Order 39 CPC : temporary injunction and interlocutory orders

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December 23, 2021

The article is written by Vedant Bhardwaj Singh from Hidayatullah National Law University. The article critically analyses temporary injunctions and interlocutory orders through Order 39 of the Code Of Civil Procedure, 1908.

This article has been published by Diganth Raj Sehgal.

Table of Contents

Introduction

Rooted in the principles of goodwill, equity, good conscience and the legal maxim, “Ubi jus, ibi remedium” – where there is a right, there is a remedy – an injunction is an equitable remedy where an individual is commanded by a court – having authority over that individual – to perform or cease to perform a specific action, provided, if the court were not to intervene would cause irreparable harm to the status quo of the individuals involved in the case.

To illustrate the practicality of an injunction, it can be used to force striking workers to resume the course of their employment during the course of the civil suit between the striking trade union and the firm which employs members of the said trade union.

This article will be a discussion regarding injunctions with a special emphasis on the Order 39 of the Civil Procedure Code, 1908 which highlights the procedure to grant temporary injunctions and interlocutory orders.

Nature of Injunctions

As is the case with any legal concept, injunctions have been subjected to multiple definitions throughout the history of jurisprudence.

Joyce defined it as “an order remedial, the general purpose of which is to restrain the commission of some wrongful act of the party informed”.

Burney attempted to define the concept of injunction as, “a judicial process, by which one who has invaded or threatens to invade the rights of another is restrained from continuing or commencing such wrongful act”.

But perhaps, the definition which holistically captures the essence of injunctions is the one provided by Halsbury who claimed that “An injunction is a judicial process whereby a party in an order to refrain from doing or to do a particular act or thing”.

An injunction is characterized by three important notions which include the presence of a judicial proceeding, the relief which is granted is in the form of a restraint, and lastly, that the restrained act needs to be wrongful on the grounds of equity.

Perpetual Injunction

The other broad category of injunctions and the counterpart of temporary injunction – perpetual injunctions – as defined by Section 37 of the Specific Relief Act, 1963 is “the decree made at the hearing and upon the merits of the suit, the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act which would be contrary to the rights of the plaintiff”.

Temporary Injunction & its basic principles

In its essence, a temporary injunction is an interim remedy to maintain the status quo of the parties with regards to the property in dispute during the pendency of the case. The aim of temporary injunctions in the Indian law is to protect a party to the suit against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favor at the trial. The aforementioned aim was highlighted in the case of M/S Gujarat Pottling Co. Ltd. & Ors v. The Coca Cola Company & Ors. (1995).

Requirements for Temporary Injunctions

The case of Dalpat Kumar And Another v. Pralhad Singh And Others (1991) has settled the three main requirements for granting a temporary injunction, they are:

Prima Facie Case

A suit consists of a seriously disputed question. The facts in those questions encourage the probability of entitlement to relief for the plaintiff or the defendant. A prima facie case does not mean that the plaintiff or the defendant come up with an irrefutable argument that will in all probability succeed in a trial. It only means that the case they build for their injunction must be meritorious enough, not to be rejected instantly.

Irreparable Loss

If an irreparable loss were to be incurred by an individual with regards to the suit before his legal right is established in the trial, it would be a cause of grave injustice. However, it must be noted that illustrations like frustration over a loss of something with sentimental value will not be regarded as irreparable damage. On the other hand, things that by nature can be remedied will be considered to be irreparable damage if the court were to have no fair or reasonable address. Very often an injury is irreparable where it is continuous and repeated or where it is remediable at law only by a multiplicity of suits. Sometimes, the term irreparable damage refers to the difficulty of measuring the amount of damages inflicted. However, a mere difficulty in proving injury does not establish irreparable injury.

Balance of convenience

The court needs to compare the case of parties, comparative mischief or inconvenience which is likely to sue from withholding the injunction will be greater than which is likely to arrive from granting it.

When can a Temporary Injunction be rejected

The circumstances in which a temporary injunction is granted is governed by Order 39, Rule 1 of the Code on Civil Procedure, 1908, which will be discussed later. Thus, it becomes imperative to discuss the instances when a temporary injunction can be rejected. This is highlighted in Section 41 of the Specific Relief Act, 1963.

Restrain any person from prosecuting a judicial proceeding at the institution of the suit, in which injunction is sought, unless restraint is necessary to prevent multiplicity of proceedings.
To restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that, from which injunction is sought.
To restrain any person from applying to any legislative body.
To restrain any person from instituting or prosecuting any proceeding in a criminal matter.
To prevent the breach of a contract the performance of which could not be specifically enforced.
To prevent on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance.
To prevent a continuing breach in which the plaintiff has acquiesced.
When equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust.
When the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the court.
When the plaintiff has no personal interest in the matter.

Rules under Order XXXIX of the Code of Civil Procedure, 1908

On Temporary Injunctions

Order 39, Rule 1 talks about the cases in which the court may grant a temporary injunction as a statutory relief, they are:

In the case of property dispute, if the property in question is under a risk of being wasted, damaged or alienated or wrongfully sold by an individual involved in the suit.
If an individual threatened or displayed intention of removing or disposing off of his property with a motive to defraud his creditors. This is specific to the defendant only.
If the plaintiff is threatened – by the defendant – to be dispossessed or injured in the context of the property dispute under question.
If the defendant were to commit a breach of peace or contract. The aforementioned ground is also highlighted in Order 39, Rule 2 of the CPC, 1908.
Lastly, the court may issue an injunction if it is of the opinion that it would be an act in the interest of justice.

Order 39, Rule 2-A talks about the non-compliance of an individual with regards to an injunction, they are:

It mandates the detainment of that individual in civil prison for not more than three months.
Furthermore, it warrants the attachment of property of that guilty individual for not more than a year. However, if the delinquency were to continue, the property may be sold.
In the case of Ram Prasad Singh v. Subodh Prasad Singh (1983), it was highlighted that it is not necessary for an individual to be a party to the concerned suit, to be liable under Order 39, Rule 2-A of the CPC, 1908, provided it is known that he was an agent of the defendant and violated the injunction despite being aware of the same.

Usually, the court is required to issue a notice to the opposite party regarding the application of injunction, but through Order 39, Rule 3, the court can grant an ex-parte injunction when it is under the belief that the object of the injunction would be defeated because of delay. The Supreme Court through the case of Union of India v. Era Educational Trust (2000), laid down certain guiding principles for courts to follow while deciding upon an ex-parte injunction, they are:

Whether the plaintiff will be a victim to irreparable mischief by the defendant?
Whether the weight of injustice will be heavier if an ex-parte injunction is not granted?
Whether the timing of applying for an ex-parte jurisdiction was maliciously motivated?
The courts will also consider the general principle of balance and irreparable loss.

Order 39, Rule 4 lays down that an injunction may be discharged, varied or set aside, if any dissatisfied party makes an appeal against it, provided that:

The application for injunction or documents advocating the same included knowingly false or misleading statements and the injunction was granted without listening to the other party. Thus, the court will vacate the injunction. However, it can also stick with the injunction if it considers – the reason is to be recorded – the same not be necessary in the discourse of injustice.
Furthermore, the court may also set aside the injunction if, due to a change of circumstances, the party against whom the injunction is granted, has suffered unnecessary hardships.

Order 39, Rule 5 makes an important point that, if an injunction is granted against a corporation or a firm, the authority of the is not limited to the corporation as an entity alone, members and officers of the corporation whose personal action it seeks to restrain are also included under its ambit.

On Interlocutory Orders

Before we analyze the remaining rules in Order 39, we must understand the concept of interlocutory orders. Interlocutory orders are the extension of which temporary injunctions are a part of. They are the final hammer for the subplots that are not related to the core of a pending suit. They settle those subordinate issues which may be necessary for deciding the outcome of the case – intangibly – and need a swift decision because of the time-sensitivity of those issues. These orders exist to make sure that the involved parties’ interests are not harmed during the due process of justice.

Achieving justice is the main aim of the Indian judiciary but achieving their aim in an equitable process is also important. The latter is governed by interlocutory orders.

Interlocutory orders may take on many shapes and sizes including, but not limited to, notice to conduct search and seizure, temporary injunction, payment into court, etc.

However, in the case of the Sub Committee of Judicial Accountability v. Union of India (1991), the Supreme Court noted that an interlocutory order must not be passed if it were to have any inference of pre-judging some important and delicate issue related to the main matter.

Reading Rules 6-10 of the Code on Civil Procedure 1908, will give us a proper understanding of the weight of interlocutory orders in the Indian legal system.

Order 39, Rule 6 talks about the power to hold an interim sale.The court may order the sale of any movable property being the subject matter of the suit. Furthermore, these movable properties also include such things which are subject to natural delay and will be rendered futile if not sold swiftly. For example, the court may order the sale of fruits and vegetables if they are a matter of suit as they cannot be stored indefinitely and are perishable goods.
Order 39, Rule 7 talks about the detention or inspection of the subject matter of the suit. Essentially, the court may order any individual to retain, preserve or inspect the property of dispute. The court may pass such an order specific observations or experiments upon the disputed land if it were to deem it necessary for the purpose of obtaining complete information.
Order 39, Rule 8 brings closure to rule 6 and 7 on grounds of equity. It claims that an order under rule 6 and 7 will only be passed if:

The applicant applies for the order after the institution of the suit.
The applicant provides notice of the application to the parties involved in the suit.
The other parties of the suit have been given a fair chance to argue against the interim order.
However, the rule is subject to the exception that if the hearing would cause delay leading to the loss of the objective of the suit.

Order 39, Rule 9 talks in relation to an instance if land paying revenue is the subject matter of the suit. It speaks about if an individual neglects paying his government revenue or the rent to his proprietor, then the court may order the sale of the land or tenure, as the case may be, to any party interested in buying that said land or tenure. The proceeds from the sale can be used to compensate the defaults in the payment of the rent. Furthermore, the party who was interested in buying the property, by the decree of the court, can be compensated by the defaulter.
Order 39, Rule 10 talks about dispute over money or any item which is capable of delivery. If in the dispute, a party claims to have the trusteeship of the disputed item, then the court may order that item to be deposited in the able hands of the court until the dispute is resolved.

Conclusion

In the general understanding of injunctions in Indian jurisprudence and as is the case presented here, the reader must have noticed the intangible presence of the Specific Reliefs Act,1963 while discussing Order 39 of the Code on Civil Procedure, 1908. This is because the essence of injunctions is captured when the two documents are interpreted together. Their symphony is what brings out the equity, good conscience, and goodwill of injunctions.

Thus, the rationale behind the provision of Order 39 of the Code of Civil Procedure, as laid down by Hon’ble Supreme Court in the case of M. Gurudas and Ors. v. Rasaranjan and Ors. (2006) can be summarized as “While considering an application for injunction, the Court would pass an order thereupon having regard to prima facie, balance of convenience and irreparable injury“.

References

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Difference between parole and furlough

By

Rachit Garg

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December 23, 2021

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This article is written by Nipun Raj , a student of Amity Law School, Ranchi. The article gives an explanation of parole and furlough in Indian Criminal Jurisprudence.

Table of Contents

Parole meaning

Parole means the release of a prisoner either temporarily for a special purpose or completely before the expiry of a sentence, on the promise of good behaviour.

The word parole is derived from the French phrase “je donne ma parole”, which means “I give my word”. Parole is the privilege given to the prisoners to return to the society and socialise with families and friends. It requires periodic reporting to the authorities for a set period of time. It is granted to that person who has already served a portion of his or her sentence. It enables the prisoner to deal with family matters and develop a good life for him or his family members.

Furlough meaning

Furlough is given in cases of long-term imprisonment. A prisoner’s sentence is considered to be remitted during his furlough time.It is to be allowed on a regular basis for no reason other than to allow the prisoner to maintain familial and social relationships and to counteract the negative consequences of long-term imprisonment. The right to be released on furlough is a substantial and legal right of the prisoner, and it cannot be rejected if permitted by law.

Types of parole

Regular parole

In all other cases, the government has the option of considering applications for regular parole. The following are some of the grounds on which the prisoner’s applications may be considered:

A family member’s serious sickness.
Family members are in a critical state as a result of an accident or the loss of a family member.
Marriage of any member of the convict’s family.
Birth of a child by the convict’s wife if no other family member is available to care for the spouse at home.
Serious harm to the convict’s family’s life or property, including damage caused by natural calamities.
Maintaining social and familial relationships.
To file a Special Leave Petition with the Supreme Court of India in response to a High Court ruling convicting or upholding a conviction, as the case may be.

