities, the promotion of export of their products should be done through E-commerce. The Draft Policy went further to recommend that the proposed National Integrated Logistics Policy must take into account the special needs of the export sector.  E-commerce must be dealt with separately under the Logistics Policy.

It further recommended for review by way of increase in the existing limit of RS.25,000 placed on the delivery of consignments through cargo mode. This is aimed at increasing the efficiency of Indian e-commerce exports and making it attractive even for high-value shipments through courier mode. In turn, setting up of Air Freight Stations (AFS) off the air ports has been proposed, where all necessary cargo preparation and documentation can be done. This would help reduce the delay and congestion at air cargo complexes handling in India, especially in Delhi, Mumbai and Kolkata. 

In relation to the repatriation of remittances out of exports which has been facilitated by the Online Payment Gateway Service Providers Draft Page 34 of 41 (OPGSPs). It has been suggested by the Draft Policy that the entire processes involved in effecting bank transfers by the exporters to these small businesses be revised and abridged to make room for the production of payment transaction reference numbers or consignment numbers in place of filing the Postal Bill of Exports (PBE). This would help reduce the lengthy documentation procedure involved in evidencing the bank transfer. 

For the purpose of reducing transaction costs for MSME and start-ups, it is proposed that the provisions for collecting fees on applications submitted to claim export benefits should be done away with. The purport of this is that it any intended increase in the selling price would be regulated as a result of the reduced transaction costs, this is so because a high selling price could be detrimental on the attractiveness of products in a market.

Issues and challenges

Definition of E-commerce 

The Draft Policy used an outdated definition of ‘e-Commerce’ which extends to buying, selling, marketing and distribution of goods and services through the electronic network. It is quite similar to a 1998 World Trade Organization (WTO) definition of E-commerce. This is out of synchronization with newer statutes in India like the FDI Policy, 2017, Central Goods and Services Act, 2017 and the Ministry of Electronics and Information Technology (“MeitY”), whose industries are part of the e-Commerce supply chain. 

The definition used in the Draft Policy is too broad, including industries and entities that need not fall under the e-Commerce umbrella. There are various updated definitions of E-commerce existing in India. For instance, the 2018 landmark judgment in the case of Christian Louboutin Sas v. Nakul Bajaj & Ors. The Delhi High Court interprets e-Commerce as simply commerce, the purchase-sale of goods/ services which takes place online, and not from physical brick and mortar shops, malls or kirana stores. The Draft Policy ought to have thrown more light on this regulatory uncertainty. Rather than doing so, the Policy has attempted a conflation of the digital economy (including social media platforms and search engines) with e-commerce, resulting in the creation of new restrictions on foreign investment in India within this sector.

Another confusing issue is that the Draft Policy used the term ‘digital economy’ synonymously with E-commerce. This is against the International recognition of the term “Digital Economy”, wherein E-commerce is seen as a subset of the digital economy. This definition is used nationally and multilaterally, by the G20, the Asian Development Bank, the Organization for Economic Cooperation and Development, the U.S. and China. Even in India, the Trillion Dollar Digital Economy Report, issued by the MeitY in February 2019, includes e-Commerce as a subset of the digital economy. 

Data

The Draft Policy recommended data localization requirements that would make it difficult for Indian businesses to work with International data and service platforms. With respect to data ownership, the Draft Policy provides that an “individual consumer/ user who generates data retains ownership rights over his/her data and that the processing of data by corporations without explicit consent must be dealt with sternly”. However, there is no consent requirement for the sharing of sensitive data with third party entities, and for accessing what the Policy terms as “national data”. In fact, the Policy does not define any kind of data – individual data, community data, sensitive data and national data. This is a serious lacuna that must be addressed.

The restriction placed on data transfers out of India from e-commerce platforms, social media, and search engines is a limiting factor on how Indian consumers and businesses can work with those platforms.

Consumer protection

The Draft Policy has excluded penal provisioning from its purview. Instead, it refers to penalization by other authorities. This may have been done because the Draft Policy is intended to be an overarching framework with no penal obligation flowing from it. However, this Draft Policy would have been truly comprehensive and rigorous had it provided for civil and/or criminal penalty (corresponding to indicative offences).

In addition, the Draft Policy does an injustice to consumers by imposing a liability on them to be cognizant of unregistered entities (GST non-compliant entities) and barring the making of payment to them. In a fast-moving click-and-buy world, it is simply not possible for consumers to carry out this check themselves.

E-commerce platform and intermediaries

The Draft Policy imposes impractical obligations on the intermediary/ platform on issues of trademark. The responsibility of informing a trademark owner each time his/her trademarked product is placed on the platform rests with the intermediary/ platform. This is a burden on the platform/ intermediary, requiring huge human and capital resources for it to be constantly proactive. This means increased operational costs for the business, and thereby, an increase in the cost of goods and/ or services.

This is not a problem for India alone. The EU Directive on Copyright in the Digital Single Market (approved by the European Parliament on 26 March 2019)[4] imposes similar liabilities on platforms, including provisions for a platform to prevent uploading of unlicensed content. These policies will likely be challenged in the courts.

India’s Draft Policy has the additional problem of multiple legislation on e-Commerce: MeitY is already in the process of amending the current intermediary rules by way of the Draft Information Technology [Intermediary Guidelines (Amendment)] Rules, 2018. Should intermediaries have the power to determine whether content is illegal or if a product is fake?

Also, allowing access to data for broad purposes such as ‘law and order’ could result in a surveillance state which is characterized by intensive watch or observation with little or no freedom to carry out their businesses freely, thereby encroaching on their right to privacy. The term is vague and can potentially provide a very wide ambit to collect data from intermediaries. 

More broadly, it suggests that online platforms should be liable for user generated content (and thus safe harbors for internet intermediaries be diluted)- this a threat to free speech and open communication.

Advertising issues

The control of the pricing of advertising tools would likely control the business models of digital advertising platforms. Pricing controls take the incentive away from digital platforms to further improve their advertising platforms and offer the various advertising tools they offer to the advertisers.

