Intermediary liability : analysis of the effect of the Shreya Singhal judgment on internet intermediaries in India

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November 16, 2021

This article has been written by Saswati Soumya, pursuing the Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho. The article has been edited by Smriti Katiyar (Associate, LawSikho).

Table of Contents

Introduction

The common argument with respect to declaring oneself as a social media intermediary is that they do not exercise editorial control over content that is produced by users. Having exclusive rights over the content produced by creators under mutual contractual agreements does not alter the status of a legal person as an intermediary. This is because having exclusivity rights is related to the obligation of an intermediary to prevent copyright infringement and in stopping the spreading of sexually explicit content. This became a contentious issue for content platforms like Sharechat and TikTok. Scaling operations specific to India’s climate required the appointment of the chief compliance officer, local grievance officer, the nodal officer either on an interim basis or on a permanent basis to look after such issues.

“Intermediaries” under the provisions of the IT Act, 2000

Section 2(1)(ua)(w) of the Information Technology Act, 2000 defines an intermediary. The essence of the definition is that one legal person acts on behalf of another person. Some examples of intermediaries are telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online auction sites, online marketplaces and cyber cafes. The second aspect of the definition is that the agency role of an intermediary is limited to the role of (i) receiving, storing, or transmitting a particular electronic record; or (ii) providing a service with respect to that electronic record.

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021

Rule 3 of Part III of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021(“Digital Media Ethics Code”) lists the due diligence that is required to be observed by the intermediary while discharging its duties. The scope of intermediary includes both social media intermediary and significant social media intermediary. Rule 2 (v) and (w) differentiate a significant social media intermediary from a social media intermediary. As per the provisions of the Digital Media Ethics Code, a significant social media intermediary means a social media intermediary that has a number of registered users in India above a specific threshold that is prescribed by the Central Government. On the other hand, a social media intermediary refers to an intermediary that primarily or solely enables online interaction between two or more users and allows them to create, upload, share, disseminate, modify or access information using its services.

It is imperative for an intermediary to inform its users not to host, upload, modify, publish, transmit, update or share any information which:

(1) does not belong to the user as a matter of right;

(2) is inconsistent with or contrary to the laws in force, such as being defamatory;

(3) is harmful to a child;

(4) infringes intellectual property rights;

(5) violates a law;

(6) deceives/misleads the addressee about the origin of the message;

(7) impersonates another person;

(8) threatens the unity & integrity of India;

(9) contains software virus that is designed to interrupt, destroy or limit the functionality of a computer resource;

(10) is patently false and untrue.

These are a few examples of information that the user is not allowed to share while using the services of an intermediary. It is on the intermediary to expressly provide this restriction in its rules, regulations, and privacy policy or user agreement so that its users are informed. This information will be published either on the website of the intermediary or in the mobile-based application or both. Further, it is on the intermediary to periodically inform its users about its right to terminate the access of the user to its services and thereby stopping their usage rights in case of non-compliance with the rules and regulations, privacy policy or user agreement. Such periodic informing exercise must happen at least once a year. The other path is that an intermediary may ask its users to remove non-compliant information or both depending on case to case basis. If prohibited information is hosted, stored or is published on an intermediary’s computer resource, then it is important that the intermediary gets “actual knowledge” of the same. When an intermediary receives an order by a court of competent jurisdiction or receives notification from an appropriate government or its agency under Section 79(3)(b), then it shall not host, store or publish information that is prohibited. Information is construed as being prohibited if it relates to:

(1) sovereignty and integrity of India;

(2) security of the State;

(3) friendly relations with foreign State;

(4) public order;

(5) decency or morality;

(6) contempt of court;

(7) defamation;

(8) incitement to an offence that relates to the above;

(9) any other information that is prohibited under any law for the time being in force.

The intermediary shall remove such prohibited content that is hosted, stored and published as early as possible. It may also disable access to that information no later than 36 hours from the receipt of the court order or on being notified by the appropriate government or its agency. If the intermediary removes or disables access to information, data or communication link as prescribed above on a voluntary basis or on the basis of grievances received, then the response of the intermediary would not amount to a violation of Section 79(2)(a) and (b). On the other hand, the intermediary might be required to preserve information and associated records for 180 days for investigation purposes or for a longer period that may be required by the court or by government agencies who are lawfully authorized. The intermediary shall provide information under its control or possession, not later than 72 hours after receiving an order. Such an order is required to be in writing clearly stating the purpose of seeking information or assistance.

A user or a victim may lodge a complaint against a violation of the rules and regulations with the Grievance Officer. The intermediary shall publish the name of the Grievance Officer and contact details prominently in its website or mobile-based application or both. The Grievance Officer shall acknowledge the receipt of the complaint within 24 hours and shall dispose of such complaint within 15 days of receiving the complaint. Within 24 hours from receiving the complaint made by an individual or any person on his behalf, the intermediary shall take all reasonable and practicable measures to remove or disable access to content that is hosted, stored, published or transmitted in its computer resource. The content can either be a material that exposes the private parts of such individual, or shows an individual in full or partial nudity, or shows or depicts such individual in any sexual act or conduct, or is in the nature of impersonation in an electronic form, including artificially morphed images of such individual. The intermediary shall implement a mechanism for receiving complaints that would enable an individual to provide details.

The Digital Media Ethics Code prescribes additional due diligence measures that should be observed by a significant social media intermediary (“SSMI”). The SSMI shall appoint a Chief Compliance Officer (“CCO”). Such officers shall be key managerial personnel or a senior employee of SSMI, who is also a resident in India. Such officers shall be responsible for ensuring that the provisions of the rules & regulations are complied with. Such officers shall be liable if the intermediary does not observe due diligence, since a significant part of their duty is to ensure that prohibited information in the form of third party information, data or communication link that is made available or hosted by the intermediary is removed, amongst other possibilities. In addition to appointing a CCO, and SSMI will appoint a nodal contact person. Such person shall ensure coordination with law enforcement agencies and other officers, 24*7 in order to take care of the requisitions or orders that are made by them. An SSMI shall also appoint a Resident Grievance Officer. Apart from appointing such personnel, the SSMI shall publish periodic compliance reports every month. Such a report shall mention the details of complaints that are received and action that is taken in response to such complaints. This report shall also mention the specific number of communication links/parts of information that the intermediary has removed or has disabled access to in pursuance of proactive monitoring that is conducted by using automated tools. If an SSMI removes or disables access to any information, data or communication link on its own accord, then it is required to ensure that it provides the user with a notification explaining the action that is being taken and the grounds or reason for taking such an action. Such intimation shall be provided to the user who has created, shared, disseminated or modified the information, data or communication link prior to the time when the intermediary is removing or disabling access to such information. Moreover, it shall ensure that such a user receives a reasonable opportunity to dispute the action that is being taken by the intermediary. Such users may also request for the reinstatement of access to such information, data or communication link that can be completed within a reasonable time. The Resident Grievance Officer of such intermediary shall maintain appropriate oversight of the mechanism for resolution of disputes between the user and the intermediary.

Judicial approach

Akansha and Bikram are friends. Akansha uploads a photo that Akansha and Bikram took together, on Facebook. Later once the photo was posted, Bikram did not like the comments from Akansha’s friend list. Bikram asked Akansha to remove the photo for this reason. Akansha hesitated to do so. In such a circumstance, what is the best way forward? Would a complaint about an inappropriate comment suffice? Or, would removing one another from their friend list be an appropriate remedy for such a grievance?

Shreya Singhal’s judgment deals with the issue of deciding the acceptable norm for communication in the online world. The case generally and specifically discussed at length the question of whether and the extent to which Section 66A of the Information Technology Act, 2000 is constitutional. The judgment does not explicitly deal with the role of intermediary in deciding the acceptable norm as such and in deciding its liability. Rather, it compares the online and offline world in terms of understanding the intent behind the “marketplace of ideas” and links it to answer the constitutional question. It was decided that there is no intelligible deferentia between the medium of print, broadcast and real-live speech as opposed to speech on the internet. Thus, new categories of criminal offences cannot be made on this ground.

The offence created by Section 66A is vague and quite broad. Thus, it is unconstitutional under the provisions of Article 19(1)(a) and is not saved by Article 19(2).
Section 69A and the Information Technology (Procedure & Safeguards for blocking for access of information by the public) rules, 2009 are constitutionally valid.
Section 79 is valid subject to Section 79(3)(b) being read as, “an intermediary upon receiving actual knowledge from a court order or on being notified by the appropriate government or by its agency that unlawful acts related to Article 19(2) are going to be committed, and then fails to expeditiously remove or disable access to such material.”
Information Technology “Intermediary Guidelines” Rules 2011 are valid subject to Rule 3(4) being read in a manner provided in the judgment.
Section 118(d) of the Kerala Police Act is struck down as being violative of Article 19(1)(a) and not saved by Article 19(2).

Legal analysis

There is a “value gap” between copyright holders and internet platforms such as Dailymotion, Youtube and Soundcloud. As per the music and entertainment industry, the right-holders in a user-generated content platform (“UGC platform”) complained that the law did not provide them with the ability to monetize in UGC platforms. Instead, the law merely provided them with liability exemptions for UGC platforms, lack of monitoring obligations and notice and takedown regime.

Content is adequately protected if infringing content is removed once notice is served, as opposed to entering into a licensing agreement. If one enters into a licensing agreement with content creators and thereby cannot avail of liability exemption provisions, then the intermediary may think of paying licensing fees to content creators in order to maintain competition in the market of UGC platforms. This shows the “value gap” in the audio-visual industry. The other rhetoric apart from “value gap” is “value grab”. This narrative argues that the internet is treated as a digital threat as opposed to being a digital opportunity space. As per Giancarlo, the empirical evidence and literature show that the digital platform economy has created value for content providers as opposed to creating a value gap that needs to be closed. On the topic of intermediary liability, two types of liabilities have emerged, namely primary liability and secondary liability. A hosting provider can still be protected even if it is not completely passive as long as it does not have knowledge or control over the data that is stored.

From the perspective of a European Union lawyer, it is important to assess liability issues from the framework of digital single market strategy (“DSMS”). DSMS focuses on four main issues, namely, “(1) cross border access to content; (2) text mining and data mining; (3) civil enforcement; and (4) role of internet service providers (“ISPs”).” The role of ISPs in distributing content raises questions about its role in safeguarding copyright-protected works, namely, are the creators being fairly remunerated? Does the current law on intermediary liability encourage the generation of content in the future? The content which is deemed to be illegal, i.e, child pornography, terrorist material and content that infringes upon intellectual property rights is not included in the ambit of “content” that the intermediary needs to distribute. The assessment of content is critical in interpreting the responsibility exercised by online intermediaries in the form of due diligence and duty of care. The topic of intermediary liability plays a critical role in identifying the causes for which the aggrieved party can argue that, it is not prudent for the internet service provider to take the leeway that it is merely acting as a hosting provider and/or access provider, and is thus, entitled to receiving the advertising revenues because it is not acting as a service provider, as such. A provision is said to provide a “safe harbour” when it does not require intermediaries to monitor the information that it transmits or stores. The intermediary does not actively seek facts or circumstances that are indicative of illegal activity.

