NHAI v. M Hakim : putting a quietus to issue of modification of arbitral awards

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November 25, 2021

This article is authored by Akash Krishnan, a law student from ICFAI Law School, Hyderabad. It analyses the present case in light of Section 34 of the Arbitration Act and Article 14 of the Constitution of India.

Table of Contents

Introduction

Several petitions were clubbed together by the Supreme Court in the instant case regarding the power of a Court to modify the arbitral award whilst exercising its jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996.

The Supreme Court after referring to various cases concluded that an arbitral award cannot be modified by a Court of law while exercising its jurisdiction under Section 34 of the Arbitration Act. Further, the Court dismissed the appeal in the interests of justice because the National Highways Authority of India had acted in a prejudicial manner by providing differential compensation to similarly situated persons.

Brief facts

Several notifications were issued under the National Highways Act, 1956 (NHA) and multiple orders were passed by the competent authority regarding the same. The competent authority in this context is the Special District Revenue Officer (SDRO). The SDRO is authorised to determine the amount of compensation w.r.t land acquired for the construction of highways. If any party is not satisfied with the compensation granted by the SDRO, then the matter is settled by arbitration.

In this case, the SDRO, while making the orders, used the guideline value of the lands instead of the sale deeds of similar lands. This led to abysmally low and inappropriate amounts to be released in the form of compensation by the SDRO. On an application made to the arbitral tribunal challenging this compensation, the tribunal held that there was no infirmity with the granted compensation and thus the order of the SDRO was valid. Due to this, all other applications regarding grant of compensation were disposed of by granting the same amount of compensation.

Petitions before the District Court

Several petitions were filed before the District and Sessions Judge for enhancement of the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. The District Court observed that Section 34 of the Arbitration and Conciliation Act empowered the court to not only set aside an arbitral award but also modify it. In light of the same, the Court held that the compensation granted by the arbitral award was low and therefore enhanced/modified the compensation to Rs. 645 per square metre.

Appeal before the Madras High Court

The Madras High Court held that Section 34 of the Arbitration and Conciliation Act gives jurisdiction to the Courts to modify the award given by the arbitral tribunal and therefore the Court had the power to enhance the sum granted by the arbitral tribunal in the present case. Thus, the High Court upheld the order passed by the District Court in this regard.

Appeal before the Supreme Court

The National Highways Authority of India (NHAI) approached the Supreme Court and sought a direction for setting aside the orders passed by the District Court and the High Court.

Issues

Whether a court can modify an arbitral award while exercising its jurisdiction under Section 34 of the Arbitration Act?
Whether NHAI had acted prejudicially by providing differential compensation to similarly situated persons?

Submission of the parties

Submissions on behalf of the Appellant (NHAI)

The provisions for the acquisition of land for the construction of highways under the National Highways Act, 1956 (NHA) ensure that there should be no delay in the acquisition of land as the said land is being acquired for a public purpose.
A competent authority, i.e., the Special District Revenue Officer (SDRO) has been set up under Section 3(a) of the NHA. The competent authority is empowered to determine compensation for the acquired land, under Section 3G of NHA.
If either party, i.e., the landowner or the NHAI is not satisfied with the amount of compensation granted, an application for arbitration can be filed by either party and the Central Government shall appoint an arbitrator to decide the matter.
The factors to be taken into consideration while determining the amount of compensation include the market value of land, damages sustained by the person taking possession, and other factors provided under Section 3G (7) of the NHA.
The power of Courts under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) is limited to setting aside the award or remitting the award. Thus, the order of the District Court and the High Court wherein the amount of compensation was modified is in contravention to the provisions of the Arbitration Act.
Once an arbitral award has been set aside under Section 34 of the Arbitration Act, it does not mean the end of proceedings in the matter. Either party could opt for initiating fresh arbitral proceedings in the same matter.

Submissions of the respondents

The SDRO while making the orders used the guideline value of the lands instead of the sale deeds of similar lands. This led to abysmally low and inappropriate amounts to be released in the form of compensation by the SDRO, which was further upheld by the arbitral tribunal.
If the arbitral award is set aside under Section 34 and fresh proceedings are initiated, there is no surety as to the change in the sum granted as compensation by the tribunal, since the arbitrator would be appointed by the Central Government itself. This would result in undue delay and continuous proceedings in this regard.

Observations of the Supreme Court

Relevant provisions under the NHA and the Arbitration Act

Section/Provision No.	Provision
NHA
Para 2 of the Statement of Objects and Reasons	The object of this Act is to avoid undue delay in land acquisition for the construction of highways. Any dispute w.r.t the compensation being granted in exchange for the acquired land should be settled by arbitration.
Section 3(a)	Competent authority: The competent authority shall be the Special District Revenue Officer (SDRO). The SDRO should be appointed by the Central Government.
Section 3A	Power to acquire land: If any land is required for the construction of highways or any related works, the Central Government may acquire such lands and issue notifications in the official gazette in this regard.
Section 3G	Amount of compensation: On acquisition of land by the Central Government, compensation shall be paid based on the determination made in this regard by the SDRO. If either party, i.e., the landowner or the NHAI is not satisfied with the amount of compensation granted, an application for arbitration can be filed by either party and the Central Government shall appoint an arbitrator to decide the matter.
Arbitration Act
Section 34	Recourse to a Court for setting aside the arbitral award, the court may adjourn the proceedings thereby allowing the tribunal to continue proceedings or take an action to eliminate the grounds for setting aside the arbitral award.

Recourse under Section 34 of the Arbitration Act

The term recourse that has been mentioned under Section 34(1) of the Arbitration Act can be defined as the mode/method for enforcing a right.
Section 34 has been enacted to ensure minimum judicial interference in arbitral awards.
In MMTC Ltd. v. Vedanta Ltd (2019), the Supreme Court has held that if an application has been made under Section 34 of the Arbitration Act, the Court is not empowered to look into and consider the merits of the case and should act within the scope of Section 34 itself. In Ssangyong Engg. & Construction Co. Ltd. v. NHAI (2019), the Supreme Court had held that a challenge on the merits of an arbitral award cannot be raised under Section 34 of the Arbitration Act. Similarly, the Supreme Court in Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd. (2018) held that the Court cannot exercise its powers as an appellate body and go into the merits of a case in an application filed under Section 34 of the Arbitration Act.
Commenting on the supervisory role of the Courts under Section 34 of the Arbitration Act, the Supreme Court in McDermott International Inc. v. Burn Standard Co. Ltd (2006) had observed that the Court is not empowered to correct the mistakes of an arbitrator in an application filed under Section 34 of the Arbitration Act and can only quash or set aside the award, thereby allowing the parties to initiate fresh arbitral proceedings. This is necessary to ensure that judicial interference in arbitral proceedings is at a minimum level.
Several other judgments regarding the position of law w.r.t Section 34 of the Arbitration Act were referred to in this case. Some of the referred judgements have been reproduced below:

Name of the Case	Ratio
Managing Director v. Asha Talwar (2009)	The Court is not empowered to grant a relief that was originally prayed before the arbitral tribunal while dealing with an application under Section 34 of the Arbitration Act.
Nussli Switzerland Ltd. v. Organizing Committee Commonwealth Games (2014)	The Court cannot modify an arbitral award while dealing with an application under Section 34 of the Arbitration Act.
Ms.G v. ISG Novasoft Technologies Ltd (2014)	The Court has the power to set aside or modify the award passed by an arbitral tribunal while dealing with an application under Section 34 of the Arbitration Act. This judgment was overruled in the present case.
Tata Hydro-Electric Power Supply Co. Ltd. v. Union of India (2003)	The Court modified the Arbitral award and enhanced the interest rate. However, this modification was made by the Court while exercising the powers under Article 142 of the Constitution of India.
Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra Reddy (2007)	The Court modified the Arbitral award and reduced the interest rate. However, this modification was made by the Court while exercising the powers under Article 142 of the Constitution of India.

In light of the aforesaid observations, the Court concluded that an Arbitral Award cannot be modified by a Court of law while exercising its jurisdiction under Section 34 of the Arbitration Act.

Grant of compensation

In various cases where the compensation granted by the SDRO was challenged and approved by the Arbitral tribunal, but on appeal, the compensation was enhanced by the District Court, the same was accepted by the NHAI and the enhanced compensation had been paid. No appeal against the order of the District Court was made in these cases.
The SDRO and the tribunal had failed to consider the actual market value of the acquired land while determining the amount for compensation. Section 3G (7) of the NHA enlists the factors that have to be looked into while determining the amount of compensation. These factors have been enumerated below:

The market value of the land on the date of issue of notification for acquisition.
The damages incurred by any interested party due to severing such land from a larger piece of land.
The damages incurred by any interested party due to any injury caused to the immovable property or earnings from the immovable property.
The damages incurred by any interested party if the party is compelled to change the place of residence or the place of business.

The market value of the land is to be ascertained based on relevant sale deeds. However, both the SDRO and the tribunal failed to do the same in the present case. Earlier, for the acquisition of lands in similar circumstances, the amount of compensation was determined based on relevant sale deeds. This non-application of the proper procedure has resulted in the payment of differential compensation.
In Nagpur Improvement Trust v. Vithal Rao (1973), the principle of reasonable classification was laid down by the Supreme Court. There are two essential tests of this principle:

The classification must be founded on intelligible differentia.
The differentia must have a rational relation with the object sought to be achieved by the legislation in question.

By applying this test in the present situation, the question that arises is whether lands acquired for different purposes can be classified differently. If yes, whether this classification would fall under the ambit of reasonable classification?
The Court in light of the aforesaid question held that protection under Article 14 of the Constitution is available in cases of differential treatment of owners and the amount of compensation.
Based on the aforesaid observations, the Court dismissed the appeal and concluded that interference under Article 136 would be inappropriate due to the following reasons:

NHAI has allowed similarly suited persons to avail compensation at higher amounts.
The awards in question were made 7-10 years ago and allowing fresh arbitral proceedings for the same will not be in the best interests of justice.

Conclusion

Two major conclusions can be drawn from this case. Firstly, an application under Section 34 of the Arbitration Act does not empower the Court to decide the case on its merits and modify the arbitral award and secondly, there can be no differential treatment in payment of compensation for similarly situated persons.

The Supreme Court in this case has ended a decades-old debate regarding the powers of the Court under Section 34 of the Arbitration Act and has clarified the position of law in this regard.

References

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Guidelines laid down by the Supreme Court for maintenance in matrimonial disputes : 2020

By

Sneha Mahawar

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November 25, 2021

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This article is written by Yash Kapadia. Through this article, we shall ascertain the set of guidelines framed by the Hon’ble Supreme Court on certain aspects pertaining to the payment of maintenance in matrimonial matters.

Table of Contents

Introduction

The Hon’ble Supreme Court of India in the case of Rajnesh vs Neha and Anr., 2020 laid down the set of guidelines relating to maintenance in cases of matrimonial disputes.

This case particularly arose out of an application for interim maintenance filed under Section 125 of the Criminal Procedure Code, 1973 (CrPC) by the Respondents i.e. wife and minor son.

In this article, we shall provide a brief overview of the facts of this case and shall enlist the guidelines put forth by the Hon’ble Apex Court.

Facts of the case

Respondent No.1 i.e. the wife left her matrimonial home in January 2013, soon after the birth of Respondent No. 2 i.e. her son.
On an application being filed for interim maintenance, the Family Court awarded both Respondents Rs. 15,000/- and Rs. 5,000/- per month respectively from 01.09.2013 to 31.08.2015 and Rs. 10,000 per month from 01.09.2015 onwards till further orders were passed in the main petition.
The Appellant herein challenged the order of the Family Court by way of a criminal writ petition filed before the Nagpur bench of Bombay High Court. The Hon’ble High Court dismissed the Petition by an Order dated 14th August 2018 and thereby affirmed and concurred with the order passed by the Family Court.
Aggrieved by this decision, the husband i.e. Appellant filed an appeal before the Hon’ble Supreme Court of India.
The Court, based on the facts and circumstances of both parties decided to take the route of mediation and appointed Mr. Sridhar Purohit as mediator. However, on 8th October 2020, it was informed to the Apex Court by the Mediator that the process of mediation failed and the dispute could not be resolved.
Both parties to the present appeal then filed their written submissions before the Apex Court.