Conclusion 

With the wave of foreign investments in E-commerce largely dominated by India, alongside the new E-commerce policy, this has put India in the advantageous position of being a key global influencer. This, along with a new, dedicated E-commerce policy, puts India in the advantageous position of being a key global influencer. India is one of the few countries to have a well drafted and well implemented Draft Policy. However, the Draft Policy is not completely infallible as some of the key issues and challenges were highlighted in the article. Nevertheless, to address these challenges, few recommendations have been provided below.  

  1. The DPIIT should consider creating a unified definition of e-Commerce and a separate definition for the digital economy in India in line with international norms as these subjects are not constrained by territorial borders. This will help in streamlining regulations in this sector across countries as well as on multilateral platforms.
  2. The DPIIT should (i) define the various types of data, and (ii) clarify whether it is necessary to cross-reference the Draft Policy with sector-specific laws, especially with regard to data. Without these clarifications, the objective of this Draft Policy will remain unclear.
  3. The DPIIT must (i) define the offences and the corresponding penalty, and (ii) consider making the e-Commerce platform responsible for hosting only GST and other tax-compliant entities on its site.
  4. As provided in the Draft Policy, Capital dumping should be certainly discouraged. Due to the monopolistic nature of the market, the best way to tackle this situation is through competition law. It would be hard to legislate against capital dumping, because the legal regime is to liberalize FDI and restricting investments through law would be considered protectionist and contrary to business-friendly policies.
  5. Clarifying the definition and role of intermediaries and e-commerce platforms in the Draft Policy will be beneficial for all stakeholders and place India in the lead globally on this issue.
  6. The Draft Policy provides for capacity building by the creation of technology centres in government and regulatory circles. This capacity needs to be extended to the state and the judiciary. For now, the Draft Policy is only a direction; it is not an enforceable document. This must change for it to be able to meet its objectives.
  7. Regulating the manner in which search engines or social media platforms decide to price advertising charges should be done in a cautious manner. Companies invest capital and resources in building innovative advertising tools. For any regulation to take place, these two factors must be put into consideration: i), the advertising charges should not be capped and should be left to market forces; ii) the principle of fair and non-discriminatory pricing can be adopted as the standard. The same principles which are followed by the Competition Commission in determining abuse of dominant position should be taken as the standard to determine if advertising charges are priced to the detriment of small enterprises or startups. 
  8. The words ‘law and order’ should be amended and restricted to interests such as the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or concerning security of the State or cyber security, as contemplated in the Intermediary Guidelines Proposed Amendment.

References


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Important anticipatory bail case laws

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This article is written by Koushik Chittella who is currently studying BBA LL.B at Dr. Ambedkar Global Law Institute, Tirupati. This article briefly describes different cases on anticipatory bail in great detail while making the reader understand the whole purpose and the scope of bail and its provisions.

It has been published by Rachit Garg.

Introduction

The Code of Criminal Procedure (CrPC) is the legislation that governs the administration of criminal proceedings in the country. It was enacted in 1973. Offences are classified into two based on their bailable nature, i.e., bailable offences and non-bailable offences. An offence in simple language is an act or an omission prohibited by law. The concept of bail is still controversial in our country because the public feels that the accused might flee after issuing a bail. There are three types of bail namely regular bail, interim bail, and anticipatory bail. This article briefly discusses the concept of anticipatory bail and important case laws decided in its regard in the Supreme Court. 

Bailable offence

A bailable offence is an offence that is not on its own very serious in nature. The bail may be granted to the accused only if he satisfies the essentials of procuring bail. 

Examples of bailable offences: Selling noxious foods or drinks, rioting with a weapon, fabrication of false evidence, etc. 

Bail

The term bail is not defined anywhere in the Code of Criminal Procedure. In general, bail is defined as a process of releasing an accused for a sum and it is also a promise that he will be attending the Court proceedings in the future. Bail is argued to be a right of the individual that is granted by the Constitution under Article 21

If a person has committed an offence that is bailable in nature, he can demand bail. He needs to sign a “bail bond” which contains the terms and conditions on which a person will be released on bail. Any person who is on bail should stay within the Court’s territorial jurisdiction. 

Aasu v. the State of Rajasthan (2017)

Facts of this case: All 4 accused in this case are booked under Section 302 and Section 34 of the Indian Penal Code. The lower court granted anticipatory bail for all the other co-accused. The petitioner in the instant case also filed an application for anticipatory bail which was not decided for a long time. He challenged the same in the High Court.
Issue: Whether there is a prescribed time limit that a court shall dispose off bail applications?
Judgement: The Court has delivered a judgement that all the bail applications shall be disposed within a week of their filing. 

Types of Bail

There are 3 types of bail available for a person. They are:

  1. Regular Bail
  2. Interim Bail
  3. Anticipatory Bail

Regular Bail

A person who is arrested and in police custody can apply for a regular/daily bail. Bail provisions are given under Section 437 and 439 of the Code of Criminal Procedure. 

Sanjay Chandra v. CBI 2011 

Facts of this case: The accused were charged with manipulation and misappropriation to influence UAS licences of the telecom industry. The Special Judge CBI, rejected the bail applications of the accused for which the accused appealed the validity of the said rejection of bail in the High Court of Delhi which was denied on 23.05.2011. The accused appealed to the Apex Court.
Issue: Whether the Court can reject an application of bail without proper reasoning?
Judgement: The Supreme Court delivered a judgement mentioning that the grant and rejection of bail application are at the sole discretion of the Court as the situations and circumstances should be carefully studied before grant or rejection of bail. 

Interim Bail

Interim bail is awarded by a direct order of the Court to temporarily release an accused for a short term. The Courts noticed that interim bails are being misused in many cases and have decreased the number of interim bails issued. 

Anticipatory Bail

Anticipatory bails are issued prior to the arrest of a person. It is also called a pre-arrest bail. It is mentioned under Section 438 of the Code of Criminal Procedure as ‘grant apprehending arrest’. The requirement of anticipatory bail has seen a rise in the early 1990s when there were a lot of false cases being filed on businessmen. To protect the interests of the public, the Law Commission has suggested adding a provision prohibiting arrest beforehand. As it is a matter of the personal liberty of a man, it was added to the Code. 

