This article is written by Yash Kapadia. Through this article, we shall ascertain the steps and provide a guide as to how a film we watch on the big screen is censored by the Central Board of Film Certification of India.
Table of Contents
Introduction
Getting your film cleared by the Central Board of Film Certification of India (CBFC) is a herculean task in today’s times. There have been films that have had unreasonably delayed releases and some that have failed to hit the big screen due to them not being cleared by the CBFC. As we all know, when a film is asked to cut certain scenes, it is public news. When a film is not cleared by the CBFC, it is an entirely new task to overcome.
India is said to have the largest film industry in the world which makes over 1200 feature films1 and above 8000-10,000 short films every year2. At a rough estimate, before we were hit by the COVID-19 pandemic, a total of about 15 million people watched films in India every day, either at its over 13,000 cinema houses or on DVDs or on the cable system or now on OTT streaming platforms. The frenzy of watching a movie is experienced by most of the people living in India. It is not uncommon to sit in a theatre that is houseful.
Coming back to our topic, before we see these movies on the big screen or even on OTT platforms today, film certification has a crucial role to play. It is the CBFC that certifies a film i.e. the CBFC acts as a gateway that provides the green light to any film to be publicly viewed by the audience. However, the process of giving the green light is not a cakewalk. Films require to adhere to certain norms and cut or delete scenes that are against it in order for them to be released. Through this article, we shall understand the role, power of the CBFC and how they censor a film.
What is CBFC and its role
At the outset, one must understand what CBFC is and its role in certifying films in India. The Central Board of Film Certification is a statutory body operating under the Ministry of Information and Broadcasting, regulating the public exhibition of films under the provisions of the Cinematograph Act 1952. Domestic as well as foreign films can be publicly exhibited in India only after being certified by the Central Board of Film Certification.
The film certification process is in compliance with the Cinematograph Act, 1952, (the “Act”) the Cinematograph (Certification) Rules, 1983, and the guidelines issued by the Central Government under Section 5(B) of the Act. The guidelines state that a film shall not be certified for public exhibition if the authority i.e. CBFC, is of the opinion that the film or a particular part of it is against the integrity and sovereignty of our nation, security of the State, friendly relations with foreign States, public order, decency or involves defamation or contempt of court or is likely to incite the commission of any offence.
As per CBFC, the following are its objectives in the exercise of the powers conferred by Section 5B(2) of the Act:
“The medium of film must remain responsible and sensitive to the values and standards of society;
Artistic expression and creative freedom are not unduly curbed;
Certifications are responsible to social changes;
The medium of film provides clean and healthy entertainment; and
As far as possible, the film is of aesthetic value and cinematically of a good standard.”
In layman terms, the main function of the CBFC is to determine whether a particular film is fit to be released to the public at large in theatres and now on OTT Platforms too.
How is a film certified
According to Section 5A of the Cinematograph Act, 1952 there are concisely four categories on which a film content is based:
Universal (U): Open to view to all age groups
Universal/ Adult (U/A): Open to all age groups but below 12 years require adult supervision
Adult (A): Open to be viewed only by adults
Special Class (S): Open to be viewed only by special classes of people like doctors, lawyers, farmers.
Circling back to our question, there are mainly two committees responsible for certifying films, the examining committee and revising committee.
Examining Committee
A film is referred to the examining committee by one regional officer once an application is received for examination. Every applicant must submit the final copy of the film along with background music and sound effects of the film for examination. The examining committee shall preview the film and in certain cases provide necessary recommendations on the basis of which the film will be certified.
The regional officer sets the date and place of the examination of the film, at the expense of the applicant.
The preview, records, and reports of the examination are kept confidential, therefore, the applicant and their representatives are prohibited to be present in the previewing process.
Disclosing the names of the members of the examining committee is not permitted to maintain confidentiality.
In addition to Section 5B(1) of the Cinematograph Act, 1952, the CBFC has to abide by a list of other Guidelines whilst examining for certification.
This examining committee comprises of:
In the case of a short film, the examining committee consists of one member from the advisory panel, and one examining officer, wherein either of them should be a woman.
For a long film, the examining committee consists of four members from the advisory panel, and one examining officer, wherein at least two members should be a woman.
After this examination, the examining committee may allow the applicant to exhibit the film with certain restrictions or unrestricted exhibition or may direct the applicant to incorporate the suggested changes or refuse the exhibition of the entire film.
Lastly, a report prepared by the examining committee is then sent to the CBFC chief for his final approval.
Revising Committee
In any case, if the recommendation/s suggested by the examining committee are not found to be reasonable or fair to the applicant, they may request the chairman to send them to what is called the revising committee.
The revision committee is approached and it engages in its work if the examining committee has refused the certification of a film and in no other case.
The revising committee comprises
the chairman; and
in his/her absence, a board member;
nine members of the advisory panel/board who are not included in the examining committee, which examined the film.
The quorum for the revising committee consists of four members, where at least two must be women.
The revising committee examines the film from the very beginning. In fact, the procedures and guidelines of the examining and revising committee are also similar.
The decision of the majority members is the decision of the revising committee.
The presiding officer has the casting vote if there is a tie of votes. If the chairman disagrees, then the board shall reexamine or shall send it to another revising committee.
The decision of the board or revising committee or the board, as the case may be, is final.
How long does it take to certify a film
The process of certifying a film and giving it a green signal for exhibition by the CBFC takes up to 68 days.
Firstly, the CBFC scrutinizes every application for exhibition, which takes around a week.
Secondly, the examining committee takes around 15 days and thereafter the chairman takes about 10 days to review the film.
Ultimately, the relevant information about the suggested cuts/deletions/disclaimers is informed to the applicant. After the said suggestions are incorporated, the CBFC overlooks the process and grants the relevant certification i.e. U, U/A, A or S which may take about 36 days.
As per legal provisions, Section 5D of the Act also provided for the establishment of FCAT in order to hear appeals against the decisions of CBFC.
The FCAT had the power to hear appeals from the revising committee within 30 days of passing such an order. An appeal could be made on any of the following orders after due certification is provided by the revising committee:
Refusal to grant a certificate
Give an A certificate only
Give an S certificate only
Give a UA certificate only
Directions to make certain changes/ modifications
It is extremely important to note if the applicant was not satisfied, previously the procedure was that they could appeal to the Film Certification Appellate Tribunal (FCAT) and send them the film. However, as of today, the FCAT has been officially abolished.
It is said that tribunals were not functioning well since their entire administration relied upon a nodal agency i.e. a Ministry under the Government. The tribunal could not fill up vacancies in the judicial department, technical members and the tribunal staff. There were issues concerning the judges of this tribunal as most of them preferred being elevated to the high court and not a tribunal.
It is public knowledge that the CBFC was in news for all the wrong reasons of issuing several cuts to various cuts to films like Udta Punjab, Kya Kool Hain Hum, Bajirao Mastaani, Haider, Kalaakandi. In such scenarios, the FCAT acted as a go-to tribunal for filmmakers to appeal to the excessive number of cuts suggested by the CBFC in order to certify their film for exhibition. The tribunal also acted in a cost-effective and timely manner to resolve disputes. However, it is now officially abolished.
In fact, we need to draw our readers’ attention to the Justice Mukul Mudgal Committee and Shyam Benegal Committee Report wherein significant powers were taken away from the CBFC for making alterations and censoring films. This Report was accepted positively by the film fraternity and also seemed to be the right path to start going ahead with. Also, the Bombay High Court in a matter of the movie Chiriakhana, stated that “You (CBFC) are a certification board and not a censor board”. Considering the power of the President under Article 123 to pass an ordinance, it is necessary that there are circumstances in existence that render it necessary for the President to take immediate measures. There is no concrete reasoning given for this drastic abolishment. In fact, filmmakers have shown their dismay at this abolishment.
Road ahead
Post abolishing of the FCAT, the power of adjudicating the disputes relating to CBFC certifications is now in the hands of the respective state high courts. This means nothing but unreasonable delays in closing disputes which the FCAT may do in an even lesser time. One must understand that there are more than 4.5 million pending cases spread across various areas of law, some urgent and some very urgent. Listing the matters on board and arguing them on an urgent basis is a task. This abolishment has only increased the caseload of the judges of our high courts to entertain CBFC related matters.
It is further unreasonable to even expect the Hon’ble high courts to expedite these matters at the speed of FCAT which is a special tribunal formed for entertaining only CBFC related disputes. Along with all that is stated above, the filmmakers, especially the producers will have a race against time in resolving these disputes while they keep burning their money on a daily basis due to delays in their film release.
Filmmakers will now retract from filing court proceedings in fear of losing money and in all probability look to come to an amicable settlement with the CBFC or adhere to all changes suggested by the board. This does not look like a sustainable method especially in the eyes of this sector of industry and we should expect provisions to be adopted by the Government very soon.
Conclusion
The CBFC frequently abuses its censoring power by snipping out all of the film’s main and effective elements. This not only detracts from the film’s inventiveness, but it also shows a lack of respect for the filmmaker’s, actors’, and the whole crew behind the film’s efforts, devotion, and hard work over many years. It would also be a breach of the Right to Freedom of Speech under Article 19(1)(a) of the Constitution. The Board’s casual attitude, combined with needless cutbacks, is inappropriate and may be seen as an attempt to make a mockery of the whole film industry.
In drawing things to a close, we have understood the process of how a film is certified by the CBFC and also updated ourselves with the recent abolishment of FCAT which acted as the court that especially hears CBFC related issues. We as viewers have now adapted to watching movies and web series on OTT platforms which are governed by a different set of laws, unlike the movies we see in theatres. Only time will tell whether a more friendly and open-minded approach is used by CBFC to certify films considering the 21st century Millennial and Gen-Z audience.
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This article is penned down by Ojasvi Gupta, a student of Law School, Banaras Hindu University. It brings to light the concept of minimum wage in India, the related legislation, and its shortcomings.
Table of Contents
Introduction
Minimum wages have been accepted globally as an important system for combating poverty and stabilizing the economy. A statutory national minimum wage impacts the economy in several ways. It helps in increasing the wage level, bridging the wage inequality gap, and thus, acts as a major step in attaining inclusive growth. Its success is determined by the extent to which the minimum wage set is both fair and economically valid. Ground implementation of the minimum wage has the potential to benefit the wage earners significantly, especially those working in the unorganized sector of the market.
The concept of minimum wage
The International Labour Organization (ILO) succinctly defines minimum wage for the work performed during a specific period by wage earners as the declared amount of remuneration which cannot be further reduced, not by mutual agreement nor coercion by the employer.
Various countries, including the member states of ILO, have defined minimum wage according to their labor market. The components of minimum wage may include:
Basic pay;
Annual bonuses;
Tips;
In-kind benefits;
Productivity and performance pay;
Allowances and premiums for non-standard work hours or dangerous work.
Minimum wage systems can only be efficient when they are specific in stating which component of the wage is to be counted in the minimum, to what extent payment-in-kind is acceptable, if the calculation is meant for hourly/weekly rate, etc. The effectiveness of minimum wages can be analyzed through a three-factor study:
Coverage:
Whether all wage earners are brought under its scheme, be it women, youth, or migrants? Its implementation must be uniform in private as well as public industries.
Level:
The wage must be set at such a level that it is sufficient to cover the basic requirements of the workers and their families by taking into account the crucial economic factors.
Compliance:
The theoretical part alone cannot ensure the fulfillment of the purpose for which the minimum wage system has been designed. Employers must comply with the minimum wage regulations effectively.
Historical background
The first global attempt was made by the ILO through the Minimum Wage-Fixing Machinery Convention, 1928. Currently, a total of 105 countries have ratified the Convention. It particularly aims to provide an arrangement of effective regulation of wages for workers who work in private settings or an unorganized sector. Member states ratifying this Convention undertake the duty to maintain the machinery which provides adequate wages to all. Since then, many Sessions of the ILO have been held in order to complement the Convention of 1928 by protecting the disadvantaged groups of wage earners, especially in developing countries.
In the Indian context, the concept of minimum wage is provided statutorily as a responsibility of the State. Article 43 of the Constitution of India lays down the State directive to ensure living wages along with such conditions of work as to maintain a decent standard of living and social and cultural opportunities. To achieve the purpose of this directive, a Labour Investigative Committee was set up by the Standing Labour Committee in 1943 which suggested in its report of 1946 the need for specific legislation which deals with the issue of minimum wages.
To further the intent, a Fair Wages Committee was also established, consisting of the government, employers, and employees to introspect and report on the matter of ‘fair wages’. The tripartite committee defined three different levels or standards of wages:
Living wage;
Fair wage;
Minimum Wage.
Indian legislation on minimum wage
Until 2019, the minimum wages were fixed through the Minimum Wages Act, 1948 the result of the contemplation of various committees. Although labor activists have stated it to be a source of much confusion in implementation as it gave central as well as state governments both dominion over deciding the wages. This Act provided the roadmap for setting the minimum wages in various industries of the Indian economy. According to this, the Central government fixed the wages of the workers engaged in scheduled employment such as railways, oilfields, etc while the authority to decide the minimum wage for the rest went to the State government including the private sector.
In 2019, the Code on Wages was introduced by Santosh Kumar Gangwar, the then Minister of Law and Justice in an effort to fill the legal lacunae in previous legislation which was used to exploit the workers. This was done in an attempt to bring uniformity in the implementation of legal policies governing the payment of wages.
