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All you need to know about the Panchsheel Agreement

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This article is written by Sarthak Kulshrestha, a B.A.LL.B. student from Jagran Lakecity University, Bhopal. This article explains the relations between India and China with respect to the Panchsheel Agreement and also mentions its aftermath.

This article has been published by Sneha Mahawar.

Introduction

In the present era, when the bilateral relations between India and China are talked through, the major outlook inclines towards bitterness, rivalry, and hostility. There have been several political, economic, and social factors affecting the relationship between the two that have made the scenario worse over decades. But turning back to the past, we get to know that the relationship between both nations was much more harmonious and friendly.

This is not only about the recent past, but the amicable relations between India & China can be traced back to ancient times. Even in the colonial period when India was under British rule, the Indian leaders were strong supporters of the Chinese, despite the British criticising them for the same. India also encouraged the Chinese freedom struggle against colonial rule. After its independence, India recognised China as an independent country. Following the friendship, India signed the Panchsheel Agreement with China in the year 1954 to set up trade relations and strengthen the bilateral ties between them.

This article explains the significance and impact of the above-mentioned agreement in detail and also discusses its aftermath. 

History of India-China relations 

For a long time, both the nations had been cooperating on the bilateral front as the economic and cultural ties held them together since the 1st century A.D. The trade became very frequent and it increased through the Silk Road corridor. Various pilgrims came from China to India and studied here. Educational institutes like Nalanda University provided remarkable education on Buddhism to the Chinese pilgrims. The teachings of Buddhism influenced them to such a great extent that Buddhism became the paramount religion of China. Also, a lot of Buddhist monks used to travel to China to spread ideas and learnings of Buddhism. In this way, religious ties were established between both countries and continued over centuries even till now.

Interestingly, the Mahabharata also substantiates the credentials of the historical relationship between India and China, where China has been referred to as ‘Qin that later came to be known as the ‘Qin dynasty. Moreover, Kautilya’s Arthashastra also gives evidence of ancient India’s contacts with China where Chinese silk was referred to as ‘Cinamsuka and ‘Cinapatta’. 

So, it can be said that India is one of the oldest foreign citizens to have established relations with China on economic, cultural, and other such fronts. 

Political relations during the colonial era

Though both countries shared ties for hundreds of years, no explicit political relations were kept up by either side. The British invasion of Tibet led to extensive trade, and in the year 1914, the  Shimla Accord was signed by both governments under which the authority of the British government was extended over the Southern region of Tibet. This also created a boundary between India and Tibet called the McMohan line. While the British policies towards China had been critical, the attitude of Indian leaders was sympathetic towards China.

India’s support to the Chinese freedom struggle 

Maintaining friendly relations with China was the foremost and principal objective of the former Prime Minister of India, Mr Jawarlal Nehru in the arena of International relations. So, India also supported the freedom struggle of China. Several rallies and agitations were conducted in India in support of the Chinese freedom struggle. The Indian National Congress under the leadership of Nehru, sent a medical team to China to assist the wounded soldiers of the Chinese freedom struggle. Finally, China got its independence on 1st October 1949, by defeating the Kuomintang (KMT) reign. Thus, India became a very robust non-communist champion of China in the international forums and committed to giving the newly independent nation recognised status in the international fraternity.

The Panchsheel Agreement

We have discussed above how India and China have maintained their friendly relations over many years on multiple fronts. But, in 1954, the foundation of India-China relations was laid down when the Panchsheel Agreement was signed by the representatives of both the nations.

The term, ‘Panchsheel’ is derived from Buddhist inscriptions which literally means five prohibitions that determine a Buddhist monk’s behaviour. In our context, the two words which it includes have their respective meanings, i.e. Panch which means ‘five’, and Sheel which means ‘the principles’. Hence, as the term itself suggests, the Panchsheel Agreement involves five principles to agree upon by both India and China. 

This pact of historic significance is “the Agreement on trade and intercourse between the Tibet region of China and India”. The Preamble of this treaty embodies the very objective of the Panchsheel Agreement which is to establish peaceful coexistence through five principles. The principles of the Panchsheel Agreement are as follows: 

  1. Mutual respect for each other’s territorial integrity and sovereignty,
  2. Mutual non-aggression, 
  3. Mutual non-interference in each other’s internal affairs,
  4. Equality and mutual benefit, and
  5. Peaceful co-existence.

The Panchsheel Agreement was signed by N. Raghavan, Indian Ambassador to China, and Chang Han-Fu, Deputy Foreign Minister of China on April 29, 1954. At the Asian Prime Minister Conference that was held in Colombo, Sri Lanka, the former PM Jawaharlal Nehru, and Premier Zhou Enlai made a broadcast speech in which they put emphasis on the above-stated five principles of the Panchsheel Agreement and upheld the spirit of brotherhood between both the nations.

Five Articles of the Panchsheel Agreement 

The Agreement consisted of the Preamble and five Articles also which delineated the five core principles of the treaty in several aspects. They are as follows: 

Article 1

The Panchsheel Agreement was, by nature, a  trade agreement. Article 1 of the treaty allowed China to set up its trade agencies in a few cities of India such as New Delhi, Calcutta, and Kalimpong. Similarly, India was also supposed to set up its trade agencies in some of the Chinese cities such as Yatung, Gyantse, and Gartok. Both countries were given the privileges to carry out free trade and enjoy the freedom to conduct their businesses and were accorded dispensation from arrest and deportation. 

Article 2

Article 2 provided for the specification of markets to both countries at that place where they were supposed to carry out their business. China agreed to give Yatung, Phari, and Gyantse to India as the specified markets for Indian businessmen. And, India specified Siliguri, Kalimpong, and Calcutta as the marketplaces for the Chinese traders. Under this Article, both the countries also set up common markets for the trade of items belonging to both nations. 

Article 3

This Article dealt with an issue other than trade. According to this provision, the pilgrims were allowed to visit the holy places located on either side. The Indian pilgrims were allowed to travel to Kang Rimpoche (Kailash), and MavamTse (Mansarovar) in the Tibet area of China. On the other hand, pilgrims from China were allowed to visit Banaras (Varanasi), Sarnath, Gaya, and Sanchi.

Article 4

Under this Article, India and China also agreed to open passes like Shipki La Pass, Mana Pass, Niti Pass, KungriBingri Pass, Dana Pass, and LipuLekh Pass for traders and pilgrimages.

Article 5

The travellers, pilgrimages, and traders were given freehand at the visit on either of the sides.  And Article 5 mandated that diplomatic personnel, officials, and nationals of both countries shall hold their passports issued by their native country when they want to visit the other one, and visas by the other side to travel into their territories.

The Panchsheel was also incorporated in the ‘Ten Principles of International Peace and Cooperation’. It was introduced in the Bandung Conference of 1955 attended by 29 Afro-Asian countries. The universal relevance of Panchsheel was taken into consideration when its principles were incorporated in a resolution on peaceful coexistence presented by India, Yugoslavia & Sweden, and adopted on December 11, 1957, by the United Nations General Assembly (UNGA).

India-China diplomacy and the spirit of brotherhood 

After signing the Panchsheel Agreement, in June 1954, the then Prime Minister of China, Zhou Enlai visited India. This visit was of a lot of significance because it symbolised the growth of friendship between both nations. It also helped to make up the mind of the Indian government in the matter of foreign policy of China with respect to Tibet. A meticulous discussion took place among Zhou Enlai, Nehru, Dr Rajendra Prasad, and other members of leadership. 

The five principles of the Panchsheel Agreement were revisited and affirmed once again. Thus, this meeting also holds its significance in the view of letting the Panchsheel Agreement rack up more weight and gravity. To keep the spirit of mutual benefit, PM Nehru made a counter-visit to China after a few months. Nehru raised India’s concern towards the Chinese map showing the parts of the Ladakh region and NEFA under China. Zhou Enlai assured PM Nehru that these are old maps of the KMT Reign and will be revised.

During Prime Minister Nehru’s visit to China, the Sino-Indian Agreement was signed by the leaders of both nations in Beijing. This kept on recurring for more times and subsequently, the slogan of “Hindi-Cheeni Bhai Bhai” (Indians-Chinese are brothers) was raised and the spirit of brotherhood pervaded among the communities of both countries.

The Panchsheel Agreement was a step in the right direction and also, to some extent it served the cooperative interests of both India and China. The five principles of the treaty were formulated so as to establish and maintain solidarity between the two and lead the Asian economy together. However, questions are often raised on the leniency of the Indian government in the matter of the Panchsheel Agreement. Many scholars argue that though this agreement strengthened the bilateral relations of both nations, it has adversely affected the foreign policy of India.

Nehru gave up India’s grip over Tibet to China which India inherited from the British rule. He did not want the colonial legacy to act as ornamentation for India so he felt it was right to get rid of such colonial occupation. This also complemented Nehru’s will to strengthen the bilateral ties with China. This treaty acknowledged Chinese sovereignty over Tibet.

Aftermath of the agreement

By the treaty, India had withdrawn its military bases from Tibet and surrendered communication links and services too. The sacrifices made by India were neither consistent with the principles of the Panchsheel Agreement nor with the long-term interests of the nation. Under this Agreement, how these sacrifices have adversely affected the interests of India has been described in the following points : 

  • Firstly, India was running trade agencies in Yatung, Gyantse, and Gartok even before the Agreement was signed. On the other hand, China did not have any such trade agencies back then. So, India having those trade agencies in Tibet was good for nothing. 
  • Secondly, India surrendered the communication links and services which resulted in restricted communication with that region. This went against India because no source of information was available to keep a check on Chinese activities in Tibet. 
  • Thirdly, the withdrawal of Indian armed personnel from Tibet raised the risk of Chinese incursion into India. 
  • Fourthly, fixing the term of the ‘agreement of peaceful coexistence’ for eight years was proved to be a blunder. Moreover, the condition was put that the agreement can only be renewed by the will of both countries if needed.
  • China used these eight years to settle the Tibet issue, hence, did not show any interest to renew the agreement. Since the agreement came to an end in 1962, the five principles of ‘peaceful coexistence’ did not make any sense for China when they attacked India in 1962

So, the spirit of the Panchsheel Agreement could not stay alive within both nations for a long enough time. The blooming of the Tibetan uprising in 1959 and the Chinese allegation of Indian involvement in the armed struggle put the two states apart. India’s decision to grant political asylum to Tibetan spiritual leaders and its permission to run a Tibetan government in exile in India further increased the Chinese suspicion towards India. Following the annexation of Tibet by China, India came to share an unsettled border with China. This led to armed conflicts between both countries.

Conclusion

Trade and culture have been two arenas that kept the relations between India and China intact and friendly throughout history till their independence. The relevance of this agreement has been rooted in the age-old traditions of both countries. The linkage that was established by the spread of Buddhism in China, ultimately laid down the historical basis for the formulation of the principles of Panchsheel by India and China.

Keeping aside the rivalry which is still going on, the countries should reminisce their old connections and friendly relations with each other. This would help them to reconstruct the cooperation and to serve their respective interests. The governments should put some effort into facilitating trade between them and in today’s era, social media can work towards shared prosperity among the people of both sides.

References


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All you need to know about gender equality

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This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed analysis of gender equality which is an important element in the social growth of a nation and its surrounding aspects. 

This article has been published by Sneha Mahawar.

Table of Contents

Introduction 

“A gender-equal society would be one where the word ‘gender’ does not exist: where everyone can be themselves.”

— Gloria Steinem

When persons of all genders have equal rights, duties, and opportunities, the same is referred to as gender equality. Gender inequality has an impact on everyone, including women, men, trans and gender diverse persons, children, and families. It affects people of all ages and walks of life. Gender equality is attained when individuals irrespective of their gender have equal rights, circumstances, and opportunities, as well as the ability to design their own lives and contribute to society’s growth. It is a matter of equitable distribution of society’s power, influence, and resources. Gender continues to be a vital yet frequently disregarded prism through which development concerns are evaluated across the world. This article aims to highlight every aspect related to gender equality and how it has been perceived globally with special attention towards India. 

Need and importance of gender equality 

These days, gender equality appears to be a pipe dream. While progress has been achieved, statistics from organisations such as UN Women paint a bleak picture. Over 2 billion women in the world do not have the same job opportunities as males. At the present rate, closing the worldwide wage disparity will take approximately a century. While both men and women are victims of human trafficking, women and girls account for more than 70% of all victims worldwide. In light of this information, gender equality must be a top focus.

Saving lives

Women and girls in many countries suffer life-threatening hazards due to a lack of empowerment and resources. One such example is natural calamities. Experts explored how gender disparity contributes to mortality and injury at the 2005 World Conference on Disaster Reduction. Climate change, which makes natural catastrophes more severe, puts women and girls in even more vulnerable circumstances, according to other studies. Women can have a stronger part in their own safety when a gender viewpoint is included in talks.

Beneficial towards economy

Women’s influence extends beyond businesses and organisations. According to studies, boosting women’s economic engagement is beneficial to the economy. If female employment rates in OECD Nations were raised to match Sweden’s, it would result in a $6 trillion rise in GDP. Pay disparities between men and women end up disrupting the economy.

Better healthcare

Women, on average, receive poorer medical treatment than males, according to research. This is due to a variety of factors, including a lack of education and lower salaries. In the medical research community, sexism contributes to substandard care. Women’s diseases such as chronic pain disorders are less well-studied than men’s diseases. Medical practitioners don’t always take them seriously. Women’s health will improve when they are treated equally in society.

Better legal protection 

Women aren’t properly protected from domestic, sexual and economic assault under the law. All such sorts of violence have an impact on a woman’s safety and independence. Women’s legal rights are being expanded in order to keep them safe and enable them to live productive and happier lives.

Healthier children 

When women make their own reproductive decisions, they are better able to care for their children. Mothers can provide their children with education, healthcare, and healthy food if they have the same financial opportunities as men. Higher levels of education have also been associated with lower infant mortality in studies. Children who are reared in gender-equal circumstances will do better than those who are raised in unequal situations.

Supporting businesses  

Women can enhance any organisation if they have access to the same education and work possibilities as males. Diversity of all kinds (gender, colour, sexual identity, etc.) has been shown to boost an organization’s productivity and innovation. The University of California conducted research in 2016 that looked at large organisations in the state that have some women in senior leadership roles. They outperformed organisations with a majority of males at the top.

Promoting racial equality 

Race equality and gender equality are inextricably related. Race has a significant effect on issues such as the gender wage gap. Women of colour, Hispanic women, and native women earn less than White and Asian women. Black women in the United States have a greater chance of dying from pregnancy-related reasons. When gender equality takes race into account, it enhances racial equality as well.

Reducing poverty and human trafficking 

Young females have the greatest poverty rates. The gender difference in poverty widens as boys and girls grow older. This is largely due to the fact that girls do not have the same access to schools and career prospects as boys, and when they marry, they frequently do not work. Women and their families are imprisoned in poverty because of gender inequity. Women may prosper when they have access to better education, healthcare, and career possibilities. Investing in gender disparity is a long-term, high-impact method to alleviate poverty.

Human trafficking affects both men and women, however, women and girls make up the bulk of victims. They’re more vulnerable, making them easier targets for traffickers. Women and girls are less likely to become victims of human trafficking as a result of improved education and work opportunities. Gender equality may also aid a country’s development by lowering poverty and insecurity. Human trafficking is fueled by them.

Ensuring and enforcing peace 

Gender equality is connected to peace, perhaps more than a country’s GDP or a level of democracy, according to research. Military action is less likely to be used in countries where women are treated equally. It encourages peace when a country addresses important areas of gender disparity, such as education and employment.

Understanding the difference between gender equity, gender equality and women’s empowerment

Gender equality refers to treating women and men equally. To compensate for women’s conventional and societal disadvantages, strategies and measures must be accessible. Gender equality entails women and men having equal access to socially valuable products, opportunities, resources, and incentives. Women are often excluded or disadvantaged in decision-making and easy access to economic/social resources where gender disparity occurs. 

Equality follows equity. The term equity connotes starting the race with the same level of potential and resources so as to compete efficiently. Equality can only be achieved if the first stairs of equity are successfully climbed. While the male gender has been resourceful majorly, when it comes to the other genders playing significant roles in society, resources at similar levels are lacking. For every gender to compete equally, equity needs to be provided, for example, women getting reservations to some extent in engineering colleges. 

Women’s empowerment concentrates on redressing disparities and providing women greater authority to regulate their lives and society, thereby being an important part of fostering gender equality. 

Gender equality and women’s empowerment : the relationship

Gender equality is not just a basic human right, but also a prerequisite for a society that is peaceful, affluent, and sustainable. Over the last few decades, progress has been made in implementing gender equality as more girls are attending school, fewer girls are being coerced into early marriages, more women are sitting in the  Parliament and in positions of leadership, and laws are being modified to promote gender equality. Despite these gains, many challenges remain. Discriminatory laws and social norms persist, women continue to be underrepresented at all levels of political leadership, and one in every five women and girls aged 15 to 49 report experiencing physical or sexual violence by an intimate partner in the previous 12 months.

Gender equality and women’s empowerment have been clearly acknowledged as critical not just to national health but also to social and economic growth during the last decade. One of the crosscutting strategic topics of India’s National Population Policy, 2000 is “empowering women for health and nutrition.” In addition, one of the eight Millennium Development Goals (MDG) to which India is a signatory is the promotion of gender equality and women’s empowerment. Women’s empowerment and gender equality are two sides of the same coin, and progress toward gender equality needs women’s empowerment, and women’s empowerment requires gains in gender equality.

Empowering females necessitates a concerted effort and partnership. Providing girls with the services, safety, education, and skills they require in everyday life will lessen the hazards they encounter and allow them to fully develop and contribute to India’s development. In their daily lives, girls have a particularly difficult time obtaining life-saving tools, knowledge, and social networks. Millions of girls may be strengthened by access to programmes especially suited to their needs, with an emphasis on education and developing life skills, reducing abuse, and including the needs and contributions of girls from vulnerable groups, such as those with disabilities. Long-term solutions created with and for girls may bolster this resilience and provide a transformative and lifetime opportunity for girls.

Impact of the COVID-19 pandemic on gender equality

The COVID-19 pandemic has the potential to undo the modest progress that has been accomplished in terms of gender equality and women’s rights. The pandemic exacerbates existing inequities for women and girls in many areas, from health and economics to security and social protection. Women have a disproportionately large part in the virus’s response, notably as frontline healthcare professionals and at-home caregivers. As a result of school closures and the rising requirements of the elderly, women’s unpaid care labour has expanded dramatically. Women are also disproportionately affected by COVID-19’s economic effects since they work in uncertain labour markets. Nearly 60% of women are employed in the informal economy, putting them at increased risk of poverty. 

The pandemic has also resulted in an uptick in violence directed at women and girls. Many women are confined at home with their abusers as a result of lockdown measures, unable to access services that are being curtailed or restricted. According to new research, violence against women and girls notably domestic violence has increased since the epidemic began.

Important facts and figures related to the discussion 

  1. At least 200 million women and girls in 30 countries have had female genital mutilation (FGM), and 750 million women and girls were married before the age of 18.
  2. In the 30 nations where the practice is prevalent, the rate of girls aged 15 to 19 who are subjected to FGM has decreased from one in every two girls in 2000 to one in every three girls in 2017.
  3. Husbands can legally restrict their wives from working in 18 countries, daughters and sons do not have equal inheritance rights in 39 nations, and domestic abuse is illegal in 49 countries.
  4. Within the previous 12 months, one in five women and girls, including 19% of women and girls aged 15 to 49, had been subjected to physical and/or sexual assault by an intimate partner. Despite this, there are no laws in 49 nations that particularly protect women from such assault.
  5. Women have made significant gains into political office throughout the world, but their participation in national parliaments is still far from equal at 23.7 percent.
  6. Women now hold more than 30% of seats in the national parliament in at least one chamber in 46 nations.
  7. Only 52% of married or in a union women have the freedom to choose their own sexual interactions, contraception, and health care.
  8. Women own just 13% of agricultural land in the world.
  9. In the non-agricultural economy, women account for fewer than one in every five paid occupations in Northern Africa. Outside of agriculture, the share of women in paid work has climbed from 35% in 1990 to 41% in 2015.
  10. More than a hundred nations have made steps to track gender equality budget allocations.
  11. Since 2000, the likelihood of a girl marrying in her childhood has decreased by more than 40% in Southern Asia.