According to Section 438 of CrPC, a person having committed an offence anticipates his arrest wherein he can approach the High Court or the Sessions Court for anticipatory bail. It is at the discretion of the Court whether to grant bail or reject the same. It solely depends on the circumstances and the seriousness of the offence. Anticipatory bail can be granted for a non-bailable offence and will be valid only if the person has no direct connection or when the Court believes that the person is innocent. 

Cancellation of Bail

Uday Mohanlal Acharya v. the State of Maharashtra (2001)

Facts of this case: The accused filed an application for bail after non-completion of investigation by the investigation agency.
Issue: Whether the Court can reject or cancel bail after the challan is issued?
Judgement: The Court cleared that the custody of the accused after the challan is not governed under Section 167 CrPC. The Apex Court has delivered its verdict stating that bail can be cancelled at any time even when he is at his committal proceedings. 

Important cases on Anticipatory Bail

Grant of Anticipatory Bail

Gurbaksh Singh Sibbia v. the State of Punjab (1980) 

The very first landmark judgement was given by the Apex Court is in the case of Gurbaksh Singh v. the State of Punjab

Facts: The Minister of irrigation and power being Mr. Gurubaksh Singh and others from the government were facing serious allegations of corruption and misuse of power. They had  applied for anticipatory bail in the High Court, but it was rejected. They filed an SLP for the Supreme Court to consider the case. 

Issues:

  1. Whether a person can apply for anticipatory bail with the reason to believe being “mere fear”? 
  2. Whether the life of anticipatory bail is limited?
  3. Whether the Court needs to examine any conditions before issuing anticipatory bail?
  4. Whether the Court can limit the anticipatory bail?
  5. Whether a Court can grant anticipatory bail after the arrest of a person?

Judgement: The Court allowed the appeal in part and critically examined the provisions of the Code. The judgement of this case has cleared the prevailing issues on anticipatory bail and has given eight conditions that all the lower Courts issuing anticipatory bail must follow. 

The Court in its judgement directed that a person cannot necessarily file an application for anticipatory bail with the reason being “fear”. The life of bail can’t be determined as the conclusion of trials can not be assured by the Court. The Court has given 8 necessary conditions that all the Courts need to consider before granting bail and has given a statement that there should be a balance between the rights of the individuals and the provisions of police during investigation.
The Magistrate or a Judge granting anticipatory bail may impose conditions as per the situations and the seriousness of the reason to believe. No anticipatory bail can be given by any Court after arrest. The Court has also mentioned that it is at the discretion of the Court as to recall or cancel the bail order of a person. The person should apply for a regular bail under Section 437 of the Code. 

Rahna Jalal v. the State of Kerala (2020) 

Facts of the case Rahna Jalal v. the State of Kerala: The accused committed an offence under Muslim Women (Protection of Rights on Marriage) Act 2019.
Issue: Whether the Court can grant an anticipatory bail on an issue related to the Muslim Women and Protection?
Judgement: The Apex Court took up the case and answered the issue that an anticipatory bail can be granted only when the Court issuing bail has heard the complainant itself. 

Amiya Kumar Sen v. the State of West Bengal (1979)

Facts of the case: The accused challenged the validity of the Sessions Court rejecting the bail wherein he filed another application in the High Court for the same.
Issue: Whether a person can file the same bail application in the sessions and High Courts?
Judgement: The Apex Court clearly mentioned that both the sessions and high Court are empowered to issue anticipatory bail to a person. The judgement stated that if the sessions Court denies bail, the same petition can’t be tried in the high Court. The party can appeal to the high Court but it is at the discretion of the Court whether to entertain the petition or not. 

The right reason to believe

Savitri Agarwal v. State of Maharashtra and Another (2009)

Facts of the case Savitri Agarwal v. State of Maharashtra: The appellants  applied for anticipatory bail at the sessions Court where the bail was granted and protection from arrest was given to the appellants. The State appealed to the High Court that the reason to believe is not examined by the Sessions Court and prayed the High Court to cancel the bail given to the appellants. Further, the bail is cancelled by the High Court mentioning that the Sessions Court committed an error and has not examined the facts and circumstances of the case. The appellants appealed to the Apex Court.
Issue: Whether a Court can cancel/reject a bail application with the right reason to believe?
Judgement: The Apex Court delivered its verdict that the Sessions Court has examined all the facts and circumstances and rightfully presented the bail to the appellant and the High Court has exceeded its thought and cancelled the bail based on the appeal by the state and others. 

The Apex Court has reversed the order passed by the High Court and provided the appellant with the bail. The Court in this case gave a guideline to the lower Courts that the reason to believe should satisfy the requirement of anticipatory bail and it should be granted only after clear examination of facts of the case. 

Vaman Narayan Ghiya v. State of Rajasthan (2009) 

Facts of the case: The applicant of the anticipatory bail just suspected and applied for the bail.
Issue: Whether a person can file an application for anticipatory bail with mere suspension?
Judgement: The Court, while rejecting the bail, mentioned that the reason to believe must satisfy the Court and direct it towards the actual requirement of the anticipatory bail. The reason to believe the requirement of bail must depend on the facts and circumstances and not just fear and suspicion. The accused should present reasonable facts that might help the Court analyse the importance of anticipatory bail in such cases.

Is Anticipatory Bail a fundamental right for a person

State of MP v. Rama Krishna Balothia and Anr. (1995) 

Facts of this case: Several persons filed applications for anticipatory bail as they were suspected to be arrested under SC\ST Atrocities Act. The counsel argued that anticipatory bail is a fundamental right of a person.
Issue: Whether anticipatory bail is a fundamental right for a person?
Judgement: The Supreme Court delivered its judgement stating that getting an anticipatory bail should not be considered a fundamental right as it is merely a special privilege granted when it is duly necessary and the Courts should not entertain any such bail applications which are contrary to the necessary conditions. The Court also mentioned that personal liberty is granted under Article 21, but not all applications are necessarily made for the protection of personal liberty. 

