All you need to know about the Bretton Woods Agreement

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February 12, 2022

This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed analysis of the Bretton Woods Agreement which was responsible for creating a collective international currency exchange regime.

This article has been published by Rachit Garg.

Table of Contents

Introduction

Delegates from 44 countries negotiated an agreement in July 1944 at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. As a result, the agreement is known as the ‘Bretton Woods Agreement.’ The United States (US) dollar was tied to the value of gold under the Bretton Woods System, while other currencies were fixed to the value of the US dollar. When President Richard M. Nixon stated that the US would no longer exchange gold for US money in the early 1970s, the Bretton Woods System essentially came to an end. The present article discusses the Bretton Woods Agreement in detail.

The Bretton Woods Agreement : an insight

In July 1944, around 730 delegates from 44 nations gathered in Bretton Woods with the primary aims of establishing an efficient foreign exchange system, eliminating competitive currency devaluations, and fostering worldwide economic growth. These objectives were made possible by the Bretton Woods Agreement and System. The Bretton Woods Agreement also established two major institutions, namely, the International Monetary Fund (IMF) and the World Bank. Despite the fact that the Bretton Woods System was disbanded in the 1970s, the IMF and the World Bank have maintained significant foundations for international currency exchange.

The Bretton Woods System did not become fully operational until 1958. Once it was enacted, it called for the US dollar to be tied to the value of gold. Furthermore, the value of all other currencies in the system was then tied to that of the US dollar. The exchange rate applied at the time set the price of gold at $35 an ounce. The inflationary monetary policy, which was improper for the key currency country of the system, was a major factor in Bretton Woods’ demise. The Bretton Woods system was built on regulations, the most essential of which was to stick to the official peg’s monetary and fiscal policies.

Background of the Bretton Woods Agreement

The United Nations Monetary and Financial Conference was held at Bretton Woods, New Hampshire, in July 1944, where delegates from forty-four countries formed the Bretton Woods system, a new worldwide monetary system. Following World War II, these countries recognized an opportunity for a new international system that would draw on the lessons of past gold standards as well as the Great Depression‘s experience to provide for post-war rebuilding. For nations that had been erecting barriers between their economy for more than a decade, it was an extraordinary coordinated effort.
They aimed to design a system that would not only avoid the rigidity of prior international monetary systems but would also solve the nations’ lack of collaboration in earlier systems. After World War I, the traditional gold standard was abandoned. Governments not only conducted competitive devaluations throughout the inter-war period but also enacted restrictive trade policies that exacerbated the Great Depression.
At Bretton Woods, participants envisioned an international monetary system that would maintain exchange rate stability, avoid competitive devaluations, and foster economic progress. The aims of the new system were agreed upon by all parties, but the strategies to achieve them differ. It took a massive worldwide effort to secure a collective bargaining agreement. Financial experts had innumerable bilateral and international discussions to come to a consensus approach more than two years before the summit. While the Treasury Department in the United States had primary responsibility for foreign economic policy, the Federal Reserve played a role in the new system by providing guidance and counsel. John Maynard Keynes, a British Treasury consultant, and Harry Dexter White, the Treasury Department’s senior foreign economist, were the principal architects of the new system.
One of the most famous economists of the period (and possibly even today), John Maynard Keynes, advocated for the establishment of a big organisation with the means and power to intervene when imbalances arise. This was in line with his idea that government institutions should be able to act in times of crisis. The Clearing Union, according to Keynes’ concept, would be a global central bank. The “bancor,” a new international currency issued by this bank, would be used to redress international imbalances. For the Clearing Union, Keynes advocated financing $26 million. Each country would be given a restricted line of credit to avoid running a balance of payments deficit, but surpluses would be discouraged because extra bancor would have to be remitted to the Clearing Union. Keynes’ concerns about the global post-war economy were reflected in the proposal. He predicted that the United States will go through another depression, forcing other nations to run balance-of-payments deficits and forcing them to choose between domestic and exchange rate stability.
White’s proposed new institution would have fewer authorities and resources. It expressed worries that much of the financial resources of the Keynes-envisioned Clearing Union would be utilised to buy American goods, resulting in the US owning the bulk of bancor. The Stabilization Fund was a new monetary organisation suggested by White. Instead of issuing a new currency, it would be backed by a limited pool of national currencies and $5 million in gold, essentially limiting the amount of reserve credit.
The Bretton Woods proposal was similar to the White plan, with certain concessions made in response to Keynes’ objections. In the event that a country’s balance of payments surplused and its currency became scarce in international commerce, a provision was included. The fund might regulate that currency and allow only a limited number of imports from the surplus nation. In addition, the fund’s total assets were increased from $5 million to $8.5 million.
At Bretton Woods, 730 delegates decided to establish two new organisations. The International Monetary Fund (IMF) would keep an eye on exchange rates and lend reserve currency to countries with budget deficits. The International Bank for Reconstruction and Growth, currently known as the World Bank Group, was in charge of providing financial aid for post-World War II reconstruction and economic development in developing nations.
When the first twenty-nine member countries signed the IMF’s Articles of Agreement in December 1945, the IMF was formally established. The countries decided to keep their currencies fixed but adjustable to the dollar (within a 1% range), and the dollar was set at $35 per ounce of gold. When a nation joins the IMF, it is assigned a quota based on its relative standing in the global economy, which affects how much it pays into the fund.
As currencies became convertible in 1958, the Bretton Woods system became fully operational. Dollars were used to settle foreign accounts, and they were convertible to gold at a predetermined rate of $35 per ounce. The US was responsible for maintaining the price of gold and had to alter the quantity of dollars in order to retain trust in future gold convertibility. The Bretton Woods system was in effect until recurrent US balance-of-payments deficits caused foreign-held dollars to surpass US gold stock, meaning that the US would be unable to redeem dollars for gold at the official price.
President Richard Nixon abolished the dollar’s gold convertibility in 1971. Representatives, financial leaders, and political agencies made several attempts to restore the system and maintain the currency exchange rate stable. By 1973, however, practically all major currencies had begun to float in relation to one another, and the system as a whole had failed.

Key clauses of the Bretton Woods Agreement

At Bretton Woods, participants envisioned an international monetary system that would maintain exchange rate stability, avoid competitive devaluations, and foster economic progress. The main clauses of the agreement are mentioned hereunder:

International Monetary Fund;
Fixed Exchange Rate;
Special Drawing Rights;
Exchange Rate;
Gold Standard;
Exchange Rate Regime;
Euro;
Balance of Payments;

Need for the Agreement

The gold standard was used by most governments until World War I. They did, however, break their ties with gold in order to create the money they needed to pay for the war. Hyperinflation developed as a result of the inflow of cash, as the supply of money outstripped the demand. Following the war, countries reverted to the gold standard as a safe haven.
Everything was well until the Great Depression. Following the stock market crash of 1929, investors shifted their focus to commodities trading. It caused the price of gold to rise, causing consumers to exchange their dollars for gold. The Federal Reserve made matters worse by hiking interest rates to protect the nation’s gold reserve.
The Bretton Woods system provided countries more freedom than the gold standard, which was rigid. It also had less volatility than a monetary system with no fixed value. A member country’s currency value might still be changed if necessary to remedy a ‘fundamental imbalance’ in its current account balance.

Entry of the International Monetary Fund

The Bretton Woods Agreement established the IMF and the World Bank as Bretton Woods Institutions. Both organisations were formally established in December 1945 and have endured the test of time, functioning as major cornerstones for international capital finance and trade activity. The IMF’s job is to keep track of currency rates and identify countries that require international monetary assistance. The IMF has 189 member nations in the twenty-first century and continues to foster global monetary cooperation.

The Articles of Agreement

On July 22, 1944, the United Nations Monetary and Financial Conference (Bretton Woods, New Hampshire) established the International Monetary Fund’s Articles of Agreement. They were first adopted by 29 nations, and a total of 190 member countries have signed and ratified them since then. The Fund’s aims are outlined in the Articles, which include promoting “international monetary cooperation through a permanent institution that offers the machinery for consultation and collaboration on international monetary challenges.”

The Articles also establish the Organisation’s mandate, as well as the rights and obligations of its members, its governance structure, and the roles of its organs, as well as a number of operational rules, including those governing the conduct of the Organisation’s operations and transactions involving Special Drawing Rights. The IMF’s main responsibilities include overseeing the international monetary system and monitoring members’ economic and financial policies, as well as providing technical help and financial services to member nations in need.

The Articles of Agreement have been revised seven times since their ratification in 1944, the most recent being on December 15, 2010 (effective January 26, 2016). The Articles are supplemented by the Fund’s by-laws, which are in turn supplemented by the Executive Board’s Rules and Regulations.

The birth of World Bank : an effect of the Bretton Woods Agreement

A detailed timeline of the World Bank can be accessed here. The events that unfolded to the formation of the World Bank have been discussed hereunder:

The Bretton Woods Conference created the Articles of Agreement, establishing the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) at its conclusion. Bretton Woods was preceded by years of planning and discussion, which established the groundwork for the conference’s success. While the early intentions of the United States, with additions from the United Kingdom, had a substantial effect on the final Articles, other nations attended discussions and made suggestions including their own vision for an international bank prior to the meeting.
The United Nations Monetary and Financial Conference, as it was officially titled, began on July 1, 1944, with 730 delegates in attendance. The meeting was presided over by US Treasury Secretary Henry Morgenthau Jr. The proposal for a bank for rebuilding and development was handled by Commission II, which was chaired by Lord John Maynard Keynes of the United Kingdom delegation. The commission’s committees were entrusted with reviewing the conference’s preliminary document and soliciting new recommendations and proposals. Among the active players were Mexico, Chile, Brazil, Russia, Belgium, the Netherlands, Czechoslovakia, Poland, Canada, China, and India. The planned bank’s twin aims of rehabilitation and development, as well as its capital structure, drew a lot of attention.
Although many decisions remained to be taken, the delegates signed the Final Act of the United Nations Monetary and Financial Conference on July 22, 1944, which included charters establishing the purposes and methods of both the IMF and the IBRD. Representatives from twenty-one nations met in Washington, DC on December 27, 1945, to ratify the IBRD Articles of Agreement and become the Bank’s first members.
The World Bank, like the IMF, did not exist formally at or soon after the summit, and hence had no recordkeeping responsibilities. After the meeting, country representatives may have taken the documents back to their nations, and archival records connected to Bretton Woods were likely to be discovered in the custody of archive institutions in those forty-four countries. The United States’ records are unusually extensive because it hosted the conference. The IMF Archives thereafter became the depository for the conference secretariat’s documents.
The World Bank Group Archives’ Bretton Woods records were gathered as a consequence of Bank units and personnel gathering copies for reference purposes. The Secretary’s Department, Office of the President, Central Files, and the personal papers of the Bank’s first Research Department Director, Leonard B. Rist contains records such as early draft proposals by countries, conference proceedings and working documents, pamphlets, government reports, and drafts and commentary on the Articles leading up to the December 1945 ratification. Internal IBRD memos and annotated copies of the Articles discussing interpretation and revisions after the Bank began operations in 1946 are also accessible, in addition to the aforementioned materials.

The benefits surrounding Bretton Woods currency pegging

There were 44 nations in the Bretton Woods System. These nations were brought together to aid in the regulation and promotion of cross-border commerce. Currency pegs are supposed to offer currency stabilisation for the trade of goods and services as well as financing, as with all currency pegging regimes. All members of the Bretton Woods System agreed to a fixed peg against the US dollar, with only 1% deviations permitted. Countries were expected to maintain and control their currency pegs, which they did largely by using their own currency to purchase and sell US dollars as needed. As a result of the Bretton Woods System, international currency exchange rate volatility was reduced, which aided international commercial ties. Foreign currency exchange stability was also a factor in the World Bank’s effective backing of international loans and grants.

The breakdown of the Bretton Woods Agreement

The Bretton Woods System had crumbled by 1973. Countries were free to adopt any exchange arrangement for their currency at the time, with the exception of pegging its value to the price of gold. They may, for example, tie its value to the currency of another nation or a basket of currencies, or simply let it float and let market forces decide its value in relation to other currencies.

Conclusion

The Bretton Woods Agreement is still seen as a watershed event in international finance. The International Monetary Fund and the World Bank, which were established at Bretton Woods, were instrumental in helping to reconstruct Europe following World War II. Subsequently, both organisations have maintained their founding purposes while also shifting to serve modern-day global government interests.

References

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Analytical school of jurisprudence

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Shoronya Banerjee

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February 12, 2022

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This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed analysis of the analytical school of jurisprudence.

This article has been published by Shoronya Banerjee.

Table of Contents

Introduction

Analytical school of jurisprudence is based on the legal maxim, ‘Ubi civitas ibi lex’ which signifies ‘where there is State, there will not be anarchy’ and therefore, the underlying principle of this school is the relation of law with that of a State. The essential concept of the Analytical school of jurisprudence is to deal with the law as it already exists. Law, according to the Analytical school, is the sovereign’s direction. As a result, analytical schools are also known as imperative schools. In the nineteenth century, the analytical school rose to prominence. It claims that morals are not objective but the law must be objective. If morals are included in the concept of law, the law will no longer be objective. The analytical school takes a ‘positive’ perspective on societal legal issues. The positivists’ main concern is the law that is actually found (positum), rather than the ideal law. Put simply, ideal law is the perfect law for a society or a circumstance whereas law which is actually found concerns logical and welfare thinking in the legislation. Legislations, court precedents, and customary laws are the most important legal sources. This school, which is the most popular in England, establishes the fundamental elements that make up the fabric of law, such as state sovereignty and the administration of justice. While Bentham, Holland, Austin and Salmond are major proponents of this school, Austin is considered as a father of the Analytical school. The present article reflects on the essential aspects related to the Analytical school of jurisprudence.

Positivism in law

The positivist movement began at the turn of the nineteenth century, according to Professor Dias. It was a reaction to a priori thought, which turned away from the reality of actual law in an attempt to uncover the universal validity principle in nature or reason. These ideas were used to explain or condemn actual legislation. Professor Hart had previously said that the term “positivism” had a wide range of connotations. One interpretation is that laws are orders. The founders of British positivism, Bentham and Austin, are connected with this notion. Judges do make law, and positivists do not reject this. In fact, the vast majority of them confess it. The term ‘positivism’ was invented by a French thinker, Auguste Comte.

The antipathy to metaphysical inquiry and the quest for ultimate principles was shared by legal positivism and positivist philosophy in general. Metaphysics refers to the studies of what cannot be reached through objective studies of material reality, for example, cosmology, ontology, etc. Any attempt by jurisprudential experts to detect and define a concept of law that transcended the actual facts of existing legal systems was dismissed. It aimed to keep value concerns out of jurisprudence and limit the discipline’s scope to the investigation and dissection of positive legal orders. Only positive law, according to the legal positivist, is the law and positive law are those legal standards that have been created by the State’s power. Legal positivism has made its most visible appearance in analytical jurisprudence, and therefore the latter acquired the name analytical positivism. Analytical positivism takes a given legal order as its starting point and distils certain fundamental notions, concepts, and distinctions from it using a predominantly inductive method, possibly comparing them in order to find some common elements.

An insight about the Analytical school of jurisprudence

Various names have been attached to the Analytical school. It is known as the Positive school because its adherents are unconcerned about the history or future of law, but as it currently exists. The Analytical school was dominant in England and therefore also came to be known as the English school. It is known as the Austinian school because it was founded by John Austin. This school takes the evolved legal system for granted and continues logically to analyse and classify its key principles in order to reveal their interrelationships. Analytical jurisprudence is the name given to this school because of its focus on the methodical investigation of legal principles. Analytical jurists’ initial interest is to comprehend the structural character of a legal system, and discussions about justice are not only unnecessary but also dangerously confusing for this aim. This approach to law is termed analytical and such writers are styled as Analytical positivists.

The Analytical school views law as a sovereign’s mandate. It emphasised the importance of legislation as a source of law. The notion of law underpins the entire system. Analytical jurisprudence does not produce its premises, rather, the law provides them. Analytical jurisprudence’s role is to accept these premises and break them down into their ultimate atomic constituents in a well-organised legal framework. This school views law as a closed system of pure facts that excludes all norms and values.

Purpose of the Analytical school of jurisprudence

The purpose of Analytical jurisprudence is to examine the foundational principles of law without regard to their historical origins, evolution, ethical importance or validity. According to Salmond, a book of analytical jurisprudence will deal with an analysis of the concept of law, an examination of the relationship between civil law and other forms of law, an analysis of the various constituent ideas of which the complex idea of law is made up, such as State, sovereignty, and administration of justice, an account of legal sources from which law proceeds, as well as an investigation of the theory of legislation, and so on.

Function of the Analytical school of jurisprudence

The Analytical school’s fundamental objective is to provide legal principles in a clear and methodical manner that is relevant to a larger and more developed legal system. It begins with the real facts of law as they exist now. It tries to define those words, explains their meanings, and illustrates how they are related to one another. One of the goals of the Analytical school is to have a thorough knowledge of the underlying notions that underpin all legal thinking.

Significance of the Analytical school of Jurisprudence

Analytical Jurisprudence’s significance stems from the fact that it provided clarity to legal reasoning. It gave us a vocabulary that was clear, precise, and scientific. It accomplished Austin’s goal of “clearing the heads and untying the knots.” It purposefully left out all external elements that aren’t covered by the law.

Founder and advocates of the Analytical school of jurisprudence

Bentham (1742-1832), Austin, Sir William Markby (1829-1914), Sheldon Amons (1835-1886), Holland (1835-1926), Salmond (1862-1924), and Prof. HLA Hart (1907) are the most prominent proponents of the Analytical or Positivist school in England. Gray and Hohfled aided this school in the United States, while Kelsen, Korkunov, and others aided it on the continent of Europe.

Everything that Bentham had to say

Bentham advocated for an imperative conception of law, in which sovereignty and command are central principles. The contrast between social desirability and logical necessity was recognised by Bentham. He also accepted divided and partial sovereignty while debating the legal constraints that the sovereign authority may face. In general, sanctions play a less important role in Bentham’s theory than they do in Austin’s. Even if simply supported by religious or moral consequences, Bentham believed that a sovereign’s edict would constitute law. Alluring incentives and the idea of rewards are acknowledged in Bentham’s account.

The English lawyer John Austin (1790–1859) published a much-simplified version of Bentham’s philosophy of law, which helped set the agenda for key work in the twentieth century. Bentham also advanced a critique of the common law as the exclusive domain of the professional elite, lawyers and judges, in which often obscure and technical language was used to keep the law shrouded in mystery from the perspective of ordinary citizens, all in the service of perpetuating the myth. In Bentham’s opinion, lawyers are experts in “artificial reason,” as Coke had first proposed.