Gender equality a concern for men : an insight

  1. In general, achieving gender equality necessitates adjustments for both men and women. Gender is an important part of men’s social identity that must not be overlooked. This reality is overlooked since masculine qualities and attributes are assumed to be the norm. Gender, on the other hand, has an equal impact on men’s lives as it does on women’s. 
  2. Men’s expectations as leaders, husbands, and sons are shaped by societal standards and ideals of masculinity. Men are expected to prioritise their families’ monetary necessities above the loving and caring duties that are traditionally attributed to women.
  3. Young men’s risk-taking conduct is encouraged through socialisation in the family and subsequently in the workplace. As a result, the lifestyles that men’s occupations demand typically expose them to greater morbidity and mortality risks than women. Accidents, ignorance, aggression, and alcohol abuse are just a few risks among such dangers.
  4. Men have the same right as women to take on a more caring role, and such possibilities should be offered to them. Men have obligations for the health of their children, as well as that of their own and their spouse’s health. Recognizing men’s individual health concerns, as well as their demands and the factors that form them, is essential to address related rights and duties.
  5. Adopting a gender perspective is a necessary first step to promoting gender equality in the society we live in. This is because the same emphasises that gender equality is concerned with both men’s and women’s roles, duties, and demands, as well as their interconnections.

Gender equality in India 

Gender equality in India is defined as having equal access to abundant resources and opportunities regardless of gender, including economic involvement and decision-making, and equally valuing varied behaviours, goals, and needs. Gender equality in India entails equality in all aspects of life. Gender equality is a basic human right in India and a prerequisite for a peaceful, wealthy, and sustainable world. Gender equality is the objective in India, while gender neutrality and gender equity are the behaviours and ways of thinking that help to accomplish it. Gender parity is a term used to describe the gender balance in a situation, which can aid in achieving gender equality but is not the goal.

In India, gender inequality leads to uneven opportunities, and while it affects both men and women, girls are statistically the most affected. Girls have better birth survival rates, are more likely to be developmentally on track, and are just as likely to attend preschool as boys throughout the world, yet India is the only large country where more girls die than boys. Girls are also more likely than boys to drop out. In India, adolescence is experienced differently by girls and boys. While boys have more independence, girls have more restrictions on their capacity to move about freely and make decisions that influence their career, education, marriage, and social ties. 

Gender barriers continue to widen as girls and boys get older, and they persist throughout adulthood, with barely a quarter of women working in formal jobs. Although some Indian women are worldwide leaders and influential voices in a variety of sectors, patriarchal ideas, norms, traditions, and systems prevent most women and girls in India from fully exercising their rights. India will not fully develop unless both girls and boys are equally supported to reach their full potential.

Gender equality in the past

Since ancient times, India has held its women in high regard. Hindus, who make up the bulk of the population, often pray to the goddess Saraswati for education, goddess Lakshmi for money, and goddess Durga for the strength to combat bad forces. Women in India have achieved greatness in a variety of fields, including as saints (Meera Bai) and warriors (Rani Jhansi and Rani Rudrama Devi). Swami Vivekananda, one of Hinduism’s most eloquent proponents, said that a civilisation is defined by how it treats its women.

Prior to the arrival of the British in India, the Indian culture practised traditions that completely gendered oppressive toward women. Sati, female infanticide, and child marriage were examples of such practices, all of which resulted in sorrow, pain, and even death for the women and girls made victim to. Sati was the act of burning alive the widow of a Hindu male, a tradition observed by Hindu cultures’ rites. During the seventeenth century, it was frequently performed by the upper castes. 

In certain Indian states, the number of women a prince brought to the death pyre with him was a measure of his accomplishments. Female infanticide was the killing of a newborn girl child which is also known as selective abortion of female pregnancy. Poverty, the dowry system, unmarried births, misshapen children, a lack of support services, and maternal diseases all contributed to such practice in India.

The present scenario of gender equality in India

It is vital to invest in and empower females by providing them with education, life skills, sports, and other opportunities. We may jointly contribute to the attainment of certain outcomes through improving the worth of girls, some short-term (expanding access to school, reducing anaemia), some medium-term (stopping child marriage), and other long-term (eliminating gender-biased sex selection) goals to ensure gender equality in India. Every individual must work together with others to change the way females are valued. Equal rights for Indian women will be realised only when society’s perceptions alter.

The need for gender equality in India

  1. In India, gender equality is connected to long-term development and is essential to the realisation of human rights. Gender equality is defined as a society in which men and women have equal opportunities, justice, and responsibilities in all aspects of life. When men and women may partake equally in the allocation of power and influence, equality exists. They are equal if they have equal opportunities, financial freedom, equal access to education and employment, and the ability to pursue their goals, hobbies, and abilities. 
  2. Gender equality is crucial in national and development initiatives because it allows women to make decisions that affect their general well-being, as well as the health of their spouses and families. Gender equality in India is critical for the country’s development from all angles.
  3. However, it is critical to recognise that women are often excluded or disadvantaged in decision-making and access to economic and social resources where gender inequality occurs. The country that has experienced gender equality has also seen development. Gender equality in India is a necessary component for a flourishing nation. As a result, gender equality is an important part of women’s empowerment in India.
  4. Gender inequality affects women at practically every stage of their lives. In India, prejudice against women begins in the womb. When it comes to male newborns, Indian women are getting superior prenatal care. Pregnant women with boys go to prenatal visits, take prescribed medications, and choose to give birth in a hospital. If she has a female child, the situation is different as in such cases either the child is born at home or is killed as soon as she is born.
  5. ‘Gender inequality’ refers to the subjugation of women and girls in society at all stages and levels. While gender inequality is more widespread in the lower middle class, it is also present in the upper-middle class. Gender inequality has been so entrenched in Indian society that it has become accepted.

Highlights of gender equality in India

  1. The UNDP’s Gender Inequality Index rated India 131st out of 189 countries in 2020. It is clear that political dialogue has to take a stronger turn, taking into account both public and private places.
  2. The normalisation of intra-household violence is a major setback for women’s welfare. Between 1991 and 2011, the number of crimes committed against women had doubled. According to the National Family Health Survey, 37% of married women in India have encountered physical or sexual abuse from their husbands, while 40% have experienced physical, sexual, or emotional violence from their spouses. While contemporary policy language promotes employment as a source of empowerment for women, research shows a troubling link between female labour force involvement and domestic abuse exposure.
  3. India has also ratified various international conventions and human rights instruments committing to secure equal rights of women. Key among them is the ratification of the Convention on Elimination of All Forms of Discrimination Against Women (CEDAW) in 1993.
  4. The Mexico Plan of Action (1975), the Nairobi Forward-Looking Strategies (1985), the Beijing Declaration, as well as the Platform for Action (1995) and the Outcome Document adopted by the UNGA Session on Gender Equality and Development & Peace for the 21st century, titled “Further actions and initiatives to implement the Beijing Declaration and the Platform for Action” have been unreservedly endorsed by India for appropriate follow up.
  5. The greatest incidences of sex discrimination at birth are seen in India. Even in 2050, India would have the poorest sex ratio in South Asia, according to a 2017 review of demographic statistics. The heartbreaking 918 girls for 1,000 boys ratio in 2011 prompted the Indian government to take action in the ‘Beti Bachao, Beti Padhao‘ effort to secure the girl child’s survival, protection, and education. The Beti Bachao initiative combats racism and provides assistance to help women avoid becoming pregnant.
  6. To educate and save the girl child, gender equality in India will be achieved via widespread awareness and large-scale female welfare programmes throughout districts.
  7. Gender equality has been improving in India over the last few decades. Fewer girls are driven into early marriage as a result their attendance at school has increased. Women are serving in Parliament and in positions of leadership, and legal change is being pursued to promote gender equality. 
  8. According to World Economic Forum publications (WEF), India was recently rated 112th out of 153 nations in the annual Global Gender Gap Index for 2020.  India has dropped to 112th place from 108th place previously. In the 2006 Report, India was placed considerably higher at 98th place. China (106th), Sri Lanka (102nd), Nepal (101st), Brazil (92nd), Indonesia (85th), and Bangladesh are all ranked lower than India.

The issues revolving around gender equality in India

Despite the gains discussed above, obstacles persist, discriminatory legislation and societal norms persist, women continue to be underrepresented in political leadership at all levels, and one in every five women and girls aged 15 to 49 report physical or sexual abuse by their relationships. 

General issues 

  1. Girls endure hazards, abuses, and vulnerabilities just because they are female. The majority of these dangers are tied to the economic, political, social, and cultural disadvantages that girls face on a daily basis. This is especially true at times of crisis and calamity. 
  2. Girls are at risk of child marriage, adolescent pregnancy, child domestic labour, poor education and health, sexual abuse, exploitation, and violence as a result of gender discrimination and social norms and practices. Many of these expressions will persist until girls are given greater value.

Preference of male gender over the female

  1. A fundamental indicator of gender inequality in India, and arguably, one of the most powerful, is a preference for bearing a son which is so strong that it is manifested as limiting the birth and survival of girls. Strong son preference and the low status of women in many regions of India play a substantial role in reducing the under-seven sex ratio.
  2. Because of gender inequities, men’s health and survival are valued more than females’. In India, sex ratios at birth, newborn and child mortality by sex, and low ages at marriage for women are examples of health and demographic indicators influenced by gender inequalities in male and female perceived value. 
  3. Women’s disempowerment also restricts their influence over decision-making and freedom of mobility at the family level, limiting their access to resources such as education, employment, and money. On the one hand, men’s power over women may be evaluated by examining the amount of women’s and men’s agreement with norms that allow males the authority to dominate women, and on the other hand, by assessing the extent to which women are subjected to marital abuse.

Educational attainment

  1. Gender disparities in access to education and educational attainment must be eliminated in order to achieve gender equality and reduce women’s disempowerment. One of the Millennium Development Goals is to eliminate gender disparities in primary education, recognising the critical role of education in development and the persistence of gender inequalities in access to school. Since independence, achieving universal primary education has been an important priority of Indian planning. However, boosting primary school enrollment does not address the dual issues of educational quality and school retention.
  2. Continued economic progress cannot be sustained with a population that has just completed elementary school. It requires a consistent supply of highly educated and competent human capital, which requires both women and men to have a high level of educational attainment. However, ensuring a steady supply of skilled human capital to support economic growth is only one goal towards reducing gender disparities in educational attainment. Another is that education, particularly higher education for women, is a key enabler of demographic change, family welfare, and improved health and nutrition for women and their families.
  3. Higher education has the ability to empower women by providing them with information and tools for comprehending and influencing the world. Women’s education has been linked to decreased fertility, infant mortality, and improved child health and nutrition.

Employment differences

  1. Employment, in addition to education, may be a powerful source of empowerment for women. Women can be empowered through employment, particularly in the formal sector and for pay, since it provides financial independence, alternative forms of social identity, and exposure to power systems outside of familial networks. 
  2. Nonetheless, women’s capacity to engage in the labour market, particularly in the formal sectors, is constrained by early marriage and childbearing ages, as well as limited access to education. Male gender roles, on the other hand, are compatible with employment, and men are often expected to work and provide for their families. Men, unsurprisingly, dominate the majority of formal labour markets.
  3. Women’s employment differs substantially depending on their marital status. Divorced, separated, abandoned, or widowed women are far more likely than currently married women to be working and married women are the least likely to be employed. Men’s employment differs little between those who are now married and those who have previously been married.

Resource accessibility

  1. As women are over-represented in the lower wealth quintiles and under-represented in the higher wealth quintiles, they have poorer per capita resource access than males. 
  2. In every age group, women have less access to the media than males. Women’s freedom of movement is highly restricted. Just one out of every three women are permitted to travel to the market, the health centre, or outside their place of residence alone. One in four women and 47 percent of women in the lowest wealth quintile suffer barriers to getting health care.
  3. A majority of women do not have any money of their own that they can use as they wish. This proportion is lowest at about one in four for women in the highest wealth quintile who are working for cash.
  4. Kerala, Delhi, and Goa are the only states where more than one in four women has a bank or savings account, whereas, less than one in six women own a bank or savings account that they use.

Attitude surrounding gender relations

  1. Although the majority of males aged 15 to 49 agree that husbands and wives should make decisions together, the number of men who believe that the husband should have the last word in most of the decisions is still large. More than half of women and men think that one or more of the reasons for wife abuse are valid. Both are likely to agree that a woman should be beaten if she disrespects her in-laws and neglects the house or children.
  2. The unequivocal rejection of unequal rights and benefits that originate from and are allocated exclusively based on a person’s sex is a crucial component of empowerment. The right to be the primary decision-maker on important household matters, the right to control their wives’ behaviour and bodies, including via violence if necessary, and the right to have sex with their spouses whenever they want are some of the normatively assigned rights of men.

Role of UNICEF in establishing gender equality in India

The UNICEF India Country Programme 2018-2022 was created in response to the identification of deprivations faced by Indian children, including gender-based deprivations. Each programming objective has a gender priority that is stated expressly in the programme, budget, and outcomes. The Ministry of Women and Child Development, in particular its leadership of the Beti Bachao Beti Padhao Program, which UNICEF India is supporting at the national and state levels, is a key partner. UNICEF India collaborates closely with other UN organisations to promote gender equality, particularly the UN Population Fund and UN Women. Gender specialists and activities, as well as civil society groups, are important partners. The outcomes of the programme have been provided hereunder:

  1. Health: Reducing excess female mortality in children under the age of five and encouraging girls and boys to seek treatment in the same way. For instance, front-line staff advise parents to take sick infant girls to the hospital as soon as possible.
  2. Nutrition: Improving women’s nutrition, particularly through supporting more equal eating habits, for example, women cooperatives develop and implement their own micro-plans for improved nutrition in their villages.
  3. Education: Support for out-of-school girls and boys to learn from gender-responsive curriculum and pedagogy. For example, implementing new strategies for identifying vulnerable drop-out school girls and boys, and overhauling textbooks so that the language, images and messages do not perpetuate gender stereotypes.
  4. Child protection: Ending child and early marriage, for instance, assisting panchayats in becoming ‘child-marriage free,’ encouraging clubs that educate females in athletics, photography, journalism, and other non-traditional pursuits.
  5. WASH: Increasing girls’ access to menstrual hygiene management, notably through the provision of well-equipped separate restrooms in schools (example: developing gender guidelines from Swachh Bharat Mission, supporting states to implement MHM policy).
  6. Social policy: Assisting state governments in developing gender-responsive cash transfer programmes and encouraging women to take on leadership roles in local government (example: cash transfer programme in West Bengal to enable girls to stay in school, a resource centre for women panchayat leaders in Jharkhand).
  7. Disaster risk reduction: Increasing gender disaggregation of information management for disaster risk reduction, as well as increased leadership and engagement of women and girls (for example, higher women’s leadership and participation in village disaster management committees).

The third gender and its rights in India

The Indian Supreme Court’s determination in National Legal Services Authority v. Union of India (2014), that transgender individuals constitute a ‘third gender’ under the Indian Constitution, as well as framing of subsequent laws, has considerably increased transgender people’s recognition and rights. 

Enjoyment of life by all citizens and an equal chance to flourish as human beings irrespective of their race, caste, religion, community, socioeconomic class, or gender,’ is the golden thread that runs through the Indian Constitution’s equality scheme. The scheme is spread over Articles 14,15,16, 19, and 21.  

The acceptance and acknowledgement of the ‘right of choice and self-determination’ is one of the main foundations of the equality programme. The freedom to determine which gender a person belongs to and to whom they connect is inextricably linked to their right to self-determination and their dignity. 

Transgenders and their rights 

The Indian legal framework’s failure to recognise the Third Gender has resulted in the systematic denial of equal protection under the law and pervasive socio-economic discrimination in society and in Indian businesses. The Transgender Persons (Protection of Rights) Act, 2019  was recently adopted by the Indian Parliament in response to the NALSA (National Legal Services Authority) Judgment. The Act is not a comprehensive piece of law, rather, it is a first step by the government in recognising the third gender as a legal entity in India’s legal system. The extent to which the stakeholders involved will take good efforts to enable inclusion and attempts to make transgender people useful members of society will be a long and difficult process.

As defined in the Act, ‘transgender’ refers to and includes all individuals whose gender does not conform or match the gender assigned to them at birth, including trans-man and trans-woman [whether or not they have undergone sex reassignment surgery (‘SRS’)] and individuals with socio-cultural identities such as ‘kinner’, ‘hijra’, ‘aravani’, and ‘jogta’.

The legislation has imposed positive requirements on all interested stakeholders, distinguishing between acts that require rapid implementation, such as implementing social welfare programmes, and activities that require a long-term strategy, such as altering the general public’s unfavourable attitude. The Central government, state governments, and businesses are all considered ‘stakeholders’, as defined under the Companies Act, 2013. The rights that have been vested by the 2019 legislation on transgender individuals are:

  1. Prohibition of discrimination against transgender individuals,
  2. Identity recognition,
  3. Welfare measures,
  4. Rehabilitation and right of residence,
  5. Obligation on establishments to ensure enforceability of the above rights.
  6. Constitution and establishment of the National Council for Transgender Persons.
  7. Coercion, bonded labour, removal from the household and physical, sexual, verbal, emotional or economic harm and/or abuse on transgender individuals will be subjected to a penalty which may vary between six months to two years, with a fine.

Including transgender as a part of every workplace : a challenge

Preparing the Indian workplace for an inclusive attitude to transgender people would be a difficult challenge since the societal change of this scale in India has historically been a gradual process. Improving the transgender community’s condition requires a communal effort, and strengthening this population in the workplace would go a long way toward removing societal stigmas and improving their financial situation. Despite the fact that the Act simply places an onus on the Stakeholders involved and does not impose legal obligations, in light of the shifting dynamic, some of the initiatives that establishments and organisations can take to create a more equitable and inclusive environment are outlined below:

  1. Sensitisation and education: Before making any changes to the system, companies must educate their employees on gender inclusiveness, workplace assimilation, and increased acceptance of transgenders’ intrinsic character and personality.
  2. Policy review: HR, administrative, recruitment, and employee benefit rules and manuals must all be reviewed and updated. To ensure that rules represent suitable approaches for an organisation to address the third gender, it might be useful to obtain and integrate comments from a member of the transgender community.
  3. Sex/gender reassignment surgery (SRS) transition: Transitioning to SRS is not only a challenging but also a stressful procedure, both physically and psychologically. Organizations must have rules that give transition assistance, not just in terms of paid leave, but also in terms of educating the rest of the workforce about an employee’s transition and providing rehabilitative and counselling help.
  4. Anti-harassment policies: Organizations must put in place adequate grievance redressal mechanisms for transgender individuals to deal with harassment complaints, similar to the requirements under the POSH Act (The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013) while keeping the complainant’s identity anonymous.
  5. Gender-neutral washrooms: Employees should be able to use restrooms that are appropriate for their profession. When trans women are forced to use male restrooms, they are frequently humiliated and harassed.
  6. Recruitment: Organizations must remember that transgender people have been discriminated against for years, resulting in social, economic, and talent gaps, and that recruiting standards must be altered accordingly. Organisations must also make an effort to provide training programmes that will help employees improve their abilities.

Indian laws and gender equality : an insight 

The Indian Constitution has a notion of gender equality that empowers every gender, and this idea is reflected in the Preamble, which mentions the principle of social justice. Indian citizens have various rights that safeguard their safety, some are constitutional, while others are statutory. Different parts of the Constitution contain constitutional protections. The existing legislations promoting gender equality have been discussed under three categories hereunder.