Life of Anticipatory Bail

Sushila Aggarwal and Others v. State (NCT of Delhi) (2020)

  1. Facts in the instant case: The petitioner’s bail was first cancelled in the Sessions Court, the petitioner appealed to the High Court of Madhya Pradesh. The applicant challenged the validity of the Court bounding the time period of the bail issued by the High Court.
    Issue:
    1. Whether the protection provided under Section 438 can be limited to a fixed period?
    2. Whether the bail is valid after the trial commences?
    Judgement: The Apex Court while answering the first issue stated that as a general rule, anticipatory bail itself is not strictly bound by time. Any Court issuing bail under Section 438 can impose some conditions as to territory and jurisdiction etc.
    The Court in its verdict stated that the bail will not be invalid as and when the trial starts but it stays to be valid till the end of the proceedings. The Apex Court empowered the lower Courts to limit the validity of anticipatory bail under special circumstances as and when the Court deems fit. 

Siddharam Satlingappa Mhetre v. State of Maharashtra (2011)

The background facts in this case include the Court setting a limitation for the bail granted to the accused to sign in the local police station. The issue decided in the case was whether the limitation set by the Court issuing bail is acceptable or not. In this case, the petitioner had requested the High Court for an anticipatory bail. The Court granted bail on one condition, that he should sign at a police station every day. The petitioner appealed to the Apex Court, the apex Court delivering its verdict set aside the order of the High Court and stated that conditions related to territory and others can be limited by the Court issuing bail but they should not be contrary to the guidelines set by the SC. 

Rejection of Anticipatory Bail

M. C. Abraham and Another v. the State of Maharashtra and Others (2002)

In the instant case, the appellants  applied for anticipatory bail under Section 438 of CrPC in the High Court of Maharashtra. The High Court rejected the bail application and issued arrest against him. The applicant appealed to the Apex Court wherein the Apex Court delivering its verdict mentioned that rejection of bail doesn’t mean that the applicant should necessarily be arrested. He may or may not be arrested based on the case and should not be based on the grant/rejection of bail.

Bhadresh Bipinbhai Sheth v. State of Gujarat (2015)

In the case of Bhadresh Bipinbhai v. State, the facts include the lower court rejecting the application of bail without any proper justification. The Court stated that rejection of anticipatory bail when all the conditions are satisfied and without any proper justification by the Court may be said as the violation of Article 21 of the Indian Constitution and the person can appeal to the High Court immediately. 

State (Rep by C.B.I) v. Anil Sharma (1997)

The facts in this case were that the minister of telecommunications and his son were accused of corruption by the state (Central Bureau of Investigation). The minister applied for anticipatory bail at the High Court. The Court while rejecting the bail stated that in sensitive matters such as corruption, the Court should carefully examine the position of the applicant, and if he is at a high position, he can trouble the investigation agency by undue influence. So, in such matters the bail should be prima facie rejected.

Cancellation of Anticipatory Bail

State of Maharashtra v. Vishwas (1978) 

Facts of the case: The applicants herein applied for an anticipatory bail read under Article 227 of the Constitution and Section 438 of the Code of Criminal Procedure, 1973. The High Court granted bail as it found the bail necessary. Later, when it was found that bail was not necessary, the Court cancelled the bail.
Issue: Whether the Court has the power to cancel the bail issued after critical examination of facts?
Judgement: The Court in its judgement mentioned that a Court can recall or cancel bail as and when it deems necessary. Anticipatory bail is a special privilege for a man and it should not be misused at any chance. The power of cancellation of bail lies with the Court even though there is no express provision as such. 

Conclusion

The right to personal liberty under Article 21 is the most important right for all the individuals of the country. Even though there are many cases and judgements on the bail system, there is a greater need for a complete review of the bail system and the Court while granting bail should consider the socio-economic conditions of the accused. The Court should examine the fact that the accused may flee after the grant of bail. In any case, there should be a perfect balance between the interests of the state and the personal liberty of the person.

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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Executory contract : what you need to know

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This article has been written by Nikunj Arora of Amity Law School, Noida. This article provides a detailed analysis of Executory Contracts along with a general overview of types of contracts and essential elements of a contract under the Indian Contract Act, 1872.

It has been published by Rachit Garg.

Introduction

Any executory contract or unexpired lease may be adopted or rejected by a trustee under Section 365(a) of the United States Bankruptcy Code (“US Bankruptcy Code”). Section 365(c)(1) is, nevertheless, subject to an exception outlined in Section 365(a).

The trustee must obtain the consent of any non-debtor party to assume or assign any executory contract or unexpired lease, except where law prohibits the trustee from accepting or delivering delivery to anyone other than the debtor or debtor in possession. Accordingly, its rules forbid a debtor-in-possession from taking on an executory agreement without the prior consent of the non-debtor, if the assignment of the agreement is prohibited by applicable law. The non-debtor party is said to be protected by this provision when the contract relies on a specific individual or entity’s performance.

To the extent Section 365(c) pertains to patent law, the Ninth Circuit determined that the licensor’s consent to the assignment of a patent license was required. Due to the lack of consent from the licensor, the Court held that Section 365(c)(1) barred Catapult from assuming the patent license.

The Ninth Circuit addressed the above-mentioned question of whether a debtor-in-possession is barred from assuming a contract even if the debtor does not intend to assign it in In re Catapult Entertainment, Inc. 165 F.3d 747, and was the latest U.S. Court of Appeals case to tackle the issue.

Under Indian laws, executory contracts are those types of contracts which require both parties to fulfil their contractual obligations. In exchange for the promise made in such a contract, future consideration will be given. Two parties are typically involved in executory contracts. One is a debtor and the other is a borrower.

The Indian government enacted comprehensive legislation on corporate insolvency in 2016. Several laws existed before this legislation, by which creditors could enforce their rights against a debtor company. Furthermore, Indian bankruptcy laws lack a similar provision to Section 365 of the US bankruptcy code. Consequently, Indian courts/tribunals did not develop executory contracts or similar principles to adjudicate creditors’ claims against debtor companies.

This concept was mentioned by the Calcutta High Court in a winding-up case in 1963, and after this, there was no judgment around this term until 2016. This was considered of interest since it was unclear as to what extent the Indian Insolvency and Bankruptcy Code would apply to such contracts, if at all, and why.

Types of contracts under the Indian Contract Act, 1872

As executory contracts are a type of contract, the reader needs to be aware about every type of contract so as to figure out the significance of executory contracts specifically. A variety of contract types fall under the Indian Contract Act, 1872 (“Act”) which is further classified under different headings, such as based on formation, nature of consideration, execution, and validity.

