Pledging of shares is one of the most important factors to consider before investing in a company. A corporation having a large number of pledged shares is a source of anxiety for investors.
According to a recent news report, the value of shares pledged by promoters in BSE 500 businesses fell to 1.95 percent in June 2020, down from 2.34 percent the previous quarter. According to the story, promoters pledged shares worth 1.3 trillion at the end of the June quarter, accounting for less than 1% of India’s overall market capitalization.
Let us try to grasp what pledging of shares is and how it affects investors in the company through this post.
What is pledging of shares
The pledge of shares is one of the methods used by company promoters to get loans for working capital, personal needs, and to support other initiatives or acquisitions. To obtain a loan, a promoter’s interest in a company is utilized as collateral. Promoters keep their ownership when pledging shares. However, as the value of the stock fluctuates, so does the value of the collateral. A ‘margin call’ occurs when the value of shares pledged to a lender falls below a certain threshold, forcing the promoters to make up the shortfall in the collateral’s value.
The promoters are expected to preserve the value of the collateral at all times by delivering additional shares to lenders when the value of the collateral erodes. This can be problematic for businesses at times. If the promoters are unable to make up the shortfall, lenders may sell the shares on the open market to recoup their losses. This can result in the promoters’ shareholding in the firm being reduced, the stock’s value being eroded further due to the infusion of fresh paper into the market, and even a rapid change of guard in the company due to the change in shareholding pattern.
In the aftermath of the Satyam scam in 2009, India’s securities market regulator, Sebi, developed several rules and regulations on adequate disclosure of such borrowings. Fears of a margin call spurred selling in numerous midcap and small-cap stocks in the Indian market in February 2013.
How does pledging of shares work
The process of pledging shares is similar to that of pledging a property, except that instead of a house, shares of a publicly-traded firm are promised. Anyone who holds stock in a public corporation can use it to secure a loan. When the company’s promoters pledge their ownership, however, investors should be aware of this.
Assume that the promoters of XYZ Ltd own 60% of the company. If there are 1 crore shares outstanding, a 60% holding indicates the promoters own 60 lakhs of them. Each share has a market value of $500. As a result, the promoters’ stake is worth Rs. 300 crore (60,00,000 * 500).
Assume the promoters need to raise Rs.100 crore to enhance the company’s manufacturing capacity and are looking for a bank loan.
When lending based on a stock promise, RBI regulations require that a loan to value (LTV) ratio of 50% be maintained at all times. The entrepreneurs will have to commit at least 200 crores worth of shares with the bank, which translates to 40 lakh shares because the proposed loan amount is 100 crores. It’s also worth noting that any gap in maintaining the 50% LTV that occurs as a result of share price movement should be paid up within seven working days.
Assume that XYZ Ltd.’s stock price drops to 450 as a result of poor financial performance. Because the collateral is now only worth (40 * 450) 180 crores, the LTV has increased to 55 percent (100/180). The promoters will now be asked to pledge additional shares in order to maintain a 50 percent LTV. The value of the collateral might be increased to 200 crores by pledging an additional 4.44 lakh shares. If the price falls to 350, the promoters will be required to promise another 17.14 lakh shares. When the price falls to 333, 60 lakh shares must be pledged to ensure that the collateral value is around 200 crores, which is the promoter entity’s whole shareholding.
If the promoters are unable to raise the collateral by pledging new shares or paying cash to lower the loan liability at any stage, the financial institution will sell the shares in the open market, realizing the proceeds and reducing the loan liability.
Let’s say the share price of XYZ Ltd declines from 500 to 250 in a matter of days owing to unforeseen events. Even if the promoters guarantee their whole 60 lakh shareholding, the collateral will only be worth 150 crores, and the LTV will be 66.67 percent (100 / 150). Only by selling the shares, realizing the cash, and reducing the loan amount can the LTV be reduced to 50%. A total of 50 crores can be raised if 20 lakh shares are sold.
The loan outstanding will then be 50 crores (100 – 50), and the pledged value will be 100 crores (150 – 50), resulting in a 50 percent (50/100) LTV. However, dumping 20% of the company’s outstanding shares into the market will put downward pressure on the stock price, causing it to fall further.
How to pledge shares
The promoter must use the trading terminal to submit a request for pledging shares.
After receiving the request, the trading terminal sends it to NSDL/CDSL for confirmation.
For PAN/BOID authentication, NSDL/CDSL uses email/mobile authentication.
The promoters can trade the collateral margin once it has been granted.
Promoters can also submit a Margin Pledge Request Form to Angel One, which must be signed by all holders.
How to draft a share pledge agreement
When you make a share pledge or a stock pledge agreement, you’re pledging your stock as collateral for a loan. Although you can pledge your stocks informally, a formal pledge agreement is safer since it makes it easier to determine the facts if someone becomes confused or forgets the terms.
Terms
Your share pledge agreement should identify you as the pledgor as well as the pledgee with whom you’re working. It specifies the stocks you’re referring to and that you’re using them as collateral. A proper pledge agreement also spells out what happens if the stock is reclassified or changed, as well as the pledgee’s options if the pledge is declared void. Once you and the pledgee are both satisfied with the terms, both of you sign.
Requirements
You can’t put up shares that have already been pledged to another lender or that have any form of lien or encumbrance on them when you sign a pledge arrangement. They must not be in debt. Similarly, you cannot sign the agreement and then pledge your shares to someone else. Unless you actually default and have to give up the shares, signing the commitment has no effect on whatever voting rights the stock grants you.
Consequences
You’re done if you pay off your debt: The pledgee relinquishes all rights to the shares you promised, and the arrangement is nullified. If you don’t pay, the lender has the authority to sell your stock to recoup the money you owe. He has the option of selling it directly or holding an auction. If the note compels you to pay off any residual debt after the sale, demand that the pledgee auction them off to raise the most money. If they must be sold, they must be sold at full market value.
Considerations
Before you sign the contract, read it well. If you and the lender end up in court, it doesn’t matter what you thought the agreement meant; what matters is what the printed word states. Some share pledge agreements allow the pledgee to accelerate the loan, meaning you’ll have to pay the full amount straight away. This can happen if you miss even one payment, or if certain other conditions occur, such as filing for bankruptcy to eliminate your obligations.
Points to remember for the pledgee
For pledging of shares, necessary board resolutions and corporate permissions have been secured.
At the time of pledging, the pledged shares are completely paid up.
On the pledged shares, there are no other charges or encumbrances.
The company’s articles of incorporation allow for stock pledges.
The underlying corporation is listed on the NSE, and the pledged shares are freely tradeable on the exchange.
The lenders have the right to attend any meeting of the firm or any gathering of creditors, as well as exercise voting rights over the pledged shares.
Except for the lender’s pledge, the borrower will not create any additional rights, pledges, encumbrances, or transfers of the pledged shares.
The pledger of shares is not or will not become a party to any agreement that restricts the transfer of shares pledged.
The Pledgor shall cause the charge created on the Pledged Shares to be recorded in its register of charges upon the creation of the pledge of the Pledged Shares in favor of the Security Trustee. The Pledgor shall also ensure that the Underlying Company files the necessary documentation evidencing the charge with the appropriate Registrar of Companies, as required by the Companies Act, 1956.
In the event that the pledger defaults, the lender has the option to sell or acquire the pledged shares for whatever price the lender deems appropriate.
The security provided under the share pledge agreement will continue if the Pledgor is wound up (voluntary or otherwise), or if the Pledgor is merged, amalgamated, rebuilt, or otherwise restructured, or if the Pledgor is taken over, managed, or nationalized.
Points to remember for pledgor
The share pledge agreement, pledges, and security interests will be cancelled once all secured obligations have been fully satisfied to the satisfaction of the lender.
The lender shall return the pledged shares and deposits to the credit of the borrower’s designated account upon termination of the arrangement, and redeliver the power of attorney obtained in favor of the lender marked “cancelled.”
Without the approval of both parties, no addition or modification to this agreement will be permitted.
Conclusion
Share pledging is a common approach for businesses to raise funds, but bad experiences in the past have left an unfavorable perception of the instrument since it indicates poor cash flow patterns, a company’s credit crisis, and promoters’ failure to satisfy short-term working capital requirements. Share pledges are frequently made by promoters for personal reasons as well. Increased share pledges are risky not only for promoters but also for shareholders. The bottom line is that investing in companies with 5-10% pledged shares is not an issue, but beyond that, the investor should use caution.
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This article is written by Sahaja, from NALSAR University of Law, Hyderabad. This article talks exhaustively about the foundational agreement LEMOA and other foundational agreements between India and the US.
This article has been published by Rachit Garg.
Table of Contents
Introduction
The abbreviation LEMOA stands for Logistics Exchange Memorandum of Agreement (LEMOA). LEMOA is a significant pact that strengthens and enhances India’s military ties with the United States. It is a revised version of the Logistics Support Agreement (LSA) that the US has with a number of countries with which it has close military cooperation. LEMOA permits the US and Indian forces to resupply from each other’s bases, as well as access supplies, spare parts, and services from each other’s land facilities, air bases, and ports, all of which can be reimbursed. Medical services, training, spare parts, fuel, food, water, transportation, clothing, repair, maintenance, and communication services are all included in the agreement.
India and the United States (US) signed the Logistics Exchange Memorandum of Agreement on August 29, 2016, during the visit of the then-Indian Defence Minister Manohar Parrikar to Washington, DC (LEMOA). Beginning with the Logistics Exchange Memorandum of Agreement (LEMOA) with the United States in 2016, India has inked several logistics agreements with all the Quad countries, and also France, Singapore, and South Korea. Because the two countries cooperate closely in the Indo-Pacific, LEMOA is particularly valuable for India – US Navy-to-Navy cooperation.
Significance of LEMOA
For India and the United States, the LEMOA is a big step forward. The agreement comes after more than a decade of talks, and it will serve as a catalyst for an automatic permission process for the two militaries to share facilities for various operations. This agreement will serve as a foundation for increased defence cooperation between the two countries. The most important part of this deal, however, is the strengthening of India’s military capabilities. India will have unprecedented access to the American military’s vast network of bases, many of which are strategically located. The deal will also strengthen India’s naval capabilities in the Indian Ocean region as China’s naval force grows.
What are foundational agreements
With its defence allies, the US enters into what is known as “foundational or enabling agreements.” The nature and scope of the US defence alliances are governed by these agreements. By sharing information, platforms, and logistics, partners help the US military improve its capabilities in far-flung locations. The United States is likewise eager to develop ‘interoperability’ with the defence forces of its defence partners. Interoperability entails force coordination in real-time.
The United States has signed fundamental agreements with at least 100 countries, the majority of which are based on a standard text. The General Security of Military Information Agreement (GSOMIA), the Logistic Support Agreement (LSA), the Communications and Information Security Memorandum of Agreement (CISMOA), and the Basic Exchange and Cooperation Agreement (BECA) for Geospatial Intelligence are examples of “regular” agreements. The agreements are “regular equipment that the US utilises to encourage military cooperation with partner-nations,” according to the Pentagon. The agreements, according to American officials, are not required for bilateral defence cooperation, but they would make carrying out defence tasks easier and more cost-effective.
LEMOA and India
Among the foundational agreements, the COMCASA (Communications Compatibility and Security Agreement) indicates one party is satisfied that encrypted systems can connect the two militaries, whereas LEMOA means one partner trusts the other enough to expose vital assets. The most recent agreement, BECA, allows the countries to transmit highly classified information in real-time without danger of being exposed.
The strengthening of military cooperation mechanisms between the two militaries must be viewed in the context of an increasingly assertive China, which poses a threat to a large number of countries in its neighbourhood and beyond, and has questioned a number of established norms and aspects of international relations.
Port calls, training, joint exercises, and humanitarian assistance and disaster relief will all be covered by the LEMOA. Any further requirements must be agreed upon by both countries on a case-by-case basis. This agreement allows these two countries to use one other’s military and naval assets for “certain types of actions.” It will increase the reach of the Indian navy and allow it to conduct far-reaching operations. This deal was struck at a time when tensions between the United States and China were rising in the Asia-Pacific region, and the strategic partnership between the United States and Pakistan was being redefined.
US-India Military Relations
In recent years, the US and India have progressively increased their military ties, signing a slew of defence agreements and deepening military cooperation. In 2019, the two countries reached an agreement on defence transactions totaling more than $3 billion. Defense trade between the two countries has climbed from virtually nil in 2008 to $15 billion in 2019. This breakthrough in military cooperation between India and the United States traces back to the 9/11 attacks strikes.
During the 1971 Indo-Pak conflict, the United States supported Pakistan. India, on the other side, signed a 20-year pact of friendship and cooperation with the Soviet Union, reversing its Cold War policy of non-alignment. On 18th May 1974, India launched its first nuclear weapon.
This action contributed to a period of enmity between the US and India that lasted well into the next two decades. The Indian government announced successful nuclear tests in May 1998. These tests received widespread condemnation from around the world and severely harmed Indo-US relations. As a result, the United States levied economic and military sanctions against India. The United States immediately dropped all sanctions against India after the 9/11 attack. The United States and India decided to start a dialogue on energy security in 2005. The Indo-U.S. ties surged to new heights on 18th July 2005 when the U.S. and India negotiated the Civil Nuclear Cooperation Initiative, a ten-year defence framework that lifted the three-decade U.S. prohibition on nuclear trade with India. India agreed to separate its civil and military nuclear facilities and place all of its civil resources under IAEA safeguards as part of the deal. In October 2008, Congress provided final assent to the accord. Since then, the two countries found common ground on a number of regional and international concerns.
Implications of LEMOA for India and the US
The United States and India have praised the LEMOA as a watershed moment in Indo-US ties. The LEMOA has many implications for the nations which are both beneficial and disadvantageous.
This deal will boost India’s naval outreach as well as its defensive and offensive capabilities against its adversaries, but it does not come without consequences. Russia and India are two significant partners, and this deal will have an impact on their “all-weather friendship.” Relations between Russia and the United States are strained, and this embrace between India and the United States will necessitate a buffer between the two countries. This will very probably prompt Russians to seek other possible weapons purchasers in the same region, and it may even result in Russians giving sophisticated weapons to Pakistan, something they have avoided doing in the past due to Indian hostility.
Due to numerous simmering issues, India’s relationship with China is unpredictable, while its relationship with Pakistan is hostile. India has asserted that it does not seek to upset the South Asian power balance. However, this agreement between the US and India might be viewed as an Indian attempt to achieve just that. This will undoubtedly bring Pakistan and China closer together, and the two countries may devise a strategy to control India. In this case, India’s worry of two hostile nuclear powers banding together against it may come true.
The relationship between the United States and India has improved significantly in recent years. Closer trade and military connections between India and the United States have been promoted by an Indian lobby in the United States. The LEMOA is a significant step forward for both India and the United States. However, this deal has significant ramifications for the United States, just as it does for India.
Pakistan has been a key partner of the United States in the area, as well as the front-line state in the ‘War on Terror.’ This deal has the potential to exacerbate the already existing animosity between the two countries.
Because of China’s belligerence in the South China Sea, tensions between the US and China are rising.
This agreement between India and the United States may be viewed by China as an attempt to encircle her, which it will try to fight by boosting its military force. It will also push China closer to Russia, which will be detrimental to the United States.
Other US foundational agreements
India has signed all four foundational agreements with the US to advance in military relations. The LEMOA agreement is a Logistic Support Agreement (LSA) between India and the US. As mentioned above, it was signed in 2016 and by virtue of this agreement, the two countries that are parties to this agreement will be able to access each other’s military facilities for fuelling and logistics support on a reimbursable basis. Apart from the LEMOA, the three other foundational agreements of the US have also been signed by India during different years and these agreements (CISMOA, BECA and GSOMIA) have been adapted to suit the kind of relation expected between India and the US. The meanings and the significance of these other agreements are mentioned below:
General Security of Military Information Agreement (GSOMIA)
The General Security of Military Information Agreement (GSOMIA), a more primitive version of COMCASA, was signed in 2002. It did not, however, encompass many of the sensitive technologies for which the COMCASA cleared the way. This agreement allows the two countries to share military intelligence and requires each government to protect the other’s confidential material. It includes explicit provisions for ensuring security standards for important information transferred between the US and India.
Communications Compatibility and Security Agreement (COMCASA)
The Communications Compatibility and Security Agreement, or COMCASA, is one of four basic agreements that the US enters with allies and close partners to promote military interoperability and the transfer of high-end technology. The COMCASA is an India-specific variant of the Communication and Information on Security Memorandum of Agreement (CISMOA).
On September 6, 2018, India and the United States signed the COMCASA foundational or enabling agreement. The COMCASA has a ten-year validity span. COMCASA enables India to obtain specialised technology for encrypted communications for the US military platforms such as the C-17, C-130, and P-8I. These platforms previously relied on commercially available communication solutions.
The signing of COMCASA paved the path for the delivery of communication security equipment from the United States to India in order to enhance ‘inter-operability’ between their forces and perhaps with other militaries that rely on US-made systems for secure data communications.