Arguments on behalf of the Appellants

The counsel for the Appellant argued that:

The husband was unemployed with no source of income and was in no position to pay maintenance to Respondent No.1.
He was not an owner of any real estate or immovable property and had a single operational bank account.
The husband declined to pay any further amount towards the maintenance of his wife as he was facing a financial crisis personally.
The Family Court was wrong to rely upon the Income Tax Returns of 2006 whilst it determined the maintenance payable in 2013 by the Appellant.
The Appellant was also exploring new business projects which would enable him to be in a better position to sustain his family in the future.

Arguments on behalf of Respondents

The counsel for the Respondents, particularly Respondent No. 1 submitted that:

The amount of Rs.10,000 per month as maintenance awarded for Respondent No. 2 was granted when he was 2 and half years old in 2015 and that the said amount was, in the year 2020 highly inadequate to meet the expenses of a growing child who was then 7 and half years old and who went to school to be educated.
The admission fee for the academic year of 2020-2021 had yet not been paid and if the fees were not paid within the stipulated time, the school would have to stop sending the link for Respondent No. 2’s online classes (considering the outbreak of COVID-19).
Respondent No. 2 was already being overburdened by the growing expenses of herself and that of her child with no adequate support from the Appellant being the husband and father.
With regards to the rebuttal to the Appellant’s submission that he had no income, Respondent No. 1 put forth on record that the Appellant had already made several investments in real estate projects and various other businesses which was concealed from the Hon’ble Court. The Appellant was successful in doing so as he diverted all the income to his parents who were in no way related to this case.
It was alleged that the Appellant retained illegal possession of Respondent No.1’s Streedhan, which he was refusing to return.

Judgment

The Supreme Court gave the following order:

The Judgment of the Family Court which was later affirmed by the Bombay High Court for payment of interim maintenance of Rs.15,000 and Rs. 10,000 per month to Respondent No.1 and Respondent No.2 respectively, was affirmed by the Supreme Court.
The Appellant was directed to pay arrears of maintenance in full of Rs.15,000 per month within a period of 12 weeks from the date of the Judgment and further comply with the Order during the pendency of the proceedings u/S. 125 Cr.P.C. before the Family Court. In case of noncompliance, Respondent has the right and liberty to enforce proceedings under Section 128 of CrPC and other relevant laws in force.

Considering the backdrop of this case is pending since over a period 7 years under Section 125 of CrPC, difficulties faced while enforcing orders of the Court and successive applications filed by Respondent No. 1, the Apex Court deemed it necessary that a set of guidelines be framed on the issue of maintenance, which would cover overlapping jurisdiction under different enactments for payment of maintenance, payment of Interim Maintenance, the criteria for determining the quantum of maintenance, the date from which maintenance is to be awarded, and enforcement of orders of maintenance.

Guidelines

The Hon’ble Supreme Court in this case decided to frame the following guidelines pertaining to the issues mentioned below:

Issue of overlapping jurisdiction

The Apex Court has in detail, enlisted the legislations pertaining to maintenance and has also further provided judicial precedents pertaining to each one.¹

It was also observed how different courts had conflicting opinions in terms of the issue of jurisdiction. Some High Courts took the view that since each proceeding is distinct and independent of the other, maintenance granted in one proceeding cannot be adjusted or set off in the other. For example, the Madhya Pradesh High Court in Ashok Singh Pal v Manjdecidingulata, 2008, held that the remedies available to a person aggrieved under Section 24 of the Hindu Marriage Act, 1955 (HMA) are independent of Section 125 of the Cr.P.C.

On the flip side, the Bombay High Court in Vishal v Aparna & Anr., 2018, held that in a case of parallel proceedings, any sort of adjustment or a set-off must take place. For example, even though proceedings under the Protection of Women from Domestic Violence Act, 2005 (DV Act) is an independent proceeding, the Magistrate must not disregard the maintenance awarded in any other legal proceedings, while determining whether over and above the maintenance already awarded, any further amount was required to be granted for reasons to be recorded in writing. Therefore, there is no bar wherein one cannot seek maintenance under two statutes.

The following are the directions issued by the Court:

If maintenance has been awarded to the wife in a previous legal proceeding then she is under a legal obligation to disclose about it in a subsequent proceeding for maintenance, which is/may have been filed under another statute or law.
Whilst determining the quantum of maintenance in the subsequent proceeding, the civil court/family court shall take into account the maintenance awarded in any previous legal proceeding and then go on to decide the maintenance payable to the claimant.

Payment of interim maintenance

The Apex Court acknowledged how this case has been pending for a period of 7 long years due to multiple adjournments sought by parties that too at the stage of interim maintenance. Despite Section 24 of HMA and Section 125 CrPC through its provisos state that such interim proceedings must be completed within a period of 60 days, courts still keep it pending for years.

The following were the directions passed by the Court:

Parties must make an endeavour to resolve the dispute amicably.
The party that claims maintenance as a spouse or as a partner, live-in relationship, common law marriage, will have to file an application for interim maintenance with limited pleadings with a mandatory requirement of submission of an Affidavit of Disclosure of Assets and Liabilities before the concerned court of law so that the court can make an objective assessment of the legitimate amount that needs to awarded towards maintenance to the applicant, with her child (if any) at the interim stage.
An applicant who is claiming maintenance must file a concise application along with the affidavit of disclosure of assets and the respondent must submit a reply to it within a period of 4 weeks. A format of the same has been enclosed in the judgement itself.
If there is any dispute with respect to contents mentioned in the Affidavit of Disclosure, the aggrieved party may seek the permission of the Court to serve interrogatories and seek production of relevant documents from the opposite party under Order XI of the Code of Civil Procedure, 1908.
If there is any change in the financial status of either party during the course of the legal proceedings or change in circumstances or new facts then a supplementary affidavit must be filed which must be considered by the court.
All concerned courts must make an endeavour to decide on interim applications for maintenance within a period of 4 to 6 months after an affidavit of disclosures has been filed.
A professional marriage counsellor must be ready and available in all family courts for the parties in dispute.

In case of permanent alimony:

Oral and documentary evidence about one’s income, expenditure, standard of living, etc. before the concerned Court can be submitted by parties to fix the permanent alimony payable to the spouse.
The duration of the marriage must be factored in to determine the permanent alimony to be paid.
If custody is with the wife, reasonable expenses for the marriage of children must be granted by the court at the time of determining permanent alimony.
Any trust/ fund in the name of a child would be taken into account when determining child support.

Readers must glance through Enclosure I, II, III from the judgment in order to understand the format of Affidavit of Disclosure of Assets and Liabilities which is supposed to be filed by the parties in the concerned courts.

Criteria for determining the quantum of maintenance

The Apex Court stated the following criteria to be considered while determining the quantum of maintenance payable to an applicant:

The needs of the wife and her child amounted in reasonable capacity;
The level of education received by the applicant and how professionally qualified the applicant is;
If there is any subsisting/ current individual source of income of the applicant;
If the aforementioned income is enough for her to live the same standard of life as she was previously living in her matrimonial house;
If the applicant already had some kind of employment or was engaged in a business at the time of her marriage;
If the wife had to sacrifice and leave her employment/ job opportunities to take care and build her family, child and look after the adult members of the husband’s family;
Reasonable costs of litigation must be considered if the wife is non-working.

Certain additional factors were also enumerated which were deemed to be relevant by the Court in determining the quantum of maintenance:

Age and employment of parties;
Right to residence;
If the wife is having a source of income;
Maintenance for food, clothing, education, residence, and medical expenses of the minor child and a reasonable amount for extra-curricular classes;
Serious illness or disability of a spouse, child.

Date from which maintenance must be awarded

The Apex Court stated that there is no law in force under the HMA with respect to the date from which an order of maintenance may be made effective. Similarly, Section 12 of the DV Act too is silent on the date from which the maintenance is to be awarded.

However, Section 125 of CrPC states that a Magistrate may award maintenance either from the date of the order or from the date of application.

The Apex Court stated how different and divergent views were adopted by different courts for this guideline similar to the guideline on the issue of overlapping jurisdiction. Some courts held that payment of maintenance has to be done from the date on which the application for maintenance was filed while some others held that payment must be made from the date of the order granting maintenance. Further, some other Courts were also of the view that such payments ought to be made from the date on which the summons were served upon the respondent.²

In the absence of a uniform law in force to tackle this issue, the Supreme Court, with a stern view to put this to rest, stated that in all cases, maintenance must be awarded from the date on which an application was made to the concerned court.

Enforcement of orders of maintenance

Well, this issue is the most challenging issue encountered by any applicant. If the maintenance is not paid and execution proceedings are filed, sometimes it takes months and even years which completely defeats the object of the law in force.

The following directions were passed in this regard:

As provided under Section 51, 55, 58, 60 read with Order XXI, an order or decree of maintenance may be enforced like a decree of a civil court through the provisions which are available for enforcing a money decree, including civil detention, attachment of property.
In cases of the last resort, the court can strike off the defence of the respondent if the default is found to be wilful and contumacious to an unemployed wife who is taking care of a minor child.
Additionally, contempt proceedings too can be initiated against the respondent.

Conclusion

The Supreme Court has taken brilliant efforts to formulate these guidelines so that no court is under the confusion of what is to be done in cases of maintenance. Also, as per the Order, a copy of this judgment was to be circulated by the Secretary-General of this Court to the Registrars of all High Courts, who would, in turn, circulate it to all the District Courts in the States. This is a landmark judgment in the domain maintenance disputes and must be read in its entirety for awareness and implementation.

References

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

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

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Bankruptcy trustee : understanding the role and functions

By

Abanti Bose

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November 25, 2021

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Bankruptcylaw-1 — Image source - https://bit.ly/3dReuyf

This article is written by Yash Dhawan, pursuing Certificate Course in Insolvency and Bankruptcy Code from LawSikho. The article has been edited by Prashant Baviskar (Associate, LawSikho) and Zigishu Singh (Associate, LawSikho).

Table of Contents

Introduction

The bankruptcy process under the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘Code’) needs to be handled properly for the purpose of which a “bankruptcy trustee” needs to be appointed in accordance with the provisions of the Code. The term “Bankruptcy Trustee” has been defined under Section 79(9) of the Code. It refers to the insolvency professional who is appointed as a trustee for the entire holdings or estate of the company under insolvency or the corporate debtor. The same is appointed in accordance with Section 125 of the Code.

Once a company is declared insolvent, an application for bankruptcy has to be filed before the adjudicating authority. Such an application for bankruptcy can be filed by the creditors of the debtor or the corporate debtor himself. The procedure for filing an application for insolvency has been provided under Section 121, 122 and 123 of the Code according to which the application needs to be filed within a period of three months “from the date of passing order by the Adjudicating Authority under Section 100 (Admission or rejection of application), Section 115 (Order of Adjudicating Authority on repayment plan) or Section 118 (Order of Adjudicating Authority for bankruptcy)”.

Appointment of a bankruptcy trustee

Insolvency professionals can be appointed as bankruptcy trustees as well, according to Section 125 of the Insolvency and Bankruptcy Code, 2016. It is mandatory there are no disciplinary proceedings against the proposed trustee and an application can be submitted under Sections 122 and 123 of the said Act wherein the authority generally directs the board to cross-check if there is any disciplinary action taken against the proposed trustee. The board after confirmation then may accept the proposed trustees’ application or clearly reject it. The Adjudicating Authority appoints the proposed trustee as a trustee.

Section 149 specifically states the functions that the bankruptcy trustee has to do in order to make the insolvency proceedings smooth–

1.) To check the assets and the liabilities of the said bankrupt.

2.) To check assets of the bankrupt which includes the estate specifically.

3.) Distribution of the assets in order to facilitate the smooth operation of the insolvency process.

Section 151 of the Insolvency and Bankruptcy Code, 2016 gives certain rights to the trustee of the bankruptcy trustee to perform the above-mentioned functions effectively. The rights of trustees include the right to hold property under any designated description, formulate contracts, engage himself or herself in any activities related to the properties of the bankrupt, call for the assistance of the employed people, perform any court-related activities including appointing power of attorney, or perform any such activities which are necessary for exercising of his rights.