To live life 

Many regulations have been established by the Indian government in order to provide people with the Right to life. It is a national embarrassment that a girl child has to struggle hard to survive in the outside world because she is slain in the womb. If we look at the world at large, we can see that there is still a gender divide in India. Gender equality is still a work in progress in Indian states like Haryana, Daman and Diu, and Rajasthan. There are three legislative acts in India that guarantee a woman’s right to life, implying that no one has the authority to take a woman’s life without her consent to the same.

Commission of Sati ( Prevention ) Act ,1987

  1. This statute states that no one can compel a woman to burn herself during her husband’s funeral. This statute prohibits the commission of sati.
  2. According to the law, anyone who performs any act for the purpose of glorifying sati will be imprisoned. In his or her jurisdiction, the District Magistrate must put an end to this practice.
  3. The state government may if it is satisfied that in any temple or other structure which has been in existence for not less than 20 years, any form of worships or the performance of any ceremony is carried on with a view to perpetuate the honour of or to preserve the memory of, any person in respect of whom sati has been committed, by order the removal of such temple or structure.

The Medical Termination of Pregnancy Act, 1971

The Medical Termination of Pregnancy Act, 1971 prohibits anyone who intends to take a child’s life through abortion, as it is usual to abort a baby girl owing to the perception of the society concerning the same. This legislation makes abortion a criminal offence, but it also allows for abortion to be done by a certified medical practitioner in a government hospital in some exceptional circumstances, such as when the woman’s life is in danger and the baby’s life is at risk after delivery.

Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994

The Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 forbids sex discrimination. This law forbids the use of any technology for sex selection, including modern chromosomal separation procedures. It also outlaws the marketing of any technology used for sex selection or sex determination, as well as the sale of ultrasound machines to individuals who are not registered under the Act.

To live a safe life 

To survive life after birth, women had to endure a lot of ridicule from others. For them to have a safe life, the Indian government has implemented a number of laws that ensure their safety at home and at work.

The Protection of Women from Domestic Violence (Prevention) Act, 2005

  1. This legislation defines ‘domestic violence’ for the first time in Indian law, stating that it covers not just physical violence but also verbal, emotional, sexual, and economic abuse. 
  2. The Preamble of the Act reads that the Act provides for more effective “protection of the rights of women provided by the Constitution who are victims of violence of any sort happening inside the family,” reads the Preamble of this bill. This conduct involves real or threatened physical, sexual, or verbal abuse of women, as well as harassment in the form of unlawful dowry demand.
  3. One of the key characteristics of the legislation is that it protects women’s housing rights. The statute allows a woman to live in a married or shared home regardless of whether she has any title or claim to the property. 
  4. The Act establishes a protection officer and non-governmental organisations (NGOs) to help women with medical, legal, and safe housing needs. Any of the law’s recognised remedies are available to the victim. Under the Indian Penal Code, 1860 the victim can also initiate a general case against the perpetrator. This Act had a significant impact on women, particularly housewives who had to put up with a lot of violence from their husbands and in-laws previously.

National Commission for Women Act, 1992

  1. A legislative entity known as the ‘National Commission For Women’ was established in 1992 under the National Commission for Women Act, 1990 to provide Indian women with an appropriate platform where they could express their opinions, seek support, and enforce their rights. 
  2. The goal of establishing a statutory body was to :
  1. Review women’s constitutional and legal protections, 
  2. Recommend legislative changes that will improve their situation,
  3. To make it easier to file a complaint,
  4. To provide advice to the government on all policy issues that impact women. On its website, the National Commission for Women expresses its objective clearly as “Today’s Indian women are culturally anchored, internationally oriented, and healthy.”
  1. Many activities for the welfare of women have lately been conducted by the National Commission for Women, such as a national conference on “NRI weddings” that was attended by many individuals from all backgrounds. “Realizing Women Farmers’ Rights: Developing A Roadmap For Action” is another topic of a national consultation. 
  2. In addition to seminars, consultations, and workshops, the commission has review sessions to examine all regulations and protections for women. A commission was recently formed to look at child care for central government employees.

Immoral Traffic (Prevention Act), 1956

According to this Act, trafficking and sexual exploitation of women for commercial purposes will be considered a criminal act.

Sexual Harassment of Women At Workplace (Prevention, Prohibition) Act, 2013

  1. This is a piece of legislation that aims to protect women from workplace harassment. The Supreme Court of India’s Vishakha Guidelines for preventing sexual harassment were superseded by this statute. 
  2. This Act will ensure that women are safeguarded against sexual harassment at all workplaces, whether public or private. This will help them realise their rights to gender equality, life and liberty, and fair pay in all workplaces all across the world. At work, there will be a greater sense of safety. Women’s engagement in the workforce will rise, leading to improved economic and inclusive growth.
  3. The Act requires all businesses with ten or more employees to establish an internal complaints committee. Employers and local governments will be required to establish grievance committees to investigate all complaints under the Act, which also includes students in schools and colleges as well as patients in hospitals, and employers that fail to do so would be penalised. 
  4. It also protects against false or malicious accusations. Any organization’s workplace and documents relating to sexual harassment can be inspected by the government.
  5. Employers must undertake education and sensitization programmes, as well as adopt anti-harassment policies, under the legislation. One very important aspect of the statute is that the complaint committee has civil court-like powers for obtaining evidence.

Provision for offences like rape, kidnapping and abduction, molestation and other offences outranging female modesty under the Indian Penal Code, 1860

The Indian Penal Code, 1860 (IPC), contains provisions for punishing those who commit egregious crimes against women. Various sections of the IPC deal explicitly with such offences, as have been mentioned hereunder: 

  1. Acid Attack (Sections 326A and 326B).
  2. Rape (Sections 375, 376, 376A, 376B, 376C, 376D and 376E) .
  3. Attempt to commit rape (Section 376/511).
  4. Kidnapping and abduction for different purposes (Sections 363373).
  5. Murder, dowry death, abetment of suicide, etc. (Sections 302, 304B and 306).
  6. Cruelty by husband or his relatives (Section 498A).
  7. Outraging the modesty of women (Section 354).
  8. Sexual harassment (Section 354A).
  9. Assault on women with intent to disrobe her (Section 354B).
  10. Voyeurism (Section 354C).
  11. Stalking (Section 354D).
  12. Importation of girls up to 21 years of age (Section 366B).
  13. Word, gesture or act intended to insult the modesty of a woman (Section 509).

To live life with dignity and pride

The Indian government has also put in a lot of effort in ensuring a dignified life for females. There are several legislations that assure gender equality so that women may keep up with men and perform at par with men in every sector.

The Family Court Act, 1984

  1. In 1975, the Commission on the Status of Women suggested that all issues touching ‘family’ be handled separately. The immediate motivation for establishing family courts was rising from various women’s organisations. The number of cases involving marriage, family, and divorce was growing by the day, necessitating the creation of a forum for a quick resolution. 
  2. In its 59th report in 1974, the Law Commission emphasised the need for a special court for family-related issues. The late Durgabai Deshmukh was the one who originally underlined the necessity for family courts.
  3. The Family Court Act of 1984 does not define the term ‘family’, although it does cover issues related to women, children, divorce, maintenance, and adoption. In the state of Rajasthan, India’s first family court was formed in 1985. These sorts of special courts are extremely beneficial to women since they provide quick justice and, of course, a platform where females may seek assistance.

The Indecent Representation of Women (Prohibition) Act, 1986

This Act prohibits indecent representation of women in advertisements, publications, writings, paintings, figures, film, or in any other manner or matter. It also states that no person shall produce, sell, let to hire, distribute, circulate, or send an indecent representation of women by post, pamphlet, painting, film, writing, or photographs.

The Maternity Benefit Act, 1961 

The Maternity Benefit Act of 1961 safeguards women’s employment during pregnancy and allows them a maternity benefit, a fully compensated leave of absence from work, to care for their child. All businesses with ten or more employees are subject to this legislation.

Employees State Insurance Act, 1948

In illness, maternity, and other emergencies, this statute offers health care and monetary benefits. This law applies to all non-seasonal factories with ten or more employees. Social insurance which it provides are mentioned hereunder :

  1. Medical benefits.
  2. Sickness benefits.
  3. Maternity benefits.
  4. Disablement benefits.
  5. Dependent benefits.
  6. Funeral expenses.

This Act also provides social security to women at the time of their pregnancy.

The Married Women Property Act, 1874

This Act expressly states that any married woman’s wages and earnings acquired or gained after the enactment of this Act in any employment, occupation, or trade, as well as any money or other property acquired through any artistic or scientific skill, and all savings, shall be deemed to be her separate property. In this way, a woman has the right to possess her own property.

Positive steps that can be taken towards achieving gender equality 

Every year, the United Nations recognises a different theme for World Women’s Day or International Women’s Day, and in 2022, the UN highlights the direct impact of climate change on women’s lives, as well as women leaders who are changing the conversation about climate change through their sustainable initiatives. While we commemorate International Women’s Day, there is so much that goes undetected in our discussions on the issue. Gender equality is a detailed topic consisting of different layers of discussion and one among those is the adoption of positive steps that will fundamentally enforce equality among every gender in this world. Some of such steps have been discussed hereunder:  

Paternity leave

The key step to introduce gender equality in workplaces is by normalising and granting paternity leave. Prince William, Justin Timberlake, David Cameron, Virat Kholi and Mark Zuckerberg have all taken paternity leave to take care of their children. These trailblazers are excellent role models for balancing career and family life. Some nations have ‘bonus periods’, meaning that if the father takes a particular amount of sharable leave, the pair may be eligible for additional weeks of paid leave. Other nations just give both parents their own separate entitlements, with no shareable term. As a result, more fathers may be at home caring for their children, making it simpler for moms and themselves to meet the demands of newborns and bosses.

Promotion of gender-neutral advertisements

Yorkie, which is owned by Nestlé, debuted its overtly masculine ad ‘It’s Not For Girls!’ with slogans like ‘Man fuel for man stuff,’ ‘Not available in pink,’ and ‘Don’t feed the birds’ just 20 years ago. Given that the only goal was to sell five solid bits of chocolate intermingled with raisins and biscuits, this was excellent marketing. The campaign lasted till the year 2012. Advertisements of Surf Excel, Nihar Hair Oil, etc. have normalised the concept of ‘share-the-load’ in the way they portray their products in front of consumers for selling the same. Thus, washing, cooking, cleaning and other related jobs are experiencing a transition from being women-centric to being gender-neutral. Another notable advertisement that often draws attention is that of Red Label tea where a transgender woman serves to the vehicles waiting in traffic. An indicator of humanity and inclusion is promoted by the advertisement. Generation Z is also encouraging and demanding such portrayal.  

Including gender equality as a core subject in primary schools

While several schools have already introduced gender studies as a part of their course and curriculum, it is expected out of every educational institution to encourage their children to view a gender-neutral world which will also help them learn how to show respect to both their parents and their individual professional life. In a safe and secure learning environment, both boys and girls must feel welcomed. Governments, schools, instructors, and students all play a role in ensuring that schools are free of violence and prejudice and that they deliver gender-sensitive and high-quality education. 

Governments may do this by developing a nondiscriminatory curriculum, facilitating teacher education, and ensuring proper sanitary facilities. Schools are in charge of dealing with school-related violence as well as offering comprehensive health education. Teachers should adhere to professional guidelines for proper disciplinary procedures and give objective instruction. Students must also act in a nonviolent and inclusive manner.

Teaching load-sharing at home 

Children must be allowed to carry out every household chores in terms of assisting their parents or elders irrespective of their gender. For instance, if guests arrive in A’s house and food needs to be served to them, A must encourage both the male and female child to assist in doing so and not be biased toward the male child, thereby pushing the female child to carry out such activities. Gender equality can be best taught to children and to society at home in this manner. 

Not fearing transgenders on road and accepting them 

It is often a common sight that whenever we see a transgender on road, the car’s windows roll-up. While this may be a very frequent and normal activity that we tend to carry out, the same is a signatory of grave gender inequality when it particularly comes to the third gender. Instead of shutting the window on their face, it is necessary for us as educated legal citizens to make them aware of their rights and the possible destiny the same holds for them.  The need for adopting and strengthening sound policies and enforceable legislation for the promotion of gender equality and the empowerment of every shadowed gender is a must in the present century.

Conclusion

In India, society should strive for gender equality and abandon the notion that women or any other gender that do not align with the mainstream gender division, are commodities. It’s the only way to get the country back on track to wealth and success. We all know that gender equality in India may make a significant contribution to the country’s growth in every aspect. Various statistics and numbers from nations with a sizable population of empowered women show that countries with a larger proportion of gender equality are fast growing on all fronts at the global level. 

Although the author strongly believes in equal rights for every citizen irrespective of gender, readers of this article might encounter more female-centric content in comparison to the other genders. The reason behind this is simple. The feminine gender which has been a part of society since the very beginning has not been given the prominent chair they deserved, and the third gender whose rights have been recognized lately could expect very less from society in general. 

When the gender globe is balanced with an equal number of men and women, the principle of gender equality will be demonstrated. To realise this objective, government action with public backing is essential. 

References 


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Can a contractual woman employee avail the benefit of maternity leave : analyzing relevant judicial precedents

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The Maternity Benefits Act, 1961

This article is written by Shivam Sharma studying at SLS Pune and pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution

This article has been published by Sneha Mahawar.

Introduction

Contractual employees refer to such employees who are hired for a specific job or gig. They are not deemed to be permanent staff or even an addition to the permanent and regular workforce. Maternity benefits are such benefits that are provided to female employees to protect their rights during pregnancy and post-childbirth. These benefits are governed by the Maternity Benefits Act, 1961.

Ideally, the act should inculcate women employed on a contractual basis. This scope of the Act becomes clear when viewed in the context of the clarifications as released by the Ministry of Labour and  Employment post the implementation of the Maternity Benefit (Amendment) Act, 2017

The problem stems from the fact that Section 2 of the Maternity Benefits Act, which provides the applicability of the Act, does not explicitly state “employment on a contractual basis”. This implies that the majority of the beneficiaries under this Act cannot avail themselves of the maternity benefits. Yet, there have been judicial attempts to expand the scope of the Act. This article is an attempt to showcase some of these attempts.

Applicability of the Act

The applicability aspect of this Act is divided into two: based on the nature and size of the establishment and based on its applicability to a woman claiming the benefits. The following establishments are bound by the provisions of this Act:

  1. Mines;
  2. factories;
  3. Plantations;
  4. Establishments that put on acrobatic and other shows;
  5. Shops and establishments
  6. Any business with ten or more employees who have been with the company for at least a year;
  7. Any other establishment as notified by the Central or State Government.

The Act will not be applicable to factories where other laws providing maternity benefits apply (such as the Employee State Insurance Act, 1948). As per Section 5(2) of the Act, any woman employee who has been employed for a continuous period of eighty days or more in the twelve months immediately preceding her date of delivery shall be entitled to the benefits under the Act.

Limitations of the Maternity Benefits Act

The Indian legislation introduced the Maternity (Amendment) Bill, 2017, which increased the maternity benefits for working women from 12 weeks to 26 weeks. This period of 26 weeks is the third highest in the world. Though the efforts of the Government are much applauded and commendable, a mere 1% of all working women get to avail of these benefits. The law is limited in its implications and application as it is applicable to organizations and establishments with 10 employees or more. Such organizations account for a very miniscule proportion of the total number of working women in India.

An estimated 84% of female employees work in organizations and establishments with fewer than 10 employees. Thus, they do not qualify for the benefits under the Act. On top of this, the Act does not specifically and explicitly state that the Act will be applicable to employees who are employed on a contractual basis.

Judicial precedents

The following is a list of some of the important judicial precedents from the Hon’ble Supreme Court and various Hon’ble High Courts:

Rakhi P.V. and Ors. v. the State of Kerala (Kerala High Court)

Facts 

In this case, the petitioner was a contract-based employee in the Higher Education Department of the Government of Kerala. During the period of her employment, the petitioner applied for maternity leave. She was granted the same for a period of 135 days and was required to report back to duty at the expiry of the said period.

As per the Kerala Service Rules and the provisions of the Maternity Benefits Act, 1961, every woman employee who is working in any establishment shall be entitled to a leave of 180 days.

Issues 

Is the petitioner (and other female employees under a similar contract) entitled to a leave of 180 days or a mere 135 days?

Judgment 

The Hon’ble High Court ruled that the female employees working in government establishments on the basis of the agreement shall be entitled to a leave of six (6) months. Thus, the 135 days of leave provided to them was not sufficient or acceptable. The court held that contentions of the respondent as to the 135 days of leave were not justified. The court set aside the order of the state government that denied leave and instead directed the state government to grant the women employees twenty-six weeks of maternity leave. 

It was asserted in this judgment that all female employees, irrespective of the fact that they are employed on a contractual basis or not, shall be entitled to the benefits under the Maternity Benefits Act. The court also emphasized that such benefits will be available regardless of the length of the employment contract. In its order, the court granted a leave of 180 days. Going against this creed would amount to an act of discrimination based on gender.

Rasitha C.H. v. State of Kerala and Ors (Kerala High Court)

Facts 

In this case, the petitioner in the given case was an Assistant Professor at Calicut University and had held that position for a period of 10 years on a contractual basis. She had recently renewed her contract for a term of one year. During this revised period, she applied for maternity leave. The petitioner was denied such leave on the grounds that the terms of the agreement with the university were silent on such benefits. 

Issues 

Is the mere absence of contractual obligations regarding maternity benefits provisions sufficient to deny such benefits to such an employee?

Judgment 

According to the court, maternity benefits were neither mere statutory benefits nor benefits arising out of contractual obligations. Maternity leave was an essential part of a woman’s dignity. Basing this judgment on the ratio of Mini v. Life Insurance Corporation of India and the judgment of Rakhi P.V. and Ors. v. State of Kerala & Ors. In both these cases, it has been held that no woman can be compelled to choose between her natural right to motherhood and employment.

Further, the Court set aside the contention of the respondents in the writ petition that since the petitioner was a contractual employee, she could only claim a maximum of 15 days of casual leave during a period of one year.

The Court highly and rightly stressed the judgment in Rakhi’s case and held that women employees who are based on a contractual basis cannot be denied their right to maternity leave. Thus, the court ordered the university to grant all such benefits irrespective of what was or was not stated in the terms of the agreement.

B.S. Rajeshwari v. State of Karnataka and Ors. (Karnataka High Court)

Facts 

In this case, the petitioner, B.S. Rajeshwari was employed on the basis of a contract with the Directorate of Municipal Administration in Bengaluru. During the month of June 2019, she was on maternity leave. During this period, she was asked to return to work with immediate effect. In August of 2019, her employer terminated her contract and her employment.

Issues 

Was it valid for the municipal authorities to terminate the contract of a female employee as she was on maternity leave and could not return to work during that period?

Judgment 

The Hon’ble Court held that the law of land applied equally to all, and in the present case, it meant that it applied to the contractual employees. There was no segregation under the Maternity Benefits Act of the country to classify female employees as government servants, temporary servants, or contract-based employees. The employer does not have the authority to make such separations on its own behalf.

At the hearing, Justice M. Nagaprasanna ordered that the petitioner be reinstated back to her work within a period of 2 weeks and be awarded 50% of her wages between the period of her termination and actual reinstatement. Additionally, the court levied exemplary damage of INR 25,000 for the gross injustice suffered by the woman employee. 

The Court criticized the employers for making the petitioner suffer such an ordeal and noted in its judgment, “men who man such offices become insensitive to the issue of the kind that is alleged in the petition, and it would become “power in the wrong hands.”

The court concluded that the Maternity Benefits Act does not venture forth, divide, and assign rights based on how a worker has been classified. As permanent employees or based on an agreement, all female employees are entitled to the benefits of maternity leave and other attached benefits.