Basic Exchange and Cooperation Agreement (BECA)
The BECA was signed by the Indian defence minister Rajnath Singh on October 27th, 2020. BECA is the fourth and final of four basic defence agreements between the two countries, allowing for far more military collaboration in terms of technology, interoperability, and defence manufacturing. The signing of the BECA brings an end to a protracted period of mutual trust-building and paves the way for further security cooperation.
BECA is primarily concerned with geospatial intelligence and the dissemination of defense-related information on maps and satellite pictures. BECA will provide high-quality GPS navigation for Indian military systems, as well as real-time intelligence for missiles to precisely target the adversary. It will provide topographical and aeronautical data and products to facilitate navigation and targeting.
Conclusion
Due to LEMOA, both India and the US will be able to use each other’s military installations for reimbursable fueling and logistics support. This agreement will serve as a foundation for increased defence cooperation between the two countries. This deal has far-reaching consequences for the parties involved as well as other significant regional and global powers. The world now knows that India is no longer neutral and has become a strategic partner of the United States in the Asia-Pacific region which was asserted to the Global military structure through the signing of the foundational agreements with the US.
The article is written by Ansruta Debnath, a law student of National Law University Odisha. This article is an attempt to define the legal nitty-gritty of Section 509 of the Indian Penal Code,1860.
This article has been published by Rachit Garg.
Table of Contents
Introduction
Eve-teasing is a common phenomenon in India. This article talks about Section 509 of the Indian Penal Code, 1860, which criminalises eve-teasing, the provisions involved, the only amendments relating to Section 509 (in Chattisgarh) and the overall issues involved.
Section 509 IPC
Ingredients of Section 509 IPC
Section 509 of the Indian Penal Code,1860 criminalises-
words,
gestures or
any act which is done with the intention of insulting the modesty of a woman.
The acts that can be considered to be within the ambit of this Section also includes-
sounds,
gestures or,
exhibition of any object which is done with the intention to be heard or seen, and which intrudes upon the privacy of a woman.
Punishment under Section 509 IPC
Any person committing this crime is prescribed to be punished with simple imprisonment for a term which may extend up to three years, and also with a fine. Until 2013, the maximum punishment for this crime was simple imprisonment that might extend up to one year fine or both. However, by the passing of Act 13 of 2013 i.e., The Criminal Law (Amendment) Act, 2013, imprisonment was made mandatory and not interchangeable (according to the will of the sentencing authority) with a fine. Further, the maximum term for imprisonment was altered and increased.
Discussion on Section 509 IPC
The following are certain observations of this author related to the wording in this Section –
The Section starts with the term ‘whosoever’ which implies that the provision is partly gender-neutral. Thus, a female can also commit this offence. However, on the flip side, this provision specifies that the crime can be committed only against women.
An important note to be taken is that this provision criminalises intention to insult modesty and not outrage of modesty. Outraging modesty, as given in Section 354 of the Penal Code involves assault or the use of criminal force. Thus, if a comparison must be done, outraging modesty is a graver offence than insulting the modesty of a woman.
For a very long time, courts had tried thousands of cases of insult/outrage of modesty without specifying what ‘modesty’ actually is. Finally, through the case of Ramkripal S/O Shyamlal Charmakar v. State of Madhya Pradesh (2007), the Supreme Court held that “the essence of a woman’s modesty is her sex…the culpable intention of the accused is the crux of the matter”. Essentially, ‘modesty’ is understood as a woman’s sexual dignity and autonomy that is acquired by their birth.
As mentioned above, the intention of the accused is very important. It must be proved that the accused intended to insult the modesty of a woman, especially since the word ‘intention’ is specifically mentioned in the Section. In the case of Dy. Inspector Gen.Of Police & Anr v. S.Samuthiram (2012), a member of the law enforcement agency, police personnel, himself was caught in the act of eve-teasing of a married woman leading to the criminal and disciplinary proceeding, ending in his dismissal from service. The matter was then appealed with respect to the legality of that dismissal. The Court while allowing the appeal stated that the burden was on the prosecution to prove that the accused had uttered the words or made the sound or gesture and that such word, sound or gesture was intended by the accused to be heard or seen by some woman.
In S. Khushboo v. Kanniammal & Anr (2010), the petitioner who was an actress had been charged with various offences including Section 509. Khushboo had given an interview in a magazine that was considered to be defaming women. Apart from the fact that no offence was made out against her at the end, the Supreme Court in relation to Section 509 stated that in order to establish this offence it is necessary to show that the modesty of a particular woman or a readily identifiable group of women has been insulted by a spoken word, gesture or physical act. But in the given case, the words of the actress had been published in a magazine and thus an offence could not be made out even if they actually were capable of insulting the modesty of said women.
In the crucial case of Mrs Rupan Deol Bajaj & Anr v. Kanwar Pal Singh Gill & Anr (1995), the act of the accused of slapping the posterior of a female I.A.S. officer in a gathering consisting of the elite of the society, when considered in the light of the sequence of events involving overtures, words used and gestures made, prima facie amounted to commission of the offence under Section 509.
Another example of a convicted offence under this Section was seen in the case of Emperor v. Tarak Das Gupta (1925), wherein it was held by the Supreme Court that the sending by post of a letter containing indecent overtures to a woman can amount to an offence punishable under Section 509 of the Penal Code, 1860.
The right to sexual integrity, dignity and autonomy is intrinsically linked to the right to privacy. Every woman has the right to self-determine her bodily affairs and infringing on those can amount to the intrusion of privacy. Hence, the words ‘intrudes upon the privacy of women’ has been rightly added to this Section.
This Section describes simple imprisonment which is different from rigorous imprisonment. While a person sentenced to rigorous imprisonment must perform hard labour in prison, a convict sentenced with simple imprisonment is assigned tasks that are based on their requests and physical fitness.
This Section was originally designed to curb eve-teasing and instances of street sexual harassment. However, it also includes acts done through cyber-space.
Classification of the offence
The offence under this Section is cognizable, bailable and compoundablewith the permission of the Court before which any prosecution of such offence is pendingand triable by any Magistrate.
Cognizable offences: They are generally offences that are serious. The police or any other investigating officer can arrest the person accused of such an offence without acquiring a warrant from a Magistrate.
Bailable offences: Persons who are accused of this offence are entitled to bail from the courts as a matter of right. These are offences where bail cannot be denied. In these cases, because the granting of bail is not a favour, the discretion of the judge does not come into question.
Compoundable offences: Compounding of offences that can be resolved without a formal court trial. It mainly involves drawing up a compromise between the accused and the victim and can be done, as mentioned above, only with the permission of the Magistrate trying the case.
Any Magistrate: Provided that there is the presence of appropriate jurisdiction, any Magistrate can try this offence regardless of whether they are First Class Magistrate or Executive Magistrate etc.
State Amendment by Chhattisgarh
Criminal laws and procedural laws are part of the Concurrent List of the Seventh Schedule and thus states can also amend the Indian Penal Code, provided their amendment is not contradictory to the Centre, which will lead to the prevalence of the Central law.
This Section talks about sexual harassment by relatives. This Section specifically criminalises any act that has the intention to insult the modesty of a woman by any person who is related to a woman by blood, adoption or marriage (apart from her husband). Criminalization of those acts which take advantage of the relational proximity and induce, seduce or threaten women has been done through the addition of this Section.
The punishment that has been prescribed is a minimum of one and the maximum of five years of rigorousimprisonment as well as liability to fine.
Section 509-B IPC
This Section talks about sexual harassment by electronic modes. It states that whosoever makes, creates, solicits or initiates the transmission of any comment, request, suggestion or image that has obscene or lewd content, is said to commit this offence. Moreover, to constitute this offence, there needs to be an intention to harass or cause discomfort and mental agony to a woman. The knowledge that such content will cause harassment or discomfort is also sufficient to constitute an offence under this Section. The punishment prescribed is rigorous imprisonment of six months to two years along with a fine.\
Is Section 509 IPC a meaningful provision in the current times
While assault cases were governed by separate provisions, Section 509 was incorporated within the Penal Code to punish lewd verbal and non-physical attacks against women. Further, Section 509 had also been seen to be used in harassment cases in the workplace. While a formal Act, Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act, 2013 (the POSH Act) has been enacted for these issues, this Act only invites civil damages and remedies while the criminal provision has jail term provisions. The POSH Act also is limited to the workplace while Section 509 is universal, thus making the latter still relevant. Section 509 is also important as it criminalises seemingly trivial acts like a stranger inviting a woman for a bike ride (In the case of Abhijeet J.K. v. State of Kerala (2020), it was held that an “act of affront to the decency and dignity of a woman cannot be considered as trivial in nature”).
Issues and conclusion
As seen in almost all sections related to sexual harassment and assault, they criminalise offences against women and not men, thus excluding a wide section of the population consisting of males and transgenders. Moreover, modesty has often been equated with chastity, which shows the wrong conception of the sexual dignity of women. While the intention of this Section is well-founded, the aim of this Section, apart from protecting sexual dignity also perpetrates certain ideas of controlling it. Any act that violates anyone’s sexual integrity and bodily autonomy should be a crime regardless of whether it “insults” someone’s “modesty” or not.
Having said that, this Section sufficiently has been able to give a structured redressal mechanism to women, who are constant victims of eve-teasing. However, a major impediment to women getting justice is the innate internalisation of eve-teasing as normal by women and lack of sufficient awareness. Lack of fast court mechanisms is also a major impediment to prompt reporting of such events, making women feel it’s better to tolerate them rather than getting into the hassle of court mechanisms. Obviously, the most ignored issue is that the root of all these problems is the sickeningly patriarchal view of women in society, something that even in the twentieth century has not been rectified.
This article is written by Ashutosh Singh, a student at Amity Law School, Amity University, Kolkata. The article explains the legal maxim argumentum ad hominem, its types, examples and usage.
Maxims are useful tools for legal purposes and the word maxim is taken from the Latin word “maxima” when Latin was the language preferred for legal purposes. Michael Polanyi who was a Hungarian-British polymath said that maxims are significant for the purpose of clear as well as implied modes of understanding. Latin maxims are the well-known principle of law or a legal policy specified in Latin form. Argumentum ad hominem is one such legal maxim.
Ad hominem means “to the person” and it is a Latin word. It means pleading to personal contemplations to be more precise, than to logic or reason. It could include attacking an opponent’s character instead of the opponent’s statements. This phrase is mostly used to explain an argument based on the imperfections of an opponent rather than on the merits of the case. For example, ad hominem is indulged in by people who attack one’s adversary and it is a tried-and-true strategy for people who have a weak case.
These maxims guide courts all over the world in the application of the prevailing laws in a fair and just manner to empower the courts in deciding issues before it. Maxims generally don’t have the authority of law however, when courts apply the maxims in deciding issues of law and when the legislature absorbs these maxims while framing laws, they form the foundation of healthy judgements and take the form of law. This article endeavours to explain the legal maxim argumentum ad hominem because it is much used in the courts against opponents. It is the phrase for an argument with emotional appeal instead of logical appeal.
Origin and history of Argumentum Ad Hominem
“Argumentum ad hominem” is a Latin phrase meaning “argument against the person”. In other words, the phrase means that a person deliberately takes on an argument with another person. The exact birth of this phrase is not known but it was used in the western part of the world earliest by the ancient Greeks. Even Aristotle makes a detailed mention of the fallacy of putting the questioner on scrutiny but not the argument.
The modern understanding of the term “ad hominem” started to take shape somewhere in the mid 19th century, a broad definition of which was given by English logician Richard Whately. According to Whately, ‘ad hominem’ arguments were generally focused on the unusual circumstances, character, admitted opinions, or past conduct of an individual.
Over the years, the phrase acquired a different meaning. Later the phrase was linked to a logical fallacy at the beginning of the 20th century. In this instance, a debater, instead of disproving an argument, attacked their opponent, not physically but through arguments. Nowadays, however, the phrase signifies a direct attack at the character and ethos of a person, in an attempt to negate their argument.
Argumentum ad hominem in courts
‘Ad hominem arguments’ characterise one of the most worrying, mistrustful, tricky and contentious yet effective argument tools in law.
They play a critical role in criminal law. One can say that they are hypothetically in-admissible arguments as they are not focussed against the issue but on the speaker’s argument and against the character of the person who put it forward.
But these confrontations can be awfully effective as a society, and sometimes juries, tend to mistrust people if proven of bad character. Although directly in-admissible, ‘ad hominem arguments are used both by the prosecution and the defence in a courtroom battle. The use of personal attacks to discredit an opponent/ witness is a common trick and skill in a trial setting and a very important form of argument for an advocate or a judge to know about.
Ad hominem arguments have long been considered to be fallacious but now researchers believe that this argument style has progressively moved towards acceptance that they were not always fallacious.
By condemning the spokesperson who may be the prosecutor or the defence counsel in a Court of law, it is possible to draw the conclusion that his/her arguments, in general, should not be accepted because the prosecution can attack and undermine all the possible evidence and arguments submitted by the defence by advocating that the counsel is dishonest, has lied, and fabricated the evidence. Some examples are as follows:
Attacking a defendant’s character
Rather than addressing the actual facts of the alleged criminal activity if the prosecutor says that the defendant hasn’t held a steady job for a long time and what could be worse than the fact that a single employer was not available to vouch for him and provide him with a good reference.
Making the excuse of witness’ geographical location
Emphasising that witness’ geographical location inhibits him from being able to make a clear judgment in the case by saying that he/she has always lived in one city and wouldn’t be able to comprehend matters and issues of importance in some other place.
Making the argument racial
Using racial affronts to debase a person of another race in an argument about a crime involving people of different racial backgrounds by saying that people won’t be able to understand what it’s like to grow up in Srinagar and they have no right to call us terrorists as we are only fighting for our freedom.
Types of ad hominem arguments
Types of ad hominem arguments that are fallacious
Abusive ad hominem
This is a “personal attack” and the most common type of ad hominem argument. The nature of the argument makes it one of the most common logical fallacies. It focuses more on the person behind the argument, rather than on the argument itself. This fallacy is a direct attack on the individual where an individual’s clothes, hair, and personal appearance are brought up during the argument when they have nothing to do with the subject matter. Apparently, the abusive fallacy is persuasive because we mistake the context of the argument for one of those in which the character or characteristics of the opponent start to matter.
For example, the prosecution tells the defendant’s counsel that his argument is stupid because what he is implying is that the person making the argument is stupid since an argument is not a person it cannot literally be stupid. We also see this approach of argument often in sexual assault cases where the defence counsel attacks the character of the victim
Appeal to motive
It is an argument where a person attacks the motive by calling into question the motive of its proposer and doesn’t take into account his/her claim. A common feature of this type of argument is that if the motive exists, then the motive played a role in forming the argument and its conclusion. Sometimes the mere possibility of a motive is evidence enough.
For example, a scientist making a presentation of his findings on climate change is questioned by a member of the audience as to why anyone should believe him because the career of the scientist and funding of his research depended on his position that climate change is happening. So, the focus here is on the motive and not the claim.
Ergo decedo
This is a fallacy where someone scorns a person with authentic complaints by telling them that if they don’t like the discussion then they can leave. It’s a way of avoiding dealing with the complaint and admonishing the complainer as unworthy of being part of the group or discussion.
For example, a student tells his lecturer that he did not understand what was being taught by him and that it would help if he used more illustrations to explain the lesson. The lecturer in turn tells the student that if he didn’t like his lecture then he should leave and go to some other college he thought was better.
Guilt by association
This is a type of abusive ad hominem that is an unsound argument based on poor reasoning in which one person attacks a second person’s associates in order to question the person and thereby his argument. In guilt by association, one side decides they do not agree with or accept an argument/point put up by the other person/people because he/she doesn’t like the person/people who have put forth the argument.
For example, Anita is a famous Bollywood movie lead actress working in women-oriented movies and also supports the cause for equal pay for equal work and has often participated in their rallies. When once she was a witness in the court, the counsel for the defendant rubbished her comments because she came from an extreme feminist group and that extremists like Anita should not be taken seriously. Making an assumption that Anita is an extreme feminist simply because she supports a cause which if implemented would be beneficial to every man and woman also, is fallacious.
Circumstantial ad hominem
This fallacy comes into play when the opponent’s circumstances are taken into account and it may be irrelevant to the argument. In circumstantial fallacy, legitimate concerns are overturned over conflict of interest by suggesting that the person who is making the argument is biased or predisposed to take a particular stance because the person has a vested interest in it, and thereby, the argument is necessarily invalid. This fallacy, in other words, affirms that someone is arguing as they do only because they have their own vested interest in the matter, and thus their argument should be dismissed as false.
For example, Andhra Pradesh is a coastal state rich in access to seafood. Before the budget session, the minister of the state in the parliament said that it would be in the interest of the country to expand the production of fish and export them. The opposition claimed that the minister was saying that because Andhra Pradesh would benefit from this project being a coastal state.
Tu quoque
This fallacy is also called an appeal to hypocrisy, where the opponent points out how the arguer doesn’t follow his or her own advice. It’s like the pot calling the kettle black because the person doesn’t put into practice what he/she preaches. Tu quoque arguments are fundamentally bombastic rather than dialectical since their effectiveness depends on the presence of an audience. This is thus a type of fallacious ad hominem that attempts to discredit a person’s position by charging the person with hypocrisy or inconsistency.