Emergency parole or custody parole

Custody parole can only be given in emergency events and circumstances, such as the death of a family member, the marriage of a family member, a family member’s major illness, or any other emergency situation. During the custody parole, the prisoner must be escorted to and from the location of visitation in order to ensure the prisoner’s safe custody. Such inmates would be considered to be in prison for the duration of the sentence, and the time would be counted as time spent in prison.

How parole and furlough are related to each other

The goal of both furlough and parole is to strike a balance between an offender’s rights and the rights of society in order to prevent the inmate from causing more harm. Both are types of conditional release, which means the offender must adhere to the terms of the order authorising furlough or parole, such as reporting to a local police station at regular intervals. If the competent authority believes that releasing the offender will be detrimental to society, both parole and furlough might be denied.

Difference between parole and furlough

Serial no.	Parole	Furlough
1.	It is not a right of the prisoner.	It is the right of the prisoner.
2.	It is releasing a prisoner with a suspension of the sentence.	It is releasing a prisoner with remission of his sentence.
3.	In the case of short-term confinement, parole may be granted.	In the case of long-term confinement, Furlough may be granted.
4.	It can be granted a number of times.	There is a limitation to grant furlough.
5.	Parole lasts for one month.	Furlough lasts for fourteen days maximum.
6.	A specific justification is necessary.	It is to break the monotony of punishment so no justification is needed.
7.	The days of leave aren’t included within the sentenced period.	The sentence of convict goes along with the furlough period.
8.	It is granted by the Divisional Commissioner.	It is granted by the Deputy Inspector General of Prisons.

Difference between parole and bail

Many individuals mistakenly believe that parole and bail to be the same thing. However, there is a distinction between the two, and they both have separate legal implications. Bail is well understood in criminal law, and regulations relating to bail are found in Chapter XXXIII of the Code of Criminal Procedure, 1973.

The power of the courts to grant bail is specified in Sections 436, 437, 438 and 439 of the Code of Criminal Procedure. Section 436 deals with bail in bailable offences, Section 437 with when bail may be taken in non-bailable offences, Section 438 with direction to provide bail to anyone apprehending arrest, and Section 439 with the specific competence of the High Court and Court of Sessions to issue bail. The result of granting bail is that the accused is released from internment, yet the Court retains constructive authority over him through the sureties. If the accused is released on his own bail, such constructive control could still be applied through the terms of the bond.

The goal of both furlough and parole is to strike a balance between an offender’s rights and the rights of society in order to prevent the inmate from causing more harm. Both are types of conditional release, which means the offender must adhere to the terms of the order authorising furlough or parole, such as reporting to a local police station at regular intervals. If the competent authority believes that releasing the offender will be detrimental to society, both parole and furlough might be denied.

While distinguishing bail from parole, the Hon’ble Supreme Court stated in State of Haryana v. Mohinder Singh (2000), that parole is a provisional release from confinement but is considered to be a component of the imprisonment. Parole is an element of the rehabilitation process, and it is meant to allow the offender to change his habits and become a contributing member of society. Parole is essentially a grant of partial liberty or a reduction in limitations to a convicted prisoner, but it does not modify the prisoner’s status. Rules are drafted to ensure that offenders released on parole are monitored by parole officials and that if they fail to keep their promises, they are ordered to surrender to custody.

Eligibility of grant of parole

The prisoner must have served at least one year in prison, in addition to the period spent in remission.
The prisoner’s behaviour should be good.
The prisoner should not have committed any crime during his previous parole period.
The previous parole should have been terminated a minimum of six months ago.
The convict should not have violated any of the terms and restrictions of his or her previous release.

Instances of misuse of parole

The concept of parole has been highlighted by the judiciary and penologists to lessen the challenges of prison life; however, whether parole truly serves a function or only serves as a means of escape becomes a critical subject. In the following cases, there is clear evidence of misuse.

In the case of Central Bureau Investigation v. Bibi Jagir Kaur & Ors. (2018), Bibi Jagir’s Kaur was sentenced to prison for her role in the murder of her daughter. The murder accusations against her were dropped, and she was acquitted in 2018. She was sentenced to five years in prison. She was granted parole after barely four months in prison. Because she was a former Punjab Cabinet Minister, she was claimed to have gotten special treatment.

In the case of Sidharta Vashisht @ Manu Sharma v. State (NCT of Delhi) (2010), while on parole, the convict in the infamous Jessica Lal murder case was discovered clubbing. His justification for seeking parole was the death of his grandmother, which occurred a year ago, and the illness of his mother, which was also discovered to be a fabrication.

Important cases related to the concepts

In the case of Babulal Das v. the State of West Bengal (1975), though in the context of preventive detention, Hon’ble Mr. Justice Krishna Iyer of the Supreme Court observed about the need for parole as follows: “It is fair that persons kept incarcerated and embittered without trial should be given some chance to reform themselves by reasonable recourse to parole power under Section 15 of the Maintenance of Internal Security Act 1971.”

In the case of Kesar Singh Guleria v. the State of Himachal Pradesh (1984), the High Court held that the act of releasing a prisoner on parole or furlough should not be viewed as an act of charity, compassion, or clemency, but rather as an act in the discharge of a legal duty that must be carried out upon the fulfilment of the prescribed conditions in order to achieve a salutary goal.

In the case of Samir Chatterjee v. State of West Bengal (1975), the Supreme Court overturned a Calcutta High Court order releasing a person detained under Section 3(1) of the Maintenance of Internal Security Act on parole and rejected the argument that long-term preventive detention can be self-defeating and criminally counterproductive.

Conclusion

It is clear that parole is unavoidable. A parole system appears to be rational and necessary in this context. It’s a support for a humanistic attitude to confined prisoners. The main goal of such regulations is to provide criminals with a chance to work out their personal and familial difficulties while also allowing them to stay connected to society. As a result, concepts like parole and furlough, when handled wisely, can assist convicts/prisoners in effectively re-entering society and living law-abiding lives.

References

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Construction project due diligence for allottees and prospective home buyers

By

Abanti Bose

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December 23, 2021

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

This article has been published by Abanti Bose.

Table of Contents

Introduction

The Real Estate (Regulation and Development) Act (“The Act”) has definitely been a boon for the customers, but the onus still lies on them to do diligent research about the project before investing in it. As a prospective buyer, there are innumerable things one must keep in mind and do a thorough check and research in order to make a smart choice. Other than that, one must also be aware of the laws in favour of the builder and also the one in favour of the prospective buyer so that they understand all their rights and duties.

RERA acts as a nodal agency for coordination, development and management of the Real Estate sector and also provides necessary advice/service to the Government to ensure that there is growth and promotion in the real estate sector. Proper due diligence will help the buyer understand all the necessary information and precaution he/she needs to take in order to purchase the property he wishes to.

This article seeks to unravel all the necessary details required for the construction project, due diligence for allottees and prospective home buyers via giving an overview of the necessary provisions under the law.

Necessary details required for construction project due diligence

The following are the necessary details required for the construction project due diligence for allottees and prospective home buyers:

The buyer must thoroughly go through the copy of the agreement. It is important to verify all the details provided for the original document of the property. It is important to note that the title of the seller should not only be clear but also marketable. The buyer should thoroughly examine the title report of the property (if available).
The buyer must cross-check whether the builder has obtained necessary non-agricultural permissions from the collector for the desired land.
The buyer must also check for a copy of clearance under the Urban Land Ceiling Act.
The buyer must check for the building plans that are sanctioned by the competent authority.
The buyer should also check for the Clearance certificate (CC) granted by Corporation/Nagar Palika.
The buyer should also check for all the building bye-laws and also verify any pertaining issues with the setbacks etc.
He must confirm with the seller the transfer fees, stamp duty and registration charges to be paid on the purchase of the property as well as outgoings to be paid for the property.
The sale agreement must be scrutinized in detail for municipal corporation approved plan of the flat, carpet area with an area of the balconies shown separately, price of the property including the proportionate price of common areas and facilities shown separately and intervals at which instalments may be paid.
The buyer should verify that proper stamp duty has been paid on the property.
It is the onus of the buyer to physically check the place before signing the purchase agreement.
It is important to keep in mind that a buyer can only claim damages if what was shown to the buyer is different or of low quality from what they were sold.
It is advisable to employ a consultant.
Please note that any dispute at a later stage can be taken to the real estate tribunal, but it will be a fair play out there. If the builder can prove that you have delayed payments or have not fulfilled his side of the commitment, the tribunal can punish the buyer as well.
Please note that it is of utmost importance to do a background check on the builder and the project details to see if all necessary permission is in place and if paperwork is in order.

Important things to know about real estate law as a house buyer

As a house buyer, these are a few things to keep in mind about real estate law::

All projects should be mandatorily registered with the Real Estate Regulatory Authority in each State.
Real estate agents who intend to sell any plot, apartment or building should also register themselves with this authority.
It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals.
It seeks to enforce the contract between the developer and buyer and act as a fast track mechanism to settle disputes.
For the construction of a project, 70% of the buyers’ investment has to be deposited into a separate account.
The Act prohibits a developer from changing the plan in a project unless 2/3^rd of the allottees have agreed to such a change.

Essential provisions to be kept in mind by the buyer

Section 3– Prior registration of the real estate with RERA.
Section 59 – Punishment for Non-registration or contravention of section 3.
Section 4 – Application for registration of real estate projects.
Section 60 – Penalty for contravention of Section 4.
Section 12 – Obligations of promoter regarding the veracity of the advertisement or prospectus.
Section 13– There should be no advance taken by the promoter without first entering into the agreement for sale.
Section 14– Adherence to sanctioned plans and project specifications by the promoter.
Section 15 – Obligations of a promoter in case of transfer of a real estate project to a third party.
Section 16 – Obligations of promoter regarding.
Section 18 – Return of amount and compensation.

Remedies in case of violation of rights

Any person can file a complaint with the RERA if there is a violation of the provisions of the respective act or the rules.

A buyer who is the victim of any unfair practices of the builder can approach the following ways for their grievance:

He can file a civil suit.
He can file a complaint before the consumer forum.
He can approach regulatory forums.
He can also file a case before the Competition Commission of India.
He can file a Criminal Case in the appropriate Court of law.

Significant case laws

There are some important issues from the perspective of the buyer that needs to be brought to light. Below mentioned are some issues such as delayed possession, jurisdictional issues and others discussed through case laws:

Delay in possession involves refund of payment and interest

In Singh vs MVL Ltd, the aggrieved party filed the complaint against the builder for delayed possession of the property. RERA authority held that it has jurisdiction even for agreements executed before RERA was enacted if the cause of action has survived after the Act came into force. Further, it held that possession without a certificate is against the law. The authority granted the aggrieved party a full refund with interest and therefore the cost of the complaint.

Constitutional validity of the RERA Act was challenged in Bombay HC

Builders filed a case against the Union of India challenging the indigenous validity of varied provisions of the RERA Act, the Maharashtra RERA rules like provisions addressing delay in possession, arbitrary interests on builders, etc. While upholding certain sections of the Act and rules, the Bombay high court struck down one of the qualifications for appointment of a Judicial Member specified in Section 46 (1) (b) of the Act.

In Geetanjali Aman Constructions vs Hrishikesh Ramesh Paranjpe, the development company approached the Maharashtra Tribunal against the orders delivered by RERA when two homebuyers filed complaints that the developer hadn’t registered the ongoing project with RERA. The state’s RERA ruled that the developer should pay a penalty of three of the project cost as per RERA provisions. Later, the developer sought a review of the order as there have been errors within the area of the project and thus the number of apartments. The RERA assessed a redundant penalty until the project is registered because the quantum of apartments exceeded eight. The Tribunal further quashed both the orders and stated that if either of the two parameters is met, one need not register the housing project with RERA

Conclusion

It is a renowned saying that whatever won’t change with the evolving time, will at last result in disappointment; this remains true for the law, as well. Society is not static, it is progressive. It needs to change with time to survive. RERA has been created to act as the central authority to regulate all real estate activities and promote transparency, efficiency and effectiveness in the real estate market. Its constitution therefore should also involve the necessary transparency. Especially with the ambit of powers extended to RERA, it has become easier for the buyers to exercise abundant diligence while buying the property. With the Coronavirus pandemic, the RERA too has evolved over a short time span. For example, virtual hearings are now common and have continued in some states even after the lockdown was lifted.

