Analysis of best practices followed worldwide vis-a-vis national security

By

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November 10, 2021

This article has been written by Sneha Jaiswal, from Christ (Deemed to be University) Delhi NCR. This article analyzes the subject matter of national security with regard to various nations specifically in India. It also attempts to resolve a few outstanding concerns about national security strategy.

Table of Contents

Introduction

An analysis of the best practices followed worldwide with respect to national security simultaneously with regard to India. Despite vast differences in socio-economic and political realities, various nations have different ideologies with respect to national security that is often borrowed as an asset by the respective nations as a national security practice. The nations appear to have a unique autonomy in building an indigenous legal framework to respond to their culture-specific requirements due to their different demography, geographical structure, and apparent ‘independence’ from communitarian regulatory processes. This additionally analyses the disturbing trend that emerges from the similar placement of the nations with regards to the issue of national security- one with the most robust, functional, and detailed legislative framework and the others without any clear policy in place. In most jurisdictions, giving national security precedence above individual liberty appears to be a common occurrence.

Basic understanding of the term national security

The safeguarding of the nation as a whole is referred to as national security. Its top priority is to protect the country and its citizens from attacks and other external threats by maintaining military forces and safeguarding state secrets. National security encompasses both national defense and the safeguarding of a variety of geopolitical, economic, and other interests, and it has an impact on not only defense but also foreign and other policies. Foreign and defense policies should be viewed as mutually reinforcing rather than zero-sum budgetary trade-offs. While difficult decisions on national security spending will have to be made, they should be based on facts, not on fanciful comparisons or incoherent and tendentious concepts.

Relation of human security and national security

The degree of resistance to or protection against danger is referred to as security. It can be used for any vulnerable and valued asset, such as a person, a home, a neighborhood, a country, or an organization. However, for far too long, the term of security has been understood narrowly, as territorial security against external attack, national interest protection in foreign policy, or global security against the prospect of nuclear holocaust. It has been linked to nation-states rather than individuals.

The valid concerns of regular people seeking security in their daily lives were forgotten. The majority of developing countries, on the other hand, have higher percentages of their populations living in constant fear of disease, starvation, unemployment, crime, social unrest, political repression, and environmental risks, among other things. Their lives are filled with anxieties and uncertainties, such as the fear of being hurt and the uncertainty about the future. This group does not feel safe and is not protected from physical, economic, or social harm.

Internal turbulence relating to human security, economic security, and socio-cultural security have caused states to suffer and even dissolve, as recent history has proved. The world’s attention was drawn to these aspects, which unhinged scholars’ minds from earlier orientations toward territorial security, resulting in a paradigm shift in the view. Human security is now seen as a significant component of national security.

The objective of national security

The manner each state addresses threats to its government, ideals, and even existence is established by national security law. National security aims may be described as safeguarding a country’s national sovereignty in order to maintain a secure and stable environment that can assure the safety and prosperity of its citizens. Assuring the country’s geographical integrity. Promoting the country’s progression to its rightful position in international affairs.

Keeping national sovereignty safe

Protecting sovereignty can be an effective technique for dealing with inter-state relations and defining permissible behavior. It’s also a manner of analyzing a state’s behavior because the idea of sovereignty is always expendable in the face of the state’s ultimate authority.

Keeping territorial integrity intact

It is a corollary of the element of sovereignty that a state’s territorial boundaries shall be honored and it shall be free from external control. States shall have the right over their international borders and other states shall interfere in the internal affairs of the state. Only established diplomatic channels allow states to influence each other’s actions.

Promoting the country’s advancement to its proper position in international affairs

International relations is the instrument that is utilized to concentrate on how country states and non-legislative associations connect in regions including governmental issues, economy, and security. International relations have taken on a new significance in our more interconnected society, but they are far from new. Treaties between states were the first form of international relations in the history of the world.

The study and practice of international relations are important in today’s world for a variety of reasons, including the promotion of successful trade policies between nations, as well as the encouragement of tourism and immigration businesses, which provide people with opportunities to better their lives. International relations permits countries to work together, pool resources, and share information in order to address global concerns that affect more than just one country or region. Pandemics, terrorism, and the environment are all current worldwide concerns. Cultural exchanges, diplomacy, and policy formulation are all ways that international interactions improve human culture.