For example, a political candidate’s speech about the dangers of drug use is attacked and questioned because there is a record of him using drugs while he was in college.
What aboutism
This is a type of logical fallacy where a person endeavours to distract the focus away from the current issue by making a counter-accusation. It’s a particular form of the ad hominem argument in which someone’s claim is doubted due to alleged hypocrisy by the arguer. As the name suggests, it’s illustrated by the phrase “What about…?”, which is generally followed by an issue that may be only distantly related to the original one. It usually comes in use when one is charged with a harmful accusation regarding their past actions, then one counters the charge by conjuring something negative about the opposing side and thus attempts to tone down the degree of their own actions.
For example, climate change is a global issue and requires international intervention and global cooperation. A president of a developing country may evidently refuse to take corrective actions to alleviate climate change in his country because some other developed countries are not taking any corrective steps themselves to mitigate the problem.
Poisoning the well
Poisoning the well is a logical fallacy. Even though having much in common with ad hominem arguments, it is best analysed in terms of argument schemes as a distinctive fallacy type. In this type of ad hominem argument, a person attempts to place an opponent in a position from which he/she is unable to reply. It is a type of fallacy where unfavourable information about a target is pre-emptively given to an audience, with the intention of discrediting and ridiculing something that the target person is about to say.
For example, a history professor is good at his job and has a good reputation but you are told by your college buddies that he doesn’t like women because he doesn’t elaborate on the contributions of women in history. Now, when you attend his class for the first time, your opinion of the professor and the lectures will be corrupted by your friend’s words.
Ad hominem arguments that are not fallacies
Just as there can be negative fallacious arguments against someone, there can also be a valid ad hominem argument that is not a fallacy. In other words, in arguments where the character or circumstance becomes relevant to the substance of the argument then there is no fallacy.
Argument from commitment
This works to persuade the opponent of a premise about information that the opposition already believes to be true. For example, in many cases, the ad hominem arguments are considered completely relevant arguments and not fallacious if they provide evidence.
Ad hominem arguments, testimony and authority
Sometimes the conflict of interest is being hidden. This could be a personal gain that influences a person’s position and in such cases, the ad hominem could become relevant where the person being criticised is making the arguments from authority, or testimony that is based on personal experience, rather than proposing formal reasoning in which a conclusion is drawn from assumed propositions/premises. For example, in the Court, when the defence counsel cross-examines an eyewitness, shedding light on the fact that the witness was convicted for lying in the past might suggest the conclusion that the witness should not be trusted, which would then not be a fallacy.
Case laws related to Argumentum Ad Hominem
Gurudevdatta Vksss Maryadit and Others v. State Of Maharashtra and Others (2001)
In this case, the Bombay High Court negated the petitioner’s assertion of the restrictive list of voters with respect to the provision to Section 27 (3) as added by the amendment to the Maharashtra Co-operative Societies Act, 1960. Elections were around the corner and the entire election programme including the list of voters was finalised. However, after the amendment to the Act, certain societies lost their right to vote due to the introduced proviso although the voter’s list had been finalised. The High Court concluded that the societies which were eligible to vote earlier cannot be faulted on the basis of the amendment which came into force at a later date. The High court said that the societies therefore can’t be denied the right to vote and hence the appeal before the Supreme Court.
The question came up before the Supreme Court about the judicial inclination to interfere with the legislative decisions and the Supreme Court replied that whether it was a political question or not, judicial inclination to interfere could not be faulted though not otherwise.
The Apex Court emphasised that the same stands subject to the facts of each case and it is almost next to impossible to even represent an outline as to what will and what will not constitute judicial reluctance to interfere. The exception is the field which can be described to be as ad hominem or even any attempt to draw the line because every case is decided on the given facts.
In this context, the Supreme Court relied on the decision of the Privy Council in the case of Liyanage and others v. Reginam (1966), wherein, their Lordships of the Privy Council introduced the concept of legislation ad hominem and struck down the legislation by reason thereof.
State v. Keil (1990)
In Missouri Court of Appeals, Eastern District, Division Four, during the rebuttal portion of the state’s closing argument in the aforesaid case, the public prosecutor stated that “. . . if he’ll do it to his own nephew, he’ll do it to anyone” where the prosecutor was implying about an act of sexual intercourse. The Trial Court sustained the defence counsel’s objection to this argument, and no further relief was requested. As if this was not enough, a few moments later the prosecutor referred to the defence attorneys as ‘vultures’. The Trial Court again sustained the defence counsel’s objection and requested that the jury be instructed to disregard the statement. However, the Court overruled the request for a mistrial.
Argument ad hominem condemns the argument because it condemns the arguer and in the aforesaid case, the law doesn’t allow a lawyer to denigrate the opposing counsel by making a personal attack upon the lawyer. such as by calling the defence attorneys “vultures”.
Thannoo v. State (1958)
In this case, the appellant appealed before the Allahabad High Court against his conviction by the Sessions Court of Budaun under Section 304, IPC, and the sentence of nine years given to in which the learned Sessions Judge did not say as to which of the two parts of Section 304 of IPC, that the appellant was convicted.
The deceased is said to have died on the spot as a result of a single lathi blow on his head. The case involved a row over a strip of land separating the houses of the appellant and the deceased on which the appellant was keen to build a house. This attempt of the appellant was opposed by the deceased that resulted in tense relations between the appellant and the deceased. Apparently, due to this tension between the appellant and the deceased, an altercation over the building of the house took place and abuses were exchanged between the two. After this, the appellant is alleged to have struck the defendant with his lathi on the head as a result of which the deceased fell down and died on the spot and this was witnessed by 5 people. The defence denied the allegations by the prosecution and a witness was produced in defence. The learned Sessions Judge did not believe the defence witness and convicted and sentenced the appellant relying upon the testimony of the eye-witnesses produced by the prosecution, There was no attempt at a restoration of the defence evidence in the Sessions Court.
The issue was whether the learned Sessions Judge was right in exonerating the appellant of the offence under Section 302 and convicting him only under Section 304. The learned Sessions Judge, while acknowledging that the blow on the head was given with great force, held that the appellant could not be held guilty under Section 302, of IPC because the act fell under Exception 4 to Section 300 of the Code. The Sessions Judge totally ignored at least two of the ingredients of the Exception. One ingredient ignored was that the offender takes no undue advantage, and hence this was a case of ‘argumentum ad hominem’. The second ingredient was not at all considered by the Session Judge because homicide should have been committed in a sudden fight. He also said that a sudden quarrel caused a homicide to take place. But the quarrel, according to the exception should have taken place in a sudden fight. Although a fight is a different ball game altogether it implies a contest in which both the parties participate irrespective of how they fare in it.
Ford Motor Co. v. EEOC (1982)
The U.S. Supreme Court, in this case, noted the opposition’s claim that the majority had misread the Court of Appeals’ decision, transforming a narrow Court of Appeals ruling into a broad one. This was just so the court would reverse and induct a broad new rule of their own choosing, rather than attempt to decide the particular case actually before them. Believing that the court’s framing of the issue was correct and fair, the court declined the opportunity to address further this ad hominem argument. The Court said that the dissent’s argument is an ‘argument ad hominem, at least in part.
The Court further added that undeniably, a simple statement that the majority misread the lower Court’s opinion would not be concentrating on the character or circumstances of the majority and hence would not be ad hominem. However, the assertion that the misreading was the outcome of an improper or even legitimate motive, the wish to establish a broad new rule, is ad hominem. Instead of arguing that the majority’s view is incorrect, the opposition strongly advocated that the majority had a motive to transform the lower court ruling. The Court added that even if the majority did have such a motive, the opposition’s ad hominem does not determine that the majority acted only on that motive or that the majority’s argument is flawed.
United States v. Biasucci(1986)
In this case, the court found the prosecutor’s addressing the defence counsel as inappropriate in his rebuttal statement. The prosecutor addressed the defence counsel as “you sleaze, you hypocritical son….., and so unlearned in the law “. The Court found the prosecutor’s repeated engagement needless and unwarranted ad hominem attack against the defence counsel.
Conclusion
To summarise, an ad hominem argument makes the opponent an issue instead of addressing the issue presented by an opponent. It tends to distract the attention from the argument to the arguer instead of invalidating the substance of what is asserted in the argument by the arguer. The use of ad hominem attacks undermines the argument even if the arguer offers other elements of logic and reasoning because the argument gets diminished and the focus is distracted from the well-argued points. Ad hominem arguments are generally used in their fallacious form.
A fallacy can be described as an illogical step in the formulation of an argument. For example, some may say that blue is a bad colour because it is linked to sadness which is an argument because it makes a claim and offers support for it, whether the claim made is true or false. Some might argue that this argument is fallacious because blue represents calmness to them.
Ad hominem arguments are seen in politics, law, and the media are notorious for these tricks. Some ad hominem arguments are an everyday occurrence in society and are often committed unintentionally. These fallacies can sometimes even make illogical arguments seem logical and they are used to persuade audiences to believe illogical claims.
Ad hominem arguments have long been considered to be fallacious but recently they have progressively moved towards acceptance of the view that they were not always fallacious. However, when they are fallacious, they are best seen as perversions or corruptions of perfectly good arguments.
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This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed discussion on the legality of abortion with respect to India in light of the Medical Termination of Pregnancy Act.
In India, abortion, or the termination of a pregnancy by chemical, surgical, or other means, became legal in 1971. Any woman seeking an abortion would be entitled to have one under the Medical Termination of Pregnancy (MTP) Act, which was adopted that year, as long as the grounds she claims are legal. Despite the fact that it is legal in India, many women are either uninformed of their entitlement to a medical abortion or seek unsafe abortions outside of the formal health care system owing to the shame associated with the practice. The present article discusses the legal status granted to abortion in India, the lacunas in the declared status, and the possible bandages existing for sufficing the lacunas.
Medical Termination of Pregnancy (Amendment) Act, 2021 : determining the legality of abortion
On March 25, 2021, the Medical Termination of Pregnancy (Amendment) Act obtained Presidential Assent. The Act modifies the 1971 enactment by increasing the number of weeks a woman can terminate her pregnancy and establishing specific conditions in which a pregnancy can be terminated at any time. While the amendment has increased abortion access to some extent, it fails to address one fundamental flaw in the Medical Termination of Pregnancy Act of 1971 (MTP Act), that a woman does not have the right to terminate a pregnancy, but may be allowed to do so only in certain specified circumstances, and only if a medical professional (and, in some cases, a medical board) determines that those circumstances are met.
The MTP Act was modeled after the Abortion Act of 1967, which had been approved in the United Kingdom when the former was initially implemented in 1971. The legal purpose was to grant a qualified ‘right to abortion,’ and abortion has never been accepted as a common option for expecting women. Therefore, legalizing abortion was never the intention of the legislature.
However, despite its nearly 50-year existence, the framework continues to be beset by implementation challenges, process ambiguities, and interpretative disagreements, all of which have been bolstered by a shaky legislative foundation that has approached the issue from a medico-legal rather than a rights-based perspective. Furthermore, the law has been significantly influenced by other legislations and has not kept pace with important advances in medical technology.
Was liberalizing abortion in India a questionable approach
Unfortunately, the approach adopted to enact a legal framework for abortion was more concerned with problems like family planning and potential criminal charges against medical practitioners rather than with women’s rights. Indeed, neither the Act nor its predecessors were focused on women’s rights, instead was involved in visualising abortion as a public health concern. The desire for a liberalised abortion law did not originate with any feminist movement, but rather with policymakers and physicians wanting to address India’s growing population. Furthermore, the MTP Act established a monopoly that authorised only Registered Medical Practitioners to conduct MTPs, despite the fact that non-allopathic practitioners were successfully doing MTPs.
The MTP Act is described as “an Act to provide for the termination of certain pregnancies by registered medical practitioners and for issues associated with or incidental thereto,” according to its Preamble. While the requirement to acquire consent from a pregnant woman is codified in law, it does nothing to emphasise the woman’s freedom to choose whether or not to continue the pregnancy. As a result, the claim that the MTP Act “is restricted to the liberalisation of circumstances under which women may have access to abortion services provided by licenced medical practitioners” stands valid.
Visualizing abortion as a human right
Human rights are those rights that should be available to everyone without any discrimination. The right to life is the most fundamental human right, from which no exceptions can be made and is unassailable. The arbitrary deprivation of life is prohibited under Article 6(1) of the International Covenant on Civil and Political Rights. However, there are several contentious concerns surrounding this privilege. The right to abortion is one of such concerns.
Previously, abortion was not granted the designation of being a right as society was highly opposed to it. Pregnancy termination has been referred to as foetal murder as well. However, as time and technology progressed, most countries now recognize abortion as a right, after the historic Roe v. Wade (1971) decision by the US Supreme Court. However, there are still many who oppose it, and some feel it should be made illegal.
Individual rights, such as the right to life, liberty, and the pursuit of happiness, support a woman’s right to have an abortion. The reproductive health of a woman influences her decisions concerning the same. Reproductive rights are widely acknowledged as essential for furthering women’s rights as humans and supporting development. Governments across the world have recognized and vowed to improve reproductive rights to unprecedented levels in recent years and the same is reflected in formal laws and programs. Every woman has the complete right to manage her body, which is sometimes also referred to as physical rights. Thus abortion is very well counted to be a significant human right vested on females.
Medical Termination of Pregnancy Act, 1971
The Medical Termination of Pregnancy Act of 1971 ushered in a new era in women’s health by establishing a framework that allowed women to exercise basic control over their bodies, as causing a miscarriage voluntarily is a crime under the Indian Penal Code, 1860, and women could be prosecuted as well. By formalising the practice of abortion, the Act established a structure that permits women to seek medical help without fear of bodily injury from untrained or underqualified individuals.
The MTP Act, 1971 was intended to give certain exceptions to Section 312 of the Indian Penal Code, 1872 (IPC) that renders “causing a miscarriage” a penal offence. Any act done with the intent of preventing the child from being born alive or causing it to die after delivery is a criminal offence under Section 315 of the IPC, for which both the woman seeking the abortion and the medical practitioner can be prosecuted. It was discovered that many women who were seeking abortion were being subjected to ill health resulting in life threatening circumstances due to strict implications of the Code. Therefore, Section 3 of the MTP Act, 1971 intended to lay down the circumstances in which a pregnancy might be terminated:
The pregnancy may endanger the woman’s mental and physical health; or
The foetus had a significant chance of being born with major physical or mental defects.
As a result, a woman did not have the legal right to terminate a pregnancy as she could only do so if one or both of the aforementioned requirements were satisfied.
Legalising abortion in India : a positive thought
Surprisingly, the Committee established by the Ministry of Health in 1964 to explore the issue of abortion legalisation, advised that it be allowed on eugenic grounds. An additional comment from one of the Committee’s members, Dr. H.N. Shivapuri, demonstrates how important this concern was to the Committee; “both partners should have a health assessment before being allowed to marry.” Those who are unfit to be healthy parents to healthy children should be sterilised before marriage. The issue of ‘Fundamental Rights’ should not be permitted to get in the way, because the right of the nation to survive and thrive outweighs the individual’s right to lower living and health standards.” Thankfully, this Orwellian advice did not make it into the law that was eventually approved, but it does provide insight into the circumstances behind the MTP Act’s passage and the motivation behind it.
When seen in the perspective of the larger battle to reduce population increase, it is evident that establishing the MTP Act had nothing to do with a woman’s freedom to make reproductive decisions. Interestingly, when commenting on the eugenic theory in the case of Suchita Srivastava v. Chandigarh Administration (2009), the Supreme Court found that such actions are anti-democratic and in violation of Article 14 of the Constitution‘s guarantee of equal treatment before the law.
Anubha Rastogi, a Mumbai lawyer who authored a report for Pratigya Campaign which is a network working for gender equality and safe abortion access, stated that a pregnant woman in India cannot go to a certified provider and say, ‘I want you to terminate this pregnancy because that is what I want,.’ This is because if the doctor says no, that’s the end of it.
Punishment for committing an illegal abortion
It is necessary to note that an abortion that does not fulfill the aforementioned conditions is considered a crime under the general law on crimes in India. The grounds for the same have been laid down hereunder:
Abortion of pregnancy which is under 4 to 5 month: The penalty for having an unlawful abortion is up to three years in prison and/or a fine. Unless it was done in good faith to save the mother’s life, both the mother and her doctor are regarded to have committed a crime.
Abortion of over 5 month pregnancy: If the abortion is performed while the foetus is moving, the penalty is increased. This is referred to as quickening, and it normally occurs between the periods of 17 and 20 weeks. Unless it was done in good faith to save the mother’s life, both the mother and her doctor may face up to seven years in prison and a fine.
Abortion without the woman’s consent: If someone else compels the mother to have an abortion or performs one without her consent, the person resorting to coercion might face up to ten years in prison and a fine.
Abortion resulting in death: If a patient dies as a result of a botched abortion or an abortion performed by an inexperienced individual, the doctor who performed the procedure might face up to ten years in prison and a fine. If the abortion was performed without the patient’s consent, the penalty is life in prison.