For only by making the laws universal, the timely payment of the wages to the workers and employees can be ensured without any discrepancy. It applies to both the sectors, organized and unorganized.
Key Highlights
Definition of wages
For the purpose of minimum wages, payment of wages, and payment of bonus, the Code provides a single uniform definition of the term wages. Earlier, the definition used to vary across various labor legislations of the country. Now the unified definition constitutes 3 parts, inclusion, exclusion, and conditions limiting the quantum of exclusions.
Minimum Wages
The Code also establishes the concept of ‘floor wage’ in concrete, an initiative long-awaited. It is the minimum wage determined by the Central government after contemplating the geographical needs for a minimum standard of living. No State government can go below this wage level. Furthermore, a government having a minimum wage higher than the provided floor wage is not allowed to reduce the same. The wages provided for overtime by the employees are required to be at least twice the rate of normal wages. This wage level is to be revisioned at an interval of not more than five years to keep up with the changes in the market.
Payment of wages
The Code expressly provides for the fixing of the wage period, be it on a daily, weekly, or monthly basis. Now, the employer has to pay the wages under each wage period based on the stipulated time period. E.g. the 7th day of each month is the settlement period for the previous month’s work. In case the employer resigns or is removed for any reason from the post, wages must reach the hands of workers within two working days. Earlier, the limitation period for filing a claim for minimum wage or equal remuneration was anywhere between 6 months to 2 years, this has been increased to 3 years.
In total, clubbing several legislations under the umbrellas of a single code was a welcome step and is a great step towards providing better clarity and uniformity. It ultimately works in the best interests of the employers as well as the employees.
What issues challenge the implementation of policy?
Implementation:
The vast informal sector makes the enforcement of minimum wage a difficult task in India. According to a report, around 35% of total wage workers did not receive any benefit from this scheme in 2009 -2010. Subsuming the labor laws in one Code was done with the intent to improve compliance but how this transition of more and more workers being paid the minimum wage can be enforced remains a mystery.
Consumption:
Food being an essential requirement of the human body, calories consumption is one of the crucial factors which determines the minimum wage. The Code specifies the energy requirement at 2700 kilocalories. Conventionally, a working-class includes the wage earner, a spouse, and two children, and their consumption units are measured in the following way:
1 unit for the wage earner, traditionally taken to be a male, 0.8 unit for the spouse, traditionally the female, and 0.6 unit per child, giving the total of 3 consumption units.
Many experts think this calculation may not be enough for growing children, apart from being discriminatory. They propose the break-up in 1+1 + 0.75 + 0.75 to give an equivalent of 3.5 consumption units, the present calorie requirement of a standard family. There also lurks the question of non-food consumption which is given much less significance in comparison to the recent trends.
Representation:
The Code also proposes a technical committee, members of which will be selected from the tripartite stakeholders of government, employers, and employees. However, the representation lacks an element of productivity. There should have been a place for the National Productivity Council, as wages are inherently linked to productivity as they are linked to social justice.
Dynamic concept:
The concept of minimum wage depends on many factors which change over time, giving it its dynamic nature. The most harrowing of them is inflation which pushes down the purchasing power. To ensure that the wages are maintained at a level that is enough for a certain amount of consumption, the real wages must be revised periodically. Though there are provisions for adjusting Dearness Allowance, the basic part is not subject to such revision, rendering the purpose of minimum wage ineffective with regard to changes in consumption patterns over time.
Work hours:
Contrary to the standard 8 hours, the Code stated the total hours of work in a day as 9. This is rather odd in times when the developed countries are trying to reduce the work hours. Moreover, the maximum number of hours of work including a period of rest is 12. This could prove harmful to employees if any of the employers utilize it to reduce the shifts from three to two. The exploitative nature of the Indian labor market is no news and spoon-feeding a provision that unfolds in the favor of the employer at the cost of misuse might be a step backward.
European policy on minimum wages
The European Union sets out its commitment to fair wages for workers in the proclamation of the European Pillar of Social Rights. It ensures that workers are paid adequate wages for their labor, allowing them a decent standard of living along with maintaining the financial attraction of work.
The majority of EU Member States have a fixed statutory national minimum wage but their adjustments mechanisms and coverage may vary. Some countries work with the minimum wage fixed through collective agreements. For instance, Cyprus has set statutory rates for different occupations. In 2020, the minimum wage ranged from €312 in Bulgaria to €2,142 in Luxembourg. The main reason behind such a wide range is the difference in the cost of living in these countries.
To safeguard this right, the European Commission proposed an EU Directive on October 28, 2020. It aims that all workers earn a fair living wage and not just minimum wage by 2024. Minimum wages in EU countries have taken two forms:
Statutory minimum wages: they are regulated by statutes or formal laws. Most member states have such rules.
Collectively agreed minimum wages: in six EU countries, wages are determined through collective agreements between trade unions and employers, including in certain cases minimum wages: Austria, Cyprus, Denmark, Finland, Italy, and Sweden.
In October 2019, a resolution was adopted before the Commission to legislate a legal mechanism for fair minimum wages in the EU. In 2020, the Commission came out with a proposal with an aim to improve the concept of minimum wage by transitioning it into fair wages. It also includes provisions for bridging the gender pay gap and working towards a level playing field for all in the market.
Taking into account national competencies, it promotes collective bargaining of wages through unions and associations in labor markets. These are primarily based on the regional and sectional differences and the socio-economic conditions prevalent at the time. Member states have to consider all the criteria such as the poverty rate, purchasing power, etc., and prepare a report on the effectiveness of minimum wages.
Collective bargaining has been promoted explicitly and active steps are to be taken in states where these collective negotiations are available to less than 80% of the workforce. Allowing collective bargaining gives the control back in the invisible hand of the market without giving exclusive exploitative power in the hands of employers. Any trade union or such organization cannot be restricted or undermined in its way of collective agreement on wage setting.
Providing the rights is not enough as it is crucial that the rights are protected. Therefore, the draft proposed by the Commission stipulates the national authorities to take necessary steps if the rights of workers are infringed. The right to redress protects the workers, laborers, and trade union representatives from being treated unfairly because of any proceeding they initiated to enforce their rights against employers.
What can India learn?
Be it in Europe or Asia, no country was able to face the financial crisis that came with the pandemic head-on. In Europe, owing to the confidence and trust held in trade unions, many draconian, macro-level interventions by the government were not made in the financial crisis. During the financial crisis, trade unions were willing to offer concessions, regular overtime wage rates and many came up with a structured lay-off system that helped the workforce to get through the difficult times to a large extent. Comparing this to the Indian situation paints an abysmal picture of the conditions of the laborers. The social dialogue could be a major factor in revolutionizing the labor market.
Another important factor which India lacks is the concept of a minimum fair wage. Developed countries have brought along the term ‘fair wage’ to emphasize maintaining a living standard that is more than the bare minimum. The Indian concept of minimum wage is still hooked on the aim to ensure that everyone gets a two square meal but the food is not the only component of a decent living. There is the issue of health, education, social security, and sustainable living which needs to be reviewed.
Though the Code was supposed to be effective from April 1, 2021, the implementation has been delayed to a future date yet to be notified. This delay could be justified considering the potential impact of the Code on per-employee costs for enterprises. On the other hand, is the fate of many wage earners who had to survive in the thickest of the times with less than minimum assistance.
Conclusion
The yet-to-be-implemented Code has sparked debate and discussion on the topic of minimum wage. As explained above, the umbrella legislation attempts to remove the multi-jurisdictional format of fixing the wages by introducing the floor wage. When applied effectively, it might be beneficial for all the major stakeholders.
Though there have been some points of contention raised by labor activists, there cannot be a parallel comparison between Indian and other developed countries. There is a lack of research on the impact of minimum wage on the employment level in developing countries like India. This is a major factor that prevents the government from determining the wage level that is fair to all wage earners. The monopolistic nature of the domestic and construction sector of the Indian economy also obstructs the purpose of the minimum wage.
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This article is written by Gursimran Kaur Bakshi. The article explores the future of the software as a service (SaaS) industry in India.
Table of Contents
Introduction
In layman terms, cloud computing is an on-demand delivery of IT resources through the internet. It allows the delivery of computing services which includes server, storage, database, networking, software, and analytics to name a few. It is different from the premise-based technological infrastructure. It offers flexibility to the workplace to pay only for cloud services that it requires rather than setting up the whole system.
Cloud computing services can be modified as per the business requirements of a workplace, as its usage would depend on the specific requirements of the same. However, with its increased demands, the understanding of cloud computing services have become complex and multi-faceted. But that does not subdue the importance of cloud computing services which are adopted to increase scalability and availability of applications to suit different types of the work environment.
There are three different types of cloud computing (private, public, and hybrid). In the public type of cloud computing, the computing services are owned and operated by a third-party cloud service provider. A known example of public cloud computing is Microsoft Azure, which delivers computing resources over the internet. A private cloud is exclusively owned and operated by a single workplace. Whereas, there would be workplaces building their own private cloud infrastructure and availing public cloud computing services. This is an example of hybrid computing.
Cloud computing service is also divided into three types [Infrastructure-as-a-Service (IaaS), Platforms-as-a-Service (PaaS), and Software-as-a-Service (SaaS)]. Out of the three, the SaaS-based cloud computing industry is all over the internet. The SaaS is one of the types of cloud computing services that allows the service provider to avail of on-demand computing resources through the internet infrastructure. Since cloud computing services offer easy and customised access to IT infrastructure to the users, the industry has grown rapidly. This is especially true for India where the changes have been rapid despite the overwhelming impact of the COVID-19 pandemic on various aspects of the IT industry.
Future of Indian Software-as-a-service industry (SaaS)
In India, the demand for the SaaS-based industry has seen transformative growth despite the overall economic slowdown. According to a report titled ‘Shaping India’s Saas Landscape’, India’s SaaS-based industry has the potential to be valued at $ 1 trillion. By 2030, the industry is expected to employ more than 500,000 people. According to the abovementioned report, the pandemic situation has forced digitisation and has led to the growth of the SaaS industry which may reach $1 trillion and may also create 5 lakh jobs by 2030. A report published by NASSCOM and the SaaS community SaaSBooMi and Mckinsey suggests that the global SaaS market is expected to cross $500 billion in revenue by 2025.
India has currently more than 1,000 SaaS startups and 10 unicorns (a privately held startup company valued at over $1 billion). At present, India’s SaaS-based industry generates a combined $2-$3 billion annual revenue. It also employs nearly 40,000 people and hence, generates 35% of the software revenue in India.
Further, India has some SaaS unicorns which are Postman, Zenoti, Innovaccer, HighRadius, Chargebee, Icertis, Druva, Freshworks and BrowserStack. These are unicorns based in India or have originated in India. Indian’s unicorns are expected to grow ten times more than what they are today by 2030. It is expected that the SaaS-based industry’s expansion will happen exponentially as the needs of the current marketplace heavily depend on internet-based services.
What are the leading SaaS-based startups in India
There are SaaS-based startups that are striving in the Indian market right now. Some of these are given below in brief.
Agile CRM
Agile CRM is one of the leading SaaS-based companies serving small and medium enterprises through its comprehensive customer relationship management (CRM) platform. It allows organisations to automate sales and marketing services. The support offered by CRM is end-to-end and allows the user to manage issues at every stage. Agile CRM also has a global presence.
BrowserStack
BrowserStack is an Indian-based cloud computing service platform that offers software applications through the internet along with the cloud infrastructure.
CleverTap
CleverTap was founded in 2013 to raise Series C funding (this type of funding is given by the investor at the growth stage of a startup when the growth of the business is visible) from Sequoia India and Tiger Global Management. It is a mobile marketing platform that supports businesses to retain, engage, and develop valuable relationships with customers. The platform has a wide range of features such as automated segmentation, audience analytics, and campaign optimisation.
Chargebee
Chargebee was founded in 2011. It is a billing and subscription management platform. It enables organisations to automate billing, manage subscriptions, and streamline revenue operations. It has received investment from Tiger Global Management and Accel Partners. In 2018, Charegebee received a Series C round of funding of $18 million from Insight Partners.
Druva
Druva provides data protection and management services for cloud-based services. It also allows for autonomous enterprise data resiliency.
Freshworks
Freshworks is one of the most known SaaS-based startups in India which was founded in 2010. It has developed a cloud-based suite to provide SaaS-based services to the customer. It has received investment from Accel Partners and Tiger Global management.
HackerRank
HackerRank provides a platform for technical interviews designed exclusively to hire developers and that is why it is widely used by recruiters to find a candidate for their concerned organisation based on their needs.
HighRadius
HighRadius is an Indian-originated SaaS-based platform that is currently based in Houston, Texas. HighRadius joined the unicorn club in 2020 when it raised $125 Million Series B growth funding which was led by ICONIQ Capital, Susquehanna Growth Equity, and Citi Ventures. HighRadius is a SaaS-based provider for automatic payments and integrated receivables such as credit, cash applications, deductions, and payments.
Hotelogix
Hotelogix was founded back in 2008. It is considered the best SaaS-based platform for the management system of property for hotels. The platform has a wide range of tools such as front-desk operations, housekeeping, restaurant operations for the effective functioning of the hotels.
Icertis
Icertis was declared an Indian-based unicorn along with Druva in 2019. This SaaS-based unicorn is a contract management software provider. .