Maintaining a tranquil internal environment

Internal security is the act of maintaining peace within a sovereign state or other self-governing territory’s borders, usually by respecting national law and defending against internal security threats. We must maintain productive and cordial relations with all nations and peoples, even as nations must chart their destiny, free of foreign meddling, threat, or aggression.

Creating an environment for citizens that is just, equitable, and prosperous, as well as one that protects them from threats to their lives and livelihood

It contributes to the development of long-term sustainable peace and is thus an important factor in the post-conflict period for promoting long-term peace. The justification for including environmental resources into the overall peacebuilding process is critical.

Dimensions of national security

Military security

Physical protection of the state’s landmass from external aggressions was referred to as national security. As a result, state measures to maintain national security were viewed as increases in military force to protect the country. These activities were also perceived as gaining military might, to impose a state’s political will on the world stage by its military force. Though this perspective remains today, as hostilities have evolved over ages and a state is required to protect the inviolability of its territory, it was a restricted one, and additional aspects of national security have been added over time.

Political security

It refers to safeguarding the government’s and political system’s sovereignty, as well as society’s safety, from illegal internal threats and external threats or pressures. National and homeland security, as well as law enforcement, are all involved.

Economic security

It entails safeguarding not only the economy’s ability to provide for people but also the degree to which the government and the people have control over their economic and financial decisions. It also refers to a country’s ability to defend its wealth and economic freedom against external threats and pressure. As a result, it includes not only economic policy and some law enforcement organizations, but also international business, finance, and trade agreements.

Environmental Security

It’s a concept with various connotations. One is the more traditional approach to dealing with conflicts caused by environmental issues such as water shortages, energy disruptions, or severe climate change; these issues are thought to be “transnational” and hence capable of causing conflict between countries. The alternative, more contemporary view is that the environment and “climate” should be safeguarded as objectives in and of themselves; the assumption is that human-caused environmental deterioration is a threat that must be handled through treaties and international governance, much like a national security concern.

Socio – cultural dimension of national security

One of the most essential components of national security is the socio-cultural factor. It is the obligation of the country’s political elite to unify the country’s diverse socio-cultural identities under one tent.’ To assimilate this diversity of sections into primary national streams, the process of assimilation should be conducted without interruption, and providing a road network is an important component of it, as road transportation is regarded as a critical factor for a country’s economy and industrial development. The government must safeguard the safety and security of the people while building a network of roads and transportation. In countries like India, many states have insufficient road networks, resulting in vehicle accidents and fatalities. As a result, while carrying out the integration process, the government must pay close attention to every segment of society in this regard.

Cybersecurity

It refers to the safeguarding of the government’s and people’s computer and data processing infrastructure and operating systems from outside and inside the country, respectively. As a result, not only national defense and homeland security but also law enforcement are involved.

Intelligence agencies

One of the most critical issues that any country’s military is concerned with is national security. The defense forces’ concern is not solely based on their understanding of the core issues that compromise national security. The Intelligence Agencies in the world are a second wing that is responsible for the country’s defense. Behind the scenes, there is a whole crew of unsung warriors fighting the country’s invisible foes. In truth, there have been numerous occasions when these individuals have defended the country’s national interests. There are various intelligence agencies in the world like the Central Intelligence Agency by the USA, the Federal Security Service by the USSR, the Central External Liaison Department by China, the Research and Analysis Wing by India, and many more. These organizations work around the clock to safeguard the country’s national interests and security.

An exception to access information – national security

All-access to information (ATI) rules have exceptions for national security. However, few of the laws, or their implementing regulations, describe national security in the context of information withholding. They also don’t establish any clear rules or procedures for categorizing or withholding information for security reasons.

The public’s right to know and national security are frequently seen as opposing forces. While there is sometimes a conflict between a government’s desire to keep information secret for national security reasons and the right of the public to access information held by public authorities, recent history suggests that legitimate national security interests are best protected in practice when the public is well informed about the state’s activities, including those undertaken to protect them.