Intentionally causing the death of a foetus: Intentionally killing a foetus can also be tried under various provisions of the Indian Penal Code, 1860, with a maximum sentence of ten years in prison.
Is abortion legal for an unmarried female in India
In India, the right to choose abortion is not ‘equal’ for all women as unmarried women face the majority of the burden. Medical abortions were permitted up to 9 weeks of pregnancy and surgical abortions were permitted up to 20 weeks of pregnancy under the Medical Termination of Pregnancy Act (MTP) of 1971. The Medical Termination of Pregnancy (Amendment) Bill, 2020, extended the period a woman can get an abortion and limited the circumstances in which the surgical procedure can be performed. While the MTP Act of 1971 required one doctor’s opinion if the abortion was performed within 12 weeks of pregnancy and two doctors for abortions performed between 12 and 20 weeks, the amended Act of 2021 allows for one doctor’s advice if the abortion is performed within 20 weeks of pregnancy and two doctors’ advice in certain cases between 20 and 24 weeks of pregnancy.
In the states of Bihar and Jharkhand, 549 unmarried women between the ages of 15 and 24 had abortions, according to a survey performed in 2007-2008. According to research published in Guttmacher, India has roughly 15.6 million abortions every year. In separate research done at the same time among unmarried female college students, it was discovered that 9% of women reported an unexpected pregnancy, the circumstances of which were not clearly specified. The 2021 Act recognizes that unmarried women have the right to have a legal abortion.
The high number of abortion cases among both unmarried and married women in India highlights the urgent need for sex education programmes, improved communication between children and their parents, and education for the male partner to foster a healthier and more responsible attitude toward female reproductive health.
Legal abortion with conditions applied
Unmarried Indian women have the legal right to medical abortion. If the woman is unmarried and over the age of 18, the doctor simply requires her written consent. If the unmarried lady is below the age of 18, a guardian’s written consent is required before the abortion can be performed. Unmarried women can seek lawful pregnancy termination in the following situations:
If the pregnancy is the consequence of rape or other forms of sexual violence.
If the pregnancy is threatening to the mother’s or the baby’s bodily or mental wellbeing.
If the infant has a chance of developing physical defects after delivery.
If the pregnancy is the consequence of failed contraception.
Concerning information for unmarried women seeking abortion
Unmarried women should understand that the decision to keep or abort a child is entirely up to them. Nobody can force any woman, married or single, to undergo an abortion, whether inside or outside the family. Anyone who compels a woman to get an abortion or perform one without her permission can be sentenced to ten years in jail and a fine.
If the unmarried mother of the unborn child wants an abortion, she can go to any licenced obstetrician or gynecologist for a safe and medically permitted procedure.
While abortion for unmarried women is permitted in India, abortion based on the foetus’s gender is deemed illegal. It is prohibited to do any sort of test to identify the gender of the foetus, according to the Pre-Conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994. Anyone who seeks an abortion based on the foetus’s sex, as well as the doctor who performs the abortion on such grounds, can face up to seven years imprisonment.
Issues faced by unmarried women seeking an abortion
India is still a conservative country in terms of gender relations. It does not recognize premarital relationships or pregnancy outside of marriage due to its stringent social, cultural, and religious foundation. Unmarried women’s pregnancy is always viewed as a social embarrassment. However, with economic independence, social progress, and improved living conditions, there is more flexibility in gender relationships, and premarital sexual relationships are becoming more common, leading to a rise in the number of unmarried pregnancies.
According to a recent poll, 15% of males and 4% of women admitted to having had premarital sex. The fact that sexual abuse is on the rise is another reason for alarm. According to a 2007 study published by India’s Ministry of Women and Child Development, 150 million girls and 73 million boys under the age of 18 have been exposed to forced sexual intercourse or other types of sexual assault. These premarital sexual encounters result in unwanted pregnancies, which are nearly often terminated due to the enormous social and financial burden placed on the person and family.
In India, there are various barriers in the way of an unmarried woman getting an abortion. The first roadblock is their inability to detect that they are pregnant quickly. This is due to a lack of a broad understanding of reproductive health. Fear of society, social duties, or a lack of support from their spouses and parents are among the reasons why unmarried women seek abortions in a haste.
Judicial reach out to unmarried women
The Bombay High Court’s Nagpur Bench on 4th February 2022, permitted a rape victim to terminate her 25-week-old pregnancy, stating that a pregnancy caused by rape would bring sorrow and substantial harm to the girl’s mental health while deciding on the case of X v. State of Maharashtra (2022). As the pregnancy lasted longer than the 24-week limit set by the Medical Termination of Pregnancy Act, 2021, the Court considered the judgment of a certified medical practitioner in determining the risk to the pregnant woman’s bodily and mental health. The medical board’s report stated that “as the girl is unmarried, the constitution of pregnancy will harm the girl, physically as well as mentally, and if the baby is delivered, it will not receive any proper care.” A Bench of Justices SB Shukre and AL Pansare based their decision on the medical board’s report. It was also said that a complaint had been filed regarding the occurrence, that the police had recorded an offence punishable under Section 376 (2)(n) of the Indian Penal Code, 1860, and that an investigation was underway. The Court, on the other hand, ordered that the girl’s written consent be obtained before the pregnancy be terminated.
In the case of Ramesh Rathod v. State (2018), the Bombay High Court was dealing with the termination of a pregnancy of a minor that was the result of rape. The minor was represented by her father to seek termination before the Hon’ble High Court. The pregnant minor’s mental health would be harmed if the pregnancy was continued, according to medical opinion. While the Court allowed the abortion, it did so with the understanding that the minor girl had a say in the pregnancy. The right to make one’s own decisions could not be taken away irrespective of the mother’s age. The Court had further observed that the legislation on abortion has also broadened the definition of MTP by adding “damage” to mental health, in addition to bodily harm. Despite the fact that the pregnancy was the consequence of physical abuse, the survivor’s decision had to be supported.
Further in Alakh Alok Srivastava v. Union of India (2020), the Court relied on the medical board’s view that continuing the pregnancy was safer for the unborn child than terminating it in one of these rejections involving the rape of a minor. The Court decided not to grant abortion where the petitioner was a 10-year-old pregnant rape victim with a 32-week pregnancy. The Court had urged the Centre to direct the establishment of permanent medical boards in states to quickly consider requests for abortion beyond 20 weeks of pregnancy, and the Centre issued directions to that effect.
Landmark judgments on legality of abortion in India
In 2016, there was an uptick in cases filed in the Supreme Court requesting authorization to terminate pregnancies that were more than 20 weeks old. There were a total of 21 cases before the Supreme Court from June 1, 2016, to February 3, 2018. Out of the 21 cases, one of the lawsuits in relation to the case of Anusha Ravindran v. Union of India (2019) concerned a petition to form committees to make revisions to the MTP Act as well as other recommendations for MTPs’ safe access. Among the five cases (in the group of 21 cases) that appeared before the Apex Court where MTP was rejected, two involved pregnancies that resulted from rape. In the case of Ms. Z v. State of Bihar (2017), the Supreme Court had determined that it was too late to authorise MTP since the pregnancy had progressed beyond 36 weeks. The Court, however, ordered the state to pay the petitioner INR 10 lakh in compensation, adding that the State and the High Court were irresponsible in not guaranteeing the supply of the MTP as soon as possible.
The courts’ rulings that have been discussed hereunder are majorly based on the Medical Board’s recommendations. The Medical Board’s conclusions on the continuation and termination of pregnancy, rather than the woman’s reproductive rights, become the deciding element for the court. As a result, we must consider whether the courts should be completely reliant on medical board records or not. While the medical boards can assess the woman’s physical health, can they also identify the woman’s mental health and issues, which may necessitate her terminating her pregnancy? If a woman’s reproductive autonomy is to be safeguarded, shouldn’t her right to terminate a pregnancy be established by her? While some judgments can be seen to have taken into consideration the significance of the mother’s mental health, dependence on medical boards is a common event in the below-mentioned cases.
Suchita Srivastava v. Chandigarh Administration (2009)
The Supreme Court of India in a landmark judgment of Suchita Srivastava v. Chandigarh Administration (2009) had declared that consent of a mental retardee for abortion is necessary.
Facts of the case
The present case of Suchita Srivastava v. Chandigarh Administration (2009) involved an alleged rape of the victim (Suchita Srivastava) when she was a prisoner in a government-run welfare center in Chandigarh, which eventually resulted in her pregnancy. The Chandigarh Administration, which is the respondent, in this case, approached the High Court after learning of her pregnancy, requesting permission to terminate the same, despite the fact that she was not only mentally retarded but also an orphan with no parent or guardian to care of her or her child. After reviewing a preliminary medical assessment, the High Court decided to form an expert body of medical specialists and a judicial officer to conduct a detailed investigation into the case. The High Court had directed the termination of the pregnancy in spite of the fact that the expert body’s findings showed the willingness of the victim to bear a child. Aggrieved by the order, the appellants moved to the Supreme Court. The issues that the Court had framed were as follows:
Whether the High Court’s decision to order the termination of a pregnancy without the woman’s consent was right?
What are the proper requirements for a Court to exercise ‘Parens Patriae’ jurisdiction, even if the stated lady is believed to be mentally incapable of making an informed decision?
Observations by the Apex Court
The Supreme Court of India made it clear that there is no dispute that a woman’s freedom to make reproductive decisions falls under the definition of ‘personal liberty’ as defined by Article 21 of the Indian Constitution. It’s significant to understand that reproductive decisions may be used to both reproduce and refrain from procreation. The most important aspect is to respect a woman’s right to privacy, dignity, and bodily integrity. This indicates that there should be no restrictions on a woman’s reproductive choices, such as her ability to avoid sexual activity or her insistence on using contraceptive techniques.
The Apex Court viewed that a woman’s reproductive rights include the right to bring a pregnancy to term, to give birth, and to raise her children. However, there is a ‘compelling state interest’ in saving the life of the unborn child in the case of pregnant mothers. As a result, a pregnancy can only be terminated if all of the requirements set out in the appropriate legislation are met. As a result, the provisions of the MTP Act of 1971 might be considered as fair limitations on the exercise of reproductive choices.
The Court had noted that the victim had already been pregnant at about 19 weeks when the order of the high court was issued on July 17, 2009. The statutory limit for terminating a pregnancy (20 weeks), had passed by the time the issue was considered on an urgent basis by the Apex Court on 21.7.2009. The Court viewed that the setting of the maximum limit of 20 weeks (of the gestation period) within which a pregnancy may be terminated has a sound explanation as there is a strong medical agreement that an abortion done late in a pregnancy is extremely likely to affect the woman’s physical health.
In view of the foregoing findings, the Apex Court concluded that the high court’s order terminating the victim’s pregnancy was not in her ‘best interests.’ Because the victim had not agreed to the operation, performing an abortion at such a late time may have jeopardized the victim’s physical health and caused her considerable emotional agony. The Court reasoned that the victim’s pregnancy could not be terminated without her consent, and doing so would have been against her ‘best interests.’ The text of the MTP Act unambiguously protects the personal liberty of mentally challenged people above the age of majority. The Apex Court therefore could not allow a reduction of the necessity of permission for continuing with a pregnancy termination since none of the other legislative prerequisites had been satisfied in this case.
Tapasya Umesh Pisal v. the Union of India & Ors (2017)
In the present case of Tapasya Umesh Pisal v. the Union of India & Ors (2017), the Supreme Court of India in the interest of justice, the petitioner was permitted to undergo MTP. The Court had observed that it is difficult for them to deny the petitioner permission to seek medical termination of pregnancy although the foetus is allowed to be born, would have a limited life span with serious handicaps, which cannot be avoided. It appears that the baby will certainly not grow into an adult.
Facts of the case
Tapasya Umesh Pisal, a 24-year-old woman, had addressed the Supreme Court under Article 32 of the Indian Constitution, requesting the Court to direct the defendants to allow her to have her pregnancy terminated medically. Her foetus had been diagnosed with tricuspid and pulmonary atresia, a heart defect of the unborn child and she had also sensed a threat to her life. The petitioner was evaluated by the Medical Board, who determined that she was in her 24th week of pregnancy as of August 7, 2017. Her husband was beside her, and they were both aware of the heart defect and the related morbidity for the baby if it was born alive.
Decision by the Supreme Court of India
The Apex Court had observed that the continuation of the pregnancy would put the pregnant woman’s life at risk, as well as the mother’s physical and emotional health. There is a significant probability that if the child is born, it will be severely handicapped due to physical or mental defects. In these circumstances, it was difficult for the Court to deny the petitioner permission to have the mother’s pregnancy terminated medically.
In the interests of justice, the Court believed it was reasonable to allow the petitioner to undergo medical termination under the terms of the Medical Termination of Pregnancy Act, 1971.
Meera Santosh Pal v. the Union of India (2017)
In the case of Meera Santosh Pal v. the Union of India (2017), the Supreme Court of India reaffirmed that under Article 21 of the Indian Constitution, a woman’s freedom to make reproductive decisions is protected as a component of personal liberty. The Court held that the petitioner had the right to safeguard and save her life by making an educated decision in this circumstance, based on the principle of personal liberty.
Facts of the case
Meera Santosh Pal, a 22-year-old woman, had petitioned before the Apex Court under Article 32 of the Indian Constitution, requesting the Court to allow her to have her pregnancy terminated medically. She had realised that she was in grave danger after learning that her pregnancy had been diagnosed with anencephaly, a condition that causes the foetal skull bones to remain unformed and was both untreatable and guaranteed to result in the infant’s death during or shortly after birth. This disorder is also known to put the mother’s life in jeopardy. In the 24th week of her pregnancy, the petitioner had approached the Supreme Court of India. A foetal anomaly was the basis for the abortion. The Medical Board had also determined that the foetus was not viable and would not survive.
Supreme Court’s observations
The Court observed that despite the fact that the pregnancy was in its 24th week, it would be reasonable to allow the petitioner to terminate the pregnancy due to the risk to the mother’s life and the foetus’ incapacity to live outside the womb. The most important aspect is that she has the right to take any and all measures required to protect her own life from needless harm. Given the threat to her life, there is no doubt that she has the right to defend and preserve her life, especially because she has made an educated decision. Her freedom to exercise it appears to be within the bounds of reproductive autonomy.
The Court concluded that they found it appropriate in the interests of justice to permit the petitioner to undergo medical termination of her pregnancy under the provisions of the Medical Termination of Pregnancy Act, 1971.
Roshni v. the State of M.P (2019)
Justice Vivek Rusia of the Madhya Pradesh High Court was considering a writ petition to allow the petitioner’s pregnancy to be terminated medically in the recent case of Roshni v. the State of M.P (2019). The petitioners had prayed before the Court to allow her to terminate her pregnancy since the radiologist’s report revealed that the foetus’ right kidney was not visible and that there were other issues. The doctor who was treating the petitioner stated that based on his assessment, the unborn child may not survive even for 2-3 days after birth.
Facts of the case
In the present case, the petitioner claimed that as the foetus was more than 20 weeks old, the doctor had refused to terminate the pregnancy under the Medical Termination of Pregnancy Act of 1971. The petitioners’ learned counsel cited the Supreme Court’s decision in X v. the Union of India (2016) in which the Court had observed that Section 5 of the 1971 Act provided an exception to Section 3 if two registered medical practitioners gave an opinion in good faith regarding the termination of pregnancy to save a pregnant woman’s life. The Supreme Court had given the petitioner the right to abort her pregnancy based on the aforementioned provision. In the 2019 case, the petitioner had requested the Court that a committee of doctors be formed to advise on whether or not pregnancy termination should be permitted.
Observations by the court of law
The competent Medical Board had already been instructed by the Hon’ble High Court to evaluate the petitioner’s health status and verify the report that was presented before the Court. The Board responded to the order by stating that such a termination was not feasible beyond 20 weeks of pregnancy. On the petitioner’s request, the Court also ordered the respondents to immediately form a Committee of five senior doctors to examine the petitioner’s physical condition and, if it was determined that the petitioner’s pregnancy was not dangerous to her life, the Committee may proceed with the termination of her pregnancy.
Issues with abortion laws in India
The Medical Termination of Pregnancy (MTP) Act in India has only been revised twice in its 50-year history, first in 2002 and again in 2021. In the meanwhile, medical technology has advanced dramatically, including the availability of safe and straightforward abortion tools such as manual vacuum aspiration and pharmacological medicines, as well as tests that may detect serious foetal defects closer to and after 20 weeks of pregnancy. Apart from medical advances, understanding and appreciation of the need for women to have complete control over their bodies have grown, as evidenced by several progressive court judgments in India, such as those in the Supreme Court’s Puttaswamy Judgment, Anil Kumar Malhotra v. Ajay Pasricha (2017), and Suchita Srivastava v Chandigarh Admin (2009), as well as international conventions and international platforms like the Convention on the Elimination of All Forms of Discrimination and the International Conference on Population and Development.