Innovaccer
Innovaccer recently joined the unicorn club by becoming the first Indian-based health-tech platform. It is responsible for analysing healthcare data to provide information to the healthcare providers for better facilitation of healthcare services. Its Healthcare Data Activation Program is a flagship SaaS-based product that allows the workplace to gain insight into the healthcare data of the patients.
KekaHR
KekaHR allows users to manage their performance and payroll in an organization. Not just this, it also allows recruiters to engage in talent management. Currently, it has added another service called productivity tracker. It is designed to promote work from the home culture at the same time maintain transparency in employment and productivity.
Kissflow
Kissflow is for those who are looking to manage their business. This one single platform allows the organisation to manage almost everything from the workflow to how the clients are to be dealt with. This platform is used by more than 121 countries and thus has an established global presence.
Postman
Postman is currently the most valued SaaS-based Indian startup which is engaged in simplifying the application programming interface of the companies and developers.
Whatfix
Whatfix is a platform designed to provide performance support and in-app guidance for software applications.
WebEngage
WebEngage is a customer data platform used for engaging users in customised campaigns. It allows users to engage in various features on the internet such as email checking, on-site notifications of the web portals, in-apps, including SMS services.
Zenoti
Zenoti joined the unicorn club in 2020, becoming the 9th SaaS-based platform to do so. It provides cloud-based software services to salons, spas, and yoga studios.
Advantages and disadvantages of the SaaS-based industry
Advantages
The first and foremost advantage of SaaS is that it offers flexibility to manage databases, servers, storage etc online which means that the infrastructural cost is minimised. In cases where workplaces depend on a physical IT ecosystem not just the infrastructure but also the maintenance cost is incurred. This is minimised in SaaS-based products.
In SaaS-based services, the workplace does not have to worry about installation issues that are there when software services are availed through traditional methods. The SaaS-based services come pre-installed and can be customised according to the needs of the workplace.
While setting up a physical IT ecosystem, it is not possible to be selective in availing services. These basic issues are tackled through SaaS-based computing. The workplace with SaaS-based products can purchase as per their needs and buy for the same.
Further, the management issues regarding SaaS-based services are not dependent on the workplace. They can only care about the service they are receiving and worry no further.
Since India is still tackling the health emergency, the SaaS-based industry can be used in the health sector. India’s spending on the health infrastructure is not up to the mark but it can be improved if the hospitals are equipped with SaaS-based technology. This will not just generate employment but also help the hospitals deal with patients effectively.
Disadvantages
Adopting SaaS-based services is internet-based and can suffer from potential cyber issues. Thus, cybersecurity becomes a major concern.
Although the flexibility offered by SaaS-based computing is incredible, many are still struggling with the issues of internet accessibility in India. Thus, SaaS-based computing services can only be availed by a limited number of people in the IT industry.
With SaaS-based services, there is an overall lack of control. This also has a direct impact on managing sensitive information. So, data security will always remain a pertinent concern.
Conclusion
With the rapid increase in digitisation, it can be seen that the Indian SaaS industry is effectively responding to the growth and demandS of the global market. It is crucial that the investment in the SaaS industry is made especially at this time when the world is going through a global health emergency. This may help in generating revenue, boost the IT sector, and give employment. But more than anything, what is required right now is consistent investments in Indian startups. Since many of India’s saas-based investments are unicorns and have crossed the 1$ million revenue generation, the right step now would be to allow them to grow by giving them financial incentives. This is the need for an hour in the present-day workplace.
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In the regime of Intellectual Property Rights, patents play a very important role in protecting IP rights. A patent could be a privilege granted for an invention, which could be a product or a process that provides, in general, or offers a new technical resolution to a problem. To get a patent, technical information regarding the invention should be disclosed to the general public via a patent application. However, it should be borne in mind that Patent litigation can be an expensive, unsafe, and risky business, and as the saying goes: prevention is better than cure. So, when a company or organization or firm or any individual plans to develop a new product and introduce it to the market, there is a major risk, especially in technological sectors that deal with a large number of patents. That is why many companies try at an early stage to ensure their “freedom to operate” (FTO), i.e. to ensure that the commercial production, marketing, and use of their new products, processes, or services do not infringe any third party property rights. Freedom to operate is the capacity to operate in a given jurisdiction without infringing on another’s intellectual property rights. Freedom to operate is established once no active patent is being infringed or is otherwise not in force. It enables the company or an individual to make and market products without infringing the right bestowed by any active patent. This article disperses light on all the things we need to know about Freedom To Operate Search together with features, advantages, importance.
About FTO search
The term FTO search stands for Freedom To Operate search. In order to get a patent, a product must be novel, creative, and must have industrial application. However, the mere undeniable fact that one has got a patent is not any guarantee that the person won’t infringe on another manufacturer’s patent. All the same, it’s been established by a novelty search that once an invention meets the essential parameters for a patent, one is able to continue to take the remainder of the market into account. To provide some insight into that market, there’s the liberty to control search. Freedom To Operate search can be also known by different names such as a Patent Clearance search, a Right to use search, and a Freedom To practice search. Whatever it is, the goal is always the same. Which is to determine whether a product or process infringes any of the claims in granted patents or pending patent applications. It aids in determining whether your product or process, regardless of whether that product or process actually exists or is still under development (or just an idea), would infringe existing patents. Ultimately, an FTO search enables an inventor or company to know in advance whether there is a patent that is identical to the inventor or company’s product or process. One is able to acquire freedom to operate by inventing a completely unique technology of their own, invalidating or opposing relevant patents, or licensing or getting the rights to the patent(s) their technology infringes on.
A good FTO patent search may offer a creator or company the chance to develop a design-around early within the development process, before massive amounts of time and/or cash are undone into a product or process. At the same time, an FTO search can also highlight changes to license existing technology, which aids in saving time and reducing the danger of litigation proceedings from the get-go. And for a few inventors or companies, mainly start-ups, an FTO search can help founders to have confidence in their product and aid in availing funding from possible investors.
It is to be noted that both Patentability Search and a Freedom To Operate Search are sharply different though they may seem similar. Basically, a patentability search better covers all publications, organized with previous art and non-patent works, to work out whether the product or process in the dispute is novel and is, therefore, patentable. Whereas an FTO search, on the other hand, emphasizes its pursuit severely on patents, since it’s solely focussed on active patents (and not other methods of permits).
Freedom to operate analysis is an analysis of whether a product used, or a process performed by an entity is infringing on any claim of an active patent. At this point, the other basics of the patent, such as specifications and sketches, are not as significant (although they may still be revised), as it is the privileges of the patent that delimit the lawful scope of the patent. While carrying out an FTO, it is recommended to follow certain practices such as date restriction, jurisdiction restriction and document type restriction, etc. In date restriction, a period of 20 years is taken into account for patents given that only active patents are taken into account. Patent literature for locations where a patent or process is in use is searched in case of jurisdiction restriction. With regards to document type restriction, only patents are searched for an FTO, since only patent claims affect FTO. Non-patent documents are not searched for an FTO search.
Though it tends to be expensive, an FTO is a worthy investment, particularly if proceedings are currently within the domain of patents. In fact, an FTO can be an essential component if the company is seeking foreign investment.
Illustration –
A company X wants to launch a motorcycle in the market with a new engine, for which they have filed several patents after a patentability search. However, the company did not conduct a freedom to operate study considering that a positive patentability study was sufficient for proceeding with the launch. It was later sued by company Y as one of its patents had a broad claim found to be infringed by an essential component of the X motorcycle engine, and the court instructed X to stop their launch and motorcycle manufacturing, due to which X suffered heavy losses.
Importance of freedom to operate search
Whenever a company is planning to develop and launch a new product, a major risk, particularly in technology sectors where there is extensive patenting, is that commercialisation may be blocked by a competitor who holds a patent for a technology incorporated within that product. This is why many companies, at an early stage, seek to secure their “freedom to operate,” i.e. to ensure that the commercial production, marketing and use of their new product, process or service does not infringe the IP rights of others. While an absolute guarantee of freedom to operate will never be attainable, there are ways of minimising the risks that can save a company significant resources and this is the importance of FTO. Similarly, it helps organizations to know the commercial and legal liability of the actual invention in numerous regions and markets. FTO search helps to accurately identify the NPEs (Non-Practicing Entities) to prevent businesses from infringing on their patents. This process of identifying NPEs gains significance because a rapid rise in infringement litigation by these entities has been recorded. Also, since FTO searches deal with numerous geographical and national regions, they help organizations to recognize countries where their innovations are most likely to be infringed upon. These searches also enable businesses to find countries/regions where they cannot commercialize their inventions due to existing patents.
Similarly, FTO searches help to recognize patents that have expired or are existing in a given dominion. By recognizing these, a company can investigate whether to launch a trust or to cooperate in the given dominion. In the same way, FTO searches additionally assist companies to become aware of expired patents in a given geographical region. These patents may be utilized by them to increase new improvements which can be commercially possible within the global market. With such complete analysis, enterprises can increase products without infringing any rights. FTO searches, therefore, help to discover whether or not there’s any liberty to work on a particular invention in a specific jurisdiction from a legal perspective.
Conclusion
Patent proceedings are often especially pricey and the time taken to reach a conclusion is lengthy as well. Since there is the potential to calculate chances of infringement through FTO analysis in advance, it is better to do this right at the stage of initiating the new project. A correct FTO analysis alone cannot measure the probability of steering clear of patent infringement litigation, however, it would additionally open up new business prospects by showing the number of opportunities in the arena of technologies within the marketplace and also minimize the risk of infringement of the rights of the third parties. So this Freedom To Operate search supports not only in preventing infringement but also helps in conducting business safely and also makes it clear what the patent rights of others are which might be infringed if one begins to operate. Therefore, FTO search is an integral part of such competitive intelligence because it prevents new technological innovation from being targeted for infringement. Furthermore, it helps businesses come up with good revenue from their product and services.
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This article is written by Komal Saloni from Jamnalal Bajaj School of Legal Studies, Banasthali Vidyapith. This is an exhaustive article which deals with the legality of one-sided contractual terms in India.
Table of Contents
Introduction
Drafters of contracts are inherently inclined to transfer risk to the other party. The same can be witnessed even in construction contracts. Though the risks that might appear on a construction project are not always foreseeable, both the owner and contractor acknowledge that the financial consequences of those risks are frequently important. Neither party accepts such responsibility willingly. Subsequently, transferring risk creates one-sided contractual terms. The immensity of a particular risk, or the absolute amount of risks, transferred to the other party can be comprehended as excessive. When that imbalances occur between the parties, it can be a matter of concern.
One-sided contractual terms
In a one-sided or unilateral contract, there are two parties in which one is, called the offeror, who makes an offer to the other party. The offeree is the person who accepts or rejects the offer. In case the offeree acts on the offeror’s promise, then the offeror is legally bound to fulfill the contract, yetan offeree cannot becompelledto act (or not to act), as long as no return promises have been made to the offeror.Thereafter, in case an offeree has performed their part, then only the offeror enforceable promises subsist.
Example of unilateral contract:- Reward Offers by the offeror (the party who is offering the reward) cannot compel a person or other party to acceptthe reward offer. But, if the offeror does not give the reward after the fulfillment of the contract’s requirements by the offeree, in that case, an offeree can sue the offeror for breach of contract. In a nutshell, a unilateral or one-sided contract is that where only one party makes an express promise or undertakesa performance without attaining a reciprocal agreement from the other party.
A bilateral contract is different from a unilateral contract. In bilateral contracts, the parties exchange their mutual obligations which are oftenprevalent in business transactions where both the parties necessarily make various promises for the performance of one action, in exchange for the promise of the other.
For example – The sale of goods i.e., if a pizza delivery store promises to deliver pizza at a specific time, or otherwise they would offer it for free, in this situation they are creating a bilateral contract between the buyer and the seller. Consequently, if they don’t deliver what they promise, they will have to face certain counter-reactions.
Breach of contract
When any of the parties fail to do their promised part of the terms and conditions on which both the parties agreed to contract, that is called to be a breach of contract. However, not all the violations are considered equal; the material breaches that result in damages to the non-breaching party account for the breach of contract; the immaterial breach of contract is still an issue yet it doesn’t account to affect the primary purpose of the contract and doesn’t damage the other party involved in the contract.
Consequences of breach of contract
Breach of contract occurs when one of the parties of the contract does not keep on their agreed terms and conditions of contract. However, breaching a contract can be costly. Parties are liable to pay the compensation that varies and depends upon the causes by which breach of contract occurred and the impact that it has on material damages – the contract’s core. Also, In the Indian Contract Act, Section 73, 74 and 75 deals with the consequences for breach of contract. With the implication, what shall be a liability and the course of action in case there is a breach of contract by either party. Legal action can be taken to remediate losses caused due to failure of execution which can be costly to the parties of the contract. Before proceeding with the lawsuit, it is essential to be aware of the consequences of the breach of contract.
Unfair trade practices
An unfair trade practice can be defined as any business or trade practice which, to promote and sell, use or supply any goods & services, adopts any unlawful, unfair method, or deceptive practices. For example – many construction contracts contain a so-called no-damage-for-delay clause. Such a clause provides a defence to the contractors that any delay not caused by the contractor falls under the force majeure event which is an extension in the contractual period and a sole remedy for the contractor. Such a clause will restrict the contractor’s right to additional compensation.