Bentham contrasted expositorial jurisprudence (that is, what the law is) from censorial jurisprudence (that is what the law ought to be). His definition of law is “law is an assemblage of signals, affirmations of intention conceived or chosen by a sovereign in a State.” While supporting the economic idea of laissez-faire (minimum government intervention in people’s economic activity), he advocated for utilitarianism which signified that ‘the legitimate purpose of every legislation is the advancement of the greatest pleasure of the greatest number.’ Bentham defined utility as “the property or tendency of a thing to prevent some evil (‘pain’) or procure some good (‘pleasure’).” According to him, the role of legislation should be to achieve these goals, namely, to provide sustenance, produce abundance, promote equality, and preserve security. Bentham’s hedonism doctrine, or philosophy of pain and pleasure, has been attacked on the grounds that pleasure and suffering cannot be the final measure of a law’s fitness.

John Austin and his sayings

John Austin (1790-1859) worked as a lecturer at the University of London. He used the analytical technique – ‘Law should be rigorously examined and evaluated, and the principle underlying it should be discovered’ and limited his research to Positive law that is Jus positivism (‘Law, simply and strictly so-called: Law set by political superiors to political inferiors’). As a result, he used the terms “analytical,” and “positivism,” to describe the school he formed, therefore, the Analytical school of jurisprudence is also known as Analytical Legal Positivism. Being the father of the Analytical school, his lectures got published under the title, “the Province of Jurisprudence Determined.”

Austin defined law as “a rule laid down for the guidance of an intelligent being by an intelligent being having power over him”. According to him, ‘proper law’ encompasses God’s law, Human laws, and Positive laws. Laws by analogy and laws by metaphor are two types of ‘improperly’ named laws. Austin claims that “Positive morality” comprises laws not imposed by men (as political superiors) or in the pursuit of a legal right, as well as laws imposed by analogy, such as fashion laws. He further stated that the improper laws were not sanctioned by the State.

Law = command + sanction + sovereign

Austin noted that every law, properly referred to as such, must have three elements, namely, command, sanction, and sovereign authority thereby intending to say that “law is the mandate of a sovereign, ordering his subjects to do or refrain from specific actions. If the command is not followed, there is an implied threat of punishment”.

A ‘command’ is a declaration of a specific individual’s or group’s wish that another person does or refrain from doing anything that would result in evil in the case of disobedience, i.e. ‘sanction.’ As a result, every law is a command that imposes a responsibility and is enforced by punishment. A command, according to Austin, can be specific (directed to a single individual or group of people) or universal (issued to the whole community and informing classes of acts and forbearances, they are often referred to as ‘continuous orders’). A specific command is effective when the individual or group being commanded obeys it whereas a general command is successful when the majority of a political society obeys it on a regular basis.

According to Austin ‘if a definite human superior not in the habit of obedience to a similar superior gains habitual obedience from the mass of a given society, that determinate superior is the sovereign in that society’. As a result, the fact of obedience is the foundation of sovereignty. The sovereign’s power is unrestricted and indivisible (there is no separation of powers). The sovereign is not constrained by any legal restrictions or their own laws.

Only the legal systems of civilised nations may become the legitimate subject matter of jurisprudence, according to Austin’s conception of law as the “command of the sovereign,” because the sovereign can only execute their orders with an efficient administrative apparatus in such societies. Customs are not taken into account in Austin’s definition. Austin believes that there are three types of law that, while not commands, may be included in the scope of jurisprudence as an exception, namely declaratory or explanatory laws, Laws of repeal and Laws of imperfect obligation (no sanctions attached). According to him, Constitutional law derives its force from a public opinion regarding its expediency and morality.

Criticism of Austin’s theory

Austin’s thesis is questioned since punishment isn’t the only way to get people to obey. The concentration on punishment as a mark of law in Austin’s theory obscures and distorts the true nature and purpose of law in a community. He dismisses law as a man-made construct, ignoring its characteristic of organic growth. As the community accepts the law, it is followed. In modern times, the law is nothing more than the people’s collective will. Furthermore, the Constitution’s norms and conventions control the conduct of the people and the State, despite the fact that they are not enforceable by law. Furthermore, court judgments (precedents) become binding laws despite the fact that no one has commanded them.
Austin’s difference between positive law and positive morality, according to Justice Holmes, is to keep notions of virtue and badness out of the sphere of law. According to Austin’s positive law, there is no place for ideals or justice in law, because “the existence of law is one thing, its merit and demerit another. A law that actually exists, is a law, even if we happen to dislike it or if it differs from the text by which we regulate our approval or disapproval.” Austin’s approach disregards laws that are permissive and grant privileges (eg the Bonus Act, Law of Wills). Bryce had observed that “Austin’s contribution to legal research is so meagre and mired in mistakes, that his work ought no longer to find a position among those required for students.”
The concept of command, according to Duguit, is inapplicable to modern social/welfare law, which does not order individuals but confers advantages, and which binds the State rather than the person. Law does not only issue instructions, it sometimes grants rights, such as the right to form a will. As a result, Austin’s legal idea is manifestly inapplicable in today’s democratic welfare state. In India, for example, it is impossible to find a single sovereign who can be said to have unrestricted and absolute power to establish laws. Austin’s idea may be extended to the highest British Parliament (there is no division of power in England into different organs of State that is the legislature, executive and judiciary).
Prof Hart had remarked to Austin that “however, the explanation of precisely where and why he is incorrect has proven to be a continual source of enlightenment, for his faults are frequently the misinterpretation of essential facts for the comprehension of law and society”. According to him, the Austinian formula specifies one crucial requirement, namely that if laws impose responsibilities or duties, they must be ‘usually followed.’ However, although necessary, this merely accounts for the legal system’s “final result.” The overwhelming evidence against Austin should not hide the reality that law is made up of prescriptions for behaviour, which are frequently expressed in the imperative form.

Professor Dias’s comparison of Bentham and Austin’s propositions

Prof Dias compared Bentham and Austin and came to the conclusion that the former had a more comprehensive and flexible theory than the latter. The following are the significant grounds of comparisons that Professor Dias had put forth:

Betham’s definition of sovereignty was open-ended, avoiding the constraints of indivisibility and illimitability. He was able to accommodate the division of authority across organs, as in a federation, or division in specific sectors, as well as authority constraints and self-bindingness.
Bentham had a larger understanding of the law than Austin, and the former avoided the absurdity of “law properly so-called.”
Bentham’s sanction was both broader and less significant than Austin’s. Even if they are justified by moral or religious sanctions, laws are laws. They might even be accompanied by awards.
Bentham didn’t have to use “sanction by nullity.” His theory had a flaw in the imperative basis, but it was so much larger and less rigid than Austin’s that he was able to accommodate permissions up to a degree. He avoided the fiction of ‘tacit command.’

Hart’s concept of law

Professor Hart (1907) is often recognized as the most prominent exponent of British positivism in the modern era. He criticised Austin’s thesis in his noteworthy work “The Concept of Law.” Hart observed that “law consists of norms with a broad applicability and non-optional nature, yet which are susceptible to formalisation, legislation, and adjudication”. He said that law is a collection of social norms (rules derived from social pressure) that take on the form of legal regulations. The term ‘law’ refers to a set of “publicly ascertainable regulations.” According to Hart, the law is the same as a legal system. A ‘legal rule’ is one that establishes a code of behaviour that is followed with the expectation. The law establishes a standard of behaviour, not a demand. This norm is followed not just because there is a sense of duty to do so, but also because others are expected to do so as well. As a result, even though a person cannot be forced to respect the law, he or she is nevertheless considered to have a duty to do so. As a result, the law is more concerned with duty than with coercion. A related concept to a ‘responsibility’ is an obligation.

According to Hart, the concept of duty signifies that a rule is accepted by the people (i.e., it is internalised) rather than habitually obeyed (as defined by Austin). There is a distinction between internal and exterior elements of regulations. The former means “having a responsibility” (without force), whilst the latter entails “being obligated” (under a compulsion). According to Hart, Austin’s predictive theory ignored internal features of rules and only dealt with exterior ones. There are two sorts of rules, according to Hart. The main rule establishes norms of conduct or imposes obligations (for example, international law), whereas the secondary rule determines, introduces, eliminates, or modifies the primary rule. Power-conferring rules, public or private, are the secondary rules (e.g. statutes, constitution). The ‘rules of recognition,’ which give authoritative criteria for determining main norms of duty, are developed from these. The ‘ultimate rule of recognition’ is the last requirement for a legal order’s legality. A legal system’s core is made up of the union of main and subsidiary rules. A civilisation ruled solely by fundamental laws (i.e., a simple primordial society) is inefficient, stagnant, and unpredictable. The legal order must be effective, which means that citizens must follow main norms and authorities must follow secondary regulations. These two requirements are both essential and sufficient for a legal system to exist.

Hart created a theory of law in which official behaviour plays a fundamental role. Some of the “puzzles” associated with the concept of legal validity, according to Hart, address the relationship between the validity and efficacy of legislation. When a rule meets all of the conditions set out by the rule of recognition, it is considered to be “valid.” When people follow the rules, they are called to be ‘effective.’ It is not necessary for an ultimate rule of recognition to be legitimate, but it should not be ignored, i.e. it must be effective (officials must obey it).

Criticism of Hart’s proponents

Some jurists, like Ronald Dworkin and Lon Fuller, have harshly challenged Hart’s idea of law. Dworkin distinguished between ‘rules’ and ‘principles,’ stating that a legal system cannot be viewed just as a collection of rules, but rather as a collection of sound principles and policies. He stated that “a principle is a norm to be followed because it is a necessity of justice, fairness, or another facet of morality.” Fuller felt that the legal system, as a tool for normal human behaviour, should be concerned with both law as “it is” and law as “it ought to be.” Thus, the law cannot be completely divorced from the concept of morality.

Kelsen’s concept of law

Hans Kelsen (1881-1973), a member of the ‘Vienna School’ of legal philosophy, offered a “pure theory of law,” that is, a theory-free of social, historical, political, psychological, and other influences thus omitting everything that is not technically law and logically self-supporting. The law is a normative (‘law as a coercive order’) rather than natural science, and it comes with punishments. The test of legality can be found inside the legal system itself. He described the law as “a set of rules governing human behaviour.” Laws, according to Kelsen, are ought propositions, or ‘norms’. If X occurs, then Y should occur. As a result, if someone steals, the individual should be penalised. Law does not seek to describe what occurs in reality (‘is’), but rather only prescribes a set of principles. An act of volition has a legal meaning called a norm. It refers to the act of commanding, permitting, or authorising specific behaviour.

A norm is valid only because it is derived from or decreed by a higher standard. This requires a ‘ladder of norms,’ with one norm legitimate based on the validity of another norm. There are also ‘dependent’ or facilitative norms that do not coerce people (for example, the right to write a will, the President’s authority and the use of force in self-defence). The so-called “independent” norms are actually coercive norms. The dependent norms are dependent on their validity on the independent norms (e.g., Section 299 of the Indian Penal Code, 1860 derives its validity from Section 302). As a result, the legislation does not have an exclusively commanding or obligatory nature.

The law is a set of behavioural standards that may be traced back to a grundnorm, or fundamental norm, from which they gain their legitimacy. The grundnorm must be effective, that is, people must have trust in it, otherwise, a revolution will occur. There will always be some type of grundnorm in any legal system, whether it is in the shape of a Constitution or a dictator’s will. The grundnorm will be that the ‘Constitution needs to be observed’ when there is a written Constitution (for eg in India, USA). Where there is no written Constitution (like in the United Kingdom), the grundnorm must be derived from social behaviour. The grundnorm of international law is the concept ‘pacta sunt servanda’ (treaty duties bind parties).

While the validity of norms issued from it is accounted for by the grundnorm, one cannot account for one’s own validity by referring to another norm. Its validity cannot be objectively evaluated, rather it must be assumed or pre-supposed. It searches for evidence of its own legitimacy in areas other than the law. It does, however, confer legality as long as the legal order is ‘by and large effective.’ It should secure a minimum efficacy, and when it loses the support of the people, it should be replaced by another grundnorm.

No theory of justice can form part of the pure theory of law. Kelsen painted a formal, scientific, and dynamic picture of the judicial system. He has had a significant impact on modern legal philosophy. Kelsen’s idea has been vigorously maintained by eminent jurists such as Stone and Friedmann.

Criticism surrounding Kelsen’s theory

Kelsen’s thesis is criticised because he believes that a legal order is lawful if it is successful, regardless of whether it is an illegitimate rule enacted by unconstitutional means. This suggests that law is a system of external coercion, in which individuals are compelled to follow laws. The effectiveness of a grundnorm does not always imply that legislation is valid. Kelsen does not specify a criterion for determining grundnorm’s minimal efficacy. The grundnorm only generates or verifies a legal or tier, but it does not offer content to a legal order. The courts are responsible for determining the grundnorm standard and determining the legitimacy and efficacy of a legal order. Kelsen’s assumption that all norms save the grundnorm are pure was disputed by Julius Stone. He claimed that other norms that take their legitimacy from grundnorm cannot stay pure when grundnorm is a composite of many social and political variables. He had said that ‘we are invited to forget the illegitimacy of the ancestor in admiration of the pure blood of the progeny.’

Austin, Kelsen, and Hart’s ideas are dominated by coercive components. According to their beliefs, any social norm becomes legislation if certain formal conditions are met, regardless of its underlying worth or quality. The essence of law is found in its purpose rather than its form. Morality is excluded from the law by all three philosophers because morality no longer plays a role after a law is enacted.

Conclusion

The different schools of thought in jurisprudence indicate distinct approaches in handling the subject. The Analytical school of jurisprudence highlighted the positive approach that needs to be adopted to address legal challenges. The school came with its own sets of pros and cons that the article highlighted, nevertheless one cannot ignore that the school had a lot to offer to society in general.

References

http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Intellectual_Property_Law_in_India.pdf.

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How transition from LIBOR will affect financial markets of the world

By

Shoronya Banerjee

-

February 12, 2022

0

This article is written by Muskan Khandelwal, pursuing a Diploma in M&A, Institutional Finance, and Investment Laws (PE and VC transactions) from LawSikho. The article has been edited by Yashprada (Associate, LawSikho), and Ruchika Mohapatra (Associate, LawSikho).

This article has been published by Shoronya Banerjee.

Table of Contents

What is London Interbank Offered Rate (LIBOR)

The London Interbank Offered Rate (LIBOR) is a standard interest rate used by prominent international banks to loan to one another for short-term loans in the international interbank market.

The London Interbank Offered Rate, or LIBOR, is a widely recognised essential benchmark interest rate that shows banks’ borrowing costs. The rate is determined and reported every day by the Intercontinental Exchange (ICE). However, it is being phased out due to subsequent controversies about its legitimacy as a benchmark rate. LIBOR will be phased out by June 30, 2023, per the Federal Reserve and UK authorities, and will be substituted with the Secured Overnight Financing Rate (SOFR). Following this phase-out, the one-week and two-month USD LIBOR rates are no longer published from December 31, 2021.

LIBOR : an overview

LIBOR stands for London Interbank Offered Rate, the benchmark interest rate at which significant worldwide banks lend to one another. It is composed of five currencies: the US dollar, the euro, the British pound, the Japanese yen, and the Swiss franc, and it offers seven maturities: overnight/spot next, one week, two, three, six, and twelve months.

Each working day, 35 different LIBOR rates are calculated and presented due to the mix of 5 currencies and seven maturities. The three-month US dollar rate is the most typically cited, often known as the current LIBOR rate.

ICE questions worldwide central banks every day to determine how much they would charge other banks for short-term borrowing. The organization subtracts the top and lowest values before calculating the average of the remaining data, which is known as trimmed average. This rate is updated every morning as the daily rate; therefore, it is not a constant. Once the rates for each term and currency have been calculated and confirmed, the ICE Benchmark Administration (IBA). Announces and publishes them every day at 11:55 a.m. London time (GMT).

LIBOR is also used as a benchmark for consumer loans in many nations worldwide; therefore, it influences customers and banking institutions. The interbank rate affects the interest rates on different credit products such as credit cards, vehicle loans, and adjustable-rate mortgages. This fluctuation in the rate helps influence the ease with which banks and customers can borrow money.

However, there are drawbacks to adopting the LIBOR. Lower borrowing rates may appeal to customers, but they impact the returns of some assets because certain mutual funds are linked to LIBOR, their yields fall with the change in LIBOR.

LIBOR : historical background

Since the industry for interest rate-based products started developing in the 1980s, a standard metric of interest rates among financial institutions was required. The British Bankers’ Association (BBA) established the BBA interest-settlement rates in 1984, covering the banking and financial services sector. Additionally, this simplification resulted in the establishment of BBA LIBOR in 1986. That became the standard benchmark interest rate for interest rate and currency-based financial transactions between domestic and international banking institutions.

LIBOR has changed dramatically since then. The most notable example is when BBA LIBOR was renamed ICE LIBOR after the Intercontinental Exchange decided to take over management in February 2014.

The currencies used in LIBOR calculations have also evolved. Although new currency rates have been introduced, several have been deleted or merged since the euro rates were introduced. During the financial crisis of 2008, the variety of tenors for which LIBOR was computed dropped dramatically.

LIBOR : phasing out

Though LIBOR has been maintained since the 1980s, institutional changes to reform benchmark rates have emerged in recent times to replace LIBOR as the interbank borrowing rate eventually. After 2021, UK authorities are anticipated to stop requiring banks to report LIBOR rates.

The new method aims to eliminate the guesswork surrounding interest rates prevalent under LIBOR in favor of actual transaction rates. In 2023, the Secured Overnight Financing Rate (SOFR) will take the place of LIBOR. The SOFR is also a dollar-denominated loan and derivative contract benchmark interest rate. SOFR differs from LIBOR in that it relies on confirmed operations in the US Treasury market, whereas LIBOR relies on borrowing rate estimates.

Although the United States and the United Kingdom are likely to utilise SOFR, other nations consider establishing their own kind of benchmark interest rate once LIBOR is phased out.

Equivalents of LIBOR

Although LIBOR is widely prevalent, different local interest rates are widely tracked worldwide. For example, the European Interbank Offered Rate (EURIBOR) is used in Europe. In contrast, the Tokyo Interbank Offered Rate (TIBOR) is used in Japan, China’s Shanghai Interbank Offered Rate (SHIBOR) is used in China, and India’s Mumbai Interbank Offered Rate is used in India (MIBOR).

The impact of LIBOR substitution on financial institutions

For financial organisations, the move from LIBOR will entail high costs and risks. Payments under contracts addressing the suggested alternative rates will vary from those using LIBOR since the suggested alternative rates are computed differently. Market risk profiles will alter due to the transformation, necessitating modifications to risk models, valuation tools, product design, and hedging methods.

LIBOR could become inaccessible, even though instruments that reference it are still in use. If LIBOR is inaccessible, these contracts often include “fall-back provisions” that set contract conditions. The consequent losses and benefits are tolerable if the duration of non-availability is limited, as anticipated when the contracts were formed. However, if fall-back provisions are applied throughout the remainder of the contract’s duration, the financial consequences will undoubtedly be enormous, with one party winning and the other losing.

The financial, customer, and operational consequences of LIBOR’s replacement

It would be challenging to renegotiate a significant number of contracts, mainly where one party had a contractual entitlement to a windfall benefit. If contracts are allowed to transition to fall-back arrangements if LIBOR is inaccessible, many price adjustments will occur quickly. It would be hard to handle the financial, customer, and operational consequences.