References

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Harmonizing the conflicting decisions in Synergies Dooray & Fortune Pharma case

By

Oishika Banerji

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December 22, 2021

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This article has been written by Ayushi Jhawar pursuing the Introductory Course: Legal Writing For Blogging, Paid Internships, Knowledge Management, Research and Editing Jobs from LawSikho. This article has been edited by Prashant Baviskar (Associate, Lawsikho).

This article has been published by Oishika Banerji.

Table of Contents

Introduction

In the Synergies Dooray order, the Court declined to accept the challenge of the NCLT Order, which was based on the fundamental principle that the provision of the Insolvency and Bankruptcy Code, 2016 states that the committee of creditors (“CoC“) of a corporate debtor cannot include a non-related party assignee of related party financial creditor who is going through corporate insolvency resolution process (CIRP).

NCLAT took a different stance from its earlier decision in Fortune Pharma order. As a result of NCLAT’s diverse perspective, that is defended based on the specific facts of the cases, a more fundamental question has arisen. Is there a proper formula that can be applied to determine whether a related party financial creditor of the Corporate Debtor (CD) who’s the assignee and owes a debt to him is subject to the same disqualifications as the related party assignor, or must it be determined more case-by-case, based on the facts?

The above background is relevant in determining whether a related party to whom a debt is owed by a non-related assignee would retain that character and the yardsticks that may be applied to determine that.

Who is a related party?

According to Sections 5(24) and 5(24A) of the IBC, the term related party is exhaustively defined. A related party in the case of a CD is anyone who may act in a managerial or directorial capacity. A related party can own a substantial share of the CD or be able to make decisions for the CD or its subsidiaries, holdings or associate companies. According to the code, a related party can include the following.

Directors, key personnel, or relatives of the CD.
Holding, associate or subsidiary of the CD, or a subsidiary of a holding company of which the corporate debtor is a subsidiary.
Directors, partners, or managers of a private or public company who hold with relatives more than 2% of the paid-up share capital of that company.
LLP in which one of the CD’s directors, managers, partners, or relatives is a partner.
Persons holding 20% voting shares in the CD, or the CD holding 20% voting shares in any person.
A person on whose instructions a director, manager, or partner is accustomed to acting.
Person controlling the board of director’s composition.

Legal provision on the issue

It is required to constitute a CoC in accordance with Section 21 of the IBC, which states that after the National Company Law Tribunal (NCLT) admits an application on insolvency, the Interim Resolution Professional (IRP), apart from other things, forms the committee of creditors (CoC) on the basis of the claims against the corporate debtor. Members of the committee are all the financial creditors of the corporate debtor, and their voting rights are determined by their debt amounts. A related party owing a financial debt to a corporate debtor does not have any representation rights, participation rights, or voting rights at meetings of the CoC.

A resolution plan must be approved by a majority of members of the CoC. In order for a resolution plan to be approved (or rejected), assignability of debts due to Related Party Creditors must be considered. As per “Rule 28 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016”, it is possible to give any person in CIRP to whom debt is due by a creditor to transfer or assign such debt, thus circumventing the restriction of influencing the decision determining of the CoC in assignment or transferring the debt to associates that are not related to such creditor.

Synergies Dooray case

In the case of Synergies Dooray, Synergy Casting Ltd. was the sister company of the Corporate Debtor, therefore, did not have any voting rights. However, Millennium Finance Ltd. received a seat on the CoC for having assigned a large Share of its debt to the company. Edelweiss challenged this assignment, alleging the assignment was made in order to reduce Edelweiss’ voting share. The court found that Synergy Casting had no relationship to Millennium Finance Ltd., and the Applicants claim that the agenda of the CoC would be prejudicial to the CD was not supported since none of the other creditors objected to the assignment. Since the Adjudicating Authority deals with summary proceedings, the CD’s intentions were not considered by the Adjudicating Authority.

Fortune Pharma Case

The NCLT, Mumbai once again considered this issue in Fortune Pharma Private Limited. In this case, an unrelated third party was assigned debts of two related party creditors before admission but after CIRP was filed for. As a result, the voting share of the applicant creditor diminished. The applicant creditor filed a claim that there was an ulterior motive behind the execution of the assignments. The NCLT determined that a simple assignment cannot remove a disqualification that exists at the time of initiation of the CIRP. The Court opined that an assignment is the transfer of one’s debt rights to another person, and the rights of the ‘assignee’ are same as those of the ‘assignor’. Consequently, the assignee cannot change its status from ‘related’ to ‘unrelated’. Therefore, the NCLT, Mumbai held that the assignment of a debt assigned to a related party (who is barred from participation in the proceedings of CoC) will not remove the bar.

Judicial precedents of foreign jurisdictions

Regarding the question of whether the judiciary could disregard the vote of an assignee of Related Party Creditor merely because the claim had been assigned by Related Party Creditor.

The term ‘insider‘ is defined in “Section 101(31)13 of the US Bankruptcy Code”, and individuals or entities that strictly qualify as insiders are called ‘statutory insiders’. In addition, the US bankruptcy courts have recognized a class of insiders that are called ‘non-statutory insiders’. These individuals are not listed in explicit manner u/s “101(31) of the US Bankruptcy Code”, but have sufficiently close ties to the debtor to qualify. It is on the basis of this distinction that the US Bankruptcy courts have handled cases involving transferred claims from statutory insiders to non-insiders in bankruptcy proceedings.

On this point, the judgement by “the United States Court of Appeals, Ninth Circuit in Re The Village at Lakeridge, LLC” on Feb. 2016”, was on the issue that whether for voting on a resolution plan can a transferred claim retain its insider status.

The CD, filed for bankruptcy. The assets of the debtor were being claimed by two creditors. “MBP Equity Partners 1, LLC (“MBP”) held an unsecured claim of $2.76 million and the U.S. Bank National Association (“USBNA”) held a secured claim of $10 million. Dr. Robert Rabkin (“Rabkin”), purchased MBP’s claim against the debtor since he had business and personal relationship with one of MBP’s board members”. Rabkin had no previous connection to MBP or the debtor. “U/s 1129(a)(10) of the US Bankruptcy Code”, a reorganization plan could be confirmed only if at least one class of impaired claims voted to accept it. As per “US Bankruptcy Code Section 1129(a)(10)”: “The plan is impaired if at least one class of claims has accepted the plan, without counting the acceptance of the plan by any insider.”

Rabkin approved the plan despite USBNA’s opposition. The plan had to be approved because both creditors’ claims were impaired.

With regard to his relations with one of the board members of MBPA, USBNA argued Rabkin became a non-statutory insider and cannot be allowed to vote on the plan. As Rabkin had become a non-statutory insider, the bankruptcy court granted USBNA’s motion and disallowed him from voting on the reorganization plan. The “bankruptcy court’s order was reversed by the United States Bankruptcy Appellate Panel for the Ninth Circuit” (“BAP“) that held that Insider status cannot be assigned; it must be determined ”case-by-case” for each individual based on the consideration of various factors.” Consequently, Rabkin was allowed to vote on the reorganization plan since he was not a non-statutory insider.

In a split decision, the Ninth Circuit affirmed the BAP’s ruling and found as follows:

“Obtaining a claim from a statutory insider does not automatically make a person a statutory insider for two reasons. First of all, bankruptcy law differentiates between the status of a claim and of the claimant. A claimant’s insider status is not an attribute of the claim. Since insider status is not a property of a claim, general assignment law – under which an assignee takes a claim subject to its benefits and defects – does not apply. In addition, determining a claim transferee’s insider status is a factual question.”

“Further, if a non-insider acquires a claim from a non-insider, an insider’s claim would retain its insider status when a non-insider acquired the claim from an insider, but would drop its non-insider status when a non-insider acquired a claim from an insider.”

The Ninth Circuit, however, conveniently rejected USBNA’s citation of a precedent in “re The Village at Lakeridge, LLC”, on technical grounds. USBNA had referred a judgment delivered by “the Ninth Circuit in Wake Fores, Inc. v Transamerica Title Ins.” that held that insider status transfers with a claim under general law of assignment. USBNA’s contention, however, was rejected by the Ninth Circuit, which cited a rule stating unpublished cases before 2007 could not be cited in Ninth Circuit courts.

“The Court of Appeal of the Republic of Singapore referenced the Ninth Circuit ruling in SK Engineering & Construction Co Ltd v Conchubar Aromatics Ltd and another” in determination of who is to be treated as a related creditor for confirming a scheme of arrangement. The following were included:

“Although the case is similar “the United States Bankruptcy Code’s” interpretation, the justification in the case is convincing. A creditor acquiring a claim against a scheme company from a related creditor would be absurd if the votes attached to that claim were automatically discounted due to the status of the assignor-creditor, regardless of the relationship between the assignee-creditor and the scheme company. Discounting related creditors’ votes is designed to remove or negate the influence of any bias such creditors may have towards a given voting outcome. This concern does not relate to the claim, but rather to the individual creditor in question. These concerns would not exist if a creditor that acquires its claim against a scheme company from a related creditor had no demonstrable interest in any particular voting outcome outside of its own interests as a creditor.”

Conclusion

This approach is the accurate way to understand if there should be disqualification of an assignee of a Related Party Creditor. It appears that in the Fortune Pharma matter, the holding was not on if the assignee was a non-related party creditor or if an assignee automatically becomes disqualified because the disadvantages applicable to the Related Party will be transferred to the assignee, rather than on whether the circumstances leading to the assignment were non-commercial in nature.

In monitoring the development of jurisprudence in this regard and examining, the NCLTs usually decide to disregard the apparent status of the assignee and add emphasis on the determination of the assignee-creditor’s relation to the corporate debtor and Related Party Creditor when determining the intent of assignments. So, even in the Indian context, it is fascinating to deliberate if ‘non-statutory insider’ could be introduced in order to mitigate the misuse of the essence on debarring of Related Party Creditors.

References

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Starbucks v Sardarbuksh : all you need to know about the trademark dispute

By

Rachit Garg

-

December 22, 2021

0

This article has been written by Sakshi Rathi, pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.

Table of Contents

Introduction

Intellectual property rights are the legal rights used to protect individuals from infringement of any of their intellectual work. Intellectual work includes any work that is created by the human mind and such work involves copyrights, patents, designs as well as trademarks. This article will give you an in-depth understanding of trademarks, and trademark disputes with the help of the famous case law – ‘’Starbucks vs Sardarbuksh’’

What is a trademark?

A trademark includes a symbol, word, phrase, logo, design or a combination of any of such things. Trademarks are used for any goods and services to be identified by the customers. Examples of a trademark can include the logo of the brand Apple, the logo of the brand Nike, the logo of McDonald’s as well as the phrase ‘’I’m lovin it’’ and other such related phrases and items.

What is a Trademark dispute?

From the above paragraph, we got an idea of what a trademark is. And, we all know what a dispute means. A dispute means a disagreement or an argument. From this, we can clearly understand, a trademark dispute means an argument or a disagreement between two people who are trying to use the same or similar trademark. Such use of the same or similar trademark is known as an infringement of the trademark. In India, infringement of a trademark is an offence. Thus, the offender shall have to bear the consequences.

Can two trademarks be deceptively similar?

Section 11 of the Trademarks Act 1999 deals with the grounds on which the registration of trademarks can be refused or denied i.e., it deals with reasons for which the trademark may not be registered. One of the reasons mentioned in the section for which the trademark can be refused or denied registration includes the trademark being refused for registration because it is “Deceptively Similar’’ i.e., it is identical or similar to another mark, and for this reason, it creates confusion in the buyer’s mind. So, two trademarks cannot be deceptively similar. Below is a landmark judgement to understand the concept of “Deceptive similarity’’ in detail.

Parle Products (P) Ltd. V. J.P. & Co. Mysore

Facts of the case

The plaintiffs-appellants before the court are manufacturers of biscuits and confectionery and they also own certain registered trademarks. One of the trademarks that they own includes the word “Gluco” which is used on their half-pound biscuit packets. Another registered trademark that they own is a wrapper with its colour scheme, general set up and entire collocation of words registered under the Trade Marks Act 1940. This wrapper is used concerning the sale of their biscuits known as “Parle’s Gluco Biscuits” which is printed on the wrapper. The wrapper is of buff colour and depicts a farmyard with a girl in the centre carrying a pail of water, with cows and hens around her along with a background of a farmyard house and trees. The plaintiffs claim that they have been selling their biscuits on a large scale for many years under the said trademark which has gained a huge reputation and goodwill to them in the public. They claimed to have discovered in March 1961 that the defendants were manufacturing, selling and offering for sale, the biscuits in a wrapper which according to them was deceptively similar to their registered trademark. The plaintiffs contended that this act of the defendant constituted an infringement of their trademark rights. Despite the lawyer’s notice, the defendants continued the manufacturing, selling and using of the wrappers which had a deceptively similar trademark on them. Such a deceptively similar trademark was the registered trademark of that of the plaintiffs. The plaintiffs filed the suit claiming injunction.