Dr. Mandeep Kaur v. Union of India (Himachal Pradesh High Court)

Facts 

In this case, the given case, the petitioner was working as a medical officer on a contractual basis at the establishment maintained by the respondents. During the tenure of her contract, she availed herself of the maternity benefits. The respondents denied her such a benefit based on the fact that her terms of agreement contained no such provision to allow her to avail of the maternity benefit.

Issues 

Is the petitioner entitled to maternity benefits even when her employment contract is silent about the same?

Relevant laws

Section 2 of the Maternity Act, 1961, provides the cases where this Act is applicable. Another important provision is Article 21of the Constitution of India. The article provides that no person can be denied his or her life and personal liberty except in accordance with the procedure of the law.

Judgment 

The Hon’ble Court in its judgment has highlighted the fact that irrespective of the fact that an employment agreement is missing the provisions addressing maternity benefits, the petitioner is still entitled to maternity benefits under the act. The act of the employer not only stood in infringement of the statutory provisions of the Act but also in infringement of Article 21 of the Constitution of India. The court relied on the judgments of Municipal Corporation of Delhi v. Female Workers & Anr., Rasitha C.H. v. the State of Kerala, and Rakhi v. the State of Kerala

The Court was right to conclude that the denial of maternity benefits to female employees under contracts is tantamount to a denial of rights under Article 21 of the Constitution. A woman is entitled to her dignity and to be treated with equality at her workplace. It is thus the duty of the employer to facilitate the facilities for maintaining the same. Judgments such as this one help in expanding the scope of the Maternity Benefits Act.

Municipal Corporation of Delhi v. Female Workers (Muster Roll) and Anr. (Supreme Court)

Facts 

In this case, the present case, the unionized female workers who were on a muster roll (i.e., not the regular roll) demanded maternity benefits just like the regular workers. These female employees were deemed temporary employees of the organization. The same was denied to them on the grounds that their services were not regularized.

Issues 

Are female employees on a muster roll entitled to maternity benefits just like regular employees?

Judgment 

The Hon’ble Supreme Court held that the provisions of the Maternity Act are in consensus with the Directive Principles of State Policy, Articles 39 and 42 of the Constitution. No pregnant woman employee should be forced to work during the advanced stages of her pregnancy because it is harmful to her health and the health of the infant. The women on muster roll performed the same nature and quantum of duties that were being performed by women on regular rolls. The female employees were performing hard labor, working on construction projects, and maintaining roads. Thus, the court concluded and ordered that all such employees are entitled to a maternity leave of 6 weeks before and after the delivery.

The Court concluded that the Maternity Benefits Act does not venture forth, divide, and assign rights based on how a worker has been classified. As permanent employees or based on an agreement, all female employees are entitled to the benefits of maternity leave and other attached benefits.

Legislative efforts 

Post the judgment of the Kerala High Court in the case of Rakhi P.V. and Ors. v. State of Kerala, the Kerala government came out with a notification. The notification dated January 4, 2021, extended the benefit of maternity leave to the female employees who are employed on a contractual basis. These benefits will be available irrespective of the tenure of the contract. The benefits themselves were available under the Kerala Service Rules.

Prior to the notification, all such female employees could only receive maternity benefits if they qualified for them under their contracts, and such contracts had to be for a period of one year or more. All such leaves shall commence three weeks prior to the expected date of delivery as certified by a medical officer. The order aims to set the correct tone moving forward.

Conclusion

There is a pressing need to recognize and reconcile women’s participation in the workforce along with their male counterparts. The provision of maternity leaves and benefits is an integral step towards the realization of this goal. When a pregnant woman is made to work, the efficiency of the work is bound to suffer. More importantly, maternity laws are in place to protect the fundamental rights to the life of female employees. Denial of these rights is a violation of the right to life of the fetus as well as the mother.


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Analysis of Section 354D IPC, 1860 with case laws

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Cybercrime

This article is written by M.Manaswini Reddy of KVRR law college, Osmania University. It comprehensively explains Section 354D of IPC, that is, stalking. The article enlightens the Section as a legal provision for the protection of women.

This article has been published by Sneha Mahawar.

Introduction

Crime is defined as an act or omission which is violative of law and thereby affects society at large. The Indian Penal Code, 1860 provides various provisions for the protection of women against crimes. The Code essentially looks at Actus Reus and Mens Rea to punish crime. Stalking generally means following someone either online or physically in the absence of their consent with a motive to establish personal interaction with such a person even after they have dissented to it. Stalking is a punishable offence under the Indian Penal Code, although the Code provides for punishment for stalking only against women. Stalking under the Indian Penal Code is recognised as a cognizable, bailable and non-compoundable offence. Stalking has made a serious impact on the physical and mental health of young women. Most victims face stress and social anxiety as a result of the trauma of being stalked along with having to move locations, change jobs, having emergency contacts and undisclosed weapons. This article gives an overview of the Section 354D and each of its necessary components.

Background

A committee was formed to bring changes to the criminal justice system. Formed on December 23rd 2013, the Committee consisted of Justice J.S Verma as chairman, Justice Leila Seth and senior Advocate Gopal Subramaniam. The changes were aimed at making the criminal justice system faster in terms of trials and enhancing punishments against offences of sexual assault of extreme nature concerning women. This was an action taken consequent to the infamous Delhi gang-rape case which highlighted the increasing number of crimes against women and outraging their modesty. Stalking was introduced under Section 354D as an offence by the committee under the Criminal Law  (Amendment) Act of 2013 and a report was submitted on January 23rd 2013. 

Section 354D IPC

Any man who follows a woman, contacts her or attempts to contact her for personal interaction time and again even after the woman has indicated clearly that she is not interested in making an acquaintance, amounts to stalking as per Section 354D. This Section also covers online stalking that is to say monitoring her use of the internet, email or other forms of electronic communications.

Exceptions to stalking

  • If the woman is pursued by the man as a part of his responsibility to the state, to detect a crime or prevent one from happening;
  • To abide by any condition or law given by a person authorised by law; 
  • Other situations that might make his conduct reasonably justifiable.

The punishment prescribed by the Section for stalking is simple or grievous imprisonment for a term of three years and fine upon first conviction and on a second conviction, imprisonment for a term of five years and fine.

Section 354D IPC interpreted with other provisions

  • 354A of the Indian Penal Code discusses making sexual advances towards a woman and physical contact that is unwelcome or explicit, demands or requests for sexual favours shows, pornography against the will of the woman and makes sexually coloured remarks. All these have been categorised as sexual harassment and before Section 354D this Section was used to cover stalking as well since most cases of sexual harassment begin with stalking. 

For example eve-teasing, a girl walking home by making sexually coloured lewd remarks or demanding and requesting sexual favours, in such cases Section 354A will be read with Section 354D(1)(i) of IPC.

  • 354B– This Section speaks about the use of criminal force or assault with the intention to disrobe a woman without her will. The Section punishes abetment of such offence.

It is pertinent to note that disrobing a woman means to take the woman’s clothes off against her will or to compel her to take her clothes off against her will.This too is a form of eve-teasing and stalking a woman with an intention to disrobe her against her will. It attracts both outraging the modesty of a woman as well as Section 354D(1)(i). There have been instances where a man stalks a woman until cornered, uses criminal force or assaults her, forcing her to disrobe or tries to disrobe her himself against her will. 

  • 354C– Voyeurism is elucidated under this Section, which simply means attaining sexual pleasure by watching a person when they are naked or engaged in sexual activity. The Indian Penal Code punishes any man who watches or captures images of a woman by invading her privacy, essentially when she is naked which means that her genitals, posterior and breast are exposed or  when she is engaged in any private act that she  would not ordinarily do in public. The Section makes it clear that such an act is punishable if done without the consent of the woman by using the line “she would not expect to be observed in the time of her privacy”.The Section punishes circulating such images of the woman.

Voyeurism too is most often read with Section 354(1)(i) since it involves a man following a woman to watch or capture her images, invading her privacy.

  • 509- Insult the modesty of a woman by using words, gestures or actions. The main ingredients of the Section that the offender must utter words, make a sound or gesture or exhibit any object and it must be done with the intention that it be heard or be seen or invade the privacy of the woman. Section 509 is often read with 354D(1)(i) since there have been incidents of eve-teasing with an intention to insult the modesty of a woman while stalking her.

354D IPC and Cyber Stalking

Section 354D(1)(ii) mentions that monitoring the use of the internet or email or any other electronic communications by a man even after she has expressed her disinterest and displeasure to interact amounts to online stalking.

Trying to contact a woman and make personal acquaintances even after she has shown her disinterest, defaming, slander and libel on an online platform also are considered cyberstalking.  For example: sending friend requests to a girl’s account even after she rejected it from multiple accounts.

Cyberstalking is usually dealt with under Sections 66E, 67, 67A and 67B of the Information Technology Act of 2000 while being read with 354D(1)(ii). 

  • Section 66E of the IT Act: while Section 354C read with 354D91)(i) is voyeurism that happens with physical stalking, 66E talks about voyeurism committed through the internet which is most commonly a result of cyberstalking. The Section punishes capturing, publishing and violating the privacy of an individual.
  • Section 67 of the IT Act: talks about punishment prescribed for transmitting obscene material in electronic form, this Section is read with Section 292 of IPC and 354D(1)(i) in instances of stalking and sending obscene, vulgar material.
  • Section 67A  and 67B of IT Act: while 67A deals with an adult woman facing stalking and being sent sexually explicit material, publishing and transmitting explicit material, 67B deals with children below the age of 18 years in the above same situation. Both these Sections cover the ambit of 354D(1)(i) to be read with.

How to identify and file a complaint against stalking

Physical Stalking

Based on these provisions, one can identify what way they are being stalked under Section 354D(1)(i). It has to be noted that certain actions of stalking also result in harassment of a sexually-explicit nature, which must be determined under Sections 354A, 354B, 354C and 509. It is important to understand and determine whether the actions happening to you are as per the Section, that is:

  • If you are being followed or contacted by a man 
  • The man shows intentions to build personal interaction 
  • You have indicated disinterest
  • Recognise if any other actions are happening along with stalking. For example, sexual harassment, voyeurism (taking pictures without consent), assault, trying to outrage modesty by words actions gestures and trying to disrobe forcefully.

It has to be noted that certain actions of stalking also result in harassment of a sexually-explicit nature, which must be determined under Sections 354A,354B,354C and 509.

  • File an FIR/complaint against it at the nearest police station. 
  • In case you are not in your domiciled state, a zero FIR may be filed. A zero FIR allows you to register a complaint irrespective of where the offence has been committed and later on transfer such complaint to the police station of that jurisdiction where the offence has been committed.
  • Establishing whether the offence is cognizable or non-cognizable helps understand whether approval of court or warrant would be required to arrest the offender. 
  • Since 354D is a cognizable offence, police can arrest the offender without the approval of the court followed by which investigation begins. 

Cyber Stalking

Cyberstalking is dealt with 354D(1)(ii): identify and be sure that you are facing cyberstalking through the essentials mentioned in the Section. 

  • If you are being followed or contacted by a man 
  • The man shows intentions to build personal interaction 
  • You have indicated disinterest 
  • Monitors the use of your Internet
  • Recognise if any other actions are happening along with stalking. For example, sexual harassment, voyeurism (taking/publishing pictures without consent), trying to outrage modesty by words or gestures, showing pornography or sending explicit content.
  • A complaint can be filed to cyber cells dealing with internet-related criminal activity that is cybercrime. 
  • The complaint can be either made online or via an FIR. 
  • To file a complaint anonymously there is provision for an online grievance cell with the National Commission For Women who then forward the case to the local police. 
  • Social Media apps and sites provide the option to report any activity that is considered explicit information that might be offensive. This option helps remove the offensive information within 36 hours as per the Intermediary Guidelines Rules, 2011.

Complaints filed for either kind of stalking, if refused the victim can seek legal assistance directly for the judicial magistrate. The complaint filed must also keep the victim’s identity confidential.

Prevention of Cyber Stalking

Here are a few suggestions to prevent cyberstalking:

  • It is advised to refrain from disclosing personal details such as phone numbers, Emails or house addresses on your social media.
  • Having different accounts for personal and professional online presence minimises a lot of risks.
  • Making sure to have the GPS location of your devices off as well as not sharing live locations whenever there isn’t a need, would ensure safety.
  • Checking privacy settings and not responding to unknown calls or messages is advised. 
  • Protect your IP address with a virtual private network, installing anti-virus software into your devices also helps.

Case laws concerning Section 354D IPC

One of the very most thought-provoking cases which invoked provision 354D was: Santosh Kumar Singh v. State Through CBI (2010) where Priyadarshini Mattoo, a 25-year-old law student was stalked, raped and murdered at her residence in New Delhi. The third-year law student had been stalked multiple times and had been harassed by Mr Santosh Singh, son of a former IPS officer and was her senior at the campus law centre in Delhi. Several complaints were filed against him on several instances of stalking her, harassing, threatening her and making indecent requests. An FIR under Section 354 was filed in Maurice Nagar Police Station the perpetrator was arrested and released on a bail bond. A complaint was filed with the Dean of the university who asked the accused to not do such activities, the victim was also assigned personal security personnel due to the severity of the situation. 

On January 23rd 1996 when the victim was alone at home on the account of coming to a legal compromise, he assaulted her. He then proceeded to hit her 14 times with his helmet, raped her and strangulated her with a wire to death. The case was taken up by the trial court and the accused was given the benefit of doubt due to the fabrication of evidence by CBI, evidence was not collected as per procedures of law.

When the matter was taken up at the High Court the accused was awarded the death penalty which was on a later date December 10 granted to life imprisonment by the Supreme Court.

In the case of Shri Deu Baju Bodake v. The State of Maharashtra (2016) Bombay High Court dealt with suicide by a woman who ascertained the reason for her suicide was consistent harassment and stalking by the perpetrator. Not only did the accused harass and stalk her while she was at work he also demanded to get married to her despite her disinterest and dissent. The High Court held it imperative to record Section 354D along with abetment to suicide to punish the accused.

Arvind Kumar Gupta v. State 2018, a man followed her to her office and stood next to where she stayed, by the time she returned from work. This continued for a year until the woman’s brother confronted the man who said that the girl reminded him of someone and was intending to marry her. The woman filed an FIR and in the trial, the man could not plead his defence. The prosecution was able to prove that he followed her constantly even after she was not interested. The prosecution was able to prove that he followed her constantly even after she was not interested. It was decided by the court that the man was guilty of stalking the woman as per Section 354D(1)(i), he was without reasonable doubt wanting to interact with her even after she expressed her dissent. The court awarded him with simple imprisonment and a fine.

Analysis of Section 354D IPC

Section 354D although discusses stalking to a greater extent, it does not provide for stalking that happens not just with women only. Stalking is such a crime that may happen to anyone at any point in time and since the invention of technology people of all genders can be victims of the communication offence. This calls for the provision to be more gender-inclusive. 

Stalking under Section 354D of the Indian Penal Code is a bailable offence in the first instance which means that the accused is free to go on bail. Such bail is not required to be approved by the court; neither does the accused need to present himself before the court. While in reality there is the utmost need to make it non-bailable since it is often misused by men. Stalking not only is a crime on its own but is also the reason for certain other crimes, most commonly sexual harassment. The above cases show that stalking can lead to several serious crimes against women including rape. 

The woman is harassed, called out by sexually coloured remarks, teased, gets asked sexual favours and demands. Since the generation of the internet is fast and affordable stalking that leads to sexual harassment is quite prevalent in the online mode. All such actions have a serious effect on a woman’s self-esteem, confidence to be independent and mental health. Most crimes against women start with stalking and progress towards serious offences especially out of rage that the victim filed a case. The stalker, despite being arrested, is allowed to roam free on bail. 

Criticism of Section 354D IPC

While the National Crime Report Bureau estimated stalking as a crime to have grown exponentially in 2017, with just 26% of conviction rate one can’t help but analyse are there enough laws to prevent stalking. The Indian Penal Code of 1860 along with the Information and Technology Act of 2000 provides punishment for stalking although there has been no discussion about prevention. This indicates that the criminal justice system needs to take a look at provisions related to women in a preventive way rather than a protective way. That is to say, nip the evil in the bud. 

There is a  need to strengthen the acts that amount to stalking as a crime as it only talks about following a woman and trying to establish contact with her even when she is disinterested. It does not mention anything about acts that might lead to stalking or are a mode of stalking such as, staring at a person, spreading false rumours, making calls or lurking around a person’s residence

Conclusion

The Indian Penal Code has played a pivotal role in making a framework for provisions for women. The code attempts to cover all crimes against women of all ages, right from the Prenatal stage covering childhood, adolescence, reproductive age and offences against elderly women, for example, there have been several cases of abuse of widows.

Most cases of stalking go unnoticed because women do not want to risk the freedom of being able to move around and many eyewitnesses ignore it, this has rendered the offence be not taken seriously at all even if there is a provision to punish it. With awareness and education on how to react in situations of being stalked or invoking Section 354D to report the crime, file an FIR and approach the right authorities, a change can be brought.

References


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All you need to know about reconstitution of a partnership firm

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This article is written by Vihanka Narasimhan, a law student from Jindal Global Law School, O.P. Jindal University. This article makes an attempt to explain the concept of reconstitution of a partnership firm in a simple manner.

It has been published by Rachit Garg.

Introduction

A partnership firm is said to be formed when an arrangement is made between two or more people to manage business operations and share the profits and liabilities as redecided. There are various reasons which can lead to certain changes in the structure of a partnership firm. Such changes may arise due to admission of a new partner, retirement of an old partner or alteration of partnership deed between the existing partners. This is called reconstitution of a partnership firm. In this article we are going to discuss the need for reconstitution and the ways in which it can take place.

What is a partnership firm

In India, all the laws concerning Partnership firms fall under the ambit of Indian Partnership Act,1932. Section 4 of this Act provides the meaning of the term ‘Partnership’ as “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.” In simple terms, a partnership is basically the association of two or more persons who operate a business together with the aim of earning profits and sharing those profits amongst themselves. It is very important to note that in most cases the amount of profit which a partner receives is directly proportional to the amount of capital invested by him. There can be two types of partnership. They can be as follows: –

Partnership at will

Section 7 of the act discusses this concept. In a situation where there is an absence of a provision in the contract made between the partners in relation to the duration of the partnership or the determination of the partnership then it can be conceived as partnership at will. 

Particular partnership

Section 8 of the act discusses this concept. In a situation where there is a presence of a provision in the contract made between the two or more persons in relation to the duration of the partnership or the determination of the partnership then it can be conceived as a particular partnership. Some examples of a particular partnership can be construction of a road, laying of a railway line, etc. It is important to understand that this type of partnership comes to an end as soon as the duties in the contract have been fulfilled.

Features of partnership firm

The following are the essential elements of a partnership in accordance to the Indian Partnership Act,1932: –

Association of two or more persons

In order to form a partnership, there should be a minimum of two persons involved. The Indian Partnership Act, 1932 remains silent on the maximum number of partners however some clarity regarding this issue has been provided in Companies Act, 2013. Section 464 of this act states that the number of partners should fall with the prescribed limit and should not exceed more than 100. It means that the rules limit can be prescribed but should be less than 100. It is also important to note that the current prescribed limit is 50. In case a partnership firm exceeds the prescribed limit, it will be deemed as an illegal association of persons.

Contract of partnership

In order to form a partnership, it is mandatory that two or more persons come into a contract. The contract of partnership can be express or implied in nature. Section 5 of the Indian Partnership Act states that the relationship between the partners of a firm arises from contract and not from status.

Profit-driven venture

In order to form a partnership, it is essential that it is formed in view of earning profits by the means of carrying out some business. The term business has been defined in Section 2(b) of Partnership Act as “every trade, occupation or profession.” This implies that a business venture created for charitable, religious and social purposes by two or more persons will not be considered as a partnership.

Sharing of profit

In order to form a partnership, the association of persons are required to divide profit amongst themselves. The profit can be divided on the basis of the amount of capital contributed or in case the contract between the partners is silent on the matter, it is divided equally.