The 194 writ petitions submitted by women wishing to have their pregnancy medically terminated, that were considered by the Supreme Court and the High Courts between June 2016 and April 2019 revealed various systemic flaws that led to unpredictable, variable, and inconsistent outcomes. In cases of rejection, the duration of the pregnancy and the medical board’s decision were frequent themes. Beyond the subjective interpretation of the Act, neither element addressed the petitioner’s medical report or the impact on the lady.
The previous findings of Pratigya Campaign on the availability of medical abortion medications demonstrated that the legal inaccessibility of medical abortion pills was causing a great deal of harm to pregnant women. Unfortunately, overregulation based on the erroneous belief that restricting access to abortion pills will help stop the decline in the child sex ratio contributes significantly to access these hurdles. Abortion medicines are approved for usage up to nine weeks of pregnancy. Using the most frequent and economical diagnostic technology, ultrasonography, to determine sex, is not viable during this time. Only around 13-14 weeks can ultrasound identify the foetus’s gender (early second trimester). The vast majority of abortions in India, believed to be as high as 85 percent, take place in the first trimester.
The campaign against gender-biased sex selection has somehow been entwined with women’s rights and access to abortion, which the MTP Act allows. As a result, pharmacists believe that stocking medical abortion medications expose them to more scrutiny. They are advised informally not to sell such tablets, to preserve copies of prescriptions, and in certain circumstances, to keep track of the purchaser’s name, which is an obvious breach of the MTP Act, guaranteeing women’s privacy.
Judicial inconsistencies
The MTP Act only refers to a vague “immediately essential to preserve the pregnant woman’s life” requirement in instances above 20 weeks, departing from the mental and/or physical health standard utilized in situations below 20 weeks. Mental and/or physical health might endanger life in the short or long term, which is exacerbated further by disparities in High Court discussions on the Act’s language. This has led to doctors applying restricted criteria used by the judiciary to circumstances that would normally be interpreted more widely and to the advantage of the woman/girl. Several circumstances permit MTP, with the caveat that serious mental trauma cannot be overlooked and must be a prominent consideration, particularly if the pregnancy is the consequence of rape.
It’s important to remember that these limits were set when the law was initially passed in 1971, and they were based on medical technology available at the time. As a result, adopting such rules verbatim, without clear definitions, and without proper consideration of mental health and its consequences is extremely troublesome. This is exacerbated by the fact that the decision does not take into consideration a woman’s financial capability for child-rearing, which can have a significant influence on the woman and her family’s future.
Finally, the potential societal stigma associated with bringing a pregnancy to term for a juvenile, widow, or rape victim, as well as the repercussions this stigma may have on mental health, receives little consideration. As a result, the Indian judiciary is considered significantly weak in determining mental health impairment and the impact of mental trauma in abortion cases. To guarantee that justice is delivered consistently across the country, the Supreme Court should endeavor to establish a complete jurisprudence that explains specific terminology and processes in relation to abortion.
Role of amendments
The revisions to the MTP Act were expected to make it really current and progressive, showcasing India’s leadership in setting the world agenda on a delicate matter. While the new legislation is a step forward from the 1971 Act, it is still a long way from being completely inclusive. The wider concerns of women’s rights and access to safe abortion treatment are largely unaffected. The actual test of the amendments’ success will be their implementation and their ability to close access gaps. Simply legalising abortion does not ensure or imply accessibility. A significant amount of work in terms of access, putting in place a rights-based approach, telemedicine, and task sharing, is left to be done.
Despite the fact that abortion is classified as an “essential service,” the gap between abortion providers and abortion seekers is larger than it has ever been. Pratigya has worked to close the gap by compiling a directory of licenced MTP providers, allowing pregnant women to connect with a trusted practitioner. The database has been accessed by over 2,000 people since its launch in late 2020, with the majority of them asking where to consult and who to contact. There stands a significant requirement to examine the MTP Amendment Act’s Rules and Regulations from a progressive viewpoint to ensure that the opportunity to increase the service provider base and fix access gaps is not wasted in the times to come.
Conclusion
Although the Indian judiciary has welcomed post-20-week abortions among females, the absence of a manner that places women’s choices at the centre and a robust law that lays down detailed procedures for abortions can be felt heavily. Legislation that respects women’s reproductive choices needs to be framed in independent India. Abortion is definitely legal in India provided the grounds discussed in this article are complied with. But it remains to be a restricted right for even the modified abortion legislation in India gives physicians and not women, the final word in deciding whether or not to terminate her pregnancy. A progressive attitude surrounding abortion will therefore be welcomed in India.
Intellectual property rights have emerged as a product of the invention, creativity, and trade values. Patents are a form of intellectual property that refers to the rights granted to a person for the invention of a product or a process that has some value in the course of commerce. The concept of a patent is not new. There have been countless inventions over the course of history; in fact, inventions are one of the most valuable intellectual property assets for the owner, as it gives them the exclusive right to exclude others or use, sell and distribute those inventions once they get patent protection over it, which lasts for at least 20 years from the date the patent application was filed.
TRIPS Agreement
The pharmaceutical patent is granted for a pharmaceutical substance which means any new entity involving one or more inventive steps as per Section 2 (ta) of the Indian Patents Act. Before the creation of the TRIPS ( Trade-Related Aspects of Intellectual Property Rights) Agreement the pharmaceutical industry was a highly unregulated industry in respect of patent protection. There existed inequalities in the health status of people, and the medical needs of the people were largely unmet. There existed only a Process patent that provided protection to pharmaceutical companies but now article 27(1) of the TRIPS agreement extends patent protection to the product as well all fields of technology.
The TRIPS Agreement came into effect on 1 January 1995. It is an extremely comprehensive multilateral agreement regarding intellectual property rights. The Agreement sets out the minimum standards of protection to be provided by each Member country in their domestic law. The main condition under the TRIPS agreement is that patents shall be available for an inventive step, whether it a product or a process, in all fields of technology provided that the invention meets the criteria for patentability namely- novelty, inventive step and industrial applicability
TRIPS Flexibilities
A patent grants exclusive rights to the innovation which often allows the patent holder to enjoy a monopoly position. In a developing nation like India, where efforts are made to make medicines available to all at reasonable prices, there is a high probability that pharmaceutical companies might take advantage of their patent monopoly by charging high prices and preventing local manufacturers from making generic versions of the drugs. Therefore, some flexibility was brought into the TRIPS Agreement so that member countries could make room for public interest measures including measures to protect public health to reach their social goals.
Drugs developed under the pharmaceutical industry received patent protection under the TRIPS agreement and their prices were driven up as a result of the monopoly so obtained by the patent holders. This posed a severe challenge for developing nations. For example, in sub-Saharan Africa, over 5 million people suffer from the disease but are still unable to afford the required drugs. b This clearly indicates that the TRIPS agreement was earlier denying these developing countries access to essential medicines. Thus, to address this issue, The Doha Declaration on TRIPS and Public Health was adopted by members of the World Trade Organization in 2001
The Doha Declaration came in recognition of the public health problem and the need for TRIPS to be a part of the solution to these health problems. The declaration sought to confirm that TRIPS does not and should not prevent member countries from taking measures to protect public health. The Doha Declaration concluded that TRIPS should be interpreted in a way that would support all members’ right to protect health and promote access to medicine for all.
Compulsory Licencing
The TRIPS Agreement provides flexibility for promoting public health by allowing the nation to issue a compulsory license on certain grounds under Article 31. A compulsory license is a license granted by an administrative body to a third party to exploit an invention without the patent holder’s authorisation. This license is generally referred to as a non-voluntary license connoting the lack of consent by the patent holder. The main aim behind issuing compulsory licensing is the promotion of research and development of new drugs. However, such licenses are subject to payment of reasonable royalty in India. Compulsory licensing allows the licensee to produce a generic copy of the drug to be made available in the local market at a lesser price than that of its competitor on the condition that the owner/manufacturer has made enough efforts to obtain a voluntary license from the patent holder on reasonable terms within a reasonable time.
Compulsory Licensing Of COVID-19 Drugs & Vaccine in India
There has been an urgent demand for medicines and vaccines in India ever since the emergence of the COVID-19 pandemic in 2019. We have witnessed an exponential surge in the number of cases but the disbalance in the equilibrium of demand and supply of covid drugs and vaccines has been an issue of concern for the past two years now.
In the last year, India’s crude death rate was around 7.3 per 1000 people of which roughly around 5.07 Lakhs lost their lives due to covid infection. Compulsory licensing of covid drugs and vaccines seem to have emerged as a boon to meet the inadequacy of supply of the vaccines much more proactively, whereas the government may force vaccine makers to share their intellectual property with other pharmaceutical companies and ensure much faster production of the vaccines.
As far as the legality of compulsory licensing is concerned, there are enough precedents that establish evidence of compulsory licensing of pharmaceutical drugs in India. In the year 2012, the Indian patent office granted a compulsory license to the Hyderabad-based drugmaker Natco to make and sell a similar version of Bayer’s Nexavar which is an advanced kidney cancer drug. Even in 2000, the country has witnessed pharma based giant Cipla fighting against the Government with regards to compulsory licensing for the Anti-Aids drug so clearly, the law permits it.
Presently, the private sector is a little more reluctant to utilize compulsory licenses even when the government issues them because they are scared of prolonged litigation being broadband by the multinational companies or being refused partnership in the future by them even for contracted manufacture. The public health sector which has been the ideal vehicle for undertaking the compulsory licenses issued by the government has been decimated by years of neglect. Most of those public health sectors are either closed or are near closure so it can be concluded that we have shot ourselves in the foot for not being able to make compulsory licenses work to our advantage.
However, the NITI Ayog in a press statement on 27th May 2021 indicated that India is not planning to issue any compulsory licenses for COVID-19 vaccines and also stated that the active cooperation of the companies that initially produced the vaccine is a must.
Countries like India and South Africa have tabled the resolution in the WTO regarding an International debate on whether patent rights should be suspended not only for vaccines but also for medicines and other equipment to enable many countries to undertake their manufacture appropriately to reduce the global inequities in excess.
Consequences of Compulsory licencing of Pharmaceutical Drugs
Medicine copies made from a compulsory license may not be produced with the same quality standards. A compulsory license does not always imply that the background knowledge of the company is sufficient to produce the drugs with the same efficiency as the original drug.
Compulsory licensing may undermine the development of new treatments. Manufacturers of pharma medicine will rely on the existing patents for their economic profits to produce copies of an existing drug and would never be able to focus on innovating new medicines.
Compulsory licensing discourages manufacturers from doing clinical trials in countries that don’t honor patents. This is a loss for patients who miss a chance to receive treatment. It is also a loss for local economies which would otherwise get a boost from having clinical trials in a region.
Conclusion
India is an emerging market of the drug industry and as a country, it has made enough efforts in the field of the pharmaceutical industry to come up with innovative research and development strategies of indigenous drugs. Given the fact that WTO cautioned that the pandemic represents an unprecedented disruption to the global economy, the council for Trade-Related Aspect of Intellectual Property Rights (TRIPS) has been successful in waiving off certain provisions of the TRIPS agreement.
In terms of Compulsory licensing, we should utilize the potential of compulsory licenses as a weapon by engaging with other Indian pharmaceutical firms and asking them whether they can use their production capacity to produce these vaccines and quality assured products. Even in terms of issuing the compulsory license for foreign-made vaccines, Indian private firms should step into that phase as well wherein the government shall ring-fence such private pharmaceutical firms in backstopping them in terms of cost of litigation or other such legal consequences.
This article is written by Adhila Muhammed Arif, a student of Government Law College Thiruvananthapuram. It explains Article 324 of the Indian Constitution and all about the Election Commission.
Table of Contents
Introduction
Free and fair elections is a characteristic of every democratic country. It is necessary for every democratic country to preserve the sanctity of this institution. An Election Commission was established in the year 1950 to ensure the fairness of the elections throughout India. It is responsible for administering elections to the Lok Sabha, Rajya Sabha, State Legislative assemblies and councils, and the offices of the President and Vice President. The power of this body has been vested by Article 324 of the Indian Constitution. Other than the Constitution, the Election Commission is also governed by the Representation of the People Act, 1950.
What is the Election Commission
The Election Commission is an autonomous body established by the Constitution to ensure free, fair and impartial elections. According to Article 324(1) of the Indian Constitution, the power of the Election Commision are of superintendence, direction, and control of the elections to the Lok Sabha, Rajya Sabha, State Legislative assemblies and councils, and the offices of the President and Vice President. It is not concerned with elections of panchayats and municipalities in states as the administration of those elections is done by the State Election Commission in each state.
Composition of the Election Commission
The following are the provisions made by Article 324 regarding the composition of the Election Commission:
As per Article 324(2), the Election Commission shall consist of the Chief Election Commissioner and any number of other Election Commissioners, if any.
Article 324(2) also provides for the appointment of the Chief Election Commissioner and the other Election Commissioners to be done by the President of India.
As per Article 324(3), in cases where another Election Commissioner is appointed, the Chief Election Commissioner becomes the chairman of the commission.
As per Article 324(4), the President of India may also appoint regional commissioners as he deems necessary to assist the election commission; this can be done after consulting with the election commission.
Article 324(5) states that the tenure and the conditions of the work to be done by the election commissioners and the regional commissioners will be determined by the President of India. It also provided that the chief election commissioner and the two other election commissioners have equal powers and they also receive equal salary and allowances, these are similar to those of a Judge of the Supreme Court.
Election Commission as a multi-member body
The Election Commission was not a multi-member body until 1989. It used to be a one-member body consisting of only the Chief Election Commissioner. In 1989, a notification was issued by the President under Article 324(2), which changed the composition of the Election Commission. It became a multi-member body consisting of a Chief Election Commissioner and two other Election Commissioners. Subsequently, the President rescinded the earlier notification in 1990 and reverted the Election Commission to be a one-member body again.
The constitutional validity of the revocation of the earlier notification was challenged in the case of S.S. Dhanoa v. Union of India (1991). The Supreme Court observed that it is necessary to prevent the concentration of power of the commission in a single individual’s hands. As the Election Commission has a vital role in preserving the sanctity of elections, it is highly crucial to ensure that it is impartial and does not abuse its power. Yet, the Court held that both the notifications were constitutionally valid. The Article gives the President unfettered power to create as well as abolish the posts. It was only obligatory to appoint the Chief Election Commissioner. Appointing other Election Commissioners or Regional Election Commissioners was a discretionary power according to Article 324(2) and (4). Thus, the President had the power to abolish both the posts of the Election Commissioners.
Subsequently, the Parliament enacted the Chief Election Commissioner and other Election Commissioners (Conditions of Service) Act, 1991. According to this Act, the Chief Election Commissioner and the other Election Commissioners shall hold their office for a term of 6 years. It was also provided that when the Chief Election Commissioner or any other Election Commissioner attains the age of 65 before the expiry of the 6-year term, he shall vacate his office. The removal process of the Election Commissioner is the same as that of a Supreme Court judge, as prescribed in Article 124. Their salary is also equal to that of a Supreme Court judge. The Chief Election Commissioner and Election Commissioners may resign by addressing it in writing to the President.
In 1993, the government promulgated an Ordinance, which was then replaced by the Chief Election Commissioner and other Election Commissioners (Condition of Service) Amendment Act, 1993, to provide an appointment for two Election Commissioners. According to this Ordinance, the decisions taken by the commission shall be unanimous. In cases of difference of opinion, the majority opinion must be taken while making decisions.
In 1993, two Election Commissioners were appointed and equated with the Chief Election Commissioner, in exercise of the power laid down in Article 324(2). T.N. Seshan, who was the Chief Election Commissioner of that time, was not pleased with the new laws and challenged the validity of the provision that equated the powers of the Chief Election Commissioner and other Election Commissioners. In the case of T.N. Seshan v. Union of India (1995), the Supreme Court decided that the provision of majority opinion’s superiority was not in contravention with the provisions in Article 324.
The Election Commission at present remains as a multi-member body. If the commission is unable to reach a unanimous decision, the Chief Election Commissioner has to express his opinion on the concerned matter.
Functions of the Election Commission
The following are the functions of the Election Commission as per Article 324(1):
The superintendence, direction, and control of the preparation of the electoral rolls for the elections.
Conducting elections to the Parliament as well as the legislatures of all the states.
Conducting elections to the offices of the President as well as the Vice-President.
Article 324(6) states that when the Election Commission requires staff for the purpose of the discharge of functions as mentioned in clause (1), the President or the Governor shall make arrangements on its request.
Powers of the Election Commission
In Special Reference No.1 of 2002, the Supreme Court held that framing the schedule for the election of the Legislative Assembly is exclusive to the Election Commission. It is not subject to any law framed by the parliament.
The power exercised by the Election Commission must not be excessive or absolute. The power vested in it under Article 324(1) must be executed within limits set by law. The Election Commission has the power to recognise political parties and decide on the disputes arising among them. It has the power to issue symbols, which is a part of its superintendence, control, and direction as given under Article 324. The Election Commission can also order repoll of an entire constituency when it’s necessary. That would also come within the purview of Article 324. It can also transfer officers to ensure that the fairness of elections is maintained. However, such orders should not be arbitrary in nature.