Trial court

The trial court, after examining the features of both the wrappers, found that there were greater dissimilarities between the wrappers than there were similarities. Consequently, the trial court held that the plaintiffs had failed in establishing their case.

High court’s verdict

The high court said the Court had to keep in mind that it was dealing with packets of biscuits that were generally used by people of the upper classes. There were many discriminating features between the two wrappers which were very apparent. The similarity in both the wrappers was narrowed to the extent that both were partly yellow and partly white and both had the design of a girl and some birds. The lady in the wrapper used by the Appellant had a pot on her hand while the lady in the wrapper used by the Respondent had a hay-bundle on her head. Respondent’s wrapper had pictures of cows and Appellant’s wrapper showed two calves. Therefore, the court said, they are not so similar that they can deceive an ordinary purchaser of biscuits.

Supreme Court’s verdict

In an act of infringement, where the similarity between the plaintiff’s and defendant’s mark is so similar to an extent where it is either visually, phonetically or otherwise matching or close and if the court reaches a conclusion that there is some kind of imitation or copying, then there is no need of any further evidence to prove that the plaintiff’s rights are violated. The court opined, to conclude whether one mark is deceptively similar to another, the essential features of the two are to be taken into consideration. They need not be put side by side to ascertain if there are any differences in the design. It shall be enough if the impugned mark bears overall similarity to the registered mark. The court stated, the packets of both the biscuits are of the same size, the colour scheme of both the wrappers is almost the same and the design of both, though not identical, shows a very close resemblance that it can easily be mistaken for the other. The essential features of both the wrappers are also similar. Therefore, there is no doubt that the defendants’ wrapper is deceptively similar to that of the plaintiff’s wrapper. Accordingly, the verdict was given in favour of the plaintiff. This case made it very clear that two trademarks can’t be deceptively similar.

According to section 2(1)(h) read with section 11 of the Trademark Act, 1999, deceptively similar means the mark resembling the other mark is likely to deceive or cause confusion. Further, the fact that both the parties are dealing in the same kind of trade and offering the same services to its customers also plays an important role. In deciding the question of deception and confusion the fact that the purchaser/buyer/customer might or might not be literate should be kept in mind.

The above case stands as a landmark one when it comes to the concept of deceptive similarity. It has provided a lot of clarity concerning cases related to the infringement of trademark through deceptive similarity and acted as a reference for future cases. After this case, there have been many cases with regards to deceptive similarity and one such recent case is the Starbucks vs Sardarbuksh case. Here is a detailed discussion of that case:

Starbucks v. Sardarbuksh

This case involves Starbucks corporation and sardarbuksh coffee and co. Starbucks is the plaintiff and sardarbuksh is the defendant in the case. Starbucks is a famous coffee joint known for its coffee and has branches in multiple countries. Sardarbuksh is also a coffee place started in Delhi in 2015 having many outlets.

Starbucks has its logo and name registered and is globally recognised. It is a well-known trademark with its logo depicting a crowned maiden with long hair in green colour. Sardarbuksh’s logo has a turbaned man with wavy lines extending from the sides. This makes the Sardarbuksh coffee and co. ‘s logo looks very similar to that of Starbucks. There are many other similarities such as the colour of the crowned maiden from the Starbucks logo and the colour of the turbaned man from the sardarbuksh logo are the same. Both the logos are round in shape. So, when we compare, the logos look very similar, the shape of the logo is the same and the colour of the logo is also the same. Moreover, the names of both coffee places also sound very similar. One more thing that needs to be noted is that the goods and services provided by both defendants and plaintiffs are identical.

After receiving a letter of demand from Starbucks Corporation in 2017, the defendants made necessary changes to their logo and changed their colour scheme to black and yellow and started trading under the new logo.

Later on, Starbucks filed a case against Sardarbuksh before the Delhi high court on 1st August 2018 for using the word mark’’Sardarbuksh’’ which was sounding very much like ‘’Starbucks’’.

The Delhi high court advised the defendants to go for new branding for its upcoming outlets while the five outlets that have been already functioning will continue the same way until the court’s final verdict. So, the defendants changed their name from “Sardarbuksh Coffee & Co.” to “Sardarji-Bakhsh Coffee & Co for their upcoming outlets.

On September 27, 2018, there was an exchange of terms and conditions between the parties, and such terms and conditions were put on record with the High Court of Delhi. Further, it was agreed that the defendant would change the name of all its outlets to “Sardarji-Bakhsh Coffee & Co.” Additionally, it was clarified and agreed upon that, if a third party uses the term “Bakhsh,” the defendant will have a right to file a suit against such a violator. The suit was finalized on the said terms.

Conclusion

This judgement in a way encouraged the registration of trademarks. Because, if a person has his trademark registered, there cannot be any means through which such trademark can be exploited by making a deceptively similar trademark and using it for their economic gains or to hamper the goodwill of such registered trademark or the trademark owner. Additionally, if any individual tries to do so, he will have to face the legal consequences.

As a trademark has a good reputation and goodwill, it is really important to protect it from any kind of exploitation, misuse and violation. With the help of the above cases, we can clearly understand that the court can go beyond what is written in the law to preserve justice, protect the rights of the traders and the interests of the consumers. Such cases make it easy for people to have faith in the judiciary.

References

Starbucks vs SardarBaksh: Local coffee chain agrees to change logo, name to Sardarji-Bakhsh – BusinessToday

True Brew: Starbucks Corporation v. Sardarbuksh Coffee & Co. – Intellectual Property – India (mondaq.com)

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

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join: https://t.me/joinchat/L9vr7LmS9pJjYTQ9

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Does silence amount to fraud

By

Rachit Garg

-

December 22, 2021

0

This article has been written by Ria Verma, at Symbiosis Law School, NOIDA. This article aims to give an overview of when the silence of one party can be construed as a fraud and how the fraudulent intent of the party can be proved despite their silence.

Introduction

Fraud is responsible for causing the loss of billions from society. Whether it be getting charged extra while traveling to a particular destination on a cab or a sharp decrease in the value of the shares of a company due to active concealment, white-collar crimes are on a rise.

Broadly speaking, fraud is a deception made intentionally with the objective of damaging another individual/entity or for personal gain. A famous saying is Fraus Omnia Vitiate, that is, fraud vitiates everything.

It is interesting to note that the silence of a party to a contract can also amount to fraud, depending on the particular situation or event.

For example, a vendor sells a defective product to a consumer without informing them of the defects of the product. In this case, failure to mention the defects is the same as a statement that the product does not have any defects.

What is a fraud

As stated in Section 17 of the Indian Contract Act,1872 fraud refers to an act that has been committed by a party or his agent, to a contract with the intent to deceive or induce the other party.

This could be in the form of misappropriation of assets, insurance fraud, money laundering, theft or infringement by a third party, etc. There must be an intentional deception of the item’s condition and genuine monetary damages suffered by a party to the contract.

Fraud refers to the intentional perversion of truth in order to induce another individual to forgo a legal right or part with something that has value in the eyes of law. Swindling individuals of cash is considered to be one of the most widely recognized kinds of misrepresentation, yet there have been numerous false “disclosures” in archaeology, art, science, and various other fields.

Common corporate frauds include the Satyam scam, the Harshad Mehta case, and the Sahara case. These scams made it critical for lawmakers to evaluate the prevailing standards and implement stringent methods to address such frauds.

Could silence be fraudulent

Mere silence usually does not support a fraudulent action. However, when silence is taken together with the circumstances of a particular case, it may amount to misrepresentation. While courts are willing to engage with various factual circumstances to ensure that parties’ intentions are upheld, prudence is always key to reducing the commercial risks and potential litigation in the formulation of contracts.

Mere silence or nondisclosure of facts would not constitute a wrongful act unless the defendant is under an obligation to talk and conceal the facts of a particular transaction or trade. Therefore, mere silence amounts to fraud when the circumstances of the case are such that the individual has a duty to speak and inform the other party of the facts, but they remain silent or the party’s silence is equivalent to expression. The other party to the contract is misled and suffers damages as a consequence.

Section 19 explains the voidability of contracts in the absence of free consent. The first exception of this section explains that if a party gave consent to the terms of the contract by silence or by misrepresentation, the contract would not be voidable if the party could have discovered the truth by ordinary diligence. Here, the silence or the misrepresentation must fall under the ambit of fraud as mentioned under Section 17.

In what circumstances will non-disclosure amount to an actionable misrepresentation

There are many situations wherein the silence, that is, the non-disclosure of information is considered to be critical to the contract and the act of withholding or not offering the material facts amounts to misrepresentation. The more genuine the defect, the more it is covered up, and the more harmful it is to the individual – the more likely the courts will consider the party’s silence as fraud.

1. Duty to disclose facts

The first such case when silence can be held accountable for fraud is when there is a duty by the other party to disclose facts about a particular case. This duty to speak arises where one party makes an offer and the other party accepts. It also arises when one of the parties does not have the intellect or the resources to discover the truth and is dependent on the honesty of the other parties involved.

A contract where such duty arises is uberrima fides, that is, a contract made in good faith. An example would be a contract of insurance, wherein it is the duty of the insured to inform the insurance agent of all the relevant facts to the risk that is being covered. There must be complete good faith on the part of the assured. The insured has a duty to disclose all the relevant facts to the insurer so that he can take into account whether the proposal should be accepted or not.

In P. Sarojam v. L.I.C of India (1985), it was held that when wrong answers are given in a life insurance policy, the policy would be voidable irrespective of the fact that the officer of the corporation certified the policy. In Rajesh Kumar Choudhary v. United India Insurance Co. Ltd, (2005), the party did not disclose that they applied for insurance for their property on similar grounds but had been rejected by the same company. This non-disclosure was held as a suppression of a material fact.

The burden of proof lies on the insurer and they need to show that facts were suppressed by the insured, and that they were of material nature to the risk that was to be covered. They also need to prove that the insured concealed the facts with the intention of misrepresenting the risk undertaken by the insurer.

Some instances where mere silence amounts to fraud are as follows:

Contract of immovable property

Under Section 55(i)(a) of the Transfer of Property Act, 1882, the seller is under an obligation to reveal to the buyer any material defect or shortcoming in the property or in the seller’s title of which the seller is aware. It must be highlighted that the buyer is not aware of that particular defect and cannot foresee or disclose it as a reasonable person.

Contract of marriage

Each party to a contract of marriage is bound by a duty to disclose every material fact. If the accurate facts are not revealed, the other party can break off the engagement and revoke the contract. In the case of Anurag Anand v. Sunita Anand (1996), it was held that caste, income, age, nationality, religion, educational qualifications, marital status, family status, financial status, would be considered as material facts and circumstances.

Therefore, when the consent of one party to the marriage is obtained fraudulently by concealing a material fact concerning the other party, this is voidable at the option of the first party. A decree of nullity can be obtained to annul the marriage. This is in accordance with Section 12 (i)(c) of the Hindu Marriage Act, 1955 and Section 25 of the Special Marriage Act, 1954.

2. When silence is deceiving

Silence itself in some situations can be considered equivalent to speech. Herein, a person who remains silent despite knowing that his silence can be deceptive is not innocent and can be declared guilty of fraud. For example, the buyer knows the property’s actual worth but conceals this fact from the seller. The seller has the option to rescind the sale as it is void.

Another example would be: Mr. A has full knowledge of the fact that an insolvent decree is fully secured. He suppresses this fact and convinces the Official Assignee to assign it at 10 percent of its face value to him. Here, Mr. A makes the representation that the decree is unrealizable. He does not have a duty to disclose that the security is fully secured. However, he makes a false statement that the decree is practically unrealizable with the intention to deceive the assignee. Therefore, his silence would amount to fraud.

3. Change of circumstances

Some of the time a portrayal is genuine when made, yet, it might, on account of a difference in conditions, become bogus when it is followed upon by the other party. In such conditions, it is the obligation of the individual who made the portrayal to convey the difference in conditions. In an English case, a clinical specialist spoke to the offended party that his training was worth £2000 per year. At the time the statement was made, he had stated the correct value of the practice. However, five months later when the plaintiff purchased the training, it was almost worthless. It was held that the failure to communicate the difference in conditions amounted to an actionable misrepresentation.