Mutual agency

Mutual agency can be defined as a type of partnership agreement in which one partner’s actions in relation to the business can bind all partners. In simple language, each partner is the agent of the firm as well as of the other partners thus, making partners as both an agent and a principal to each other. The origins of this law can be traced back to the general law of agency.

Procedure for registering a partnership firm

The registration of a partnership is not compulsory by law and it is at the sole discretion of partners of the firm to register or not. It is, however, advisable to register a firm as it provides for legal protection in case a dispute arises between the partners. The following are the steps to register a partnership firm :-

Step 1: Application for registration

An application form (Form A) has to be filed to the Registrar of Firms of the State in which the firm is operating. The registration application has to be signed and verified by all the partners or their agents. The application is necessary to file as a partnership firm is required to disclose basic details which are as follows –

  • Name of the Partnership Firm
  • Name and address of all partners
  • Place of business (address of main and branch offices)
  • Duration of the partnership
  • Date of joining of partners
  • Date of commencement of business

Step 2: Filing partnership deed

A partnership deed can be defined as an agreement between the partners which specifies the details with regards to each partner’s rights, duties, profits shares and other obligations. After filing an application, a copy of the partnership deed should be filed with the registrar of firms.

Step 3: Payment of fee and stamp duties

The next step is the payment of fees and stamp duties. It is crucial to note that stamp duties vary from state to state.

Step 4: Certificate of incorporation

After following all the above steps and the approval of the same from the registrar, a certification of incorporation is issued. This process will ensure that the firm has been entered into the records and consequently gains legal recognition. The whole process generally takes 12-14 days.    

Reconstitution of a partnership firm

Any changes in the constitution of the firm or change in relation of partners or restructuring of the partnership firm can be defined as ‘reconstitution of a partnership firm’. Reconstitution leads to changes in the firm which put an end to the pre-existing agreement between the partners and results in the formation of a new agreement in its place. Under the Indian Partnership Act, 1932, Sections 31 to section 35 broadly deal with the Reconstitution of a partnership firm.

Example

A, B and C are partners of a firm sharing profits in the ratio of 2:2:1. Their capital contributions are Rs.10000, Rs.10000 and Rs.5000 respectively. One day all the partners decide that C should bring in an additional capital of Rs.5000. This makes the new capital as Rs.10000 each which results in a change in the profit-sharing ratios to 1:1:1. The arrangement can be called a reconstitution of a firm as a change in the structure can be observed. 

Need for reconstitution in a partnership firm

Reconstitution of a partnership firm takes place whenever there is a change in the profit-sharing ratio among the partners, admission of a new partner, retirement of a partner and death or insolvency of a partner. This process of reconstitution can lead to the following changes in an organisation: –

  • Determination of sacrificing ratio and gaining ratio between continuing partners
  • Accounting for goodwill
  • Accounting treatment of reserves and accumulated profits
  • Accounting for revaluation of assets and liabilities
  • Adjustment of capitals

Modes of reconstitution of a partnership firm

Change in profit sharing ratio among partners

A firm is said to have reconstituted when there is a change in the amount of profit shared between the partners. This can be done with the mutual consent of all the partners and will result in the formation of a new partnership deed.

Admission of a new partner

A firm is said to have reconstituted when the admission of a new partner takes place. Section 31 of the Indian Partnership Act discusses the same in detail. The act states that the following are essential for the admission of a new partner in the firm –

  • Consent of the existing partners for admission
  • The admission should be in conformity with the agreement between the partners and the provision of partnership deed

The newly admitted partner is also known as ‘incoming partner’. It is important to note that all the transactions made prior to the admission of the new partner will not be binding on him unless an agreement is made regarding the same.

Retirement of a partner

A firm is said to have reconstituted when the retirement of the partner takes place. Section 32 of the Indian Partnership Act discusses the same in detail. The act states that the following are essential for the retirement of an existing partner in the firm –

  • Consent of the existing partners for retirement
  • The retirement should be in conformity with the agreement between the partners and the provision of partnership deed

In case, it is partnership at will, a notice in writing by the partner retiring to all the other partners would suffice. The retiring partner is also called ‘outgoing partner.’ The liability of the retiring partner for does not cease till the day he retires however it is discharged in case –

  • The partners of the reconstituted firm decide to take over his liability
  • The third party decides to set free the retiring partner and accepts the partners of the new firm as the debtors.

Removal of a partner

A firm is said to have reconstituted when an existing partner is expelled. Section 33 of the Indian Partnership Act discusses the same in detail. The act states that that the following are essential for the of the expulsion an existing partner in the firm –

  • Partnership deed provides for the power to expel the partner
  • Should be exercised by majority of the partners
  • Should be done in good faith

After being expelled from the firm, there is no liability of the expelled partner for the acts or debts of the firm. The partner is deemed liable only for the transactions made in the tenure of his partnership. This, however, is discharged when: 

  • The partners of the reconstituted firm decide to take over his liability
  • The third party decides to set free the retiring partner and accepts the partners of the new firm as the debtors.

Insolvency of a partner

A firm is said to have reconstituted when the insolvency of a partner takes place. Section 34 of the Indian Partnership Act discusses the same in detail. The act states that the following is provided when an existing partner is declared insolvent –

  • The insolvent partner ceases to be partner of the firm from the date of being insolvent
  • Dissolution of the firm takes place when no provision is stated in contract.

Death of a partner

A firm is said to have been reconstituted when the death of a partner takes place. Section 42 of the Indian Partnership Act discusses the same in detail. The estate of the deceased partner is liable for his acts done or liabilities incurred before his death. It is however discharged if the firm agrees to continue the business.

Impact of reconstitution on a partnership firm

There are many changes when the structure of a partnership firm is altered. The impact of reconstitution of firm are as follows –

Change in mutual right and duties

Section 17(c) of the Partnership Act, 1932 states that “where a firm constituted to carry out one or more adventures or undertakings carries out other adventures or undertakings, the mutual rights and duties of the partners in respect of the other adventures or undertakings are the same as those in respect of the original adventures or undertakings.” In simple language, it means that on reconstitution of the firm, the rights and duties of the partners remain the same as they were before the reconstitution. 

Revocation of continuing guarantee

Section 38 of the Partnership Act, 1932 states that “A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is, in the absence of agreement to the contrary, revoked as to future transactions from the date of any change in the constitution of the firm.” In simple language, it means that on reconstitution of the firm the continuing guarantee given on behalf of the firm or to the firm stands revoked as to future transactions from the date of reconstitution.

Conclusion

A partnership is an arrangement that has taken place between two or more persons to manage a business with the aim of sharing its profits and liabilities. In totality, this arrangement is a consequence of meeting a mutually beneficial objective amongst all the partners. Any changes, big or small will result in some alteration in the relationship between the partners of a firm ultimately resulting in the reconstitution of the firm itself. In conclusion, the concept of reconstitution is vital for the development of the growth of the business. 

References

  1. https://www.mca.gov.in/Ministry/actsbills/pdf/Partnership_Act_1932.pdf
  2. https://www.investopedia.com/terms/p/partnership.asp
  3. Introduction to Law of Partnership Including Limited Liability Partnership by Avtar Singh

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All about a shareholders’ agreement

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This article is written by R Sai Gayatri from Post Graduate College of Law, Osmania University. This article deals in detail with a shareholders’ agreement, its essential contents and the role it plays in creating a regulation between the shareholders and the company. 

This article has been published by Sneha Mahawar.

Table of Contents

Introduction 

A shareholder is an individual who invests their money into some company in return for getting a certain number of shares in such a company. By the virtue of the shares bought by them, they are entitled to become one of the owners of such a company. The shareholder also gains certain rights concerning the matters of such a company such as the right to vote. A shareholders’ agreement, also known as a stockholders’ agreement, is an agreement made among shareholders that explains how a company must be operated in certain circumstances and outlines the rights and obligations of the shareholders. The purpose of a shareholders’ agreement is to protect the interests of the shareholders, including minority shareholders, i.e., the ones holding less than 50% of the shares in the company. Let us know more about shareholders’ agreement through this article.

Shareholders’ Agreement – a brief understanding

A shareholders’ agreement is a contract between the shareholders of a company and the company itself. It ties the shareholders to rules to preempt issues that might become contentious in the future. A shareholders’ agreement mentions the shareholders’ rights and obligations, regulates the ownership of shares, privileges, the management of the company, voting and various other insulative provisions for shareholders.

It is a known fact that the Articles of Association (hereinafter ‘AoA’) act as the Constitution for a company and thus they are mandatory and standard in nature. AoA ties a company and its shareholders in their capacity as shareholders and further mentions the responsibilities of the directors, the means by which the shareholders exert control over the board of directors and the kind of business to be undertaken.

When it comes to a shareholders’ agreement the protection of the shareholders is given more importance. Even though a shareholders’ agreement may include certain terms from the AoA, it has no specific format i.e., the shareholders’ agreement can be as flexible and extensive as required by the shareholders according to their needs. While AoA is a public document, the shareholders’ agreement is a private document because it contains confidential internal information of a company. A shareholders’ agreement is an affordable option to reduce the risk of possible business disputes because it specifies how decisions must be made regarding certain disputes including the provision of a framework and procedures for dispute resolution.

The AoA and a shareholders’ agreement must be complementary to each other. However, a shareholders’ agreement may contain a supremacy clause to ensure that it overrides the AoA in case there is any inconsistency so that the shareholders can amend the AoA as required.

Contents of a shareholders’ agreement

The terms included in a shareholders’ agreement may depend on various aspects such as the nature and size of a business, the amount of investment and number of shareholders, etc. A shareholders’ agreement can be as simple or as complex according to the requirements of the shareholders and the company. However, the following contents are usually included in a shareholders’ agreement whether it is simple or complex in nature –

Parties to the agreement

The shareholder agreement recognizes and mentions the company as one party that is different from the shareholders, i.e., another party.

Board of directors and board meetings

The shareholder agreement mentions the role of the board of directors in the company. It also states that the decisions of the board should be approved by the majority. Further, the details as to how frequently the board of directors should hold meetings and how the directors must be selected and replaced are also mentioned in a shareholders’ agreement.

Rights of a shareholder

A shareholder is entitled to certain rights with respect to the company. Therefore, the shareholders’ agreement mentions the rights of the shareholders. Some of the shareholders’ rights are –

  • Right to call for a General Meeting
  • Right to vote
  • Right to appoint directors and take legal action against them
  • Right to appoint the company auditor
  • Right to inspect the registers and books of the company
  • Right to summon the copies of the financial statements of the company
  • Right to be informed about winding up of the company

Liabilities of a shareholder

It is understood that the shareholders are not liable for the acts of the company. However, shareholders may be liable to the extent of the unpaid amount of the share capital regarding the shares held by them. In case the company is limited by guarantee, then the shareholders may be liable to the extent of the amount guaranteed by them. The premise of limited liability of the shareholders is based on the concept that the company is a separate legal entity from the shareholders, i.e, another party. Thus, it becomes important for a shareholders’ agreement to mention the liabilities of the shareholders.

Reserved matters

A shareholders’ agreement must outline the issues that cannot be passed without getting the approval of all signatories, which includes majority support. When a list concerning reserved matters is made, all shareholders are given the chance to vet certain transactions to decide if they are prejudicial to their investment. Generally, under reserved matters, the information regarding acquiring or disposing of certain assets, paying dividends, changing the AoA and memorandum, changing share capital, taking a new debt, etc are included.

Shareholders’ information and meetings

A shareholders’ agreement must include a requirement that the shareholders are entitled to receive regular updates on the company’s performance by means of quarterly reports and an annual report. It should state the specific period when the reports should be sent out to shareholders. A shareholders’ agreement must also mention when shareholder meetings will be held and the date, time and venue of such meetings.

Share capital and share transfers

A shareholders’ agreement must record the company’s share capital on the date when it is signed. Because changing the share capital is one of the reserved matters, the directors are not allowed to issue new shares or change the existing shares into a new share class without the signatories approving such changes. A shareholders’ agreement must also contain the provisions relating to share transfer, such as preventing share transfer to unwanted parties, transferring shares to a new party, consequences in the event of the death of a director or shareholder, as well as ‘drag along’ and ‘tag along’ provisions.

Drag along provisions operate when an offer is received to buy all the shares in the company and a majority of the shareholders are ready to accept such an offer. The rights allow the majority to require the other shareholders to also accept the offer for the transaction to be successful. Tag along provisions enable the minority shareholders to “tag on” to a majority shareholder in a share sale case, wherein the majority shareholders attempt to sell only their shares rather than trying to find a buyer for all the shareholders which includes the minority shareholders.

Amendment and termination

A shareholders’ agreement must mention the process of amending or terminating the shareholder agreement. For instance, a shareholders’ agreement may be terminated upon the dissolution of the company, based on a written agreement, or after the lapse of a specific period from the date of the agreement.

Procurement of finances for the company

Since the shareholders are given copies of the financial statements, they can track the progress and the needs of the company. If the shareholders find that there is a need for funds for the growth of the company, then they can trace out a proper source of funding for the said purpose. The procedure for procuring such finances must be included in the Shareholders Agreement.

Valid meeting and quorum

A shareholders’ agreement must specifically mention the requirements regarding a quorum. The quorum herein refers to the minimum number of members required to hold a valid meeting.

Valuation of the shares of the company

A shareholders’ agreement must mention the information regarding the valuation of the shares of the company. Since the market is extremely fluid, the value of the shares of a company may fluctuate accordingly. But, to create the financial statements the valuation of the shares must be done correctly because they have a material impact. There are a few methods of valuation of shares such as the assets approach, income approach and market approach.

Functioning of the company

A shareholders’ agreement should include the guidelines regarding the functioning of a company on a daily basis to ensure sustainable and consistent workflow in the company. Such guidelines must include the procedure and policies to further create a favourable situation for the smooth operation of the company matters.

Protection of minority shareholders

Minority shareholders are those who hold less than 50% of the shares in a company. Since the minority shareholders do not have much power over the management of the company, their protection is important. A shareholders’ agreement must therefore provide for the protection of minority shareholders. The Companies Act, 2013, mentions the rights of the minority shareholders such as the –

  • The requirement to appoint a Small Shareholder Director (Section 151 of the Companies Act, 2013)
  • Right to apply to the Board in case of oppression or mismanagement (Section 241246 of the Companies Act, 2013)
  • Right to be included when the majority of shareholders sell their shares. This concept is known as Piggy Backing.
  • Right to institute a class action suit against the company and the auditors. (Section 245 of the Companies Act, 2013)

Role of a shareholders’ agreement

The point of having Articles of Association is to ensure that the functioning of a company is done according to the provisions and rules mentioned in it. However, a shareholders’ agreement is not as rigid as the AoA because it allows the shareholders to create the rules according to which the company will operate in a flexible manner or as required by them. A shareholders’ agreement plays a key role in the functioning of a company because it binds the shareholders and the company together. The following are some of the reasons as to why shareholders’ agreement is required and the role it plays –

More control in the hands of the shareholders

Usually, the daily operation of the company is handled by the board of directors, however, when a shareholders’ agreement exists, certain ‘reserved matters’ (as mentioned in the shareholders’ agreement) will require the approval of the shareholders before being executed rather than being left to the discretion of the board of directors.

Avoiding shareholder disputes

Since the shareholders’ agreement will mention the framework and procedure for dispute resolution, many of the disputes that generally arise between the shareholders may be easily resolved or even avoided.

Stability of business

A shareholders’ agreement can prove to be an important tool that ensures stability in the business of the company. Such stability can be appealing to the creditors, banks and potential investors that may want to invest in the company. The stability will also clearly speak for itself thereby showcasing the healthy relationship amongst the shareholders.

Specific shareholder rights

The shareholders’ agreement has the power to enable the individual shareholders to involve themselves in the matters such as the appointment of directors or receiving operational information regarding the company. Thus, it can be understood that by the virtue of a shareholders’ agreement the individual shareholders will have a chance to be heard.

Restrictions when exiting the company

By virtue of a shareholders’ agreement, when a shareholder exits the company, the restrictive covenants shall operate to protect the legitimate business interests of the company including the element of protection that would not exist if a shareholders’ agreement did not exist.

Protection for the majority and minority shareholders

The provision of the ‘drag along’ rights in the shareholders’ agreement enables the majority shareholders to eliminate the potential obstacle of minority shareholders not agreeing to sell their shares to a buyer who has offered to acquire the company. On a similar note, a shareholders’ agreement can usually be amended only by the means of unanimous consent of the shareholders. However, the ‘tag along’ provision in the shareholders’ agreement gives the minority shareholders an opportunity to participate in a sale being made by the majority shareholders.

Control over share transfers

In a shareholders’ agreement, the share transfer provisions like the transfer restrictions and pre-emption rights are talked about. The share transfer provisions act as a practical tool to determine who is entitled to acquire and hold shares in the company.

Factors to consider while drafting a shareholders’ agreement

The basic requirement while drafting a shareholders’ agreement is to ensure that the terms and provisions included in it are in accordance with the relevant laws. It is important to understand the objective behind the shareholders’ agreement, i.e., the creation of balance of interests. A shareholders’ agreement cannot be favouring the shareholders in a manner that contradicts the best interests of the company, the Articles of Association or the board of directors. The provisions and rules set out in the shareholders’ agreement must always be legitimate and free from bias. The procedures, guidelines and policies mentioned in the shareholders’ agreement must be brief and rational. The shareholders’ agreement must protect the shareholders to such an extent wherein the ecology of the company will not be disrupted.

As aforementioned, a shareholders’ agreement contains a plethora of terms and rules. The point to take care of here is that such terms and rules must mandatorily have crisp clarity. As they say, “too many cooks spoil the broth”, the same may occur in the case of a shareholders’ agreement. Where there are so many terms to keep in mind, it becomes imperative to have a proper understanding of such terms to avoid further confusion or potential disputes. This includes the clear and concise specification of the rights, duties and obligations of the shareholders and the company.

A shareholders’ agreement can make it or break it which means that it can create a healthy bond amongst the shareholders and the company or create further problems. To avoid such problems and to further maintain strong relations between the shareholders and the company the shareholders’ agreement must in fact be conclusive.

Example of a shareholders’ agreement

The following is an example of a shareholders agreement for a startup. An agreement for a startup shall include the following terms –

  1. A preamble, identifying the parties (for instance, a company and its shareholders);
  2. A list of recitals (rationale, spirit and goals for the agreement);
  3. Details of optional and mandatory buying-back of shares by the company if a shareholder gives up their shares;
  4. A right of first refusal clause, elucidating how the company has the first right to purchase a selling shareholder’s securities before them selling such shares to an outside party;
  5. Notation of a fair and rational price for shares, either re-calculated as per a formula or annually;
  6. A potential detailed description of an insurance policy.

Sample of a shareholders’ agreement

Disclaimer: The following is just a sample draft of a shareholder’s agreement that has been taken from https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/Tools_templates/internal_templates/startup_founders_sha_sample.pdf.  

Shareholders’ Agreement of [Company name] company

1. Partners to the Agreement

[Company Name] [Company Type], a Company in planned to be registered in [Country, City] (hereinafter referred also as the Company) for [Summary of what company does] (hereinafter referred also as Company services),

Partners:

  1. [Partner Name], [address], [Personal or Business ID if any] (hereinafter referred also as [initials])
  2. [Partner Name], [address], [Personal or Business ID if any] (hereinafter referred also as [initials])
  3. [Partner Name], [address], [Personal or Business ID if any] (hereinafter referred also as [initials])

2. Ownership of the shares

The ownership of the shares (total [Number of shares]) is presented in the table below.

ShareholderNumber of shares%
[Partner Name]
[Partner Name]
[Partner Name]

3. Background and Rationale and the Spirit of this Agreement

This Shareholders’ Agreement defines the co-operation principles between the Partners, and related measures and responsibilities.

The Partners have recognized a growing market opportunity to provide company services to [customer types] [In what markets]. The Partners have agreed upon pursuing this opportunity by their engagement with The Company.