Financial institutions would likewise have a difficult time communicating with their retail clients. Most variable-rate mortgage clients in the United States, for example, may comprehend that their rate is LIBOR+200 basis points (or something similar) but have very minimal knowledge of LIBOR altogether. They are inclined to believe that a suggested replacement rate of the Secured Overnight Financing Rate (SOFR)+230 basis points is a much worse bargain unless it is well conveyed, even if SOFR is on average 30 basis points cheaper than LIBOR.

India’s regulatory position on the LIBOR transition

The Reserve Bank of India (RBI) has issued a guideline for LIBOR transition that, among other things, necessitates banks and financial institutions to develop a Board-approved plan. This plan outlines an assessment of LIBOR-related exposures and measures to be followed to resolve risks associated with the discontinuation of LIBOR, such as preparation for the implementation of ARRs. RBI has also urged banks and financial institutions to stop engaging in new financial agreements that utilise LIBOR as a benchmark as quickly as possible and to urge their clients to do the same, as soon as possible, and in any event by December 31, 2021.

Effectiveness of the Guideline

In a market beset by ambiguity as a result of the discontinuation of LIBOR, the RBI has provided some clarity to financial institutions, borrowers, and market participants on how to hedge their risk in overseas borrowing and ensure a smooth transition, even if it has not specified any specific ARR that it suggests. The goal is to emulate standard market practices as quickly as possible. With many backward-looking ARRs already in use, it is unclear which one will be universally accepted and eventually replace the forward-looking LIBOR.

The shift from LIBOR is speeding up, and so is the level of unpredictability

Since everything is changing quickly, market players are searching for a forward-looking rate that will allow them to estimate the cost of borrowing ahead of time. The fact that SOFR is calculated “in-arrears” after the period during which the interest rate is paid is one of its most significant flaws. It is similar to learning the expense of a surgical operation only after it has occurred. Borrowers are justifiably apprehensive about accepting these agreements.

Maybe the financial sector will provide the answer. The world’s leading financial derivatives market, CME Group, issued a term rate calculated from SOFR futures contracts. Short-term swap contracts swapping a floating leg based on ex-post SOFR for a fixed leg specified in advance have some embryonic liquidity. This set leg, such as a three-month swap rate, might be the new benchmark for floating contracts.

While a replacement may be on the verge, there is still a degree of ambiguity about how fast various market parties will bow to a prospective alternative to LIBOR’s reign and how possible delays could affect market fundamentals.

Broader implications beyond banking and finance

This article focuses on the banking and financial components of the shift from LIBOR to RFRs. The widespread usage of LIBOR in the corporate industry necessitates consideration of the corporates and people engaged in resolving disputes, notably in arbitration.

Many businesses would have engaged in commercial and trade contracts that reference LIBOR in clauses like default interest computations for a late fee of monies due and payable under the contract. These will have to be evaluated and, if required, revisions agreed upon by the parties to guarantee that these protections keep working when LIBOR is phased out.

Arbitration agreements may include language stating that LIBOR will be used to determine the value of any arbitral award (including the interest). If not done as part of a more exhaustive evaluation and modification of the agreed terms that contains the arbitration agreement, these references will have to be corrected to guarantee that an arbitrator cannot calculate an award premised on a non-reference rate, even though arbitrators are undoubtedly equipped under the governing statute to safeguard the parties’ agreement. Nevertheless, this may not be enough to prevent arbitrators from ruling any LIBOR-benchmarked commitments impossible to fulfill.

Problems that will need to be discussed with arbitration practitioners involve those that may emerge if modifications to arbitral awards that reference LIBOR are needed, as well as those that will be impacted by the abstinence of LIBOR publication, such as awards which have already been made but not yet been fully paid.

Conclusion

The challenges surrounding the LIBOR transition are continually evolving. Some of the consequences discussed in this article may or may not change or be replaced as the transition phase develops; nonetheless, it is increasingly evident that RFRs will be LIBOR’s successor. In light of this, substantial effort has to be taken to guarantee that financings are reported in a way that either provides for a smooth transition from LIBOR to RFRs or enables the correct reference of RFRs in future financings.

The parties’ financing documentation will only get them so far in implementing the LIBOR transition; banks’ mechanisms and operational processes must be executed properly so that the profoundly different rationale for calculating interest rates outlined in this article is structurally accessible from the point in time the transition is deemed necessary to take effect.

Financial and legal advisers and consultants must be brought in soon enough in the transition to determine any legal, financial, and operational concerns that must be handled as a component of the transition process and develop strategies and processes to manage them. Legal and financial advisors can also aid in initial discussions with third parties, such as borrowers or other syndicate banks, so that any contract amendments can be addressed, agreed upon, and implemented in time for the transition to LIBOR, ensuring that banks’ interest income is not disrupted.

References

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

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Doctrine of priority : all you need to know

By

Rachit Garg

-

February 11, 2022

0

This article is written by Niharika Agrawal from IFIM Law School, Bangalore. This article explains about the doctrine of priority under the Transfer of Property Act, 1882, along with its essentials and exceptions. The author has also discussed the relevance of the doctrine of priority to the IBC. Further, case laws on the doctrine have also been discussed for better understanding.

Table of Contents

Introduction

The concept of the doctrine of priority is regulated by the Transfer of Property Act, 1882 (TPA) under Section 48. This doctrine helps the court in determining the correct party to whom the rights are to be given priority over the other in a case where the court has conflicting interests. The need for this doctrine arises in a situation where the transferor of the property deals with the same property with two different people subsequently. Hence, this resolves the problem of the courts to a large extent.

This article explains how the conflicting interest created over a particular immovable property can be settled through the rule of priority and its applicability and exceptions under Indian laws.

Doctrine of priority

This doctrine is based on the Principles of Natural Justice which states that if the rights are made in favor of two different people at different times, then the one who has the advantage in time will also get the advantage in law. However, this principle applies only in the cases where the conflicting equities of the parties are involved are otherwise equal. The doctrine of priority under Section 48 is inspired from the legal maxim, qui prior est tempore potior est jure which ultimately means one who is first in time is better in law.

This Section lays down an important principle that states, no man can convey a title other than what he has. This means when a transferor transfers the same property in favor of more than one transferee, then each transferee will enjoy the property along with its right as the former transferee. Under this doctrine, if a person has already created a transfer of the property in motion, then he cannot ignore his grant and deal with the property free from the rights that were created in an earlier transaction. This Section is absolute in nature and does protect or reserve in favor of the transferee, who may not even know about the prior transfer. The principle of the doctrine of priority explained under Section 48 is applicable where there is competition among the mortgagee by retaining title deeds and a subsequent transferee.

Essentials of the doctrine of priority

There ought to be one owner or transferor of the property and more than one transferee.
It is only applicable only to immovable property.
The transfer should be created at different times and at these different times there ought to be created rights to the transferee.
This right cannot be exercised to the fullest at the same time.

Illustration

A is the owner of the immovable property. He mortgaged that property to B in the month of August. Later, in July A transferred the same property to C. Here in this case all the essentials are satisfied and as per the rule of priority, B will get all the rights of the property prior to C. In case of default on the payment of the loan, the mortgagee can sell the property as the latter transfer is in accordance with the earlier transfer.

Effect of the document registered under doctrine of priority

Under the rule of priority, registration of the document does not affect the rights of the prior transferee. That means if the document of the prior transferee is unregistered whereas the document of the subsequent transfer is registered, still the rule of priority would be applicable to the prior transferee and not the subsequent transferee unless and until the subsequent transaction is made with bonafide intention and without the knowledge of the prior transaction. Registration does not create any right in the property. It is merely proof of intention to transfer the title of the property.

Illustration

A mortgaged property to B where the deed is unregistered and will be registered at a later point in time. Later A transfers the same property to C where the deed is registered and was made with bonafide intention without the knowledge of the previous transfer. Here B’s right will have priority over C’s right as the registration of the document does not affect the rule of priority.

In the case of Duraiswami Reddi v. Angappa Reddi (1945), it was observed that the prior transferee would be entitled to enforce his rights though his documents were registered later. And even if the subsequent transferee’s documents were registered earlier and he entered into a transaction with bonafide intention and without the knowledge of the previous transaction, still he is not entitled to the prior rights. It was also held that the result of the above case was implied and was a direct impact of the fused operation of Section 47 of the Registration Act and Section 48 of the Transfer of Property Act. It was concluded that the right of priority of the earlier transferee would be adjourned only if the latter transferee established any detailed incidents such as fraud, esstoples, or gross negligence.

The Court was also of the opinion that if a document earlier registered should be considered and prevailed over the document registered later then it would be an advantage for the vendors and the subsequent transferee to enter into a transaction within the prescribed time for registration of the earlier document and get the new deed registered immediately and thus defeat the first transferee under the earlier deed.

Exceptions to the doctrine of priority

Postponement of prior mortgagee (Section 78)

Section 78 of the Transfer of Property Act is an exception to the doctrine of priority. According to this Section, if the prior mortgagee creates some fraud, gross negligence, or misrepresentation and induces any person to give security money for the same property, then the prior mortgagee is postponed to the subsequent mortgagees. Hence, the subsequent mortgagee will have priority in the rights of the property over the prior mortgagee.

For example, A mortgages a property to B, subsequently, A also mortgages the same property to C. C unaware of the previous transaction inquiries about any debts (if any) in the property with B. B fraudulently conceals his mortgage due to which B advances money for the same to A. Here, though B is the prior mortgagee since B has committed fraud, his prior rights are postponed.

Non-compliance with the procedure of law in prior transfer

If the prior transfer is created non-complaining to the procedure laid down by the law, then such subsequent transfer would be given all the rights prior to the previous transfer. For example, A executed a lease deed of immovable property in favor of B for 5 years but did not get it registered which was mandatory. Later, A sold the same property to C. Here the rights of C would be given preference over B.

Estoppel

In this case, if the first transferee knew about the subsequent transfer, then the subsequent transferee will get the priority. This is an exception to the rule of priority. In this exception, it is not necessary that the first transferee should know the exact contents of the transfer.

By registration

Every instrument starts its operation from the date of its execution. In cases where subsequent deeds are carried out on the same date and the order of execution is unknown, then all the deeds will be carried out at the same time. And in cases where two deeds consist of different dates and are registered on different days, then the priority, in this case, will depend upon the dates on the deeds and not on their respective registered dates.

By notice

The presence of notice means being familiar with the facts. Therefore, when a bona fide contract, whether oral or written, is created for the sale of property, and further the third party buys the property concerning the notice of the earlier transfer, the title of the party claiming under the previous transfer would get the priority over the subsequent purchaser. But the transfer that has been created in time must be bona fide.

Section 50 of the Registration Act also provides various classifications of the registered document which is related to the immovable property to draw effect against the unregistered document. Hence, in cases where the holder of the registered deed had notice of the earlier unregistered deed, at the time of execution, it gives the registered deed of the subsequent holder a priority because of his deed over the previous holder of an unregistered deed for not being ought to be registered.

By court

When the court orders or passes a decree to take the subsequent transfer or the second transfer, then such transfer would prevail over the prior transfer and the rights of the subsequent transfer would be given preference. Thus, the rule of priority will not be applicable in such cases.

Relevance of the doctrine of priority with respect to Insolvency and Bankruptcy Code

The priority of charges agreed between the creditors in an inter-creditor or subordination agreement will be useless if a creditor gives up its security and comes to the verge of liquidation of the company under Section 53 of the code. However, this section does provide any rights of priorities over the mortgaged assets. This may have a negative impact upon the credit market as the lenders shall have no protection in case of insolvency of the corporate debtors. If the secured creditors opt to give up their security interest towards the liquidation estate, it will not be applicable under Section 48 of the Transfer of Property Act during distribution.

In the case of ICICI Bank v. SIDCO Leather (2006), the Apex Court has discussed in detail, the inter se priority amongst the secured creditors of a company in case of liquidation. The Court held that the Parliament is deemed to consider the terms of Section 48 of TPA. According to the said provision, the claim of the first charge holder shall be given priority over the claim of the second charge holder, to be realized from the property that belongs to the mortgagor, the first charge holder will be repaid first. The Court also opined that the specific provision provided under the general statute shall prevail in all the cases, where the special statute does not include any particular provision for the contractual and other statutory rights among different kinds of the secured creditors

Case laws on the doctrine of priority

Chouth Mal v. Hira Lal

In this case, the sale of the land agreement was executed in favor of one defendant in January 1932 however, the sale deed was executed in May 1932. During the period of execution that is somewhere in February 1932, the owner of the property executed a usufructuary mortgage of the same land in the favor of the plaintiff. The court, in this case, held that the usufructuary mortgage will be given priority over the subsequent sale deed. It was observed by the court that if the parties intended and delivered the possession of the properties to the transferee, then the mere omission of the sale deed will not have any effect or consequence. It was opined that only transfer does not confer any right or title in the property. It depends upon the date of execution of the deed. It is also not mandatory to have a deed registered as it does not create any rights.

SFL Industries Ltd. v. Reliance Capital Ltd. (2015)

In this case, the court ordered the petitioner company to wind up on the recommendation of the Board of Industrial and Financial Reconstruction (BIFR). The question that arose, in this case, was whether the provision of the Companies Act shall have the effect of the doctrine of priority which includes whether the claim of the first charge holder would prevail over the claim of the second charge holder. The court held that there is no specific provision for the right of priority in the Companies Act. In such cases, the rule of priority under Section 48 of the Transfer of Property Act can be made applicable. Hence, in the present case, the court ordered that the claim of the first charge holder would prevail over the claim of the second charge holder.

Conclusion

Section 48 determines the priority when there is more than one transferee. It safeguards the rights of the first transferee in absence of a special contract or reservation. It describes the essential principle that no person can carry their rights and titles better than himself. Thus, the transferor cannot harm the rights of the transferee by making any further transactions with the property. It cannot ignore the rights created by the earlier transfer. Also, the rule of priority has expanded its scope of relevance to the Registration Act and Insolvency and Bankruptcy Code.

References

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All about Section 467 and 471 IPC : forgery

By

Rachit Garg

-

February 11, 2022

0

This article is written by R Sai Gayatri from Post Graduate College of Law, Osmania University. This article talks about forgery concerning Section 467 and Section 471 of the Indian Penal Code, 1860.

Introduction

In the present day, it is very common to come across cases where a person gains wrongful benefit by the means of forgery. Such forgery may be of many kinds such as forgery of signatures, documents, electronic records, etc. It is a known fact that the Indian Penal Code, 1860 through its provisions, acts like armour when it comes to protecting the citizens of India from various offences. This includes the offence of forgery as well. In this article, we will be discussing in detail about two such provisions of the IPC which deal with forgery i.e., Section 467 and Section 471.

Meaning of forgery

Forgery refers to the creation, addition or alteration of any writing, record, instrument, stamp, register, deed, etc in a false manner to the prejudice of another individual’s right. It is an act to commit fraud that is fueled by the intention of deceit. In a case of forgery, the instrument in question is altered in such a manner that if it is passed off as genuine then it shall possess legal value or establish legal liability.

As per Section 463 of the Indian Penal Code, 1860 forgery is committed when an individual makes any false documents or false electronic records or a part of such documents or records with an intention to cause injury or damage to the public or any other person, or to support a particular claim or title, or to cause any other person to part with property or to enter into any express or implied contract, with an intention to commit fraud or that fraud may be committed.

Some of the documents that are often forged are wills, deeds, patents, cheques, certificates of authentication, identification documents, medical prescriptions, contracts, etc.

Elements of forgery as per Section 463 of IPC

The document or electronic record or the part of it should be false in fact
Such document or electronic record or any part of it should be created dishonestly or fraudulently
Such creation of a false document or electronic record or any part of it should be done with an intention to –

Cause injury or danger to the public or any individual.
Cause any individual to part with property.
Support any claim or title.
Enter into any express or implied contract.
Commit fraud or that fraud may be committed.

The aforementioned elements were laid down in the case of Sushil Suri v. CBI and Another (2011). It is pertinent to understand that the term ‘fraud’ in Section 463 of IPC refers to the infringement of an individual’s legal right and such intention to defraud involves an intention to deceive and cause legal injury. However, a case of forgery can only be made when an element of fraud is present in the creation of a false document or an electronic record or a part of it.

General defences to forgery

There are certain general defences to protect oneself from the allegation of forgery, they are as follows –

Absence of intention– In each case of forgery, the ultimate factor that establishes the offence is the element of intent. Thus, if the individual who is accused of forgery had no intention to commit the said offence then they cannot be held guilty.
Coercion– If the individual who is accused of committing forgery establishes the fact that he had to commit forgery due to coercion or any such threat leading to coercion, then such an individual cannot be held guilty.
Lack of knowledge– In case the individual who is accused of committing forgery proves that they had no knowledge that the document or legal instrument in question is fraudulent then they cannot be held guilty for the offence of forgery.

Understanding Section 467 IPC

Section 467 is embedded in Chapter XVIII of the Indian Penal Code, 1860 which states that any individual who forges a document that may be valuable security or a will, or a document enabling a person to adopt a son, or which provides authority to any person to make or transfer any valuable security, or to receive the principal interest or dividends, or to receive or deliver any movable property, or any document that is falsified to be a receipt acknowledging the payment of money, shall be punished with imprisonment for life or with imprisonment for a term which may extend to ten years, and shall also be liable to fine. Offences under this provision are non-bailable but can be both cognizable and non-cognizable based on the offence committed.

Ingredients of Section 467 IPC

The following are the essential ingredients of Section 467 of IPC, 1860 –

Any document or legal instrument that is forged purports to be a –
1. A valuable security, or
2. A will, or
3. An authority to adopt a son, or
Such forged document or legal instrument gives authority to any individual –
1. To make or transfer valuable security
2. To receive the principal interest or dividends or valuable security.
3. To receive or deliver any money, movable property or valuable security.
To an acquittance or receipt –
1. For the purpose of acknowledging the payment of money.
2. For the delivery of any movable property or valuable security.

Illustration

Let us understand the concept of Section 467 of IPC through an example. If an individual is in possession of a forged Will wherein they have manipulated certain proceeds of the Will to their benefit, then in such a situation, the law will assume that the Will was forged with a malafide intention to gain wrongful benefit. Further, such offence will be considered under the ambit of Section 467 of the IPC wherein the offender will be convicted and punished according to the said provision.

It is pertinent to note that an offence under Section 467 of the IPC is considered as an aggravated or extended form of forgery. Just by forging a document or legal instrument an individual may be held guilty under Section 467 of the IPC, irrespective of whether such individual gained any wrongful benefit from such document or legal instrument or not. This implies that the mere possession of such document or legal instrument and the intention to make use of such document or legal instrument is sufficient to convict an individual under Section 467 of the IPC.

Whether an offence under Section 467 is bailable or non-bailable?

Section 467 of IPC comes under the purview of non-bailable offences. In the case of bailable offences, the provision of bail is considered a right, however, in the case of non-bailable offences the provision of bail is considered a privilege. This is because the accused cannot apply for bail until and unless he is presented before the magistrate.