From the context of intermediary liability, a progressive legislative endeavour in the form of court rulings may answer the following questions, namely:

What are the exceptions to forming a digital cross border environment? In simple words, this refers to the content that is required to be removed.
What is the exclusive right that is exercised by the intermediary? What are the issues faced by the intermediary when it links one content with another content? In what circumstances, the intermediary act as a news aggregator?
What cases necessitate the enforcement method of the “follow the money” strategy? Is it justified to apply this strategy in infringements that are commercial in nature?
Under what circumstances, should provisional and precautionary measures be applied? The provisional and precautionary measures are taken keeping in mind the effect of (1) injunctions in a cross border environment; (2) notice and actions that follow notice being served in a party; (3) “takedown and stay down” principle.
Is it always clear to identify that an intermediary is acting “technical, automatic and passive”? Do the new situations merit the re-categorization of intermediaries? If so, will the duties of care be different?
Is the “takedown and stay down” principle the same as monitoring prospectively for flagged content? Does a specific type of content require a specific notice and action procedure?
Will algorithmic tools be able to privatize law enforcement?

Conclusion

Section 79 of the IT Act, 2000 provides for exemption from liability, if the intermediary adheres to Section 79 (2). Thus, the legal issues associated with the liability of intermediaries are linked with its roles and responsibilities in preventing the dangers of the internet. The private parties pursue actions against intermediaries under the principles of tort law. For instance, credit card companies will prevent the processing of payments for the illegal sales of cigarettes over the internet. The other example relates to preventing the online sale of prescription drugs. To conclude, an intermediary can be shielded from liability if it adheres to Section 79 (3) of the IT Act, 2000.

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How to combat voyeurism in India

By

Rachit Garg

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November 16, 2021

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This article is penned down by Pranjali Aggarwal of the University Institute of Legal Studies, Panjab University, Chandigarh. This article deals with voyeurism, its origin and provisions in Indian law, and how to combat it.

Introduction

The newspapers nowadays are filled with excerpts revealing the reality of growing crime against women in India. Despite being provided the same fundamental rights as men and even some special provisions that allow positive discrimination for the upliftment of their status and to protect prejudices against them, still, women fall prey to such felonies. Voyeurism is one such offense against women that sometimes lays the basis for other major offenses. In India, the cases of voyeurism are rising every year. According to the NCRB report of 2019, the cases recorded were 2419 whereas it was 1393 in the year 2018. In Maharashtra, maximum cases were recorded followed by Delhi. In the year 2020, 144 complaints of voyeurism were filed with the National Commission for Women.

What is voyeurism

The word voyeur is derived from the French word ‘voir’, which comes from the Latin word ‘videre’ and both mean ‘to see’. Voyeurism is defined as a practice under which one gains sexual pleasure by secretly observing or watching others, either naked or engaged in any intimate or sexual activity like bathing, disrobing, etc or engaging in any activity that would be usually considered as ‘private’. The victims of voyeurism are not aware that they are being watched, recorded, or photographed as they believe themselves to be in a situation of complete privacy and another important factor is that they have not given any consent to such actions. The person committing voyeurism is generally called ‘voyeur’ or ‘peeping tom’.

Types of voyeurism

Initially, the term voyeurism was limited only to physically peeping into homes, bathrooms, or other private places through windows, doors, or peepholes to gaze at the person indulged in some intimate activity. But with the advent of technology, voyeurism is now committed through the use of electronic devices and electronic voyeurism has become the practice among the voyeurs. It has become easier and more convenient for the person to capture the intimate moments of the person without being physically present there. The hidden camera can be placed in changing rooms, bathrooms, or other such places to capture the victim in nude or obscene conditions. The voyeuristic content is being used as revenge porn as these recordings or photos are leaked and are used to blackmail the victim which harasses the victim mentally as well as physically.

Development of law on voyeurism in India

Before the year 2013, Indian law did not have stringent provisions to combat the growing offenses against women like rapes, stalking, acid attacks. But the Nirbhaya gang rape in December 2012 brought up the inadequacy and incompetency of Indian law to curb such violent incidents in India and punish the offenders and the government faced a lot of agitation and backlash after this unfortunate incident because the safety of women in India was at stake. Thus, some amendments were needed in Indian law regarding sexual offenses so that it is in consonance with the present-day circumstances. For this purpose a committee was set up under the chairmanship of former Chief Justice of India, J S Verma, which submitted its report on January 23, 2013, and the Criminal law (Amendment) Act, 2013 was passed based on these recommendations that introduced voyeurism as an offense in India under Section 354C of Indian Penal Code,1860 along with other amendments in the act. The concept of voyeurism is based on the doctrine of reasonable expectation of privacy.

The doctrine of reasonable expectation of privacy

Reasonable expectation of privacy refers to the circumstances in which a person has the right to privacy. In other words, the right to be left alone. Thus, if a person expects privacy but it is intruded unlawfully then the intruder can be held liable.

This doctrine was laid down in the case of Amerian Court in Katz v. United States (1967). The Court framed a two-prong test to ascertain whether this act can be considered private or not. The first test is that whether the person has an actual (subjective) expectation of privacy in that space. Secondly, whether the person’s expectation of privacy is (objectively) reasonable or not? If the answer to both the questions is affirmative then the person is considered to be in a private space and the privacy of such person could not be invaded.

In the case of R v. Jarvis (2019), this doctrine was applied in the case of voyeurism. In this case, the school teacher was charged with voyeurism as he was found guilty of recording photographs of the female students’ breasts and upper bodies while they were indulged in ordinary school-related activities, through the use of a camera pen. The question that arose, in this case, was whether the circumstances were such that the victims expected privacy or not. The Court in this case laid down circumstances that need to be adhered to while determining the question of reasonable expectation of privacy or not that are as follows:-

The location of the person when she is being recorded or observed.
Whether the alleged conduct amounted to observation or recording.
The consent of the victim for recording.
How was the recording done?
Content of the recording.
Any rules, regulations, or policies that governed the observation or recording.
Relationship between the person being recorded and the person who is recording.
The purpose behind such recording or observing.
Personal characteristics of the person who is being observed or recorded.

All these factors are not necessary to be present for considering the expectation of privacy. Moreover, in areas like washrooms, etc, the factors need not be applied as it is ordinarily understood that a person expects privacy in such places. In this case, the teacher was held liable as privacy does not depend on confined walls but consideration of all circumstances and consent of the person being recorded.

In the landmark case of K. Puttuswamy v. UOI (2017), Justice D. Y. Chandarchud has recognized this doctrine. He quoted that “While the legitimate expectation of privacy may vary from the intimate zone to the private zone and from the private to the public arenas, it is important to underscore that privacy is not lost or surrendered merely because the individual is in a public place. Privacy attaches to the person since it is an essential facet of the dignity of the human being.” Thus, the privacy of the person does not depend on the fact that whether it is a public or private area but on the fact that whether the person believes to be in the private space where there is no reasonable apprehension of being seen or not.

Even in the recent pegasus case, the Honorable Supreme Court remarked that besides the fact that the people live in the “information revolution” and their lives are portrayed digitally, still they have a reasonable expectation of privacy.

Provisions involved in the cases of voyeurism under Indian Law

Voyeurism is explicitly mentioned as an offense under Section 354 C of the Indian Penal Code, 1860. According to this Section, voyeurism is committed by a man if he watches or captures the photographs of a woman when she is engaged in a private act and she believes it to be under those circumstances where she can reasonably presume the fact that no one is watching her. The offender can either be the perpetrator himself or any other person who commits the act on the behalf of the perpetrator or the one who is spreading such pictures. In India, keeping the background and social situations in mind, the offense has not been made gender-neutral and can only be committed by a man against a woman. This Section is not against the principle of equality in the country as it comes under the umbrella of Article 15(3) of the Constitution of India and is a special provision for women.

For this Section, the word ‘private act’ has been explained under Explanation 1 of the Section which states that any act that is committed in the areas which are usually considered private or those circumstances in which the victim’s genitals, posterior, or breasts are exposed or covered only in underwear; or the victim is using the washroom or is engaged in a sexual act. Basically, all the acts that the person under normal circumstances will not engage in public.

Explanation 2 clarifies the situation in which though the victim agreed to the capture of the images or any act but she did not consent in the distribution or dissemination of her images to any other person and if such images are disseminated, then this act would be considered an offense under this section.

Punishments

If anyone is found guilty and is thus convicted under this Section then:-

He is punishable with imprisonment of either description of a minimum of one year which can extend up to three years and also liable for a fine if he is convicted for the first time.
But in case of second or subsequent conviction, the person is liable for the imprisonment of either description which can range from three years to seven years, and also for fine.

Electronic voyeurism

Electronic voyeurism has been introduced in India under the Information Technology Act, 2000 by the virtue of the IT Amendment Act, 2008 which came into force on 27 October 2009. The amendment is modeled based on Section 1801 of ‘is Video Voyeurism Prevention Act of 2004’, a federal law of the USA, and it strengthened the law against voyeurism in India. The amendment was made because of the advancement in technology and how the use of smartphones and an internet connection can pose a grave threat to the modesty and integrity of the women because the women can be recorded through such covert means (hidden cameras etc.) and she does not realize the fact. The offender even need not be in close proximity to the victim while committing the crime and thus sometimes the offenders easily escape the liability. The circulation of such obscene images worldwide with the help of just a click can also prove to be fatal and such incidents torment women. Moreover as stated in the case of KS Puttaswamy v. Union of India (2017), the right to privacy is one of the fundamental rights as it is enshrined under Article 21 ( right to life) so to protect invasion of privacy of any person through technological means, Section 66-E was incorporated in the IT Act, 2000 which encompasses all the acts like transmitting, recording, capturing, recording of obscenity and capturing a sexually explicit act and criminalizes them.

Section 66-E of IT Act, 2000

According to this provision if any person voluntarily i.e. intentionally or knowingly captures, publishes, or transmits the image of private areas of any person and person did not consent to any of the acts. This Act intrudes on the privacy of the victim and the offender is liable for imprisonment which can extend to three years or a fine up to Rs 2 lakh or with both.

Landmark judgments

In the case of State v. Shailesh (2019), Justice Susheel Bala Dagar held that voyeurism is a ridiculous type of enjoyment for men whereas it causes mental trauma to women. Such acts infringe the Right to privacy of women and she feels unsafe in the places which are generally meant to be safe for women. In this case, the Supreme Court reiterated the judgment of R. Rajgopal v. the State of Tamil Nadu (1995) and stated that the Right to Privacy also employs the ‘right of being left alone’

In the case of Rahul v. State (2020), the appeal was filed by the accused who was convicted by the trial court under Sections 376(2)(n), 354C, 506 of Indian Penal Code,1860 in the High Court. But the High Court upheld the decision of the trial court and the accused was convicted for the offense of rape and video graphing the same while clicking nude images of the victim.

In the case of State v. Unknown, 2017, it was held that to prove the case under Section 354, IPC the video taken by the accused should contain obscene footage.

In the case of Kalandi Charan Lenka v State of Orissa (2017) the accused was charged for the offenses under Sections 354-A / 354-D/ 465/ 469/ 506/ 507/ 509 of the I.P.C. read with Section 66-C/ 66-D/ 67/ 67-A of the Information Technology Act because he threatened the girl, made a fake profile in her name to sexually manipulate her and even published her obscene pictures because she rejected his marriage proposal. The accused was found prima facie guilty in all the cases and thus was convicted.

In the recent case, a male nurse of Sanjay Gandhi Institute of Trauma and Orthopaedics was booked under Section 354C, IPC because he was found recording the videos of fellow nurses while changing clothes in the changing room before going for an operation. The matter is still in consideration.