Force majeure – a defense to contractors
Force majeure is a concept in contract law that describes a clause that exempts the parties to the contract from performing their contractual obligations in the event of extraordinary circumstances or the occurrence of an unforeseen situation that is completely beyond the control of the parties to the contract and that makes it impossible for the contract to be fulfilled.
Instances that might trigger a force majeure clause into effect include a disease epidemic, declaration of war, or an earthquake, hurricane, or any other natural disaster events that fit within the legal term, “Act of God.” Further, the mere occurrence of such an event is not adequate to trigger a force majeure clause. It must also include the situation that the catastrophic event directly averted at least one of the parties to a contract from attaining their contractual obligations.
COVID-19 and force majeure
For many individuals and companies, the COVID-19 pandemic accounts for a force majeure event. Consistently, many people and corporate entities are probing relief from contractual agreements in which they previously entered into, before the pandemic. Force majeure contract clauses are effectively triggered by the pandemic and probably to happen in situations where the lockdown and quarantine are necessarily imposed by the government making it impossible for one or both parties to fulfill their contractual obligations. However, it’s important to consider that just a general decrease in business conditions, such as recession, is not deemed as sufficient grounds for a party to claim relief under the force majeure provision in a contract.
COVID influence lease agreements
Retailers say that they will pay rent only in proportion to actual business during the lockdown. However, the top retailers and restaurant groups such as Reliance Retail, Domino’s, Madura Fashion & Lifestyle, Mamagoto, Plum by Bent Chair, Farzi Cafe, Wrangler, Lee, and Cafe Warehouse among others, are demanding on introducing clauses in all new leases that specify that they will pay only in percentage to their actual business, in the affairs of government-mandated closures of stores and malls.
Concept of force majeure with the current COVID-19 scenario
Let us understand the concept of force majeure in a contract with the following hypothetical situation. ‘A’ is a company that entered into a supply contract for a non-essential good with Company ‘B’ and aforesaid supply contract develops specific reference to the occurrence of a force majeure event and consequences of the same.
The provision of force majeure in the supply contract includes that a notice of the happening of the event shall be given by either party to the other within 30 days from the date of occurrence of such event, and simultaneously the obligations of Company ‘B’ to supply the goods to Company ‘A’ and obligation of Company ‘A’ to make payments to Company ‘B’ for such goods shall be deferred for six weeks and within the ambit of orders of government.
Since in the present times, owing to the coronavirus, the lockdown imposed by the government can be interpreted as an act or order of the government, where Company ‘B’ will be required to issue a notice to Company ‘A’ stipulating that such an event has taken place and the lockdown is beyond the control of Company ‘B’ and hence the provisions of force majeure clause will set off and all obligations of Company ‘A’ and Company ‘B’ shall be deferred for a period till the order for lockdown continues to be in effect.
Impact of the concept of force majeure on businesses, companies, and organizations in the stir of COVID-19
COVID-19 has impacted the cross-border trade, the real estate market, specifically the home-buyers, the developers, the commercial lease arrangements, joint-venture agreements, EPC (engineering, procurement & construction) as well as M&A deals in India. It also hits the parties’ ability to meet their contractual obligations owing to restrictions in movement, increase costs of products due to the scarcity of raw materials, stoppage of production, lack of funds, labor shortages, disturbance in the supply chains, etc.
At present, companies in different sectors have already declared a force majeure which includes Gateway Terminals India Private Limited, Indian Oil and Mangalore Refineries, Adani Ports in Gujarat, and also the private highway developers such as Ashoka Buildcon, IRB Infrastructure, and Hero MotoCorp. Due to Covid-19, the widespread disruption in business, manufacturing, and transport, set the stage for India to see an inundation of ‘force majeure invocations’.
Of course, in such a situation, the courts and arbitrators will have to judge and decide each dispute on an individual basis, which would be based upon the intent of the parties, the terms of the contract, and the steps taken to mitigate. In 2020, the Ministry of Finance has by way of an office memorandum clarified that the disruption of the supply chains due to the spread of coronavirus in China or other countries should be considered as an occurrence of natural calamity and the “force majeure clause” may be invoked, wherever considered appropriate, ensuing the due procedure.
Force Majeure: how successful has the law been post-COVID in India
In India, it is relevant to observe that the instances of Covid-19 getting recognized in the sphere of contractual law by the Government of India, Ministry of Finance, through the Office Memorandum dated 19.02.2020 where it interprets under para 9.7.7 of the Manual for Procurement of Goods, 2017 (which didn’t include “pandemics” or “epidemics” as a force majeure event), and specifically count Covid-19 under the bracket of force majeure, considering it as a natural calamity. Subsequently, further reliefs were announced, including relaxation in bank guarantee norms and extension of time as well as concession period with no cost to the contractors.
Regarding road projects, several reliefs were granted for all national highway works, including the expeditious release of payments, an extension of time, expeditions approval of change of scope, an extension of the concession agreement, relaxation of PBG rules, relaxation in remittance of toll money for tolling contractors, etc.
Regulators such as the Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI) had also introduced several relief measures such as imposing a moratorium/deferment of 3 months on payment of loan installments and interest on working capital facilities, and exemptions from several compliance and disclosure requirements. Further, considering the severity of the situation, the moratorium was extended and the same is continuing. Likewise, amendments were also brought to the Insolvency and Bankruptcy Code (IBC) by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2020.
Also, various courts in India have recognized Covid-19 as force majeure. The celebrated judgment of M/s Halliburton Offshore Services Inc vs. Vedanta Limited, 2020was one of the ultimate judgments in which the High Court of Delhi categorically held Covid-19 to be a force majeure event. However, the court has stated that non-performance or breach of a contract must justify the reason of Covid-19 and the same has to be examined on the facts and circumstances of the individual case and was therefore allowed only in a genuine matter where the party could justify its non-performance or was prevented because of the pandemic. The court also held that a force majeure clause has to be interpreted carefully and in case there is a breach from before the Covid-19 period, in that case, the parties will not be entitled to take the interest of the force majeure clause.
In another judgment of Mep Infrastructure Developers Ltd. vs. South Delhi Municipal Corporation, 2020, the Delhi High Court especially relied on the Ministry of Road Transport & Highways to grant relief under para 29 in remittance in toll collection from the contractor to South Delhi Municipal Corporation from 26.03.2020 till 90% traffic, compared to the traffic before lockdown period of a weekly basis, stands to restart. Therefore, the Governments concerning certain sectors are voluntarily providing certain reliefs, however, the question remains whether or not the said reliefs are enough.
One-sided and unreasonable clause : unfair trade practice in apartment buyer’s agreement
In the leading casePioneer Urban Land And others v. Govindan Raghavan (2019), it was stated that “A term of a contract will not be final and binding in nature if it manifests that the flat purchaser had no choice except signing on the dotted line, on the contract which is formulated by the builder.” It was held by the Supreme Court that the amalgamation of one-sided clauses in a builder-buyer agreement established an unfair trade practice according to Section 2 (1)(r) of the Consumer Protection Act, 1986. The bench comprising Justice Indu Malhotra and Justice UU Lalit also observed that a builder could not strive to confine a flat buyer with one-sided contractual terms contained in the Apartment Buyer‘s Agreement.
Developer (the Appellant) challenged the decision of NCDRC where refund of the installment amountby the apartment buyers was directed on account of unreasonable delay in obtaining the Occupation Certificate and in finishing the construction work. The court discarded an appeal that had been filed by the developer against the order passed by the National Consumer Disputes Redressal Commission i.e., regulating the developer to refund the amount due because of the delay in completing the construction.
Issues raised in the appeal
Determining the date from which the 42 months period for retaining possession is to be calculated under Clause 13.3 – whether it would be from the date of sanction of the Building Plans as affirmed by the Apartment Buyers or from the date of the issuance of the Fire – NOC as contended by the Developer.
Whether the contractual terms were one-sided and the Apartment Buyers would not be bound by the Apartment Buyer‘s Agreement?
Whether the Apartment Buyers were entitled to terminate the agreement on account of the inordinate delay in handing over possession, and claim for the amounts deposited to refund with interest?
As regards the second issue, the court held that one-sided contractual terms were an unfair trade practice under Consumer Protection Act, 1986.
The court responded to the third issue by mentioning to the judgment of M/s Imperia Structures Ltd. v. Anil Patni and Anr (2020) where it was held that Section 79 of RERA Act, 2016 is not a bar under the Consumer forum to entertain the complaint on behalf of an allottee. Section 18 of the RERA Act, 2016 specifies that the remedies are “without prejudice to any other remedy available”. In the case of Emaar MGF Land Ltd. v. Aftab Singh, (2019), it was held that the remedy under the Consumer Protection Act, 1986 is confined to the complaint filed by a consumer as defined by the Act, for defects and deficiency caused by the service provider. The other issues were also in the favour of the allottees.
Dealing with one-sided contracts
Signing a contract for a masterwork can be both intimidating and exciting. The expectationof being employedon an eminent project depends upon the idea of transparency which is paramount towards the company and the additional work resulting from a well-done job.
Whatsoever, practically the sub-contractor will also be required to agree upon the terms and conditions of projects, whether the project is large or medium is immaterial; they are required to agree to the long as well as complex sub-contract. However, it would be very difficult for contractors to understand each and everything in the standard subcontract agreement – an enormous pyramid of documents including special terms and conditions, general terms and conditions, cross-references to building codes, plans and specifications, and industry guidelines, and many other ambiguous terms. All these terms are deliberated in a manner that provides benefits to the general contractor.
Many contractors simply sign these contracts and hope for the best. Although such blind faith can work on occasion, some simple steps can make the contracts more agreeable:-
Ask the general contractor to make certain variations in terms. Alternatively, general contractors would like to use the same contract with every sub-contractor for simplicity. For the reason that they are working with their standard contract, a person can expect that it will esteem them nearly in every respect. This doesn’t mean that they are reluctant while negotiating. Don’t forget that the general contractor has selected you as their sub-contractor, and there is a possibility that they agree to replace or remove a couple of those one-sided terms to clinch the deal.
Keep in mind that not all the contractual terms are enforceable. Some of the contracts enclose unenforceable terms. For example:
Most of the sub-contracts enclose a “pay-when-paid” clause. A valid meaning of this clause is that the general contractor has no such obligations to make payment to subcontractors until he is paid by the owner.
Correspondingly, a contract that runs contradictory to the “prompt-payment” laws can only be enforced in the condition that it encounters certain statutory requirements.
These are two examples of contractual terms which could not be enforceable. Regrettably, until you don’t know that terms are unenforceable, you are probably to merely accept them at their face value. Consequently, if you are anxious about a specific contract provision, and in case you were incompetent to persuade the general contractor to alter it, in this case, it is appropriate to consult with an attorney about the enforceability of the particular terms.
In the end, your pre-eminent defense might be your willingness to abandon an adverse contract. It is verifiable that even a bad contract can have some good outcomes. This may permit you to retain your business and encounter payment until the profitable project comes your way. Nevertheless, the gloomy effects of probing into a one-sided contract will frequently overshadow the good.
At best, a one-sided contract will hitch your resources so you are bound to pass on the next good job that comes across. At worst, an unbalanced agreement may cause you to drop out of your profits increase, which in turn, may constrain you into bankruptcy or towards legal action. Be attentive while probing into a new contract. Even though you will, in no circumstances, be able to persuade a general contractor to get a handle of all the one-sided wording in the contract, with few judicious changes to the contract and a better understanding of which terms will be enforceable, you can enter into a new project coupled with confidence.
Rights of the parties involved
Rights that are guaranteed to parties of the contract through a legally valid contract that have formed the agreement are as follows:
Rights which are in written form; for example- the exclusive rights to copyrighted content.
Rights are also in implied form; for example- each party has a right to transparency and fair disclosure of the contractual facts themselves.
Rights to a contract exist on both sides of the contracted parties, however, will most probably look different. Every contract involves a different set of rights, no two contracts are alike. If one party has the right to avail of the services, subsequently the other party has the duty to provide the services to that party. Contract rights are related but different to the duties to the parties of the contract as those are the obligations to the parties to perform as both the parties are under the terms and conditions of the agreement.
A contract must clearly describe the following:
The rights and responsibilities of the parties towards the contract.
The activities, time-frames for the implementation of the contract.
Assignment of responsibilities if those are permitted and also clarify what are those responsibilities.
There is a need to carry out their obligations by the respective parties to the best of their abilities and their required skills to do so, indeed that is in terms of a contract. There are two types of terms as mentioned:
Express – These are detailed, clear, and state precisely what is required; they are binding on the parties.
There are also two types: –
Conditions – conditions to a contract are essential parts of a contract. Breach of such conditions can result in rescission or repudiation and is liable for damages also.
Warranties – warranties to a contract are considered to be minor terms that only approach for damages.
Implied- Implied contracts are deemed to be a part of the contract by law. An implied contract requires a meeting of minds. A court may refuse to read the implied terms into a contract if the point is silent or did not indicate the nature of the terms of that contract.
Liabilities of the parties involved
Once the parties have entered into a contract, it is the responsibility of each party to make sure that they deliver on what they promise. When the parties failed to do so, they shall be liable for damages to compensate for what the other party may suffer due to the non-fulfillment of the contract by them. This will result in them needing to fulfill their contractual obligations concerning the performance for the completion and discharge of the said contract. In case the party fails to perform the contract, there are various options available to the other parties to claim and stand liable to that party; these all depend on the grounds and circumstances on which the party failed to deliver performance.