Whether the candidate has been linked to any criminal offence in the past, and whether he was convicted, acquitted, or discharged? Was the accused subjected to imprisonment or fine?
Whether the candidate has been named in any pending criminal case of an offence punishable with imprisonment of 2 years or more, and details regarding the charges framed.
The movable and immovable assets of candidates, their spouses, and dependants.
Liabilities, especially pending dues to public financial institutions or the government.
Educational qualification.
The Election Commission has the power to lay down the Code of Conduct for the candidates and also take action against candidates who do not abide by it.
In the case of A.C. Jose v. Sivan Pillai (1984), the Supreme Court held that the Election Commission can issue orders that are supplementary to the already existing rules. However, they are subject to the following limitations:
When there is no parliamentary legislation or state legislature issued rules, the commission can pass orders in respect of the conduct of elections.
When there is an Act or Rule made regarding it, the commission cannot pass any order overriding it.
When the Act or Rule is silent, the commission can use the power vested in it by Article 324 to issue directions for the conduct of elections.
When any direction of the commission is submitted to the government for approval, the commission has to wait till its approved before implementing it.
InKunwar Raghuraj Pratap Singh v. CEC of India, New Delhi (1999), the Chief Election Commissioner directed the petitioner, who was a minister, to withdraw from the district of Pratapgarh till the polling is over to ensure that he does not disrupt the elections. The Court held that the order was not an abuse of the Election Commission’s powers.
In the case of Sayed Ahmed v. CEC of India (1998), it was held that the Election Commission has the power to postpone the election, as it is vested with the power by Article 324. The Election Commission in this case took such a step in order to preserve the purity of the elections. They had to take this step because of the involvement of the Governor of another state in the elections.
The Election Commission has the power to ban pre-poll, exit-polls, surveys, etc. if it is of the opinion that it would affect the free choice of the voters.
In Special Reference No.1 of 2002, the President consulted the Supreme Court regarding a question on the interpretation of Article 174, which is on proroguing and dissolution of the State Legislature, and Article 324. The period between the last sitting in one session and the first sitting in the next session should not be more than 6 months. The power of dissolving the State Legislature is vested in the government. Once this happens fresh elections must be held, the task of which is undertaken by the Election Commission. The superintendence, direction, control, and preparation of electoral rolls for State Legislature elections is done by the Election Commission as per Article 324. In Gujarat, due to the Godhra incident and its aftermath in 2002, the Chief Minister dissolved the assembly and recommended reelections. The Election Commission recommended the President’s rule over the state.
The President’s questions were the following:
Is Article 174 subject to the Election Commission’s decisions as per Article 324?
Can the Election Commission declare elections 6 months later and call for the necessity of President’s rule with that?
Does holding elections as per Article 324 fulfil the mandate of Article 174?
The Supreme Court was of the opinion that Article 174 is not connected to elections and that it does not set any limit for holding the elections. The holding of elections is exclusive to the domain of the Election Commission. It also held that the date of holding of elections is fixed by the President or the Governor on the recommendation of the Election Commission.
Independence of the Election Commission
The following are the provisions in the Indian Constitution that enables the Election Commission to be an independent body:
As per Article 324(5), the Chief Election Commissioner has a fixed tenure and he cannot be removed from his position except in the manner in which a Supreme Court’s Judge is removed from his office. He can be removed by the President on the basis of a resolution passed by both the Houses of the Parliament with a special majority, which is 2/3rd of the members present and voting. This should be done on the grounds of misbehaviour or incapacity to work.
Article 324(5) also states that the conditions of the Chief Election Commissioner’s service cannot be changed to his disadvantage after his appointment.
Lastly, Article 324(5) provides that no other Election Commissioner or Regional Commissioner can be removed from his office unless it is done on the recommendation of the Chief Election Commissioner.
Related constitutional provisions
Apart from Article 324, the Indian Constitution contains the following provisions which are related to the elections in Part XV:
Article 325 of the constitution is concerned with the general electoral roll of a constituency. According to this Article, no person can be excluded from it on the basis of sex, caste, religion, or race.
As per Article 326, elections in India follow the principle of universal adult suffrage.
Article 327 provides that the parliament has the authority to enact laws that concern the elections.
Article 328 provides that the legislature of a state may also enact laws that concern elections to the state legislature.
Article 329 provides for the restriction of courts from questioning the laws made by the parliament or legislature of a state under Article 327 and Article 328, which is regarding delimitation of constituencies or allotment of seats in these constituencies.
Conclusion
The Election Commission has controlled and maintained the sanctity of the elections across the country for over half a century. It has played a crucial role in ensuring that the democratic nature of the country remains untainted. To this day, it has protected several elections from the influence of fraudulent activities of political parties and figures so that the citizens’ right to free and fair elections are not taken away. It is apparent that Article 324 has played a fundamental role in aiding the Election Commission in performing its duties free from external influences.
This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed analysis of the General Agreement on Tariffs and Trade (GATT) which was a legal arrangement designed for lowering trade barriers by eliminating or reducing quotas, tariffs, and subsidies while keeping significant limitations in place.
The General Agreement on Tariffs and Trade (GATT), which was signed on October 30, 1947, by 23 nations, was a legal agreement that aimed to reduce trade barriers by abolishing or decreasing quotas, tariffs, and subsidies while retaining considerable restrictions. The GATT was created to help the world economy recover after World War II by rebuilding and liberalising global commerce. On January 1, 1948, the GATT came into effect. It has been developed since then, culminating in the founding of the World Trade Organization (WTO) on January 1, 1995, which integrated and expanded it. By this time, 125 countries had signed on to its accords, which covered almost 90% of world commerce. The GATT is overseen by the Council for Trade in Goods (Goods Council), which is made up of representatives from all WTO member nations. Market access, agriculture, subsidies, and anti-dumping measures are among the topics addressed by the council’s ten committees. This article helps the readers understand GATT in a better way.
General Agreement on Tariffs and Trade : an understanding
The GATT was established to set out regulations to eliminate or limit the most costly and inefficient characteristics of the pre-war protectionist period, notably quantitative trade barriers like trade restrictions and quotas. The agreement also established a mechanism for resolving international commercial disputes, as well as a framework for multilateral tariff reduction discussions. In the post-war years, the GATT was seen as a great success. Trade without discrimination was one of the GATT’s major accomplishments. Every GATT signatory was to be treated on an equal footing with the others.
The ‘most-favoured-nation’ concept, as it is known, has been carried over into the WTO. As a result, once a nation had negotiated a tariff reduction with a few other countries (generally its most significant trade partners), the same reduction would be applied to all GATT members. There were escape provisions in place, allowing nations to negotiate exclusions if tariff reduction would disproportionately hurt domestic producers. When it came to determining tariffs, most countries used the most-favoured-nation approach, which virtually supplanted quotas. Other broad requirements were consistent customs laws and each signatory nation’s commitment to negotiate tariff reductions upon another’s request. Contracting nations might change agreements if their local producers incurred disproportionate losses as a result of trade concessions, according to an escape clause.
History behind the General Agreement on Tariffs and Trade
The GATT’s main focus was on resolving individual trade concerns affecting specific commodities or trading states, although large multilateral trade conferences were conducted on a regular basis to hammer out tariff reductions and other issues. From 1947 to 1993, seven such “rounds” were held, beginning with those in Geneva in 1947 (concurrent with the signing of the general agreement), Annecy, France, in 1949, Torquay, England, in 1951, and Geneva in 1956 and again in 1960–62. The Kennedy Round (1964–67), the Tokyo Round (1973–79), and the Uruguay Round (1986–94) were the most important rounds, all held in Geneva. These agreements were successful in lowering average tariffs on industrial goods throughout the world from 40% of their market value in 1947 to less than 5% in 1993.
The Uruguay Round was the most comprehensive collection of trade liberalization accords ever negotiated by the GATT. At the end of the round, a global trade deal was signed that dropped tariffs on industrial products by an average of 40%, decreased agricultural subsidies, and contained ground-breaking new accords on services trade. The agreement also established the World Trade Organization (WTO) as a new and stronger global organization tasked with monitoring and regulating international trade. With the completion of the Uruguay Round on April 15, 1994, GATT ceased to function. The WTO established its principles and the numerous trade agreements achieved under its auspices.
The 550-page “Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Discussions,” signed by ministers in Marrakesh on April 15, 1994, comprised of legal provisions outlining the results of the negotiations since the Round began in Punta del Este, Uruguay, in September 1986. The Final Act also included texts of ministerial decisions and declarations that explained important terms of the agreements. With two notable exceptions, the final act covered all of the bargaining topics mentioned in the Punta del Este Declaration. The first was the outcome of “market access discussions,” in which individual nations had made legally enforceable pledges to decrease or abolish certain tariffs and non-tariff trade obstacles. National schedules, which were an important element of the Final Act, were used to record these concessions. The second was the “first pledges” on service trade liberalisation. These liberalisation pledges were also included in national schedules.
Uruguay Round Protocol (GATT 1994)
The outcomes of market access talks in which countries agreed to abolish or lower tariff rates and non-tariff barriers to goods trade are documented in national schedules of concessions appended to the Uruguay Round Protocol, which is an important element of the Final Act. On the day that the Agreement establishing the WTO entered into effect for a Member, the schedule appended to the Protocol dealing with that member became a Schedule to the GATT 1994 relating to that member. The Protocol has five appendices:
Appendix I Section A: Agricultural Products: Tariff concessions on a Most-Favoured Nation basis;
Appendix I Section B: Agricultural Products: Tariff Quotas;
Appendix II: Tariff Concessions on a Most-Favoured Nation Basis on Other Products;
Appendix III: Preferential Tariff: Part II of Schedules (if applicable);
Appendix IV: Concessions on Non-Tariff Measures: Part III of Schedules;
Appendix V: Agriculture Products: Commitments Limiting Subsidisation: Part IV of Schedules,
Section I: Domestic Support: Total AMS Commitments,
Section II: Export Subsidies: Budgetary Outlay and Quantity, Reduction Commitments
Section III: Commitments Limiting the Scope of Export Subsidies.
Except as otherwise indicated in a Member’s Schedule, the tariff reduction agreed upon by each member for non-agricultural items shall be implemented in five equal rate reductions. The first such decrease will take effect on the day the World Trade Organization (WTO) Agreement enters into force. Each succeeding decrease will take effect on January 1 of the following year, with the final rate taking effect no later than four years after the WTO Agreement enters into force. Participants may, however, implement a reduction in fewer phases or at earlier dates than those specified in the Protocol.
The staging of reductions for agricultural goods, as stipulated in Article 2 of the Agreement on Agriculture, was to be carried out as was indicated in the relevant portions of the schedules. A related decision on Least-Developed Country measures specified, among other things, that these countries would not be obliged to make any obligations or concessions that are incompatible with their unique development, financial, and trade needs. It also permitted them to complete their schedules of concessions and promises under Market Access and Services by April 1995 rather than 15 December 1993, in addition to other more specific provisions for flexible and favourable treatment.
Agreements that were responsible for the formation of the World Trade Organization
The World Trade Organization (WTO) accord asks for a unified institutional framework that includes the GATT, as amended by the Uruguay Round, all agreements negotiated under its auspices, and the Uruguay Round’s entire outcomes. A ministerial conference meets at least once every two years to lead the organization. On a regular basis, a General Council monitors the agreement’s operation and ministerial decisions. This General Council serves as a Dispute Settlement Body and a Trade Policy Review Mechanism and has developed subsidiary bodies such as a Goods Council, a Services Council, and a TRIPs Council to deal with the complete spectrum of trade concerns covered by the WTO.
Articles and their purpose under the General Agreement on Tariffs and Trade
All contracting parties applied the General Agreement ‘provisionally.’ The GATT is applied under the Protocol of Provisional Application by the original contracting parties, as well as former territories of Belgium, France, the Netherlands, and the United Kingdom that acceded to the General Agreement after gaining independence under Article XXVI:5(c). Chile implemented the General Agreement with a September 1948 Special Protocol. The General Agreement was applied by the contracting countries that have acceded since 1948 under their separate Protocols of Accession. The contracting parties altered the title of the head of the GATT secretariat from ‘Executive Secretary’ to ‘Director-General’ by a decision dated March 23, 1965. However, because the General Agreement had not been amended to reflect this change, the term ‘Executive Secretary’ had been kept in the wording of Articles XVIII:12(e), XXIII:2, XXVI:4, 5, and 6. The General Agreement’s responsibilities and powers “must be executed by the person holding the office of Director-General, who shall, for this purpose, also hold the position of Executive Secretary,” according to the decision of March 23, 1965. GATT Articles that are included in the Final Act have been provided hereunder:
Article II (Schedules of Concessions): Agreement to record “additional levies or charges” paid in addition to the recorded tariff in national schedules and bind them at the levels in effect at the time the Uruguay Round Protocol was signed.
Articles XII and XVIII:B (Balance-of-payments provisions): Agreement that contracting parties should impose balance-of-payments limitations in the least trade-distorting way possible, preferring price-based measures such as import surcharges and import deposits over quantitative limits. The agreement was also reached on protocols for GATT Balance-of-Payments (BOP) Committee discussions and notification of BOP measures.
Article XXIV (Customs Unions and Free-Trade Areas): Agreement defining and reinforcing the criteria and processes for evaluating the implications of new or expanded customs unions or free-trade zones on third parties. In the event that contracting parties join a customs union and wish to increase a binding tariff, the agreement defines the method to be followed to achieve any necessary compensating adjustment. Contracting parties’ duties in relation to actions implemented by regional or local governments or authorities within their jurisdictions are also defined.
Article XXV (Waivers): Agreement on new processes for awarding exemptions from GATT disciplines, including the specification of termination dates for any future waivers and the fixation of expiry dates for current waivers. However, the major clauses addressing the granting of exemptions are included in the WTO Agreement.
Article XXVIII (Modification of GATT Schedules): Agreement on new processes for discussing compensation when tariff bindings are amended or removed, including the establishment of a new negotiating right for the nation whose exports are dominated by the goods in issue. Smaller and developing nations will be better able to engage in discussions as a result of this.
Article XXXV (Non-application of the General Agreement): After entering tariff discussions with each other, an agreement to allow a contracting party or a newly acceding nation to exercise GATT’s non-application provisions against the other party. Any use of the WTO Agreement’s non-application provisions must apply to all multilateral agreements, according to the agreement.
Agreements under GATT
Agreement on Agriculture: The Agriculture Agreement (AoA) is a World Trade Organization (WTO) international treaty. It was negotiated at the Uruguay Round of the General Agreement on Tariffs and Trade, and it went into effect on January 1, 1995, when the WTO was established.
Agreement on Sanitary and Phytosanitary Measures: The Sanitary and Phytosanitary Measures Agreement lays down the groundwork for food safety as well as animal and plant health requirements. It empowers countries to create their own standards, which should only be used to preserve human, animal, plant life or health.
Agreement on Textiles and Clothing: The Uruguay Round of Trade Negotiations produced the Agreement on Textiles and Clothing (ATC). From the date of the WTO Agreement’s entrance into effect, all existing textile and garment trade barriers were to be disclosed and abolished over a 10-year period.
Agreement on Technical Barriers to Trade Agreement on Trade Related Aspects of Investment Measures: Certain investment measures can limit and distort trade, according to the Trade-Related Investment Measures Agreement (TRIMS). It stipulates that members of the WTO may not take any action that discriminates against foreign products or results in quantitative limits, both of which are in violation of fundamental WTO principles.
Agreement on Implementation of Article VI (Anti-dumping): In written applications for anti-dumping relief, the Anti-Dumping Agreement establishes requirements for evidence of dumping, injury, and causality, as well as other information about the product, industry, importers, exporters, and other matters, and specifies that, in special circumstances when authorities initiate without a written application from domestic industry, they shall proceed only if they have sufficient evidence of dumping, injury, and causality.
Agreement on Implementation of Article VII (Customs Valuation): The WTO Agreement on customs valuation aspires for a fair, uniform, and impartial system for valuing products for customs purposes, one that is based on business reality and prohibits the use of false or arbitrary customs values.
Agreement on Preshipment Inspection: Private firms are hired to examine shipping data such as pricing, quantity, and quality of items bought from another country. The Preshipment Agreement acknowledges that the GATT Agreement’s principles apply to the aforementioned action.
Agreement on Rules of Origin Agreement on Import Licensing Procedures: Import licencing should be straightforward, clear, and predictable, according to the Agreement on Import Licensing Procedures, so that it does not constitute a trade barrier. It also explains how nations should inform the WTO when they implement new or amend current import licencing processes.
Agreement on Subsidies and Countervailing Measures: The World Trade Organization’s (WTO) Agreement on Subsidies and Countervailing Measures (Subsidies Agreement) establishes standards for the use of government subsidies as well as the implementation of remedies to address subsidised trade that has negative commercial consequences.
Agreement on Safeguards: The Safeguards Agreement establishes the regulations for using safeguard measures under Article XIX of the GATT 1994. Safeguard measures are described as ‘emergency’ procedures taken in response to increasing imports of certain items that have caused or threatened to cause substantial harm to the domestic industry of the importing Member.