Another very important aspect that can be enclosed in the Insolvency and Bankruptcy Code, 2016 is the aspect that the properties of a bankrupt person and the rights of the properties of the bankrupt person shall be transferred to the trustee on the date of his or her appointment according to Section 154 of the Code. Such transfer is done to make the procedure of insolvency smoother. When having all of these documents and properties in possession of the trustee, the trustee can use such properties or documents in the bankruptcy procedure. Where such property is attached to any actionable claim then such property shall be transferred without any prior notice.

The role of a bankruptcy trustee in the bankruptcy process

When taking over the property of the bankrupt, a notice of 15 days must be given to the bankrupt. The 15 days shall begin from the day the property is acquired or valued. The trustee shall give the notice to the bankrupt or any other person having similar interests in the property to have no claims in the property which is part of the bankrupt’s property. Sometimes a transaction by the bankrupt person is an undervalued transaction. The trustee would ideally apply for the same to adjudicating authority wherein the authority shall either declare the transaction void, vest the property back to the bankruptcy trustee as part of the insolvency transaction, or restore the property in such a manner that the property is restored to its original as if it was not sold by the bankrupt at all as an undervalued transaction. The Trustee performs a very important function which comprises a major part of the proceeding. The trustee shall send a notice to the creditor asking for proof of the debt that the bankrupt owns within fourteen days after preparing an elaborate and careful list of creditors. The creditors, after receiving the notice, shall submit the proofs within thirty days and if they fail to do so then the trustee, after the leave of the adjudicating authority, shall dispose of the property without securing it. Where there have been any mutual agreements between the parties i.e. bankrupt and creditor, bankruptcy trustees shall take into account anything that is due between the parties in reference to the mutual contracts between them and shall set off from one another. If any money is left or any balance amount is left then that amount can be recoverable. The bankruptcy trustee after acquiring adequate funds shall distribute the funds among the creditors who had submitted their claims with enough proof and this can be done with the approval of the committee of creditors. The bankrupt trustee can further declare if a dividend is to be distributed or if no dividend is to be declared.

The bankruptcy trustee can resign if he gives up practice as an insolvency professional, there is a conflict of interest or the trustee has some change of opinion due to some personal reason. After understanding the reason and accepting the resignation the adjudicating authority shall, within seven days of acceptance of the same, direct the board for his replacement. The bankruptcy trustee must be appointed within fourteen days. The initial trustee will have to transfer the properties or the estates to the new bankruptcy trustee.

If there is a vacancy at the office of bankruptcy trustee due to his replacement or resignation, the vacancy shall be filled under Section 147 of the Insolvency and Bankruptcy, 2016. The board shall within ten days recommend a new bank trustee after which within fourteen days the Adjudicating Authority shall fill up the vacancy within fourteen days. Section 148 elaborates upon whether the bankruptcy trustee can be released from his or her office. Before being officially released from the office the former bankruptcy trustee shall share all of the details of the estate and properties with the newly appointed bankruptcy trustee which would give him greater clarity regarding how the bankrupt’s property is to be dealt with.

Powers of the bankruptcy trustee

A Bankruptcy Trustee has been empowered to do the following under Section 152 of the Code for the purpose of carrying out his duties towards the corporate debtor:

He is authorized to sell any part of the holdings of the corporate debtor, that is, the bankrupt company.
He is empowered to give receipts to creditors for any amount received by him.
He may also claim and accept a dividend relating to the debts that are owed by the corporate debtor with respect to his entire holdings.
The Code has also empowered him to deal with any holdings or property belonging to the entire estate of the corporate debtor to which he is rightfully entitled. The Trustee can deal with the property “in the same manner as he might have dealt with his own property.”
In case one of the properties belonging to the estate of the bankrupt company is under the possession of another person under a pledge or hypothecation, the bankruptcy trustee is empowered to exercise the “right of redemption” in relation to the property held by another person by way of serving a notice on the said person subject to the terms and conditions mentioned in the contract by which the said person got possession.
In case one of the properties belonging to the estate of the bankrupt company or any part thereof “consists of securities in a company or any other property which is transferable in the books of a person, exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.”

Replacement of bankruptcy trustee

The appointment of a bankruptcy trustee is a bit flexible in the sense that at any given point or situation if the committee of creditors feels that the appointed bankruptcy trustee is not carrying out his duties or performing his functions efficiently, they may replace that trustee with another bankruptcy trustee for the purpose of handling the bankruptcy of the corporate debtor. This can be done by calling a meeting of the committee of creditors where, by a vote of 75% of the voting share, the committee of creditors may pass a resolution for replacement of the current bankruptcy trustee with another one. The committee needs to file an application before the Adjudicating Authority for this purpose. Thereafter, the Adjudicating Authority is required to direct the Board to give a recommendation for replacement of the bankruptcy trustee within seven days of receiving an application, after which the Board has to mandatorily recommend for replacement of the bankruptcy trustee by giving another person’s name as a recommendation to act as the bankruptcy trustee within 10 days. The recommended person shall be someone against whom no disciplinary proceedings are pending before any court of law.

The Adjudicating Authority may, then finally, appoint that recommended person as the new bankruptcy trustee within 14 days of such recommendation. Once the bankruptcy trustee is replaced by another person, the one being replaced is required to give the possession of the entire holdings and estate of the bankrupt company or the corporate debtor to the newly appointed bankruptcy trustee, who shall then take over the charge connected to his position and title.

Conclusion

One of the key people in most bankruptcies is the bankruptcy trustee. The trustee’s duty is to manage the process and distribute the property of the person or business in bankruptcy. This article looks at the role and duties of the trustee during the bankruptcy process, depending on the bankruptcy type. A trustee is someone who has administrative control of property (like business assets) in trust. The trustee has a fiduciary duty to administer the property impartially for a person or business. A bankruptcy trustee is a special kind of trustee who oversees a bankruptcy case.

References

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

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Effect of anti-trafficking strategies on the lives of sex-workers : exploitation and torture

By

Sneha Mahawar

-

November 25, 2021

0

Human trafficking — Image Source - https://rb.gy/4zs4n5

This article is written by Nishtha Garhwal, a student of Alliance School of Law, Bangalore. The article talks about the abuse and exploitation faced by the sex workers who are picked during raids or rescue operations. The article also discusses how the anti-trafficking strategies lead to exploitation and torture of the sex workers instead of providing them protection.

Table of Contents

Introduction

In history, the practice of slavery was very prevalent, however, it had been eliminated from the current society. History found its way of repeating itself through trafficking. The Trafficking of Persons (Prevention, Protection, and Rehabilitation) Bill, 2018 had been approved and passed by the Lok Sabha in 2018, however, this Bill never got introduced in the Rajya Sabha. The 2018 draft of the Bill was criticized on the ground that it seemed to combine sex work as well as migration along with trafficking. However, the Union Ministry of Women and Child Development have invited suggestions for the recently introduced bill, that is, The Trafficking in Persons (Prevention Care and Rehabilitation) Bill, 2021. The objective of the Bill is to prevent counter-trafficking in persons. It specifically focuses on women and children and seeks to provide them with care and protection.

The previous draft of the Bill in 2018 was dealing with the victim’s rescue, protection as well as rehabilitation, however, the 2021 Bill has an extended scope and also includes offenses that take place outside India. The Bill seeks to make the National Investigation Agency (NIA), the Central investigation authority in order to look into such offenses. The 2021 Bill applies to all the offenses related to trafficking in persons along with cross-border implications. The various anti-trafficking strategies like forced raids, rescue, rehabilitation, and criminalization have been brought to attention by the Bill. The Bill raises the question as to whether these strategies are really the solution for the issue of human trafficking.

As the lives of sex workers have constantly been affected by the flawed anti-trafficking laws and strategies, serious apprehensions are raised by the declassified previous drafts of the Bill in addition to the experiences that arose from the implementation of the Immoral Traffic (Prevention) Act, 1956 (hereafter referred to as ITPA). Despite these apprehensions, the claim of some people who were involved in the drafting of the Bill like the government, some anti-trafficking organizations, and activists is that the consenting adults who voluntarily go into sex work would not fall under the purview of this bill.

Therefore, unless the adult consenting sex workers who voluntarily undertake sex work with their clients are excluded from the ambit of the Bill, large-scale human rights violations would keep on continuing in the name of anti-trafficking norms.

Sex workers bearing the brunt of violence

The sex workers have to face violence inflicted by law enforcers and anti-trafficking groups in the name of anti-trafficking laws and strategies. The sex worker rights’ activists in India who had gathered some anecdotal information reveal that many of the women who have been rescued and rehabilitated go back to sex work again. These instances raise serious questions like why do women who were forced to indulge in sex work voluntarily return to sex work and why do women who entered sex work because of lack of skills voluntarily return to sex work even after being taught the skills to pursue some other work. Therefore, it becomes very important to understand why this happens.

The root cause of the above issue can be found in the law and its implementation on the ground. Since the law enforcement authorities have the right to exercise arbitrary powers, they often subject the sex workers to violence during raids and also during ordinary times. The ITPA has the terms ‘Immoral’ and ‘Traffic’ in its name itself which suggests that trafficking is not an issue of a criminal offense but it is an issue of morality. Therefore, it can be inferred that the anti-trafficking strategies wrongly assume that no woman would enter sex work out of her own volition.

Thus, it is evident that violence is inflicted on the sex workers in the name of raid and rescue operations.

Infantilizing adult women

As per Section 17 (2) of the ITPA, a rescued woman as a result of raid or rescue operations can be handed over into the safe custody of her parents, guardian, or husband. Adult women who have voluntarily consented to pursue sex work also fall under the purview of this Section. On being satisfied with the suitability and social background of the parents, guardians, or husband, the magistrate can issue orders for granting custody of such a woman to them.

This particular Section of ITPA is devitalizing for those women who are adults and are living independently of their parents, guardians, or husbands. Many among these women are the heads of their household who are earning to provide daily bread and basic facilities to their families.

There are many instances where the adult woman had not told her family that she is involved in sex work in order to earn a livelihood. In humiliating circumstances, if such a woman is directed by the magistrate to produce her parents, guardian, or husband, she is forced to contact her family members. In many cases, the custody of such a woman is given to her parents, guardian, or husband and she is compelled to sign an affidavit that she will not indulge in sex work in the future.

The most common strategy that is adopted in order to address and fight trafficking in women and girls is raid and rescue operations. However, these strategies hardly address the issue of trafficking and rather lead to large-scale human rights violations. It also exposes women to exploitative practices and enhances their vulnerability, for instance, falling into debt bondage.

The raids that are conducted indiscriminately pick even the women who are voluntarily involved in sex work, and are forcibly rehabilitated through incarceration, and they are counselled to leave sex work.

Despite having no source of income, due to incarceration, the women who are released from the rehabilitation homes have to pay huge fees to the lawyers, for surety for bail, bribes for officers in addition to the daily expenses and thus, they have to borrow money and consequently have to incur huge debts. It can be observed that the raid and rescue strategies that were designed in order to help women actually lead them to be trapped in a cycle of debt bondage which is quite ironic.

The anti-trafficking strategies which were adopted by keeping some objectives in mind like rescuing the victims of trafficking, creating a better livelihood for them, and prosecuting the people involved in trafficking, have certainly failed to achieve these objectives. This conclusion can be drawn from the torture and exploitation the sex workers are exposed to by the law enforcement agencies.

Ineffectiveness of anti-trafficking strategies

The police, NGOs, and other organizations who are involved in ordering as well as conducting raids and rescue operations are usually not very sensitive to the individuals they encounter during these operations. There is an unalterable presumption in the mind of these people that the people they are attempting to rescue are victims of trafficking and no one is involved in the sex work out of their own volition. They refuse to listen to those who are being rescued.

Many of the women who are rescued return to sex work after being released from correction homes. These include both the women who have been trafficked to enter into sex work and the women who have voluntarily entered into sex work out of their own will. Thus, it is clear from such things that the rescue and restore missions have proven to be indiscriminate, violent, and destructive for the lives of the sex workers. In addition to this, these strategies have proved to be ineffective in dealing with the problems of minor as well as adult women who are forced to enter into sex work.

Reasons to stand against the criminalization of sex work

It is important to note that sex work and sex trafficking are two different things. The victims of trafficking are forced to enter into sex work without their consent. They are coerced to indulge in this work. The sex workers have to face violence, exploitation, torture, and trafficking. On the other hand, there are some who voluntarily indulge in sex work.