Considering a general rule: the payment of any contract is subsequently payable only when the work is performed and for that amount which is done whatsoever when the work is not completed there payment has been deducted. As a result, if a contractor can complete the installation service for 9 houses where the contract is specified for 10 houses, that 90% of the contract fee would be payable.
Frustration
On certain occasions, a contract may be frustrated. It is the legal termination of a contract due to some unforeseen situations. This can prevent the objectives of the contract from being attained, depict its performance as illegal, or make it practically impossible to execute. It could be caused by reasons such as a change in the law, an accident, fire, third-party interference etc. The frustration of a contract defends non-performance and automatically discharges the contract excluding where the terms of the contract override the implied legal provision. However, frustration is not acceptable as an excuse where such circumstance was foreseeable.
In a case where a contractor only installed the services for 9 out of the 10 houses, if one of the houses had been destroyed by fire before services could be installed, then the contract is frustrated in nature.
Doctrine of frustration
As general rule parties to the contract are having an intention towards the fulfilment of their part and in case of a breach, the party breaching is liable to compensate for the same. But an exception to this rule is laid down under Section 56 of the Indian Contract Act 1872 which deals with the doctrine of frustration i.e., the acts that cannot be performed. Under this doctrine, a promisor is relaxed from liability under a contract for the breach of contract and the contract will deem to be void.
Section 56 is based on the maxim “lex non-cogit ad impossibilia” which means that the law will not compel anyone to do what he cannot possibly perform.
Breach of contract
Liability of a party arises in case of breach of contract where parties fail to perform the agreed contract, what they agreed upon fails to deliver that then it is said to be a breach of contract and the parties get liable for the breach of contract.
However, breach of contract can be related to quality and time even though in construction industries, it is common to work for defective products to be finished; in this situation, it is not any breach of contract on the condition that the faulty work must be rectified within the said period. On the other hand, in case if the contractor refused to correct the mistake or in case not completed in the said time frame which is as mentioned in the contract to be completed, then it would be considered as a breach of contract. Where there is a breach of contract and the parties fail to meet their liability, it is free for the other party to take action and seek redressal.
Carlill v. Carbolic Smoke Ball Co. (1893)
Facts
As per the facts of this case, a company offered to pay € 100 by advertisement to anyone “who contracted the increasing epidemic cold, influenza, or any disease caused by catching a cold after having used the smoke ball according to the printed directions”. In addition to that “€ 1000 is deposited in the Alliance Bank showing the company sincerity in the matter’’. According to the prescribed directions, the plaintiff used the smoke balls but still she subsequently suffered from influenza. She was held entitled to recoup the promised reward. It was concluded by the defendants that there was no intention to enter into a legal contract or any such kind of legal relations as it was simply a flurry advertisement; that the offer was not made particularly to any one person and that the plaintiff had also not communicated her intention to accept the offer.
Court of appeal
Bowen LJ easily disposed of the first argument by stating: “Was it intended that the amount of € 100 should be paid on fulfillment of the conditions? The advertisement said that € 1000 is advanced at the bank for the purpose. For that reason, it cannot be said that the statement for € 100 would be intended to be a mere advertisement”. It was also rejected by the Lordship that the misconception of the argument that an offer could not be made at large to the world, by stating, “why should not an offer be made to all the world which is to mature under the contract with any person who comes ahead and performs the conditions? It is an offer to become liable to anyone who, before it is withdrawn, performs the conditions, and even though the offer is made to the world, the contract is made with that limited part of the public who came forward and performed the condition on the faith of the advertisement.”
The kind of contract, in this case, is a unilateral contract, in which the offeree accepts the offer by performing their side of the agreement. It can be conflicted with a bilateral contract, in which there is a communication of promises between the two parties. It was held that all cases of general offers, which are a kind of unilateral contract, demand some act in return for the promise to pay.
In the case of Australian Woollen Mills Pty Ltd v. The Commonwealth, (1955), it was held by the High Court of Australia that, to raise a unilateral contract, the promise must be made “in return’’ for the doing of the act. The Court differentiated between a conditional gift and a unilateral contract. The case, in general, seems to signify the connection between the preconditions of offer and acceptance as well as intention and consideration to create legal relations.
One-sided contractual terms constitute unfair trade practice under Consumer Law in India
Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna and Ors, (2021)
Facts
As per the facts of this case, the Department of Town and Country Planning had granted a license to Precision Realtors Pvt. Ltd. and Blue Planet Infra Developers, and Madeira Conbuild Pvt. Ltd. to develop a vast housing project called “The Corridors” in Sector 67-A, Gurgaon, Haryana. Afterwards, the licence for construction was transferred to Ireo Grace Realtech Pvt. Ltd. and the building plans of the project were sanctioned by the Directorate of Town and Country Planning, Haryana, on 23-07-2013 which contained a detailed set of terms and conditions, which inter alia incorporated provisions for fire safety and environmental authorization. According to Clause 3 of the Sanctioned Building Plan, authorization from the fire authority was needed to be submitted within 90 days from the issuance date of the Sanctioned Building Plan. Additionally, Clause 17(iv) of the Sanctioned Building Plan required the Developer to procure a no-objection certificate before beginning the construction of the project from the Ministry of Forests & Environment.
In 2013, the Developer opened booking for the apartments. A 2 BHK apartment was allotted to an apartment buyer in Tower-C of the Project on 7 August 2013. Similarly, to various other apartment buyers in the housing Project, allotment letters were issued. The Ministry of Environment & Forest Government of Haryana on December 12, 2013, was required to submit a copy of the fire safety plan as approved by the fire department before the commencement of the Project.
Subsequently, the Developer approached the Municipal Corporation, Commissioner, Gurgaon, for granting of no objection certificate for the firefighting scheme of the project. The said approval for the scheme was granted on 27 November 2014. After that, the apartment buyers received a copy of the apartment buyer’s agreement with a construction-linked payment plan with certain terms and conditions.
On 27 December 2017, Respondent no.1 of this case filed a consumer complaint before the National Consumer Disputes Redressal Commission, inter alia, appealingthe amount of sales consideration to refund along with 20% interest/annum, on account of extreme delay on part of the Developer in the accomplishment of construction and getting occupation certificate.
Respondent no.1 inter alia also submitted that;
The Developer by way of misrepresentation had invited applications from the public for booking flats in the Project on the account that all the necessary pre-clearance/ approvals concerning the constructions had already been obtained from respective authorities;
The Developer made false representations to the apartment buyers and was convinced to engage apartments on account that construction of the project would be completed within 42 months from the collection of the initial booking amount.
The Developer replied to the consumer complaint, submitting that in offering possession of the apartments there was no delay on its part, henceforth, the complaint was ulterior and liable to be dismissed. Likewise, numerous other apartment buyers filed complaints about the project before NCDRC. The National Commission inter alia ordered to refund the deposited amounts by the apartment buyers in the project on account of the excessive delay in completion of the construction and getting the occupation certificate. Aggrieved by the said pronouncement, the Developer filed an appeal under Section 23 of the Consumer Protection Act, 1986.
Findings of the court
The Court mentioned that the subsequent delay on part of the Developer in the completion of the construction and producing the offer of possession was unquestioned. Examining the terms of the Apartment Buyer’s Agreement (ABA), the Court established that alike were completely one-sided and entirely weighted in favour of the Developer, and as against the allottee at each step. It was held that the terms and conditions of the ABA were unreasonable and oppressive that would constitute an Unfair Trade Practice under the 1986 Act. The Court undisputedly held that the Developer could not compel the apartment buyers to be bound by the one-sided contractual terms specified in ABAs. The Court, however, in this case, directed the Developer to pay delayed compensation to such allottees. Concerning the allottee that had applied for the Insolvency and Bankruptcy Code, 2016, the Court directed the Developer to refund the amount deposited by him, along with interest. The Court observed that the occupation certificate was still not available (even as on date of the judgment) and the same amounted to deficiency of service.
Held
The Supreme Court three-judge bench, inter alia, held that the developers cannot coerce apartment buyers to be confined by one-sided contractual terms. Detecting such one-sided agreements burdensome, the Court held that the equivalent would be established as unfair trade practices under the consumer laws in India.
It has also been ensured by the Supreme Court, keeping its progressive and consumer-centric view, that the parties in uneven bargaining positions are placed on an impartial footing. Keeping in mind, the Court has also stated about the prevailing financial impact of the pandemic and the commercial realities of the construction industry on the said sector. It has called for a harmonious balance between the challenging interests of the apartment buyers and developers,to accord requisite impetus to economic development and social welfare as a whole.
Conclusion
Keeping with its progressive and consumer-centric view of one-sided contractual terms in India, the Supreme Court has ensured that parties in unequal bargaining positions are placed on an equitable footing. From the different judgements, it has been laid down that a harmonious balance between the competing interests of both parties is important to accord requisite impetus to economic development and social welfare as a whole. With the one-sided contractual terms at some point in time, the other parties had no other choice except to sign on the dotted line, on the contract which is formulated by the other parties of the contract. In this situation, as aforesaid by the Apex Court, the term of a contract will not be final and binding. Also, the incorporation of such one-sided and unreasonable clauses in the Apartment Buyer’s Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act. At last, it is concluded that the party couldn’t strive with the other party with the one-sided contractual terms.
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This article is written by Ansruta Debnath, a student from National Law University Odisha. It is about the patent lawsuit Intel lost, making it liable to pay damages of $2.18 billion.
Table of Contents
Introduction
Intel Corporation is one of the most dominant companies in the market today. In this digital age, almost everyone has heard of Intel. If you are using a personal computer right now, Intel has probably supplied its microprocessor. This mega corporation has now unfortunately gotten wrapped up in strings of litigations with regards to multiple alleged patent violations. The suing party involved is VLSI Technology, Inc. Patents are a type of exclusive right that is given to an inventor on their invention This article is a brief overview of one portion of the legal battle where Intel lost spectacularly and was made liable to pay damages upwards of $2 billion. Consequently, a discussion of the patent laws involved has been done.
Patents: acquired exclusivity
Indian laws describe patents as an exclusive right accorded to an author or inventor over their invention. The right is with regards to extracting profits and benefits from their invention exclusively. According to Section 2(j) of the Indian Patents Act, 1970, inventionhas been defined as a new product or process which involves an inventive step and has application in the industrial sphere. The objective that this Act aims to fulfill is to encourage inventors to contribute substantially in the scientific field- the Act provides various incentives for this purpose.
It is important to note that not all inventions are patentable. Moreover, inventions can be protected by many other forms of intellectual property other than just patents.
Patents are granted for a duration of 20 years from the date of grant of order by the Controller. However, patents can be renewed.
In general, conditions of novelty, industrial application and the need of inventive steps have to be fulfilled to qualify for the protection granted to patents.
A brief background
VLSI Technology, Inc. was a firm based in the United States that designed and manufactured customized and semi-custom integrated circuits (ICs). The company’s headquarters were located in San Jose, California. VLSI Technology, together with LSI Logic, established the cutting edge technology of the application-specific integrated circuit (ASIC) market, accelerating the push of powerful embedded systems into cheap goods.
VLSI was bought by Philips Electronics in June 1999 for around $1 billion and is now a component of the Philips spin-off NXP Semiconductors.
Intel Corporation is an American multinational Tech Giant headquartered in Santa Clara, California. It is the world’s largest semiconductor chip manufacturer in terms of sales. It is also credited with the creation of the x86 series of microprocessors, which are currently being used in the majority of personal computers. In 2020, Intel brought in revenues close to $77.9 billion.
However, Intel’s luck has been going in a downward spiral for the last few years. And the reason is VLSI Technology, Inc. VLSI Technology has slapped Intel with patent lawsuits in eight different American states, spanning California, Delaware and Texas. They are suing for estimated total damages of $7.1 billion. Intel has said that in case they lost all the cases, their total costs could go up to $11 billion.
In March 2021, Intel lost its first jury trial in the U.S. District Court in the Western Division of Texas situated in Waco. In August of the same year, Intel’s request to a Waco District Judge to overturn the order was denied.
In April, however, Intel won a $3 billion patent trial in front of another Waco jury with regards to two other patents.
Before the trials started, Intel along with Apple Inc. had filed antitrust cases against Fortress Investment Group LLC, which is the present parent company of VLSI Technology.
Facts of the case
Plaintiff VLSI is a Delaware limited liability company duly organized and existing under the laws of the State of Delaware. They filed the case in the Western District of Texas Court who had jurisdiction over personal jurisdiction over Intel because Intel manufactured products that are and have been used, offered for sale, sold, and purchased in the Western District of Texas. Defendant Intel is a corporation duly organized and existing under the laws of the State of Delaware, having a regular and established place of business in the Western District of Texas.
The lawsuit involved two patents, one with damages of $1.5 billion and the other $ 675 million. VLSI Technology purchased them from NXP Semiconductors. The patents were originally made by Freescale Semiconductor Inc. and SigmaTel Inc. both of which had been acquired by NXP Semiconductors.
One patent is the ‘373 Patent (U.S. Patent No. 7,523,373) with the name “Minimum memory operating voltage technique”. It was issued on April 21, 2009, and made by Andrew C. Russell, David R. Bearden, Bradford L. Hunter, and Shayan Zhang as co-inventors. This patent is on a method to reduce memory’s operating voltage.
The other patent is the ‘759 Patent (U.S. Patent No. 7,725,759) with the name “System and method of managing clock speed in an electronic device”. It was issued on May 25, 2010, and named Matthew Henson as the inventor. This patent is mainly on clock speed management.