Similarly, in T.S. Rajagopala Iyer v. South Indian Rubber Works Ltd (1942), a company’s prospectus showed that certain individuals would be the company’s directors. However, before the allotment, some directors had retired and there were changes in the directorate. The Madras High Court held that the non-communication of the change in the directorate was enough for an allottee to avoid the allotment.

4. Half-truths

In any event, when an individual is under no obligation to unveil reality, he may turn into blameworthy misrepresentation by non-divulgence if he intentionally reveals something and at that point stops a large portion of the way. An individual may keep quiet, yet on the off chance that he talks, an obligation emerges to unveil every bit of relevant information.

In R.C.Thakkar v. Bombay Housing Board (1972), incorrect estimates were given in a tender. The contractor, in the belief that the estimate was correct, reduced the costs. The court held that the representations made in the tender amounted to misrepresentation. The defendants could not take the defense that the plaintiff could have deduced the actual costs by reasonable efforts.

5. Guarantee obtained by keeping silence to material circumstances

Section 143 of the Indian Contract Act, 1872 invalidates a guarantee obtained by willful silence as distinguished from mere non-disclosure. The creditor had the duty to give the surety precise and accurate information of all the relevant material facts.

Under this Section, it must be proved that not only was silence observed to material circumstances but the guarantee was also obtained because of the same.

For example, an employer guarantees that the servant is honest and hardworking. However, he concealed the fact that the servant is also employed elsewhere and is guilty of acts such as dishonesty. Here, the past conduct of a servant is a material fact and should be disclosed to the other employer. The case of London General Omnibus Co v. Holloway (1912) had similar facts and the Court held that an omission to mention such facts would imply that such facts do not exist. Therefore, it can be noted that this contract which has been induced by non-concealment of material facts is invalid.

Proving fraudulent intent

An important question here is how can we prove that the contracting party remained silent and did not disclose the relevant material facts? The party who has suffered damages must show that:

The defendant did not disclose material facts pertaining to the subject matter of the contract.
The defendant had full knowledge of the facts.
The defendant’s failure to disclose the facts led to a false impression in the plaintiff’s mind.
The defendant had the knowledge that his failure to disclose the material facts would cause a false impression and the plaintiff would rely on the false impression.
The plaintiff relied on the impression and suffered damages as a consequence.

Proving defendants’ intention of deceiving the plaintiff

The defendant’s intent can be proved by obtaining the relevant documents from the possession of the defendant. After the fraud, the plaintiff must consider the following to prove his claim:

1. Hold order

The defendant has to be immediately notified of the duty imposed on him to preserve all the relevant documents about the case, particularly all the information which has been stored electronically. This electronic data could be in the forms of texts and conversations which have been shared with the plaintiff.

2. Document collection

The written documents in possession of the defendant must be collected. The plaintiff relying on these documents must show that the defendant concealed information and committed fraud.

3. Buzz words

There must be a search for words such as “let’s discuss” while reviewing the defendant’s documents which can indicate fraud. An effort to conceal can also be implied by messages requesting the plaintiff to discuss over the phone. Words that raise ethical questions, jokes about misconduct, and hostility can also suggest fraud.

4. Third-party subpoenas

Subpoenas must be used liberally to ensure the disclosure of a complete record in the form of audit work papers, bank statements, and the defendant’s communication with supplies, lenders, and other relevant counterparties. These would help in ascertaining the contradicting statements that were presented to the plaintiff.

If the court is willing to ‘inspect’ evidence that signifies non-disclosure, mere silence is sufficient to prove that fraud has been committed.

Remedies

In case of a silent fraud, the plaintiff has the following two remedies:

The plaintiff can rescind, that is, cancel the contract and obtain compensation for the losses he has suffered.
Affirm the contract and sue the defendant to receive damages. (for example, when the value of the asset has decreased)

Depending upon the facts and circumstances of the case, the malicious or criminal intent of the defendant can be proved. Criminal charges can be then brought against the defendant which can result in consequences like criminal fines or even a jail sentence for the defendant.

Damages

In Dambarudhar Behera v. State of Orissa (1980), the plaintiff rescinded the contract due to misrepresentation of facts by the other party. The plaintiff claimed damages as the expenditure occurred in the formulation of the contract and the loss of earnings till the time the plaintiff got to know about the misrepresentation. The Court awarded damages to him and held that the damages given for fraudulent misrepresentation should not surpass the losses which would have occurred had the facts not been misrepresented.

In Smith New Court Securities Ltd v. Scrimgeour Vickers (Asset Management) Ltd (1996), Lord Browne-Wilkinson formulated certain principles to assess adequate damages for fraudulent misrepresentation:

The defendant is bound to make amends for all the damage directly flowing from the transaction or the contract.
The defendant must make amends for all the foreseeable damages caused emanating from the contract or by the transactional.
The plaintiff is entitled to recover by way of damages the full price paid by him, but he must give credit for any benefits which he has received as a result of the transaction.
As a general rule, the benefits received by the plaintiff would include the market value of the property acquired at the date of the transaction. But this rule is not to be inflexibly applied when applying the rule would obstruct the plaintiff from recovering compensation for the damage he suffered.
The plaintiff is entitled to recover consequential losses caused by the transaction or the contract.

The plaintiff must have taken all the reasonable steps to mitigate the loss once he has discovered the fraud.

Punishment

The punishment for committing fraud is non-compoundable as the punishment is both fine and imprisonment. With the advancements in technology, online frauds have increased, and subsequently, committing fraud has become a grave offense in the eyes of law.

Section 447 of the Companies Act, 2013 provides punishment for fraud. About 20 Sections of the Act have been dedicated to elucidating the frauds committed by the directors of an organization/entity, auditors, key managerial personnel, and/or the officers of the company. The Act goes beyond ascertaining professional liability and expands it to personal liability if a company is found to contravene any of the provisions of the said Act.

Under Section 447, if an individual is found guilty of fraud he can be punished with imprisonment ranging from 6 months to 10 years. He shall also be liable to fines ranging from the amount involved to three times the amount involved in the fraud. In case the circumstances of the fraud are against the interest of the public, the wrongdoer can be punished with imprisonment for a minimum period of three years.

Section 7(5) states that any individual who suppresses material information or furnishes false information or incorrect particulars he is aware of, in the documents filed with the Registrar for the purposes of registering the company, he shall be subject to punishment under Section 447.

Conclusion

Hence, mere silence to certain material facts affecting the wish of an individual to enter into the contract would not amount to fraud. But if their silence can be treated as speech or the individual has a duty to inform the other party of the facts, silence would amount to fraud. Mere silence can result in fraud because of non-disclosure of relevant facts by one party causing damages to the other party.

A desperate financial need may be the cause of frauds prevalent all across the globe. Punishment for fraud is quite minimal and should be replaced with a harsh penalty to instill a moral conscience on the citizens to not be swayed by the rewards of fraud. The public must be aware of prevalent scams and must verify whether the information provided by the party is credible or not. Elimination of fraud is not an instantaneous event but society as a whole has to pay the price.

References

Avtar Singh, Contract and Specific Relief, 12^th Ed (2020)
Pollock and Mulla, The Indian Contract Act,1872, 15^th ed (2017)
https://www.gtlaw.com/-/media/files/insights/published-articles/2019/06/common-law-fraudulent-and-negligent-misrepresentation.pdf
https://www.mondaq.com/india/white-collar-crime-anti-corruption-fraud/696380/corporate-frauds-an-analysis

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Witnesses protection in India

By

Sneha Mahawar

-

December 22, 2021

0

witness — Image Source -https://bit.ly/3d0Cv4q

This article is written by Ishan Arun Mudbidri, from Marathwada Mitra Mandal’s Shankarrao Chavan Law College, Pune. This article talks about the recent developments regarding vulnerable witnesses and the protection of witnesses in India.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

Witnesses play an important role in legal proceedings. Witness protection in India is not a heavily discussed matter as compared to other issues like rape, domestic violence, etc. and frankly speaking, it is unfair and wrong. Both parties to the case know that an individual witness can hold the verdict in their favor, consequently, many times witnesses are either emotionally blackmailed or bribed to stay quiet and change their stand in a case. It is often seen in such instances, that witnesses who are minors or are suffering from additional difficulties fall prey. Such people are termed as vulnerable witnesses. The Supreme Court in a recent remark gave clarification regarding the term ‘vulnerable witness’.

Who is a witness

A witness is a person who sees crime happen and who has the ability to express it when asked by the court. Under Section 118 of the Indian Evidence Act 1872, the term witness is defined as a person who is competent enough to understand the questions asked by the court. Thus, according to this section, any person can be a witness unless they are unable to understand and answer the questions that are asked to them.

Vulnerable witness

The Supreme Court while hearing a special leave petition in the case of Smruti Tukaram Badade v. State of Maharashtra and Anr. (2019) orally remarked that the definition of the term ‘vulnerable witness’ might not be constrained to child witnesses. This was in reference with the Delhi High Court Guidelines on the protection of vulnerable witnesses wherein, Section 3 of these guidelines define a vulnerable witness as a child who has not yet completed 18 years of age. The term vulnerable witness is not included under Section 118 of the Indian Evidence Act. The Youth Justice and Criminal Evidence Act 1999 of the United Kingdom mentioned certain measures for the protection of vulnerable witnesses. There are certain people who are unable to testify or give evidence to the court due to certain additional difficulties like mental disorders, physically handicapped or are unable to cope due to intelligence impairments, and are below 18 years of age. Such people are termed as vulnerable witnesses.

If so, can a child testify

A child can testify if the court thinks that he/she is able to answer the questions put forward rationally provided he/she is not a toddler. In the case of Dhanraj and Ors, v. State of Maharashtra (2002), the witness was a child of class VIII. The Supreme Court held that a child of class VIII who is not very small will be having enough intelligence to understand the facts and answer the questions put forward. Hence the testimony of the child was heard.

Recent developments relating to the concept of vulnerable witnesses in India

The Supreme Court in 2017, ordered for the immediate establishment of at least two vulnerable witness deposition centres under every High Court’s jurisdiction. The protection of vulnerable witnesses in criminal proceedings has become a growing issue. Children, rape survivors, victims of sexual abuse, etc. often find the court environment stressful. They are constantly under threat, if not physically, mentally. The term secondary victimization is often used while describing vulnerable witnesses. This simply means the mental suffering endured by the victims due to other institutions or individuals after the crime has been committed mostly in sexual violence cases. The same thing can be seen when witnesses who are small children or people with certain disabilities are bribed or threatened to change their stand. Due to this, many times such people are not ready to give their testimonies.

Delhi High Court guidelines

The Delhi High Court in 2017, released a set of guidelines for the protection of vulnerable witnesses in India.

Objectives of these guidelines

To strike a balance between the fairness of the trial and ensure that the witnesses are able to give evidence.
To reduce secondary victimization and harm caused to vulnerable witnesses as a result of their contribution to the criminal justice system.
To secure the evidence given by the witnesses.

Important sections

Section 13 of the guidelines states that the vulnerable witness shall be allowed a pre-trial visit of the court to get familiarized with the surroundings.
Section 17 states that the vulnerable witness shall be provided legal assistance by the court.
Section 24 states that the court shall make sure that the witness is in a comfortable environment.
Section 34 states that the court shall explain to the vulnerable witness to listen to the questions properly and answer them truthfully.
Under Section 38 clause (a) the court shall maintain confidentiality and seal the records of the witness.
Section 39 states that the court shall impose protective measures if the safety of the child or any other vulnerable witness is at risk. The protective measures include; avoiding direct or indirect contact between the child and the accused or any other party related to the case, protecting the witness by calling the police or other relevant agencies.

The Bandu case

The Apex Court’s recent remarks on vulnerable witnesses came in compliance with its decision in the State of Maharashtra v. Bandu (2018) case. The victim, in this case, was a deaf and dumb 14-year-old girl who was raped allegedly by the respondent i.e Bandu. The High Court set aside the conviction of the respondent on the ground that the victim was not cross-examined. The case went to the Apex Court who held that, even though the victim was not cross-examined, there was plenty of evidence to prove that she was raped by the respondent. After passing its Order, the Court looked into a suggestion stating that special examination centres must be set up for examining vulnerable witnesses so as to make them comfortable to give their statements. The Court further asked for the status of setting up vulnerable witness deposition centres and pressed for the same.