Nevertheless, the accused can apply for anticipatory bail before they are arrested if they have a reason to believe that they will be arrested soon. But even in the case of anticipatory bail, the court follows a procedure before granting it to the accused, such procedure may involve the perusal of the court in matters such as the motive of the accused, checking if there is any previous criminal record, charge sheet filed by the police, the status of the accused in the society, etc. After receiving all such information, in case the court is satisfied that the accused deserves to get bail, only then bail is granted. The provision of anticipatory bail can be found in the Criminal Procedure Code, 1973 under Section 438.

Cognizance of Section 467 IPC

When it comes to IPC, the offences are further classified into two kinds, i.e., cognizable and non-cognizable offences. A cognizable offence is an offence wherein the police can arrest the offender without requiring a warrant and the offender must be presented before the magistrate within 24 hours. However, in the case of a non-cognizable offence, the police essentially require the approval of the court or the commission of a warrant before making an arrest.

An offence under Section 467 of IPC is non-cognizable, however, if the valuable security is related to the Central government then it is cognizable. The offences under Section 467 of the IPC are triable by a first-class Judicial Magistrate.

Punishment under Section 467 IPC

Forgery can be understood to be a grave and heinous crime just by having a glance at the punishment given for it. Any person who commits an offence under Section 467 of the IPC shall be given the punishment of imprisonment for life or ten years. The offender may also be made liable to pay a fine in addition to his imprisonment.

OFFENCE	PUNISHMENT	COGNIZANCE	BAIL	TRIABLE BY
Forgery of valuable security, will or authority to make or transfer any valuable security, or to receive any money, etc.	Imprisonment for Life or 10 Years + Fine	Non-cognizable	Non-bailable	First class Judicial Magistrate
When the valuable security is a promissory note of the Central Government	Imprisonment for Life or 10 Years + Fine	Cognizable	Non-bailable	First class Judicial Magistrate

Case laws dealing with Section 467 IPC

Daniel Hailey Walcott And Anr. v. State, 1968 – In this case, the appellant Daniel Hailey Walcott made unauthorized endorsements in his passport having his photograph to travel to countries where he was not allowed to go and such unauthorized endorsements were made dishonestly and fraudulently. It was held that any individual who forges a passport and further makes use of it as a genuine passport shall be held guilty under Section 467 of the IPC.

Krishan Lal v. State, 1976 – In this case, the accused received a certain amount of money from a postman by falsely representing himself as the payee. The accused signed the postal acknowledgement in the name of the original payee. The court held that the accused has committed the offence of forgery as per Section 467 of the IPC.

Shriniwas Pandit Dharamadhikari v. State of Maharashtra, 1981 – In this case, the appellant had forged two certificates to get admission in the Arts the Commerce College affiliated to Poona University. The Hon’ble Supreme Court held that the certificates forged to get admission in a college or university shall not be considered as valuable security under Section 467 of the IPC, however, such offence will be considered under Section 471 read with Section 465 of the IPC.

Inder Mohan Goswami and Another v. State Of Uttaranchal and Others, 2007 – In this case, the respondents had committed a breach by purporting to sell a particular part of the land for which an agreement to sell was procured by misusing the Power of Attorney given to them for some other part of the land. They were also executing sale deeds without any right whatsoever. The appellants contended that the trial court was unjustified in taking cognizance of the matter wherein no prima facie case was established against the appellants. They further stated the trial court was gravely mistaken in not considering the facts of the case in toto in the required perspective. It was also stated that the trial court failed to correctly comprehend the investigation reports submitted by two different investigating officers. The court noted that the respondents in the case had committed a criminal breach by scheming to sell a particular part of the land illegally for which an agreement to sell was obtained by abusing the Power of Attorney given to the respondents for some other part of the land. In this case, one of the respondents was held guilty under Section 467 of the IPC.

Swapna Patker v. State Of Maharashtra And Ors, 2021 – In this case, a doctor was accused of using a fake Ph.D certificate for practising in a hospital in Mumbai. However, the Bombay High Court granted interim bail to the doctor on the grounds that the Ph.D certificate does not fall within the ambit of Section 467 of the IPC.

Understanding Section 471 IPC

Section 471 of the IPC, 1860 deals with the concept of using a forged document or an electronic record as a genuine one. It states that any individual who dishonestly or fraudulently makes use of any document or electronic record as genuine which they know to be forged or have a reason to believe that such document or electronic record is forged, then such individual shall be punished in the same manner as if they have forged document or electronic record.

Ingredients of Section 471 IPC

The following are the ingredients of Section 471 of IPC, 1860 –

The document or electronic record is a forged one, wherein such forgery is done dishonestly or fraudulently to gain pecuniary or non-pecuniary benefit.
The accused made use of the forged document or electronic record as a genuine one.
The accused knew or had a reason to believe that such document or electronic record is a forged one.
The accused made use of the said document or electronic record in spite of knowing it to be a forged one.

Illustration

Let us understand the concept of Section 471 of IPC through examples. James uses a forged passport in order to gain entry into the Indian territory. He will be held liable under Section 471 of IPC as he knew that the passport is a forged one and he still tried to use it as a genuine one.

A person by the name Bond forges a promissory note makes use of it knowing it to be a falsified legal instrument, here Bond will be held liable under Section 471 of IPC.

Whether an offence under Section 471 IPC is bailable or non-bailable?

As discussed earlier, the offences under IPC are classified into bailable and non-bailable offences. Any individual who commits an offence under Section 471 of the IPC shall have the right to get bail, i.e., it is a bailable offence.

Cognizance of Section 471 IPC

If any individual commits an offence under Section 471 of IPC then they will be arrested by the police without requiring a warrant and they shall be presented before the Magistrate within 24 hours by the police. Thus, it can be understood that an offence committed under Section 471 of the IPC is a cognizable offence.

Punishment under Section 471 IPC

The offence under Section 471 is cognizable, bailable, and non-compoundable. It may be tried by a First Class Judicial Magistrate. If the forgery is of a promissory note of Central Government, it is cognizable.

OFFENCE	PUNISHMENT	COGNIZANCE	BAIL	TRIABLE BY
Using as genuine a forged document which is known to be forged	Same as for Forgery of such document	Cognizable	Bailable	First class Judicial Magistrate
When the forged document is a promissory note of the Central Government	Same as for Forgery of such document	Cognizable	Bailable	First class Judicial Magistrate

Case laws dealing with Section 471 IPC

M. Fazal llahi v. Mohan Lal and Ors., 1922 – In this case, the appellant, i.e., M. Fazal llahi in the High Court of Lahore applied for the sanction to the prosecution of the respondents, i.e., Mohan Lal and Others as per Section 471 of the IPC. It was observed that whenever and wherever any forged document or electronic record is used as a genuine one with a fraudulent or dishonest intent then an offence under Section 471 is committed. Such offence is cognizable, bailable, non-compoundable and triable by a first class Judicial Magistrate.

Jibrial Diwan v. State of Maharashtra, 1997 – In this case, certain letters were prepared by the accused on the letterhead of a minister wherein invitations were written to invite actors for a cultural show. However, those letters did not bear the signature of the minister. It was established that neither any wrongful gain nor wrongful loss was caused to anyone by the delivery of the letters. The Hon’ble Supreme Court ruled that the act was not done dishonestly and so the conviction of the accused under Section 471 of the IPC was not approved.

A.S. Krishnan v. State of Kerala, 2004 – In this case, the father of a student forged the marksheet of his son in order to secure admission in a medical course. However, the total marks in the forged marksheet contained more marks than that which a student could score even if he secured one hundred per cent marks. The material on record clearly contradicted the plea of innocence. The marksheet in question was purported to have been drawn up by the father after revaluation, however, it indicated the same date of seal as that of the original marksheet. Thus, the plea that the student and his father did not know the marksheet to be forged was not maintainable. The Hon’ble Supreme Court held that the accused were liable to be convicted under Section 471 of IPC as they did not just possess the knowledge that the marksheet was forged but also had a reason to believe that the said marksheet was forged before they used it.

Ibrahim and Ors v. State of Bihar and Anr., 2009 – In this case, the first accused who had no connection with a piece of land and who had no title thereto, had executed two registered sale deeds dated 2.6.2003 in favour of the second accused dishonestly and fraudulently. It was held that a person is said to have made a false document in the following circumstances –

If he has made or executed a document claiming to be someone else.
If he has altered or tampered with the document.
If he has practised deception to obtain a certain document or has obtained such document from an individual who is not in control of his senses.

Sheila Sebastian v. R. Jawaharaj, 2018 – In this case, the complainant alleged that the accused with the assistance of an imposter impersonating as Mrs. Doris Victor procured a Power of Attorney in his name as if he were her agent. It was also stated that the accused, by making use of the aforementioned Power of Attorney attempted to transfer the property of the complainant with the help of a mortgage deed. After hearing the matter, the Hon’ble Supreme Court held that the offence of forgery under Section 471 of IPC cannot be imposed on someone who has not committed it. The Apex Court further held that only when the components of Section 463 are satisfied an individual can be held liable for forgery.

Conclusion

The offence of forgery can be considered as a white collar crime that involves the creation of a false document or an electronic record or any other legal instrument with a malafide intent to defraud an individual. The offence of forgery is dealt with in detail under Chapter XVIII of the IPC, 1860 that enumerates the offences relating to the property and documents.

Section 463 of the IPC states that there must be an intention on part of the offender to establish a case of forgery and the burden of proof lies on the prosecution to prove that the accused has committed forgery. Further, Section 467 of the IPC talks about the forgery of valuable security, wills, any document that enables an individual to adopt a son, or to transfer any valuable security, or to receive or deliver money or any property whether movable or immovable, or valuable security, or any such legal instrument which appears to be receipt of money acknowledging the payment, or any receipt acknowledging the delivery of movable property or valuable security. Coming to Section 471 of IPC the offence of forgery occurs when an individual makes use of forged documents or electronic records as genuine ones by knowing or having a reason to believe that such documents or electronic records are in fact forged.

References

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The new registration requirement for Cat I and II AIF Managers facilitating co-investments

By

Shoronya Banerjee

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February 11, 2022

0

This article is written by Suha, pursuing a Diploma in US Technology Law and Paralegal Studies: Structuring, Contracts, Compliance, Disputes and Policy Advocacy from LawSikho.

Introduction

The Securities and Exchange Board of India (SEBI) introduced amendments to the SEBI (Alternative Investment Funds) Regulations, 2012, and SEBI (Portfolio Managers) Regulations, 2020 on November 9, 2021. The aforementioned amendments regulate co-investment opportunities provided by fund managers to investors (limited partners) of Category I or Category II alternative investment funds (Cat I/Cat II AIFs).

The newly amended regulations introduce a new category of portfolio managers, i.e. co-investment portfolio managers. An alternate investment fund manager under Category I and Category II will be required to register as a Co-investment Portfolio Manager if he/she decides to offer. Before we understand what co-investments are, let’s look into Alternative Investment Funds.

What are alternative investment funds?

Alternative investments are financial assets that do not adhere to any specific investment category. A financial asset that does not fall into any of the conventional equity, income, or cash categories is known as an alternative investment. Alternative investments include private equity or venture capital, hedge funds, real estate, commodities, and tangible assets.

Alternative investments, which were traditionally exclusively available to institutional or accredited investors, are now available to individual and retail investors through alternative funds.

Regulation 2(1) (b) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 defines alternative investment funds (AIFs) in India. Any privately pooled investment fund (whether from Indian or foreign sources) in the form of a trust, a company, a body corporate, or a Limited Liability Partnership (LLP) is referred to as an alternative investment fund. As a result, alternative investment funds are private funds that are otherwise not subject to the jurisdiction of any regulatory agency in India.

Alternative investment fund managers typically have greater experience than mutual fund managers in handling entrepreneurial funds and/or mutual funds, allowing them to provide superior management and innovation. Alternative investment funds offer High Networth Individuals (HNIs) the opportunity to produce greater returns through customized investments.

A private equity investment, by its very nature, is a blind pool investment vehicle for investors. Investors of an alternative investment fund, also known as Limited Partners (LP), do not enjoy the liberty of participating in the selection of transactions to be made by the alternate investment fund. Investment and transaction selections are made entirely by the alternate investment fund manager.

What are co-investments?

Co-investments represent investments made alongside a ‘main fund.’ Co-investments are a mechanism for Limited Partners to put more money into deals alongside the main fund. As a result, the management fee and carry (a portion of the earnings) for Limited Partners or investors in funds are reduced. Over the last decade, the co-investment framework has picked up steam in the Indian fund management business.

Co-investment is a parallel investment alongside the alternate investment fund. When an investment opportunity is being considered for the alternate investment fund by the fund manager, the fund manager may disclose the deal opportunity to the Limited Partners about investee entities of alternate investment fund requiring more capital in a given round. This allows the alternate investment fund manager to utilise a lesser amount of capital and consequently allows the alternate investment fund to participate in a larger number of investments. After the alternate investment fund manager informs the investors about the investment opportunity, it is up to the Limited Partners to make their own investment decision. The approach of co-investing through alternate investment funds goes against the pooling concept of the alternate investment fund.

Limited Partners use funds as a source of diversification and discovery, especially in the unlisted market, and co-investments are an important aspect of the Limited Partner-General Partner relationship. Co-investments are not officially mentioned in India’s alternative investment funds legislation, which describes alternative investment funds as pooling vehicles. SEBI’s recent investigation appears to be a technique of better understanding market practices and their prevalence.

Co-investments are a significant component of private equity and venture capital funds around the world, and they serve a series of objectives for Limited Partners, including gaining access to deals and transactions, and lowering the fee and carry base. This also permits investors with small teams to benefit from a fund manager’s skill in due diligence and subsequently monitoring the investment till exit.

Limited partners in a typical co-investment do not pay a fee or carry to avoid creating biases or conflicts for the fund manager. When executed properly, co-investments can benefit all three parties involved: the corporation, the fund manager, and the Limited Partner.

Who is a Co-investment Portfolio Manager?

Limited Partners of an Alternate Investment Fund are obligated to make co-investments only through Co-investment Portfolio Managers licensed under the SEBI Portfolio Manager Regulations.

AIF managers who are also registered portfolio managers and wish to provide co-investment services through the portfolio management route must notify SEBI in advance. SEBI has prescribed a separate registration form for a Co-investment Portfolio Manager. Co-investment Portfolio Managers are portfolio managers of a Category I or Category II Alternative Investment Fund that facilitate the option of co-investment.

Co-investment Portfolio Managers are required to provide services only to the investors of Category I or Category II Alternative Investment Fund; and provide services only in unlisted securities of investee companies where such Category I or Category II Alternative Investment Fund make investments.

Any other manager who is not a registered portfolio manager and seeks to provide co-investment services through the portfolio management route must apply for portfolio manager registration with SEBI. If a portfolio manager wishes to provide portfolio management services (PMS) other than co-investment as a result of their registration, they must comply with all terms of the PMS rules, including eligibility criteria, as well as obtain SEBI’s prior approval.

The co-investment structure and registration requirement after the amendment

1. Co-investment Portfolio Manager registration criteria

SEBI has set up a separate registration form for a Co-investment Portfolio Manager, which must be filed along with the draft disclosure document and draft client agreement with SEBI. SEBI Portfolio Management Regulations prescribe detailed requirements on mandatory contents of the client agreement.

2. Investments permitted to Co-Investment Portfolio Managers

Co-Investment Portfolio Managers shall invest 100% of the assets under management in unlisted securities of investee companies where Cat I and II AIFs managed by it as manager, has made investments.

3. The exception to net worth requirement

For Co-investment Portfolio Managers, the net worth requirement for registration as a portfolio manager has been lifted.

4. Non-applicability of minimum investment criteria

Co-investment Portfolio Managers are not subject to the minimum INR 50 lakh investment criteria that apply to the clients of a portfolio manager.

5. Principal officer

The Co-investment Portfolio Manager may appoint a member of the manager’s key investment team as the ‘Principal Officer’ (as specified by SEBI PM Regulations) who qualifies the SEBI Alternative Investment Funds Regulations’ criteria (i.e., 5 years of experience and professional qualifications). In this case, there is no requirement to designate a separate ‘Principal Officer.’ For the SEBI PM Regulations, the compliance officer’s duty can be fulfilled by the same individual.

6. Terms of co-investments

Investment by the co-investor should be on the same terms as Cat I or II AIF. The timing of exit by the co-investor has to be identical to that of the Cat I or II AIF.

The challenge is that, as stated previously, not all such co-investments would be under the alternative investment funds manager’s control to guarantee that the terms are identical to those of the alternative investment funds.

7. Documentation requirement

The amendment appears to indicate that the Disclosure Document (which portfolio managers are expected to prepare) is not required to be made available on the manager’s website. It is, nevertheless, still necessary to file it with SEBI.

8. Periodic reporting

Portfolio managers will be required to submit a monthly report, presented in the updated format, on their portfolio management activity on the intermediaries site within seven working days of the end of each month, according to the regulator.

9. Quarterly reports

Portfolio managers will be required to provide a quarterly report to their customers in accordance with the amended structure, which includes details of co-investment opportunities given by the portfolio manager.

From April 2022 onwards, reporting requirements in the updated reporting formats will apply to monthly reports to SEBI and quarterly reports to clients.

10. Operating expenses

SEBI clarified that the provisions of the PMS rules concerning fees and charges, as well as portfolio managers’ direct onboarding of clients, will not apply to co-investment services. These provisions will not change for portfolio management services other than co-investment. Clients will not be charged any upfront fees by portfolio managers, either directly or indirectly, under the PMS Regulations.

Over and above the fees charged for portfolio management service, operating expenditures excluding brokerage will not exceed 0.50% per year of the client’s average daily assets under management (AUM). According to the guidelines, no costs will be assessed at the time of direct onboarding of clients other than statutory charges.

11. Withdrawal

Since Cat I and II AIFs are close-ended funds having fixed tenures, investors engaging in co-investment concerning Cat I and II AIFs would have no regulatory right to withdraw from co-investments when the portfolio management services with the Co-investment Portfolio Manager were voluntarily or compulsorily terminated.

12. Appointment of a custodian

Custodians are only necessary for alternative investment funds with a corpus of more than Rs. 500 crore. The requirement to appoint a custodian separately for co-investments by Co-investment Portfolio Manager has been waived off otherwise.

13. Prohibition of B2B arrangements

Before the Amendment Regulations, an Indian entity that is also an alternative investment funds management could provide investment advice to an overseas fund manager, but this now seems to be prohibited.

Conclusion

In addition to the existing compliance requirements as alternative investment funds managers, the Amendment Regulations appear to increase the compliance burden on alternative investment funds managers by requiring them to register as portfolio managers with SEBI to offer co-investment opportunities to the alternative investment fund’s investors.

The registration requirement will lengthen the time it takes for fund platforms to get up and running, as it will necessitate more filings with SEBI, as well as increasing compliance expenses for fund managers.

This raises the cost of offering co-investment management, which may dissuade fund managers from extending such a right to alternative investment fund investors, affecting Limited Partner sentiment when allocating to alternative investment funds.