Issues related to the enforcement of law

Despite the amendments and introduction of laws to criminalize voyeurism, women in India are still subjected to such atrocities and suffer. Some of the reasons behind the lack of effectiveness of the law of voyeurism are:-

In some cases, the victim herself is not aware of the fact that her pictures are leaked or disseminated so no cases are filed against the offender.
The victims are often blackmailed regarding the circulation of such images on the internet which forces them to shut their mouths and suffer torture.
Victims sometimes do not file cases as they are concerned about their image and reputation in society.
Some victims of voyeurism are not even aware of the law present to deal with such instances.

And as our present law only probes and takes action against the offender when a complaint is filed, most of the cases are not reported so these offenders roam free to prey on another victim.

How to combat voyeurism

Loopholes in law should be justified

The law of voyeurism is still under development and there are major lacunas in it. Firstly, the definition does not include the morphed or photoshopped images or videos of the victim that are curated by the offender by transposing the face of the victim from the non-intimate photo to any obscene image or video. This will impact the victim gravely as any other voyeuristic content but does not fall under the purview of voyeurism. Secondly, the provision is not gender-neutral and does not recognize the fact that males can be victims of voyeurism too. Thus, these two loopholes need to be mended by the legislature so that offenders do not escape liability and cases of voyeurism can be curbed

Public awareness

The imperative step to curb cases of voyeurism is to create awareness among the people. All public, in general, should be apprised regarding laws on voyeurism so that not only the victim knows how to claim her right but also the potential perpetrator knows about the consequences that could be the result of such profane acts.

Periodic scrutiny by the agencies

The government can set up the agencies that will conduct regular inspections to search for any such hidden cameras or other devices used for the purpose of voyeurism.

Proper regulation of the content being uploaded

Cyber cells can be established that can locate such sites that publish voyeuristic content and action can be taken to remove such videos from cyberspace so that voyeurism is not promoted and the image of the victim is not tarnished.

Role of intermediaries

The voyeuristic content is uploaded online and such websites are usually hosted by intermediaries. The intermediary as per Section 2(1)(ua)(w) of the IT Act, 2000 refers to a person who on behalf of another person receives, stores or transmits that record or provides any services in respect of it. The intermediaries should be made liable so that such voyeuristic content can be easily removed. Though Section 79 of the IT Act, 2000 safeguards any intermediary for the content hosted or made accessible by them, still any person can take action against copyright infringement under Section 81 of the IT Act, 2000. Even as per Rule 3 (d) of the IT (Intermediary Guidelines) Rules, 2011, intermediaries need to be on guard while posting content on websites to ensure that content does not violate any trademark, copyright, patent laws, etc. As held in the case of My Space Inc. v. Super Cassettes Industries Ltd. (2011), Sections 79 and 81 of the IT Act, 2000 are to be interpreted harmoniously, and any infringing content should be taken down within 36 hours of receiving a complaint from the affected person.

This law is currently vague regarding the liability of the intermediaries in case of voyeuristic content and steps to be taken by the affected person to remove such content. The intermediaries should be made liable so that the publishing of such content is regularized and the content could be easily taken down from the website.

Maintenance of anonymity

Most of the victims do not approach the police because of the humiliation that could be faced by her if such obscene images would be leaked. So some measures should be developed by the government to ensure the anonymity of the victim which will make her fearless in filing cases.

Speedy disposal of the cases

The courts should ensure speedy disposal of these cases so that the victim is not harassed for a long period and the offender should be behind bars as soon as possible.

Proper counseling

Some offenders become obsessed with voyeurism and they find sexual pleasure by engaging in such acts. So they need to be properly counseled regarding this behavior and to help them to control their sexual urge. Psychotherapy, support groups, and medication could be put into use to curb such urges.

Fund women organization

The women organizations that work in the direction of women empowerment or help in the spread of awareness should be funded so that women are empowered about their rights and opportunities.

Conclusion

Voyeurism is emerging as a sex crime in India and the use of technology in the commission of such offenses has exacerbated the situation. The cyber-world is expanding day by day and so are the chances of its misuse because within a glimpse of seconds the images could reach millions of people, ruining the reputation of the victim. Voyeurism leaves unforgettable traumas for the victims as well as their families. As technology has advanced by miles, the laws in India should also be concrete enough to regulate such crimes against women. The government should take immediate actions to combat the issue of voyeurism so that no more lives are tormented by these sex-driven maniacs.

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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Business interruption vs. rent loss insurance

By

Diva Rai

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November 16, 2021

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business-owner-closed-sign-gettyimages-680x402 — Image source - https://al.st/3Dhuhlk

This article is written by Kavana Rao from Symbiosis Law School, Noida. This article gives an overview of Business Interruption Insurance policies and Rent Loss Insurance policies which have the most relevance in the present times.

Introduction

In recent times, many businesses have faced uncertain and unforeseen situations with the inability to operate their businesses. In this particular article, we shall see two alternatives to face this uncertainty, particularly in the case of landlords and tenants. Many tenants were and still are unable to pay rent to their landlords because of the Covid restrictions and the fall in their revenues. Coverage for such losses largely depends on the insurance policy terms, lease terms, the circumstance where loss has occurred or proposed legislation.

What is rent loss insurance

In situations when an unprecedented event occurs and the tenant is unable to pay rent, then there can be two outcomes with respect to the lease. One of the two of them is that the lease exempts the tenant to cease paying rent temporarily for the period of the uncertain event. In the present case, it is required of the landlord to compensate for the rent that it does not receive during the period of abatement. Rent loss is a means to cover the risk associated with the loss of rent. An example of one such situation is when there is an unprecedented event like an Emergency put in the country because of a war, and there is a total restriction in movement.

What is business interruption insurance

It can also happen that the lease may require the tenant to continue paying the rent despite the unprecedented event or casualty. In this circumstance, the tenant requires a source of funds it loses due to the disturbance in its business, to ensure that it can continue paying the rents. These are the losses that business interruption insurances are intended to cover.

A business income insurance policy primarily consists of an agreement by the insurer to pay for the actual loss of business income that the insured sustains due to the temporary suspension of operations during the period of an unprecedented event. For the purpose of loss of business income to be covered, the suspension of the operations must cause direct physical loss or damage to the insured property.

What are the perils covered

In order to understand the coverage of these insurances and to understand how it would respond to potential losses, it is essential for risk professionals to focus on certain key concepts.

Actual loss sustained

Business interruption coverage protects against an actual loss sustained by an insured as a result of direct physical loss or damage to the insured property by a peril that is not excluded from the policy. For example, fire, floods, theft, etc. The insurer is bound to pay only if the insured sustains an actual loss.

Business income

The insurer is often responsible for the reduction that arises as a result of the suspension of operations due to the physical loss to an insured’s premises. The insurer covers Net income that could have been earned by the insured and normal operating expenses incurred.

Period of restoration

Insurers will be liable for the loss of business income only during the period of restoration. The period of restoration is the length of time required to rebuild, repair or replace damaged property, and it begins when the damage occurs and ends when the property is repaired. It should also be noted that the property must be restored within a reasonable time.

Extra expense

A business interruption insurance can cover and provide coverage for extra expenses. The insurer covers these extra expenses that occur during the restoration period, as these extra expenses would not have been incurred had there been no physical loss.

The insurance also covers those extra expenses that are incurred to reduce the loss, as long as they do not exceed the loss itself.

Service interruption

Any kind of service interruption that is incurred due to the direct physical loss or damage which results in loss of business income will be covered by the business interruption insurance.

Interruption by civil or military authority

The business interruption coverage will also provide coverage to an insured for loss of business income it incurs during the time when access to its premises is prohibited by an order issued by the civil authority as a result of physical damage.

Contingent business interruption

Business interruption insurance also covers business income loss that is incurred due to the loss, damage or destruction of property owned by others. The insurer only covers this when the damage has happened on the insured’s premises.

Business interruption vs. rent loss insurance

Rent loss insurance is a way to cover the risk associated with the lost rent. However, the business interruption insurance merely covers those risks which cause physical damage to the premises. Rent loss Insurance fails to cover certain kinds of damages. For example, certain rent loss insurance does not cover water damage that has caused mould in the premises, as it was the landlord who failed to remedy the problem. One of the most significant facts about Rent loss insurance is that it pays the fair market rental value of the leased premises, which may be less than the amount of rent that the tenant is mostly obliged to pay under the lease.

Present day relevance of this issue

In the present times, with Covid-19 engulfing the world where it has not only affected the health of people but also affected businesses at large. Shops, restaurants, malls, and most commercial establishments were shut down around the world, deeply affecting their revenues. In such situations, the rent control insurance and the Business interruption insurance play a great role in retaining the premises for the tenants and retaining the tenants for the landlords.

It is essential for the landlords and tenants to ensure that they have these insurances, business interruption insurances in case of tenants to avoid non-payment of rents when they are ordered to pay and other expenses and Rent loss insurance incase of landlords to prevent loss of income when the tenants are unable to pay.

FCA v Arch Insurance (UK) Ltd and others [2021] UKSC 1

Facts

In the case of FCA v Arch Insurance (UK) Ltd and others (2021) UK’s Financial Conduct Authority, as the conduct regulator of insurers, placed a test case before the High Court based on a representative sample of insurance policy provisions and put forward arguments with the aim of attaining clarity of whether the losses occurred due to closure of operation during the Covid-19 lockdown and restrictions can be covered by the Business Interruption Insurance.

Issues

The primary issue dealt with in this case was whether the losses related to Covid -19 can be covered under the certain “non-damage” extensions to Business Interruption Policies.
The Court was also asked to observe whether there was a necessary causal link between the Covid-19 pandemic and the policyholders’ losses.

Supreme Court order

The UK Supreme Court gave its judgment on the appeal of the FCA’s business interruption insurance test case. The Court dismissed the main appeals by the insurers and allowed the FCA’s appeals. The judgment broadens the circumstances in which they may recover the losses. The court confirmed that the insurance can cover the losses under the disease clauses on the basis that all individual Covid-19 cases and the lockdown measures imposed were.

What are the clauses covered

Disease clause

Disease clauses are the ones that provide cover for businesses that are gravely affected by notifiable diseases, like an epidemic or a pandemic like Covid-19. For the disease clause to apply there must be losses because of the onset of a particular disease at or within a specified distance of the business premises.

Prevention of access clause

These are clauses, which in general provide cover for businesses that incur losses resulting from the intervention of the public authority which prevents or restrains the use or access to the business premises.

Hybrid clause

The Hybrid clause combines the elements of both the disease clause and the prevention clause.

Trends clause

Clauses which in general allow the business loss to be quantified by reference to how the performance would have been if the insured peril had not occurred.

Analysis

In the present case, the Court gave the correct interpretation of the disease clause. In the disease clause, there is a requirement for the occurrence of a notifiable disease within a specified vicinity of insured premises.

The Court observed that if there are multiple series of events and none of the events is sufficient on its own to cause that result, the claim can still succeed. Therefore, the policyholders will be able to get their loss due to Covid-19 covered under policies that contain disease clauses.

The Court also interpreted the denial of access clause as a more narrow approach. To apply the denial of access clause, there must be an emergency, incident, danger, or disturbance and when properly interpreted, the court notes that the wording of the clause provides a narrow localized cover and that action taken in response to Covid-19 would not be sufficient.