In order to ensure the full exercise of human rights, it may be necessary to keep information secret in some instances in order to defend legitimate national security objectives. The fact that courts in many nations show the least independence and the most deference to government assertions when national security is raised makes striking the correct balance all the more difficult. Many countries‘ security laws strengthen this deference by triggering exceptions to the right to information, as well as to regular norms of proof and the rights of the accused, based on a little showing, or even the government’s mere allegation, of a national security concern. Over-invoking national security concerns by a government have the potential to substantially erode the primary institutional safeguards against government abuse; judicial independence, the rule of law, legislative oversight, media freedom, and open government. Restrictions on freedom of expression based on national security must meet several requirements in order to be lawful and meet international standards and best practices.

India’s national security strategy

The protection of a nation and its population against a variety of multi-dimensional dangers and coercion is referred to as national security. The vast breadth of a strategy to address these challenges in a rapidly changing national and international scene might be a deterrent to formally establishing a national security strategy. A well-defined national security strategy, on the other hand, is a clear picture of the path a country should take in order to achieve its national goals. It also serves as a roadmap for all state organs in terms of policy directions to follow.

This necessitates the state creating a favorable external and internal environment in which India takes its proper place in the world, is protected from global and regional hazards, and lives in peace. India’s national security objectives could be stated as follows: To provide a secure and stable India that can guarantee the safety and prosperity of its people.

Protecting India’s national sovereignty.
Securing the territorial integrity of India.
Advancing India’s rise to its rightful place in international affairs.
Ensuring a peaceful internal environment within India.
Creating a just, equitable, and prosperous environment for our citizens, as well as one that protects them from dangers to their lives and livelihood.

These tenets define our core approach to ensuring India’s overall national security. The four pillars are Assuming Our Rightful Place in the World, Creating a Secure Neighbourhood, Peacefully Resolving Internal Conflicts, Protecting Our People, and Strengthening Our Capabilities. This National Security Strategy lays out the steps to achieving the aforementioned fundamentals. There are dangers and uncertainties in any strategy, but the starting point must be clarity about the country’s course.

How this all works : the primary goal

There are certain fully prepared ways to characterize legal similarities that exist among legal systems in comparative law. Some countries are divided into legal “families” that pass down shared legal attributes such as genetic traits. Some countries accept legal “transplants” pushed on them by countries with more advanced legal systems. Other countries just borrow legal concepts from other countries. Furthermore, legal concepts may migrate like humans in international space, settling in friendly locales after long journeys. Each of these procedures results in the transfer of legal ideas from one time or place to another’s legal system. Regardless of the various mechanisms involved in the inheritance, pushing, pulling, and moving with the flow, all of the popular models share a similar assumption: laws from different countries converge through the horizontal transfer of legal concepts from one domestic legal system to another.

National security policies

Economic, political, or military policies may be implemented to secure national security. They can be aimed either domestically or externally. Maintaining effective armed forces, implementing anti-terrorism measures, ensuring civil and emergency defenses, employing intelligence to detect and counter external attack and internal subversion, employing diplomacy to strengthen alliances and isolate threats, and employing economic power to encourage cooperation and isolate or weaken political rivals are all examples of national security measures.

For example, the United States of America’s 2002 National Security Strategy calls “defending our [American] Nation against its enemies” “the primary and fundamental commitment of the [US] Federal Government.” To do so, the US administration claims it would employ “every tool in our disposal,” including “military power, improved homeland defenses, law enforcement, intelligence, and vigorous attempts to cut off terrorist financing.”

In a similar context, the Home Office of the United Kingdom recognizes that it is “responsible for keeping the United Kingdom safe from any danger to our national security.” We collaborate with law enforcement and security organizations to ensure that we are doing everything possible to keep our country and people safe.’ This kind of national security statement can be found in the public documents of most Western countries.

General nature of the country’s external (international) security environment

The formulation of an NSP requires a detailed analysis and understanding of a country’s international context. Such an analysis can distinguish between a regional setting, which includes the characteristics of neighboring states and the nature of the country’s relationship with them, and a more global setting, which includes the characteristics of neighboring states and the nature of the country’s relationship with them. Global great-power competition or rivalry will be immediately important, especially if it has or may have regional effects. Furthermore, a more multipolar global system could have local implications. The assessment of a country’s international setting, with a focus on security, provides a good foundation for the obvious following step: analyzing and assessing the country’s possible security threats, dangers, and difficulties, as well as the opportunities. A complete assessment is at the heart of a National Security Strategy.