VLSI alleged that both of these technologies were being deliberately used in Intel products thus amounting to patent infringement by the defendants. Intel claimed that there were no patent violations and that their products included technology completely and absolutely developed by Intel employed engineers.
Applicable legal provisions
In the United States, Congress has the power to regulate intellectual property. This power flows from the Commerce Clause which is Clause 3 of Article 1, Section 8 of the US Constitution. The U.S. Patent and Trademark Office (PTO) is responsible for issuing and monitoring federally registered patents and trademarks. Patents are exclusively governed by federal law. Article 1, Section 8, Clause 8 empowers Congress to further scientific innovation by providing exclusive rights to inventors and authors over their creations for a limited period of time.
The law with regards to patents is codified under Title 35 of the United States Code (hereinafter referred to as U.S.C.). This case, for both patents, mainly made use of four provisions under Title 35-
The patentable subject matter requirement tackles the question of which sorts of innovations are eligible for patent protection. The patentable subject matter is generally defined as any process, machine, manufacturing, or materials composition, or improvement thereof. The Supreme Court determined in Diamond v. Chakrabarty 447 U.S. 303 (1980) that Congress intended patentable subject matter to “include anything under the sun that is produced by man”. However, the Court also acknowledged that this wide definition had boundaries and does not encompass every discovery. Natural laws, physical facts, and abstract concepts, according to the Court, are not patentable.
A basic requirement that an invention must have to be accorded protection under relevant patent laws is utility. To specify, it should have utility in the industrial sphere. Utility specifications are specified in the Utility Guidelines Training Materials which is published by the U.S. Patent and Trademark Office.
Credible usefulness necessitates that logic and evidence back up the utility claims, or that a person of ordinary skill in the art would agree that the said invention is now capable of the claimed application. The usefulness must be particular to the claimed subject matter, not a general utility that may apply to a wide range of innovations. Substantial utility necessitates that the invention has a specified real-world application; a claimed usefulness that necessitates or constitutes more study to identify or validate a real-world application is insufficient.
The novelty requirement has a two-pronged approach- novelty and statutory bars to patentability. Novelty imposes the condition that said invention should not have been in use or within the public domain in the United States. It also includes that the invention should not be patented or present in the public domain in any other country other than America. Statutory bar implied that the patented material should not be in use or public knowledge in America, and should not be in the publication or patented in any other country, for more than one year before the application is made for the U.S. patent.
The test of non-obviousness tests whether the invention was something that is obvious to a person of ordinary skill. Graham v. John Deere Co., 383 U.S. 1 (1983), was the first case in which the Supreme Court applied the nonobviousness standard. The Court decided that nonobviousness may be assessed by conducting simple factual inquiries into the extent and content of previous art, the distinctions between the prior art and the claims at issue, and the level of skill possessed by a practitioner of the relevant art.
The enablement requirement is intimately tied to the specification, or disclosure, which must be submitted as part of every patent application. Every patent application must include a specification outlining the workings of the invention, as well as one or more claims at the conclusion of the specification giving the precise legal meaning of the invention. To fulfil the enablement criterion, the specification must detail the invention with such particularity that a person of ordinary skill in the art would be able to create and utilise the claimed invention without “undue experimentation.”
§ 251-329 of Title 35 (PART III) of the U.S.C. talks on patents and the protection of patent rights.
U.S. PTO has given out the following types of patents-
Utility Patent;
Design Patent;
Reissue Patent;
Plant Patent;
Defensive Publication (DEF);
Statutory Invention Registration (SIR).
Outcome of the trial
As mentioned before, the jury found Intel Corp guilty of patent infringement on both grounds and directed them to pay $ 2.18 billion to VLSI Technology.
Intel, after failing to overturn the judgment will be appealing ensuring that this legal battle might go on for years.
Counsel for VLSI Technology had made a statement during the trial saying VLSI had no products on the market and that damages that were owed to them were their only source of revenue. After the trial verdict was declared, Intel lashed at VLSI stating that their statement (mentioned above) proved that VLSI was nothing but a “patent troll”.
Surprisingly, the stock prices of Intel went up after the outcome of the trial was made known to the public while those of VLSI went down. However, this cannot be a reliable indicator of the confidence of the market in Intel because there are many more suits to come.
Similar American judgments
There are very few judgments in the United States which have such large patent infringement awards. Intel Corporation v. VLSI Technology (2021) holds second place in the list of largest patent infringement awards. The first position goes to Idenix vs Gilead Sciences Inc (2016) where damages of $2.54 billion were awarded to Idenix, the plaintiffs.
Litton vs Honeywell (1993)was a very controversial case that was dragged through the courts for 11 years. The case was initially filed by Litton in 1990 for patent violations and antitrust activities by Honeywell. The judgment was given in 2011, with damages of around $1.2 billion being awarded to the petitioner.
Apple Inc. v. Samsung Electronic Co., Ltd. (2012) was a real-life manifestation of the fabled cold-war rivalry of two of the biggest smartphone manufacturers in the world. The legal battle spiralled into more than 50 lawsuits across the globe with damages involving close to $1.04 billion.
Polaroid vs Kodak (1991) was another of the most famous patent cases of the United States. Polaroid sued Kodak for infringing 12 patents. The latter was asked to pay close to a billion dollars in damages, a huge amount for the 90s.
Conclusion
The ongoing legal battle between Intel and VLSI is not over. With multiple appeals and lawsuits in the future, what is there in Intel’s future is uncertain. One loss, however large it might be, has not affected the goodwill it holds with the public. To what extent it is not clear. It would be better if Intel somehow starts looking towards other avenues like alternate dispute resolution methods before things get out of hand.
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Removal of jurisdiction is the process of transferring a case from the state court to the federal court. It is provided under federal statute. A Defendant can choose to remove a case if the case could have been filed in federal court in the first place. A federal statute governs removal. Only a defendant can remove a case to federal court, since, if a Plaintiff files a case in the state court then it is by choice and the same cannot be changed subsequently.
As soon as a case has been removed from state to federal court, the state court ceases to have jurisdiction over the matter, though a federal court can remand a case to state court. A federal judge has the discretion to remand a case on its own if the judge comes to the conclusion that federal jurisdiction has not been properly invoked by the Defendant. However, once a case has been removed to federal court, it stays there until it is fully resolved.
Section 1441 of Title 28 of the U.S. Code authorizes a Defendant to remove the civil case from a state court to a federal court if the federal court originally had authority over the case. For example, diversity of citizenship of the parties or where Plaintiff’s action involved a claim under federal law.
If removal is based only on diversity of citizenship then the principle of removal of jurisdiction will not be attracted, if out of many Defendants any properly joined and served Defendant is a citizen of the state in which the action is pending.
Section 1442 of Title 28 of the U.S. Code authorizes the United States, any federal agencies, and any officer of the United States to request for the removal of a case from a state court to a federal court. A Defendant can request the removal if their act in question was done in relation to their employment or the federal government.
Right of the defendant
It provides a Defendant with the right to have the case heard in a federal court, rather than in the state where the Plaintiff resides. It helps by providing a more equitable playing field between the Plaintiff and Defendant.
In order for a case to be removed to a federal court, the Defendant is required to file a plea within 30 days of receipt of the complaint/summons, and the amount claimed by way of damages must exceed $75,000. Also, Defendant and Plaintiff must reside in different states.
A Defendant must file a copy of the notice of removal in the state court and must notify all other parties of the removal. In a case with more than one Defendant, normally all Defendants who have been served with the legal process must be joined in the notice of removal.
Remedy against improper invoking of removal
If a party contends on any ground other than the Federal District Court not having jurisdiction to remove the case, the party can move to the district court to remand the case to state court within 30 days from the date of Defendant’s filing the notice of removal. The District Court will grant the application/motion if it finds that removal was improper.
The reason behind a Defendant choosing the Case to be heard in a Federal Court and not a State Court
One reason that is typical behind considering removal, is that there may be prejudice against the non-resident Defendant. A Defendant may apprehend that in court, this prejudice could come from the jury and/or the judge, who may favour the in-state resident.
There are, however, other factors that are looked at by Defendant and their defence when considering if removal is necessary:
The judge- It is important to consider the judge who will be on the case. Determining the background, political views, and experience of the judge will help to determine whether the judge is more likely to favour the Plaintiff. If that is the case, then the defence would choose to remove to a federal court for a neutral judge. It may happen that a defendant may represent a company that promotes oil companies, while the judge is an environmentalist. The judge could be biased against Defendant.
The counsel- Knowing more about the Plaintiff’s Counsel can help to determine the defence’s next move. Knowing if the Counsel is well known in state courts and if they practice a lot in court can be a deciding factor for removal to federal court. If the counsel rarely practices in federal courts, it would be beneficial for the defence to remove to federal court to have the advantage. The Counsel is well-known in the state court and has won many cases because of his experience and name. The defence would consider removal because of this.
Removal in case of multiple Defendants
When there are multiple Defendants involved in a case and even if just one Defendant out of others is a citizen of the state where the lawsuit was filed, a Plaintiff can successfully object to removal, if the only ground for invoking federal jurisdiction is based on diversity of citizenship.
A Plaintiff can never remove his/her own case, even if the Defendant files counterclaims alleging violations of federal law by the Plaintiff. In such an event, a Plaintiff must seek a dismissal order without prejudice and refile the case in federal court.
Cases that are barred from removal
The cases filed under Workers’ Compensation Action and Actions under the Federal Employers Liability are barred from removal in all the circumstances.
Removal of criminal cases
Removal of state criminal cases are allowed under 28 U.S.C. Section 1442, where Defendant is a federal officer and who alleges that the act was committed while carrying out his federal duties.
A well-known example of such removal is the case of Idaho vs. Lon Horiuchi wherein the accused was alleged to have committed manslaughter of Vicki Weaver in the encounter of Ruby Ridge.
Removal of cases involving federal agencies or federal officers
Removal jurisdiction in cases that involve federal agencies or officers, who are named as defendants in civil suits or criminally prosecuted, is governed by 28 U.S.C.§ 1442, known as the federal-officer removal statute., as opposed to removal under 28 U.S.C. § 1446.
The primary difference between the two statutes is that in section 1442, it is provided that in the case of federal agencies or officers, the federal district court need not otherwise have subject-matter jurisdiction over the type of case presented as long as the federal officer was acting under colour of office in a civil matter, or in a criminal matter whereas under Section 1446, criteria are that there must be federal subject-matter jurisdiction to justify removal.
The time limit for removal
A Defendant must make an application to remove within 30 days of receiving summons and complaint as required under 28 U.S.C. § 1446(b).
If a case cannot be removed immediately but becomes removable later, Defendant has 30 days from the receipt of the amended complaint or pleading that makes the case removable. In any event, a case cannot be removed more than one year after filing.
The deadlines stipulated for removal cannot be extended by agreement of the parties or even by order of the court as the same are jurisdictional which means if the same is not followed and satisfied, the court does not have jurisdiction to hear the case.
Steps to be taken for removal
Removal documents which are to be filed in the Federal Court would include the payment of requisite filing fees, Civil action sheet, Federal notice of removal and copies of all pleadings, processes and orders filed in the State court.
Notification to be filed in the State Court from which the case is being removed which will include the formal notification of removal and copies of some or all documents from the removal packet filed in Federal court are to be attached thereto.
The materials filed in Federal court and State court are also served to other parties to the litigation which will include copies of the removal documents filed in State court and new federal pleadings associated with the removal.
After removing the case to Federal court it is to be ensured that the deadline for filing an answer or other responsive pleading in that forum, is adhered to.
Miscellaneous issues
State courts are not empowered to adjudicate whether an action can be properly removed. As soon as a Defendant completes the removal process by filing a notice of removal in the state court, jurisdiction is transferred automatically and immediately by operation of law from the state court to the federal court.
Any objection to removal must be presented to the federal court by way of a timely-filed motion. If a federal court comes to the conclusion that the notice of removal was defective or that it does not have jurisdiction, the case is remanded to the state court.
Reverse removal
There is no reverse “removal”. That is, if a case originates in a federal court, a Defendant is not entitled to remove a case from federal court into state court. If the federal court lacks jurisdiction, the case is dismissed. Only cases that originate in a state court and are improperly removed to a federal court may be sent back to the state court where they started.
A Defendant can waive the right to remove by contract, although courts take different views while interpreting the terms that are necessary to create a waiver.
Conclusion
In most cases, one will prefer to have his/her cases proceed in the federal court rather than the state court. Even on the ground level, removal of a case from State court to Federal court may sound easy but there are many outlines and forms to federal jurisdiction. It involves many issues that may not be quite obvious but need to be considered as the same can significantly impact the litigation. Removal application should not be taken lightly and it should be carefully considered, properly planned, and executed.
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“To tackle the menace of film piracy…”. The public comments sought on the Cinematograph (Amendment) Bill 2021, commences with the above quote, and with such quoted objective, The Cinematograph (Amendment) Bill, 2019 was introduced in the Rajya Sabha on the 12th of February, 2019 to amend the Cinematograph Act of 1952 (the “Act”). Upon being subjected to a storm of criticism from all major stakeholders of the movie, and other entertainment industries, the Ministry of Information and Broadcasting (the “I&B Ministry”) announced the incoming Cinematograph (Amendment) Bill of 2021 (the “2021 Bill”). Similar to the previously introduced amendment bill of 2019, the 2021 Bill has been introduced aiming for the same objective i.e., ‘to tackle the menace of film piracy‘. Despite being fresh to the eyes, it has yet again been shrouded with some controversial statements from various stakeholders of the entertainment industry. Among the few proposed changes, the Centre had sought public comments on the draft Cinematograph (Amendment) Bill 2021, which proposes to penalize film piracy with a jail term and fine, introduce age-based certification, and empower the Central Government to order recertification of an already certified film following receipt of complaints.