The FCA gave the final strike when they applied the causation and trends clause. The Supreme Court found that the trend clause issues should be considered so that the gross profit from earlier trading is adjusted, only to reflect circumstances that are unconnected with the perils that were insured and not those circumstances which are remotely linked to the insured peril. This ensures that the trend clause is construed consistently and the prima facie provided by the insuring clause is not taken away.

Conclusion

Commercial landlords and tenants should consider whether their property insurance and other insurance policies cover lost rent and other coronavirus-related business interruptions as the COVID-19 pandemic continues to disrupt their ability to collect and pay rent due to tenants’ inability to operate and produce income from their leased premises.

It is important that the landlords and tenants document all the Covid-19 related events and conditions which affected their operations to notify and have sufficient proof to pursue coverage for their losses.

References

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A critical study on the issue of harassment by recovery agents

By

Rachit Garg

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November 16, 2021

0

This article is written by Nishtha Garhwal, a student of Alliance School of Law, Bangalore. The article tries to study the coercive tactics that recovery agents adopt in order to collect the payments owed by a client and the remedies available to such a client against harassment.

Table of Contents

Introduction

Recovery agents are hired by a bank or a financial institution in order to collect the installments or payments due for a charge owed by the clients to the bank or financial institution. These recovery agents are not a party to the original contract (that is between the financial institution and the client). They are thus considered a third party to the contract.

There are many instances where borrowers have committed suicide because of the humiliation faced in front of family members and neighbours. Borrowers not just face threatening calls from these agents but also face actual damages. One such case is of Telangana where a 23-year-old student hanged himself because of being harassed as he was unable to repay the loan.

There are plenty of cases in India regarding recovery agents’ illegal and oppressive conduct with an intention to benefit the bank or financial institution by collecting the pending dues from its clients. Due to such conduct, there exists a fear of recovery agents in India.

Harassment by recovery agents

For a long time, recovery agents have threatened and caused mental anguish to the borrowers who owe payment to the bank or financial institution. During the Covid-19 crisis, there has been a rise in the cases of recovery agents utilising coercive and oppressive tactics in order to collect payment dues. There is a fear among the lenders of the surge in Non-Performing Assets (NPA) because of the stress faced financially by the borrowers in the Covid crisis.

In the case of ICICI Bank Ltd. v. Prakash Kaur and Ors.(2007), a loan was taken by the Petitioner in order to purchase a car and certain defaults were committed by him in repayment. As a consequence of this, the vehicle with the Petitioner was taken away from the Petitioner by force through employing musclemen. The Court, in this case, gave the ruling that neither force can be utilized nor musclemen or hooligans can be hired by a private or nationalized bank in order to recover the amount of a loan.

What is and is not considered harassment by a lender

Any of the following things done by a lender is deemed to be harassment.

Lender attempting to approach the borrower multiple times on each day.
Using relatives, neighbors, or friends of the borrower in order to spread the message about the borrower’s debts.
Humiliating the borrower in front of the public.
Using fake logos or forms to give an impression that they are official, for example sending letters to the borrower that give an impression that they represent court forms.
Contacting relatives or friends of the borrower continuously.
Pressurizing the borrower to sell his home.
Attempting to seek the borrower on a social networking site.

In the case of ICICI Bank v. Shanti Devi Sharma and Ors. (2008), the Appellant’s son was humiliated and threatened before his family and neighbors by the recovery agents appointed by the bank to recover the amount he took in order to buy a motorcycle which resulted in the son committing suicide. The Court in this case gave the judgment that the deceased was prompted to commit suicide because of the humiliation faced by him in front of his family and neighbors by the bank’s agents and it was held that banks are not permitted to hire and use musclemen and hooligans for recovering loans from the defaulters.

In a judgement given by the Kerala High court in the case of Smart Security Secret Service Agency v. SBI (2016), it was ruled that the utilisation of musclemen for the recovery of a due amount would lead to lawlessness in a democratic country like India. Therefore, it was held that the application of solid arm strategies in order to recover credit by a bank or financial institution is opposed to public policy and therefore, is unlawful. The financial institutions were guided to follow the due process of law in an authorised way.

However, not all the tactics used by a lender are considered harassment and a lender is allowed to get the amount owed in some way. If a lender sends installment updates and demands, calls at customer’s home at a reasonable time, or initiates a court motion, it won’t be considered harassment, and the lender is permitted to adopt these measures to recover the due payment.

Guidelines for the protection of borrowers from the recovery agents

A Fair Practice Code has been laid down by the Banking Codes and Standards Board of India (BCSBI) which is an autonomous banking industry watchdog that seeks to provide protection to the consumers of the Indian banking services. As per the BCSBI’s Code of Customer Rights, the recovery agents cannot visit a borrower before announcing and if they want to meet a borrower, they must inform the borrower to decide the place of meeting. During the meeting, the recovery agent must interact with the borrower in a civil manner and respect their privacy. A letter of authorization from the bank must be brought by the recovery agent for the meeting. In addition to this, the recovery agents are only allowed to contact the borrower between 7 AM to 7 PM.

In case the borrower cannot be contacted, such a borrower’s friends, relatives or neighbors can be approached by the recovery agent. The duty to keep updating the contact details with the lender is upon the borrower. As per the BCSBI’s Code of Customer Rights, lenders should inform the borrower before beginning the recovery proceedings and the banks are also supposed to provide the name of the recovery agent to the borrower who has been hired to handle the case.

The Reserve Bank of India has also laid down certain guidelines to define what can and cannot be done by a recovery agent and these guidelines must be followed by all banking and financial institutions. As per this, if any grievance has been raised by a customer, recovery cases cannot be forwarded by the bank to a recovery agency till the time the grievance is settled.. Coercive tactics are not supposed to be utilized by the lenders for recovery. For any action by the recovery agents or their behavior, the banks are held responsible. Thus, it is necessary for the banks and financial institutions to ensure that their agents don’t violate the RBI guidelines.

The recovery agents are supposed to record and maintain the calls with the borrower so that they can be used for investigation by the financial institution in case a customer makes a complaint of harassment or threatening calls by recovery agents.

Although several norms have been laid down by RBI to deter banks from delegating the recovery process to the recovery agents, these agents are still hired by the banks.

Legal remedies available to the defaulter in case of harassment by recovery agents

The following are the remedies that the defaulter can seek in case of harassment by the recovery agents.

A complaint can be filed by the defaulter against the bank and recovery office at the police station under Section 506 of the Indian Penal Code, 1860 which is about criminal intimidation. If vulgar language has been used by a recovery agent against a woman, an FIR can be lodged under Section 509 of the IPC. In case the police station does not register an FIR or take any action, the Magistrate can be approached and a complaint can be made under Section 156 (3) of the Code of Criminal Procedure, 1973.
A civil injunction suit can be filed by the defaulter in the civil court against the bank and recovery organization with an ad-interim relief.
An objection can be filed by the defaulter with the Reserve Bank of India. With a purpose to regulate the approach towards defaulters, the RBI has laid down certain norms for the conduct of recovery agents after receiving some objections from the public and witnessing harassment cases by the recovery agents. Thus, the organization can be contacted and a legal complaint can be filed if the defaulter feels that they have been harassed.
A trespass objection can be raised in the form of a complaint about disregarding the right of an individual if recovery agents of the bank without consent enter a defaulter’s home illegally.
A case of extortion can be filed if the money has been recovered forcefully from the defaulter by the recovery agents. The banks will be vicariously held liable for the conduct of its agents.
Generally, every bank has a complaint department that the clients can approach to raise a grievance. Thus, the defaulter can register a complaint with the bank. After that, there is a thirty day waiting period for the client to get an answer or for the issue to be tackled.
In case the bank does not respond to the grievance within the specified time, the banking ombudsman can be approached by the defaulter. The individuals for redressing the grievances by the clients are appointed by RBI as a senior authority. The complaints in relation to credit cards are filed before the ombudsman whose jurisdiction lies within the billing address of the client. The banking ombudsman needs to make a settlement between the bank and the client and also give a legally binding decision.

Legal remedies available to banks and Non-banking Financial Company (NBFCs) for credit recovery

The general laws, for instance, the Indian Contract Act, 1872, the Transfer of Property Act, 1882, the Specific Relief Act, 1963, and so on apply to all the banking transactions depending upon the nature of the transaction as an agreement is formed between the bank and the borrower when the credit is taken from the bank.

An Original Application (OA) to the Debt Recovery Tribunal can be utilized by a bank or financial institution against the defaulter for the recovery of the debt. The right to the implementation of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act, 2002) is reserved with a secured lender.

If the amount of Non-Performing Assets (NPA) crosses the mark of INR 1 Lakh and the account of NPA credit surpasses the principal interest by 20%, then the provisions given under the SARFAESI Act can be applied. The Act permits banks or financial institutions to recover credits through auctioning the business or private properties of the defaulters.

An ordinary money suit can be filed by a moneylender for the recovery of a pending amount from the defaulting borrower.

Legal remedies to corporates for advance recovery

Some general laws can be applied to all corporate transactions depending upon the nature of the transaction as an agreement is formed between the company and the borrower when the amount is borrowed.

Legal moves can be taken by a company against the borrower in case such a borrower neglects to repay the borrowed amount. Under Order 37 of the Code of Civil Procedure, 1908, a summary suit can be instituted in a competent court.

In addition to this, under the Arbitration and Conciliation Act, 1996, arbitration can be sought for the purpose of settlement outside the court.

Asset Reconstruction Companies (ARCs)

Although instances of harassment by the recovery agents are prevalent in the country, under the Asset Reconstruction Companies (ARCs), certain rules have been issued by RBI according to which a Fair Practice Code has been established. Thus, as per this, borrowers cannot be disturbed by the recovery agents, and a complaint redressal system has also been established so that genuine objections can be resolved quickly. In addition to this, the number and name of the assigned complaint redressal official need to be shared by the ARCs with the borrowers.

The role of ACR is to make sure that proper training of the recovery agents to handle their responsibilities with sensitivity happens. The recovery agents must be sensitive to the privacy of the client’s information. The information that is gathered by ARCs must not be leaked unless the law requires the disclosure of such information or if the client has given consent to it. The recovery agents must not indulge in any uncivilised and unlawful way of recovering debts from the clients. The recovery agents must adhere to the guidelines as there are many provisions through which a client can seek redressal and set the liability of the bank or the financial institution in case they have been harassed.

Conclusion

The banking system and corporate business play a crucial role in an economy. If the borrowed amount is not recovered, it reduces the capacity of banks to lend and therefore, hinders the reuse of assets. The three primary functions of a bank or a corporate business include the mobilization of the available resources, their arrangement, and the re-utilization of resources.

Thus, if the borrowed amount is not recovered, it hinders all these areas of function. Even the honest borrowers have to suffer because of this as it also hinders the capacity of the bank to restore advances to financial institutions. The recovery of credit on time is crucial for the proper working of a corporate 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.

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Transfer of land under Section 43 and 63 of the Bombay Tenancy and Agricultural Lands Act, 1948

By

Diva Rai

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November 16, 2021

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This article is written by Kavana Rao from Symbiosis Law School, Noida. This article gives an overview of Section 43 and 63 of the Bombay Tenancy Act and a case analysis of the Vinodchandra Sakarlal Kapadia v. State Of Gujarat And Ors. Tenancy Act and Agricultural Lands Act, 1948.