Based on formation

Express contract

Any contract that involves any conversation or expression is called an express contract. Both offer and acceptance are expressed in these types of contracts.

Implied contract 

An implied contract is one in which each party’s duty is unquestionably acknowledged without him or her having any say. This type of contract does not require dialogue or expression.

Quasi-contract 

In a quasi-contract, the parties will not have any contractual relations, so no offer and no acceptance will take place. The law determines whether a quasi-contract exists. In sections 68 to 72 of the Act, the court describes situations in which a quasi-contract can be made.

Based on the nature of consideration

Bilateral contract 

A bilateral contract is one in which consideration is moved in both directions. A party in this contract will deliver goods or services, and the other party will then pay money as consideration.

Unilateral contract 

Known as a unilateral contract, these contracts provide consideration only in one direction.

Based on execution

Executed contract 

The contract is considered executed once the task has been accomplished or the performance has been completed. In the case of a contract that has been executed lawfully, the contract comes under fulfilled contracts.

Executory contract 

In this type of contract, the contractual obligations are being performed shortly and not immediately. The term executory contract applies to this type of contract.

Based on validity

Valid contract 

A valid contract can be enforced in a court of law. For these contracts to be valid, certain requirements must be met as provided under the act.

Void contract 

A void contract is any contract that does not comply with any of the features of a valid contract.

Voidable contract 

A voidable contract is deficient only in terms of free consent. The contract is therefore one that is made under certain physical or mental pressure. A suffering party may choose to make it valid or void in the future. It is not free consent if it was obtained by coercion, undue influence, mistake, and misrepresentation (as defined under the act).

Illegal contract

The contract may be considered illegal if it involves an unlawful object. This makes the contract void. An illegal contract would be made for killing someone.

Unenforceable contract 

Unenforceable contracts are those that have not been properly drafted and have not fulfilled all the legal formalities necessary to enforce them.

Essential elements of an Executory Contract

For an executory contract to be valid, it must contain the following components:

  1. Offer and Acceptance: An offer and acceptance are the core of a contract. There is no contract unless an offer is made and approved. Under section 2(a) of the Act, a proposal is when one person expresses his will to do or abstain from doing something to gain the consent of another person to do or abstain from something.
  2. Intent to create a legal obligation: There is no explicit clause in the Act, that requires the creation of legal obligations, but various rulings over the years have resolved the issue, making the intent to create legal obligations a significant requirement. 
  3. Consideration: According to section 25 of the Act, agreements without consideration are invalid. The concern must be genuine and not fictitious. A contract​​ without consideration will become Nudum Pactum. The adequacy of this consideration must not be considered.
  4. Competent To Contract: The law considers competent anyone who is of sound mind, has reached the age of 18 and is not otherwise excluded from avoiding a contract. Contracts made by minors are unenforceable from the beginning, and they do not entail any liability.
  5. Free Consent: Consent must be free for a legal contract to be enforceable. According to Section 13 of the Act, when two additional parties agree on the same issue, they are said to have mutual consent and binding to an agreement. It is also referred to as ‘Ad idem Consensus’.
  6. The object of the contract: The unlawful consideration is explained under Section 23 of the Act. If the court determines that the object of the contract is dishonest against public policy or the intent of the contract, then it will be deemed improper.
  7. Not void-ab-intio: Under the Act, few contracts are explicitly deemed void. 

Overview of Executory Contracts

What is an Executory Contract?

Executory contracts are those in which the parties have not yet fulfilled all their material obligations. In simple words, both sides are not performing their obligations under the contract.

There is either no performance of contractual obligations by either party, or partial performance with important obligations yet to be fulfilled. The other party can sue the non-performing party for breach of contract if they stop performing the obligations they are required to perform under the contract.

Consideration in an executory contract takes the form of a promise to perform or an obligation. Executory contracts, as their name implies, present a future performance of the consideration. These promises cannot be readily fulfilled right away.

Taking an example of a lease agreement between lessor and lessee, a lease cannot meet all of the conditions immediately. Instead, they have to be met over time. Another example can be when a person decides to give tuition classes to students. Eventually, the person will receive a certain amount of money as a fee when the month begins. As the person must still fulfil his/her promise, the contract is not executed, and, therefore, is an executory contract.

For a deeper understanding of an executory contract, the meaning of the term ‘executory’ shall be understood. The term is defined as follows by Cornell Law School’s Legal Information Institute:

“Something (generally a contract) that has not yet been fully performed or completed and is therefore considered imperfect or unassured until its full execution. Anything executory is started and not yet finished or is in the process of being completed to take full effect at a future time.”

In simple words, these contracts still need to be completed and have not been completed yet.

FindLaw defines an executory contract as:

“Generally includes contracts or leases under which both parties to the agreement have duties remaining to be performed. (If a contract or lease is executory, a debtor may assume it or reject it.)”

Interestingly, according to the above-mentioned legal definition, an executory contract involves an agreement with obligations left to be performed, and any underperformance is considered a breach of the agreement. Because both parties remain obligated to each other, the contract can be considered executory bilateral.

Types of Executory Contracts

Typically, the following are the two types of executory contracts:

Unilateral contracts

This type of contract is one-sided. It typically occurs when only one party makes a promise, which is open for anyone to fulfil. A contract will only come into existence when the promise is fulfilled.

For example, a person lost his watch in a playground. In this case, he decided to offer a reward of Rs 1000/- to anyone who can find and return his watch. Here, only the person is involved in the deal and no other party. When someone finds the bag and returns it, he must pay the stated reward. Therefore, it is a unilateral contract.

Bilateral contracts

Bilateral contracts, on the other hand, involve two parties. A bilateral contract is the most commonly known and encountered type. In this situation, both parties agree to the terms of a contract, thus creating a legal relationship. It is also referred to as a ‘reciprocal contract’.

A time frame to carry out bilateral contracts is usually agreed upon by both parties. Consider, for example, in the case of a house sale contract. Initial down payment is made, and the balance is to be paid at a later date. Ownership of the house passes from the seller to the buyer. The seller agrees to deliver the title in exchange for the sale price. Hence, it is a bilateral contract.