References

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All about Section 409 and 447 IPC

By

Rachit Garg

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February 10, 2022

0

This article is written by Abanti Bose, studying at Amity University Kolkata, India. The article provides an analysis of the essential requirements, objectives and judicial pronouncements concerning Sections 409 and 447 of the Indian Penal Code, 1860.

Introduction

In India, the Indian Penal Code, 1860 specifies the gravity of various crimes and states the quantum of punishment. The Code defines various activities that are considered to be a crime, their scope, nature, penalties and punishments levied in case of commission of such offences. It is a comprehensive Code that covers the crucial elements of criminal law. The Code extends to the whole of India and it consists of 511 Sections divided into 23 Chapters. The significance of the Indian Penal Code, 1860 is to govern criminal justice all over the country without any inconsistencies.

Section 409 and 447 of the Code entails a criminal breach of trust by a public servant, banker, merchant or agent and the punishment for criminal trespass respectively. The legislature in both Sections has meticulously laid down the ingredients necessary for the commission of such offences, the categories of individuals who will be held responsible, the specified amount of punishment that will be granted by the judiciary. The main goal of the legislature behind laying down these sections was to protect the possession of a property.

What is a criminal breach of trust

Section 405

Criminal breach of trust is defined under Section 405 falls under Chapter 17 of the Indian Penal Code, 1860 dealing with offences against property. It lays down that any person who entrusted with a property of another person;

dishonestly misappropriates,
converts to his own use of the property, or
dishonestly uses or disposes of the said property violating any direction of the law prescribing the mode in which such property is to be discharged.

Then he shall be guilty of committing the offence of criminal breach of trust.

There are two distinct parts involved in the offence of criminal breach of trust. The first comprises the creation of an obligation in relation to the property over which dominion or control is acquired by the accused. The second is misappropriation or dealing with the property dishonestly and contrary to the terms of the obligation created.

Section 409

However, Section 409 of the Code talks about the criminal breach of trust by a public servant, banker, merchant or agent. It states that any person who is at their capacity as a public servant, or as a banker, merchant, broker, agent, etc. entrusted with property or any dominion over a property commits criminal breach of trust concerning that property shall be punished with imprisonment for life or a term which may extend to a period of ten years and they shall also be liable to fine.

This Section is attracted when an offence regarding property is committed by a public servant, banker, merchant, agent, etc. As it is expected from the above categories of individuals to discharge their duties honestly and without negligence and whenever they fail to do so they shall be liable to punishment.

The offence mentioned under this section is cognizable, non-bailable, non-compoundable and triable by a Magistrate of first class.

What is known as criminal trespass under the code

Section 441

Criminal trespass is defined under Section 441 of the Code. Criminal trespass is committed when any person enters the property in possession of another person with the intent to commit an offence or to insult, intimidate or annoy the person who is in possession of such property. The offence of criminal trespass is directed towards the protection of possession of the property.

Section 447

Section 447 of the Indian Penal Code, 1860 also falls under the Chapter that deals with offences against property. This Section entails the punishment for criminal trespass. Now, Section 447 states that whoever commits the offence of criminal trespass shall be punished with imprisonment for a term that may extend to three months or a fine of five hundred rupees or with both. However, in order to attract this section, an actual personal entry by the accused must take place.

Ingredients necessary to prove charges under Section 409 and Section 447

Ingredients necessary to attract offences under Section 409

In order to bring an action under this Section, it is essential to establish the following facts:

This Section states that the offence must be committed by a public servant, broker, attorney or agent.
The accused was entrusted with the property.
The word “dishonestly” in the Section portrays the presence of mens rea.
And lastly, the accused must commit a criminal breach of trust in respect of the property entrusted.

Ingredients necessary to attract offences under Section 447

In order to bring an action under this Section, it is essential to establish the following facts:

There must be an unauthorised entry into another person’s property against the will of the person who is in possession of such property.
Such entry must be with an intention to commit an offence or to insult, intimidate or annoy the person who is in possession of the property.
The person must enter the property lawfully but stay in the property of another person unlawfully.

Views of the judiciary

Section 409

S.P. Verma vs. State of Bihar, 1972

In this case, the accused had access to the keys of a safe, thus it is his duty to account for the contents of the safe including the cash as he was the only one who had access to the safe and all the duplicate keys were kept inside the safe. Unless the accused could provide evidence that he parted with the keys of the safe he was under a duty to account for the contents of the safe. Hence, the Court found the accused guilty under Section 409 of the Code.

Sardar Singh vs. State of Haryana, 1976

However, in Sardar Singh vs. State of Haryana, it was stated that mere failure or omission to return the property does not constitute an offence under this Section. The accused was entrusted with the receipt book, however, there was no evidence to establish that he dishonestly misappropriated the receipt book or converted it to his own use or dishonestly used or disposed of the receipt book. Therefore, it was held by the Supreme Court that the accused must have lost or misplaced the receipt book and hence was unable to return it to the superior authorities. It was further stated by the court that Section 409 of the Code requires more than mere failure or omission to return the receipt book by the accused. The prosecution has to go beyond reasonable doubt and show that the accused dishonestly misappropriated or converted the receipt book to his own use or dishonestly used or disposed of it.

State of Gujarat vs. Jaswantlal Nathalal, 1967

In State of Gujarat vs. Jaswantlal Nathalal, it was contended before the Court that the government sold cement to the accused on the condition that the cement will be used for construction work. However, a certain amount of the cement was diverted to a godown. Therefore, the accused was prosecuted under the offence of criminal breach of trust. The Supreme Court held, that the term ‘entrustment’ carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner.

Furthermore, it is important to note that a person handling the property must have confidence in the person entrusted with the property so as to create a fiduciary relationship between them. Thus, the court stated that no offence of criminal breach of trust was committed as a mere transaction of sale cannot amount to an entrustment.

Jaswant Rai Manilal Akhaney vs. State of Bombay, 1956

In this case, the accused was charged under Section 409 of the Code for committing the offence of criminal breach of trust. It was held that in order to attract an offence under Section 409 of the IPC it is necessary to pledge the securities with the bank for a certain purpose which would amount to entrustment.

Section 447

Kanwal Sood vs. Nawal Kishore, 1982

In the case, Kanwal Sood v. Nawal Kishore, the premises “Aranaya Kutir” was owned by Shri R.C. Sood. He executed a gift deed in favour of Shree Anand Mayee Sangh, Dehradun, with a stipulation that the benefactor shall remain in possession of the premises during his lifetime and after his death, his widow if alive would remain in possession. Shri Sood invited the appellant the widow of his brother and since then she has been residing peacefully at his house but after his death, Shri Nawal Kishore as secretary of the Anand Mayee Sangh, threatened her to vacate the premises or else he would file a case against her constituting the offence of criminal trespass.

However, it was held by the Supreme Court that an essential ingredient of the offence of criminal trespass is the intention to commit an offence. The appellant must enter the property in possession of another person with the intention to commit an offence to be held guilty under Section 447. A mere occupation, even illegal, cannot amount to criminal trespass as there is no intention of the appellant to commit any offence or to intimidate, insult or annoy any person in possession.

Trilochan Singh vs. Director, Small Industries Service Institute, 1962

In this case, it was held by the Madras High Court, that writing love letters and delivering such letters to an innocent girl. That annoys her, then the person committing an act would be guilty of the offence of criminal trespass under Section 447 of the Indian Penal Code, 1860.

Conclusion

Hence in order to constitute an offence under these Sections, it is necessary to fulfil all the essential criteria as in the case of Section 409 the offence must be committed by a person who has dominion over the property like a public servant, broker, attorney or agent. The person handing over such property must have confidence in the person so as to create a fiduciary relationship. And finally, dishonest intention to misappropriate is a crucial fact that must be proved to hold a person liable under Section 409. And for Section 447, the required criteria for the commission of the said offence are unauthorised entry into another person’s property and the entry must be with an intention to commit an offence or to insult, intimidate or annoy the person who is in possession of the said property.

Therefore, it can be stated that the provisions laid down in the Code concerning these sections are elaborately mentioned and the punishment for committing such offence is quite grave so as to cope with the problem of criminal breach of trust and criminal trespass. The judiciary has also taken adequate steps to prevent such offences as can be seen from the above-mentioned judgements. Thus, the existing provisions penalising these offences are sufficient and need no amendment but the only concern is the effective implementation, as well as application of the law since a lot of cases go reported and with a thorough investigation, such cases will be accounted for.

References

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All you need to know about the Constitution of Pakistan

By

Shoronya Banerjee

-

February 10, 2022

0

This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed analysis of the Constitution of Pakistan.

This article has been published by Shoronya Banerjee.

Table of Contents

Introduction

On April 10, 1973, the National Assembly overwhelmingly enacted Pakistan’s third Constitution, which is the present Constitution of Pakistan. The fact that all of the main political parties agreed on the text and signed it before it was presented to the National Assembly made it exceptional. Pakistan’s Constitution guarantees the country’s parliamentary democracy. Fundamental rights, provincial autonomy, and local governance are all guaranteed along with it. It also promotes a sense of equality among the federating units by providing all provinces equal representation in the upper chamber. The official name of the nation, according to the Constitution, is the “Islamic Republic of Pakistan.” The Preamble of the Constitution expresses unequivocally that Almighty Allah alone has dominion over the whole universe, and that the authority to be exercised by the people of Pakistan within the limitations established by Him is a sacred trust. The people of Pakistan have expressed their desire to construct an order in which the state exercises its powers and authority through people-selected representatives. The present article discusses the Constitution of Pakistan in detail.

History behind the Constitution of Pakistan

The British imperial authority granted independence to its Indian colony at the conclusion of World War II, and the British Parliament adopted the Indian Independence Act, of 1947 to that aim. On 14 August 1947, the British Crown ceded its sovereign rights over India via the Act, and those powers were passed to the newly constituted dominions of India and Pakistan. The Government of India Act, 1935, which had previously served as British India’s Constitution, was revised to align it with the goals and objectives of independence set forth in the 1947 Act. Until the newly constituted dominions’ constituent legislatures produced their own Constitutions, the combination of these two constitutional documents operated as an interim constitutional order for both countries.

The first Constitution of Pakistan was drafted in 1956 after three Governor Generals, four Prime Ministers, two constituent legislatures (1947-1954 & 1955-1956), and nine years of lengthy Constitution-making. All Hindu minority parties and the major Muslim political party (the Awami League) from East Pakistan, the country’s most populous region, voted against it on the last day of its adoption (February 29, 1956). The 1956 Constitution failed to prevent the political instability that swept the whole country after its promulgation, eventually resulting in its abrogation and the imposition of the country’s first martial law on October 7, 1958, due to a lack of consensus among ethno-national factions.

The current Constitution, enacted by the third constituent assembly in 1973, was suspended twice by military coups led by General Zia-ul-Haq (1977-1985) and General Musharraf (1999-2002), and when it was restored’ in 1985 and 2002, the military regimes changed it fundamentally, changing its Islamic and federal character. The giving of power to the President to dissolve the lower chamber of the federal legislature was one such modification on both occasions. The Islamic character of the State and federalism were the two vexing questions that prevented ethno-national groups from reaching consensus on the constitutional design of the instruments that have governed the polity in the three constituent assemblies of Pakistan (1947-1954, 1955-1956, 1972-1973), producing the 1956 and 1973 Constitutions (current).

Shaping of Pakistan’s Constitution

Two opposing views of identity, expressed by two contending forces, have shaped and continue to shape Pakistani federal discourse. Despite the multiethnic and severely divided nature of the society, the centripetal forces, representing the state elites, have sought to create a homogenous society and a monolithic national identity by deploying Islam as a uniting factor in the service of constructing a centralized Muslim Nation-State. On the other hand, centrifugal forces representing various ethnic, linguistic, cultural, and regional groups have been pushing back against the officially sponsored nation and state-building project, making counter-demands for constitutional recognition of the polity’s multiethnic nature and accommodation in a multinational framework within a decentralized federal order. Divergent perspectives have impacted not just the federal debate, but also the creation of all constitutional instruments.

Members of the Constituent Assembly, which produced the present Constitution from 1972 to 1973, were elected in 1970 while the country was still unified. The independence of East Pakistan (now Bangladesh) in 1971 drastically changed the country’s political landscape. Despite this, no new elections were held, and the Constituent Assembly for Pakistan was established by MPs elected from West Pakistan in the 1970 elections.

North-West Frontier Province (NWFP), now Khyber Pakhtunkhwa and Balochistan, two of Pakistan’s four provinces at the time, did not endorse the 1973 Constitution. The secession of East Pakistan altered the demographic makeup of the country, as Punjab became the biggest province, with Punjabis accounting for more than 60% of the population, outnumbering all other significant ethno-national groups from the remaining three provinces combined. The Pakistan People’s Party (PPP) won a majority of seats in the assembly from the two largest provinces of Punjab and Sindh, resulting in the formation of a federal government and provincial administrations in both. The National Awami Party (NAP) secured a majority of seats in the Constituent Parliament and formed the opposition in the NWFP and Balochistan provinces. Only one of the opposition’s 400 amendments was adopted during their time in the legislature. In the absence of opposition members, the remaining two-thirds of the draft Constitution was accepted, resulting in the lapse of sixteen hundred changes proposed by opposition members in those areas of the draft Constitution. On the penultimate day of the Constitution’s ratification, the opposition appeared in the Assembly, and the majority of its members signed the draft Constitution under threat of treason charges. The 1973 Constitution contains 280 Articles and 7 Schedules and establishes a centralized federal system.

The centralised federal system laid down by the Constitution

The centralised federal system as laid down by the Constitution of Pakistan includes the federal executive, federal legislature, and federal judiciary.

Federal executive

The president is the head of state and represents the republic’s unity. He or she is chosen by a simple majority of members of the federal legislature’s two chambers and the four provincial legislatures. The president can be impeached in a joint sitting of the federal houses if he or she is found unfit to hold office due to physical incapacity, or removed by votes of not less than two-thirds of the total membership. After each general election, members of the lower house of the federal legislature elect the prime minister, and the president appoints additional cabinet ministers on the prime minister’s suggestion.

The prime minister, or through him, the federal ministers, exercise the executive authority of the federal government in the name of the president. The president’s functions are aided and advised by the federal cabinet, which is led by the prime minister. Except in circumstances where the Constitution has entrusted the president with discretionary powers, the president must act on and in accordance with the recommendation of the cabinet or the prime minister in the discharge of her or his responsibilities. The prime minister is responsible for keeping the president up to date on all topics of domestic and international policy, as well as any legislative proposals that the federal cabinet intends to present to Parliament.

The prime minister may not be removed unless the president is persuaded that he or she has lost the confidence of the lower house majority. The president must call a meeting of the lower house and demand that the prime minister receive a vote of confidence. When the lower house votes a vote of no-confidence against her or him, the prime minister may be dismissed on the lower chamber’s initiative. The federal cabinet is accountable to both chambers of Parliament as a whole. The president has the authority to call, prorogue, address, and transmit communications to either chamber of Congress, individually or collectively.

The president also has the power to dissolve the lower house of the federal legislature, either on the prime minister’s advice or on her or his own initiative, if the house passes a vote of no confidence against the prime minister and no other member commands the support of a majority of the house members. Within ten days, the president signs laws enacted by the federal legislature. He or she may send a bill back to the legislature with a request that it be reconsidered in its entirety or in part, as well as any amendments proposed by her or him, in which case the bill will be reconsidered by the joint sitting of the legislature, and if passed by a majority of votes, it will be sent to the president for assent. The president must next provide his or her consent to the bill within 10 days, otherwise, it will become law automatically.

Federal legislature

Composition

The president, the lower house (National Assembly), and the upper house (Senate) make up the Parliament, the federal bicameral legislature. The National Assembly seats are divided based on population, with 342 seats distributed among the four provinces, FATA (Federally Administered Tribunal Areas), and the Federal Capital. Unless the president dissolves it sooner, the Assembly is elected for five years. The Senate has 104 seats, with 14 general seats, four women seats, four technocrat seats, and one non-Muslim minority seat in each province, giving each province equal representation. It has eight seats for the FATA, and four seats for the Federal Capital, including two general seats, one woman seat, and one technocrat seat.

Election

Elections to fill Senate seats allotted to each province are held using the proportional representation system, with the provincial legislative assembly voting with a single transferable vote. The Senate is not subject to dissolution and has a six-year term.

Functioning

With the exception of money bills, both chambers of the federal legislature have equal authority over all legislative matters under federal jurisdiction. A non-money bill can originate in either of the two chambers, and if there is a dispute between them, it must be considered in a joint sitting, and if passed by a majority of the members present and voting, it is forwarded to the president for assent.

The National Assembly is the only place where a money bill may originate and be adopted. A money bill can be recommended by the Senate, which the National Assembly may or may not accept. As a result, approving a money bill is solely the responsibility of the National Assembly. The president’s consent is required for any bill to become law. When a bill is delivered, the president must either sign it or, if it is not a money bill, return it to a joint session of Parliament with a message to rethink the measure or any portion of it, within 10 days. Whether or not the president signs the bill, it becomes law if a simple majority of the joint session of Parliament accepts it after such review.

The federal legislative list, which includes 71 subjects, is established by the Constitution, while provincial legislatures have exclusive legislative rights over subjects not included in the federal legislative list. A provincial legislature may freely transfer the power to create laws to the federal legislature on issues over which it has jurisdiction. The federal and provincial governments’ executive powers extend to subjects over which the federal and provincial legislatures, respectively, have legislative responsibility.

Federal judiciary

The 1973 Constitution establishes a judicial hierarchy, with the Supreme Court of Pakistan at the top and five high courts below it, each functioning in one of Pakistan’s four provinces and the federal capital. The administrative control of lower courts in each province is exercised by their respective high courts. The Supreme Court and the high courts have original constitutional jurisdiction in some matters, in addition to being appellate courts in civil and criminal cases. The Supreme Court has original and exclusive authority to resolve any dispute between and among the federal and provincial governments since it is a federal court. However, the Supreme Court’s jurisdiction to resolve such issues is restricted to delivering “declaratory rulings exclusively.” The Constitution also establishes a Federal Shariat Court, which has universal authority to study and rule whether any legislation or provision of law is incompatible with Islamic injunctions.

12 Parts and 5 Schedules of the Constitution of Pakistan

The Constitution of Pakistan has 12 Parts which have been discussed hereunder.

Part I : Introductory (Articles 1-6)

Articles 1 to 6 of the Constitution of Pakistan provide an introduction to the Constitution as a whole. While Article 1 lays down the territorial extent of Pakistan as a nation, Article 2 specifies Islam as the religion of the State. Article 3 ensures elimination of exploitation and Article 4 lays down the enjoyment of protection of the law and to be treated in accordance with the law, as the inalienable right of every citizen of the State. Article 5 establishes loyalty as the basic duty of every citizen towards the State and Article 6 presents high treason as the offence that every citizen should be aware of.