Table of Contents

Introduction

There is a mass migration of the rural population into the urban cities in search of better employment opportunities, this has led to a large loss in the agricultural lands in the villages which then gets acquired by people from non-agricultural backgrounds leading to the urbanization of the villages. This puts the agriculture community at threat.

Section 43

Primarily Section 43 applies restrictions on the transfer of land purchased or sold under the Bombay Tenancy Act and Agricultural Lands Act, 1948. The section gives that no land purchased or sold to any person, shall be transferred by sale, gift, exchange, mortgage, lease, or assignment or partitioned without taking the permission of the Collector. The main purpose of Section 43 is that it ensures the protection of the persons belonging to the disadvantaged agricultural groups and gives them the right of purchase upon them.

Section 63

Section 63 present in Chapter V of the Bombay Tenancy Act and Agricultural Lands Act, deals with the restrictions of transfers of agricultural lands.

Section 63 of the Act gives that the transfer of property by sale, gift, exchange, or lease of any land or interest therein is not valid if that person is not an agriculturist or who is not an agricultural laborer. In addition to being an agriculturist or an agricultural laborer, their landholdings should not exceed two-thirds of the ceiling area determined.

If the Collector or an officer grants permission by the State Government, then he or she may grant permission for such transactions in accordance with the conditions prescribed.

The principal reason for the conferral of ownership rights only upon a cultivating tenant was to ensure that the cultivators be protected, conferring the right of purchase upon the cultivators and to ensure that there is a direct relationship between the cultivators and the land. Section 63 protects the farmlands and the rights of the cultivators. The law acts as an antidote against “absentee landlordism”. It protects naive and gullible persons from disadvantaged categories from “gifting” cultivable land to non-agriculturists, through a Will to be used for other purposes.

By the Maharashtra Act No,1 of 2016, Section 63 was amended to include a subsection and proviso. By the said amendment the bar for transfer of Agricultural land shall not apply to land situated within the limits of a Municipal Corporation or Municipal Council. It will also not apply if the land is within the jurisdiction of the Special Planning Authority or New Town Development Authority and if the land is allocated to residential, commercial, industrial, or any other Non- Agricultural use in the draft of the final Regional Plan or Town Planning Scheme.

Although the bar was for the transfer of agricultural lands was removed, yet there are proviso which puts conditions of such transfers, they are as such:

The first proviso provides that the land which is transferred for non-agricultural purposes like residential, commercial, and industrial, shall be put to such use within the period of five years from the date of transfer.
The second proviso provides that if the land is not put to use for non-agricultural purposes for five years from the date of transfer, then the Collector on the non-payment of non-utilization charges @ 2% of the market value can grant a further extension of five years.
If the land is not put to non-agricultural use within the time period, then the Collector shall resume the land after giving one month’s notice to the defaulting transferee. The land resumed shall be vesting with the Government.
If the original owner of the land fails to accept the offer to purchase the land within ninety days or, having accepted the offer, fails to deposit the purchase price, then the Collector shall auction the land.
If the transferee is unable to utilize the land fully or partly for non-agricultural use permissible in the draft or final Development Plan or Town Planning Scheme and plans to sell the land before the expiry of ten years, he is authorized to do it, but with the prior permission of the Collector, for the remaining period of 10 years, on payment of deposit transfer charges @ 25% of the market value of such land as per Ready Reckoner.

Bequeathing land under the Bombay Tenancy and the Agricultural Lands Act

Bequeath is to give or leave by will, especially used in the case of personal property. Under the Bombay Tenancy and Agricultural Lands Act, an agriculturist cannot part with his cultivable or agricultural property or land to an agriculturist through a will. This is given in the Sections 43 and 63 of the Bombay Tenancy and Agricultural Lands Act, 1948.

In Section 63 it is explicitly mentioned that there should be no transfer of property in the form of gifts to a non-agriculturist party. Transfer of land as a gift implies bequeathing. Therefore bequeathing agricultural land to a non-agriculturist will not be permitted. Such a transaction will not be considered valid.

Section 43 debars the transfer of property through sale, lease, mortgage, and gift to another party without the prior permission of the Collector. The Collector cannot grant permission as the transfer of property belonging to an agriculturist cannot be transferred to a non-cultivator despite the transaction being through a gift deed.

Vinodchandra Sakarlal Kapadia v. State of Gujarat and ors (2020)

This case consisted of a 3 judge bench composed of UU Lalit, Indu Malhotra, and AS Bopanna. These appeals arose out of a common judgment that was passed by the Division Bench of the Gujarat High Court at Ahmedabad.

Facts

Mr. Samubhai Budhiabhai was a tenant and the cultivating land was in his possession. He was also the testator and later became the deemed purchaser of the said land as per the Bombay Tenancy and Agricultural Lands Act, 1948. The testator executed a registered will in favor of the appellant where the said agricultural land was being bequeathed to the appellant. After the testator’s death, the appellant’s name was updated on the records as the owner of the land. Soon, the revenue authorities found out that the appellant was not an agriculturist and therefore against him under proceedings Section 84C of the Act. Despite furnishing a no-objection certificate from the legal heirs of the testator, it was held that the bequest was invalid and contrary to the provisions of Section 63 of the Act and hence declared that the said land vested in the State without any encumbrances.

On an appeal, the Deputy Collector affirmed the decision of the Additional Mamlatdar, but later a revision application was then preferred before the Gujarat Revenue Tribunal which allowed the revision and quashed the orders by observing that disposal by way of a Will would not amount to transfer and would not be hit by Section 63 of the Act. The State, unsatisfied and aggrieved by the decision approached the Gujarat High Court where the matter was referred to the Division Bench and the Division Bench interpreted the scope and ambit of Section 43 and 63 of the Act and held that the bequest was invalid and not in accordance with the provisions of the Act. Later, the Appellant, unsatisfied by the order, approached the Supreme Court with an appeal.

Issues

The issues dealt with by the Court, in this case, is are as follows:

Whether Section 63 debars an agriculturist from parting with his agricultural land to a non-agriculturist through a “Will”.
Whether Section 43(1) of the Tenancy Act restricts transfers of any land or interest purchased by the tenant or sold to any person through the execution of a Will by way of testamentary disposition.

Arguments

Relying on the case of Mahadeo Ganpat Sawarkar v. Shakuntalabai Vishwasrao, (2003) it was contended that, since the word “assignment” does not occur in Section 63, agricultural land can be transferred to non-agriculturist without the need for temporary disposition. It is also contended that the words like ‘ sale’, ‘gift’, ‘exchange’ and ‘ mortgage’ in Section 43 and 63 suggest transfers by a living person and the expression ‘assignment’ under Section 43 must be interpreted with the previously used expressions appearing in that section. It is also contended that the expression ‘assignment’ does not even appear in Section 43, thus allowing the transfer without any restrictions.

The State contended that the main motivation for granting ownership rights to only cultivating tenants was to ensure that the actual tillers and cultivators were protected and provided with ownership rights on payment of nominal charges. In addition to this, it was also contended that according to Section 63 of the Act transfer to a non-agriculturist is not permissible and further any agriculturist holding land beyond his or her ceiling limits is not allowed.

Order

The Supreme Court upheld the decision of the Division Bench of the High Court of Gujarat and also held that the testamentary dispositions come within the ambit of the word ‘assignment’ under Section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948 and hence the appeal was dismissed.

The Court observed that, after referring to the provisions given under Section 43 and other allied provisions, it can be concluded that the main intent of those provisions is to ensure that the legislative scheme grants protection to persons from disadvantaged groups and confer the right of purchase upon them at nominal costs. The Court cited the case of Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawal (1986), which held that a tenancy governed by a statute prohibiting assignment could not be transferred to a total stranger by will. It also asserted that the expression ‘assignment’ includes testamentary disposition. If testamentary disposition is not covered under the ambit of Section 43, then a naive person can be made to execute a testament in favor of a person who may not have fulfilled the requirements and yet be eligible to be a transferee under the law. This would have distorted the purpose of the provision, which is to protect the interest of the cultivators.

Contravening provisions of the Bombay Tenancy and the Agricultural Lands Act with Indian Succession Act

The concept of succession falls under the Indian Succession Act, 1925. Since it is a part of the Concurrent List, i.e in the Union and the State list, if there is any prohibition in the State, in the absence of any assent of the President, then the state order would be void. It is further submitted that the State Legislature must be taken to be fully aware of this legal position and, therefore, while construing the term ‘assignment’ due regard to this aspect must also be given.

Testamentary succession or disposition of wills as per the Indian Succession Act refers to a case when the deceased leaves behind a will and the devolution of property take place as per his or her wishes as expressed in the will, but according to the Bombay Tenancy Act, the devolution of property cannot take place always as per the wishes of the testator. If the testator owns agricultural land, then the land cannot be devolved to non-agriculturist as per Section 63 of the Bombay Tenancy Act.

Conclusion

To sum up, by understanding the case brief of Vinodchandra Sakarlal Kapadia v. State of Gujarat and Ors, one comes to understand the interpretation of Section 43 and Section 63 of the Bombay Tenancy Act. One understands the importance that the legislature gives to these laws to protect the interest of the cultivators and also prevent the shift of agricultural lands to non-agricultural lands.

References

Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawal, (1986) 1 SCC 571.
Vinodchandra Sakarlal Kapadia v. State Of Gujarat And Ors, Civil Appeal No. 2573 of 2020
https://www.thehindu.com/news/national/aim-of-farmland-statutes-is-to-protect-disadvantaged-categories-sc/article31940872.ece
https://www.legallyindia.com/views/entry/amendment-to-section-63-and-63-1a-of-the-maharashtra-tenancy-and-agricultural-lands-act-mah-1-of-2016-a-comparative-study

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All you need to know about extended workplace under POSH laws

By

Shoronya Banerjee

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November 16, 2021

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This article is written by Goran Trbojević, pursuing Certificate Course in Prevention of Sexual Harassment at the Workplace from Lawsikho. The article has been edited by Zigishu Singh (Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).

Table of Contents

Introduction

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter referred to as POSH Act) has been brought to provide protection against sexual harassment of women at the workplace. This act defines the workplace as it is not always obvious what falls under that term. While the place of work generally appears clear and unambiguous, some circumstances require the term to be extended to all other places that the work process is connected to. The way we communicate and the way we operate our business tasks have changed in recent years. Such changes are happening fast due to the development of technical solutions in the digital era. The term ‘workplace’ can be best explained through examples from real-life situations and court cases.

Workplace as defined in POSH Act

The workplace is defined in the POSH Act in Chapter I, Section 2(o). In order to better understand it, here are some situation scenarios per each subsection as examples.

Subsection (i): any department, organisation, undertaking, establishment, enterprise, institution, office, branch or unit which is established, owned, controlled or wholly or substantially financed by funds provided directly or indirectly by the appropriate Government or the local authority or a Government company or a corporation or a co-operative society.

For example, a female apprentice that works for the Ministry of Finance is sexually harassed by the deputy minister. It happens in his office in the Ministry building.

Subsection (ii): any private sector organisation or a private venture, undertaking, enterprise, institution, establishment, society, trust, non-governmental organisation, unit or service provider carrying on commercial, professional, vocational, educational, entertainment, industrial, health services or financial activities including production, supply, sale, distribution or service;

Example: a male Sales Manager from Delhi is visiting a company’s branch office in Mumbai. He sexually harasses the Branch Office Manager who is a female, in her office.

Subsection (iii): hospitals or nursing homes.