Since laws related to sex work are vague in India, the opportunities for violence are enhanced. Due to the fear of arrest and other consequences, the sex workers who suffer from exploitation and violence often choose not to report this to the police station. Although prima facie, it appears that the criminalization of sex work is beneficial for the sex workers, its implementation leaves the sex workers with no other option than to work in isolated locations and conditions so as to escape from policing of the areas of business. This enhances their vulnerability to abuse and exploitation.

As a result of shame involved in the work, and the fear of judgment, the sex workers often chose not to reveal that they are involved in sex work irrespective of the fact that whether they are into this work by choice or coercion. These sex workers already live in poor economic conditions. If they report the violence and exploitation they have been subjected to and any kind of fine or cost is incurred on them, this would further worsen their economic condition and make them pauper. Therefore, such things also enhance the vulnerability of sex workers to trafficking and other means of exploitation.

Although under the Immoral Traffic (Prevention) Act, 1956, sex work had not been considered a criminal offense, a stigma is attached to the sex workers. This leads to the marginalization of sex workers. The sex workers have to face human rights violations, physical and sexual violence, discrimination in accessing health care, and harassment from the law-enforcing authorities. Thus, it is evident that socially, culturally, politically as well as economically, sex workers are stigmatized and marginalized in society. It can be observed that the usual practice is that someone would speak on behalf of the sex workers and they do not find a platform to speak for themselves. Thus, this results in their lack of recognition and lack of enforcement of their basic human rights.

Sex workers against human trafficking

The sex workers collective in India, the Durbar Mahila Samanwaya Committee comprised of over 65,000 members, demonstrated the positive potential in involving the sex workers in anti-trafficking initiatives. It can be done through the formation of self-regulatory boards constituting sex workers, health workers, social workers as well as local government officials. When a new sex worker enters the market, such a collective would inform their new colleague about their rights and can ensure that such a colleague has not entered into the business by coercion or force.

The sex workers and their organizations could help in avoiding the exploitation, torture, and abuse of their colleagues. The sex workers meet each other on many occasions and get to know their colleagues. Such personal contacts help to keep them safe and prevent them from being subjected to any wrong. In addition to this, the sex workers organization campaign for the decriminalization of sex workers. This would ensure a safer environment for the sex workers and will also decrease their vulnerability and risks. The sex workers-led organizations also share information with each other regarding the rights of sex workers, practical knowledge about the business, and the laws and policies that govern sex work. Thus, sex worker-led organizations can also be effective in controlling the menace of trafficking in persons and such organizations would also prevent the sex workers from being exploited and abused.

Conclusion

The police raids and rescue operations conducted as a means to fight the menace of trafficking in persons have failed to achieve their goal. The police have the power to arrange and conduct raids and often these raids expose the sex workers to abuse and exploitation instead of providing them protection. These things would be more evident if the voices of these women are amplified.

The violation of human rights is both a cause as well as a consequence of trafficking in persons. If sex work is decriminalized, it would promote the recognition of the basic rights of sex workers and thus, would be helpful in reducing the instances of trafficking. The sex workers who face abuse or violence will also be willing to seek help from the law enforcement authorities without the fear of any consequences for simply trying to survive. They can also create some peer networks that can enable them to live in a safer environment. Therefore, placing the protection of human rights first would be an effective step for addressing and combating the issue of trafficking.

References

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

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

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Fake news in times of COVID-19 : role of media

By

Diganth Raj Sehgal

-

November 25, 2021

0

fake-news-1024x768-1 — Image Source- https://rb.gy/mvnagm

This article is written by Ridhi Mittal, a student of Symbiosis law school, Noida. This article examines the role of the media in the creation of fake news during the COVID-19 pandemic.

Table of Contents

Introduction

Fake news means any news which is either not true or is misleading. When one thinks of news, media is a term that gets associated with it automatically. Media comes in different forms like television, movies, social media, and print media that includes newspapers, magazines, and books. With such a diversified range of media, it is pretty natural to see the spread of fake news. Fake news is a global menace leaving India no exception to it. In today’s time, social media has more influence over people than other forms of media. Rather than reading a newspaper, people prefer downloading e-news apps and staying updated through them. During the COVID-19 times, the strict protocol of ‘no physical contact and no physical labour at work was followed, this trend gained a huge increase. The scenario of fake news is a threat as well as a challenge to public health communication as more and more people depend upon the internet for information therefore, in such serious life and death situations during the COVID-19 times, fake news is a boon to society.

Intricacies of fake news

There is no particular or mandatory definition of fake news. There are various connotations attached to it. As per the ethical journalism network, fake news is the information that is likely to be perceived as news. It is something that is deliberately fabricated and disseminated for others to believe in its falsehood and doubtful facts. This term, although coined a long term back, gained popularity during the 2017 US elections. Donald Trump was elected as the US president and allegations were raised against him that social media’s fake news influenced the elections as well as Brexit. Fake news is acknowledged as news, story, information, data, and report which is or is wholly or partly false. Justice Sanjay Kishan Kaul addressed the issue of fake news as a serious problem during an online lecture. He said that it is even more dangerous than the coronavirus itself. According to him, the then constitutional makers did not see the problem of fake news coming into existence and thus took no measures against it. He also emphasized the role of mainstream media and accountability from mainstream media to pull out fake news. In Today’s situation, where the epidemic like coronavirus (COVID-19) has grasped the world into its hands, the internet-based life is overflowing with a wide range of posts, extending from data about the malady’s flare-up to bogus news about its starting point and spread, also offering untested ‘treatment’. Seeing this critical situation of our society. Fake news is widely accepted as false information. It is a fabricated story or information without any verifiable facts or missing sources. These stories may be specially designed to mislead a reader by making him/her believe something that is either completely or partly false. Recent years have seen social media being a more common platform for the spreading of fake news.

The role of media

Media is considered the fourth pillar of democracy. With great power comes great responsibility. Therefore, by being the fourth pillar of democracy, the media is expected to deliver confirmed and verified news only. When it comes to fake news, the media has a significant role to play, be it print media or social media. There are times when the news becomes fake because of the difference of understanding and further interpretation of people. The lack of proper communication leads to misunderstanding between the reader and writer which further results in wrong interpretation causing a form of fake news. This system has grown during the pandemic situation. Popular social media sites like Facebook, Twitter, Whatsapp, etc., are prominent platforms wherein people spread fake news as information circulates fast and it is not always censored or verified. We have often witnessed a lot of forwarded messages on WhatsApp groups or posts on Facebook whose credibility is highly doubted. One such group of messages were related to the cure of covid-19 and the measures to avoid them. These messages resulted in fake news as the cures mentioned were not scientifically proven or advised by any doctor. Sites like WhatsApp and Facebook are easy mediums to spread fake news or misinformation without any strict measures to scrutinize their content. The mainstream media’s inclination for sensationalism and propaganda-driven news has led to inaccurate news dissemination. Due to the increase in misinformation and fake information by the media, the trust of people in the media has started declining. A study conducted by the IAMAI found out that more than Facebook or Whatsapp, fake news on traditional media can influence the minds of the public. Due to the scarcity of reasonable facts and evidence, one tends to believe in the fake news by the media as the trust in the media is enough for one to reason out with what the media shows and tells. Not just the mainstream media but also online social media is responsible for the spread of fake news as these days teenagers get updated with recent trends and happening through social media more than the print media like newspapers or even TV news channels also.

Instances of misinformation in the pandemic

Certain instances as to when the media is seen spreading fake news are as followed:

The improper coverage of the media and its reporting for the issue of Tablighi Jamaat led to criminalizing the pandemic. The jamaat was blamed for the spread of the coronavirus which resulted in everyone giving their own stories and thus creating a flood of fake news. This happened because no one had complete knowledge but just bits and parts of it and thus ended up creating their fake news.
There were many Whatsapp forwards talking about remedies of curing COVID-19 through homely methods like gargling with lemon or salt water and injecting yourself with bleach which were never approved by any health organisation.
In a recent incident in Mumbai as migrant laborers gathered at the Bandra Railway station near masjid, the mainstream media especially TV news channels sensationalized their gathering. Giving it a religious angle and spreading hatred against the Muslim community. The media here created a situation of misinformation resulting in different misinterpretations and thus the spread of fake news.
In Lucknow, Uttar Pradesh, a man was arrested for committing fraud and forgery, who called himself as “Corona Wale Baba” and misguided people to wear magical inscribed rings to keep corona away.
In Maharashtra, on 13th March, FIR was registered against the owner of a mattress company who claimed in a newspaper advertisement that his mattress could cure COVID-19. There was no such way of curing corona which is why he was arrested for spreading Fake News.
A claim regarding women avoiding vaccines while on periods also came into limelight. There is no such thing that a woman on her periods can’t get vaccinated, neither said by any doctor nor proven scientifically. Yet such news was spread, adding to the pile of fake news spread during the corona period.

Implications of fake news

When fake news is discovered by people, they tend to lose interest in that particular media. With such a diverse range of news channels and news forms, one has several options to go to for having news. But sometimes what happens is that when a news channel brings forward a piece of twisted news that is partly true and partly false, the other news channels try to mold it further and present it from a different perspective. This molding of news leads to the complete changing of facts and thus showing fake news. Then, when this fake news is discovered by people, their trust and belief in the fairness and truth of the media automatically declines and leads them into believing that what other news is being shown might also be false, although it might not be.

One such incident happened on social media. The boy’s locker room case. In this case, everyone believed in a half story and started spreading it. It resulted in fake news. Later when the case was investigated and the entire case came forward, everyone got to know that half the story was fake and fabricated. The relation of this case with the Snapchat case was detached which therefore made the whole picture a lot more clear. Even the slightest bit of news can affect a large number of people in different ways and when it turns out to be false, it can have different implications on people. Some of those effects may even be outrageous.

Another situation of misinterpretation or we can say misinformation was seen during covid times when our prime minister, Mr. Narender Singh Modi requested entire India to step out of their house on 22nd March 2020 at 5 p.m. to bang thali. People mistook this and hundreds of people gathered on the streets to perform the said task which contradicted the whole purpose of the Janta Curfew.

In India, there is no explicit legislation dealing with false information. The right to freedom of speech and expression, guaranteed by Article 19(1)(a) of the Indian Constitution, is the fundamental law that encourages the free publication or broadcasting of news. If you believe you have been the victim of fake news, you can submit a complaint with the NBA, which is an organization that represents private television news and current affairs broadcasters.

Legal aspect

Implications or repercussions are seen in terms of legal punishments as well. The offence of making, publishing, or circulating any statement, rumour, or report which tends to cause a fear-like situation amongst the citizens of the country or to any particular section of the society is punishable under Section 505(1) of the Indian Penal Code, 1860. A person can either be imprisoned for a period of up to 3 years or can be awarded a fine. In certain cases, both can also be avoided. Personating or cheating through any device or computation source, which thereby spreads a rumour is a punishable offence under Section 66 D of the Information Technology Act, 2000. The punishment that can be awarded is either description for a term which may extend to three years and shall also be liable to a fine which may extend to one lakh rupees. Section 54 of the Disaster Management Act, 2005 can also be considered as it says that whoever makes or circulates a false alarm or warning as to disaster or its severity or magnitude, leading to panic is punishable with imprisonment which may extend to one year or with fine. The existing legal provisions do cater to penalizing the creation of false content and the malicious distribution thereof but in the absence of any designated legislation which enables for timely/instant removal of such content once it has been published. Rumours are a lethal weapon that affects the morale of the people. The Law enforcement agencies have power under law to take legal action against anyone who spreads rumours about the virus and causes a state of panic among the general population. Spreading fake or false news can be dangerous thus shall be avoided completely. If a person believes fake news is defamatory, he or she can initiate a civil or criminal defamation case. As a result, we can observe that there is no specific provision dealing with all sorts of fake news under the IPC.