In this article, we would be delving into some of the provisions which have been introduced under the 2021 Bill and also address the underlying issues of such provisions.
Background
Before looking into the provisions under the 2021 Bill, it would be in our best interest to understand the context and background of this 2021 Bill and its requirements. The Cinematograph Act of 1952 came into force as an act to ensure that films made for public consumption go through certain checks so that they may be eligible for display in theatres and other public displays. The Act also established the board which would be responsible for ensuring such checks and balances i.e., the Central Board of Film Certification (“CBFC”). The CBFC is responsible for providing the necessary permits and certificates of viewing, or if the film requires another round of editing which would be exhibited in the public. As per Section 5A of the Act, the CBFC, upon examining a film, shall provide either of the following certifications to classify the category for viewing the film. The classification has been divided into four categories:
The film is suitable for unrestricted public exhibition (U);
The film is unrestricted but subject to parental guidance for children below the age of 12 (U/A);
The film is only restricted to adults (A); and
The film is restricted towards a class or a profession (S).
Amendments proposed under the draft Cinematograph (Amendment) Bill 2021
As mentioned hereinabove, the release of the 2021 Bill has attracted several eyes and criticisms from the entertainment industry regarding the changes that have been proposed thereunder.
Validity of certificate for perpetuity
As per the current law, a certificate granted by the CBFC shall be valid for 10 years. Under the 2021 Bill, they have extended this period to perpetuity. Although, the intent for making the certification till perpetuity lacks clarity, however, it is to be noted that perpetual validity period was also proposed by a notification released by the Ministry of I&B in 1984 in which the Ministry had exempted validation and revalidation of certificates, thereby the validation of certificates was perpetual.
Power of the Central Government to re-examine a film for certification
Addressing the most controversial provision under the 2021 Bill, that is the granting of revisionary powers to the Central Government to direct the CBFC to re-examine an already examined (thereby certified) film. Thus, the Central Government will have the power to reverse the decision of the CBFC. Although Courts in India have been against such revisionary powers of the Central Government, the Supreme Court had opined that the Government may overrule or nullify such judicial decisions by enacting appropriate legislation.
As per the 2021 Bill, this amendment stems from the reasonable restrictions provided under the Constitution of India, thereby films may not be given the green light in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement of any offence. However, if we look at the recent years, a large number of films have been restricted from public viewing, without any viable reasoning (although brought to the court under Article 19(2) of the Constitution of India).
On a parallel note, considering the increasing rise in the popularity of the Over-The-Top (OTT) platforms broadcasting movies, any restriction against viewing of a film in the theatres may not have a major impact, as the viewers or the “public” may be able to watch the ‘banned’ film on any of the OTT platforms. It is important to note that the COVID pandemic has seen the shutting down of movie theatres in the country, and a considerable shift has been made towards the OTT platforms- to the extent that it will take a reasonable amount of time for a shift towards the movie halls. It is also to be noted that there have been no significant regulatory-backed mechanisms formulated for the OTT platforms. However, if in the near future, there are regulations for the operations of the OTT channels, it might pose an issue for various stakeholders in the entertainment industry (especially, the makers of the disputed film, among others) as well as the audience in general.
This may also lead to certain issues regarding India’s portrayal of films on the world cinema stage, especially since in recent years, where movies that were ‘banned’ within the country have seemingly performed at par with international standards, if not more, and have been at the receiving end of applause from various international celluloid festivals. Adding to the above, what is even more devastating to the entertainment industry, is that this move comes shortly after the abolition of the Film Certification Appellate Tribunal (FCAT), which was the stakeholders’ resort to appeal if the CBFC had rejected certifying their film. Thus, any appeal to be made will go directly to the High Courts or the Supreme Court, which many of the stakeholders are unlikely to be able to afford. Therefore, the proposed inclusion of this provision seeks the question of its importance at the ground level, as on one hand, it will barely have much of an impact on public viewing, if the same is broadcasted on other platforms, and on the other hand, even if the Government comes down heavily with regulations on the OTT platforms, the Indian entertainment industry will face a huge pushback on good content delivery, loss of business, loss of international acclaim, etc.
Power to re-certify a film by the Central Government
In furtherance of the above power of the Central Government to re-examine a film, the Central Government has also been given revisionary powers to direct the CBFC to recertify an already certified film. Section 5B of the Act, provides for the ‘Principles of guidance in certifying films’, and it states that, if in the opinion of CBFC, a film is found to be against the interests of the Constitution i.e., it is against the interests of the sovereignty and the integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or involves defamation or contempt of court, or is likely to incite the commission of any offence, such film shall not be certified for public exhibition. Although as per sub-section 5B (2) of the present provision, the Central Government has the right to issue directions and principles to guide the CBFC in certifying films, the 2021 Bill gives an explicit right under Section 6 (Revisional powers of the Central Government) as a proviso that the Centre can reverse the decision of the CBFC, and can direct the Chairman of CBFC to re-examine a film already examined. Therefore, even if the CBFC, upon the direction to re-examine the film, deems the film to be valid for certification, the Central Government will have the right to re-certify such film. As highlighted in the above point, eventually this would be a massive pushback for the filmmakers who would be producing an otherwise good film but would get caught up in the tangles of regulations and administrative processes.
Additional categories to the existing UA certification classifications
The 2021 Bill has also proposed further subcategories for the existing UA certification categories. We have already highlighted the existing UA certifications above. . To further classify and categorize, the upcoming 2021 Bill has been further segmented into age-based classifications. As per the proposed 2021 Bill, the following classifications shall apply:
Prohibition of unauthorized recording-Insertion of new Section 6AA
One of the primary motives behind the amendment of the Act has been to curb film piracy in the country. Keeping this intent in mind, a section has been proposed to be added as Section 6AA. The section penalizes the recording of any sound or video without the permission of the author of the film.
“6AA. Notwithstanding any law for the time being in force, no person shall, without the written authorization of the author, be permitted to use any audio/visual recording devicein a place to knowingly make or transmit or attempt to make or transmit or abet the making or transmission of a copy of a film or a part thereof.
Explanation.- For the purposes of this subsection, the expression “author” shall have the same meaning as assigned to it in clause (d) of Section 2 of the Copyright Act, 1957.”
The above section was initially introduced in the 2019 Bill as well with a slight variation. The 2019 Bill had an undefined term “exhibition facility” in the above language. Although the term was vague and undefined, the 2021 Bill did not do much justice in replacing it with another ambiguous terminology “in a place”. Moreover, the amended language fails to define “author”, which, considering it has been defined under the Copyright Act, 1957 such definition may be applicable.
Penalties for film piracy
Concluding our analysis by looking at the penal provisions prescribed under the 2021 Bill, an article correctly quoted the punishments to be “Disproportionate Criminalization”. The penalties for contravention of unauthorized recording have been prescribed as imprisonment ranging from 3 months to 3 years, and/or a fine which is not less than 3 lakh rupees which may extend up to 5% of the audited gross production cost of the film. Not only does the change in penalty amount and additional penalization seem lop-sided, it is also a wasted opportunity for the amendment to bring about a crucial change. Even if we take into account that 3 lakh rupees minimum fine is not an exorbitant amount, the additional penalization percentage of the production cost would be over the top and uneven (both morally and ethically) for the offender; especially if it is a high-budgeted film and the punishment is merely for a minor clip of the film.
Conclusion
The 2021 Bill came with promises and aimed to address issues that were looming large in the entertainment world. However, upon its in-depth analysis, it can be concluded that it was a spoilt opportunity by the legislature. Film piracy is not new to the world of crimes relating to the entertainment business, especially with illegal websites and download portals contributing largely to the crime, and thereby it is increasingly difficult to prevent such crimes from occurring. Although the laws preventing and penalizing crimes of film piracy existed before, they have not been able to successfully counter them. What would have been expected from the amendment 2021 Bill would have been novel ways to tackle the issue of film piracy rather than modifying the timeworn mechanism of penalization. Even more so considering, as highlighted above, the crime of film piracy is more prominent in the cyber world during this digital age. Considering the backlash received from the stakeholders of the entertainment industry, it would be wise for the legislature to consult the stakeholders or take their viewpoint in formulating the laws, and also modify the existing ways to address the problem in the cyber forums as well.
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This article is written by Gyaaneshwar Joshi, from the Faculty of Law, Jamia Millia Islamia, New Delhi. This article enlightens readers about the circumstances that led to the enactment of the Abducted Persons (Recovery and Restoration) Act 1949 to rescue the abducted persons after the partition of India in 1947.
Table of Contents
Introduction
In August 1947, India gained independence after almost 200 years of British rule, followed by one of the largest and bloodiest forced migrations. This massive and sudden migration changed the demography of South Asia. British India was partitioned into two independent nation-states, Hindu-majority India and Muslim-majority Pakistan. The two countries were carved up in haste by British colonialists, leading to one of the greatest migrations in human history.
In November 1948, as a result of the agreement signed between India and Pakistan, the Abducted Persons (Recovery and Restoration) Act, 1949, was temporarily enacted by the Indian legislature to recover abducted female Muslims of all ages and males under sixteen who were left in India after the partition, to officially allowed them to restore with their migrated families in Pakistan. The tenure of the Act was mandated for up to 31 May 1955. However, after passing the Abducted Persons (Recovery and Restoration) Continuance Bill, 1955 which came into force on 30 May 1955, the tenure of the Act was continued for a further period, i.e. till 1960. After the expiry of this tenure, the Act on its own got repealed.
Circumstances that led to the passing of the Act
Before British colonization, the Indian subcontinent was a patchwork of regional kingdoms known as princely states, populated by Hindus, Muslims, Sikhs, Jains, Buddhists, Christians, Parsis, and Jews. Starting in the 1500s, a series of European powers colonized India with coastal trading settlements. By the mid-18th century, the English East India Company emerged as the primary colonial power in India. In the 19th century, the British began to categorize Indians by religious identity. They counted Hindus as majorities and all other religious communities as distinct ‘minorities’, with Muslims as the largest minority. In elections, people could only vote for candidates of their religious identification that exaggerated differences between the previously co-existing communities. The infamous strategy of divide and rule introduced by the British led to increasing mistrust between Hindus, Muslims, Sikhs, and Christians.
India had long wanted independence from repressive British rule; therefore, the 20th century began with anti-colonial movements where India fought for freedom from British rule. Indian political leaders had presented their different views on how an independent India should look like. The Congress leaders, Mahatma Gandhi and Jawaharlal Nehru, who represented the Hindu majority, wanted a secular India. On the other hand, Mohammad Ali Jinnah, the leader of the All-India Muslim League, wanted an independent state for Muslims called Pakistan.
In June 1947, the British Viceroy Lord Mountbatten announced that India would gain independence and partitioned into Hindu India and Muslim Pakistan but gave little explanation on how this would happen. Using outdated maps, inaccurate census, and minimal knowledge of the land, the Border Committee drew a border within five weeks. The boundaries were constructed while looking at the areas, for example where Hindus or Muslims were in majorities or considering other factors like location and their population percentage.
While the Boundary committee worked on the new map, Hindus and Muslims began moving to areas where they thought they would be a part of the religious majority. People who found themselves in the wrong country fled for their homes, on foot, in bullock carts, or by trains. More than seven million people travelled from India to Pakistan, and another seven million travelled from Pakistan to India. In two years from 1947, millions of Hindus and Sikhs living in Pakistan left for India. Lahore, Delhi, Calcutta, Dhaka, and Karachi emptied of old residents and filled with refugees. Refugee camps were set up in India and Pakistan to try to house millions of refugees. Many refugees lost their lives because of the poor conditions, and several succumbed to hunger and thirst or were murdered by religious extremist groups. Around ten thousand women were abducted, usually by men of a different religion. Therefore, with an expectation to be a part of the majoritarian population, Muslim people started heading towards the west to Pakistan, and Hindus and Sikhs began to flee east to India.
The Abducted Persons (Recovery and Restoration) Act, 1949
Purpose
The Governors of the United Provinces, East Punjab, the Rajpramukhs of Patiala, the East Punjab State Union, and the United State of Rajasthan accorded their consent for making of this Act under the provisions of sub-section (1) of Section 106 of the Government of India Act, 1935. This Act made a formal agreement between the Government of India and the Government of Pakistan for the recovery and restoration of abducted persons [as per defined under Section 2(1)(a)] who became victims of religious violence in both countries.
Section 1(2) mandated the Act to be remained valid until 31 October 1951 for rescuing abducted people in India and sending them to their families in Pakistan. However, after passing the Abducted Persons (Recovery and Restoration) Continuance Bill, 1955, the Act further extended for up to 31 May 1955 by adding clause 3 in Section 1 of the Abducted Persons (Recovery and Restoration) Act, 1949. The time of the Act was extended because many alleged abductions cases remained to be investigated by the governments of both countries.