The goal of the Partners is to develop the Company rapidly into [What type of Company is being targeted; size, scale, etc.]. The initial business outline is presented in the [Annex 1 ie. company presentation/business plan], and related revenue allocation structure is presented in Exhibit D. The Company develops the plan continuously based on the market feedback and opportunities.

The purpose of this Agreement is to protect the interests of the Partners. It is not meant to punish a Partner who unintentionally breaches this Agreement and discontinues his or her misconduct after notification from other Partners.

In this spirit, the Partners agree not to sell The Company’s shares to outsiders when share disposal restriction provisions of this Shareholders’ Agreement (hereinafter referred also as Agreement) restrict the selling of the shares.

4. General Commitments

The Partners agree to the following:

We, as the Partners to this Agreement, agree to conduct our tasks in the field of The Company’s business operations in the interests of the Company. All immaterial and other property rights created during or directly related to The Company’s business development process will become the property of The Company unless agreed otherwise in written by all Partners.

Tasks and/or roles of the Partners :

[Partner] [Role/Title]

Main tasks & responsibilities:

  1. manage the business
  2. etc.

Related incentive plan presented in Exhibit C

[Partner] [Role/Title]

Main tasks & responsibilities:

  1. manage the business
  2. etc

Related incentive plan presented in Exhibit C

[Partner] [Role/Title]

Main tasks & responsibilities:

  1. manage the business
  2. etc

Related incentive plan presented in Exhibit C

5. Proceedings

By default, each Partner can freely vote in a shareholders’ meeting. However, the Partners agree on two exceptions to the above:

Firstly, if more than 2/3 of the shares owned by the Partners are supporting certain voting behaviour, then all Partners will vote in agreement with the 2/3 majority of Partners. The purpose is to ascertain that the Partners will be unified, acting as a single group, even in the situations when there would be other shareholders in the Company than the Partners alone.

Secondly, certain decisions will require support by Partners holding at least 90% of all Partner shares; otherwise, all Partners agree to vote against these decisions. The decisions are the following:

  1. Increasing and decreasing the share capital,
  2. Issuing new shares,
  3. Issuing convertible loans or options that can be transferred to shares,
  4. Selling all or a major part of the business of the company,
  5. Authorizing the Board to make decisions listed above.

To implement the proceedings described above, the Partners agree to efficiently work together at the shareholders’ meetings and before them. Any Partner may call the partners to meet in two week’s notice, either in person if possible, or over the internet/telephone, and otherwise following the protocols used for inviting a shareholders’ meeting. The Partners will do their best effort to find meeting times – several meetings if necessary – to work out their common voting strategy. The Partners agree to participate in all shareholders’ meetings, either in person or by proxy instructed to follow the proceedings described above.

6. Competition Restriction Clause

The Partners who have an active role in The Company undertake not to compete in any way, directly or indirectly, with the business of The Company. Here, the following definitions are used:

  1. Active role in The Company is defined as being either employed by The Company, or acting as a Board director, advisor, or consultant for the company.
  2. The business of The Company is defined based on the strategy, business plans, customer relations and pipeline, product roadmaps, and IPR’s of The Company at any given time.

If a Partner ceases to have an active role in The Company, then the Partner agrees not to compete in any way with the business of The Company as defined at that moment, during the following [number of months i.e., 12].

In addition to the above, all Partners (not just those having an active role in The Company) agree not to compete in any way with the business of The Company during the first [number of months i.e., 6] after signing this Shareholders Agreement of the company.

If The Company decides to change its strategy, business plan or business focus, this change and new business plan must be communicated to each Partner. If a competitive situation follows from the change by The Company, this is not considered as a breach of this Competition Restriction Clause.

If one or several Partners materially breach this Competition Restriction Clause and do not correct the breach within [number of days i.e., 30] after being notified about the breach by The Company or other Partners having at least 2/3 of the remaining Partner shares, with shares of the Partner(s) breaching the Clause excluded, then the following sanction will be applicable:

The Partner(s) breaching the Competition Restriction Clause agree to sell their shares at a price that is 10% of their fair market price (as defined in Clause 9 below), pro rata of the other Partners’ ownerships. In addition, each Partner breaching the Clause agrees to pay [EUR i.e., 30,000 Euros] to The Company.

This breach shall be documented by the Board and it shall be proven to be harmful (e.g. The Company has lost business or competitive advantage) for The Company.

The Partners shall be deemed to have provided written consent in terms of this Chapter 6 to each Partner current ownership of and role/appointment in other companies/businesses and other activities as set forth in Exhibition B and each of the Partner shall not be in breach of this Chapter 6 in relation to any such ownership, role, appointment or activity.

7. Buy back option in normal partner exit situation and share disposal restrictions

The Partners undertake not to transfer their shares to third parties before [number of months i.e., 36] of signing the shareholder’s Agreement for the first time unless otherwise agreed in writing by the Partners holding at least 90% of the shares of the Company. Each Partner shall inform the other Partners about any intent to transfer the Partner’s shares, and about the information to be given to third parties in connection with such intent to transfer shares.

The Partners to this Agreement have the right to buy shares back for a period of [number of months i.e., 12] from the resignation of a Partner if the buyback has not materialized earlier.

8. Exit

In connection with the Liquidation Event, any Net Consideration shall be distributed pro-rata between the shareholders.

9. Abnormal Exit Situations

In the event that the Partner leaves the Company as a Bad Leaver, a defined percent as defined in Exhibit A of his shares shall be subject to mandatory transfer to the Company at their nominal value.

A bad leaver is any shareholder that discontinues to be employed by the Company, in a consultant-relation with the Company, a board member before the Milestones as described in the Exhibit A has been achieved for any of the following reasons:

  1. does not contribute the agreed minimum time and/or effort to the Company on an ongoing basis, as agreed by partners, and continues to not contribute after notification from other Partners.
  2. material breach of this Agreement;
  3. gross misconduct or any serious or persistent breach of any obligation to the Company or any associated Company of the Company;
  4. conviction of a criminal offence (for which a custodial sentence is imposed) by a court of competent jurisdiction; or

A Bad Leaver is determined by 3/4 of the Partners agreeing, backed with proper documentation.

10. Rules Governing Share Disposal

If any of the Partners, (the “Selling Partner”), negotiates with a third party/Partners (“the Buying Parties”) on the transfer of its shares, the Selling Partner undertakes to promptly notify the other Partners in writing (“Tag-Along Notice”) about such intent. Other Partners shall have the right, but not the obligation, to require the Selling Partner to cause that, either all, or proportionately the same amount of their shares, as the Selling Partner intends to transfer are purchased by that Buying Party/Partners (“Tag-Along Right”) at the same consideration and otherwise on the same terms and conditions obtained by the Selling Party. In such share transfer, the Selling Partner shall make best efforts to find a third Partner to whom all of the shares could be transferred at market price. The other Partners respectively must inform the Selling Partner within [number of days i.e., 30] from the receipt of the Tag-Along Notice whether they wish to use their respective Tag-Along Rights.

In the event that a group of owners holding the majority of Company shares (“Majority Holders”) have found a candidate (“Third Partner Offeror”) who wishes bona fide to purchase all of the shares of the Company, the Majority Holders shall have the right but not the obligation, to require that the other Partners to this Agreement transfer their shares to the Third Partner Offeror (“Drag-Along Right”) at the same consideration and otherwise on the same terms and conditions obtained by the Majority Holders. The Drag Along-Right shall be exercised by a notice submitted to the other Partners at least [number of days ie. 30] before the consummation of the transfer of shares from the Partners to the Third Partner Offeror.

A transfer of shares from a Partner to a third party must always happen simultaneously with the third-party becoming also a partner in this Shareholders agreement, and the selling Partner is responsible to see that this happens.

11. Market Value Determination

If the shares are to be valued based on provisions of this Agreement, and if the Partners concerned cannot agree on what the market value for the shares will be, the market value shall be determined on the basis of an arms-length third Partner purchase offer for the shares. In the absence of such an offer, a respectable financial advisor or investment bank appointed by the Board of Directors shall determine the market value.

12. Disclaimers and Order of Interpretation

The Agreement here is understood by all the Partners to contain all relevant questions currently concerning the governance of the Company.

This Agreement supersedes – only for the above-mentioned issues handled within this Agreement– any arrangements, understandings, promises or agreements made or existing between the Partners hereto, prior to, or simultaneously with the Agreement and constitutes the entire understanding between the Partners hereto.

If this Agreement, related Agreements and documents or the Articles of Association are inconsistent with each other, the documents shall be interpreted in the following order:

  1. this Agreement;
  2. other Agreements or documents signed between the Partners
  3. the Articles of Association of the Company.

If the Partners decide to modify this Agreement it has to be done in writing and signed by and on behalf of all Parties. In that Agreement, there must be a clause mentioning that this is a modification to the existing shareholder’s Agreement or the modification must be otherwise evident by the circumstances.

13. Other Shareholder Agreements

The Partners understand and are aware that some of the Partners have existing shareholder agreements or competition restriction clauses in other companies. These agreements restrict competition. The Partners agree to make their best effort to avoid conflicts with these other shareholder agreements and competition restrictions. The Partners agree that if any Partner encounters liabilities from these agreements or restrictions, the Company will cover those liabilities, including but not limited to compensation payments and legal costs. The Board shall make the final decision, to what extent the Company covers the costs.

14. Insight and confidentiality

The Partners shall hold in confidence and shall not disclose to any third Partner without the prior written consent of all the Partners the material contents of this Agreement unless disclosure is required by law, regulation, stock exchange rules or order of a court of competent jurisdiction.

The Partner under an obligation to make a disclosure as defined hereinabove shall use its best efforts to notify other Partners before making the disclosure.

The Partners shall not at any time hereafter disclose or communicate to any person (other than, where relevant, to their officers, employees or professional advisors, whose position makes it necessary to know the same) any confidential information concerning the business, accounts, financial or contractual arrangements or other dealings, transactions or affairs of the Company or any of its subsidiaries which may be within or which may come to its knowledge save for;

  1. such information that at the time of disclosure is public knowledge,
  2. when disclosure is required by law, regulation, stock exchange rules, or order of a court of a competent jurisdiction.

Any Partner wishing to disclose confidential information to a prospective transferee of shares and to their representatives and advisers shall first obtain an appropriate commitment as to confidentiality before making the disclosure.

15. Communication among Partners to the Agreement

Any communication between the Partners concerning this Agreement will be in writing and will be delivered in person or by e-mail in such a way that the recipient confirms having received the information, or sent by registered mail and fully prepaid in an envelope properly addressed to the address given by the Partner to the Company or to other Partners. Any such notice will be in the English language and will be considered to have been given at the time when actually delivered and confirmed by all Partners or in any other event between [number of days ie. 14] after it was mailed in the manner hereinbefore provided.

16. Costs

Each of the Partners hereto will bear his/her or its own legal, accountancy and other costs, charges and expenses connected with the negotiation, preparation and implementation of this Agreement and any other Agreement incidental to or referred to in this Agreement.

17. Assign Ability

This Agreement cannot be assigned by any one of the Partners without the prior written consent of the other Parties.

18. Disputes and Governing Law

This Agreement will be governed by and constructed in accordance with the laws of [Country]. Any disputes arising out of this agreement shall be resolved in the [District Court or other] of [City, Country].

19. Term

This Agreement becomes effective upon the signature by all Partners and shall be binding on each Partner as long as that Partner is the owner of the Shares or other Equity Securities. This Agreement shall, however, be terminated upon the consummation of a Trade Sale or an IPO.

Notwithstanding the aforesaid, Sections 7 – 10 (Competition Restriction Clause, Buy Back Option in normal Partner Exit Situation and Share Disposal Restrictions, Abnormal Exit Situations, and Rules Governing Share Disposal) and Sections 18 (Disputes And Governing Law) will be binding, to the extent applicable, upon the Party even if the Party has ceased to be a Party to this Agreement.

20. Ancillary Provisions and Signature

Except as otherwise provided herein, no addition, amendment to, or modification of this Agreement will be effective, unless it is made in writing and signed by and on behalf of all Parties.

There will be no waiver of any term, provision, or condition of this Agreement unless such waiver is evidenced in writing and signed by the waiving Parties.

No omission or delay on the part of any Partner hereto in exercising any right, power, or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power, or privilege preclude any other. The rights and remedies herein provided are cumulative with and not exclusive of any rights or remedies provided by law.

In the event that any of these terms, conditions, or provisions will be determined invalid, unlawful, or unenforceable to any extent, such term, condition, or provision will be severed from the remaining terms, conditions, and provisions which will continue to be valid to the fullest extent permitted by law.

This Agreement has been executed in [number of copies] identical originals and reviewed completely by the Parties, signed after approval, and all pages in appendixes inclusive initialed by the Parties. The Company has received one and each Partner has received one original bearing the following legally binding signatures.

This Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof and merges and supersedes all prior and contemporaneous discussions, agreements, and understandings of every nature between the parties hereto.

This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.

[Partner & title/role] [Partner & title/role] [Partner & title/role]

Exhibit A

Before Milestone 1 all (100%) of the shares shall be subject to mandatory transfer. After that the percents of the mandatory transfer, when each milestone is achieved, are the following:

1. Milestone 1 definition, ninety (90) percent of the shares shall be subject to mandatory transfer:

  • [time and/or development stage of company]

2. Milestone 2 definition, seventy (70) percent of the shares shall be subject to mandatory transfer:

  • [time and/or development stage of company]

3. Milestone 3 definition, fifty (50) percent of the shares shall be subject to mandatory transfer:

  • [time and/or development stage of company]

4. Milestone 4 definition, zero (25) percent of the shares shall be subject to mandatory transfer:

  • [time and/or development stage of company]

Exhibit B

Current Roles [if any]:

[Partner name]
  1. [any role in other company/entity where having commitments]
  2. etc.
[Partner name]
  1. [any role in other company/entity where having commitments]
  2. etc.
[Partner name]
  1. [any role in other company/entity where having commitments]
  2. etc.

Exhibit C

Additional incentives [Per partner if any]

  1. [number of shares] shares (or stock options representing equal amount of shares) from the allocated company incentive options pool after reaching the below targets:
    1. [Additional target per person/role]
    2. [Additional target per person/role]
    3. [Additional target per person/role]
    4. etc.
  2. [Additional external compensations if any]*
    1. [Additional target per person/role]
    2. [Additional target per person/role]
    3. etc.

*a separate agreement will be executed to cover [type of] incentives.

Targets will be re-evaluated periodically and new targets with new incentives set as needed.

Exhibit D

Revenue allocations

Initially after external third party costs are covered

  1. [percentage ie. 25%] is kept for [company] administrative, marketing and development support
  2. [percentage ie. 75%] is used for operative Management and related costs as defined by [CEO or partners together]

Operative Management* and related costs revenue allocation

  1. [Person 1]
  2. [Person 2]
  3. etc.

After project related external third party costs and operative management allocations are covered

  • [percentage ie. 75%] of the revenue is handled normally as company income
  • up to [percentage ie. 25%] can be used for operative Management and related bonuses (case by case up front approval)

Company revenue is used to enable

  • [investments in growth outline of targeted usage]
  • [Other]

*The personal maximum monthly compensation can be EUR [how much max.] (first calculated 25% for the company and then shared to sales and execution resources) if the company also reaches its monthly revenue and profit target. If the company doesn’t reach the targets, the personal maximum is EUR [how much min.]. If the company reaches at least 75% of its targets the personal maximum grows from [min to max] linearly, e.g. if the company reaches the targets 87.5%, the personal maximum can be EUR [calculated based on percentage].

Exhibit E

List of incentive structure for [company] additional team/resources [if any]

  1. Option Compensation model [if available]
  2. Revenue share model [if available]
  3. Commission model [if available]

Conclusion

A shareholders’ agreement has a primary objective and that is to ensure the smooth functioning of the company. A shareholders’ agreement further provides a certain level of clarity and specific structure concerning the relationship between the shareholders and the company. The provisions and the terms included in a shareholders’ agreement help in efficient and expeditious resolution of disputes thereby soliciting potential investors, banks and creditors for the company because it clearly showcases the healthy relationship amongst the shareholders.

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.

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What is a social media management agreement and why do you need one

0

This article is written by Shivam Sharma studying at SLS Pune and pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution

This article has been published by Sneha Mahawar.

Introduction

A social media manager is tasked with helping businesses capitalize on the popularity of various social media outlets. This is done via management of the marketing, branding, and engagement of the products and services that the business has to offer. For instance, what videos on YouTube will be appropriate for running an ad for the client’s business? For how long should this ad run? Where will the user be directed if he clicks on the said advertisement? These are some of the questions that the social media manager needs to deal with on behalf of the client’s business.

We offer social media management agreements to formalize such an understanding into a legal and well-defined structure. Such a contract will outline the terms of how to perform the work to be done by the service provider and protect the parties’ interests and rights.

A good social media management agreement will inculcate all such terms and conditions within the boundaries of which the social media manager needs to work with the goal of growth in the client’s businesses. This article is an attempt to explore what a social media management agreement is, what makes up a good social media management agreement, and some other pivotal considerations while drafting such an agreement.

What are social media management agreements

A social media management agreement is a legal document that oversees and regulates the working relationship between a social media manager and a business or client. It is a form of service agreement. It helps define the scope of work to be undertaken, the time and method of making a payment, and which third-party platforms will be used (like Google, Facebook, Instagram, Snapchat, etc.). Furthermore, it specifies the promotion’s content, who will be in charge of making the necessary posts, and who will create the written and visual content. The person who manages social media is called the “service provider,” and the person receiving such services is usually referred to as the “client.”

What is the need for social media management agreements

Social media management is a complex task that involves the dabbling and organizing of convoluted and confidential information. It is also for services whose quality may not be easily gauged. For instance, it is not easy to gauge creativity in a promotion campaign. For this reason and the following, it is important to have a social media management agreement:

  1. The agreement helps define what the service provider is allowed to do or say on behalf of the client.
  2. It aids in the resolution of disputes between the service provider and the client.
  3. It helps define the ownership of the content being developed.
  4. It aids in defining what is private and what can be shared.
  5. It specifies a method for the client to securely share passwords and sensitive information with the service provider.
  6. It ensures the payment mechanism for the service provider.

What should be included in such an agreement

The following are some of the most important clauses in a social media management agreement:

The parties to the agreement

This is usually a part of the recitals of the agreement, but there can be a separate clause with respect to the same. The clause is a way to state who the contract is between. The clause will include the following information: Names, Titles, (If applicable) Addresses, Date of the Contract (especially the “effective date” of the contract).

Scope of work

This clause spells out the scope of the work that is to be performed by the service provider. Anything not covered by this clause does not have to be done by the service provider. The clause defines all the obligations of the service provider. For instance, the clause can define the maximum and a minimum number of posts that are to be made on a social media platform. 

It must also define the websites or social media platforms on which the service provider will post and provide an exact description of all the activities that will be performed. The inculcation of such a clause eliminates the occurrence of “scope creep,” whereby the client takes on additional duties that were not originally agreed upon between the parties.  Finally, if there is no separate clause for the same, the present clause needs to incorporate all the information that is required from the client, such as pictures, videos, etc.

Fees and expenses

This clause defines the consideration for the services provided by the service provider. It includes the details of the sum payable, when the payment has to be made, and the methods by which it needs to be made. In general, the industry standard is to demand a 50% fee upfront, with the balance due at the end of each month. However, the payments can be made to meet the needs and desires of the people who are involved. There also needs to be a detailed description of how the invoicing needs to be done. Provisions can be made as to the consequences of late payment.

Term and termination of the agreement

This clause is concerned with the timeline of the agreement. The contract can either end on a specific date or on the achievement of a specific milestone, for instance, gathering 10,000 followers on Instagram. The clause also defines how the contract can be terminated and what the consequences of a premature termination will be.