For example, a female doctor works in a private clinic. After her shift, on her way home, she is sexually harassed by her male colleague at the clinic´s parking lot.

Subsection (iv): any sports institute, stadium, sports complex or competition or games venue, whether residential or not used for training, sports or other activities relating thereto.

For example, a female athlete is sexually harassed by her male coach. This happens after a workout in the gym locker room.

Subsection (v): any place visited by the employee arising out of or during the course of employment including transportation by the employer for undertaking such journey.

For example, a company throws a party for its employees. The party is held in a private restaurant. A male employee addresses his female colleague and makes vulgar comments.

Subsection (vi): a dwelling place or a house.

For example, a woman works as a housemaid. Her employer has been harassing her by repeatedly making sexual gestures at her.

The term workplace also includes the unorganized sector where the number of workers is less than ten (such as self-employed workers and individually owned enterprises).

As can be seen, the law includes any place visited by the employee as a workplace, as long as it arises out of or during the course of employment, including accommodation and transportation provided by the employer.

The most common examples of workplace extensions

The list of all the possible extensions of the workplace is not something that is final and definitive. With the development of business processes, technological tools and always changing life circumstances that list will be constantly expanding. In the present time, some of the not-so-obvious work environments can be singled out as the most common examples. They are defined in the POSH Act in Chapter I, Section 2(o), Subsection (v).

a) Team-buildings and incentives

With the aim of optimising the teamwork and individual skills of their employees, employers often organize activities out of the workplace for team building that includes group challenges, team sports tournaments, puzzle-solving, etc. An incentive is traditionally in the shape of a prize, travel, or outing, usually given as a reward after a team has been particularly productive at work. Such outing destinations are organized and managed by the employers and attended during the course of employment. As such, they fall under the term of the workplace, as well as:

b) Seminars, conferences and business trips

A part of a woman’s job is attending all kinds of events that include extra education related to her profession – whether she is an attendant or attendee. Meetings and contracting in other towns with clients and partners are common things. At all these places, outside the premises of the employer, women can be exposed to all kinds of unpleasant situations.

c) Taxi services

Transportation to the workplace provided by the employer for the employee is not obligatory. However, if that is the case, the employer holds responsibility if passengers are harassed by the driver. Since the safety of the women passengers commuting to work has to be ensured and the insides of the vehicle represent an extension of the workplace, this is also a scenario that is covered by the POSH Act.

d) Cyberspace

Business activities are often conducted through video or audio conferences. If during such a conference any incident of harassment takes place, the aggrieved woman can file a charge as these situations are covered by the POSH Act. We´ll say something more about this in the next paragraph, for this topic deserves some more space due to the rise of the use of digital technologies in recent years.

New normal : work from home as extended workplace

Due to the COVID-19 pandemic, offices have moved into employees´ homes over the past year. Video meetings and conferences began to take place on Zoom, Teams, and other similar digital platforms with participants attending online while sitting in their living rooms. Although this rose out of necessity in tough times, companies soon realized this could work out as a long-term solution. Cutting costs seemed particularly appealing to them. For example, in 2020 India’s largest IT service firm Tata Consultancy Services had decided to prolong the measure of working from home to the year 2025 for 75% of their workforce.

In such circumstances, one could imagine that number of workplace harassment cases would dropdown. Instead, the acts of harassment only transformed and began to take place on virtual mediums. A survey conducted by the Network of Women in Media, India, and Gender at Work, found that over 33% of its respondents from the media industry had experienced some form of sexual harassment at their workplaces.

Even before bringing the POSH Act in 2013, it was clear that work at/from home comes under the definition of workplace. In 2008 in the case Saurabh Kumar Mallick vs. Comptroller & Auditor General of India, the Delhi High Court stated that the workplace is not limited to a physical office. To dismiss all the doubts there is Section 2(o)(vi) of the POSH Act, where the term workplace includes dwelling place or a house. Yes, it was enlisted with domestic workers and maids in mind, but it is clear that it covers work from home as the norm of the present time. The inclusivity of the definition of the workplace under the POSH Act had been highlighted by the Sikkim High Court in the case of Silajit Guha vs. Sikkim University & Ors.

The use of social networks such as WhatsApp, Messenger, Viber, Facebook, etc. is not excluded from the scope of the workplace. Sending messages in any form (textual, graphic, video, or audio) is by no means less susceptible to consideration in assessing a colleague´s harassment. This opinion was held by the Delhi High Court in the case of Jahid Ali vs. Union of India.

Conclusion

There is consensus among employers, employees, and legal practitioners that a workplace is not only limited to the physical space of work. The consensus is global: in order to eliminate gender-based violence and harassment at work International Labour Organization Convention 190 (C190) on June 25, 2021, brought Recommendation 206. It is the first global treaty on violence and harassment in the field of work. By the Convention, the concept of “the world of work“ is expanded beyond the physical workplace.

In that light, it can be concluded that the POSH Act interprets the term work in a proper way and leaves room for its extension and additional interpretations. It takes into consideration new norms of performing business tasks and as such serves as a good tool in preventing women from facing sexual harassment at work. In the case of litigation, the aggrieved woman may consider herself well protected under the POSH Act even in cases where the physical boundaries of the workplace are unclear. The practice has shown that the foundations of this Act are well laid and it can cope well with the challenges of changing circumstances.

References

1) The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 https://legislative.gov.in/sites/default/files/A2013-14.pdf

2) Khetarpal S.: „Post-COVID, 75% of 4.5 lakh TCS employees to permanently work from home by ’25; from 20%“, BusinessToday.In, 2020, 11 Jun

https://www.businesstoday.in/latest/corporate/story/post-coronavirus-75-percent-of-3-5-lakh-tcs-employees-permanently-work-from-home-up-from-20-percent-256494-2020-04-25

3) Ranalvi M.: „Act now to stop harassment in the virtual workplace“, Livemint.com, 2020, 8 Jul

https://www.livemint.com/opinion/online-views/act-now-to-stop-harassment-in-the-virtual-workplace-11594217747525.html

4) Bhasin & Co.: „Workplace defined in sexual harassment case“, India Business Law Journal,

2008, 26 Dec

https://law.asia/workplace-defined-in-sexual-harassment-case/

5) Sikkim High Court, Silajit Guha vs Sikkim University And Ors on 3 July 2021

https://indiankanoon.org/doc/10859819/

6) Delhi High Court, Jahid Ali vs Union Of India & Ors. on 27 September 2017

https://indiankanoon.org/doc/179353262/

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Securing the attendance of a person under the Code of Criminal Procedure, 1973

By

Shoronya Banerjee

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November 16, 2021

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This article has been written by Gunjeet Singh Bagga, pursuing the Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho. This article has been edited by Prashant Baviskar (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).

Table of Contents

Introduction

A well-settled principle of Common Law as incorporated into the Indian Code of Criminal Procedure, 1973 is that a trial ought to be conducted in presence of the accused person. The accused’s presence gives him a fair chance to understand the prosecution’s case against him and prepare his defence accordingly. The CrPC expressly provides that all evidence in a trial shall be taken in the accused’s presence and the accused has to seek leave of the court to not attend a trial against him. In some cases, the Trial court may itself direct the accused to not appear before the court and in other cases, the Trial Court may direct the personal attendance of the accused before it.

The Supreme Court in Bhaskar Industries vs. Bhiwani Denim & Apparel Ltd observed that an accused’s presence is mandated in a trial to enable the court to proceed with the trial. The SC held that exemption from appearance under Section 317 CrPC shall only be given if it is in the interests of justice and the accused gives an undertaking that he/ she will not dispute their identity during the trial and the accused’s counsel has no objection in taking evidence while he is not present in court.

There are 4 methods to secure the attendance of a person under CrPC –

(1) Issuing summons,

(2) Issuing warrants for arrest,

(3) Proclamation, attachment, and selling of the property,

(4) Executing bond for attendance in Court under Section 88 where the person against whom summons or warrants were to be issued was present in court.

There are 3 essential requirements under Section 204 CrPC before any summons or warrants can be issued against any person except under Section 87 CrPC:

A list of prosecution witnesses has to be filed by the prosecution [vide Section 204(2)]
If the proceedings are instituted upon a written complaint, then the summons/ warrants must be accompanied by it [vide Section 204(3)]
Process Fee or any other fees prescribed shall be paid [vide Section 204(4)]

The Magistrate, while hearing prosecution’s evidence, may upon prosecution’s application, issue summons to a witness. Similarly, the Magistrate may issue summons to a witness upon the accused’s application after he has stated his defense or after the accused pleads guilty.

Summons

Section 2(x) of CrPC defines a warrant case is a case in relation to an offence punishable with death, life imprisonment or imprisonment of more than 2 years while Section 2(w) defines a summons case as a case other than a warrant case.

Summons may be defined as a written order of the court requiring the attendance of the person so summoned in the court. Summons are issued ordinarily in all summons cases [vide Section 204(1)(a)] and in warrant cases at the court’s discretion [vide Section 204(1)(b)]. They may be served through a police officer, a court officer, or any other public servant. If the person summoned cannot be found, the summons may be served to an adult male member of the family residing with the person so summoned.

Section 63, 65-69 of CrPC provides for different modes of service of summons depending upon varied circumstances including but not limited to substituted service, service to corporate bodies & societies, service on govt. servants, service outside local limits, etc.

The Supreme Court, in Bhushan Kumar vs. State, held that there is no requirement of writing a reasoned order while summoning a person but the magistrate ought to have applied his mind to the materials placed before him.

Warrant

A warrant is an order by the Magistrate to arrest a person, including a witness, and bring him before the court. It is issued ordinarily in all warrant cases and even in summons cases if deemed necessary by the court [vide Section 204(1)(b)]. A warrant may also be issued in case of breach of bond under Section 88 CrPC which was executed for the appearance of a person who was present in court when the bond was executed [vide Section 89].

Under Section 87 a magistrate, through a reasoned order, may issue a warrant after issuing summons if the magistrate has reason to believe that a person has absconded and will not obey the summons or that a person fails to appear in court without any reasonable excuse while it is proved that the summons was duly served upon him.

A warrant of arrest is directed to a police officer or police officers for executionand it may be executed anywhere in India. The person executing the warrant has to show it to the arrested person if demanded and also state the reason for his arrest. It is within the discretion of the magistrate to make the arrest warrant either bailable or non-bailable.

In Inder Mohan Goswami vs. State of Uttaranchal, The Supreme Court held that a court should balance both personal liberty & societal interest before issuing warrants and should properly scrutinize facts and apply its mind to the facts of the case because of the extremely serious consequence of curtailment of personal liberty of a person. The court ought to examine whether the criminal complaint or FIR has been filed with an oblique motive. Summons should be preferred over warrants and bailable warrants should be preferred over non-bailable warrants.

The SC further held that non-bailable warrants should be issued when it is reasonable to believe that the person will not appear in court voluntarily, police are unable to find the person to serve him with a summons or that person could harm someone if not arrested.

In Raghuvansh Bhasin vs. State of Maharashtra, the Supreme Court issued very detailed directions to the subordinate courts and police with respect to the issuance of non-bailable warrants.