Part II : Fundamental Rights and Principles of Policy (Articles 7-40)

Part II of the Constitution of Pakistan is divided into two chapters, Fundamental Rights (Chapter 1) and Principles of Policy (Chapter 2). The list of Fundamental Rights that have been listed under Articles 8 to 28 of the Constitution of Pakistan has been provided hereunder:

Laws inconsistent with or in derogation of fundamental rights to be void (Article 8): any law, or any custom or usage having the force of law, in so far as it is inconsistent with the rights conferred by this Chapter, shall, to the extent of such inconsistency, be void and the State shall not make such laws.
Security of person (Article 9): No person shall be deprived of life or liberty save in accordance with law.
Safeguards as to arrest and detention (Article 10): No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest, nor shall he be denied the right to consult and be defended by a legal practitioner of his choice.
Right to a fair trial (Article 10 A): Every arrested individual has a right to fair trial.
Slavery, forced labour, etc. prohibited (Article 11): Slavery is non-existent and forbidden and no law shall permit or facilitate its introduction into Pakistan in any form.
Protection against retrospective punishment (Article 12): Proportionality and retrospectivity needs to be taken care of while punishing an individual.
Protection against double punishment and self-incrimination (Article 13): Double punishment and self-incrimination must be mandatorily avoided.
Inviolability of dignity of man, etc (Article 14): The dignity of man and, subject to law, the privacy of home, shall be inviolable.
Freedom of movement, etc (Article 15): Every citizen shall have the right to remain in, and, subject to any reasonable restriction imposed by law in the public interest, enter and move freely, reside and settle in any part throughout Pakistan.
Freedom of assembly (Article 16): Every citizen shall have the right to assemble peacefully and without arms, subject to any reasonable restrictions imposed by law in the interest of public order.
Freedom of association (Article 17): Every person has the right to organise groups or unions, subject to any reasonable legal limits imposed in the interests of Pakistan’s sovereignty, integrity, public order, or morality.
Freedom of trade, business or profession (Article 18): Every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business.
Freedom of speech, etc (Article 19): Every citizen has the right to freedom of expression and the press, subject to any reasonable restrictions imposed by law in the interest of the glory of Islam, the integrity, security, or defence of Pakistan or any part of it, friendly relations with foreign states, public order, decency, or morality, or in relation to contempt of court, commission of, or incitement to an offence.
Right to information (Article 19 A): Right to information is a fundamental right in the land of Pakistan which is subjected to reasonable restrictions as well.
Freedom to profess religion and to manage religious institutions (Article 20), Safeguard against taxation for purposes of any particular religion (Article 21) and Safeguards as to educational institutions in respect of religion, etc (Article 22): Every citizen has the right to profess, practice, and spread his religion, and every religious group and sect has the right to create, operate, and govern their own religious institutions.
Provision as to property (Article 23): Every citizen shall have the right to acquire, hold and dispose of property in any part of Pakistan subject to reasonable restrictions in the interest of the public.
Protection of property rights (Article 24): No person shall be compulsorily deprived of his property save in accordance with law.
Equality of citizens (Article 25): All citizens are equal in the eyes of the law and have the right to equal protection under the law. There will be no discrimination based only on gender. Nothing in this Article prevents the state from adopting particular provisions for women’s and children’s protection.
Right to education (Article 25 A): The State shall provide free and compulsory education to all children aged five to sixteen years in accordance with applicable laws.
Non-discrimination in respect of access to public places (Article 26): There shall be no discrimination against any person on the basis of race, religion, caste, sex, domicile, or place of birth when it comes to access to places of public enjoyment or resort that are not solely for religious reasons.
Safeguard against discrimination in services (Article 27): On the basis of race, religion, caste, sex, domicile, or place of birth, no citizen otherwise competent for employment in the Pakistani service will be discriminated against in any such appointment.
Preservation of language, script, and culture (Article 28): Subject to Article 251, any group of citizens with a distinct language, script, or culture has the right to conserve and develop it, and to form organisations for that purpose, according to the law.

Articles 29-40 of the Constitution deals with the Principles of Policy. It is the responsibility of each organ and authority of the State, and of each person performing functions on behalf of an organ or authority of the State, to act in accordance with those Principles in so far as they relate to the functions of the organ or authority. The Principles aim towards bringing social welfare in the State thereby promoting the socio-economic well-being of the people.

Part III : Federation of Pakistan (Articles 41-100)

The Federation in Pakistan can be categorized into three parts, namely,

Chapter 1: The President [Articles 41-49]

Article 41 guarantees that there shall be a President of Pakistan who shall be the Head of State and shall represent the unity of the Republic. Article 48 clarifies that the President shall be acting on the advice of the Cabinet or the Prime Minister.

Chapter 2: Majlis-e-Shoora (Parliament) [Articles 50-89]

The Majlis-e-Shoora is the Parliament of the State of Pakistan. Article 51 provides that there shall be three hundred and thirty-six seats for members in the National Assembly, including seats reserved for women and non-Muslims. Article 52 specifies that the term of a National Assembly should be five years.

Chapter 3: The Federal Government [Articles 90-100]

The Federal Government of Pakistan comprises the Cabinet under Article 91, Federal Ministers and Ministers of State under Article 92, the Prime Minister and the Attorney-General for Pakistan under Article 100.

Part IV : Provinces (Articles 101-140A)

Provinces under Pakistan’s Constitution comprises of the following:

Chapter 1: The Governors [Articles 101-105]

Article 101 (1) provides for the appointment of a Governor for each Province, who shall be appointed by the President on the advice of the Prime Minister. Article 105 lays down the function of a Governor thereby stating that subject to the Constitution, in the performance of his functions, the Governor shall act on and in accordance with the advice of the Cabinet, or the Chief Minister.

Chapter 2: Provincial Assemblies [Articles 106-128]

Articles 106-128 of the Constitution of Pakistan provide every detail associated with provincial assemblies. Article 106(2) lays down that a person is eligible to vote if:

he is a Pakistani citizen,
he is at least eighteen years old,
his name appears on the electoral roll; and
he has not been declared insane by a competent court.
Chapter 3: The Provincial Governments [Articles 129-140A]

Article 129 provides that provincial governments would consist of a Governor, the Chief Minister, and Provincial Ministers, which shall act through the Chief Minister.

Part V : Relation between Federation and Province (Articles 141-159)

The relation between the federation and the provinces can be understood in three parts, namely,

Chapter 1: Distribution of Legislative Powers [Articles 141-144]
Chapter 2: Administrative Relations between the Federation and Provinces [Articles 145-152]
Chapter 3: Special Provisions [Articles 153-159]

Part VI : Finance, Property, Contracts and Suits (Articles 160-174)

Article 160 lays down the provision for constitution of the National Finance Commission by the President, consisting of the Minister of Finance of the Federal Government, the Ministers of Finance of the Provincial Governments, and such other persons as may be appointed by the President after consultation with the Governors of the Provinces. Distribution of net proceeds of taxes between Federation and Provinces, making of grants-in-aid by the Federal Government to the Provincial Governments, the exercise of borrowing powers, are some of the notable functions of the finance commission.

Articles 166 to 171 deal with borrowing and audit. The appointment of an auditor-general will be carried out by the President as per Article 168. Functions and powers of the auditor-general have been provided under Articles 169 and 170 respectively.

The power to acquire property and make contacts have been discussed under Article 173 of the Constitution. Article 172 provides that any property which does not have a rightful owner will belong to the government of the province if located in a province or in all other cases to the federal government.

Part VII : The Judicature (Articles 175-212)

The distribution of courts in Pakistan can be understood by the following:

Chapter 1: The Courts [Articles 175-175A]
Chapter 2: The Supreme Court of Pakistan [Articles 176-191]
Chapter 3: The High Courts [Articles 192-203]
Chapter 3A: Federal Shariat Court [Articles 203A-203J]
Chapter 4: General Provisions Relating to the Judicature [Articles 204-212]

Part VIII : Elections (Articles 213-226)

Articles 213-221 deal with Chief Election Commissioner and Elections Commission. While Article 213 (1) provides that it is the President who appoints a Chief Election Commissioner, Article 213 (2) specifies that no person shall be appointed Commissioner unless he has been a judge of the Supreme Court or has been a senior civil servant or is a technocrat and is not more than sixty-eight years of age. Article 218 provides for the formation of an Election Commission to conduct elections to both Houses of Majlis-e-Shoora (Parliament). Electoral laws and conduct of elections have been discussed under Articles 222-226.

Part IX : Islamic Provisions (Articles 227-231)

As per Article 227 of the Constitution of Pakistan, all laws must be brought into compliance with the Islamic Injunctions as written forth in the Holy Quran and Sunnah, referred to as the Injunctions of Islam in this section, and no legislation shall be made that is in violation of such Injunctions. An Islamic Council formation for allowing and supporting Pakistani Muslims to conduct their lives in line with the values and teachings of Islam on an individual and community level, decide on repugnancy of laws, provide proposals for efforts to bring current legislation into compliance with Islamic injunctions, has been provided under Article 228.

Part X : Emergency Provisions (Articles 232-237)

Article 232 provides that emergency can be proclaimed to the President’s satisfaction if he believes that the security of Pakistan, or any portion of it, is threatened by war or foreign attack, or by internal disturbances beyond the control of a Provincial Government. Article 233 lays down that fundamental rights will be suspended during the emergency period. Article 235 lays down the provision for proclamation in case of a financial emergency.

Part XI : Amendment of Constitution (Articles 238-239)

While Article 238 provides that the Constitution may be amended by the Act of Majlis-e-Shoora (Parliament), Article 239 talks about the Constitution Amendment Bill, that is, the steps involved in amending a part of the Constitution.

Part XII : Miscellaneous (Articles 240-280)

Part XII of the Constitution of Pakistan can be understood in seven chapters, namely,

Chapter 1: Services [Articles 240-242]
Chapter 2: Armed Forces [Articles 243-245]
Chapter 3: Tribal Areas [Articles 246-247]
Chapter 4: General [Articles 248-259]
Chapter 5: Interpretation [Articles 260-264]
Chapter 6: Title, Commencement and Repeal [Articles 265-266]
Chapter 7: Transitional [Articles 267-280].

Schedules of the Constitution

The Constitution of Pakistan has five schedules, namely,

First Schedule: Laws exempted from the operation of Article 8(1) and (2).
Second Schedule: Election of President.
Third Schedule: Oaths of Office.
Fourth Schedule: Legislative Lists.
Fifth Schedule: Remuneration and Terms and Conditions of Service of Judges.

Important amendments to the Constitution

The Constitution of Pakistan has undergone 25 amendments as of 2022. The 25th Amendment Act (to mainstream the Federally Administered Tribal Areas), received the assent of the President on May 31, 2018. Some of the significant constitutional amendments have been highlighted hereunder.

Constitution (Seventeenth Amendment) Act, 2003

The Constitution (Seventeenth Amendment) Act, 2003 was a parliamentary validation of amendments made by Gen. Pervez Musharraf’s Legal Framework Order with certain changes. It was passed by the National Assembly on December 29, 2003, and by the Senate on December 30, 2003. It received the President’s assent on December 31, 2003.

Constitution (Eighteenth Amendment) Act, 2010

Pakistan approved significant revisions in April 2010 with the passage of the 18th Amendment, which reinstated many of the 1973 Constitution’s provisions. It curtailed the President’s powers and returned authority to the provinces. It restored the previous military head and President Pervez Musharraf’s constitutional reforms by restoring presidential powers to Parliament and the Prime Minister, including the ability to dissolve an elected Parliament and designate military chiefs. Despite the fact that commentators praised the amendment’s promise of devolution of powers from the federal government to the provinces, most anticipated that the allocation of natural-resource earnings between the federal government and the provinces would be difficult to accomplish.

Constitution (Twenty-First Amendment) Act, 2015

The Twenty-First Amendment (2015) permits military tribunals to circumvent the judiciary and hold trials for terrorism-related offences. The same remained in force until January 7, 2017. The Statement of Objects and Reasons provided that there was a unique scenario and set of circumstances that necessitate specific measures for the quick prosecution of terrorism, war, or insurgency against Pakistan, and the prevention of activities endangering Pakistan’s security. Miscreants, terrorists, and foreign-funded groups pose a major and unprecedented danger to Pakistan’s territorial integrity. Because of the unique scenario described above, it is necessary to make an appropriate constitutional change, and therefore, the Amendment Act was brought about.

Conclusion

A pattern of military coups interspersed with short-lived civilian government has weakened Pakistan’s Constitution. A democratically elected legislature did not write a Constitution until 1973. Even after then, coups and the demands of influential members of Pakistan’s political class have repeatedly changed the document. It has alternated between parliamentary democracy and one in which the president wields executive power. It also gave provinces more power and expanded fundamental rights to include access to education and information. The people and lawmakers in Pakistan sought the revisions as a reversal of actions made by previous military ruler and President Pervez Musharraf. Nevertheless, it is correct to state that Pakistan’s Constitution establishes overall guiding principles for the country’s administration.

References

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Deep dive into necrophilia and Indian laws

By

Shoronya Banerjee

-

February 10, 2022

0

This article is written by Khan Saba, pursuing Certificate Course in Real Estate Laws from LawSikho. The article has been edited by Prashant Baviskar (Associate, LawSikho) and Indrasish Majumder (Intern at LawSikho).

This article has been published by Shoronya Banerjee.

Table of Contents

Introduction

Despite the fact that the Indian Constitution is the world’s largest written constitution, it is silent on certain rights, rights that were unimaginable when the constitution was drafted. These rights are centered on the topic of whether or not a person has rights after death. Is a person recognized by the state after they have died? The answer to the latter is yes because enforcing a person’s will after his death is a clear illustration of the state’s recognition of a dead person; however, Indian laws and statutes cover the rights of a dead person in a very ambiguous manner. Necrophilia, for example, is a result of this.

The term ‘Necrophilia’ is derived from ‘nekro’ (dead body) and ‘philia’ (attracted to / love) and is defined as a paraphilia whereby the perpetrator gets sexual pleasure while having sex with the dead. A necrophiliac is a person who voluntarily indulges in such acts which are generally motivated by sexual desires.

A study by Jonathan P. does a good job of delivering 122 cases of necrophiliac behaviors or fantasies (88 from the literature and 34 unpublished cases). Necrophilia is divided into three categories: necrophilia homicide, “regular” necrophilia, and necrophilic fantasy. Necrophilia is not necessarily associated with insanity, mental impairment, or sadism. Possession of an unresisting and unrejecting companion is usually the most typical reason for engaging in necrophilia. Necrophiles frequently pick jobs that require them to interact with corpses. Despite having occupational access to corpses, some necrophiles committed homicide. This unusual disorder’s psychodynamic themes, defense mechanisms, and treatment are examined in this article.

Psychology behind necrophilia

Why do some people commit necrophilic acts? What is the psychology behind necrophilia? In this article, we are going to be looking into research that has focused on the motivations behind necrophilia in an easy-to-understand manner! By understanding why certain people commit necrophilia, we can learn a lot about human nature, as well.

There is a famous study on necrophiliacs, which gathered information on a sample of necrophiliacs including things such as their motivations, mental health, IQ, and other things. As you can imagine, it’s pretty hard to recruit a group of necrophiliacs since they aren’t exactly going to be upfront about it. So there isn’t too much data we can look at in this regard, but this study does a good job of informing us of the motive behind these acts. The researchers were able to get information on the motives of 34 necrophiliacs out of the 91 in the sample. 23 of the 34 stated that they wanted to be able to possess a romantic partner that was unresisting. This suggests to us that a load of traumatic romantic and social experiences is a key contributor here.

Fears of emotional abandonment were there for 7 of the 34 participants. There was a desire to reunite with a romantic partner. In other words, these people did not want to accept the death of their romantic partners. They didn’t want to believe they could leave them. The authors spoke about some possible events that could lead a person to the path of necrophilia.

Let’s use a made-up character, Tom, as an example. Tom developed poor self-esteem and lack of confidence in himself, which was further worsened after getting rejected by his romantic partner of 4 years, Samantha. For as long as he could remember his family was very emotionally avoidant and his desire for acceptance and love in his family was often affected by the violent fists of his father or the verbal abuse of his mother who often told him she never loved him and hated the fact that she ever gave birth to him. As time passed he was also hurt by numerous friends and he was unable to trust many people, as a result. Tom had been on a few dates after his relationship with Samantha ended, but each one ended horribly. As his fear of rejection by women and people, in general, continued to heighten, he began to desire more and more, a sexual object that could never reject him. At first, he resorted to his fantasies about women, but gradually he started to fantasize about having sex with a corpse. He had an increasing desire to act out these fantasies, and his job as a morgue attendant meant that he had occupational access to corpses. One day he finally acted on these impulses.

Nowadays, although not as extreme as the necrophiliac, we can see similar incidents in our society. Many people have experienced traumatic events. In one study using a representative national sample of around 3,000 people, the DSM-5 criteria were used to see how much trauma the average person experienced. It was estimated that 90% of the participants had been exposed to traumas such as sexual assault, physical assault, warfare, or accidents, and exposure to multiple traumas was the norm rather than the exception. These findings aren’t anything new. They have been replicated over and over again. True, it’s unlikely that a person will ever be insecure to the level of a necrophiliac, but it’s still important to understand the dynamic of all of your current relationships, and how the trauma you’ve experienced might be affecting your behavior.

Classification of necrophilia

Jonathan P. Rosman and Phillip J. Resnick defined two kinds of Necrophilia in 1989. The first is known as “genuine necrophilia,” which involves a strong sexual attraction to corpses. The second is “pseudo-necrophilia,” which is characterized by a temporary sexual attraction to corpses rather than a permanent erotic predilection for them.

Anil Aggrawal authored a study called “A new classification of necrophilia” in 2008. He mentioned in the article that there are at least ten different varieties of necrophiliacs. The following is a short description of the 3 different varieties of necrophiles:

1. Homicidal necrophiles

These necrophiles are the most dangerous of all the necrophiles. Homicidal necrophiles kill living individuals in order to have sexual relations with them. Because the sexual activity is undertaken on the fresh bodies of the deceased, such incidents are frequently referred to as “warm necrophilia.”

Sadism and passion are included in homicidal necrophilia. The case of American serial killer Jeffrey Dahmer is a well-known example. He was aroused by the fragments of his victims’ bodies that he preserved. He was also thought to have been aroused by the carcasses of dead animals.

2. Regular necrophiles

Even if they have the opportunity of having sexual intercourse with the living, this type of necrophile prefers intercourse with the dead. Even if they had the option, they do not enjoy having sex with living people.

This includes people who steal dead bodies from mortuaries and cemeteries. This does not include a graveyard attendant who had sex with the dead because a dead body was readily available to him. He would also fall into this category if he preferred to have sex with the dead even while he had the opportunity to have intercourse with the living. Intercourse with the living is available for regular necrophiles, but it does not change their preference.

3. Romantic necrophiliacs

These necrophiles have minor necrophilic inclinations and are unable to accept the fact that a loved one has passed away. They usually mummify the bodies of their loved ones and continue to have sexual relations with them. This inclination is usually temporary, but it can potentially last for years or even decades. Most necrophiles suffer from various mental illnesses and require psychiatric treatment.