What should be the procedure for national security decision making

The constitutional order and other legal laws will determine the solution to the matter. One option is to outline the procedures for making national security decisions in a separate national security statute. Another option is to put processes such as this in the NSS document itself. The substance of the procedures will be directly connected to the duties and responsibilities of the relevant governmental institutions and security agencies, regardless of how the decision-making procedures are given in legal terms.

National security concerning human rights

Human rights and national security are sometimes seen as being incompatible. with one another. When government officials talk about national security, they usually start with the assumption that defending human rights and civil freedoms is sometimes more important than protecting national security. The Indian government has enacted strict regulations to safeguard national security and combat terrorist threats, but these laws do not pass the human rights test.

The constraints on governmental authority were also justified by the international human rights framework, conventions, or treaties to which India was a signatory or ratifying party. However, the current state of executive governance exposes the treaties’ and conventions’ flaws and shortcomings. As a result, human rights are still being violated by police, military, and paramilitary groups. This issue highlights the importance of cultivating a culture of human rights respect among law enforcement professionals as a precondition for maintaining the rule of law. Passing certain legislation under the pretense of preserving national security provides an opportunity to review the constitutional notion of human rights. These legislations gave the executive tremendous authority, increasing the potential for abuse and violations of fundamental rights.

Several countries have the challenge of balancing the two seemingly opposing agendas of national security and human rights protection. There are substantial worldwide initiatives underway at the United Nations and international human rights NGOs to explain the human rights considerations that underpin nations’ processes in establishing national security policy. In response to U.N. General Assembly Resolution 57/219 passed on December 18, 2002, the United Nations Secretary-General submitted a report to the Commission on Human Rights titled Protecting Human Rights and Fundamental Freedoms while Countering Terrorism. 122 Resolution 57/219 emphasized the need of safeguarding human rights while undertaking all counter-terrorism actions in order to maintain national security. “States must ensure that any action taken to combat terrorism complies with their commitments under international law, particularly international human rights, refugee, and humanitarian law,” the resolution stated.

Striking a balance

“Protecting human rights during counter-terrorist activities is more than a legal obligation,” emphasizing the importance of national and international counter-terrorism initiatives adhering to the human rights framework. It is critical to the effectiveness of the anti-terrorist campaign. Terrorism will not be defeated only by the use of military or security forces. Terrorism must be combated by reaffirming, not rejecting, human rights values. Even in armed conflicts, states must demonstrate that the situation poses a threat to the nation’s life and that measures deviating from international covenants are necessary, lawful, and “limited to the amount necessarily required by the exigencies of the situation,” according to the United Nations Human Rights Council (UNHRC).

Thus, both before and after September 11, 2001, policy formulation and statement adoption by United Nations human rights mechanisms, as well as efforts by human rights NGOs, demonstrate the need for a balance between the interest in protecting a state’s national security from terrorist threats and the importance of protecting an individual’s human rights and civil liberties.

The need for integrated approaches

No one country can combat these challenges on its own. As a result, a fundamental component of our approach is to adjust our security relationships with key countries worldwide to resist these challenges to our shared interests. To confront these challenges, we want to increase collaboration with friends and allies by denying terrorists safe havens, clamping down on money laundering, and strengthening intelligence cooperation to prevent weapons proliferation, terrorist attacks, and international crime.

It is not enough to form successful coalitions of like-minded states. That is why it is critical to improving our capabilities so that we can better engage in the international community’s reaction to the threats and act when necessary. The threat response is not only the responsibility of one agency. National security readiness, particularly in this period of more mixed domestic and international policy, transcends agency borders; as a result, strategy prioritizes coordinated interagency efforts to strengthen national security.

Many parts of an approach are aimed at influencing the international environment in order to discourage or avert threats. Shaping efforts include diplomacy, foreign assistance, weapons control programs, nonproliferation measures, and abroad military presence. The capacity to respond throughout the whole range of potential crises, up to and including fighting and winning large theatre wars, is the second part of this integrated strategy. Finally, we must prepare ourselves now to face the difficulties of an uncertain future.

Suggestions for national security strategy goals

Preserve

The homeland’s safety and the integrity of the nation’s internal institutions and processes are critical to this goal. This goal requires strong active, guard, and reserve forces as well as effective intelligence, law enforcement, counter-terrorism, cybersecurity, and immigration policies to protect the homeland and secure the nation’s borders.