Proclamation, attachment and selling of the property

If a person is absconding even after issuance of an arrest warrant, the Magistrate may order proclamation and attachment of the property of the accused as per the procedure prescribed under Section 82 and 83 of CrPC. The court shall require the person against whom a proclamation is published to appear at a specified time and place within 30 days of such publication. If the person does not appear at the specified time and place, the court in cases of offences specified under section 82(4) CrPC shall declare the person a proclaimed offender. Thereafter, a court issuing proclamation may order the attachment of movable and/or immovable property of the proclaimed person. The court may order proclamation and attachment simultaneously if the proclaimed person is about to dispose of his property or move it out of the court’s jurisdiction.

Movable property shall be attached by seizure, appointing a receiver, prohibiting delivery of attached property to proclaimed person or someone on their behalf, etc. Immovable property shall be attached by taking possession, appointing a receiver, prohibiting payment of rent on delivery of the attached property to the proclaimed person or anyone on his behalf, etc.

The property attached shall be sold by the State Government 6 months after attachment under Section 85(2) CrPC. Under section 85(3) CrPC, if the proclaimed person appears before the court within 2 years of the attachment, and proves that he did not abscond for avoiding execution of a warrant, and he did not have the notice of proclamation, the court shall, after deducting the costs incurred in attachment, deliver to him the net proceeds of sale and residue property, if any.

The Delhi High Court in Sunil Tyagi vs. Govt. of NCT of Delhi, in para 494 directed the subordinate courts to not close the matter after declaring a person a proclaimed person or offender; rather the courts should direct the police to file status reports and monitor actions taken by police with respect to tracing the absconding person.

Offences and penalties under The Indian Penal Code

Section 172 of Indian Penal Code, 1860, inter alia, makes it punishable with simple imprisonment upto 1 month &/or fine upto Rs. 500 for a person who absconds to avoid summons, notice, etc. being served from any public servant.

Section 173 IPC, inter alia, provides that whoever intentionally prevents the service of summons, notices etc. upon himself or any other person shall be punishable with simple imprisonment upto 1 month and/ or fine upto Rs. 500.

Section 174 IPC, inter alia, makes intentional non-attendance of a person in response to the summons from a public servant punishable with imprisonment upto 6 months and/ or fine upto Rs. 1000.

The non-appearance in response to a proclamation published under Section 82(1) CrPC shall be punishable under Section 174A IPC with imprisonment upto 3 years and/or fine and if the person has been declared a proclaimed offender under Section 82(4) CrPC, then imprisonment upto 7 years and fine.

Section 183 IPC makes it punishable with imprisonment upto 6 months and/or fine upto Rs. 1000 for any person who resists the public servant who is lawfully taking any property.

Section 184 IPC makes it punishable with imprisonment upto 1 month and a fine upto Rs. 500 for any person who obstructs any public servant from lawfully selling any property.

Conclusion

It can be seen from the discussion so far that the Code of Criminal Procedure prescribes different methods for securing the attendance of persons as well as procuring the documents and other relevant things required for the purposes of investigation, inquiry, and trial. As far as securing the attendance of the accused is concerned, we have seen that the methods like summons, warrant, proclamation, and attachment of property are the measures adopted by the Court. Summons being a milder method should be used at first instance and in case it is not obeyed by the accused person the court may resort to other methods. But in no case, the proclamation and attachment proceeding shall begin before the issuance of a warrant. Issuance of warrant is a condition precedent for invoking the proceeding of proclamation and attachment of property. We have also discussed that non-bailable warrants must not be issued at first instance. It has been observed by the courts that such issuance of a non-bailable warrant is violative of Article 21 right. Similarly, in the case of production of documents and other things that the Code prescribes for issuance of summons and search warrants as effective methods to procure the same. In this regard, both police and Magistrates are given power under the Code. The foregoing discussion also revealed the safeguards or protections provided to individuals against arbitrary search and seizure.

References

(2012) 9 SCC 791 CRL.M.C. 5328/2013 Dated 28/6/2021; Available at: https://www.livelaw.in/pdf_upload/jrm28062021crlmm44382013193732-395810.pdf

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What is the law for new age GIG workers in India : an overview

By

Oishika Banerji

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November 16, 2021

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3078 — Image source: https://www.theguardian.com/technology/2020/feb/05/amazon-workers-protest-unsafe-grueling-conditions-warehouse

This article has been written by Satabdi Bhattacharya pursuing the Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho. This article has been edited by Smriti Katiyar (Associate, Lawsikho).

Table of Contents

Who are GIG workers?

GIG Workers are those who are not in a traditional employer-employee relationship, usually they are employed on contractual basis or project-based work. Freelancers are also GIG workers. Different E- Commerce platforms like Amazon, Flipkart use GIG – workers. GIG worked on different platform-based works where they perform specific services. GIG workers come from different corners of India, they allow different age groups, skills. Gig works are easier to find than any conventional jobs. The law concerning the gig economy has seen transformational changes in the year 2019. India, being the uprising gig economy, has also been witnessing huge growth in the number of gig workers in the past few years. This has led the Indian legislature to introduce the gig workers in one of the draft labour code bills i.e., the Code on Social Security, 2019

GIG workers under contract labour

The Contract Labour (Regulation and Abolition) Act, 1970 regulates engagement of contract labour in India, including work done through third-party contractors. There is scope for gig workers who work for platforms to be “contractors” under this law. This imposes obligations on employers to comply with the requirements under this law, including welfare and health obligations to be provided to employees such as the provision of canteens, first aid, etc. Yet, this law has still not been applied by most platforms nor has it been discussed by any Indian Court.

The Employment Compensation Act, 1923 mandates that the employer pay compensation for accidents arising out of and in the course of employment. The applicability of this law to gig workers also remains to be determined by Courts. If this does apply to gig workers, it would go a long way in ensuring compensation for occupational safety hazards.

Key developments in India

The Code was introduced in the Lok Sabha on December 11, 2019 intended to simplify and rationalize the provisions of nine laws relating to social security, including the Employees’ Provident Fund Act,1952, the Maternity Benefit Act, 1961, and the Unorganised Workers’ Social Security Act, 2008. The Code has introduced the concept of gig workers and contemplates social security schemes for such workers. The Code has included various non-traditional types of occupations and workers involved therein by categorizing them as gig workers and/or platform workers, unorganised workers, home based workers, etc., which the current industrial laws do not cover, to whom the Code proposes to extend certain benefits. The Code defines a gig worker as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship. Further, platform workers are defined as workers who are involved in work, in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services in exchange for payment. The Code differentiates a gig or a platform worker from the conventional definition of ’employee’ as given under the Code.

A bare perusal of the definitions of ’employee’ and ‘gig worker’ makes a clear distinction in nature and scope of work of a gig worker and an employee in the traditional sense. While the definition of employee is similar as defined previously under current various social security legislations, the definition of gig or platform worker encompasses the concept of a deemed employment which is independent of traditional employer and employee relationship. Further, the Code proposes that the Central Government may formulate social security schemes for gig and platform workers on matters relating to:

(a) life and disability cover;

(b) health and maternity benefits;

(c) old age protection; and

(d) any other benefit as may be determined by the Central Government.

What are new gigs?

The new gig roles aim at attracting people who would otherwise not be open to full-time roles. It could be highly qualified professionals who may not be able to travel to work because of ailing family members or differently-abled persons who may find it tough to travel.

Similarly, women who have quit their jobs, post-maternity or a difficult pregnancy, can continue working from home through these gig roles.

Traditionally, gig roles are considered to be inferior to a full-time job. This is because semi-skilled or unskilled workers are hired for short-term roles based on demand. Some of these include delivery personnel or logistics staff.

However, the new-age gigs could even have a former vice-president Working on a short-term project. This effectively means that the educational qualifications and work experience requirements would be the same.

Unlike regular freelance jobs, where one individual works on multiple projects across companies, the new-age gig roles would have non-compete agreements where a professional cannot work in such roles in the same sector or industry.

How would hiring be different?

The hiring process for the new-age gig roles would be exactly similar to a regular shortlisting process. First, candidates would need to apply for the role. This will be followed by one or multiple rounds of online interviews. Companies having aptitude tests for new hires would follow the same rigour for the new-age gig roles as well.

IT firms, as well as financial institutions like banks, mutual funds and insurance companies, have background verification as a standard part of the selection process. So, for new-age gig roles as well, this will be no different.

Regular gigs of semi-skilled workers involve a phone call from the hiring manager, after which the individual may join the role. However, the new-age gigs would follow the standard procedures of hiring, and, hence, the shortlisting process will be as lengthy as a regular hire.

How do companies benefit?

The new-age gigs would be specialist roles that will last between 6-12 months. After the project or assignment is over, he/she would need to be redeployed to some other job position, or, worse, be laid off.

Regular gigs like the ones seen in the e-commerce space have a possibility of being extended or the person being absorbed as a full-time staff member. However, the new-age gigs don’t hold this possibility.

One reason why the role works well for the individual as well as for the company is that a qualified worker from any part of the world can be hired for new-age gigs without distance acting as a barrier. Travel costs need not be paid since these are virtual roles. Companies also save costs since the specialist is hired only for a short period. Long-term employee benefits like provident fund, insurance cover and gratuity won’t be available for these positions. The new-age gigs would be 100 percent virtual so physical infrastructure cost for the hire is also saved.

HR experts estimate that compared to less than 3 percent currently, India Inc would have close to 10-15 percent working on new-age gigs in the next five years. Customer-facing roles and shop-floor positions, however, won’t be on a gig model.

Axis Bank, for instance, has said that the new-age gig roles would be offered in areas like digital banking, technology, risk modelling, virtual sales, audit and credit policy, which are the first set of pilot offers.

Conclusion

The introduction of these concepts would lead to provide better work opportunities to students and would promote them to take up non-regular jobs in the market. At the same time, it would be a lesser burden over the employer to not engage in traditional long term employment commitments with the employees. The new concepts would help in generating several small jobs which will be duly regulated by the labour codes and also provide social security to the employees. Further, it would be evident to see how these sectors are practically regulated and what all schemes the Government comes up with to provide benefits to the employees working in the gig and platform-based economy before making any concrete statements.

References

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All you need to know about drafting a cost-plus contract

By

Oishika Banerji

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November 16, 2021

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This article has been written by Muskaan Bangani pursuing the Certificate Course in Introduction to Legal Drafting: Contracts, Petitions, Opinions & Articles from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).

Table of Contents

Introduction

A cost-plus contract may also be known as a cost-reimbursement contract, it is an agreement between two parties in which one of the parties repays the company for the expenses incurred along with a percentage of profit which is usually the contract’s total price. These contracts are commonly used in construction, where the customer accepts some risk while simultaneously allowing the contractor considerable flexibility. In some cases, the budget is limited or there is a good chance that real expenses will be lower than what the parties anticipated. The contractor is required to show proof of all connected expenses. The contractor is permitted to collect a specified amount in excess of the amount reimbursed in order to make a profit—hence the “plus” in cost-plus contracts. Because certain contracts limit the amount of payback, not all expenses are reimbursed. This is especially true if the contractor makes any inaccuracy or error during the course of the contract or is found to be not performing his duties in due diligence in any part of the construction. Cost-plus contracts are preferred by governments because they allow them to select the best qualified contractors rather than the lowest bidder.

Components of a cost-plus contract

The three main components of a cost-plus contract are :

• Materials, equipment, supplies, and professional advisors are all considered direct costs.

• Overhead costs, also known as indirect costs, are business-related expenses incurred in order to carry out the contract’s conditions. Office supplies, insurance, office rent, labour expenses, drawing and printing charges, and communication expenses are all examples of overhead costs.