Vulnerable witness deposition centres

The Court ordered the States to set up at least two vulnerable witness deposition centres under the jurisdiction of every High Court in the country. This was in view of the stress and trauma these witnesses go through during court proceedings. These centres are specially set up for child witnesses, and victims turned witnesses in heinous crimes like rape, sexual assaults, etc. who need protection. These centres will have all the protective measures in place to ensure a safe haven for the witnesses. In 2019, Gujarat established its first vulnerable witness deposition centre in Vadodara. The centre was directly attached to the Chhota Udepur District Court with a special entry and exit system. The centre was designed in a way that there won’t be any direct or indirect contact between the witness and people outside. Further, the centre has a separate washroom, pantry, television set, children’s play area, etc.

Witness protection in India

Witness protection has become a raging issue in India. In the case of Swaransingh v. the State of Punjab, (1957) the Court held that in a criminal case evidence is admissible in law. To provide such evidence, witnesses are important. It is rarely seen that a witness has changed his/her stand by his/her own free will during a trial. In the case of Mahendra Chawla and Ors. v. Union of India and Ors. (2019), the Court held that one of the main reasons for witnesses changing their stance can be the lack of proper protection given by the state, hence a threat to life. Such witnesses are known as hostile witnesses. The 4th National Police Commission Report 1980, states that most witnesses in India are turning hostile because of pressure and coercion by the accused and that a regulation on the manipulation of witnesses is necessary. Hence, the state of witnesses in India is bad. There’s a lot of stress witnesses have to deal with. First witnessing the entire crime scene and then staying in fear against a possible threat to their lives.

Right to a Fair Trial

The Indian Constitution provides for the Right to Fair Trial under Article 21. This has become an important feature of the Indian democratic system. It is also recognized as a fundamental right. Witnesses can completely change the scenario of a case hence, deserve a free and fair trial. In the case of Zahira Habibullah Sheikh & Anr. v. State of Gujarat & Ors., (2006) the Supreme Court held that a witness should not be forced or threatened to give false evidence. If done so, the trial would not be considered fair. This principle was mainly put forth for the accused in a case. Hence to maintain fairness in a trial, the accused should be allowed to cross-examine any number of witnesses in a proceeding. In the case of Mohd. Hussain Julfikar Ali v. the State (Govt. of NCT) Delhi, (2012), out of 56 only one witness was cross-examined. So the Court ruled in favor of the appellant and stood down his conviction.

Witness Protection Scheme 2018

The Witness Protection Scheme in 2018, is the first legal enactment set up by the Indian Government. The need for such an Act was due for a long time. The Supreme Court in the State of Gujarat v. Anirudh Singh (1997) held that it is the duty of every witness to help the State by giving evidence. The objective of the scheme is simple. Protect and safeguard the interests of the witnesses in India. The Scheme further enables the witness, a police escort to the courtroom. In worst-case scenarios, the Act divides witnesses into three categories:

Class A:- When the witness and his/her family members get threats to their lives during the proceedings.
Class B:- When the safety, reputation, and property of the witness and his/her family members during the investigation.
Class C:- When the threat only extends to harassment of the witness and his/her family members during the proceedings.

The Scheme further provides for a Witness Protection Fund, which is created for the expenses incurred during a witness protection order. Witness protection Order is the detailed list of protective measures to be passed by a competent authority. Further, the Scheme ensures full identity protection of the witness and his/her family members during the investigation. Some of the other protective measures mentioned in this Scheme include:-

Installation of security cameras at the witness’s house.
Regular patrolling, and recce of the witness’s house.
Monitoring the witness’s call records, emails, messages, etc.
Relocation of the witness based on the Threat analysis report.
Emergency contact numbers are provided to the witness.

Conclusion

Jeremy Bentham rightfully says, “Witnesses are the eyes and ears of Justice”. Since the 14th Law Commission Report in 1958, which first mentioned witness protection in India, this topic has come a long way. Likewise, various other enactments including, the Protection of Children from Sexual Offences Act 2012, the Scheduled Caste and Tribes (Prevention of Atrocities) Act 1989, the National Investigation Agency Act 2008, etc. have mentioned the need to safeguard the rights of witnesses and give them adequate protection. From the crime scene to the courtroom, a witness has to experience everything. To add further misery, they are exposed to life threats, coercion, harassment, etc. by the accused. Vulnerable witnesses are more prone to such suffering. In this situation, they tend to crack and turn hostile. To avoid this, the stance of the Indian Government is important. The Witness Protection Scheme 2018, and also the setting up of separate vulnerable witness deposition centres are important and effective steps taken by the administration. However, apart from the Delhi High Court guidelines, there is no other legal mention for the protection of vulnerable witnesses. Hence, unanimous and separate legal provisions for safeguarding the rights of vulnerable witnesses including strict punishments for those who manipulate the witness is the need of the hour. As the name suggests, these kinds of witnesses are regular targets and can get easily manipulated but, their courage and strength to come out and testify can put those guilty behind bars. Hence, their protection becomes very important.

References

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Nature and extent of liability of surety

By

Sneha Mahawar

-

December 22, 2021

0

contract — Image source: https://rb.gy/wg42es

This article has been written by Ria Verma, a student at Symbiosis Law School, NOIDA. This article aims to examine the nature and extent of the surety’s liability with a comprehensive study on prominent case laws.

This article has been published by Sneha Mahawar.

Table of Contents

Introduction

According to Black’s law dictionary, the word “guarantee is used, as a noun, to denote the contract of guarantee or the obligation of a guarantor, and, as a verb, to denote the action of assuming the responsibilities of a guarantor.”

A contract of guarantee enables an individual to get a loan or buy goods on credit or acquire means of livelihood. A contract of guarantee is a tripartite agreement, that is, it concerns three parties- the principal debtor, the creditor, and the surety.

There must be a principal debtor who has taken debt from the creditor. The surety comes into the picture and pays the debt on behalf of the principal debtor. For example, A, an individual comes up and tells the supplier of certain goods B, that he will pay for the goods bought by C, in case C fails to do so. A promises to guarantee the payment in consideration of B’s promise to deliver the goods. This is sufficient consideration for C’s promise.

Contract of guarantee

A contract of guarantee is precisely stated under Section 126 of the Indian Contract Act, 1872. According to this section, a contract of guarantee can be understood as a contract that requires an individual or a group of individuals to perform a promise made or to discharge their liability under the contract when the third party to the contract failed to fulfill their part of the promise. This guarantee can be oral or written.

A contract of guarantee requires three parties: the principal debtor, the creditor, and the surety. The individual on whose non-payment the guarantee has to be given is the principal debtor or the borrower, the creditor is the individual who is given the guarantee and the surety is the individual who gives the guarantee.

Surety makes a promise to the creditor that on the principal debtor’s default, they will discharge the third party’s liability or fulfill the promise which was made by the principal debtor. Therefore, the surety gives assurance to the creditor for the principal debtor’s act.

It can be interpreted that the liability of the surety acts as collateral to the principal debtor’s liability. In case the principal debtor defaults, the surety is bound by a conditional promise to be held liable.

There are three essential features of a contract of guarantee:

Consideration- It is an essential element of a contract of guarantee. The consideration can be monetary, a future act, personal property, etc. that largely benefits the principal debtor.
Not made in good faith- A contract of guarantee is not an uberrimae fides contract, that is, a contract made in good faith. But there is an obligation to disclose all the material facts to the surety so he can make an informed decision. Therefore, a guarantee obtained by concealment or misrepresentation is invalid.
Either oral or written- The contract can either be oral or written according to Section 126 of the Indian Contract Act, 1872.

The Act seeks to protect the interest of all the three parties that are involved in a contract of guarantee with emphasis on the interests of the surety.

Nature of liability of surety

As laid down in Section 128 of the Indian Contract Act, 1872, the liability of the surety is coextensive. It has the same extent as that of the principal debtor. It emphasizes the maximum degree as well as the scope of the surety’s liability.

Coextensive

‘Coextensive’ is an attribute to the word extent and refers to the amount or the quantum of the principal debt. This particular section only explains the ambit of the extent of surety’s obligation when no limit has been stipulated against the validity of the principal debtor’s obligation.

The Section further explains how the surety may, however, in the agreement impose certain limits to the extent of his liability entering into a special contract. They can make a declaration and impose a certain limit or restriction to their liability.

Unless it is expressly mentioned in the terms of the contract, neither can the surety be held liable by the creditor nor can he sue him, till the principal debtor makes a default. Therefore, the surety’s liability is secondary or peripheral in nature.

It is encouraging to take note of the fact that even before the Indian Contract Act, 1872 was enacted the Indian courts perceived the principle of co-extensiveness. In the case of Lachman Joharimal v. Bapu Khandu and Another (1869), the Bombay High Court explained how it is not binding on the creditor to extinguish his remedies before suing the principal debtor. On obtaining a decree against the surety, it may be upheld in a similar way as a pronouncement or a decree for any obligation of the party or any debt which has not been repaid.

Condition precedent to the surety’s liability

Where there is a condition precedent to the surety’s liability, he will not be liable unless that condition is first fulfilled. Section 144 is based on this principle to an extent. For example, when an individual gives a guarantee to undertake a task unless another individual joins as a co-surety, the guarantee will be invalid if another co-surety does not join the contract.

In National Provincial Bank of England v. Brackenbury (1906), a guarantee was signed by the defendant. The defendant signed the contract on the condition that three more individuals would also sign the contract, as part of a joint and several guarantee. However, one of the three individuals did not sign the contract of guarantee. The Court held that no agreement took place since there was a condition to the contract that was not fulfilled. Hence, the defendant was held not liable.

The extent of liability of surety

It is still a critical issue to measure the maximum extent of surety’s liability and to what extent it is being invoked presently. Herein the question is at what time the surety’s liability comes under scrutiny- when the debtor has not fulfilled their part of the promise of all the remedies that have been availed by the creditor against the debtor.

Is creditor bound to exhaust his remedies before suing the surety

The surety’s liability is not removed in case of the omission of the creditor in suing the borrower. The creditor does have to necessarily exhaust his remedies against the principal debtor before they sue the surety. They can still maintain a suit if no proceedings have been initiated beforehand against the borrower. However, the surety cannot be held liable until the contingency takes place.

Difficulties arise in interpreting the principle of co-extensiveness when the surety has guaranteed performing a contractual liability to make payments by way of installments to the creditor.

Prominent case laws

The reference point for these difficulties was brought to light and elucidated in Lep Air v. Moschi (1973). In this particular case, the debtor did not make the payment in installments to the creditor who had performed their end of the contract. The contract was repudiated by the creditor. The issue here was whether the creditor could initiate proceedings against the surety at the time of repudiation for the amount entitled to the creditor under the contract, regardless of the fact that when the repudiation was accepted the debtor now had a secondary and not a primary obligation to pay damages.

The surety had an obligation to observe the debtor’s performance of his contractual obligations, so on his default, the surety was obligated to make a payment to the creditor for the loss incurred to him. However, it was visualized in this case that the obligation of the surety and the debtor would be coextensive and no pronouncement could breach this basic principle.

The principle of co extensiveness was further enforced in the following cases of Bank of Bihar Ltd v. Damodar Prasad and Another (1968) wherein the Supreme Court explained how the sole condition required was to demand the payment pertaining to the principal debtor’s liability for the implementation of the bond. On the fulfillment of the condition and despite constant demands, both the principal debtor and the surety did not fulfill their end of the contract.

The liability being co-extensive and immediate in nature made the surety liable to pay the whole sum in question. There was no delay and no anticipation for the remedies to be extinguished by the creditor against the principal debtor.

A similar judgment was held in State Bank of India v. Indexport Registered (1992), wherein the Supreme Court explained how the surety solely because of the creditor’s omission in initiating proceedings against the surety does not become free from their liability to pay the debt. It was reinstated that the creditor is not confined to having his remedies and a suit is still maintainable before suing the principal debtor.

The Supreme Court explained how prima facie there can be proceedings against the surety despite the absence of demand and without proceeding against the principal debtor first. They explained the lack of any such prerequisite for the creditor to request payment from the principal debtor or sue him for not fulfilling his part of the promise and they can directly initiate proceedings against the surety unless it has been expressly stipulated in the contract.