Executory contracts may take many other forms, such as:

  • Rental lease: In a tenancy agreement, the tenant pays the landlord rent; the landlord provides living space.
  • Equipment lease: The borrower is responsible for renting the equipment borrowed, and the renter is responsible for providing the equipment.
  • Development contract: Building owners make payments to contractors when milestones are reached, and contractors perform tasks on behalf of building owners.
  • Car lease: The consumer pays the dealership lease payments in return for obtaining the car.

Difference between an Executed Contract and an Executory Contract

Different forms of contracts exist, one of which is ones based on performance. This type is determined by whether the contract is complete or still to be completed. In light of this, executed contracts and executory contracts are known as such.

Executed contracts are contracts that have been signed by the parties and thereby become legally binding. A contract is typically enforceable once it is executed. Once that has been done, the parties will have to perform their obligations as outlined in the contract.

Execution of a contract between two or more parties occurs when one or both of the parties has fulfilled their promise to forbear in some way. What it means, in essence, is that whatever terms are stated in the contract have been fulfilled. The contract has, therefore, been said to be executed.

For example, a cup of coffee is bought by someone from a coffee shop, and such a person buys the coffee from the said shop in exchange for cash. Therefore, there has been an executed contract. It has been observed that there has been compliance by both parties.

It is common for promises to be made and then fulfilled immediately after an executed contract is signed. It is often the case when purchasing goods or services. As a rule, the date of execution of the contract is immediate, so there is no confusion about it.

On the other hand, as discussed above, executory contracts are those contracts that specify a future date at which the terms will be met. Once signed, however, both contracts are considered executed agreements. The clauses of the agreement are then must be followed by both parties in accordance with their legal obligations.

Difference between Past, Present (Executed) and Future (Executory) consideration

Section 2(d) of the Act recognises three kinds of consideration, such as past, executed, and executory. The section says that when at the desire of the promisor, the promisee or any other person:

  • has done or abstained from doing, (the consideration is Past.)
  • does or abstains from doing, (the consideration is Executed or Present.)
  • promises to do or to abstains from doing, (the consideration is Executory or Future.)

Past consideration

Any consideration for a promise made in the past is known as past consideration, i.e., the consideration for the promise was given before the promise was given.  It is necessary that at the time the act constituting consideration was done, must have been done at the desire of the promisor.

According to English law, past consideration is no consideration. A promise in lieu of a past act is deemed to be the only expression of gratitude for the benefit already received, rather than any consideration motivating the other side to make the promise.

Executed consideration

When one of the parties to the contract has performed his part of the promise, which constitutes the consideration for the promise by another side, it is known as Executed consideration. Performance of the promise by the other side is the only thing now to be done.

For example, a person (suppose Rahul) makes an offer to reward anyone who finds his lost watch and brings the same to him. Another person (suppose Kunal) finds his watch and delivers it back to Rahul. When Kunal does so, that amounts to both the acceptance of the offer, which results in a binding contract under which Rahul is bound to pay the stated amount(reward) to Kunal, and also simultaneously give consideration of the contract. Thus, the consideration, in this case, is ‘Executed’.

Executory consideration

When one person makes a promise in exchange for the promise by the other side, the performance of the obligation by each side to be made subsequent to the making of the contract, the consideration is known as Executory.

For example, Rahul agrees to supply a bulk of goods to Kunal and in return, Kunal agrees to pay for them on a future date, hence, this makes the case for Executory consideration.  

Executory Contract under US Bankruptcy Law

In order to determine whether a contract is executory under Section 365(a) of the US Bankruptcy Code and can, therefore, be assumed or rejected, can be a complicated and long process. Continuing obligations under a trademark license agreement are not sufficient to make it executory, according to the Eighth Circuit Court of Appeals in this decision.

In Lewis Bros. Bakeries, Inc. v. Interstate Brands Corp. (In re Interstate Bakeries Corp.), Appellate Case (2014), Interstate Bakeries entered into an asset purchase and trademark licensing agreement with Lewis Bros Bakeries. Lewis Bros bought facilities, equipment, and other tangible assets needed to produce a line of bread products.

The license agreement gave it exclusive rights in the Chicago area for using and marketing certain brand names for those products. The agreements formed a single transaction and made substantial references to one another. A bankruptcy petition filed by Interstate Bakeries sought to convert the licensing agreement into an executory contract. Lewis Bros then argued that the licensing agreement shall not be executory.

A panel of the bankruptcy court, and a district court agreed that this licensing agreement was executory since it required Lewis Bros to achieve specific product quality control standards and limited the geographic area within which it could use the trademarks.

In addition to these requirements, the agreement required Interstate Bakeries not to use those same brands when operating within Lewis Bros territory, to maintain and defend the trademarks, and to report any third-party trademark infringement that occurred.

Furthermore, during its rehearing, en banc, the Court of Appeals reversed the above decision, holding that the licensing agreement was only one part of the transaction and needed to be considered in conjunction with the purchase agreement as part of a single general agreement.

Therefore, the parties had substantially performed their obligations when viewed as a whole under their overall agreement. As a comparison, the remaining obligations that remain for Lewis Bros and Interstate Bakeries after the closing, which mostly prohibit the parties from taking certain actions, rather than obligate them to take any, were simply too small to be considered material.

Executory contracts are so significant in bankruptcy proceedings since the US Bankruptcy Code allows bankruptcy trustees, and debtor-in-possessions, to reject executory contracts or leases if doing so would be in the best interest of the bankruptcy trustee or debtor-in-possession.

A provision that prohibits or restricts such rejections in executory contracts or leases is void. Counterparties to executory contracts and leases with one party in bankruptcy may face the following things:

  • Financially distressed businesses will sometimes enter into executory contracts or leases with an unknowing counterparty to achieve a strategic advantage. A Chapter 11 proceeding of the US Bankruptcy Code is then filed after the unsuspecting non-debtor counterparty has taken some significant performance or action, and the debtor-in-possession can extract significant modifications to the agreement which is a better solution than rejection.
  • Upon rejection of an executory lease or contract in bankruptcy, the non-debtor counterparty has only the right to file an unsecured claim for damages. Moreover, the Bankruptcy Code severely limits the number of rent damages that can be claimed for leases of real property, etc.