Conclusion

Fake news refers to false news or misinformation. News can be spread through different forms of media, namely print media, social media, verbal media. During the pandemic, the spread of fake news increased. Although, major popularity was gained during the 2017 US elections. It was during the time of Donald Trump’s election that the practices of fake news gained such huge limelight. The case talked above in terms of fake news, affected both Brexit and the elections. In India, COVID-19 is one of the periods which lead to an increase in the spread of fake news. It was also possible because everyone was free from their busy lives and had time to turn on the tv and see what the news was. Even those who never checked the news started looking for updates on cases of coronavirus and its affecting areas like the opening of schools and colleges, updates on gym’s and being up to date with the latest COVID-19 guidelines. The news channels showed certain pieces of news which had double meaning or were partly true which lead to the belief of people in fake news. The coverage of the number of equipment and resources was not transparent. Due to this people have wrong assumptions regarding the treatment given to a covid patient. Even there was news regarding people molesting and misbehaving with hospital staff amid covid situations on religious grounds creating religious disputes. When verified, such news was never true and was only spread to create religious problems in the country. Due to these situations, certain implications arise which result in the declining faith of people in the media, be it print, verbal or social media.

References

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

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All you need to know about corporate governance

By

Abanti Bose

-

November 25, 2021

0

This article is written by Devina Rathod, pursuing Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho. The article has been edited by Ruchika Mohapatra (Associate, LawSikho).

What is corporate governance?

In undecorated terms, Corporate Governance refers to the way in which the companies are governed. It is a system of rules, practices and processes that a firm uses to direct the organization towards achieving its overall objectives. Corporate Governance essentially involves the management and the board of the company taking decisions and formulating policies at the corporate level. These decisions enable the management to deal with the challenges of running an organization. Corporate Governance also ensures that the interests of all the stakeholders (shareholders, employees, suppliers, customers and the community) are balanced by formulating appropriate policies, regulating the decisions and ensuring that the appropriate procedures and controls are in place.

Corporate Governance fundamentally includes formulating action plans, internal control systems, performance measurement and corporate disclosure. It plays an integral part in an organisation by directing the consumers towards the company’s vision, integrity and goodwill and as a result connecting them with the community as well as the investors.

Corporate Governance also gains significant attention considering its impact on corporations as well as society. Some people disagree on the shareholders’ interest extended towards decision making, formulating strategies, executive remuneration, environmental policies and the likes of it. On the other hand, some people believe that the rights of other parties such as the purpose of an organization, the rights of stakeholders and the corporate decision making must be respected as well.

What are the basic principles of corporate governance?

Accountability,
Transparency,
Fairness,
Responsibility.

Accountability

Accountability means holding an individual or a group of people responsible for one’s actions. The organizations must set various mechanisms to follow for accountability in case of variances in performance. It also helps to fix answerability in case of failed corporate governance.

Transparency

Transparency enables an outsider to analyse the company’s financial as well as the non-financial aspects such as its actions, decisions, fundamentals, technicals etc. It enables the investors to segregate good organizations with good fundamentals and management.

Fairness

The management should emphasise a balanced interest of all the stakeholders with an unbiased distribution of powers. For instance, the rights of minority shareholders must not be overlooked.

Responsibility

With regards to the board, it consists of responsibility towards all the stakeholders’ having interest in the organization and communicating responsively. With regards to management, it essentially pertains to corrective actions, penalizing mismanagement etc.

What are the 4 P’s of corporate governance?

People,
Process,
Performance,
Purpose.

People

People come first amongst the 4 P’s of Corporate Governance considering their existence in every business equation. People include the management that determines the purpose, the board that is responsible for formulating the policies and strategies, the stakeholders’ and investors having an interest in the organization along with the outside consumers and observers.

Process

The process consists of a series of actions and steps taken in order to achieve the purpose. Corporate Governance is one such process by which an organization achieves its objectives. These processes are designed by evaluating various performances at different levels in an organization. They can also be refined over time to maintain efficiency and consistency and minimize losses from external threats.

Performance

Performance analysis is one of the key skills for any organization. It means analyzing the actual performance with the standard performance to determine its efficiency. Performance analysis in Corporate Governance can be used to minimize deviations as well as to eliminate the non-performing policies and strategies.

Purpose

Every equation of Corporate Governance exists for a purpose and to achieve a purpose. The purpose is the mission statement of an organization and every strategy, policy and process should be formulated for fulfilling the purpose.

What are the benefits of corporate governance?

Corporate Governance ensures financial viability and economic growth.
Good Corporate Governance helps to maintain investors’ confidence.
Corporate Governance can help to build strong relationships with the community with good performance.
Corporate Governance helps in lowering the cost of equity and debt capital.
Corporate Governance can also help to induce the corporate level managers and supervisors to merge their personal goals with the overall objectives of the organization.
Good Corporate Governance builds a strong brand and can contribute towards the growth of goodwill and development.
Corporate Governance minimizes risk and mismanagement and corruption.
Corporate Governance ensures that the organization has a business model that is designed in a manner that fits the best interest of all.
Good Corporate Governance can be a contributing factor in the case of mergers and acquisitions.

What are the various models of corporate governance?

Anglo-US Model,
The German Model,
The Japanese Model,
Social Control Model,
Indian Model.

Anglo-US Model

The Anglo-US model is also recognized as the Anglo-Saxon model of corporate governance. It holds bases in Britain, Canada, America, Australia and CommonWealth Countries including India. It is a shareholder-oriented model, meaning, the rights of shareholders’ are given importance. The organizations are run by managers having negligible ownership stakes and the Directors are rarely independent of management. Small investors are encouraged and large investors and discouraged from actively participating in corporate governance. Institutional investors like banks and mutual funds have the right to sell their shares if they are not satisfied with the performance of the organisation.

The German Model

The German Model is also recognized as the European model or Continental model. This model considers the workers as the key stakeholders and they should have the right to participate in the management of the company. Corporate governance through the German model is carried via a two-tier board model. These two boards are-

Supervisory Board- The members of the supervisory board are elected by the shareholders’ of the organization. The employees also elect their representatives which can essentially constitute one-third or half of the board.
Executive Board- The Executive Board is appointed by the Supervisory board and is monitored by the same. The Supervisory board reserves the right to dismiss or re-institute the Executive board.

The Japanese Model

The Japanese model recognizes the organisations raising a significant part of their capital through banks and other financial institutions. As a result, these banks and institutions work closely with the management as they have high stakes in the business of the company. The concentration of power amongst various Japanese corporations and banks results in a lack of transparency. Individual investors are not considered as important as the business entities, the union groups and the government.

Social Control Model

The social control model emphasizes a full-fledged representation of the stakeholders’. The stakeholders’ board would result in the improvement of internal control systems along with good management. The Stakeholders Board consists of representation from shareholders, employees, major consumers, major suppliers, lenders etc.

Indian Model

The Indian model can be essentially seen as a mix of the Anglo-US model and the German model of corporate governance. This mix is essential as there are various kinds of companies that are incorporated in India i.e. Private Companies, Public Companies and Public Sector Undertakings (PSU’s) with distinct shareholding patterns. The framework should be such as to uphold the principles of fair representation, transparency and integrity.

Examples of corporate governance

Spelling out ethical expectations for the management as well as the employees and investors to abide by.
The powers of the board members to interfere in public matters, their authority over the Chief Executive Officer (CEO), and their rights while making major decisions.
Prescribing the manner in which the company distributes its financial reports.
Framing policies regarding finance, leadership and legal issues that are upheld by all.
Allocating funding and resources efficiently towards achieving the overall objectives.

Consequences of bad corporate governance

Loss of shareholder’s confidence.
Loss of prestige and weak business reputation in the market.
Hindrance to business growth and development.
Poor customer relations and impact on public perception of the business.
Negative impact on the larger economy due to bad corporate governance.
Impairment of performance due to inefficient processes, unregulated procedures and lack of accountability.
Risk of fraud by insiders.

Questions to ask for good corporate governance

How does the interpretation of corporate culture differ across various countries and regions?
Is the organization’s board aware of the shareholders’ effective approach to shareholders’ engagement?
Do the directors and managers of the organization have a shared understanding?
Does the overall objective of the directors run parallel to the personal goals of the managers?
Does the board have the right composition?
Are the mechanisms for exercising control and setting accountability sufficient?
Does the organization have an efficient process, structure and rules to carry out its responsibilities?
What is the role of other parties in protecting the rights of shareholders, investors, employees and customers from injuries caused due to bad corporate governance?

Conclusion

Corporate Governance is the soul of an organization hence it should be strictly adhered to while indulging in business to work towards social and economic development. Corporate Governance essentially acts as a guiding principle to direct operations, supervise processes, analyse procedures, penalize mismanagement, impact on the climate etc. A strong corporate governance structure benefits all the stakeholders as well as the organization as a whole while maintaining integrity. A bad corporate governance structure can lead to insolvency, frauds and scandals and in extreme cases, can lead to the breakdown of the business.

References

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

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

https://t.me/joinchat/L9vr7LmS9pJjYTQ9

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

An overview of the Finance Commission of India

By

Diganth Raj Sehgal

-

November 25, 2021

0

Parliament_of_India — Image source - https://bit.ly/3HaL23Q

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

Table of Contents

Introduction

The Finance Commission of India is a constitutional body that has survived for over 50 years on Indian soil. Formed under Article 280 of the Indian Constitution, the Finance Commission of India functions as a quasi-judicial body. The purpose behind the formation of this Commission is to determine the methods and formulas necessary for distributing the tax proceeds between the Centre and states as well as among the states as per the arrangement provided by the Constitution of India and current requirements. Along with this, the taxes and grants that are to be provided to the local bodies in states for their functioning are also determined by the Finance Commission of India. It is to be noted that Article 281 of the Constitution provides that it is the President of India who is required to lay the Finance Commission report before each House of Parliament along with a note that explains the actions taken by the government on the basis of the recommendations given by the Commission. It was the 73rd Constitutional Amendment Act, 1992 that facilitated the constitution of a Finance Commission at a 5 years interval by the state governments in order to decide the division of resources between the state government, and the Panchayat institutions at all levels. From 2000 onwards, there have been five Finance Commission that has been constituted from time to time, namely;

The 12th Finance Commission was constituted in November 2002 under the chairmanship of former RBI governor and noted economist Dr. C Rangarajan.
The 13th Finance Commission was constituted on November 13, 2007, under the chairmanship of Dr. Vijay Kelkar.
The 14th Finance Commission was constituted on January 02, 2013, under the chairmanship of former RBI governor Dr. YV Reddy.
The 15th Finance Commission was constituted in November 2017, under the chairmanship of NK Singh who has been a former member of the Planning Commission.

In this article, the Finance Commission of India has been explained with a detailed analysis of its composition, functions, and roles.

Composition of the Finance Commission

The Finance Commission of India is composed of five members which include one Chairman, and four other members of the Commission. All of these members are appointed by the President of India who also determines the term of their office. These members are anyway subjected to reappointment as per requirement. The responsibility of determining the qualification, and the manner of appointment for the Finance Commission’s members rest on the Parliament’s shoulder, as have been provided by the Indian Constitution. The qualification that has been determined by the Parliament for the Chairman and the members of the Commission have been presented hereunder;

The Chairman of the Commission must be an individual with expertise in public affairs. The current Chairman of the Commission is Mr. N.K. Singh, who has been a member of the Planning Commission alongside being an IAS officer.
The four members of the Commission are selected from the following list;

A high court judge, or an individual who has been qualified to hold such a position.
A person who has his or her expertise in finance and accounts of the government.
Any person having divergent experience in financial matters and in administrative matters.
Any person possessing special knowledge of economics, and related studies.

The 15th Finance Commission has been formed with Mr. N. K. Singh as its Chairman followed by Mr. Ajay Narayan Jha, Prof. Anoop Singh, Mr. Ashok Lahiri, Prof. Ramesh Chand as the members of the Commission, and Mr. Arvind Mehta as the Secretary.

Functions of the Finance Commission

The Finance Commission of India has been vested with certain functions that are determined by the President of India. The majority of these functions surround the recommendations that are supposed to be delivered by the Commission to the President of the nation. The functions of the Finance Commission have been listed hereunder;

It is the responsibility of the Finance Commission to recommend the distribution of the net proceeds of taxes that are supposed to be shared between the Union, and the states, along with the inter-state distribution.
The Finance Commission recommends the principles that are applied to govern the grants-in-aid to the states and the Union Territories by the Union from the Consolidated Fund of India.
The Commission recommends the measures that need to be adopted to augment the consolidated fund of a state in order to facilitate supplying of the required resources to the panchayats and the local bodies of the state so as to avoid hindrance in their functioning. The Commission has to carry out this function on the basis of the recommendations made by the state finance commissions as per their requirement.
As it is the President of India who carries out all the necessary formalities in relation to the Finance Commission of India, any matter which the President feels needs to be considered by the Finance Commission from time to time, will be taken up by the Commission as a function only. A report is submitted by the Commission to the President after delivering the necessary functions allotted to it. This report is further presented before the Houses of the Parliament by the President which accompanies a memorandum that explains the necessary actions taken by the Commission to fulfill its functions.