In the case of Hukumchand Insurance Co Ltd v. Bank of Baroda (1977), the Karnataka High Court observed the nature and the incidents that occurred are the two main factors which decide the liability, the extent, and manner of the enforcement. Although the principal debtor and the surety’s liability arising from the same bargain, the two liabilities are not alike. These principles laid down were further reinforced in a number of cases.

It is the choice of the creditor which remedy they find fit to pursue and neither the defaulter nor the surety can compel the creditor in any manner and advise them to take recourse to a particular remedy. It falls in the exclusive domain of the creditor.

In the case of State Bank of India v. G.J. Herman and others (1998), the Kerala High Court observed that the surety’s liability being joint and several, would not bind the creditor to initiate proceedings against the principal debtor or the other sureties in the contract. If such a direction would be binding, it would be a direct violation of the principle of co extensiveness.

They are to be liable till the extent to which they stood guarantee and can face proceedings by the creditor. It is solely the discretion and the decision of the creditor against whom he wants to initiate the proceedings- the principal debtors or any of the sureties.

A suit against principal debtor alone

The creditor can initiate a suit against the principal debtor alone without initiating any proceedings against the surety. In Union Bank of India v. Noor Dairy Farms (1996), it was held that such a suit would be maintainable. The liability of the surety in a contract of guarantee is not absolved on the dismissal of a suit against the principal debtor.

A suit against surety alone

A suit against the surety without initiating proceedings against the principal debtor has been held to be maintainable. In N.Narasimhaiah v. Karnataka State Financial Corporation (2004), the creditor showed sufficient reasons for not proceeding against the principal debt in his affidavit. A contract of guarantee was made enforceable by the terms stipulated against the guarantors severally and jointly with that of the principal debtor’s company. The Court held that the creditor has the option to sue the company and the surety as co-defendants or the surety alone.

Proceedings against surety’s mortgaged property

A financial corporation cannot take possession of the surety’s mortgaged property of the guarantor without prior notice. The corporation also cannot issue any public notice to sell the property without informing the surety. This is because the surety’s liability is secondary in nature and would arise only when the principal debtor fails to repay the amount.

The property of the surety which has been offered as a security can be proceeded against without exhausting the available remedies against the principal debtor.

Death of principal debtor

In case of the death of the principal debtor, any suit against him would be void ab initio. However, the surety would not be discharged of his liability to pay the amount.

In Orissa Agro Industries Corpn Ltd v. Sarbeswar Guru,(1985), it was held that the dismissal of the suit against the principal debtor, under Order 1 of Code of Civil Procedure, 1908 would not automatically absolve the surety of its liability.

Surety’s right to limit his liability or make it conditional

The surety may put a restriction on the extent of his liability in the agreement. He can expressly declare his guarantee to a fixed amount and in such a case the surety cannot be liable for any amount beyond the fixed amount.

The principal debtor owes a greater amount but it is not the responsibility of the surety to be responsible for even a single rupee more than what was stated in the agreement. For example, in Hobson v Bass (1871) the surety expressly declared that “my liability under this guarantee shall not at any time exceed the sum of £250“.

Conclusion

The principle of co-extensiveness cannot be classified as a rigid principle. The exact degree and extent of the surety’s liability would be governed by the provisions mentioned in the guarantee on the actual constructed document and the parties have the freedom to impose certain restrictions towards the surety’s liability without deviating from the actual nature of the contract of guarantee.

The exact and precise extent will always be under the governance of the provisions of guarantee on how the document has been drafted and the parties enjoy the freedom to add restraints if any to the surety’s liability.

There have been conflicting issues regarding the issue of initiating proceedings, without extinguishing the remedies available in opposition to the principal debtor. The Supreme Court had the same stance in the Damodar Prasad case that the surety can be sued before other remedies are used. The Judiciary has restated this basic principle in many judgments and over the years have and continue to remove the pertinent ambiguities and issues regarding the scope of the surety’s liability.

Each case has clarified the interpretation of the principle however, there is still a wide scope of improvement. The courts will continue to ponder and expound on the validity of the principle with respect to the nuances of the period.

References

Avtar Singh, Contract and Specific Relief, 12^th Ed, (2020)
Pollock and Mulla, The Indian Contract Act,1872, 15^th Ed,

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Equity capital reflects ownership while debt capital reflects an obligation

By

Abanti Bose

-

December 22, 2021

0

GettyImages-980973568-406377906a73421db5c9525576df17f9 — Image Source: https://rb.gy/whofst

This article is written by Priya Singh, pursuing Diploma in General Corporate Practice: Transactions, Governance and Disputes from Lawsikho.

This article has been published by Abanti Bose.

Introduction

Sima has been finding it difficult to commute to her office every day as her office is quite a distance from her house. Sima is now looking to purchase an apartment close to her workplace. She has been visiting at least two properties every day. Sima finally liked one of the houses she saw last week and is now ready to purchase it. The house costs 50 lakhs, and Sima has already paid 20 lakhs and plans to borrow the remaining 30 lakhs from the bank. If we look at Sima’s example, we can consider Sima’s house as an asset in which she invested 40% of her own money and 60% of the money she will borrow from the bank. Let’s compare this situation to running a business. A business in some way always requires capital and funds but it is quite possible that the business would not always have the required capital. In such a case the business owners or promoters have two options to raise funds. This could be in the form of debt or equity financing.

What do these terms actually mean?

In Sima’s example, we can say that her asset, which is her house, can be considered as your business which requires investment in the form of money. This money could be obtained through two options; one in the form of debt financing and the second in the form of equity. We can get an idea about debt financing through Sima’s example of getting a loan from the bank but to understand equity a deeper understanding is required.

Equity is when a business issues its stocks either to the public or to private investors. These investors ultimately become the shareholders of the company. For issuing stocks of the company, it is essential that the company dilutes its stocks or issues new shares on proper evaluation to the interested investors.

What is debt financing?

Debt finance is when you borrow money and pay it back with an interest over a set period. Bank loans, debentures, overdrafts, mortgages, bonds, and other forms of debt finance are the most frequent types of debt financing instruments.

Advantages of debt financing

Retention of ownership

Debt financing allows you to retain complete control over your business. As the business owner, you are not answerable to the creditors. This is not the case in equity financing.

Tax benefits

Tax benefits are a big incentive for debt financing. Unlike private loans, interest fees and charges on a business loan are tax-deductible.

Options of the low-interest rate

Various loan schemes with low-interest rates are available to small businesses.

No sharing of profit

The creditors do not get a share in your profit. You are only bound to pay the agreed interest to your creditor within the agreed time frame.

Easy financial planning

You know well in advance how much principal and interest you will pay back each month. This helps in future financial planning

Disadvantages of debt financing

Difficulty in securing the loan

Banks are cautious when it comes to lending money. For new businesses, debt finance may be difficult to come by.

Mandatory repayments

You must assure that your business can generate sufficient revenue to pay off the debt and the interest incurred at regular time intervals. Even if the company fails to generate profit it is obligated to pay its debt.

Inadequate cash flow

Making timely payments has the potential to affect your cash flow. In start-up enterprises, cash flow issues are prevalent, making regular payments difficult.

Bankruptcy

Any business that employs debt financing is at risk of going bankrupt unless it has a solid plan in place to repay the loan. This is especially dangerous if you have pledged your assets as collateral for a loan.

Impacts credit rating

Every loan you take for a business will reflect on your credit rating.

What is known as equity financing?

The sale of company shares to raise capital is referred to as equity financing. It can refer to the selling of any type of equity instrument, including common stock, preferred stock, share warrants, and so on. When investors buy shares in a company, they are also buying ownership rights in the company.

To finance plant assets and initial operational expenses, equity financing becomes an important tool, particularly during a company’s inception stage. Investors profit from dividends or when the value of their stock rises.

What are a few major sources of equity financing?

Angel investors, crowdfunding platforms, venture capital firms, or corporate investors could be a few major sources for private companies to raise capital. Ultimately, shares can also be sold to the public in the form of an IPO.

Advantages of equity financing

Alternate source of finance

It is not always possible for emerging start-ups to qualify for large bank loans. In such a case the main advantage of equity financing is that it offers such companies an alternative funding source to debt.

Typically, investors focus on the long term and do not expect a quick return on their investment. Instead of focusing on debt repayment and interest, it allows the company to reinvest cash flow from its operations to grow the business.

Helps maintain cash flow

In the event of equity financing, the corporation is only required to pay dividends on profits to shareholders, as opposed to paying interest at regular intervals in case of a loan. This aids in the company’s cash flow management.

Less risky

From the company’s end, the risk involved is less. As you don’t have to pay a fixed payment as in case of a debt.

Access to better management expertise

Equity financing also provides certain advantages to the management of the company. Some investors are personally motivated to contribute to a company’s growth and want to be involved in its operations. Their successful experiences enable them to offer essential support in the form of business contacts, management skills, and access to additional financing sources. Many angel investors and venture capitalists are willing to help businesses in this way. It is crucial during the early stages of a company’s development.

Disadvantages of equity financing

Dilution of ownership and operational control

The major disadvantage of equity financing is that it requires business owners to give up a portion of their ownership and control. If the business becomes profitable and successful in the future, a portion of the profits must be distributed to shareholders in the form of dividends.

Many venture capitalists demand up to 50 per cent equity share, especially from firms with little financial experience. Many business owners and founders are hesitant to give up such significant control of their company, which limits their equity funding alternatives.

Cost and lack of tax shields

In comparison to debt, equity investments provide no tax benefits. Dividends paid to shareholders are not tax-deductible expenses, although interest payments are. This results in a rise in the cost of equity borrowing.

In the long run, equity financing is believed to be more expensive than debt financing as investors demand a higher rate of return than lenders. When funding a business, investors take on a lot of risks, so they demand a bigger return.

Conflicts

Not all investors may agree on a certain decision. They may have varying personal goals for the company’s development. These are challenges that the company’s founders will have to cope with.

Debt vs equity

Let’s assume your company named ‘Olive’ intends to scale up its business by purchasing new equipment, land and factories. It estimates that it needs to raise Rs. 100 crores in capital to fund its expansion.

To execute this, the Company decides to adopt a combination of equity financing and debt financing. The debt financing component obtains a business loan from a bank for an amount of Rs. 65 crores, with an interest rate of 3.5% per annum. The loan is to be repaid over five years. For the equity financing component, the Company sells a 10 % equity stake in its business to a group of investors and in return receives Rs. 45 crores.

With the given scenario, there could be a variety of possible combinations that result in different outcomes. If for example, Company Olive decided to raise capital solely through equity financing, the owners would have to give up more ownership, reducing their share of future profits and decision-making power.

In contrast, if they were to rely solely on debt financing, their monthly expenses would be higher, leaving less cash on hand for other purposes and a larger debt load to repay with interest. Businesses must choose the best option or mix of options for them.

When we look at the benefits and drawbacks of debt and equity financing, it is evident that the phrase “Equity Capital reflects ownership, while Debt Capital reflects an obligation” generally holds good. However, the phrase cannot be viewed in its entirety. Other factors must be considered when determining if a given type of financing will result in retention of ownership or will become a liability.

A corporation may choose debt financing, produce reasonable profits, and return the debt without losing ownership or incurring any obligation. Similarly, a company’s promoters may dilute their shares to raise funds and lose a portion of their ownership.

Conclusion

Which is better for your business: debt or equity financing, and why? The short answer is that it is debatable. The decision to go with equity or debt is based on several criteria, including the present economic climate, the company’s existing capital structure, and the company’s life cycle stage, to mention a few. The best form of financing can be a combination of the two or the company may resort to any one of the methods depending on the existing factors. The phrase “Equity Capital reflects ownership while Debt Capital reflects an obligation” may generally hold good but it is clear that a company can employ either type of financing and fulfil its need for capital expansion without losing ownership or incurring liabilities through proper planning and management.

References

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Data privacy compliance for online dating apps and sites

By

Oishika Banerji

-

December 21, 2021

0

This article has been written by Eashaa Chan pursuing the Diploma in International Data Protection and Privacy Laws from LawSikho.

This article has been published by Oishika Banerji.

Table of Contents

Introduction

Dating apps in recent years have become extensively popular, as these apps assist in making our life easy, it is crucial to point out that these apps also collect sensitive data about their users. By meticulously calculating the algorithms, these services match our interests, likes, dislikes, and preferences with other people who have similar tastes. But to make these perfect matches, these apps collect personal, sensitive information including sexual preferences, physical location, etc. When that is done, it is apparent these apps should make sure they manage these private data responsibly as it should not affect the users negatively.