Indian Courts’ take on an Executory Contract

As a result of the judgement dated May 21, 2020, the High Court of Delhi ruled that the doctrine of frustration under Section 56 of the Indian Contract Act, 1872 (“Act”) is inapplicable to lease contracts since its application is restricted to executory and not executed contracts.

In this case, the following issues were involved:

  • To what extent does Section 32 of the Act apply to the matter?
  • Does Section 56 of the Act apply to only executory contracts and not executed contracts?
  • Whether temporary non-use of the premises will invalidate the lease?

According to the High Court, a landlord-tenant relationship may take on a variety of forms. The relationship is primarily governed by contracts and laws. Contractual terms determine if there is a force majeure clause or if any other condition allows for the waiver or suspension of monthly payments.

The issues will, however, be determined by the law of the state if the contract does not exist at all or there is no force majeure clause. According to Section 32 of the Act, where a pandemic occurs, like the ongoing Covid-19 outbreak, other parties would be able to claim a waiver or non-payment of the monthly amounts under contracts that include a force majeure clause.

Due to the absence of a rent agreement or lease deed between the two parties, the High Court dismissed the appeal as inapplicable under Section 32 of the Act. Consequently, the case falls under the provisions of the Delhi Rent Control Act, 1958, and tenancies do not fall under Section 56 of the Act.

Due to an eviction order against them, the Appellants are not ‘Lessees’. Therefore, the Appellants’ request for suspension of rent is liable to be rejected in so far as it is clear from the submissions made that they are not intending to surrender the leased premises while invoking the doctrine of suspension of rent based on a force majeure event. According to the court, in light of the lockdown, some postponement or relaxation in the schedule of payments may be allowed due to the inability to suspend rent.

In Fertilizers and Chemicals Travancore Limited v. Annam Steels Pvt. Ltd. and Others, the court held that the contract of sale would be created if an offer is accepted as contemplated in Section 5 of the Act.

Generally, a contract of sale is where a seller grants the buyer title to the goods or agrees to grant it to them. It would be considered an agreement to sell the property if the transfer is to be made in the future or subject to certain conditions being met.

As opposed to this, if the goods are transferred, it is a sale. A contract of sale can be viewed as both a completed sale and an agreement to sell. As a simple agreement to sell, a contract may be a mere offer-and-acceptance-based agreement that remains as an executory contract and does not transition into a sale where the goods are transferred to the purchaser.

What happens if you breach an Executory contract?

It may be a breach of contract for either party if it fails to perform its contractual obligations of the prescribed contract. For example, if a person fails to make the required payments as per the executory agreement with a vehicle dealership company, such person is said to have breached the contract. It will then be possible for the dealership to seize her vehicle and pursue civil court action to collect any unpaid payments.

Conclusion

Executory contracts can take several forms, including a franchise agreement, long-term supply contract, etc. However, executory contracts do not usually include a contract that has expired, a sale that has been completed, a promissory note, a single purchase order, etc.

Exclusive licensing and perpetual licensing are sometimes treated more like completed assignments of rights or territories rather than executory contracts. To determine whether or not an agreement is executory, any ongoing obligations of the parties must be taken into account.

Executory contracts are legally enforceable even if the terms of the said contract are not fulfilled immediately. Therefore, it is imperative that you should all your contractual obligations that have been made in the contract. Generally, the use of these contracts is especially beneficial when purchasing the most expensive items. In such a case, it is easier for consumers to pay for items over time instead of having to make one large payment upfront.

References:

  1. https://www.toppr.com/guides/business-laws/indian-contract-act-1872-part-i/types-of-contract-based-on-performance/#:~:text=it%20is%20instantaneous.-,Executory%20Contracts,hence%20the%20name%20executory%20contract.
  2. https://www.vaishlaw.com/high-court-of-delhi-doctrine-of-frustration-under-section-56-of-the-indian-contract-act1872-is-not-applicable-to-lease-agreements/
  3. https://observer.com/2017/03/understand-executory-contracts-bankruptcy-cases/
  4. https://www.restructuring-globalview.com/2015/03/executory-contracts-the-whole-is-greater-than-the-sum-of-its-parts/
  5. https://indiankanoon.org/search/?formInput=executory%20contract&pagenum=1
  6. Contract-I by Dr. R.k. Bangia. 

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All you need to know about the Ambedkar Social Innovation and Incubation Mission (ASIIM) under Venture Capital Fund for SCs

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Third-party funding

This article is written by Sarvesh Sawant. This article has been edited by Ruchika Mohapatra (Associate, Lawsikho).

This article has been published by Sneha Mahawar. 

Introduction 

Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. A private venture capitalist invests in organizations that have high potential or pay back substantial returns. Startups or founders from socially and economically backward classes face difficulty in accessing the resources required to grow their commercial venture. Due to a lack of business expertise and resources, these innovative ideas are either lost or underutilized. 

The Government of India through the Ministry of Social Justice and Empowerment has launched various funds to help innovative ideas from a socially and economically backward class of society convert into successful business ventures.  Ambedkar Social Innovation and Incubation Mission (ASIIM) is a scheme launched under Venture Capital Fund for Scheduled caste. This scheme is launched with a view to promote innovation and enterprise in students of SC communities studying in higher education and technology institutions. The objective is to encourage SC youth to engage in entrepreneurship rather than becoming job-seekers.

Venture capital fund for scheduled castes

As per the Census 2011, the SC population is 20.13 crore, which constitutes approximately 16% of the total population of India. There is huge potential for such a large community to prosper, hence there is a greater demand for providing concessional finance to such entrepreneurs for the upliftment of their businesses and community. 

The Venture Capital Fund for Scheduled Castes is an initiative by the Ministry of Social Justice and Empowerment (MSJE) and the Government of India to promote entrepreneurship among the scheduled caste population by providing finance to them at a concessional rate. The objectives of the fund are to promote entrepreneurship opportunities amongst the scheduled caste population who are ambitious and driven towards innovative technologies, thus increasing direct and indirect employment generation of the SC population and leading to the upliftment of the Scheduled Caste population. SC entrepreneurs willing to set up projects or units in the manufacturing or service sector and ensure asset creation out of the funds deployed shall be considered under this scheme. Moreover, SC women entrepreneurs should be given preference. The total corpus of the fund is 606 crores. The Industrial Finance Corporation of India acts as the sponsor, settler, and asset management company to operate the scheme. 