It is interesting to note that till 1960, the Finance Commission used to provide suggestions to the states of Assam, Bihar, Odisha, and West Bengal in relation to the assignment of share of the net proceeds to the export duty on jute products. Such grants were provided for a temporary period extending up to 10 years from the commencement of the Indian Constitution.

The advisory role played by the Finance Commission

The term ‘advisory’ symbolizes recommendations. Therefore, the Finance Commission of India can be said to be a recommendatory body that gives advice to the President of the nation, who after going through the same, applies it to make decisions on financial matters. This advisory role of the Finance Commission is in a way binding on the President of India. The President can either accept the recommendations made or reject them. Further, whether to implement the recommendations issued by the Commission or not in matters of granting money to the states, rests on the Union Government. The advisory role is neither of a binding nature nor can give rise to a legal beneficiary in the state’s favor to receive money from the Union on the basis of the recommendations made by the Commission. This has been clarified by the Indian Constitution itself.

The Chairman of the Fourth Finance Commission, Dr. P.V. Rajamannar has rightly pointed out the advisory role played by the Finance Commission during his term of office. He said that “since the Finance Commission is a constitutional body expected to be quasi-judicial, its recommendations should not be turned down by the Government of India unless there are very compelling reasons”. The importance of the advisory role of the Finance Commission lies in its balancing mechanism of fiscal federalism in India. Previously, the functions of the Finance Commission used to overlap with the functions allotted to the Planning Commission. This would create confusion in both the bodies, but the same has been erased by the introduction of NITI Aayog.

The 15th Finance Commission Report : an understanding

The 15th Finance Commission Report was submitted on 9th November 2020 for the period of 2021-22 to 2025-26 to the Hon’ble President of India. The Commission prepared its report as per the terms of reference and majorly recommended the following areas:

Apart from the vertical and horizontal tax devolution, the Commission recommended local government grants, and disaster management grants.
The Commission was asked to examine and recommend performance incentives for States in many necessary areas like the power sector, adoption of DBT, solid waste management, etc.
The 15th Finance Commission was also asked to examine the need for setting up a separate, and independent mechanism for funding defence and internal security of India, and determine the functioning procedure for the same.

The 15th Finance Commission Report was organized in four volumes with Volume I and II, consisting of the main report and accompanying annexes, Volume III was completely devoted to the Central Government as it addressed the challenges in the future and possible ways of handling it and Volume IV was devoted to the states where the Commission has analyzed the finances of each state and addressed the key challenges that individual states come across.

Conclusion

The Finance Commission is perceived to be the supreme constitutional body regulating finance in India, both between the Centre and the states, and among the states. There are several prominent factors that have contributed to the fall of this esteemed institution and the same is reflected in the 12th Finance Commission. The Central government has noticed appointments made to the Commission simply on the grounds of distribution of patronages to the individuals belonging to some of the other regional parties. As India witnesses the emergence of coalition parties, the detriment suffered by the Finance Commission cannot go unnoticed. The Commission is supposed to be technical in its approach and logical in its procedure, and recommendations provided to the President require members who are experts in the subject matters related to the Commission. Ignorance of such a necessity welcomes the decaying of this constitutional body. Actions must, therefore, be taken in order to rule out the irregularities taking place within and by the Commission.

References

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Revenge pornography : harms associated with it and options of redressal

By

Abanti Bose

-

November 25, 2021

0

This article is written by Mir Adnan Zahoor, pursuing Certificate Course in Advanced Criminal Litigation & Trial Advocacy from Lawsikho. The article has been edited by Prashant Baviskar (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).

Table of Contents

Introduction

“The inviolability of the person is as much invaded by a compulsory stripping and exposure as by a blow. To compel anyone . . . to lay bare the body, or to submit it to the touch of a stranger, without lawful authority, is an indignity, an assault, and a trespass . . . .” – Justice Horace Gray.

Revenge pornography is the non-consensual distribution of sexually explicit photos or video that is used to threaten and control the victim. Scholars have argued that revenge pornography should be considered a type of violence along a “continuum of Image Based Sexual Abuse (IBSA)”. Furthermore, revenge pornography presents a glaring example of gender imbalance and power differential whereby women are mostly being portrayed as submissive sexual objects, who are subordinate to men. It would not be amiss to presume that revenge porn media forms the part of a larger cultural narrative that not only objectifies, degrades, and humiliates women, but also seeks to entrench a belief system that devalues women and encourages acts of misogynistic dominance and power.

Noteworthily, scholars have also pointed out deficiencies with the “revenge porn” terminology as it fails to capture behaviours of perpetrators that go beyond the acts of distributing intimate images without consent. It has been suggested that terminology that captures a wide range of motivations, not limited to revenge, is needed. Further, apart from revenge, other motivations of offenders such as blackmail, monetary gain, sexual gratification, social notoriety or entertainment need to be taken into account as well. The perpetrator in this offence should not be narrowed down to ex-partner and to his revenge motivations, but also extended to unknown and unrelated persons combined with various motivations and contexts.

“Revenge porn” terminology can therefore lead to an oversimplification of what is actually a complicated offence. Hence, a nuanced understanding of this technology facilitated menace is necessary to ensure accountability and dispensation of justice to the victims. Further, the effects of revenge porn are devastating to the victims of it. Victims of revenge porn evidence psychological symptoms congruent with posttraumatic stress disorder. 93% of victims indicated that they suffered significant emotional distress in a survey conducted by Cyber Civil Rights Initiative. The revenge porn epidemic is violative of an individual’s right to life and its facets such as dignity, privacy and autonomy. Therefore, it offends both the guarantees of the constitutions and international covenants pertaining to the right to dignified life and liberty.

The offence of revenge porn needs to be redressed by the coercive power of law as well as non-legal redressal options, both of which need to be sought and explored. A holistic approach needs to be adopted that secures effective redressal and justice to victims, and at the same time, ensures robust deterrence and prevention.

In the following Section of this article, questions as to the definition of revenge pornography; the harms inflicted by it on the victims and society; recourses to redressal; and finally the conclusion have been seriatim delineated.

The definitional conundrum of ‘revenge porn’

Limitations of the revenge porn terminology

Scholars have argued that the term “revenge pornography” focuses ‘solely on the motivation of the offender rather than the harm inflicted upon and experienced by the victim. More importantly, the language used to describe nonconsensual pornography is influential for it impacts how these crimes are dealt with by law enforcement and how they are perceived by the public and media.

Further, the attention that “Revenge Porn” has garnered cannot be discounted, but given its limitations, it is being rejected on the following grounds:

“Revenge porn” as a misnomer: Not all the perpetrators of “revenge porn” are motivated by revenge, as other motivations such as blackmail, entertainment, economic gain etc. can also trigger them. . Therefore, this term emerges as a misnomer.
“Revenge porn” limits the focus on non-consensual image sharing by ex-partners: ‘The revenge porn terminology fails to bring into its fold the perpetrators who may not necessarily be ex-lovers or ex-partners. Therefore, this terminology unwittingly excludes violations by unrelated and unknown perpetrators, who without doubt can also be potential non-consensual sharers of private images or media.
“Revenge porn” terminology entails victim-blaming connotations: This terminology is suggestive of a connotation whereby the violated person is a provocateur herself because of her behaviour or carelessness which led to or invited the conduct of the offender; or that the victim is conscious about the production of pornographic content, and hence complicit. This line of understanding can lead to victim-blaming rather than direct the focus on the conduct of the offender.
Attention is directed at the content of the image, and not the perpetrator: Finally, “revenge pornography” instead of directing the attention to sexual abuse committed by the perpetrators, directs the attention to the content of the image.

Image Based Sexual Abuse (IBSA) as an alternative to “revenge porn” terminology

Notably, “revenge porn” has been alternatively labelled as “non-consensual pornography”, “involuntary porn”, “non-consensual sexting”, or “image-based sexual abuse” (IBSA). However, the IBSA is comparatively useful in capturing the wide range of behaviours underlying the so-called “revenge porn”.

IBSA is inclusive of three key behaviours, which are stated hereunder:

The first behaviour type may involve the taking of non-consensual nude or sexual images. Motivations of the offenders may include sexual pleasure, gender domination, entertainment, or monetary gain. Examples of stealth photography or filming of victims (like “creepshots,” “upskirting,” and “downblousing”) without their knowledge in both public and private spheres belong to this behavior-type.
Second, IBSA also refers to the non-consensual dissemination of nude or sexual images distribution, whether online or offline or both. Offenders’ motivations may range from retribution, sexual gratification, monetary gain, voyeurism, or social status building. Offenders are encouraged by the anonymity that can be secured on the internet and the economic gains from the online pornographic industry. The offenders enjoy the liberty to share the identity credentials of their victims. The availability of identity details of the victims leaves them vulnerable to repeated victimization by the same or other offenders.
The third key IBSA behaviour involves the issuance of threats to the victims to share their nude or sexual images, also known as “sextortion”, that is, acts committed against persons who are threatened with revealing of their sexual content, or any other sexual media related to them in lieu of money or any sexual favour. The perpetrator’s motivations for such behaviour may include extortion of money from the victims, seeking unwanted sexual intimacy, the humiliation of victims, intimidation to share sexually coloured media of victims, forcing the victim to continue an abusive relationship and offender’s exercise of domination for power or mere enjoyment. Breaches committed against victim’s devices like mobile phones or computers to gain unauthorized access to images and use of them as tools of intimidation may also arise in this IBSA behaviour-type.

Therefore, the foregoing discussion as regards the IBSA clearly shows the usefulness of this terminology and its coverage of multifarious behaviours and correlative motivations behind media-based sexual abuse.

Why is a coherent and all-encompassing definition of ‘revenge porn’ needed?

Arguably “revenge pornography” focuses on the motivation of the offender rather than the harm inflicted upon and experienced by the victim. The language deployed to describe non-consensual pornography has to be conscious of the effect it can have on law enforcement as well as the perception it creates within the media and the public. Scholars Henry and Powell rightly argue that ‘these crimes are too often framed as user naiveté or bad decision-making on the part of the victim and not as gender-based violence perpetrated by offenders to harass, coerce, or blackmail women’. Therefore, the classification and characterization of these offences can be achieved better if the laws that take into account the so-called “revenge porn” as part of a continuum of abuse, are facilitated by larger cultural values rather than specific instances of nonconsensual distribution.

The harms inflicted by “revenge porn”

The harms inflicted by “Revenge Porn” are deeply gendered, and females predominantly happen to be the victims. The offence of “Revenge Porn” is replete with the violations of individual victim’s personhood and its negative impact on society. An overview of these harmful effects has been provided hereinbelow.

“Revenge porn” as a violation of personhood

Harms of personal and bodily nature: The image-based sexual abuse is detrimental to the physical and mental well-being of the individuals depicted in the images. 80% of ‘revenge porn’ victim-survivors experienced severe emotional distress and anxiety as per a study of the US Cyber Civil Rights Initiative. Studies have recorded adverse impacts on individuals including education, emotional trauma as well as instances of suicide.

Further, owing to the “revenge porn” victimization and subsequent online sexual media abuse, victims have reported incidents of employment discrimination – like outright dismissals and denial of employment. Also, victims are so adversely affected that they force upon themselves a closeted identity, retreating from both the physical and virtual world.

All this amounts to the absence of favourable conditions required for the exercise of civil, economic and social rights by an individual.

Invasion of privacy and personal dignity: Image-based sexual abuse constitutes a serious violation of individuals’ fundamental right to privacy and the right to a dignified life. Privacy is inherited by every individual and is indispensable for the realization of their personal liberty, human dignity and exercise of autonomy. Therefore, when sexually coloured media is non-consensually shared by the offender, he not only invades and encroaches upon the victim’s privacy, but also disables the victim’s right to assert and control all those facets of her human personality which she would have otherwise preferred to keep secret.