Indian laws pertaining to necrophilia

Although Indian law is very unclear about a crime like necrophilia, they do not jeopardise the human rights of a person after their death. Article 21 of the Indian Constitution not only recognises the right to live with dignity and respect but also includes the right to die with dignity. The Supreme Court in Parmanand Katara v. Union of India, recognised that Article 21 provides for the right to life, fair treatment, and dignity, and these rights not only extend to living people but it also implies to the dead. In the case of Ashray Adhikar Ahiyan v. Union Of India, the High Court ruled that the dignity of the dead must be respected and that the deceased homeless people are entitled to a proper cremation according to their religious customs. In the case of Ramji Singh and Mujeeb Bhai v. State of U.P. & Ors., the Allahabad High Court stated that Article 21 rights also include the right to treat the corpse with the respect that he or she deserves throughout life and to protect the dignity of the deceased person. The court also said that the post-mortem should be avoided unless absolutely necessary.

According to Section 297 of IPC, “whoever enters the religious place, or sepulture with the intention and knowledge of hurting religious feelings and sacraments of any person, commits the offense of ‘trespass to burial grounds’ and is liable to be punished with imprisonment for a term which may extend to one year, or with fine, or with both.” As a result, the most important requirement for a person to be accused of necrophilia is trespassing on burial grounds, which does not suffice to penalize necrophilia in and of itself. This clause is insufficient to address necrophiliac behavior for a variety of reasons.

First and foremost, corpses and cadavers can be found in a variety of locations other than cemeteries, such as morgues, crime scenes, and so on. Secondly, even if they are detected partaking in any such act, individuals such as morgue keepers, morgue guards, or guards of the burial grounds cannot be held accountable because they did not commit a trespass.

Finally, even if the prosecution proves beyond a reasonable doubt that a person defiled a corpse by trespassing into the burial ground, he will be sentenced to one year in prison, a fine, or both.

Section 377 of the Indian Penal Code, on the other hand, states that “Whoever voluntarily has carnal intercourse against the order of nature with any man, woman or animal” may include necrophilia under its ambit. The Supreme Court stated in the case of Childline India Foundation v. Allan John Waters that there must be an act of carnal intercourse and that such act must be against the natural order to establish a criminal under Section 377. An act that is against the natural order must be extremely rare and cannot result in procreation. Although necrophilia appears to be against nature’s order, the term “voluntarily” makes it difficult to place it in this section.

This section only applies to voluntary acts of sexual intercourse that are contrary to nature’s order. Because the dead cannot give or refuse consent, determining whether necrophilia is voluntary or not becomes impossible. If the act is performed without consent, it is considered rape, and thus falls outside the scope of Section 377, which deals with unnatural offenses. Because of the ongoing disagreement over the term “voluntarily,” necrophilia is not covered under this section, thus the right to dignity of departed citizens remains unprotected.

Rising cases of necrophilia in India

Necrophilia is not provided the recognition it deserves in India. The Indian legal system lacks key legal safeguards and contains ambiguous laws, resulting in major loopholes for crimes such as necrophilia. Due to such potential loopholes, the judiciary, constrained by the law, is forced to acquit the accused. In the last decade, India has seen an increase in incidences of necrophilia, not only in places like mortuaries but also in cases where people are digging up buried bodies and even murdering others for raping their bodies.

The Nithari case (2006) is one of India’s most well-known examples of necrophilia, in which the accused and his servant were arrested after it was discovered that 19 girls had gone missing after visiting the accused’s home. Several pornographic CDs and naked images of various women and children were discovered in his home during the inquiry, and the accused and his servant were charged with murder, rape, kidnapping, sexual assault against children, and cannibalism. The servant admitted to the crimes and indicated that the accused was responsible for the deaths of 16 individuals. He used to murder his victims in his living room before dragging their bodies upstairs to a bathroom and attempting to rape them and then chop them into small pieces to cook them and throw the rest into the drainage behind his bungalow.

In 2018, a 20-year-old laborer from Gurugram admitted to raping the corpse of numerous of his victims in order to satiate his lust for sex and maximize his catch. In another case in Uttar Pradesh, it was discovered that a deaf and mute guy attempted to rape the woman, but when she fought, he strangled her to death and raped her corpse.

In May 2020, police in Assam detained a 50-year-old man for allegedly having sexual relations with the deceased body of a 14-year-old girl. Skarkur Lucas, a cemetery attendant from Ghana, admitted on a live streaming news channel in 2015 that he had many times sex with the dead bodies of girls in the mortuary because he didn’t have a girlfriend. In the majority of these cases, the offenders are charged with murder, rape, sexual assault, and cannibalism, depending on the circumstances, but not with necrophilia because the statutes are so broad. Because of the ambiguity of the laws, the state is unable to draft appropriate charges, and this nebulous crime goes unpunished.

International stakes on necrophilia

We will not be able to build perfect legislation unless and until we are willing to accept the views of worldwide communities. The same is true with Indian laws, which are updated on a regular basis to address gaps in the existing legislation. When it comes to brutal crimes like necrophilia, a comparable modification is required, and international rules have paved the way in some ways.

Although there is no federal legislation against necrophilia in the United States, certain federal states have passed laws prohibiting it. In terms of New Zealand law, Section 50 of The Crimes Act, 1961, provides for a two-year sentence for anyone who violates the dignity of a corpse, whether buried or unburied.

The act of defiling the deceased is also prohibited under Canadian law. “Whosoever improperly or indecently interferes with or offers any indignity to a dead human body or human remains, whether buried or not, is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years” according to Section 182 of The Criminal Code of Canada, 1985.

Although the Indian and Canadian provisions appear to be similar in phrasing, the Canadian provision is broader and covers everybody, whereas the Indian law only covers those who have trespassed on the burial grounds. In addition, Canadian law specifies a five-fold higher penalty than Indian law.

Conclusion

The heinous act of necrophilia is not only a crime against society, but it is also a crime against humanity. Denying the basic right to a respectful burial as well as a crime against the deceased’s feelings. Despite this, the legislation is stagnant and out of date in this area. However, the country appears to be in desperate need of better legislation.

The length of imprisonment stated in Section 297 against such a crime should be raised to establish a deterrent effect among individuals because the change would be difficult to achieve without laws that harshly penalize such illegal activities.

In addition, the Indian laws in this area appear confusing, necessitating revisions as well as increased penalties. It is past time for Sections 297 and 377 to be amended, or for a separate punitive provision to be added to portray a clear legal stance in this regard with severe penalties

The word ‘trespass’ should be removed from Section 297’s scope to ensure that no one, not even the guards of the cemetery, is exempted from its purview. Second, in addition to man, woman, and animal, the word ‘corpse’ might be incorporated in Section 377, which would undoubtedly attract Section 377 in the case of necrophilia.

References

Boureghda, S. S., Retz, W., Philipp-Wiegmann, F., & Rösler, M. (2011). A case report of necrophilia–a psychopathological view. Journal of forensic and legal medicine, 18(6), 280–284.
Aggrawal A. (2009). A new classification of necrophilia. Journal of forensic and legal medicine, 16(6), 316–320.
Necrophilia: An Understanding: June 2019 The International Journal of Indian Psychology 7(2):607-616 DOI:10.25215/0702.073
Rosman, J. P., & Resnick, P. J. (1989). Sexual attraction to corpses: a psychiatric review of necrophilia. The Bulletin of the American Academy of Psychiatry and the Law, 17(2), 153–163.

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Maintenance cases in favour of the husband

By

Rachit Garg

-

February 10, 2022

0

This article is written by Sarthak Kulshrestha, from Jagran Lakecity University, Bhopal and Oishika Banerji of Amity Law School, Kolkata. This article discusses some of the maintenance cases ruled in favour of the husbands.

Table of Contents

Introduction

The definition of maintenance as provided in the dictionaries in general is “support or subsistence.” The term “maintenance” is not specified in any religious community’s marital regulations. However, the right to claim maintenance is predicated on the presumption that the claimant lacks the financial resources to sustain themselves. The expenditures for necessities or requirements for the substance of life are usually covered by maintenance. It is not, however, only a right to the claimant’s survival. To determine the amount of maintenance, the court will consider the husband’s and wife’s possession of the property, the husband’s or wife’s capacity to work, the parties’ behaviour, and other factors. Before determining the amount of maintenance, the position of the parties and the standard of living they have enjoyed throughout the marriage must be taken into account.

The legal system of India sets out the provision of maintenance which has to be paid to the spouse, either husband or wife, depending upon the circumstances of a case. Personal laws like the Hindu Marriage Act, 1955, and Hindu Adoptions and Maintenance Act, 1956 contain the provisions for maintenance following the dissolution of a marriage. In Muslim personal laws too, maintenance is granted under the statutes like Muslim Women (Protection of Rights on Marriage), Act, 1986, and Muslim Women (Protection of Rights on Divorce) Act, 2019. The Special Marriage Act, 1954 is another legislation dealing with marriages irrespective of religion or faith which either of the party follows, the maintenance can be sought in this Act as well. Apart from the Personal laws, the Protection of Women from Domestic Violence Act, 2005 (PWDVA), and Code of Criminal Procedure, 1973 (CrPC) also contains the provisions of maintenance. Parties belonging to any religion can enforce their right to maintenance under these statutes. All of these provisions are intended to require a man to fulfill his moral commitments to society in regard to his wife, children, and parents. The inability of the wife, child, father, or mother to maintain themselves could lead to social problems, and it became the State’s concern not to allow such inability to grow into issues of greater magnitude, unless the consequences of such inability were checked by providing appropriate measures, with large-scale vagrancy being a likely offshoot. But little is known about a man being taken care of by his wife and children and therefore this article provides a few notable case laws where the judiciary has accepted the uncommon fact of the wife or the children maintaining their husbands or fathers.

Maintenance of husband : an insight

Article 39 of the Indian Constitution, which falls within the broad header of the Directive Principles of State Policy, states, among other things, that the State shall direct its policies toward ensuring that all citizens, men and women alike, have access to a sufficient means of subsistence, that children are provided with opportunities and facilities to develop in a healthy and dignified manner, and that childhood and youth are protected from exploitation and moral and material abandonment. The very principle of this article has been incorporated in Sections 24 and 25 of the Hindu Marriage Act, 1955. These are the two noteworthy provisions that must be taken into consideration while talking about the maintenance of husbands. Both these provisions are gender-neutral in their approach and therefore can be invoked in maintenance suits involving the husband as the aggrieved party.

It is true that Section 24 of the Hindu Marriage Act, 1955 (maintenance pendente lite ) allows any party to file a maintenance application if the other party is able to give maintenance and the other party has no means of sustenance. However, this does not imply that a husband who is otherwise capable of earning a livelihood should cease working and rely on his wife’s earnings. In the case of Govind Singh v. Smt. Vidya (1999), that appeared before the Rajasthan High Court, it seemed that the appellant, Govind Singh, had rendered himself incompetent by ceasing to operate the hired auto-rickshaw. It was a well-established Anglo-Saxon law precept that no one may be permitted to become incapacitated and that adage holds true in the case of a working husband. The Court, therefore, observed that a person who voluntarily incapacitated himself from earning, would not be entitled to claim maintenance from the other spouse.

List of maintenance cases in favour of the husband

There have been several cases in which the Courts gave the decision in favour of the husband and rejected the claim of maintenance to the wife either due to the wife’s own fault or her sound financial condition. Let us look into them one by one.

Shiv Kumar Yadav v. Smt. Santoshi Yadav (2004)

In the case of Shiv Kumar Yadav v. Smt. Santoshi Yadav (2004), a revision petition was filed by the husband, Shiv Kumar. The facts leading to this petition are briefly explained hereunder as:

After marriage, the husband took his wife to his home located in village Kanhera. As per the allegations in the petition, the husband started harassing his wife and subjected her to cruelty. She left the matrimonial house and went to her maternal grandfather’s house. Thereafter, she filed an application under Section 125 of CrPC for maintenance. Her parents were labourers and were not able to maintain her, and she was also not able to maintain herself. On the other hand, the husband had an annual income of 20,000/- rupees per month.
The Magistrate dismissed the application as the wife categorically stated before the Court that even if the husband assures her not to make any dowry demands and will not subject her to cruelty, she will not return to the home.

The Magistrate rejected the application filed by her, on the ground given under sub-section 4 of Section 125 CrPC. It states that maintenance cannot be granted if the wife abstains from returning to the matrimonial home and lives separately without any sufficient reason. The order was reversed by the Additional Sessions Judge but in the revision petition, the High Court of Chattisgarh found that the order of the Judicial Magistrate was correct, as Shiv Kumar, the petitioner proved that his wife-respondent was living separately without any reason thus, she lost her claim to maintenance.

Lalit Mohan v. Tripta Devi (1988)

The 1988 case of Lalit Mohan v. Tripta Devi was one of the few early cases that dealt with the maintenance of the husband by his wife. The case appeared before the Jammu & Kashmir High Court to the Single Bench of Justice R Sethi.

Facts of the case

In the trial court of Sub Judge, Reasi, the respondent-wife (Tripta Devi) sought to dissolve the marriage by obtaining a divorce decree under Section 13 of the Jammu and Kashmir Hindu Marriage Act, 1955. The respondent-wife claimed that the couples’ marriage was solemnized on October 13, 1976, in accordance with Hindu rituals and traditions. After a year, the spouse was involved in a terrible car accident and lost his mental stability for a period of time. The parties’ relations got tense and deteriorated day by day. The respondent claimed that her spouse had battered her and subjected her to cruelty over a period of more than four years. The husband’s (petitioner, Lalit Mohan) treatment towards his wife at the time of the present case was reported to be brutal and barbarous.

The husband was accused of defaming the wife by bringing baseless and false accusations against her character. Since October 1979, she had been deserted willfully and without justification. The wife was compelled to quit her husband’s firm and was forced to live in her parents’ house in Reasi against her choice due to her husband’s forced circumstances. The respondent was said to have been convinced by the wife’s father to move in with him at Reasi, but despite the father’s efforts, the husband did not change his attitude towards his wife.

The marriage between the parties and the occurrence of the accident is not challenged in the objections made on behalf of the husband, the petitioner. The spouse is said to have had a major brain injury as a result of the accident and was in a coma for a long period. The wife, instead of behaving like a pious Hindu wife and helping the husband at the time of his accident and injury, deserted the husband and did not even think it proper to attend to her husband. The wife was to blame for the breakdown of the relationship, and it is said that she had abandoned her husband. The petition was submitted in bad faith with the intention of obtaining a divorce on false grounds. It was further submitted that the petition was not bona fide as the wife was taking advantage of her own wrong.

The issues that were framed by the trial court have been provided hereunder:

Whether or not the application has been correctly validated, and if so, what effect does it have?
Has the petitioner been subjected to harsh treatment by the respondent?
Whether the respondent had wilfully deserted the petitioner without any reasonable and probable cause?

After considering the evidence presented by the parties, the trial court concluded that the wife had proven the issues of cruelty and desertion, and eventually directed the passing of a decree of divorce under Section 13 of the 1955 Act. The present appeal was filed before the Hon’ble High Court after the wife was aggrieved by the trial court’s judgment and decree on various grounds, including that the trial court did not properly appreciate the evidence presented in the case and that the issues framed were not proved in her favour. It is further argued that even if the charge of cruelty and desertion had been proven, no decree could have been entered in the wife’s favour because, according to her husband, she had approved the acts of cruelty and desertion that she had complained about in the petition. The husband had also filed an application for recovery of conjugal rights under Section 9 of the 1955 Act. Despite the fact that both petitions were consolidated, the trial court made no decision on the husband’s petition specifically.

During the course of the proceedings, the husband filed an application in the High Court, requesting maintenance pendente lite as well as reimbursement for his legal fees. In addition, he had filed a petition for permanent alimony and maintenance as well. The learned counsel for the appellant-husband had argued that because the wife permitted the husband to cohabitate with her, the husband’s actions of cruelty and desertion were excused. According to the husband, the respondent-wife worked for the National Hydro Project Corporation and had adequate funds to provide his maintenance at the amount of Rs. 500/- per month, which was his minimal demand, under Sections 30 and 31 of the 1955 Act (currently Sections 24 and 25 of the Hindu Marriage Act, 1955). It was said that because the spouse experienced a brain injury that resulted in a permanent impairment in the neurological system, he was unable to make enough money to support himself. He was said to be completely reliant on his close relatives for his maintenance. The respondent’s counsel chose not to file any objections with respect to this contention thereby arguing that the husband’s application for maintenance was likely to be rejected as the same is not maintainable under the law.

Observations by the court of law

The Jammu & Kashmir High Court had observed that the trial court correctly concluded that the husband’s desertion and cruelty were proven based on the facts presented in the case and the parties’ actions. In the trial court’s decision and decree, there was no illegality or jurisdictional error. As a result, the trial court’s decision and order dissolving the couples’ marriage was therefore affirmed.
The Court had observed that the wording ‘wife or husband’ in Sections 30 and 31 of the 1955 Act indicated that either of the parties to the marriage can seek relief under the Act, including maintenance pendente lite and permanent alimony. The Act’s provision on maintenance was plainly separate from the one found in Section 125 of the Criminal Procedure Code, 1973. Under the aforementioned provisions of the 1955 Act, either party to the marriage might be given support and expenses of the proceedings if the circumstances are sufficient. The provisions were enacted so that a wife or husband who does not have an independent income adequate for her or his maintenance or to cover the costs of the proceedings would not be disadvantaged. These provisions were introduced on social and moral grounds with the goal of ensuring that the party could support himself or herself during the course of the proceedings because there was no freedom to form another marriage. The legislature intended to offer financial aid to the indigent spouse during the proceedings and after the passing of the decree. The other spouse owes it to the aggrieved spouse to offer financial help so that the processes can be carried out and that he or she is not subjected to famine or moral degradation while the proceedings are pending.
The Court had noted that after the passing of the decree of divorce or judicial separation, perpetual alimony or maintenance may be given for a period not exceeding the spouse’s life or until he or she remarries. If it is proven that the husband has been having sexual relations outside of marriage, the order of maintenance granted to him might be revoked.
The facts and circumstances of this case revealed that the husband had no independent income and that the respondent-wife was able to give the husband support under Sections 30 and 31 of the 1955 Act. The Court was convinced that the petitioner was entitled to maintenance pendente lite, expenses of the proceedings, and permanent alimony and maintenance, based on the respondent’s own income and income from other properties, the petitioner’s earning ability, and the parties’ conduct. Given the facts and circumstances of the case, it was ordered that the respondent-wife must pay Rs. 500/- as court expenses and Rs. 100/- per month as maintenance pendente lite and permanent alimony to the petitioner, husband, from the date of application until his death or remarriage, whichever comes first.

Smt Kanchan v. Kamalendra (1992)

The Bombay High Court’s opinion in the case of Smt Kanchan v. Kamalendra (1992) is a notable one with respect to maintenance of the husband as the Hon’ble Court had observed that the husband could not rely solely on the income of his wife and granting maintenance to a skilled person will promote idleness if the husband can work and earn.