Ownership of the work

This clause states who would be the true owner of the work being done by the service provider. Generally, the client will retain the right to inspect all the work being done as long as the client is paying for all the work. However, there may be instances where the service provider retains the ownership rights, especially where the service provider is providing the services of educating and training the clients. In such a case, the training materials and courses are owned by the service provider. Through such a clause, the service provider assures that all the client’s information shall be deemed confidential unless written permission is obtained from the client. This is especially important since the service provider will have complete access to the social media presence of the client’s business, which includes the passwords and the ability to post and regulate comments.

Access to third-party platforms

In order to manage the social media profiles of the client, the service provider must have access to such profiles. This circles back to the confidentiality clause, as the service provider, will have access to all the confidential information and passwords. There must be an attempt here to limit the liability of the service provider in the event that information is lost or leaked. 

Another important consideration

Agreement termination

One important reason for having such a contract in place is that it allows for a clear way to terminate the agreement. This is especially true when the client is unable to or does not want to fulfill its obligations under the agreement. With such an agreement in place, there is a hedge available against any kind of misunderstanding or disagreement between the client and the service provider. To enhance the same, a provision about the notice for termination shall be included.

Evidence

An agreement becomes a contract when it is legally enforceable by law. Without a valid agreement, the service provider will have to rely on emails to and from the client in order to prove a certain aspect in court. This is especially indispensable when it comes to getting paid for the work done, as there might be no clear outline of the work or even a notice within which to end the arrangement. With an agreement, the service provider will have a clear idea of what is included and what is not.

A Sample of a Social Media Management Agreement

The Social Media Marketing Agreement

BETWEEN

XYZ Ltd., a public limited company incorporated under the provisions of the Companies Act, 2013, with CIN XXXXXXX and having its registered office at 32A Nevanthon Road, LE3 6DR, Chandigarh (hereinafter referred to as the “Service Provider”);

AND

ABC Pvt. Ltd. is a private limited company, incorporated under the provisions of the Companies Act, 2013, with CIN YYYYYYY and having its registered office at Estate Blocks, Sector 42B, Chandigarh (hereinafter referred to as the “Client”).

The parties above shall be individually addressed as’ party ‘and collectively as’ parties. ’

WHEREAS,

The Service Provider has agreed to perform social media management services for ABC Pvt. Ltd. on the social media platforms of Facebook and Twitter for a period of 9 months, terminating on the 18th day of November 2022, for an agreed compensation of INR 10,00,000 (ten lakhs) to the Service Provider, the details of which are as stated under the “Fees Clause”, and the same shall be paid using the online billing account as provided under this Agreement.

The Parties to this Agreement hereby agree as follows:

  • Deliverables and work scope

The client hereby authorizes and gives full permission to the service provider to perform the following actions on various social media platforms for the client during the term of this agreement:

  1. Upload pictures, videos, and other audio-visual elements.
  2. Post regular updates on the client’s Facebook wall with a minimum of 2 (two) updates per week and a minimum of 8 (eight) status updates in any given month during the term of this agreement. 
  3. Such uploads include quizzes, polls, info, news, etc.
  4. That the service provider should moderate comments and delete spam.
  5. That the service provider shall hold regular contests that are relevant to the promotion and marketing of the client’s business, where such contests shall not exceed 2 (two) per month or 1 (one) big contest every 4 (four) months.
  6. The service provider will create and launch targeted Facebook ads in order to increase engagement and fan base.
  7. And everything else that is synonymous with designing and maintaining the client’s Facebook page.
  • Information and details

The following details and information shall be provided by the client to the service provider on a regular basis via the support center, http://development.abcpvtco.india/,and the same shall not be done via email: 

  1. Pictures: All pictures with regards to events, products, etc.
  2. Videos: All videos from events, product demonstrations, and so on.
  3. Event Details: Any and all event details should be provided in advance so that the service provider can update the fan pages and create an event.
  4. Details of Logins: All login details for social media accounts that already exist for the client’s business.
  5. Previously used promotional materials: all previously used posters, ads, magazine ads, and other promotional materials.
  6. brand manual or any existing guidelines.
  7. A high-resolution logo
  8. Any other important information or news-worthy items for the brand that can be shared with the online community?
  • Confidentiality
  1. All materials provided to the service provider, including but not limited to, brochures, audio content, video content, photos, etc., shall be exclusively used for the client’s promotional purposes. 
  2. Such materials shall not be used for any other purposes in any shape or form, and such materials shall be deleted if and when not required by the service provider. 
  3. All such materials shall be treated as confidential and proprietary in nature and shall not be used by the service provider for any other purpose besides using the materials to promote the client’s business on Facebook and Twitter. 
  4. The Service Provider shall maintain the confidentiality of all the client’s information, including business plans, financial information, analytics, etc., regardless of whether or not such information was designated as “confidential” at the time of disclosure.
  • Ownership
  1. All the content and materials that are developed and created by the service provider under this agreement shall be exclusively owned by the client, and the service provider shall have no rights over such content and materials.
  • Termination
  1. Both parties to this agreement shall have the right to terminate this agreement with one month’s notice.
  2. When this Agreement expires or is terminated, the Service Provider will provide the Client with all login information for the Client’s accounts on Facebook and Twitter.
  • Invoices
  1. The service provider shall prepare an invoice for every social media channel, i.e., Facebook and Twitter, and such an invoice shall be prepared separately. 
  2. Such invoices must be sent to [email protected]. It is understood that
  3. all such invoices are to be sent at the beginning of every billing period, the details of which are provided in Schedule 1 to this Agreement. Every 
  4. invoice shall be paid within a period of 7 days from the date of receipt.
  • Fees Clause
  1. The Client shall pay the Service Provider a cumulative sum of INR 10,00,000 (ten lakhs) and the same shall be paid in four equal installments as per Schedule 1 to this Agreement.
  2. That such payment be made in one of the following ways:
  1. PayPal;
  2. GoCardless;
  3. Direct Debit
  4. BACS

That in the event of late payment, interest at the rate of 12 percent per annum shall be levied from the date such payment became due until the date of actual payment.

Signed by both parties and executed on this 18thday of February 2022.

For XYZ Ltd,

Anup Sharma, Director, and CEO, XYZ Ltd.

Date: 18.02.2022

Signature:…….

ABC PVT. LTD.

Zia Chaudhary, COO, ABC Pvt. Ltd.

Date: 18.02.2022

Signature:…….

Other agreements required by every social media manager

Apart from the social media management agreements, the service providers can also deploy an agreement for independent contractors as well as a non-disclosure agreement.

Agreement Between Independent ContractorsSuch an agreement would have the following details:

  1. The services that need to be provided under the agreement are:
  2. A payment mechanism and schedule
  3. The penalty is imposed if the client fails to make a payment;
  4. Clauses of confidentiality to protect the client’s trade secrets;
  5. intellectual-property ownership;

The agreement is especially important for new hires who are self-employed and do not work for a company or another organization. The service provider can avail the help of such freelancers, especially when such freelancers provide for a talent that is not usually present in the industry.

An NDA (Non-Disclosure Agreement): Such an agreement can be deployed to protect the ideas and details of the work being performed by the service provider. Entering into an NDA makes both the parties to the agreement bound by a promise not to share any details of their work. This is particularly effective in social media management engagement as there is a tremendous amount of confidential information at stake. Such information includes:

  1. Social media accounts’ passwords;
  2. Accounting information;
  3. Details of ideas and work performed, etc. 

Conclusion

Social media management agreements play a pivotal role in protecting both the social media managers and their clients. It is not to say that all such arrangements require a written contract. No such agreements are required in the case of short-term consultations. Such arrangements can be covered via the terms and conditions that can be set up on the website of the service provider, including the details of work that will be provided to the client. However, these contracts are indispensable for all long-term engagements or engagements that are more complex in nature.


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

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

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Interpretation of Legislative Lists

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This article is written by Smaranika Sen from Kolkata Police Law Institute. This article exhaustively deals with the analysis of the interpretation of the legislative lists of India.

It has been published by Rachit Garg.

Introduction

The term ‘legislation’ has been derived from the Latin words ‘legis’ meaning ‘law’ and ‘latum’ meaning to ‘make’. Therefore, etymologically, legislation means to make the law. Legislation is considered one of the most important sources of law.  It is very crucial in a democratic society, especially where there is a federal type of government or a very highly complicated form of government. Legislation when used as a source of law is denoted to be a law made by defined persons or bodies and not by any type of customary or conventional laws or judicial decisions, it is rather termed as an enacted law. There is a difference of opinion regarding the importance of legislation as a source of law. Analytical jurists emphasize the importance of legislation on the other hand historical jurists attach no importance to legislation. 

There are three types of legislative lists: Union, State and Concurrent List. These three lists form an important part of the functioning of a federal government. It also enhances legal sovereignty among the government. 

In this article, I will try to interpret the three legislative lists: powers, functions, principles, etc.

Legislative Lists

Legislative lists are of three types: State List, Union List, and Concurrent List, as mentioned under Schedule VII of the Indian Constitution. The main purpose for the distribution of powers is to create federalism; the object for which a federal state is formed involves a division of authority between the national government and the separate states, therefore there is a division of power at the central and at the state level. A federal constitution tries to establish a dual polity with the union at the centre and the states at the peripheries and thereby each of them is granted sovereign powers to exercise in their fields assigned to them by the Constitution. 

Let us now take a glance at the lists of legislation.

Union List

The Seventh Schedule of the Indian Constitution talks about the lists. List I of Article 246 states the Union List. The Union List consists of various subjects like a defence of India, naval, military, air, armed forces, CBI, industries declared by Parliament necessary for defence, foreign affairs, diplomatic, consular, trade relations, UNO, war, peace, extradition, railways, citizenships, currency, RBI, etc. The List contains 97 numbered items. Entry 33 was deleted and Entry 2-A, 92-A, 92-B, and 92-C have been added by amendments. In a simpler language, it can be stated that the List contains all those subjects which are of utter national importance. In this List, the Central Government enjoys supreme power.

State List

The State List is also contained in the Seventh Schedule of the Constitution. List II of Article 246 states the State List. The State List consists of various subjects like public order excluding naval military or air forces, High Courts,  revenue courts,  district courts, prisons,  reformatories, borstal institutions, local governments,  public health sanitation, hospital, burial grounds,  pilgrimage,  disabled and unemployed peoples, agriculture,  water, roads, highways, etc. The List contains approximately 66 items. Entries 19, 20, 29 and 36 have been deleted by amendments. The State List contains all those subjects which are solely dedicated to the state level. The State Government has jurisdiction over this List.

Concurrent List 

The Concurrent List is also contained in the Seventh Schedule. List III of Article 246 states the Concurrent List. The Concurrent List contains subjects like criminal law, a criminal procedure including Codes for Criminal Procedure, marriage, divorce, adoptions, wills, successions, moving prisoners from one reform to another, contracts, partnerships, bankruptcy, insolvency, trust & trustees, contempt of court, migratory tribes, prevention of cruelty to animals, protection of wildlife and forests, population control, etc. The List contains approximately 47 items. New Entries 11-A, 17-A, 17-B. 20-A and 33-A have been added by amendment. Concurrent List mostly comprises those subjects which are of equal importance to both Centre and the State, therefore in such cases both the Union and the State have jurisdiction. The main purpose of this list was to avoid excessive rigidity to two list distribution.

Residual powers

Article 248 vests residuary powers in the Parliament. It is to be noted that certain subjects are neither mentioned in the State List nor the Concurrent List. These subjects are also not exclusively mentioned in the Union List. However, during the time of need regarding those subjects, the Union will have sole jurisdiction over those subjects.

Legislative lists relations

The Constitution of India makes the two-fold distribution of legislative powers:

  1. With respect to the territory
  2. With respect to the subject-matter

Territorial jurisdiction

Article 245(1) of the Indian Constitution states the subjects to the provisions of the Constitution. Parliament can also make any laws for the whole or any part of the territory of India. Even Article 245(2) states that no laws made by the Parliament will be deemed invalid on the ground that it was an extraterritorial operation. In the case of A.H. Wadia v Income-tax Commissioner, Bombay (1949), It was decided that in matters of a sovereign legislature a question of extraterritoriality of any enactment cannot be raised in the Municipal Court, even its validity cannot be challenged as a ground. It was further stated that there might be certain legislation that might contradict or offend the rules of international law or which may not be recognised by foreign courts in such cases there might be difficulty in enforcing them but the questions of policy in such cases will not be raised by the domestic tribunals. 

The doctrine of territorial nexus

As we know, the Union has the power to make even extra-territorial laws, but the State does not have the same power. In such cases where the state makes extraterritorial laws, it is important to make those enactments valid, therefore, to make them valid a nexus between the object and the state must be shown. A state legislature can only make laws for its purpose. The doctrine of Territorial Nexus can be only valid if certain conditions are fulfilled. The conditions are:

  • Legitimate nexus
  • There should be a liability related to the territorial connection.

Therefore it can be stated that a state law of extraterritorial operation will only be valid if there is sufficient nexus between the object and the state.

In the case of Sonudar Gopal v Sonudar Rajni (2013), it was observed that during the process of judicial separation the husband raised the question of the maintainability of the petition on the ground that both of them had acquired Swedish citizenship. The wife contended that she had never changed her domicile. Husbands contended that his wife would follow the domicile of the husband. It was held that both the wife and the husband were domiciled in India. According to Section 1(2) of the Hindu Marriage Act, 1955, This Act extends to the Hindus to the whole of India and also to those who were domiciled in India although they resided outside India or acquired the citizenship of another country. Thus, the Court held that this Act will apply to all those people who are domiciled in the Indian territory and are Hindus. This clearly shows a nexus between the state and the object therefore this provision made by the state legislature is considered valid. 

Subject matter

The distribution of powers between the centre and the state is not only distributed based on the provisions of the Constitution, it is also distributed according to the local and political background of each country. For example, in America, the sovereign states did not like complete subordination to the central government therefore they entrusted subjects of common interest to the central government, and the rest were kept under their jurisdiction. The Indian Constitution makers Adopted the same method as Canada,  therefore India opted for a strong Centre, however, they added a Concurrent List. The Government of India Act 1935 introduced a scheme threefold that is federal, provincial, and concurrent.  The present Constitution adopted a method similar to the Government of India Act 1935 with certain changes. It divides the powers between the Union and the state through three lists- Union, State, and Concurrent. Article 246 is related to the subject matter of laws made by Parliament and by the legislature of States. 

Characteristics of Legislative Lists

Legislative power is plenary

Under Article 245, the power of the legislature to enact laws is plenary. However, it is subject to some legislative competence and some constitutional limitations. It is to be noted that when there is a power to make laws, it also includes giving such laws its effect prospectively as well as retrospectively. In the case of Jagannath Baksh Singh v State of U.P. (1962), it was observed that “the cardinal rule of interpreting the words used by the Constitution in conferring legislative power was that they must receive the most liberal construction and if they are words of wide amplitude the construction must accord with it. If a general word was used it must be so construed as to extend to all ancillary or subsidiary matters that can be reasonably included in it.”

A statute cannot be declared unconstitutional

Any statute enacted by either Union or State cannot be declared unconstitutional without any reason. A court needs to showcase beyond any iota of doubt there has been a violation of the constitutional provisions for which the legislative provision has to be deemed invalid,

Legislation declaring earlier decisions invalid

Legislature cannot by a mere declaration not reverse or override a judicial decision. Regarding its plenary powers, it can render a judicial decision ineffective by enacting a valid law; altering or changing the conditions of the basis of such decisions. In the case of S.T. Sadia v State of Kerala (2015), The Supreme Court held that the legislature has no power to directly anal a judgement of the court. It is because the purpose of Legislature is to make law and not to declare as to what the law shall be. 

Principles of Legislative Lists

The powers of the Centre and the State are divided but a scientific division between them is never possible and therefore constant questions may arise as to which subjects come under which sphere of the List. The Supreme Court of India must maintain a federal Constitution. The Supreme Court has evolved certain principles of interpretation of the Lists. Let us have a look at them.

The predominance of Union List 

The predominance of the Union List over the State List and the Concurrent List is expressly mentioned in the Constitution. The same is the case with the Concurrent List over the State List.  does in case of overlapping between the Union and the State List the Union List will prevail over the State List and in a conflict between concurrent and State List the Concurrent List shall prevail.

Simplification of each List broadly

Due to the predominance of the Union List, entries in each list should be simplified. In the case of Calcutta Gas Ltd v State of West Bengal  (1962), the Supreme Court held that the widest and the most liberal interpretation should be given to the language of each entry. 

In another case of International Tourism Corporation v State of Haryana (1981), the Supreme Court held that there were certain competing entries in the list. List two and entry 97 of list 1 when having certain conflicts. It was then decided that a State List should be given a broad and plentiful interpretation and should not be interpreted in favour of the centre by resorting to the residuary power. Residuary power cannot be interpreted so widely that it curbs down the power of state legislature, thereby affecting and jeopardizing the federal principle. For any subject residuary power should be the last option, it should be only held when all the categories in the three lists are exhausted. 

The doctrine of pith and substance

The doctrine of pith and substance states that within respective spheres the union and the state legislature are made supreme and they should not encroach into the sphere reserved to the other. If anyone introduces upon the field assigned to the other the court will apply this doctrine and thereby it will determine whether the legislature concerned was competent to make it or not. If it concludes that pith and substance of law that is the true object of legislation relate to a matter with the competence of the Legislature enacted then it will be held intra vires even though it might incidentally trench on matters outside the capacity of Legislature. This doctrine was applied in the case of Profulla Kumar Mukherjee v Bank of Khulna(1947), it was observed that the Bengal Money Lenders Act of 1946 was enacted by the state legislature but it was challenged that the parts of the legislation dealt with promissory notes which was a subject of Centre. Therefore the Privy Council applied this doctrine and held that the Act was in pith and substance as money lending and money lenders belong to the jurisdiction of State and therefore it was a valid Act, even though the Act incidentally trenched on promissory notes which belong to Centre. 

The doctrine of colourable legislation

This doctrine is based upon the Latin maxim “quando aliquid prohibetur ex directo, prohibetur et per obliquum” which means what is prohibited directly is also prohibited indirectly. Colourable Legislation arises in such cases where the legislature does not have any power to enact laws. As we know, the legislature can only make laws on such subjects which are mentioned in the seventh schedule of the Indian Constitution, therefore when any such subject lies beyond the seventh schedule the legislature does not have any power to enact laws. At certain times the legislature in such cases enacts certain laws which appear to be in its competence but its effect is beyond its jurisdiction. It is said that such law is given a different colour to bring it under the competence of Legislature but it can be declared invalid. Such laws are called colourable legislation. In these cases, the Court looks upon the true nature and character of the legislation and for whether its object purpose or design to make a law on the subject is relevant or not. It does not check its motive.  if the legislature has the power to make law, the motive in making the law is irrelevant. In the case of State of Bihar v Kameshwar Singh(1952), the Bihar Land Reforms Act, 1950 was considered void on the basis that it tried to show apparently that it laid down principles for determining compensation but in reality that was not the case. Thus, the Court held the law invalid on the ground of colourable legislation.

Harmonious construction

The entries in the list should be defined and interpreted in such a way that it does not create a conflict between each other. In cases of conflict,  each list should be interpreted separately,  the powers, purposes,  jurisdiction, etc should be checked thoroughly.  After checking, there must be a conclusion where one of the lists is restricted to provide jurisdiction on the subject of conflict and the other list shall prevail. However,  the reason for such a decision should be brought through thorough scrutiny and reasonable reasons.

Parliament’s power on State subjects

The state enjoys supreme power over its subjects in the State List. However, there are certain times where even in State subjects the Union enjoys power. These are also termed exceptional circumstances. The exceptional circumstances are:

  • If there is any national interest
  • During emergency
  • With the consent of State
  • To give effect to treaties and agreements
  • In case of failure of constitutional machinery in a state.

Conclusion

An important characteristic of the federal type of government is its distribution of powers between the centre and the state. The reason for distributing powers between the centre and the state is to create a check and balance on the government and to avoid a tyrannical form of government. The Indian Constitution also distributes power between the centre and the state but through the various provisions of the Constitution, it can be stated that the distribution of power is slightly tilted more towards the centre. This is why it is often stated that India has a quasi-federal Constitution.