• A fee, also known as profit, is a fixed percentage calculated using the labour costs directly associated with the contracted work.

Types of cost-plus contracts

The different types of cost-plus contracts are as follows:

Cost-plus-award fee: This is a contract between project managers and contractors that specifies a predetermined awarded payment that contractors can receive if they execute a project accurately, on schedule, and within the agreed-upon budget. Contractors are subject to a penalty fee if they fail to meet these objectives.
Cost-plus fixed fee: In this type of contract, the project managers cover both direct and indirect costs and pay the contractor a fixed price that all sides agree on.
Cost-plus-incentive fee: These fees are determined by how effectively the contractor performs. If they obey all of the rules and provisions outlined in the contract they will receive an impressive incentive fee.
Cost-plus-percent-of-cost: If the contractor spends more on direct and indirect costs than expected and it can be demonstrated that they require the additional funds to execute a quality project, they will be reimbursed along with the cost numbers.
Cost-plus-fixed-rate contract: In this contract, the project manager examines the contractor’s previous cost sheets and uses that information to set predetermined labour rates that both parties have agreed on.

Advantages

Tools and materials are purchased for the project without risking the quality of the final outcome which is made easier by Cost-plus contracts. The pros of cost-plus contracts are:

Enables contractors to purchase high-quality tools and equipment.

When the expenses of tools and equipment aren’t deducted from the contractor’s income, they are less hesitant to make purchases that increase the project’s overall quality. This means the project manager will be able to create a high-quality end product that will satisfy customers

Lowers contractor’s risks

There are times when a contractor is unable to produce a detailed cost estimate owing to a variety of factors such as building site damage, inclement weather, or confusing project plans. In these situations, if a contractor spends more than the agreed-upon anticipated amount, they risk losing that money. Maintains a steady and manageable budget for the project.

Keeps the project’s budget consistent and manageable.

Before the start of the project, project managers might meet with contractors to set a budget for the project’s tools, equipment, and labour costs. This encourages contractors to stick to the budget they’ve set because they’ll make money if they finish the task on time and within budget. This also protects project managers from receiving unexpected equipment invoices.

Disadvantages

Though cost-plus contracts can be beneficial for both contractors and project managers, some drawbacks could negatively impact the project. The cons of cost-plus contracts are:

1. May result in a longer project timeline.

Contractors and project managers must negotiate and approve budgets and certain item purchases, which may cause contract projects to take longer than intended.

2. Involves the contractor paying for tools in advance.

Contractors are reimbursed for their expenditures once the projects are completed; however, they are responsible for purchasing materials, tools, and equipment on their own. If contractors don’t have the funds to purchase pricey materials, this could be a problem, lowering the project’s overall quality.

3. Additional effort is required to justify and track all expenses.

A cost-plus contract often requires contractors to keep track of all expenses and submit them to project managers. Contractors are sometimes asked to explain their justification for each transaction. This can take a long time for contractors to accomplish, which may affect the construction project’s timeframe.

Important clauses

There are a few key clauses that must be included in order for a contract for the cost plus agreement. The following are the details:

Title of documents

Title to a document differentiates it from the other documents. It makes it more specific as to what and which subject-matter it deals with. It gives an identity to a document.

Name the parties to the contract

The name of the owner and contractor must be mentioned in the contract. Beside this, the addresses of the parties must be mentioned to ensure accountability and transparency for future contingencies.

The recitals

The ‘Whereas’ clause is seen in almost every contract. These are known as ‘recitals’. The whereas clauses are added to understand the objective of the parties for entering into the contract. Recitals act as primary statements for the effective enforceability of the agreement.

Scope of Work

The owner and the Contractor agree that the Contractor will be constructing fixtures, structures etc and also providing services on the property described, on which the work will take place (e.g., address and area on the property, if relevant).

Time of Completion

There should be an approximate commencement and completion date of the project. Setting time boundaries up front is a good way of ensuring your project will remain on track.

Compensation

In a cost-plus fee agreement, the compensation clauses are the most complicated because both parties must agree on what is and is not an included cost that must be returned. It’s a good idea to try to spell this out in the Agreement to avoid future conflicts regarding purpose.

Progress Payment

Although the parties must have already agreed on the estimated full price of the contract, the parties must decide how these payments will be made. There are no absolute rules about how a contractor will collect its fees. Some don’t collect anything until the work is completed.

Duties of Contractor

This clause spells out the duties of the contractor that he needs to perform which could vary in types and the amount from contract to contract. Some generic duties that are found in a construction contract are:

All work shall be in accordance with the provisions of the contract.
All work shall be done by licensed individuals.
Contractor shall obtain the permit to do the work.
Contractor shall remove all the debris after the completion of work.

Insurance

A provision for unforeseen circumstances must also be made in the form of insurance to avoid disputes later on. A sample clause can be in the form of: “The contractor shall purchase and maintain the insurance of the property, machinery, site, etc. in case of unforeseen circumstances like fire, earthquakes etc.”

Warranties

The Contractor guarantees that the job it does will meet specific criteria.

(a) Defective Work Correction: It specifies that any flaws discovered in the work within a specific time period will be remedied or otherwise fixed at the Contractor’s expense. The length of time for which this warranty will be valid should also be specified

(a) Normal Wear and Tear Only: This clause states that the Contractor is only liable for damage caused by normal events. In other words, if you do something to the property that is harmful or dangerous, the Contractor will not be held liable.

11. Arbitration of Disputes

Arbitration is a method of resolving disputes outside of the courtroom. In the event of disagreements or conflicts, an arbitration provision must be incorporated into the contract of sale of products as a means of resolving future situations. Arbitration is less expensive and time-consuming.

12. Termination of Contract

It specifies that specific actions or circumstances, such as written notification or substantial breach, will result in the agreement being terminated early (i.e., before the work is completed or the end of the term, if any). The amount of notice a party must give of its desire to terminate or to warn the other of a breach will be written down by the parties.

13. Licenses and Permits

It is required by the Contractor to obtain any necessary permits and/ or licenses to perform the work under the Agreement.

Conclusion

Only if specific mechanisms are in place before the contract is executed will the cost-plus agreement be successful.

There is a proper system in place to keep track of the costs incurred during the contract’s construction.
To keep track of the contract’s development, a proper communication channel is established between the contractor and the contractee.
To minimise future problems, all terms and conditions must be clearly stated in the contract.
A contractor must have sufficient finances to complete the contract because the contract cost will not be paid to him instantly; he must first pay for the expense.
A team should be in place to ensure that correct accounting, budgeting, auditing, and other records for the contract in question are kept.

References

https://www.upcounsel.com/cost-plus-contracts

https://www.wallstreetmojo.com/cost-plus-contract/#:~:text=Cost%2Dplus%20contracts%20are%20majorly,profit%20me%20on%20the%20 contract

https://www.indeed.com/career-advice/career-development/cost-plus-contract.

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Freelance opportunities in IPR outside India

By

Sneha Mahawar

-

November 16, 2021

0

This article has been written by Anindita Deb, a student from Symbiosis Law School, NOIDA. This article aims to elucidate the opportunities available in IPR outside India on a freelance basis.

Table of Contents

Introduction

Intellectual Property Rights (IPR) has come up as a field of law in which professionals are in high demand. IPRs cover cognitive creations and are granted by governments to IP creators for new and original ideas. Individuals can claim exclusive rights and financial gain from what they invent or create, thanks to intellectual property law which benefits both creators and the general public. It should come as no surprise that workdays for intellectual property professionals are never dull or monotonous, given their foundation in human ingenuity.

What is freelancing

Freelancing is a unique manner of working in the employee vs. entrepreneur world. Consider it a midway point. Freelancers are self-employed individuals who work for a number of different companies. It sounds interesting. Isn’t that so? The client (or conventionally the employer) hires a freelancer for a specific project, service, or task.

A freelancer works on multiple projects for different clients at the same time. A freelancer must manage their priorities, time, and workload, as well as file their taxes. That may seem like a lot to take on, but there’s nothing quite like being your own boss. A freelancer can work from anywhere in the world, but it usually involves working from home at certain times. In recent times, a lot of international opportunities have opened up for freelancers in the field of IPR.

Opportunities for IPR Freelancers

There are a variety of jobs that can be taken up on a freelancing basis. Some of them have been described as follows:

Trademark registration

Merely registering a business name, a company name, or a domain name does not grant someone exclusive rights to use that name. Only a registered trademark provides them with the exclusive legal right to use, assign, license, and sell their IP around the world. Freelancers can take up an independent job of filing for trademark registrations across the world. You have discretion as to set a filing fee per registration. The average salary for a trademark layer carrying out trademark registration work internationally is around Rs. 4,38,000 per year.

Filing patent applications

Freelancers across the globe offer services for filing patent applications in different countries. Their job includes providing a variety of services so that the creator is able to file an appropriate patent application to claim their Intellectual Property Rights. The responsibilities of the person filing the patent application are as follows:

Drafting a provisional application
Filing a patent application for the invention
Patent search and advice
Help the creator overcome patent rejection
Drafting a complete specification
Patent analysis

Again, you can set a fee ranging around Rs. 4000-5000 per application for the complete drafting and filing of patent applications.

IP consultancy services

One of the most convenient jobs you can take up as an IPR freelancer is providing consultancy and advising services for IP related issues to people around the world. You can help them with their patent filing and trademark registration process, by guiding them and educating them on the due process to be filed to obtain patent rights for their invention. IP consultants may charge an hourly fee for providing consultancy services to inventors. The average salary for this job internationally goes up to Rs. 17,50,000 per year.

Patent, trademark and copyright searcher

Freelancers provide services of researching available patents, trademarks and copyrights available for various inventions which are similar to the creator’s invention so that they can come up with a proper patent application to be filed. The responsibilities included under this job are as follows:

Search

Based on the product/concept/idea details the creators provide to them
Is the product or idea patented, trademarked or copyrighted?
Is it a utility patent or a design patent?
Are the terms trademarked?
Are the images the creator might want to use in their books or product listings copyright protected?
Search within jurisdictions of the creator’s choice

Comparison

Does the idea infringe upon an existing trademark, copyright or an existing patent?
An exhaustive analysis of to what extent the creator’s concept compares to existing patents
This includes recommendations as to what changes they should make to the proposed concept.

This job can pay you around Rs. 5,00,000 per year.

Media and televisions patent analysts

Media platforms like Netflix and Amazon Prime hire legal professionals on a freelance basis to do a time-to-time analysis on their content and the patent and copyright searches that must be carried out before their content is published. This can serve as a good job opportunity in the era of digital entertainment. However, some of these jobs might require some previous work experience of about a year or two in order to hire someone for the job. You can earn Rs. 10,00,000 on average per year by being a media patent analyst.

Websites that offer freelance jobs

There are a number of websites that offer freelance jobs. You can apply through them to get a freelance job. You can also offer freelance services on some of these websites by describing the services you will provide to your clients and interested people can contact you through the website. Some of the websites are:

Conclusion

A person wishing to build a career in IP law has a plethora of opportunities available to them. Freelance jobs allow you to be flexible and work according to your will. With the era of digitisation and globalisation, one can easily find international IPR freelance jobs online and apply in their area of interest. Even a low pay in a foreign country will translate into a good amount of earnings in Indian currency. So grab your opportunity and kickstart your freelance career in IPR.

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/J_0YrBa4IBSHdpuTfQO_sA

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