Venture capital fund for the backward classes

“Backward class” is a term used to classify castes that are socially and educationally disadvantaged. The Government of India is determined to uplift and develop the backward class community. The Venture Capital Fund for the Backward Classes is a fund launched by the Ministry of Social Justice and Empowerment to provide financial assistance at a concessional rate to companies promoted by entrepreneurs from the backward classes of the country. The objective of the fund is to promote entrepreneurship amongst the backward class population, to increase the financial inclusion of BC entrepreneurs and motivate them for further growth of the backward communities. Manufacturing or service units, as well as startups with the potential to create jobs, will be eligible for funding under this scheme.Preference shall be given to women and disabled entrepreneurs of the backward class. Financial assistance ranging between Rs. 20 lakhs and Rs. 5 crore shall be provided, including an 8-year moratorium period.

Ambedkar Social Innovation and Incubation Mission

The Ambedkar Social Innovation and Incubation Mission (ASIIM) was launched in 2020 by the Ministry of Social Justice and Empowerment (MSJE) in order to promote innovation and entrepreneurship among SC students studying in higher educational institutions. The main objective of the scheme is to develop entrepreneurship among SC/Divyang youth and enable them to become “job-givers” instead of “job-seekers”. 

Under this scheme, 1000 SC youth with start-up ideas will be identified through the Technology Business Incubators (TBIs) in the next 4 years. The main objective of the scheme is to support these 1,000 innovative ideas till 2024 through the TBI set up by the Department of Science and Technology. Initial funding of Rs. 30 lakhs will be provided for 3 years as equity funding to convert their startup into commercial ventures. Successful ventures would further qualify for venture funding of up to Rs. 15 crore from the Venture Capital Fund for Scheduled Castes. 

Eligibility under ASIIM 

The following SC youth or SC Divyang youth would be eligible for support under ASIIM. 

  • Youth who have been identified by TBIs, Atal Incubation Centers (AICs), Technology/Industrial Parks, Science and Technology Parks of India which are promoted by the Department of Science and Technology (DST) or other than DST, any other incubation center supported by the Government of India. 
  • Youth who have been identified for incubation by private TBIs can qualify for the scheme.
  • Students who have been awarded under the Smart India Hackathon or Smart India Hardware Hackathon conducted by the Ministry of Education are directly eligible. 
  • Students with innovative ideas for the socio-economic development of society as identified by the TBI’s can also benefit from this scheme. 
  • Startups which are supported and nominated by corporates under the Corporate Social Responsibility (CSR) fund. 

Search and selection process

To identify potential SC entrepreneurs, the TBI’s set up under the DST must be contacted and informed about the potential young SC entrepreneurs to avail assistance from VCFSC funds to kick-start their innovative ideas. 

Search 

  • A potential SC entrepreneur must be identified and informed by TBI.
  • On the recommendation of TBIs, a potential SC entrepreneur shall be identified to avail assistance from VCFSC to pursue their innovative ideas.
  • In addition to TBI’s, young potential entrepreneurs working in incubation centres can also be identified and informed about other technology and management schools.

Selection 

  • The startup ideas of SC and SC Divyang that are selected by TBI will be automatically selected for incubation. 
  • Other applications/proposals received from various scheduled castes and SC Divyang Start-Ups will be taken up as per the guidelines of the fund. 

Provision of equity 

  • The identified innovative ideas of SC students will be provided equity assistance with respect to TBI accommodation costs, hardware, software, fellowship, travel & marketing, IP filing, tool-room expenses, co-workers, etc. 
  • The innovative idea of the SC entrepreneur identified by TBI shall be provided with equity assistance of Rs. 30 lakhs over a period of 3 years under the VCFSC scheme.
  • During the three-year incubation period, the entrepreneurs will not be required to make any financial contributions to the company.
  • Expenses required for forming a company shall be borne by entrepreneurs or TBI.
  • Financial assistance shall be released to the entity promoted by the SC entrepreneur. 

Motivate youth

To motivate the SC youth to avail the benefits under the ASIIM scheme, wide publicity shall be done to seek the interest of potential candidates. As per the guidelines of the scheme, publicity shall be done in the following manner at least twice a year.

  • Connecting with students on all higher education campuses
  • promoting the scheme through social media, television and other media platforms.
  • Working with industry clusters and associations
  • Reaching out and interacting with various technology and management schools

General facts about ASIIM

How can an eligible person get funding under the scheme

  • In order to receive funding under ASIIM, the eligible SC entrepreneur must have a 51% holding in the private limited or limited company and also be associated with TBI.

What is the amount of funding under ASIIM

  • Companies owned by SC entrepreneurs and affiliated with TBIs are eligible for funding of up to Rs. 30 lakhs over a three-year period, i.e. Rs. 10 lakhs per year.

The funds infused by IFCI Ventures under ASIIM will constitute what percentage of the shareholding in the incubatee company?

  • The funds invested in the incubatee company must be in the form of equity shares, convertible preference shares, or mandatory convertible preference shares.The maximum conversion rate of convertible preference shares into equity shall be 49%.After three years of receiving funding, the conversion will take place.

What is the tenure of financial assistance under the scheme

  • 10 years starting from the date of the first disbursement of funding.

What projects are covered under ASIIM

  • Innovative ideas in manufacturing and service sectors are eligible under ASIIM.

Are proprietorships, partnerships, one-person companies (OPC) and limited liability partnerships (LLP) eligible to receive funding under ASIIM

  • Perpetuities, partnerships, one-person companies (OPC), limited liability partnerships (LLP), or any other form of establishment should convert itself into a private limited company or public company before getting assistance under ASIIM.

Conclusion 

Scheduled castes are those castes/races in the country that suffer from extreme social, educational, and economic backwardness arising out of the age-old practise of untouchability, and certain others on account of lack of infrastructure facilities and geographical isolation, and who need special consideration for safeguarding their interests and for their accelerated socio-economic development. ASIIM helps entrepreneurs belonging to economically weaker sections of society by providing abundant funding and incubation facilities. This scheme will encourage SC students to pursue innovation and entrepreneurship and also give a further boost to the Stand Up India programme of the government.


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

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