References


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

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

https://t.me/lawyerscommunity

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

Download Now

Online Rent Agreement registration procedure

0

The article is written by Ansruta Debnath, a law student of National Law University Odisha. This article talks about the registration of rent agreements and how they can be done online in certain states like Maharashtra and Delhi.

It has been published by Rachit Garg.

Introduction 

With the rise of technology comes the increasing need for ease of access with government procedures as well. Governments have been trying to streamline various processes that people have to undertake regularly. One example is the registration of rent agreements. To incentivise the creation of formal rent agreements between a landlord and their tenant, certain state governments have launched e-registration mechanisms for these rent agreements. These allow for easy drafting, signing and registration of a rent agreement from one’s own home. This article enumerates the states and union territories that have functioning e-registration portals. Further, a case study has been done on the process of e-registration in the portal provided by the state of Maharashtra. 

Rent agreements and whether their registration is mandatory 

Rent agreements are written or oral contracts that enumerate the rights and obligations of the landlord and tenant of a particular property. They can also be called “leave and licence” agreements and are extremely useful to protect the rights of the parties to a rent agreement in case of disputes. Without a rent agreement, the rights of either party can be easily infringed upon.

According to Section 17 of the Registration Act, 1908 which applies all over India (except Jammu and Kashmir) “leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent” must be registered. Thus, any rent agreement which involves the leasing of a property to a tenant for more than twelve months has to be mandatorily registered. Otherwise, registration is not necessary.

But, according to the Model Tenancy Act, 2021, there is a mandatory need for a written agreement that needs to be executed between the landlord and the tenant. The agreement must contain all the necessary details of the lease including but not limited to the pre-decided rent amount period of tenancy, terms for rent revision, advance payment of security deposit and causes for landlord’s entry upon the property/premises.

However, housing and land and thus by extension rent is a state subject. Hence the 2021 Act is just a suggestive Act with no enforceable nature. To date, only Assam is the State which has adopted this Act through the Assam Tenancy Act, 2021

Despite the non-mandatory nature of registration of rent agreements in most states, it is always recommended to register your rental agreements. Various disputes have arisen even in eleven-month rent agreements but they were considered non-admissible in courts because they weren’t registered. Even if registering is not done, notarizing these short-term agreements by a notary and paying the stamp duty can also lend credibility to them in courts.

The availability of online registration 

The number of people engaging in rent agreements has been increasing. To make the process of registration of rent agreements easier and incentivise their formation in the first place, many states have launched online portals for the registration of rent agreements. The following are the states/UTs that have the online mechanisms for the registration process. 

  1. Maharashtra 
  2. Delhi
  3. Goa
  4. Gujarat
  5. Jammu and Kashmir
  6. Jharkhand
  7. Manipur
  8. Odisha
  9. Tamil Nadu
  10. Tripura
  11. West Bengal
  12. Puducherry

Clicking on the names of the States/UTs above will lead you to their online registration portals. Registration procedures are similar in all states. The complete step-by-step process is mentioned below. 

Further, there are multiple third-party operators that provide online agreement drafting and registration services of rent agreements in all states. But it is recommended to do these processes either through state government websites, or if not available, through going to the concerned office and using the offline method by using state government approved agreement templates.

Online Rent Agreement registration procedure in Maharashtra

The process of registration is similar, if not identical in most states, that provide this facility for online registration of rental agreements. For the benefit of the reader, this article will give the detailed procedure of the online registration of a rental agreement in the State of Maharashtra. 

Step-by-step process:

  1. First, the website for the registration of rental agreements as provided by the Maharashtra government needs to be visited.
  2. Then an account has to be created on the website, by filling in the district of the property that is involved in the rent agreement and a new password.
  3. Once the profile has been successfully created, a new page on “Property Details” opens which then needs to be filled. On this page, the details of the property involved in the rent agreement, like the detailed property address is required.
  4. After the “Property Details” page is filled and submitted, a token number will be generated. This token number is very important as that along with the previously set password will be required for re-logging in the newly made profile on the website.
  5. The next page that shows up is “Party Details” which needs the information of the parties/people involved in the rent agreement. Thus, for the most basic rent agreement, details of at least two parties must be there- the tenant and the landlord. 
  6. When the filling of details of one party, for eg, the tenant is done, one can click the “Add Party” button at the end of the page to add in the details of the other parties. This can be done multiple times based on the requirement and number of parties involved in the rent agreement.
  7. After the “Party Details” page has been successfully saved, the next step is to fill in the ‘identifier’ or witness details. There needs to be a minimum of two witnesses.
  8. Next, one needs to go to the next page called the “Rent and other terms” page. Here, details of the rent like the amount of rent, duration of rent needs to be duly filled in.
  9. The above steps involve the drafting of the rent agreement. Once these steps are properly completed, users can modify them as and when necessary before the final submission.
  10. The agreement then needs to be e-signed and executed.
  11. The thumb impressions and pictures of the involved parties must be uploaded next. 
  12. After the thumb impressions and pictures have been verified, KYC details have to be put in and the same verified.
  13. Finally, the pdf, which has been generated can be submitted along with the proof of payment of stamp duty and registration fee, the details of which are given in the next step.
  14. Finally, the stamp duty must be paid by the generation of the online challan receipt. The main page mentions that stamp duty and registration fees should be paid online through GRAS (https://gras.mahakosh.gov.in). The stamp duty varies from district to district in the state and is notified on the website itself. On the main page, there is an option to calculate the required stamp duty and registration fee which can be easily accessed and used. 
  15. There are certain pre-requisites for the procedure to be completed sitting just at home. They are mentioned on the main webpage. They are the following-
  1. Biometric Device (Thumb Scanner)
  2. Webcam
  3. Google Chrome/ Microsoft Edge
  4. Aadhaar Number

In situations when online registration cannot be done, the application needs to be submitted to the office of the concerned District Sub-Registrar. Most state websites also provide templates for the agreements and detailed procedure that needs to be followed. Detailed information on the appropriate stamp duty and registration fee are also readily available on the concerned state website.

Tracking of the status of a rent agreement registered online 

The status of the registration can be tracked through the website after logging in to the profile through the allotted token number and password. Further, visiting the concerned Sub-Registrar’s office to ensure that registration has successfully occurred can also be done, but it is not necessary. The status of the registration can also be checked and tracked through SMS. 

Grievance redressal mechanism for registration of rent agreements

The grievance redressal mechanism is prescribed in the Maharashtra Government grievance portal. The complaint can be filed online, its status checked as well through the user profile. Further, a complaint to an Independent Grievance Authority can also be done. It is important to note that any complaint received from the citizen will have to be responded to by the Sub Registrar Officer/ Collector of Stamps within 7 working days. In case of no response, the complaint will be automatically escalated by the grievance redressal system to the Joint District Registrar / Additional Controller of Stamps who will serve as the Level 2 redressal officer. Level 2 officers i.e. JDR/ACS will have to respond to the complaint within 10 working days of the receipt of the complaint.

Divisional Commissioners (Konkan Division) have been identified as the Independent Grievance Redressal Authorities (IGRA), by the Government of Maharashtra. The IGRA will handle the grievances in the following scenarios:

  1. In case of no response, the system will not auto-escalate the grievance to the IGRA. Citizens will have an option to escalate the complaint to the respective Divisional Commissioner (Konkan Division), who has been declared as the IGRA by the Government of Maharashtra.
  2. In case of responded grievances, which are closed by Level 2 officers, but the resolution provided is not satisfactory to the citizen, citizens will have an option to escalate the complaint to the respective IGRA.

Conclusion

Thus, states providing e-registration facilities for registration of rent agreements allow for their drafting, viewing, modifying, signing and subsequently submitting and registering completely online, effectively aiding so many people. Now, every state and union territory must start implementing this system to ensure hassle-free registration of rent agreements.

References 

  1. Rent agreement registration process – Charges, Documents, Format, Online/ Offline
  2. How to register a Rent Agreement? | Business – Times of India
  3. Is Registration of Rent Agreement mandatory? | Business – Times of India
  4. What happens if you don’t have a rent agreement? – Times of India
  5. Explainer: Model Tenancy Act and how it is different from Rent Control Act of 1948-India News, Firstpost
  6. Your Guide to Executing a Registered Rent Agreement in Maharashtra

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All you need to know about a bilateral agreement

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This article is written by Adhila Muhammed Arif, a student of Government Law College, Thiruvananthapuram. This article seeks to explain what a bilateral agreement is, its essentials, and how bilateral agreements are different from unilateral agreements.

This article has been published by Sneha Mahawar.

Introduction 

As per Section 2(e) of the Indian Contract Act, 1872, an agreement is essentially a promise that is coupled with a consideration. That is, it consists of an offer and its acceptance, and a price for the performance of the offer. Several transactions that take place every day involve the use of some form of an agreement or contract. We see agreements in several commercial relationships such as the rental agreement between a tenant and a landlord, loan agreement between a lender and a borrower, agreement to sell a property between its owner and the buyer, etc. Agreements do not always have to be written or documented in their form. When we go to a nearby shop to buy candy, an agreement is formed between us and the shopkeeper which is unwritten in form. However, it qualifies all the essentials of an agreement. It involves the buyer offering to pay for the chocolate and the seller accepting the payment of money for the chocolate. Agreements can be classified in many ways and some of which are express and implied, written and unwritten, unilateral and bilateral, valid, void, and voidable, etc. Most of the agreements that we form in our day-to-day transactions are bilateral in nature. Such agreements consist of mutual or reciprocal promises. It is crucial to explore what bilateral agreements are, how bilateral agreements are distinctive from unilateral agreements, and what are the different kinds of bilateral agreements. 

Essentials of a valid contract

Firstly, Section 2(b) of the Indian Contracts Act defines a promise as an offer made by one party which has been accepted by another party. Section 2(e) defines an agreement as a promise for which another promise exists as consideration. Finally, Section 2(h) defines a contract as an agreement that can be enforced by law. Essentially, as per Section 10, any valid agreement can be called a contract when it’s accompanied by the following factors: 

  1. Competent parties;
  2. Free consent of the parties;
  3. Lawful consideration and object, and 
  4. The agreement must not be declared expressly void by law. 

Bilateral agreement – meaning and example

In several agreements, one party makes an offer that the other party may or may not accept, and consideration is provided for the performance of the offer. Only one party makes a promise to perform something in such agreements. However, bilateral agreements are distinct in this aspect. A bilateral agreement involves mutual promises. In such an agreement, a promise is met with another promise, also called a reciprocal promise.  

For further explanation, some examples of a bilateral agreement are given: 

  1. A promises B that he would sell his car after 20 days. B promises that he would pay the price once the car is delivered to him. Here, both A and B make promises to each other. B promises to perform his obligation once A performs his obligation. 
  2. In an agreement of contract of sale of a house, A, the seller, promises to deliver the title of the house in exchange for an agreed sale price. B, the buyer, agrees to pay the specified sale price in exchange for the title of the house. Both A and B have made promises to each other. 
  3. In an agreement, A promises to ship 20 sacks of rice to B. B in return promises A that he will pay for the 20 sacks of rice once he receives them. This is an example of a bilateral agreement as both A and B have made promises for each other. 

What is a unilateral agreement

So far we have seen that in a bilateral agreement, a promise is met with a reciprocal promise. In unilateral agreements, the offer is made by the offeror but the offeree may or may not accept the offer. The offeree does not declare the intention to perform any promise or obligation. Only when the offeree performs the conditions put forward by the offeror the agreement gets formed. For instance, A loses a valuable item and puts up a notice promising to reward whoever finds it for him. Here, the agreement is offered to the public in general and it gets accepted only when someone finds the item and returns it to A. A performs his promise of rewarding the finder only on receiving the item. 

Difference between unilateral and bilateral agreements

The following are the notable aspects of unilateral and bilateral agreements that distinguish them: 

  1. Promise: In unilateral agreements, only one party, who is the offeror, makes promises and is obligated to fulfil them. Bilateral agreements on the other hand are created on the basis of mutual or reciprocal promises to fulfil obligations. 
  2. Offer: Unilateral agreements are formed by the acceptance of offers which are in the form of open or optional requests. They are usually open to the general public and not to a specific person. Bilateral agreements on the other hand are always specifically formed by an offer made to a specific person. 
  3. Clarity and communication: There tends to be a lack of clarity in unilateral agreements as the offer can be accepted by any person. In bilateral agreements, there tends to be proper communication between the two parties. The parties to the agreement are clear and specific. The promises made to each other are clear as well. For instance, if there is a unilateral agreement where there is a promise for a reward for finding a lost cat, many individuals could put in the effort in finding the cat. They would not even know if someone has already accepted the agreement by finding the cat. 
  4. Time-frame: In unilateral agreements, the offeror must state the time period for which the offer would stay valid. Bilateral agreements usually specify time-related requirements. 

Kinds of bilateral agreements

The following are the different types of bilateral agreements: 

Mutual and independent promises 

In a bilateral agreement where each party can perform their obligations independently without waiting for the other party’s performance, we can say that the reciprocal promises are mutual and independent. For instance, A agrees to pay B the price of goods on the 10th of February and B promises that he will deliver the goods on the 12th of February. Here, both A and B can perform their promises independently without having to rely on the performance of the other. 

Mutual and dependent promises 

In a bilateral agreement where one party has to depend on the other party’s performance in order to perform his obligations, the reciprocal promises are mutual and dependent. For instance, in a bilateral contract between A and B, where A promises to build a house for B and B agrees to supply the necessary materials for construction, A has to depend on B’s performance. Since one party has to depend on the other party’s performance, the reciprocal promises can be termed as mutual and dependent. 

Mutual and concurrent promises 

In a bilateral agreement where the promises have to be performed simultaneously, the reciprocal promises are said to be mutual and concurrent. For instance, A promises B to sell goods to B. B promises to pay on the delivery. Here, the agreement is complete when both parties perform their obligations at the same time. Hence, the reciprocal promises in such a bilateral agreement are mutual and concurrent.  

Provisions in the Indian Contract Act, 1872 with respect to bilateral agreements

The following are the provisions in the Indian Contract Act, 1872, which  with bilateral agreements, or more specifically reciprocal promises: 

Bilateral agreements with mutual and concurrent reciprocal promises 

As per Section 51 of the Indian Contract Act, 1872, in a bilateral agreement where the reciprocal promises are to be simultaneously performed, no promisor needs to perform his promise unless the promisee is also willing to perform his reciprocal promise. For instance, A and B enter into a bilateral agreement. As per the agreement, A is supposed to deliver certain goods to B for which B would pay on delivery. A does not have to deliver the goods unless B is willing to pay for it on its delivery. Similarly, B does not have to make the payment unless A is willing to deliver the goods on payment. 

Order in which the promises are to be performed 

As per Section 52 of the Indian Contract Act, when a bilateral agreement has fixed an order in which promises are to be performed, it has to be performed in that order itself. As for bilateral agreements with no expressly fixed order of performing promises, the order should be what is generally followed for the transactions of that nature. For instance, in a bilateral agreement between A and B, A promises to B that he shall build a house for B for a certain price. Here, B shall make the payment only after A builds the house. 

Where one party prevents the performance of promise 

Section 53 of the Indian Contract Act renders bilateral agreements where one party prevents the other from performing his promise voidable at the option of the party who is so prevented. Additionally, the prevented party is also entitled to seek compensation for any loss sustained due to the non-performance of the agreement. For instance, A and B enter into a bilateral agreement. B’s promise is to execute certain work for A fixed price of Rs. 1000. Though B is willing to undertake the work, A prevents him from performing it. The agreement is voidable at the option of B if he chooses to rescind it. Another remedy that B has is to make A compensate for the losses incurred by B if any. 

Default in promises which are mutual and dependent 

As per Section 54 of the Indian Contract Act, in a bilateral agreement when one of the promises cannot be performed, or when it cannot be claimed until the other promise has been performed, the promisor who is supposed to perform his promise first cannot claim the performance of the other. He must also compensate the other party for any losses sustained due to the non-performance of the agreement. For instance, A and B enter into a bilateral agreement where A has to execute certain builders’ work for a certain price. B’s obligation is to supply the necessary materials for the work. If B refuses to supply the materials, the work cannot be executed. In that case, A does not have to execute the work and B will also be liable for compensation for the losses incurred by A. 

Bilateral agreements which consist of legal as well as illegal promises 

Section 57 of the Indian Contract Act deals with such kinds of bilateral agreements. As per this section, if a set of promises in a bilateral agreement are legal, while the other promises are illegal, the first set remains valid and the second set becomes void. For instance, A and B enter into a bilateral agreement where A promises that he shall sell a house to B for a fixed price of Rs. 10,000. But he also put forward a condition that if he uses that as a gambling house, the price shall be Rs. 50,000. The first promise is lawful meanwhile the second promise enables B to use the house for an unlawful object. For this reason, the second promise is rendered void. 

Important clauses to be included in a bilateral agreement

The following are some of the important clauses that the parties to a bilateral agreement should consider while drafting the agreement: 

  1. Parties: It is important to include details of the parties to an agreement while drafting. This is to show who is liable for performing the obligations stated therein. 
  2. Promises: In a bilateral agreement, both parties make promises to each other. It is important to include the obligations undertaken by each party. It would also be ideal to include the order of the performances if one party’s promise is dependent on the other party’s performance of the agreement. 
  3. Termination clause: It is suitable for parties to include a termination clause and for what causes it becomes operative. The parties to a bilateral agreement must consider including this clause so that they can absolve themselves from performing the agreement in difficult circumstances. It is important to include the causes for which the agreement can be terminated. 
  4. Indemnification of loss: This is an important clause that can be included in an agreement as it can ensure that any party affected by the other’s non-performance can be indemnified for the losses incurred. 
  5. Mode of resolving dispute: Another important clause to be included is the mode of resolving the dispute if it arises. It could be either litigation or alternate modes such as mediation or arbitration, whichever the parties prefer to go by. 

Sample of a bilateral agreement

Here is a sample of a bilateral contract between the owner of a house and its buyer: 

Agreement for sale of house 

  1. This sale agreement has been made on …(date)….between …(name of party1)…, residing at …(address)….., who is the seller, and ….(name of party2)…, residing at …(address)…, who is the buyer. 
  2. The entire house of ….(house address)… will be sold by the seller to the buyer. 
  3. The buyer has paid a part of the price, which is an amount of  ….. and the seller hereby acknowledges it. The balance will be paid by the buyer at the time of execution of the deed. The house is free from all encumbrances. 
  4. The sale will be complete by  …(date)…
  5. The seller shall submit the documents regarding the title of the house to the buyer’s advocate. Within one week from the date of such submission, the buyer will intimate about his advocate’s report.  
  6. If the title turns out to be defective, the seller shall make a refund of the money paid in advance. 
  7. The seller will hand over the vacant possession of the house on the execution of the deed. 
  8. If the buyer commits a breach of the agreement,  the seller will be at liberty to resell the property to any person and the balance will be retained by him. 
  9. If the seller commits a breach, he will be held liable to refund the advance payment and a sum of ….. as damages. 
  10. The seller shall execute the conveyance deed in favour of the buyer on receiving the balance amount. 
  11. The expenses for the preparation of the conveyance deed, cost of the stamp, registration charges shall be undertaken by the buyer. 

                                                                 ……………………………………

                                                                  Signature and name of party1 

                                                                 ……………………………………

                                                                 Signature and name of party2

Conclusion 

To conclude, most agreements formed in our day-to-day lives are bilateral in nature. In other words, most of the agreements that we form consist of reciprocal or mutual promises. It is rare to see agreements where only one party makes a promise to perform an obligation. Bilateral agreements are much clearer with regard to the parties involved and the terms and conditions. The provisions regarding bilateral agreements or more specifically reciprocal promises are found in Sections 51 to 57 in the Indian Contract Act. 

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

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