General Agreement on Trade in Services (GATS): The Uruguay Round’s outcomes went into force in January 1995, and one of the most significant successes was the founding of the GATS. The GATS was founded on the same principles as its merchandise trade counterpart, the General Agreement on Tariffs and Trade (GATT) with the purpose of establishing a credible and reliable system of international trade rules, ensuring fair and equitable treatment of all participants (principle of non-discrimination), stimulating economic activity through guaranteed policy bindings and promoting trade and development through progressive liberalisation.
Agreement on Trade Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods: The TRIPS Agreement mandated that WTO members must offer a minimum degree of protection to the intellectual property of other WTO members. Copyrights, trademarks, patents, geographical indications (GI), industrial and layout designs, and concealed information (trade secrets) are among the topics covered in the TRIPS Agreement.
Agreement on agriculture
The discussions’ (Uruguay Round Protocol) outcomes established a foundation for long-term agricultural trade and domestic policy change in the years to come. It takes a significant step toward achieving the goal of enhanced market orientation in agricultural commerce. The regulations that govern agricultural commerce have been reinforced, resulting in more predictability and stability for both importing and exporting nations.
Many additional concerns of essential economic and political relevance to many members are addressed in the agriculture agreement. Provisions that encourage the use of less trade-distorting domestic support policies to maintain the rural economy, that allow actions to be taken to ease any adjustment burden, and that introduce strictly prescribed provisions that allow some flexibility in the implementation of commitments, are found in the agreement. Specific issues of developing nations, such as those of net food importers and least-developed countries, have been addressed. Commitments in the areas of market access, domestic assistance, and export competition are included in the agriculture agreement as well.
Non-tariff border controls are replaced with tariffs that provide a similar degree of protection in the area of market access. Duties originating from this ‘tariffication’ process, as well as other tariffs on agricultural goods, are to be cut by an average of 36% in developed nations and 24% in developing countries, with minimum reductions necessary for each tariff line. In the case of rich nations, reductions will be made over a six-year period, while in the case of developing countries, reductions will be made over a ten-year period. Tariff reductions are not necessary for least-developed countries.
Where present access is less than 3% of domestic consumption, the tariffication package also allows for the preservation of current access possibilities and the implementation of minimum access tariff quotas (at lower tariff rates). Over the course of the implementation term, these minimum access tariff quotas will be increased to 5%. In the event of ‘tariffied’ items, ‘special safeguard’ measures will allow for the imposition of extra tariffs if exports at prices denominated in domestic currencies fall below a specified reference level or if imports rise. The import surge trigger in the safeguard is determined by the present market’s ‘import penetration,’ i.e., when imports currently account for a substantial share of consumption, the import surge necessary to activate the special safeguard action is lower.
Domestic policies that have a negligible influence on trade (known as ‘green box’ policies) are exempted from reduction obligations. General government services, such as research, disease control, infrastructure, and food security, are examples of such policies. Direct payments to producers, such as ‘decoupled’ (from production) income support, structural adjustment aid, direct payments under environmental programmes, and direct payments under regional assistance programmes, are also included.
Other policies are not required to be included in the Total Aggregate Measurement of Support (Total AMS) reduction pledges, in addition to the green box policies. These policies include direct payments under production-limiting programmes, certain government assistance measures to encourage agricultural and rural development in developing countries, and other support that accounts for a small percentage of the value of individual product production or, in the case of non-product-specific support, the value of total agricultural production in developing countries.
The agreement includes ‘peace’ provisions such as an understanding that certain actions available under the Subsidies Agreement will not be applied to green box policies, domestic support, and export subsidies maintained in accordance with commitments. These peace measures will be in effect for nine years.
The agreement establishes a committee to oversee pledges and the execution of the decision on measures concerning the potential negative effects of the reform program on least-developed and net food-importing developing countries.
Agreement on Sanitary and Phytosanitary Measures
The application of sanitary and phytosanitary measures, in other words, food safety and animal and plant health standards, is the subject of this agreement. The agreement acknowledges that governments have the right to take sanitary and phytosanitary measures, but that they should only be used to protect human, animal, or plant life or health, and that they should not be used arbitrarily or unjustifiably to discriminate between members where identical or similar conditions exist.
Members are urged to base their sanitary and phytosanitary measures on international standards, guidelines, and recommendations where they exist, in order to harmonize sanitary and phytosanitary measures as much as practicable. Members may, however, keep or implement measures that result in higher criteria provided there is a scientific basis or if consistent risk judgments are made based on an adequate risk assessment. The Agreement lays forth the processes and criteria for risk assessment and determining suitable levels of sanitary and phytosanitary protection.
Members are required to recognize other countries’ sanitary and phytosanitary measures as equivalent, if the exporting nation can show the importing country that its measures provide an acceptable degree of health protection.
Agreement on Textiles and Clothing
The goal of this negotiation was to ensure the future inclusion of the textiles and apparel industry into the GATT, based on reinforced GATT rules and regulations, where much of the trade is now subject to bilateral quotas established under the Multifibre Arrangement (MFA).
While the agreement is primarily focused on the phase-out of MFA limitations, it also acknowledges that certain members maintain non-MFA restrictions that are not justified by a GATT clause. These would likewise be brought into compliance with GATT within one year of the Agreement’s entry into force, or phased out gradually over a period not exceeding the Agreement’s term (that is, by 2005).
It also includes a transitional safeguard mechanism that might be used at any time to apply to items that have not yet been included in the GATT. Individual exporting countries could face action under the safeguard mechanism if the importing country could show that overall imports of a product were entering the country in such large quantities as to cause serious damage, or threaten it, to the relevant domestic industry, and that imports from the individual country concerned had increased sharply and significantly. The agreement has procedures to deal with probable commitment circumvention via transshipment, rerouting, fraudulent declarations about nation or place of origin, and fabrication of official documents.
As part of the integration process, all members must take such actions in the area of textiles and clothing as may be necessary to comply with GATT rules and disciplines in order to improve market access, ensure the application of policies relating to fair and equitable trading conditions, and avoid discrimination against imports when taking general trade policy measures.
A Textiles Monitoring Body (TMB) is in charge of overseeing commitment implementation and preparing reports for the key reviews indicated above. Certain kinds of nations, such as those that have not been MFA members since 1986 (new entrants, small suppliers, and least-developed countries), will receive preferential treatment under the agreement.
Agreement on Technical Barriers to Trade
This agreement will expand and clarify the Tokyo Round Agreement on Technical Barriers to Trade. Its goal is to guarantee technical agreements and standards, as well as testing and certification procedures to avoid obstruction in commerce. It does, however, acknowledge that nations have the right to provide protection at levels they deem appropriate, such as for human, animal, or plant life, health, or the environment and that they should not be prohibited from taking the steps necessary to guarantee that such levels are fulfilled. As a result, the agreement encourages nations to utilise international standards where appropriate, but it does not oblige them to adjust their protection levels as a result of such standardisation.
The revised agreement is unique as it includes processing and production processes that are relevant to the product’s attributes. The scope of conformity assessment procedures has been expanded, and disciplines have been refined. The notification rules for local governments and non-governmental organizations are more detailed than those in the Tokyo Round agreement. As an annexe to the agreement, a Code of Good Practice for the Preparation, Adoption, and Application of Standards by Standardizing Organisations is included, which is available for approval by both commercial and public sector bodies.
Agreement on Trade-Related Aspects of Investment Measures
Certain investment policies impede and distort trade, according to the agreement. It states that no contracting party may use a TRIM that is incompatible with the GATT’s Articles III (national treatment) and XI (quantitative limits ban). To that aim, the agreement includes an example list of TRIMs that have been determined to be incompatible with these articles. The list contains measures that demand a certain level of local procurement by an entity (“local content requirements”) or limit the volume or value of imports a company can buy or use to a level that is proportional to the number of products it exports (“trade balancing requirements”).
All non-conforming TRIMs must be reported and eliminated within two years for affluent nations, five years for developing countries, and seven years for least-developed countries, according to the agreement. It creates a TRIMs Committee, which will oversee, among other things, the execution of these pledges. The agreement also allows for future discussion of whether it should be supplemented with more comprehensive measures on investment and competition policy, or not.
Agreement on Implementation of Article VI (Anti-dumping)
Article VI of the GATT gives contracting parties the right to impose anti-dumping measures, which are tariffs against imports of a product at a price below its ‘normal value’ (usually the price of the product in the exporting country’s domestic market) if the dumped imports harm a domestic industry in the importing contracting party’s territory. An Anti-dumping agreement signed at the end of the Tokyo Round has more precise guidelines guiding the use of such measures. The Uruguay Round negotiations resulted in a revision of this agreement that addresses many of the areas where the existing agreement was lacking in accuracy and depth.
The agreement enhances the criteria for the importing countries to demonstrate a clear causal link between dumped imports and local sector harm. The impact of dumped imports on the business must be examined in conjunction with other relevant economic factors affecting the status of the industry. The agreement confirms how the phrase “domestic industry” is currently defined. The domestic industry refers to domestic producers of similar items as a whole or to those whose overall output of those products accounts for a significant share of total domestic production of those products.
All preliminary or final anti-dumping measures must be notified to a Committee on Anti-dumping Practices promptly and in detail, according to the agreement. Parties to the agreement will be able to consult on any topic relevant to the agreement’s operation or the achievement of its goals, as well as propose the formation of panels to investigate disagreements.
Agreement on Implementation of Article VII (Customs Valuation)
The Customs Valuation Decision would allow customs administrations the power to ask importers for more information if they have grounds to dispute the claimed worth of imported goods. If the administration retains a reasonable doubt, notwithstanding any further information, it may be found that the customs value of the imported products cannot be established on the basis of the reported value, and customs must calculate the value in accordance with the Agreement’s terms. In addition, two supplementary texts explain specific sections of the Agreement that affect developing nations, such as minimum values and imports by sole agents, sole distributors, and sole concessionaires.
Agreement on Preshipment Inspection
Preshipment inspection (PSI) is the practice of using specialist private organizations to evaluate shipment details, primarily the pricing, quantity, and quality of products bought from another country. The goal of this tool, which is used by developing country governments, is to protect national financial interests for example, (by preventing capital flight, commercial fraud, and customs duty evasion) and to compensate for administrative infrastructure deficiencies.
The agreement acknowledges that GATT principles and duties apply to the actions of government-mandated pre-shipment inspection organizations. Nondiscrimination, transparency, preservation of sensitive business information, avoidance of undue delay, adoption of particular rules for performing price verification, and avoidance of conflicts of interest by PSI agencies are among the requirements imposed on PSI-user governments.
Non-discrimination in the implementation of domestic rules and regulations, quick publishing of such laws and regulations, and the provision of technical help to PSI users are among the duties of exporting contractual parties towards PSI users. The agreement provides an impartial review system to settle disputes between an exporter and a PSI agency, which will be handled jointly by an organization representing PSI agencies and an organization representing exporters.
Agreement on Rules of Origin
The agreement intends to achieve long-term harmonisation of rules of origin that aren’t related to the awarding of tariff advantages, as well as ensure that such regulations don’t generate additional trade barriers. The agreement establishes a harmonisation programme that will begin as soon as practicable once the Uruguay Round is concluded and will be completed within three years. It would be founded on a set of principles, including the objective, intelligible, and predictable nature of origin rules. A WTO Committee on Rules of Origin (CRO) and a technical committee (TCRO) under the aegis of the Customs Cooperation Council in Brussels would carry out the job.
Much work has been done in the CRO and TCRO, and significant progress has been made in the three years set out in the Agreement to complete the task. However, due to the complexities of the challenges, the HWP was unable to be completed by the scheduled date. In the year 2000, the CRO resumed its operations. The General Council Special Session voted in December 2000 to designate the Fourth Session of the Ministerial Conference, as the new timetable for completing the remaining work.
Contracting parties would be expected to ensure that their rules of origin are transparent, that they do not restrict, distort, or disrupt international trade, that they are administered in a consistent, uniform, impartial, and reasonable manner, and that they are based on a positive standard until the harmonisation programme is completed. In other words, they should state what confers origin rather than what does not. An annexe to the agreement contains a ‘common statement’ on the application of origin regulations to commodities eligible for preferential treatment.
Agreement on Import Licensing Procedures
The updated agreement tightens the rules for users of import licencing systems, which are in any case far less common currently than in the past, and improves openness and predictability. The agreement, for example, requires parties to provide enough information to allow traders to understand the basis on which licences are given. It includes new guidelines for notifying the institution of import licensing proceedings, as well as revisions to such procedures. It also provides advice on how to evaluate submissions.
The revised agreement establishes criteria under which automated licensing procedures are deemed not to have trade-restrictive implications. Importers and exporters should only have to deal with the administrative burden of non-automated licensing processes if it is absolutely essential to administer the measures to which they apply. The updated agreement also stipulates that applications will be examined for a maximum of 60 days.
Agreement on Subsidies and Countervailing Measures
The Subsidies and Countervailing Measures Agreement is designed to expand on the Tokyo Round’s Agreement on the Interpretation and Application of Articles VI, XVI, and XXIII. Unlike its predecessor, the agreement includes a definition of subsidy and adds the idea of a ‘particular’ subsidy, which is a subsidy that is offered exclusively to a single firm, industry, or group of companies or industries within the jurisdiction of the awarding body. Only specified subsidies would be subject to the agreement’s restrictions.
Subsidies are divided into three categories under the agreement. First, it considers the following subsidies to be “prohibited”; those contingent, in law or in fact, on export performance, whether solely or in conjunction with one or more other conditions; and that contingent, solely or in conjunction with one or more other conditions, on the use of domestic over imported goods. New dispute resolution processes apply to prohibited subsidies. The primary elements include an accelerated time frame for action by the Dispute Settlement Body, and if the subsidy is judged to be unlawful, it must be revoked promptly. The complaining member is entitled to take countermeasures if this is not done within the stated time frame.
Subsidies that are “actionable” fall under the second group. The agreement states that no member should use subsidies to harm the interests of other signatories, such as injury to another signatory’s domestic industry, nullification or impairment of benefits accruing directly or indirectly to other signatories under the General Agreement (particularly the benefits of bound tariff concessions), and serious prejudice to another member’s interests.
Non-actionable subsidies fall into the third category, which can be either non-specific or specific, such as assistance for industrial research and pre-competitive development, assistance to disadvantaged regions, or certain types of assistance for adapting existing facilities to new environmental requirements imposed by law and/or regulations.
The Agreement stipulates that if repayment of funding in the civil aviation industry is contingent on the number of product sales, and sales fall short of expectations, this does not automatically result in a presumption of substantial disadvantage.
Agreement on Safeguards
A GATT member can take a “safeguard” action under Article XIX of the General Agreement to protect a specific domestic industry against an unanticipated surge in imports of any product that is causing, or is likely to cause, substantial harm to the industry. The agreement establishes a bar on so-called “grey area” measures and a “sunset clause” on all safeguard acts, both of which are significant. On the export or import side, the agreement states that a member may not seek, take, or maintain any voluntary export limitations, orderly marketing agreements, or other similar measures.
The agreement would create a Safeguards Committee to supervise the implementation of its provisions and, in particular, to ensure that its pledges are met.
General Agreement on Trade in Services
Three pillars support the Services Agreement, which is included in the Final Act. The first is a Framework Agreement, which contains essential responsibilities that all member nations must adhere to. The second concerns national commitment schedules, which contain particular additional national obligations that will be subject to a continual liberalisation process. The third section has a variety of annexes that address the unique circumstances of various service sectors.
The agreement includes duties about recognition requirements (such as educational background) for the purpose of obtaining authorizations, licences, or certification in the services field. It promotes conditions for recognition that are met by harmonisation and internationally agreed-upon criteria. Parties are also expected to guarantee that monopolies and exclusive service providers do not abuse their positions, according to the regulations.
Decisions were made in the last days of the services negotiations on financial services, professional services, and natural person movement. The Financial Services Decision stated that obligations in this sector will be implemented on an MFN basis, and it allows Members to adjust and complete their commitment schedules and MFN exclusions six months after the Agreement enters into effect.
Agreement on Trade Related Aspects of Intellectual Property Rights including Trade in Counterfeit Goods
The agreement acknowledges that the lack of a multilateral framework of principles, rules, and disciplines dealing with international trade in counterfeit goods, as well as widely differing standards in the protection and enforcement of intellectual property rights, has become a growing source of tension in international economic relations. To deal with the tensions, rules and disciplines were required. The agreement addresses the applicability of basic GATT principles as well as those of relevant international intellectual property agreements, the provision of adequate intellectual property rights, effective enforcement measures for those rights, multilateral dispute settlement, and transitional arrangements.
In terms of trademarks and service marks, the agreement establishes what sorts of signs must be qualified for trademark or service mark protection, as well as the minimum rights that must be granted to their owners.
In terms of geographical indications, the agreement stipulates that all parties shall provide methods to prohibit the use of any indicator that misleads consumers about the origin of goods, as well as any usage that would be considered unfair competition.
For a period of ten years, industrial designs are also protected under the agreement. Owners of protected designs would be allowed to restrict goods bearing or embodying a design that is a duplicate of the protected design from being manufactured, sold, or imported.