Facts of the case

The couple, in this case, married on May 5, 1981, and were having a child out of wedlock. In the year 1985, the applicant-wife (Smt Kanchan) had filed for divorce under Section 13 of the Hindu Marriage Act, 1955. On 23-2-1989, the non-applicant-husband (Kamalendra) filed an application under Section 24 of the 1955 Act for maintenance at the rate of Rs. 600/- per month along with litigation expenses. The applicant worked for the Collectorate and earned Rs. 2,000 per month. Her take-home pay was Rs. 1200/- after deductions. She also needed to care for her child, who was roughly ten years old, as well as his schooling. She had adequately described the costs she would incur. Initially, the husband had a bookbinding business. According to him, the bank had seized his equipment in order to collect the debt. His father, who worked in the same industry as him, had refused to help him. By his order dated 6-12-1989, the trial court judge awarded maintenance at the rate of Rs. 100/- per month to the husband and directed the wife to pay Rs. 500/- towards litigation expenses. A revision petition was filed before the Bombay High Court by the applicant concerning the trial court’s decision.

Bombay High Court’s observations

Taking into account the legislative intent of Section 24 of the Hindu Marriage Act, 1955, any spouse in the proceedings might seek maintenance pendente-lite if they can demonstrate that they have no independent source of income to maintain themselves. As a result, both the wife and the husband are entitled to maintenance. The husband who is intending to seek maintenance from his wife will have to prove to the Court that he is unable to earn and support his family due to a physical or mental disability.
The Court observed that the husband was a healthy individual both emotionally and physically. He had a problem with a specific firm but no disadvantage in earning the absolute minimum to maintain his family. It could not, therefore, be assumed that just because his business was closed, he had no source of income. Just because the wife was employed, the husband could not use Section 24 of the 1955 Act to make himself entirely reliant on her income. Granting maintenance to such able-bodied individuals armed with talent would promote laziness in the absence of any impairment or hindrance to earning and was against the spirit of Section 24 of the Act. Because the trial court acted without reason in granting maintenance to the husband, the challenged judgment cannot be upheld.

Yashpal Singh Thakur v. Smt Anjana Rajput (2001)

The case of Yashpal Singh Thakur v. Smt Anjana Rajput (2001) that appeared before the Madhya Pradesh High Court involved invoking the revisional jurisdiction of the High Court under Section 115 of the Code of Civil Procedure, 1908 by the petitioner husband (Yashpal Singh Thakur), where he called in question the defensibility of an order passed by the learned Additional District Judge, Jabalpur.

Facts of the case

On the grounds of adultery and mental cruelty, the petitioner’s husband filed an application for dissolution of his marriage with the non-applicant wife (Smt Anjana Rajput) under Section 13(1)(i)(ia) of the Hindu Marriage Act, 1955. On the 30th of May, 1996, they married in Jabalpur, India, according to Hindu Rites and Rituals. A boy called Prithvipal Singh was born into their union. The non-applicant was employed as a Technical Assistant at the State Forest Research Institute in Jabalpur, where she earned Rs. 4725 per month. It was undisputed that the petitioner spouse worked as a private secretary in the Madhya Pradesh High Court from October 1995 to July 1997, but had quit on July 14, 1997. The petitioner had denied being Prithvipal Singh’s father. After hearing the parties, the district court had ordered that the petitioner’s blood be tested to determine his paternity, but this was yet to be done owing to a lack of funds to pay the blood grouping costs.

During the course of the procedure, the petitioner filed an application for maintenance and litigation fees under Section 24 of the 1955 Act. The non-applicant wife objected to the above-mentioned plea, claiming that the petitioner had resigned from the High Court employment to take a better one in Delhi. The learned trial Judge had observed that the petitioner was capable of obtaining private work and was financially self-sufficient. The trial court had further noted that the non-applicant wife was not only supporting herself but also her two-year-old child.

Mr. V.G. Tamaskar, learned counsel for the petitioner, had challenged the aforementioned order, claiming that the trial court had misled itself in recognizing the husband’s situation and that this alone renders the order void in the eyes of the law. Defending the aforementioned claim, Miss J. Iyer, the wife’s learned attorney, had argued that the petitioner had sufficient funds to support himself and pay for the litigation. She further claimed that if he was not earning, it was because he had willfully disabled himself and that he was not entitled to maintenance or litigation expenses under Section 24 of the 1955 Act because of the same.

Observations by the Madhya Pradesh High Court

The Court observed that in the present case, it was unmistakably clear that the spouse petitioner had chosen to live a sedentary lifestyle and had made no effort to generate money that he was capable of earning. He could not afford to become incapacitated and then file a claim under Section 24 of the Hindu Marriage Act, 1955. It would be an anathema to the very purpose of the said provision.
The High Court concluded that the Trial Judge’s judgment was perfectly justified, and the contested order did not deserve any intervention.

Gurbinder Singh v. Manjit Kaur (2010)

In this case, while divorce and various other proceedings were going on, both the parties were made to sign a mutual settlement according to which they had to sign an undertaking. The undertaking bound both husband (petitioner) and wife (respondent) not to interfere in their personal affairs and also not to disturb their parents or relatives. It explicitly restricted any of the parties to do anything which could affect the character or reputation of the other. The respondent was also made to declare that she will not take any action against their children, provided that they were living with the petitioner at that time.

In August 2004, the respondent filed an application under Section 125 Cr. P.C. in Jalandhar Court. Following the application, the respondent was made to give the perusal of an ex parte order. It showed that she concealed the material facts from the Court. While applying for maintenance, she did not disclose that she was a teacher in a school in Jalandhar and that she filed an affidavit in the High Court that she will not harass her husband.

The Court found that she was filing the application for maintenance only to harass her husband and this clearly violates the undertaking signed between them. Her conduct of concealing material facts from the Jalandhar Court, and obtaining an ex parte order made her guilty of contempt of court and was liable to pay a fine of 10,000 /- rupees. The husband did not have to pay maintenance to her.

Alok Kumar Jain v. Purnima Jain (2007)

In Alok Kumar Jain v. Purnima Jain (2007), the husband (petitioner) and wife (respondent) had two daughters out of wedlock. Unfortunately, one of the daughters, Radhika, had a hearing problem in both ears. To meet the expenses of her treatment, the petitioner left his job in India and shifted to Abu Dhabi in the year 2000. The petitioner received 27 Lakh rupees as terminal benefits from the company where he used to work in India. This amount was deposited in the bank account owned by both of them jointly.

However, the wife filed for divorce under Section 13(1)(i)(a) of the Hindu Marriage Act, 1955. Subsequently, she filed an application under Section 24 of the Act and demanded 2 Lakh rupees as maintenance from the husband, and 11 Lakh rupees for daughter’s treatment. The husband stated that the wife had already withdrawn 56 Lakh rupees from the joint account. He said that the wife had enough money to maintain her expenses and standard of living. The learned judge, without calling the wife to give the explanation of the investment made out of those 56 Lakh rupees, ordered the husband to pay the maintenance of 20000 /- rupees per month to the wife.

The husband challenged the order in the High Court of Delhi and from the statement of bank account filed by the husband, it was clear that between 2001 and 2003, the wife spent 5,25,000/- rupees to sustain the household. She also withdrew 6,12,000/- rupees to purchase a car, a hearing aid for the daughter, and a computer. Apart from this, investments in FDs and PPF accounts in the name of the daughters have also been made amounting to 18 Lakh rupees. Thus, expenditure of 34,00,000/- by the wife was still left unexplained before the Court.

The Court said that the learned judge should have sought the explanation for the same and relegated the parties to the lower Court for fresh adjudication. It disposed of the petition and quashed the order that directed the husband (petitioner) to pay maintenance of 20000/- rupees.

Rani Sethi v. Sunil Sethi (2011)

While deciding on the case of Rani Sethi v. Sunil Sethi (2011), the Delhi High Court was considering a petition which was directed against the order of the learned Additional District Judge, Delhi, dated 24.2.2009, passed on an application filed by the respondent (husband, Sunil Sethi) under Section 24 of Hindu Marriage Act, 1955, seeking maintenance from the petitioner (wife, Rani Sethi). The trial court had ordered the petitioner to pay the respondent a sum of Rs 20,000/- per month in maintenance and Rs 10,000/- in litigation fees, as well as to provide a Zen car for the respondent’s use.

Facts of the case

On December 6, 1982, the parties’ marriage was solemnized. They have a son, who is 26 years old, and a daughter, who is 24 years old, born out of wedlock. The parties admittedly began living apart from September 2006, and following the intervention of friends and relatives, the petitioner and respondent lived together in the marriage residence for a brief while, but the parties again separated on September 6, 2008. According to the trial court, the respondent’s allegation that he was kicked out of the matrimonial residence was prima facie accurate, as just a handful of his things were turned over to him on January 20, 2009, in the Court. The facts that were presented before the Delhi High Court involved contention from both parties to the case. The same has been discussed hereunder.

Contention of the petitioner (wife)

The learned counsel for the petitioner stated that the learned trial court had exceeded its jurisdiction and had erroneously come to a finding with regard to the income of the petitioner. While it was undeniable that the petitioner was engaged in the business of operating paying guest hostels under the name ‘Paradise PG’, counsel for the petitioner contended that the trial court had failed to consider the costs of running the business, which included providing boarding, lodging, and transportation for students, and that the earnings from the business were insufficient to support herself and her two children.
It was claimed that the trial court failed to take into account the petitioner’s financial situation. The counsel for the petitioner had further claimed that the petitioner’s financial situation was evident by the fact that she lived in leased housing and was paying a rent of Rs 12,500/- per month.
It was also contended that the trial court had entirely overlooked the fact that the petitioner was also responsible for two unmarried children, one son, 26 years old, and a daughter, 24 years old, and the petitioner must not only provide for their maintenance but also organize their weddings and safeguard the children’s future. Aside from that, the petitioner must fend for herself as she was medically unfit, suffering from Leucoderma and arthritis, and she must spend money on physicians, medications, and other testing. In support of her claim, copies of medical prescriptions had been filed with the Court also.
The counsel for the petitioner contended that the respondent was a capable individual who was competent to support himself. Counsel further claimed that the respondent was conducting business under the name and style of Sethi Contractor and hence was not entitled to any maintenance. Counsel had also placed emphasis on the respondent’s behavior and character. The petitioner had mentioned a number of examples in her petition to prove that the respondent had an immoral character.

Contention of the respondent (husband)

Despite the fact that the business was started by the respondent and the petitioner together with funds received from the sale of the respondent’s ancestral property, and the business was profitable, learned counsel for the respondent contended that the trial court had been extremely conservative in granting only INR 20,000/- per month as maintenance for the respondent.
According to counsel for the respondent, a review of the assets of the firm revealed that the petitioner was operating a successful business. It was also argued that the petitioner’s company assets, business investments, and other personal assets would provide some insight into his or her financial situation. It was further claimed that the petitioner had filed an additional affidavit before the trial court in which she admitted that she was operating a business under the name and style of Paradise Hostel for the purposes of which she had rented 81 flats in two societies and was paying Rs 5,07,000/- as rent and Rs 65,800/- as maintenance + electricity and other expenses towards the hostel, bus payments, and so on. In the additional affidavit, the petitioner also admitted that she was paying Rs 25,000/- per month for housekeeping, Rs 48,000/- per month for kitchen expenses, Rs 50,000/- per month for the salaries of drivers, electricians, plumbers, and Rs 2,50,000/- per month for the Hostel’s Ration, Grocery Expenditure, for a total of 386 students.
The learned counsel for the respondent also contended that the respondent was rudely ejected from his home.

Delhi High Court’s observations

The Delhi High Court observed that the purpose of Section 24 of the Hindu Marriage Act, 1955 is to pay a fair sum to the wife or husband who has no sufficient source of income for her or his maintenance or for the expenditures of the proceedings, that strikes equity between the spouses.
The High Court concluded that the learned trial court had appropriately evaluated the relevant criteria after considering the circumstances of the case and the settled law. The High Court found no flaw in the judgment dated 24.2.2009 that obliged the High Court to intervene in the proceedings under Article 227 of the Indian Constitution. As a result, the current petition was rejected as being without merit. The husband was therefore eligible for the prescribed maintenance from his wife.

Nivya V M v. Shivaprasad M K (2017)

The 2017 case of Nivya V M v. Shivaprasad M K that appeared before the Kerala High Court, involved the woman being ordered to pay Rs 6,000 as monthly maintenance to her husband for spoiling his career by raising a false allegation of rape against him by a Family Court.

Facts of the case

The petitioner (Nivya V M) and the respondent (Shivaprasad M K) got married on 31.1.2011, and the marriage was recorded with the Marriage Registrar at Enmakaje. After a while, their relationship became strained. The petitioner had filed a petition in Kasaragod’s Family Court seeking a declaration that the petitioner and respondent’s marriage was null and void, and the respondent had filed for restitution of conjugal rights, and both cases were settled by a common judgment dated 18.3.2014 dismissing the petitioner’s petition and allowing the respondent’s. Following that, the petitioner filed a dissolution of marriage application under Section 13(i) (a) of the Hindu Marriage Act, 1955, alleging cruelty on the part of the respondent. The respondent filed a counterclaim, contesting the charges and requesting that the application be dismissed. He also asked the petitioner for pendente lite maintenance and litigation fees under Section 24 of the 1955 Act and Section 151 of the Code of Civil Procedure, 1908.

The respondent was working in a financial institution under the name and style ‘Thulunad Chits, Kasaragod’ at the time of the marriage, and he was asked to resign from the post after false news was published in Malayala Manorama daily on 4.6.2011 alleging that the respondent had abducted the petitioner and taken her to different places and committed rape on her. He was therefore compelled to resign. The petitioner also filed a complaint against the respondent in Kasaragod’s Judicial First Class Magistrate Court, alleging that he committed offences under Sections 341, 365, 366, 376, and 506 of the Indian Penal Code, 1860. The complaint was forwarded to the Kasaragod police for investigation.

The respondent was unemployed and was afflicted with a number of ailments. The petitioner was employed as an Assistant Professor of Biology and received a monthly salary of Rs.50,000/-. She simply needed a third to cover her expenditures. She was able to provide Rs.15,000/- per month to her husband, who was unable to maintain himself due to a lack of a reliable source of income. As a result, he requested before the Kerala High Court that the petitioner herein be ordered to pay Rs.15,000 per month in pendente lite maintenance and Rs.3 lakhs in litigation costs.

Observations by the Kerala High Court

The Kerala High Court had observed that Section 24 of the 1955 Act makes it clear that a petition can be filed by either a woman or a husband who is unemployed and has no source of income to support pendente lite maintenance and litigation fees from the other spouse who is able to do so. Because of the wording of Section 24 of the Act, a petition brought by the spouse, for this reason, is completely maintainable.
The Court went ahead to state that, the husband had mentioned in his testimony that he was a musician who attended carnatic and cinematic musical programs, as well as ganamelas, and received additional money in addition to his job as an employee of a private chits fund at the time of marriage. It was also established in evidence that he was capable of generating cash to pay large costs by hiring senior attorneys, as evidenced by his petition’s arguments. If he could raise finances for that, it’s hard to believe he won’t be able to raise funds to support himself.
The Kerala High Court concluded that the decision of the Family Court requiring the petitioner to pay Rs.6,000/- in pendente lite maintenance was unsustainable in law and was likely to be overturned.

Hemlataben v. State (2010)

In the case of Hemlataben v. State (2010), the wife (petitioner) had already instituted the proceeding under Sec.125 Cr PC. under which the maintenance for her son was allowed at 750/- rupees per month. The petitioner was not given any maintenance because she was working in a factory and earned 2500/- rupees every month which was sufficient to maintain herself.

The wife prayed for maintenance before learned Magistrate under the PWDV Act and he granted the prayer. The husband challenged the order and the Additional Sessions Judge dismissed the order of the Magistrate.

The petitioner challenged the order of the Additional Sessions Judge in the Gujarat High Court and Justice Akil Qureshi observed that the Magistrate could not have granted maintenance until and unless strong reasons are stated. The Additional Sessions Judge committed no mistake in setting aside the order of the learned Magistrate to grant maintenance to the petitioner. The wife’s petition was thus, dismissed by the High Court.

Kumaresan v. Aswathi (2002)

In Kumaresan v. Aswathi (2002), Madras High Court took the fact into consideration that if the wife is working then the husband need not maintain her. In this case, the husband (petitioner) filed the petition for divorce under Section 13(i)(a) of the Hindu Marriage Act. While so, the wife (respondent) filed two applications. First, to direct the petitioner to give the alimony pendente lite of 500/- rupees per month. Second, prayed before the Court to direct the petitioner to pay 5000/- rupees towards litigation fees.

The petitioner argued that the respondent was a working woman who is employed in Kadhi craft at a shopping centre in Trichy, and she earns 4500/- rupees per month. Therefore, the petitioner is not dutiful to pay the respondent the demanded amount in the applications.

The Court took the view of Section 24 of the Hindu Marriage Act, 1955, and as it states that the only condition required for grant of maintenance pendente lite is that the party should not have sufficient independent income source. If it is found that the applicant has sufficient income, no maintenance pendente lite can be granted to him/her. Hence, the Court dismissed both the applications of the respondent and remitted the case to the trial court for fresh disposal.

Manokaran @ Ramamoorthy v. M. Devaki (2002)

In this case, the husband (petitioner) filed for divorce under Section 13(1)(i) (a) and (b) of the Hindu Marriage Act, 1955. The wife (respondent) filed the application for interim maintenance of 750/- rupees per month and litigation expenses of 1500/- rupees. The learned judge of the Family Court granted the interim maintenance and litigation expenses as demanded by the respondent considering the fact that the petitioner is working at Senthil Auto garage where he earns 2000/- rupees per month, thus would be dutiful to pay the said maintenance.

The petitioner challenged the judgment in the High Court where the learned counsel, N. Manokaran appearing for the petitioner pointed out Section 24 of the Hindu Marriage Act in which frees the husband of the liability to pay maintenance if the wife earns sufficient to support her expenses. In the present case, the respondent was working in Raj T.V. and drawing the salary of 4500/- rupees per month. Therefore, the Court decided that since the respondent had an independent source of income, the petitioner would not be bound to give the interim maintenance and litigation expenses to her and dismissed the order of the Principal Family Court.

Conclusion

In our country, there are various laws that provide for the maintenance of the spouse after the dissolution of marriage. We have seen how the Courts in various cases have considered the circumstances and scrutinised the cases exhaustively in order to decide whether the demand for maintenance is legitimate or not. In all the cases discussed above, the claim for maintenance to the wife was denied or the question of maintenance was ruled in favour of the husband. It is pertinent to note that not only interim or quantum maintenance has been talked about, but the husband has been given relief in paying pendente lite maintenance and litigation expenses also, considering the financial background of the wife or checking whether she herself is at fault.

In the present context of India, it is apparent that women are considered to be the weaker section of society and the laws should be made to protect their interests. This would be consistent with the principle of “equal protection of laws” that has been incorporated in our democratic setup. But, in the case of such matrimonial matters, the husbands have been treated unequally under the garb of the said principle. Hence, the cases which have been discussed in this article have prevented such unequal treatment and upheld the principle of natural justice.

References

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