When talking about dating apps, two issues need to be dealt with first the sharing or trading of sensitive data (sexual orientation, sexual preference, religious beliefs), second the users being unaware of what kind of information and with whom it is shared (unexpected third parties), as most of the apps do not give users any control over how their data is being used.

Trading sensitive data may have negative consequences on the users, specially in regions where homophobia and trans phobia is prevalent, safety of the users is compromised who may choose to hide their sexuality from friends and family as advertisers use their information for target marketing, may expose their secrets through ads and emails that the user receives, also members of the LGBTQIA+ community (historically marginalized group) have a particularly high risk of being targeted because of their identity or relationships, as users of the dating app GRINDR have been located and targeted in countries where homosexuality is illegal (discussed further).

Many security researchers have discovered that popular dating apps like Tinder, GRINDR, OkCupid, etc. have been accused of breaching GDPR for sharing sensitive and personal information with “unexpected” third parties’ (will be discussed). This vague and ambiguous information provided about the transmission of data between the service provider and the third parties makes it impossible for users to make informed choices about how their data is collected, shared, and used. This can result in grave consequences as the fundamental right to privacy of the data subjects is jeopardized.

Expected and unexpected data transmissions

A service provider may be incapable of performing all the necessary tasks needed for the proper functioning of the app all by themselves, therefore they may have more than one third-party service provider that processes data on their behalf. This is to make sure the app functions perfectly as intended, therefore these kinds of transmission of information are expected. GDPR precisely mentions in Article 25(2), which specifies the requirements for data protection by default, states that-

“The controller shall implement appropriate technical and organizational measures for ensuring that, by default, only personal data which are necessary for each specific purpose of the processing are processed. That obligation applies to the amount of personal data collected, the extent of their processing, the period of their storage, and their accessibility. In particular, such measures shall ensure that by default personal data are not made accessible without the individual’s intervention to an indefinite number of natural persons”

Article 25(2) if not followed, then any kind of transmission to a third party becomes unexpected.

Adtech companies (third party) through dating apps are receiving a variety of sensitive personal data. Identifiers (information that is enough to identify a person) such as, IP addresses, Android Advertising IDs, and exact GPS coordinates are transmitted together with additional sensitive information about their religious and political believes, sexual preferences more. These kinds of additional transmissions that the users are unaware of are unexpected.

Expected transmission of data includes:

Data that ensures the product’s basic functionality,
Data for crash reports and analytics,
Data to show advertising in the app,
Data for tracking and profiling the user.

When does data transmission become unexpected?

The data sharing becomes unexpected when apps do not clearly inform the user about these third parties, and their intentions behind accessing their information. Sharing the ad server the GPS coordinates when it is unnecessary, sexual preferences, political views, and gender, religious believes (special categories under GDPR) all come under unexpected transmission.

Consent

When registering in an app for the first time, it is common that the user is presented with a privacy policy. These privacy policies are usually many pages long, the information is very ambiguous and the users cannot get a clear vision of exactly how many parties will get access to their information and what kind of information. If the user refuses to accept the privacy policies, the only option is usually to uninstall the app, therefore here a controller is denying services to users who do not want their personal data to be used for other purposes, this results in denial of valid consent under GDPR^.

Under the GDPR, consent, in order to be considered legally valid, should be freely given, specific, informed, and unambiguous i.e., the user should receive clear and easily understandable information.

The processors or controllers cannot pressure users to agree to data sharing, the provision of a service should never be conditional on accepting an unnecessary collection of personal data, which means that the use of a dating app should not require the user to consent to their personal data being used for profiling and behavioral advertising.

Therefore the choices and consent prompt should be unambiguous, it should not be confusing and tedious to read, it should be to the point and understandable to a layman to ensure that there are no misunderstandings about what the consumer is consenting to.

For consent to be valid, the data subject must at least have the knowledge of –

The controller’s identity,
What kind of data will be processed, (no unnecessary collection of data i.e sensitive data)
How exactly will it be used?
His or her right to withdraw consent anytime. The withdrawal of consent should be as easy as giving consent.

Case study of Tinder and Okcupid

Tinder and OkCupid are known to be very popular dating apps today, and both services are run by the Match Group (Company Based in Los Angeles). According to their privacy policies, they share the user data with third parties for advertising purposes and also with other Match Group companies.This means that user data is not only shared between Tinder and OkCupid, they also share data with Match group and other Match Group companies, which includes at least 45 dating-related businesses.

This means that, according to the privacy policy, a Tinder-user or OkCupid user could have their personal data used by other match group companies (like plenty of fish) even if they never used that service, this leads to breach of informed consent.

Breach of informed consent

Both Tinder and OkCupid did not comply with GDPR conditions for informed consent (discussed later), as they failed to provide clear information about third-party data sharing. The user in this case will have to read the entire privacy policy of Tinder and OkCupid along with the privacy policies of Match groups and its subsidiaries, in order to get a clear understanding of the extent of data sharing, this can be very confusing to a layman. This shows that the consent is not informed, specific and is unambiguous.

Breach of explicit consent

Consent in the privacy policies concerning the processing of personal data has to be explicit.

Violation of principle of purpose limitation

GDPR Art. 5(1) (b) states that any personal data should only be processed for a specified, explicit, and reasonable purpose, and should not be processed in ways that are contradictory to or conflicting with the aim of processing the data. But in this case both tinder and OkCupid sharing personal data between Match group companies can raise issues as it fails to comply with the data protection principle of purpose limitation.

How data sharing in dating APPS Affects LGBTQ+ community?

It is important to give special attention to LGBTQ+ users in dating apps and dating apps specifically for them. GRINDR, OkCupid, Tinder have been accused of collecting and transferring very sensitive user data that comprises of users’ sexual orientation and sexual preferences with at least 135 different third parties.

This can have way adverse effect on LGBTQ+ users, as many users reside in places where queers are still considered taboo, and the concept of gay relationships is stigmatized and even illegal in many regions. If their sensitive data falls in the wrong hands, the consequences can be life-threatening and a matter of physical safety.

In 2020, Recorded Future, a cyber-security firm, explained how governments and agencies around the world are targeting LGBTQ+ people through user data in dating apps, it also pointed out many loopholes in the data security of these apps.

GRINDR

This app’s target market is homosexual, bisexual, and Trans people and is the world’s most popular gay dating app. A user using GRINDR, in itself is a strong indicator of his sexual preferences. Therefore even if GRINDR claims that the data transferred does not include sensitive data like sexuality, still, the fact that the users’ data is transferred from an app like GRINDR is itself a strong indicator of his sexuality.

In April 2018, GRINDR was sharing sensitive, intimate and personal details of user data like H.I.V. status, sexual tastes, etc., with third party companies like Apptimize and Localytics. This issue was identified by the Norwegian Consumer Council and consequently, a complaint was filed to the Norwegian Data Protection Authority for breaches of the GDPR.

In August 2019, Pen Test Partners reported that GRINDR, Romeo, Recon, and 3 fun (dating apps) were found to expose users’ exact locations, just by knowing a user name was thus putting users’ physical security at risk.

The Norwegian Consumer Council (a non-profit organization in Oslo) made many claims over the years that GRINDR had violated many GDPR rules and compromised user’s privacy. This resulted in the Data Protection Authority taking action and fined Grindr 11.7 million dollars and Twitter removed GRINDR from its advertising network.

GRINDR is owned by the Chinese gaming company Beijing Kunlun Tech. China has ambiguous IT laws, companies could be forced to hand over network data whether they want to or not in the name of “national security”. In January 2020, John Demers, assistant attorney general for national security at the Department of Justice, expressed concerns over the amount of data collected by social apps owned by Chinese organizations as data collected by Chinese companies is at risk for exposure to the Chinese government.

Issues with GRINDR’s privacy policies

TRANSPARENCY

GRINDR is the “controller”, therefore is responsible for any personal data collected and shared through its services, therefore should clearly state how the user information will be processed from the time of collection of the data to its deletion (entire life cycle). GRINDR in its privacy policy only lists MoPub as an advertising partner, and directs users to read the privacy policies of MoPub’s partners to understand precisely how data is used. The issue is that MoPub has more than 160 partners, which makes it impossible for the users to understand how each of these partners may use personal data. It is impossible for users to give informed consent in this case.

SECTION 9 OF GDPR, PROCESSING OF SPECIAL CATEGORIES

Section nine covers “special categories” of data, which includes information on sexual orientation. Under the GDPR, the processing of special categories of personal data is prohibited (with few exceptions). As discussed Grindr has been accused of transmitting user information like sexual orientation, religious believes, political opinions, which all fall under the ambit of special category.

THREAT TO LGBTQ+ THROUGH DATA SHARING

On June 29, 2013, the Russian government enacted policy Law No. 135-FZ (the “gay propaganda” law) that criminalizes public and online expressions of LGBTQIA+ rights, banning the distribution of any information about ‘non-traditional sexual relationships.

May 2016, the Moldovan Socialist Party considered adopting a law against so-called gay propaganda, which seek to “impose fines for spreading ‘homosexual propaganda’ to minors ‘through public meetings, the media, the Internet,’ and other means.” The legislation was later ultimately abandoned.

In 2018, the country banned Pride events, Moscow denied more than 100 individual requests to hold Moscow Pride, and in 2019, it blocked LGBTQ groups from officially registering in the country.

March 2020, President Putin then proposed a constitutional amendment banning gay marriage and even banned Russian authorities from recognizing gay marriages registered outside the country.

April 24, 2020, a survey by the Levada Center showed that one out of five Russians wanted to “eliminate” LGBTQ+ from society. LGBTQ violence is only increasing.

The above timeline shows the prejudice of Russia against the LGBTQ+ community. Many countries like Serbia, Turkey, China, and many more similar issues. Understanding the privacy issues Tinder has faced in the past, it cannot be ignored how easily accessible is data from Tinder and could be used against LGBTQIA+ users, to track and potentially punish individuals.

The General Data Protection Regulation (GDPR)

Privacy and data protection are two rights enshrined in the EU Treaties and the Charter of Fundamental Rights. Article 8 of the charter contains an explicit right to the protection of personal data. The General Data Protection Regulation (GDPR) grants data subjects the right to access data which in turn results in further rights such as rectification and erasure of their personal data.

DATA SUBJECT- any natural living person (identified or identifiable) whose personal data undergoes processing operations, GDPR protects the rights of the data subjects.
CONTROLLER- an entity that determines the means and purposes of data processing operations. According to the European Court of Justice Ruling decided in the Wirtschaftsakademie case that a marketer who commissions targeted advertising is a controller even if it does not have direct access to personal data being processed as long as they define the means and purposes of the processing.
PROCESSORS- Any institution or organization that carries out data processing on behalf of the controller.

When a processor can also regulate and determine the purposes and means of the processing of personal data it receives from the controller, it shall be considered a controller or a joint controller in its own right.

Therefore, if a company uses the personal data it receives for its own purposes and advantage and determines the means and extent of processing, it makes it a separate controller. It cannot depend on the original controller (app provider) to be the only one responsible to obtain legal consent and comply with the GDPR rules for their data operations.

Conclusion

One can come to the conclusion that Privacy is crucial in online dating applications. Dating apps with the data they collect are perfectly capable of constructing a detailed personality of the user and sharing it to third parties to generate more precise targeted advertising.

Therefore, they should process data responsibly and in compliance with all the data protection laws of places their target audience reside. Information about what user data is collected and who it is transferred to and for what reason must be mentioned in the privacy policy in a clear precise manner so that even a layman understands them. If any data processors are hired, they should be monitored to ensure compliance. The user, especially in dating apps should have a clear choice of what kind of data he wants to allow the app to share and to whom.

Some dating apps, though secure at the server level, do not offer end-to-end encrypted chat service or adopt essential safety measures to protect data from data breaches or third-party access, therefore users should be aware of their institutional privacy and should know the consequences of sharing their personal information before using the application.

References

https://www.forbrukerradet.no/dark-patterns/

https://www.consumersinternational.org/members/members/norwegian-consumer-council/

https://www.recordedfuture.com/lgbtqia-community-cyber-threats/

https://www.buzzfeednews.com/article/azeenghorayshi/grindr-hiv-statusprivacy

https://www.forbrukerradet.no/side/filing-complaint-against-grindrssharing-users-hiv-status-and-sexual-preferences/

https://iapp.org/news/a/norwegian-dpa-to-fine-grindr-11-7m-for-alleged-gdpr-violations/.

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

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join: https://t.me/joinchat/L9vr7LmS9pJjYTQ9

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