Whenever images of the victim are disseminated in absence of her explicit consent, it is immaterial whether such pictures were produced consensually or otherwise, as in both instances; a severe breach of the expectation of trust and confidentiality is occasioned to the victim.Therefore, the legitimate right to the recognition of privacy is impaired at the peril of the victim.

Hindrances caused to the sexual autonomy: As mentioned in the foregoing, the right to privacy is vital for the exercise of sexual autonomy as it ensures an individual to make decisions independently that are intimate to human personality. At the heart of it lies the consent of the victim, the decisional autonomy of her to make decisions on the facets of her person which she would choose to publicize or keep private. The harassment and abuse that is invited upon the victim by way of image-based sexual abuse denudes and disables the victim of her right to make her choices thereby denying her both sexual privacy and agency.

Where instead of disapprobation of perpetrators of image-based sexual abuse, the entire focus is shifted to shaming the victimized females by holding them responsible for the creation of sexual media only speaks of the prevalence of gender inequality and the wider socio-cultural environment that allows such an unfair treatment against the females to exist and thrive.

Impact on society

The offence of image-based sexual abuse does not only cause personal injury to the victim of it, but the effects cause harm to society as well. Any failure on part of the society to uphold the women’s capacities of consent will further encourage violence against them in all its forms and shapes. Further, rendering of online sexual abuse of females as mere ‘hypersensitivity’ or ‘humorlessness’ of females is indicative of victim-blaming and the making of a narrative that seeks to minimize the harms of online abuse and leads to the potential normalization of such egregious conduct.Consequently, such a cultural narrative will cause the members of the society to get steeped into a culture where infractions of privacy and sexual autonomy of women will, overtime, become tolerated.

As has been discussed previously, this will result in inhibiting women’s voices, and engender their invisibility both in the physical and virtual world. Thus, a negative impact on the personality of the victims because of online sexual abuse is not detrimental to the victims alone, but also leaves societies bereft of a public discourse that is richer in terms of the plurality of views and reflective of equality of individuals in every facet of their human existence.

Options of redress

Legal responses : criminal and civil remedies

Law plays a vital role in regulating the behaviour of individuals by informing them about the commissions and omissions (both of criminal or civil nature) that are proscribed by it in order to prevent detriment or harm to others. Further, the prescription of certain conduct is reflective of societal censure for such conduct. Therefore, the law can be said to have the function to protect individuals from unlawful deprivations of their right to a dignified life and personal liberty.

Criminalization of “revenge porn”: Several countries across the globe have criminalized the distribution of nonconsensual pornography. The Philippines became the first country to criminalize such behaviour in 2009. Other countries followed, including Australia, the United Kingdom, Japan, Israel, and Canada, responding to this issue by creating and implementing laws against the non-consensual distribution of intimate images. In the United States, approximately 48 states and the District of Columbia have criminalized revenge pornography. In addition, multiple perpetrators as well as website owners, who encourage the posting of revenge porn have been successfully prosecuted under these new laws.

In India, there is no specific statute for the offence of “revenge porn”, but the accused can be charged under various sections of the Indian Penal Code, 1860 (IPC) and Information Technology Act, 2000 (IT Act). The following Section of the IPC that will be attracted includes Section 292 (Sale etc., of obscene material); Section 354C (Voyeurism); Section 499 (Defamation); and Section 509 (Word, gesture or act intended to insult the modesty of a woman). And under the IT Act following Section will be attracted: Section 66E (Punishment for the violation of privacy); Section 67 (Punishment for publishing or transmitting of obscene material in electronic form); Section 67A (Punishment for publishing or transmitting of material containing the sexually explicit act, etc., in electronic form); and Section 72 (Penalty for breach of confidentiality and privacy).

The first successful prosecution for “revenge porn” in India was in the case of State of West Bengal v. Animesh Boxi. The case is considered to be a landmark as the accused in the case was convicted for uploading intimate photos and videos of his former girlfriend on pornography websites and sentenced to 5 years imprisonment along with a fine of Rs. 9,000. Also, demands of sexual favours by the accused, online stalking, and taking and transmitting of images of the victim without her consent, were held to have caused injury to the victim. Further, the Court reasoned that the absence of physical injury was immaterial as the victim had suffered the injury on account of her reputation and the same could be read within the scope of the definition of ‘injury’ provided under Section 44, IPC.

Image based sexual abuse will be considered as a form of sexual abuse just like physical sexual abuse if there is a penal sanction. Therefore, fixing criminal responsibility for image-based sexual abuse will ensure accountability for offences that inflict grave harm on the right to dignified existence of individuals, paving the way for a form of redress and justice to the victims.

Civil remedies for revenge porn: Victim-survivors of image-based sexual abuse have put to their use civil law when seeking redress in many jurisdictions. It has been argued that the suits brought under common law or statutory civil law have brought victims of IBSA to a position of control.

“Revenge porn” victims have used copyright law in order to seek justice. For example, one victim copyrighted her breasts and demanded her revenge porn photos be removed from the Internet. She also sought financial damages from her perpetrator. One Californian woman was awarded $6.4 million (USD) from the court after she copyrighted her intimate images and sought damages for copyright infringement and severe emotional distress. In cases such as these, victims have been successful in civil suits where the aim was receiving damages and having images removed from the Internet.

In the UK, the Court granted a non-disclosure order in favour of the claimant to protect her ‘right to confidentiality and privacy’ in respect of ‘sexual’ photos and personal text messages she had sent to the second defendant who had been her former partner.

In Australia, where the defendant had uploaded private sexual photos and videos taken during their relationship to Facebook, the Court awarded the claimant over $37,500 in damages, alongside an injunction and held the defendant in breach of confidence against her former partner.

Need for public-private collaboration: For the purpose of addressing the menace of harassment on online platforms, suggestions have also been made in support of public-private collaboration involving the law enforcement agencies, information technology industry and internet service providers (or ISPs).However, what also needs to be ensured is that information exchange is used only for investigative and intelligence purposes and is not misused to unlawfully deprive individuals of their civil liberties. Further, such collaborations can be used as a means to impart necessary technical knowledge to all the stakeholders in the criminal justice system so that investigation, prosecution and adjudication of cybercrimes can become easier and speedier.
Role of education: The role of education has been argued to be the first step towards self-protection, and that educating the potential perpetrators has been described as one of the best solutions to curb sexual harassment on the internet.Education programs have also been advocated for those convicted for such offences so that they are sensitized about the harms of cybercrimes and are educated on how they can make well-informed choices in the future.

Conclusion

From the above discussion, it is very clear that “revenge porn” has far-reaching implications for the victims. The experience of image-based sexual abuse can be as debilitating an experience for the victims as the physical abuse. Consequently, this not only hinders the overall personal development of the victims but at its very core, impairs their very right to a dignified life. With the increase in the availability of internet accessibility, access to sexual media has also increased. The market of sexually-explicit media, which in the words of scholars K. Holt and R. Liggett ‘used to be an underground venture has now become a thriving, vast corporate-capitalist industry that is accessible to all and facilitates and maintains a rape-supportive culture’. Moreover, the anonymity and amplification of the internet are used by the perpetrators of image-based sexual abuse at the peril of their victims, whose suffering becomes permanent (given the nature of the internet), and revictimization becomes an ever-present threat.

Furthermore, the language that is deployed to describe image-based sexual abuse needs to be revisited. A coherent language that would cover wide-ranging motivations behind this sexual abuse and perpetrator-types needs to be followed. The narrative that seeks ‘to shift from revenge terminology towards the commission of gender-based violence needs to be adopted, and this can elucidate the serious nature of the crime of image-based abuse and reveal it as a behaviour used to control, dominate, and humiliate others and prevent them from engaging fully in online spaces’. In the same vein, the language of the statutes should be perpetrator-centric, meaning that the focus of attention has to be the abusive actions of the perpetrator, rather than the content of the (sexually explicit) media.

The victims’ of image based sexual abuse suffer serious violations of their privacy, autonomy and sexual expression. Both the state and society should share responsibility to awaken and sensitize the general public about this menace. The devastating effects of this image based sexual abuse cannot be overlooked as such an attitude will lead to the minimization of its harms and potential normalisation of non-consensual sexual activity. This shall engender a culture that is conducive to further forms of sexual violence. Moreover, not only the coercive power of law but also non-legal redressal options need to also be explored and deployed so that a holistic approach can be devised to deal with such a grotesque violation of human dignity.

Thus, the inviolable and inalienable right to a dignified life of victims of revenge porn needs to be restored and justice needs to be dispensed to them. Personal autonomy and privacy, which form as part of the personhood, are inextricably linked to each other; and their violations by image based sexual violations or any in other manner, cannot be allowed with impunity or tolerated in any conscientious society. To conclude with the following words of the Supreme Court of India in K S Puttaswamy v. Union of India held, “…Privacy postulates the reservation of a private space for the individual, described as the right to be left alone. The concept is founded on the autonomy of the individual. The ability of an individual to make choices lies at the core of the human personality. The notion of privacy enables the individual to assert and control the human element which is inseparable from the personality of the individual. The inviolable nature of the human personality is manifested in the ability to make decisions on matters intimate to human life. The autonomy of the individual is associated with matters which can be kept private. These are concerns over which there is a legitimate expectation of privacy…”.

References

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Notice clause in a contract : an analysis

By

Oishika Banerji

-

November 24, 2021

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31799361247_64d7c0015f_b-1024x768 — Image source - https://bit.ly/30P6ZFf

This article has been written by Arushi Agarwal pursuing the Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho. This article has been edited by Ruchika Mohapatra (Associate, Lawsikho).

Table of Contents

Introduction

The notice clause assists the parties to bring certain matters to each other’s consideration which affects their contractual norms, directly or indirectly. This clause generally contains:

The issues and/or matters relating to or affecting the provisions in the contract for which it is necessary to inform the parties through serving a notice; and
The manner of serving such required notice(s).

Parties need to give each other a notice for various purposes under a transaction such as:

Notice of overdue payment;
Notice initiating a dispute;
Notice of change of address;
Notice of termination;
Notice to have a waiver in writing;
Notice for renewal.

This article will give you practical insights into how to draft a notice clause in a contract and it will also provide you with a checklist of items that should be considered while drafting a notice clause

Why does a notice clause exist in a contract?

A notice clause in a contract primarily serves two purposes:

Sets a parameter to determine if notice was properly and timely given;
Creates a framework for parties to a contract for communicating among themselves.

A proper notice clause in a contract will clearly indicate the procedure to be followed for valid delivery of the notice and a ‘deemed delivery; provision so that chances of disputes by a dishonest party claiming non-receipt of notice are minimized.

What are the different types of notices?

A notice clause in a contract can be of two types-

Generic– Generic notice sets a structure for giving notices. To whom the notice is to be given, by whom it is required to be given, by when should it be given, at what address should a notice be given etc. for all types of notices.
Specific- Specific notice refers to those that are given only for a particular purpose such as a termination notice.

Key points to consider while drafting a notice clause in a contract

To draft an effective clause, consider the following points which should be provided for:

How to deliver the notice i.e., the mode of delivery such as courier, email etc. ?
When will the notice be considered as delivered?
What will happen if there is a disruption in delivery of said notice?
How and to whom should the notice be addressed?
What should be the format of the notice?
Procedure to be followed for initiation of change of address or name/designation of the recipient of either party in such a situation, the arty whose address other details are going to change can notify the other party by sending a notice as per the contract

How to draft the notice clause?

Whom should the notice be addressed to?

While addressing the notice to an individual, ensure his or her name is correctly spelled, and it is sent to the address as stated in the contract. Make sure to clearly state the address on which correspondence or notices are to be sent.

If the notice is sent to a corporation or an organisation, do not draft the notice clause requiring the notice to be addressed to a recipient’s personal name because the person might leave the organisation, or his designation might change later. Such notice might accidently be ignored, Therefore, the best practice is to mention the recipient’s designation or office such as the Company Secretary, The Chief Financial Officer etc.

Sample Clause– “Any notices provided must be in writing and be addressed to the Company Secretary of the Company and will be deemed effective upon personal delivery or the next data after sending by overnight courier, whichever is earlier to the registered office of the Company.

This notice clause precisely states the address at which the other party is supposed to send the notice, the designation of the addresses and the time at which it will be considered to have been served.

How is the notice to be given?