The uprooting and dislocation of the people during partition were accompanied by the rape, abduction, and widowhood of thousands of women on both sides of the borders. Thousands of women were brutally raped and abducted by the local perpetrators and religious extremist goons. Therefore, the government in both countries categorizes all women missing or living with men of the other religion to consider under the category of ‘abducted’ women. Based on the complaints filed by relatives in both countries, the estimated figures stated that around 33,000 Hindu and Sikh women were abducted in Pakistan. Similarly, Pakistan displayed the figure of Muslim women who were abducted in India to be around 21,000. Therefore, taking action on the complaints filed by the relatives of the abducted persons in Pakistan, the Indian state decided to enable this Act for making a proper procedure to locate, recover, and rehabilitate abducted persons, and legitimately send them with their families in Pakistan.
A Central Recovery Operation created by the Government of India carried out work between 1948-1956. It was formed to examine and recover those women who were abducted and forcibly converted during the upheaval. The Central Recovery Operation, presumed women if found living with a man of another religion as the abducted. Also, in a situation where women stated the relationship as a matter of her choice, it was assumed as a decision made under pressure and discounted at the same time.
Therefore, the Prime Ministers of India and Pakistan met at Lahore in September 1947 and decided on the recovery of abducted women and voiced for those women and children to be restored with their families by the joint organization of both dominions. A book published by the Central Recovery Organisation in 1952 informed the district by district list of Hindu and Sikh women who went missing or were presumed abducted in Pakistan. The Pakistan newspaper Dawn (founded by Jinnah) also published information about abducted Hindu and Sikh women and asked people to supply full details about where women were last seen, and other relevant details regarding those women. All the tactics, including subterfuge and disguise, were used by the rescue teams. Bringing women out of the hostile environment was not an easy task because people in positions of authority were charged for abducting women, which happened on both sides of the borders.
In Section 2(1)(a) of the Abducted Persons (Recovery and Restoration) Act, 1949, the abducted persons were specified as “a male child under the age of sixteen years or a female of whatever age who is, or before 1 March 1949, was, a Muslim and before 1 January 1949, separated from his or her family and living under the control of any other individual or family”.
Meanwhile, during the rescue work of Muslim women conducted by the Indian officials, Pakistan argued that some women (Hindu and Sikh) were happy in their new surroundings, that means in Pakistan, and had offered resistance to being rescued and come to India. The government officials stated that several women gave their consent that they do not want to go to India. However, it was not evident that women may not have been coerced to say this. Later, the Indian records also clarified that many women did refuse to come back to India.
Relevant Provisions
The Act contained eleven sections and was repealed by the Repealing and Amending Act, 1960. Section 2 defined the term ‘abducted persons’ and ‘camps’ under which an abducted person can be any male child under the age of sixteen and a female of whatever age who was Muslim before 1 March 1947. The Act provided that a person to be rescued by the officials has separated from his or her family and living with any other individual or family in India after partition. Any child born to any such female was also considered abducted. Similarly, the meaning of camps defined under the Act referred to any place established for the reception and detention of these abducted persons.
Section 3 of the Act required the Provincial Government to establish as many camps for the reception and detention of abducted persons. The Provincial Government was required to maintain discipline in the camps and was obliged to make appropriate regulations for the transfer of abducted persons from one camp to another to maintain health and harmonious relations among the abducted persons.
Section 6 in the Act stated for the determination of the question whether any person detained is an abducted person or allowed to leave a camp or handed over to another person out of India. The Tribunal constituted by the government was given the power to take such decisions. The decision of the Tribunal was set to be the final, and review and revision of any such decision was only made possible by making an application to the Central Government on behalf of any party interested in the matter. The detention in camps from being questioned in the Court was exempted under Section 8 of the Act.
Section 8 authorized any officer in charge of a camp or any officer/authority to assure that a person was abducted, and that person needs to be restored to his or her relatives or conveyed out of India.
Functions
A Joint Fact-Finding Commission was appointed to facilitate the transfer of persons and entrusted the task on the two HPOs (High Powered Officers), the officer not below the rank of a Deputy Commissioner, and separately appointed in both the countries to ease the rescuing process. Both the officers appointed separately in the country were given six months to prepare and verify lists of almost all abducted persons.
The Act eased the movement of relatives of abducted persons from one country to another. Both countries agreed that they would give the relatives of abducted persons all reasonable facilities.
After passing this Act in India, the Pakistan government undertook the same to bring the definition of abducted persons in their Ordinance. The Pakistani government issued executive instructions to recover the abducted persons belonging to Hindu and Sikh scheduled caste.
Conclusion
The concern of the Abducted Persons (Recovery and Restoration) Act, 1949 reflected the sense of the violation of the body and spirit of the abducted persons. The mass rape and abduction of Hindu and Muslim women across borders glossed over the challenge to manhood and nationalism in both countries. The Central Recovery Operation provided the data that over 50,000 women had been abducted or missing but both states had managed to recover around only 8,000 women, and many of these women were not among those who reported missing.
The massive rehabilitation operation by both the States was marked as one of the major humanitarian operations. With all its faults, it was beneficial to a large number of people, especially suffering women. Looking after more than seventy years of partition, the legacies of the partition are still evident in the subcontinent in its new political formation and the memories of the divided families.
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In a country like India where there are a plethora of laws dealing with crimes committed by citizens, corporations, and other entities, it is very surprising that there are hardly any laws to check the crimes committed by police officers. It is a very rare occurrence to see a police officer being proven guilty and getting convicted for misuse of law or crimes committed under the guise of discharge of duty and following orders.
The Courts in India, more particularly the Supreme Court has, on many occasions, held police officers liable for wrongdoings committed through misuse or excessive usage of power, leading to violation of human rights. violations. Compensation for violation of fundamental rights was also introduced by the Supreme Court in 1983 in the famous case of Rudal Shah vs. State of Bihar where the Supreme Court granted Rs.30,000/- as compensation to the victim who was wrongly detained even after his acquittal.
A police officer can be held accountable for violations under public law, private law, criminal law, and also through departmental proceedings. However, the success rate involved in proving the police officer guilty of the crime is minimal.
In this article, the author has limited the discussion to the liability of police officers under private/civil law and has discussed whether a defamation suit can be filed against police officers in India. Before going straight to the private/civil liability of police officers, it is important to understand the concept of Sovereign Immunity and what kind of immunity is given to police in India.
Concept of sovereign immunity
Sovereign immunity is a well-recognised legal doctrine dating back to the time when kings and queens used to rule their kingdoms or countries. Under this doctrine, a king or a state can do no wrong and is immune from all types of civil and criminal prosecution. It is more of a justification for wrongs committed by the state and its instrumentalities.
We all know that India was a British colony and was ruled by them for more than 200 years and the concept of sovereign immunity in India has been borrowed from British jurisprudence as most of the laws in India are a product of the British era.
Until the late 1900s, this doctrine was used widely by the instrumentalities/representatives of government to escape from prosecution. However, the Indian courts played an important role in narrowing down the sovereign functions and making the scope of this doctrine as limited as possible in various judgments so that an ordinary citizen would be able to get justice. The jurisprudence was further evolved by the courts when they started granting compensation to the victims for wrongs committed by state representatives against them.
Recently in the year 2000, the Supreme Court in State of Andhra Pradesh vs. Challa Rama Krishna Reddy had outright stated that the doctrine of sovereign immunity has no place in India anymore while deciding a case on police negligence leading to the death of a person and injuries to his son. Even though this judgment was limited to violation of fundamental rights, it created a spark for further development in the area of governmental liability. The Supreme Court, in this case, held that:
“The Maxim that King can do no wrong or that the Crown is not answerable in tort has no place in Indian jurisprudence where the power vests, not in the Crown, but in the people who elect their representatives to run the Government, which has to act in accordance with the provisions of the Constitution and would be answerable to the people for any violation thereof.”
Distinction between sovereign and non-sovereign functions
Even though it sounds fairly simple to say sovereign and non-sovereign functions, it is very difficult to distinguish between them. There is no way anyone can simply make a list and add the functions to either category. Even the Supreme Court has struggled to distinguish what kind of action falls under which category of functions. But based on various precedents of the Supreme Court it can be understood that if an action is reasonably related to discharging duty or following an order by a superior then it falls within the ambit of sovereign function and this has to be seen on a case-to-case basis. It is the need of the hour to try and distinguish the sovereign and non-sovereign functions as much as possible and that task is the responsibility of the legislature and government.
The author has given simple examples to differentiate between a sovereign and non-sovereign function in relation to the actions of a police officer.
Example 1
Let’s assume that you are a part of a group protesting against a fuel hike and all of a sudden, the group turns a little violent where a few members of the group start vandalising nearby shops. Immediately the peaceful group turns into a violent mob and police officers start using tear gas and lathi-charge to disperse the mob and control the situation. In this situation even if police are using force to hurt people it falls under the ambit of sovereign functions and discharging the duty.
Example 2
Let us assume you are in a restaurant with your family and at the next table, a group of police officers is having their lunch. Assume that they are talking loudly and using foul language and you have a couple of children with you and you politely ask them not to use such language in a public place where there are children. All of a sudden, they start beating you saying something along the lines of, “How dare you to tell us what to do”. This is a completely different situation compared to the earlier example and this action of beating you is not related to discharge of duty by a police officer even remotely. Hence, actions like these fall under the ambit of non-sovereign functions.
Immunities given to police in India
In India, the police are given procedural immunity from any prosecution under Section 132 and 197 of the Code of Criminal procedure (CrPC). Under these sections, courts are barred from taking cognizance of any complaint or case against any police officer who is alleged to have committed an offence while discharging his duty. Prior permission of the State/Central Government is necessary if the courts have to take cognisance.
The immunity under Section 132 of CrPC is specifically for situations where force is used by the police officers for dispersing a crowd and maintaining law and order. Whereas, Section 197 is a general section that prescribes the procedure to be followed if a police officer is to be prosecuted.
Police accountability under private law
Police officers can be made liable under private law in cases of reckless and wrongful arrest/confinement of a person. False imprisonment/arrest is an arrest of a person by a police officer without any lawful authority or a reasonable cause. In situations like this the victim can file a suit claiming damages for mental agony, loss of reputation and physical harm (if any) and also for loss of income.
However, in India there is no hard and fast rule when it comes to the quantum of damages the courts will grant. We can see the pattern in a series of judgments by the Supreme Court starting from the Rudal Shah case followed by the Vidyawati case, the Nilabati Behra case, etc.
If a person wants to file a case against a police officer seeking damages, then he has to prove beyond reasonable doubt that due to the actions of police in wrongful arrest or reckless treatment, the victim has lost his/her reputation in society and suffered severe mental agony. Damages will be granted only if the courts think it is a fit case. One of the instances happened in Bangalore in January 2020 where a software engineer was booked under Section 66(a) of the Information Technology Act, 2000 when the section was struck down by the Supreme Court. In this case, the High Court of Karnataka granted Rs.10,000/- compensation to the victim and also ordered the Police officers to apologise to the victim for wrongful arrest based on a struck down provision of law.
Defamation suit against police officers
As discussed above, police officers are protected under immunity from any type of criminal prosecution under Sections 132 and 197 of CrPC. But Defamation can be both criminal and civil. Under civil law, defamation is treated as a tort and a suit can be filed for damages.
In India people seldom dare to file a defamation suit against a police officer. Proving that a cop has defamed someone is difficult, notwithstanding the power and influence cops enjoy in society; people are generally afraid to file cases for a plethora of reasons. However, there are a few cases where defamation suits are filed against cops.
In 2012 in the first of its kind, a young woman lawyer filed a defamation case against two cops in Mumbai for calling her a liar and outraging her modesty. Allegedly the two cops had done so in reaction to a complaint filed by the lawyer against another lawyer for harassing her. The court, in this case, has summoned the two officers to seek an explanation on this issue. There is no further information on what happened to this case.
In 2017 a retired police officer filed a 20-crore defamation case against D. Roopa, a senior police officer for allegedly bringing his name into the bribery case where the well-known politician Sasikala was given special treatment for a bribe worth 2 crores in the prison.
Analysis and conclusion
There is a need for a mechanism to hold Police officers accountable and award exemplary damages to the victim in certain rare situations where the police officers aether of their own accord or under the influence of some other person misuse their power and wrongly arrest and abuse a person or recklessly use unnecessary force and arrest a person without any reasonable cause. Let’s assume that Mr. Sharma is a big businessman who owns a billion-dollar company. One day the police come to his house and forcefully arrest him for an offence that is not serious in nature. The news spreads like wildfire and the shares of his company plummet and he loses reputation and huge amounts of money and after a few days it is found that he is not at all related to the offence and police have committed a grave mistake. In such situations, the police have to be held liable for loss of reputation, and money and exemplary damages have to be granted to the victim.
In conclusion, the author has stated that a suit for defamation (civil) can be filed against a Police officer but it is very tough to prove the same and eventually the court will dismiss the case. Alternatively, a suit for damage to reputation, income, mental and physical torture, and violation of fundamental rights can be filed against a police officer, and courts may award some compensation. In India, there is no hard and fast rule when it comes to calculating the quantum of compensation. There is a need to balance both the interest of citizens and the powers of police to investigate offences. This balance can be best achieved if an independent body free from governmental control is tasked with the responsibility of issuing sanctions for prosecuting a police officer. The guidelines issued by the Supreme Court in Prakash Singh vs. Union of Indianeed to be implemented to see any change in the current situation of police accountability in the near future.
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