There is a universal responsibility to follow the substantive provisions of the Paris Convention (1967) when it comes to patents. Furthermore, the agreement mandates that all inventions, whether goods or processes, in practically all disciplines of technology be granted 20-year patent protection. The agreement requires parties to guarantee protection for layout designs of integrated circuits based on the Washington Treaty on Intellectual Property in Respect of Integrated Circuits, which was opened for signing in May 1989.
Commercially valuable trade secrets must be safeguarded from breaches of confidence and other unethical business activities.
The agreement’s final clause deals with anti-competitive conduct in contractual licences. It allows for government-to-government dialogues when there are grounds to think that licencing procedures or conditions relating to intellectual property rights are an infringement of such rights and have a negative impact on competition.
Understanding Rules and Procedures Governing the Settlement of Disputes
The GATT’s dispute settlement mechanism is widely regarded as one of the multilateral trade order’s pillars. Reforms agreed upon during the Mid-Term Review Ministerial Meeting in Montreal in December 1988 have already improved and simplified the system. Disputes now before the Council are subject to these new rules, which include increased automaticity in decisions on panel creation, terms of reference, and composition, so that these decisions are no longer reliant on the parties’ permission.
The Uruguay Round Agreement on Rules and Procedures Governing Dispute Settlement (DSU) greatly enhanced the present system, expanding the more automaticity agreed in the Mid-Term Review to the implementation of panels’ and a new Appellate Body’s conclusions. Furthermore, the DSU provides an integrated system that will allow WTO Members to base their claims on any of the multilateral trade agreements included in the WTO’s Annexes. The General Council, as well as the councils and committees of the covered agreements, shall exercise their jurisdiction in this regard through a Dispute Settlement Body (DSB).
The DSU stresses the significance of discussions in obtaining conflict settlement by requiring a member to engage in consultations within 30 days of another member’s request for consultations. If no resolution is reached within 60 days following the request for discussions, the aggrieved party may request the formation of a panel. If a disagreement cannot be resolved through discussions, the DSU mandates the installation of a panel at the DSB meeting following the one at which a request is made, unless the DSB unanimously decides against it.
The DSU also establishes particular procedures and timelines for determining terms of reference and panel membership. Unless the parties agree to specific conditions within 20 days of the panel’s formation, the standard terms of reference shall apply. If the parties cannot agree on the panel’s membership within 20 days, the Director-General has the authority to make the decision. Panels are usually made up of three people with relevant backgrounds and expertise from nations that are not parties to the dispute. One of the DSU’s core clauses underlines that members must use the DSU’s dispute resolution norms and processes to determine whether or not there have been breaches or concessions suspended.
Difference between GATT and WTO
The most significant list of differences between GATT and WTO have been discussed hereunder:
The GATT is an international multilateral treaty signed by 23 countries to promote international commerce and eliminate trade obstacles between countries. WTO, on the other hand, is a worldwide organisation that replaced GATT and regulates international commerce between member countries.
GATT is a basic agreement with no institutional structure, but it does have a small secretariat. WTO, on the other hand, is a permanent organisation with a secretariat.
In the GATT, the participating countries are referred to as contracting parties, whereas in the WTO, they are referred to as member nations.
GATT agreements are temporary in nature, with the government having the option of treating them as permanent commitments after 47 years. WTO obligations, on the other hand, have been in place since the outset.
The WTO’s scope is broader than the GATT’s in the sense that the GATT’s regulations apply only when products are traded, unlike the WTO, which has laws that apply to both commodities and services, as well as parts of intellectual property.
The GATT agreement is essentially multilateral, although it is subsequently expanded to include plurilateral agreements. WTO accords, on the other hand, are completely multilateral.
Conclusion
After World War II, the fundamental goal of implementing GATT was to enhance global cross-country commerce in order to strengthen economic stability. It is the bedrock of the World Trade Organization (WTO), which established unrestricted trade between States while maintaining some barriers for the benefit of everyone.
NFT is a Non Fungible Token. The etymology of the word is from the Latin verb Fungi, i.e, to perform or in the “wider sense”, it is interchangeable. Therefore, it is a token that cannot be exchanged, unlike traditional currencies or cryptocurrencies. NFTs are financial and digital tokens having a monetary value which represents an underlying asset. This could be any digital assets like a tweet or any digital work like digital art, songs, music, or even other physical forms like artistic paintings.
As the name indicates,
It is a token that is made or bought or minted by a person through digital wallets (that can have traditional currencies or crypto coins).
It is powered by smart contracts (assign ownership and manage the transferability of the NFT’s).
– Blockchain address (can be seen anywhere using a blockchain scanner),
– Wallet address (identifies the originator of NFT).
On a block chain ledgers Ethereum, Bitcoin Cash, EOS (the NFTs are initially minted or created here).
They can be bought from third party platforms like Rarible, Mintable, Nifty Gateway, SuperRare, OpenSea which are stored in a web address called the InterPlanetary File System(IFPS) which is a peer-to-peer file sharing system.
It is linked with the underlying asset or content with cryptographic hashes. Therefore, NFTs can track down the authentic ownership of the underlying asset using its TokenID.
Can NFTs be brought under copyright?
The definition of Copyright as worded by the World Intellectual of Property Organization (WIPO):
“Copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture, and films, to computer programs, databases, advertisements, maps, and technical drawings.”
As we know that NFT is a token that represents an underlying asset which should be a literary or artistic work for it to be covered under the copyrights. Therefore, one can infer from the above statement that NFTs per se do not come under the ambit of copyrights but the underlying assets in the NFTs are eligible for copyrights.
Main players in the NFT domain
Creator
The creator of the NFT of digital/underlying content or an asset must be the creator of the digital/underlying asset or content represented by such NFT. After they sell the NFT to the buyer, they are no longer the owner of the NFT. But they are the owners of the digital content linked to the NFT.
Buyer/ new buyer
The buyer acquires the NFT from the NFT creator through marketplaces like Rarible, OpenSea, and the like. Therefore, he owns the NFT, who can only have access to the underlying content but cannot own the underlying asset itself.
Copyright infringing party
This party is not the original digital content creator. However, it copies or replicates others’ digital assets with new NFT and marks it up on the blockchain ledger.
Why do NFTs give rise to copyright issues?
The NFTs only give access to underlying/digital assets, but they do not give complete ownership of those assets simply because one owns such NFTs. But due to the very nature of digital content, it is easy for the infringing party to copy or replicate it. This makes it easier for the infringing party to take somebody else’s work and tokenize it.
What are the copyright issues related to NFTs?
Just because one owns the NFTs, it does entitle him to the full ownership of the digital content linked to the NFTs. They can only have access to view or to listen to the digital/underlying content and this cannot be displayed in public nor can it be replicated. For example, if an NFT represents a physical asset like a sculpture then the NFT owner definitely won’t own the sculpture. Probably what might be unique to him from the sculptor might be instructions regarding the maintenance of that sculpture. Therefore, whatever is being sold is just a digital version of the underlying content/asset and not the content/asset.
Cent project, a company that offers an NFT service for tweets says:
“Owning any digital content can be a financial investment, hold sentimental value, and create a relationship between collector and creator. Like an autograph on a baseball card, the NFT itself is the creator’s autograph on the content, making it scarce, unique, and valuable.“
Hence, NFTs are more like the token through which one owns the signed version of the picture of a painting and not the painting itself. This doesn’t stop the painter from minting NFTs based on different pictures of that same painting.
The buyers of NFTs cannot sue for copyright infringement since they only own the NFTs and not the digital/underlying content linked by the NFTs. Does this mean that an NFT buyer cannot own the digital content? The answer is yes. The buying and selling of NFTs between the artists/owners of NFT and the buyers take place through smart contracts (digital contract in which the terms of the contract is set in code and this code will create a document in English about the terms of the contract and where there can be clauses for conferring complete or partial or complete ownership).
What could be a workable solution to prevent copyright infringement?
NFTs license agreements
The creators can protect their intellectual property rights and economic rights by coding the NFT license agreements into their smart contracts that automatically execute the terms of the license in all the subsequent resale of the NFTs. These license agreements should set out the rights of the original owner, and the buyer.
In the NFT License Agreement, the original creators should set a percentage of the subsequent resale value as a profit. For instance, if the new owner sells the NFT , the original owner automatically gets his profit. This is assured on every sale because the original creator’s address is coded into NFTs metadata(that can’t be modified).
One must pay attention to the rights that may be granted by NFTs license agreements. For example, The website of Mike Shinoda, the co-founder and lead vocalist of Linkin Park sells NFTs under the following “NFT Terms”:
“Only limited personal non-commercial use and resale rights in the NFT are granted and you have no right to license, commercially exploit, reproduce, distribute, prepare derivative works, publicly perform, or publicly display the NFT or the music or the artwork therein. All copyright and other rights are reserved and not granted.”
In the above case, breaching any of the above points would result in copyright infringement.
Cryptographic hash
The cryptographic hash linked to NFT creates a set of codes but one small change that NFT would create a very different set of codes. The platforms that sell NFTs should hash their NFTs metadata and the underlying asset. The artists must insist that the platforms hash NFT and buyers must look out if the NFTs they bought are hashed. This can be beneficial in finding whether the NFT is authentic.
Other ways in which one can get authentic NFTs
– The buyers have to check if the NFTs that they are buying are verified or under “verified collections” from the marketplaces like OpenSea. The verified ones assure that the NFTs displayed are from the original creators and artists.
– The buyers can check the social handles of the artists where they inform if their NFTs are still available. Therefore, assures the authenticity of the origin of NFTs.
– The buyer should understand that owning NFTs does not mean complete ownership of the underlying asset and must read the terms of the contract properly whether it is for public display or for personal use only.
Conclusion
There is a severe lack of laws governing the NFTs especially when it comes to copyrights involved in NFTs. There is legislation (not yet in force) in the European Union – MiCA (Markets in Crypto Assets) Regulation. It is one of the major steps taken to regulate the financial sector in the growing digital age. It is doubtful whether it will cover the NFTs, let alone the copyright infringement of NFTs. There is no exclusive law for the NFTs in the world whereas there should be at least a global protocol or consensus to control such infringement. Since the NFTs are global in nature, there should be an international community and legal framework to guide and enforce the just, economical, and moral rights of the original creator, new owner, and buyer.
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This article is written by Niharika Agrawal from IFIM Law School. It comprises of a complete analysis of Section 427 of the Indian Penal Code which explains the offence of mischief with a special emphasis on the type of mischief where damage is to the amount of fifty rupees.
Table of Contents
Introduction
The offence of mischief is explained under Section 425 of the Indian Penal Code, 1860 (IPC). According to this Section whoever intentionally or with knowledge commits such an act that causes wrongful loss or damage to large public or an individual or causes damage to their property which ultimately diminishes its value or affects the person, commits the offence of mischief. Mischief is one such offence that can be observed in everyday life such as the destruction of essential things like mobile, furniture, land, any other property, that affects the person. To hold an accused liable for this offence, it is important to have the intention behind committing such an act. And such intention should be to cause injury to the person.
Section 425 has a wider scope. It is applicable to both private and public damages. If the essentials of the offence are not satisfied then this Section will not be applicable. Section 426 of IPC states the punishment for the offence of mischief which holds an accused liable for imprisonment, fine, or both. Section 427 to Section 440 explains different aggravated forms of mischief based on the value of the wrongful loss and damage of the property. These sections also include the punishments depending upon the severity of the offence. One such aggravated form of mischief is described under Section 427 of IPC.
This article deals with a detailed analysis of Section 427, its essentials, punishment, features, etc.
Analysis of Section 427 IPC
Section 427 of IPC describes an aggravated form of mischief which is based on the degree of the damage caused. This Section specifically speaks about the damage caused due to mischief to the amount of rupees fifty or above. According to Section 427:
‘Whoever commits mischief and thereby causes loss or damage to the amount of fifty rupees or upwards, shall be punishable with imprisonment of either description for a term which may extend to two years, or with fine, or both.
Thus, Section 427 is part of Section 425 of IPC that describes the offence of mischief based on the value of rupees fifty or more. As similar to Section 425, also under Section 427, there needs to be an intention to cause damage or wrongful injury to the public or an individual by an accused. The only difference in both Sections is the degree of the damage caused to the aggrieved party. However, Section 427 is not applicable in the cases where the accused has committed an act without an intention to cause or without the knowledge that such action would cause damage to the public or any other person. For example, the removal of tea stalls by an order of executive engineer does not cause offence or mischief. This Section is also not available for the value of damage less than rupees fifty.
It is important to note that, even if the act committed by the accused does not cause loss or damage to the owner of the property, but, had an intention or knowledge that such action may cause loss or damage to the person by damaging his property whether it belongs to him or not, is enough to prove the offence of mischief and held the accused liable for the same. This Section also provides provisions for punishments. The period and the quantum of punishment depend upon the nature of the crime committed. Thus, the one who commits the offence of mischief under the prescribed value would be punishable under Section 427 and not under Section 426.
Essentials ingredients of Section 427 IPC
The accused must have the intention and knowledge to commit an act that may cause loss and damage to the person or the property.
There must be loss and damage caused to the person.
The value of loss and damage must be rupees fifty or upwards.
For a person to be held guilty under Section 427, all the above-mentioned conditions need to be fulfilled.
Illustrations for Section 427 IPC
A has an intention to cause damage to a sporty bike of his friend B. He asks B for a ride, deliberately drives it at a high speed on an empty road, and dashes it into a banyan tree. Here A has an intention to cause damage to the bike of B and therefore, drives the bike at a high speed which collides into a banyan tree. The value of the bike is more than Rs. 50 and hence A is liable for mischief under Section 427 of IPC.
A with an intention to cause damage to his neighbour, sets fire to the window of B who is a tenant, due to which his entire window and nearby things get destroyed. Here, as the value of the destroyed things was more than Rs. 50, A is liable for mischief under Section 427 of IPC.
Features of Section 427 IPC
It is the offence of mischief that intends to cause loss or damage to the amount of Rs.50 or more.
It is punishable for up to 2 years of imprisonment, with a fine, or both.
The offence under this Section is non-cognizable, which means the police can arrest the accused without a warrant.
The offence of mischief under Section 427 is bailable and hence, can be investigated and decided by the authorised Magistrate in the nearby area where the offence is committed.
The proceedings of the offence can be held in Trial Courts by any Magistrate.
The offence of mischief under this specific Section is compoundable at the discretion of the person to whom the damage is caused.
Punishment under Section 427 IPC
The offence of mischief under Section 425 is punishable under Section 426 of IPC with imprisonment up to 3 months or with a fine or if needed with both. However, under Section 427 where the loss or damage is caused to the value of Rs. 50 or more, the punishment is imprisonment up to 2 years or fine, or both in some cases. The punishment depends upon the graveness of the crime.
Case laws
Md. Kausar Ali v. the State of Jharkhand (2020)
In this case, the complainant was the only owner of a piece of land and was also having possession of the same by the virtue of registered sale-deed for valuable consideration. The accused in this case is the State who did not have any title, interest, or possession over the land. However, in March/April 2009, the accused started dumping iron ore, boulders, etc. on the part of the land that belongs to the complainant. Due to this, the value of cultivable land started diminishing which caused him the loss of more than Rs. 10,000. This deprived him of using the agricultural land for cultivation. Thereafter, the complaint was filed under Section 447 and Section 427 of the Indian Penal Code. It was further contended that the present case is a civil dispute and not a criminal dispute.
The Jharkhand High Court, in this case, held that all the necessary conditions of Section 447 and Section 427 are satisfied as the actions of the accused have caused wrongful loss to the land of the complainant, and made his soil unfertile for further use. The Court also clarified that though the case is related to land, it will be covered under criminal law and not under civil law as all the ingredients of the crimes are satisfied in this case.
Kashiben Chhaganbhai Koli v. State of Gujarat (2008)
In this case, the original accused was the owner of the agricultural land. She decided to sell the same land to the complainant for Rs. 1,45,000/-. Therefore, the complainant initially paid a sum of Rs. 40,000 through a cheque followed by Rs. 60,000/-. After paying the amount the complainant was given possession of the land. The complainant was cultivating the land and started a sugarcane plantation. After taking one crop of sugarcane, he left the land open awaiting for re-growth of the sugarcane plant. However, in January 1995, the accused suddenly and illegally entered into the land and tilled the land through tractors which ultimately caused substantial loss of crop of the complainant. In this case, the accused used derogatory words against the complainant.
The Gujarat High Court held the accused liable for the offence under Section 427 and Section 3 (i) (v) of the Atrocities Act (1989). According to the Court, the accused destroyed the sugarcane crops of the complainant through a tractor and hence was guilty of the same.
Conclusion
From the above analysis, it can be concluded that the offence of mischief covers all the aggravated forms of mischief and their respective punishments. Section 427 is also one of the important provisions under the offence of mischief. It includes all the small and grave acts of the accused and punishes him according to the value of the damage caused due to him. The nature of offence under this Section is very feasible as it is bailable and compoundable at the discretion of the aggrieved party. This Section has protected all the individuals and the public at large from such loss and damage.
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