For ensuring evidence of delivery, specify the mode of delivery, such as email, by post speed post, register post, personal service, courier etc. Select a method that provides you evidence of the delivery of notice; you don’t want to be in a situation where the other party denies receipt of the notice. That will enable a dishonest or defaulting party to delay legal proceedings and prolong a default.

For instance, consider a notice which was sent through email, however it was not delivered to the other party because it was not sent due to a system error or crash of your organisation’s email server or a wrong email ID, which you didn’t know about.

How will you mitigate the risks? It can be done in the following ways:

To completely avoid such situations, always opt for such methods of giving notice where you get evidence of delivery. For instance, in case of a Registered Post with Acknowledgment Due (RPAD) anything that is sent through the post will require the signature of the party receiving it and the acknowledgement of such receipt by the receiving party is sent back to the sender.

Sample Clause

“Any notice required or permitted to be govern hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested (c) by facsimile or (d) by a commercial overnight courier that guarantees next day delivery and provides a receipt.”

Format of the notice

In some contracts the scheme of the notice language, especially in cross-border contracts is to be looked at in detail as when and by whom the notice is to be signed is mentioned in a few contracts.

Changes in the details of parties

Ensure that all notice clauses include the procedure to amend the details of the parties. This will be necessary to invoke in the event of a change in the address, legal entity’s name (e.g., In the event of a merger) or the designation of the officer to whom the notice is sent.

When you need to change any details in the notice clause pursuant to the above events, information about such changes must also be intimated in writing as per the terms of the notice clause.

If you deviate from this method, make sure there is written acceptance of service of the notice and the fact that the notice is served under the contract, even though it deviates from the format specified.

When will the notice be considered delivered?

The most important component of a notice clause is to categorically state when a notice clause is deemed to be delivered and received called a deemed service or deemed delivery clause. This prevents the other party from arguing that it did not receive the notice.

You must specify a mechanism for such deemed delivery in the notice clause. One such mechanism could be that the notice will be considered delivered if it is entered to the person at the address listed in the agreement within a specified number of days after it has been sent.

Similarly, if it is sent by email or fax, receipt of a confirmation that the fax has been sent successfully or an email-tracking receipt by a software will be sufficient.

In the absence of such a clause, defaulting parties would have the power to delay proceedings by resorting to such arguments,

Specify a range of delivery methods for delivery of the notice, do not restrict delivery methods. For example, if you specify only postal service delivery as a valid method, a postal strike can cause a delay in the delivery of the notice. For an innocent party, this increases the time it needs to wait before taking the next step in litigation or arbitration proceedings.

If you also provide email as one of the methods to deliver a notice, you can send an email and then supplement it with a physical notice, If you have an electronic ‘read receipt’ for the notice, you may be able to present a stronger argument in court that the date of the ‘read receipt’ of the email is the time from which the countdown starts.

Ensure that the notice clause is not cumbersome and does not require multiple methods to be collectively used, else it makes serving notices itself a complex task. As a conservative party, you may still use multiple methods to deliver a notice i.e., one in electronic format and one in physical format.

The sample clause below provides multiple methods of delivery of notice and include deemed delivery provisions as well

Sample notice clause in a technology transfer agreement
Any notice required or permitted to be given under this Agreement will be in writing and will be delivered by hand or overnight courier with tracking capabilities or mailed postage prepaid by first class, registered or certified mail addressed as set below unless changes by notice so given:
Brilliant Medical Services 222 Park Avenue New York, NY 20134 U.S

Attention: General Counsel and Corporate Secretary

Any such notice will be deemed delivered on the date received.
A Party may add, delete, or change the person or address to whom notices should be sent at any time upon written notice delivered to the Party’s address in accordance with this Agreement.

What are the consequences of erroneous drafting of a notice clause?

The most common dispute that arises with respect to a notice is whether it was effectively delivered or not. In the landmark judgment of Ener-G Holdings Plc v. Philip Hormell (decided by the UK Court of Appeals), the notice clause of the agreement stipulated that the “notice should be personally delivered”. Thereby the appellant went personally to the respondent’s house and kept the notice on the front porch table. However, this notice was not deemed to be delivered because “personally” doesn’t mean to just leave the notice at the premises of the person. It means that the notice should be given “in person” delivering it in the hands of the respondent. Consequently, the notice was held to be “not delivered” as it was not given as per the manner stated in the agreement. When a notice is hand-delivered, a signature of the recipient on a copy of the notice is obtained, so that it can be presented in evidence subsequently if required.

Conclusion

A notice clause is of vital importance in any contract as it supports and regulates the communication between parties and holds them accountable. It allows for a contract to be enforced in a better manner. From a legal point of view, the time of fulfilment of the notice requirement is relevant. Where the timing of a notice is of essence, it does make sense to stipulate that a notice shall be deemed to be delivered upon either delivery or dispatch. What matters is whether the applicable law follows the ‘receipt theory’ or the ‘dispatch theory’ to determine if a message was on time. The parties, through this clause, can remind each other about the work, duties, and obligations that are required to be performed by them and decrease the chances of there being any miscommunication between them.

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Draft Intellectual Property Rights Division Rules, 2021 : an insight

By

Rachit Garg

-

November 24, 2021

0

This article has been written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed analysis of the Draft Intellectual Property Rights Division Rules, 2021.

Table of Contents

Introduction

After the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (currently known as Tribunal Reforms Act, 2021 (“TRA 2021”)) was passed by the President of India, which resulted in the liquidation of numerous boards and appellate tribunals that operated under separate laws controlling intellectual property rights (IPR), the Delhi High Court established the Intellectual Property Division (IPD) to deal with all cases pertaining to IPR. Exercising its power conferred by Section 7 of the Delhi High Court Act, 1966, Section 129 of the Code of Civil Procedure, 1908 and by various Intellectual Property statutes as amended by the TRA 2021, the Delhi High Court made the Intellectual Property Rights Division Rules, 2021, which will be governing matters listed under the IPD. The Draft Delhi High Court Intellectual Property Rights Division Rules, 2021, were submitted to the Hon’ble Chief Justice Dhirubhai Naranbhai Patel by a committee composed of Justices Prathiba M Singh and Sanjeev Narula. The Rules were circulated on October 8, 2021, in order to solicit feedback from the Bar. This article provides a detailed analysis of the Draft Intellectual Property Rights Division Rules, 2021.

The roots

The dissolution of the Intellectual Property Appellate Board (IPAB) and the emergence of the Intellectual Property Division (IPD) by the Delhi High Court has a long story to narrate.

The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021 was introduced in Lok Sabha in February 2021. As the Bill was pending at the end of the summer session, an Ordinance with similar provisions was promulgated on 4th April 2021 by the name of Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021.
The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021, proposed that some current appellate bodies be dissolved and their powers be transferred to other existing judicial bodies. One among the dissolved appellate bodies was the Intellectual Property Appellate Board (IPAB). It also suggested including provisions in the Act itself regarding the makeup of selection committees and terms of tenure.
The Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 was challenged in the Supreme Court of India over its lack of compliance with past Supreme Court judgements on Tribunals, in the landmark case of Madras Bar Association vs Union of India (2021). In July 2021, the Court struck down provisions related to the four-year tenure and the minimum age requirement of 50 years for members of tribunals.
All cases and appeals that were pending before the IPAB got transferred to their respective high courts and the copyright matters to the commercial courts. IP-related appeals are now being filed before the appropriate high courts or commercial courts having competent jurisdiction to try the case.
On 6th July 2021, the Delhi High Court issued a press release announcing the creation of an Intellectual Property Division in the Delhi High Court for the purpose of handling multiplicity of proceedings and avoiding the possibilities of any kind of confusion that may arise with respect to similar intellectual properties.
Further, the Delhi High Court established the Intellectual Property Division on 7th July 2021 with the intent that the new Division will be solely dedicated to handling cases related to intellectual property rights.

The structure

The reason behind the formation of the Draft Intellectual Property Rights Division Rules, 2021 has been laid down under the Preamble of the aforementioned statute. The Draft Intellectual Property Rights Division Rules, 2021 has a framework of thirty-one Rules dealing with different procedures and definitions that is to be applied while dealing with cases under the IPD. The General Clause under Rule 24 clarifies that the procedures which are not specifically provided for in these Rules shall, in general, be governed by the Civil Procedure Code, 1908 as amended by the Commercial Courts Act, 2015 and the Delhi High Court (Original Side) Rules, 2018.

Rule 2(a) read with Rule 2(i) of the Draft Intellectual Property Rights Division Rules 2021 specifies the meaning of the term ‘intellectual property rights’ and the statutes that are applicable to the Rules. They are;

What is interesting to note in Rule 2(i) is that the provision along rights pertaining to different expressed intellectual property statutes and common law recognizes the rights pertaining to data protection, data exclusivity, and related matters. The explanation attached to this provision specifies that cases involving the Information Technology Act of 2000, which deal with the rights and liabilities of intermediaries, online marketplaces, and e-commerce platforms, and which involve “issues relating to any of the aforementioned rights, shall be deemed to be within the purview of intellectual property rights.”

Rule 2(l) of the Division Rules 2021 states that IPR matters or cases or proceedings or disputes shall include all original proceedings, appellate and other proceedings related to IPRs as defined in Rule 2(i). Further, it is Rule 4 which discusses jurisdiction under the Division Rules 2021 thereby providing that every IPR matter or case or proceeding or dispute filed before the Intellectual Property Office (IPO) shall be heard and adjudicated by a Single Judge of the IPO.

While Rule 6 of the Division Rules 2021 lays down the procedure for appeals to the IPD, Rule 7 provides the procedure to be followed while filing original civil petitions. Rule 8 and Rule 9 deal with the procedure for civil writ petitions and civil miscellaneous main petitions respectively. Rules 10 to 14 also encircles the necessary procedures to be abided by while addressing a suit to the IPD, namely:

Procedure for Regular First Appeal (Rule 10);
Procedure for First Appeal from Order (Rule 11);
Procedure for Civil Revision Petition (Rule 12);
Procedure for CM (Mains), FAOs, RFAs, CRPs (Rule 13);
Procedure for Suits (Rule 14).

The Draft Intellectual Property Rights Division Rules, 2021 lays down provisions for summary adjudication as well under Rules 21 and 22 on principles akin to those contained in Order XIIIA, Code of Civil Procedure, 1908 as applicable to commercial suits under the Commercial Courts Act, 2015.

With the intent of avoiding unnecessary delays in the disposal of suits, Delhi High Court has made sure that strict guidelines of written submissions and timelines for oral submissions be followed while drafting the Division Rules, 2021. Rule 28 of the 2021 Division Rules deals with the same.

The future

When the transferred cases from IPAB are combined with the current backlog of IP matters in the Delhi High Court, the burden is certain to skyrocket. According to the news announcement by the Hon’ble High Court announcing the IPD’s formation, the IPAB had around 3000 cases outstanding, which would now be moved to the High Courts. According to the most recent data on commercial cases in the Delhi High Court, there are around 2500 commercial civil claims pending. If we include writ petitions, the number of cases before the Delhi High Court’s Commercial Division is projected to quadruple.

Furthermore, COVID-19 led to widespread case de-prioritization, and the IPAB was disbanded without any advice on case management, delivery of papers, filing of pleadings, statutory deadlines, and so on. These problems must be included in the IPD Rules, as well as progressive methods to resolve them. They must establish shorter and more stringent deadlines for filings and oral arguments. In contrast to typical civil cases, summary processes should be the rule, with oral evidence recording (which greatly lengthens a case) being the exception.

Conclusion

The establishment of the Intellectual Property Division (IPD) in the High Court of Delhi is a significant step in the scenario of intellectual property rights with respect to India, and it is in accordance with international standards. The benefit of this strategy is that the expert benches are part of the general structure of normal courts, thus no changes to Indian law are required. However, in order for this to operate, the following essentials must be complied with:

Adequate qualifying requirements for such judges must be developed.
Second, comprehensive IP training for the judges is required.
Finally, it must be assured that these judges remain on the IP bench for a long time, rather than being rotated every 2-3 years.

IP Divisions or IP Courts that only deal with IPR issues already exist in the United Kingdom, Japan, Malaysia, Thailand, China, and other countries. The establishment of an IPD with complete rules controlling IPR disputes is a significant step forward in the efficient resolution of IPR-related issues. The other High Courts should hopefully follow suit and create IPDs. This will be especially useful for courts that deal with a large number of IP matters.

References

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