Maintain

A global balance of power in favor of the nation’s security and interests and those of its friends and allies. This necessitates an armed force capable of accomplishing all military objectives entrusted to it as well as meeting pledges to protect the nation’s allies and partners.

Guarantee

The freedom of the seas, upon which the countries and world commerce and economic viability depend. This in particular requires a strong navy and marine corps and overseas bases capable of supporting the projection of national power around the world.

Exert

National influence as much as possible overseas through the entire spectrum of instruments of power, including diplomacy, foreign aid, selective intelligence sharing, public diplomacy, and human rights and humanitarian programs. This requires integrating national diplomacy and foreign aid and humanitarian programs more closely to achieve the purposes of the national strategy.

Dedicate

Country to maintain as much as possible a global economy based on economic freedom (sometimes called democratic capitalism), including free trade and the openness of energy markets and international financial systems based on the rule of law.

Focus

National energy security strategy focuses on increasing domestic resources and preventing damaging political manipulation of the international energy market.

Ensure

That country’s commitment to values and its promotion abroad reflects not only its history of liberty, but also universal principles of liberty, with human rights being defined as freedom of expression, democratic self-government, economic liberty, equality before the law, and freedom from persecution and oppression. Values should inform and guide national strategy rather than command or dominate it. From time to time, geopolitical concessions will be necessary, and the country should not regard itself as the world’s policeman upholding particular ideals. However, it is critical to realize that this country’s adherence to universal ideals such as freedom and democracy are among the reasons why other nations and peoples support it.

How frequently and under what conditions should the NSS be reviewed and updated

The NSS document may include a clause concerning a review and updating at regular periods if it is not governed by legislation, such as a national security statute, for example, every three or four years. Alternatively, when deemed necessary, such a review or update may be subject to a particular political decision. In the sphere of national security decision-making, determining the review procedures ahead of time may be beneficial in fostering national security and predictability. The processes for reviewing and updating the NSS may be included in the document. Such clauses might be incorporated in a national security statute or other legislative rules governing national security decision-making. Another option is to codify the procedures in a national security council statute.

Conclusion

Peace and prosperity for the people, as well as a prominent position for the country in international affairs, are essential in a continuously developing world. We must appraise both the problems we face and the opportunities presented by the increasing national strength in a realistic manner, taking into account the global and regional geopolitical environments.

The National Security Strategy lays forth the path that the country should pursue in order to accomplish its goals. This approach acknowledges the importance of our personnel. We won’t be able to attain genuine security if huge segments of our people experience prejudice, inequality, a lack of opportunity, and are threatened by climate change, technological upheaval, and water and energy scarcity. The National Security Strategy also looks at present capacity gaps and proposes ways to enhance the critical elements of national power. A lack of capabilities will make it impossible to turn the idea into reality. Progress is certain, however, as long as the positive basic concepts are maintained.

References

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How to negotiate an investment banking agreement

By

Shoronya Banerjee

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November 10, 2021

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This article is written by Rashmi C, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho. The article has been edited by Prashant Baviskar (Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).

Table of Contents

Introduction

Investment banking plays a fundamental role in enabling financial stability and management in an enterprise. These specialized financial services enable companies to raise, manage, and allocate capital resources in an effective and efficient manner, thereby paving the way to achieving their established objectives. The centerpiece of investment banking services is an “Investment Banking Agreement”, also called “Investment Banking Engagement Agreement”.

Investment banking

In common parlance, the term “banking” instantly reminds us of depositing our funds and obtaining credit facilities such as loans, credit cards, etc. This is only one part of the entire banking system, called “Commercial Banking”. Investment banking, on the other hand, is a completely different service vertical, separate and distinct from commercial banking.

Investment banking is a special segment of banking operation that helps individuals, organizations, and sometimes even Governments, raise capital and provides financial consultancy services to them. These services are one of the most complex and intricate mechanisms in the financial services market. Investment bankers provide a range of services ranging from the creation of capital to the dissolution of a company. Some of the important services rendered by investment bankers include:

Valuation of an enterprise

Valuation of an enterprise is required whenever important capital transactions, such as Initial Public Offer (IPO), Follow-on Public Offer (FPO), private placement, long-term business credit facilities are made. The primary purpose of a valuation is to determine the net worth of the shareholders’ funds of an organisation.

Raising of capital

Companies resort to raising capital funds through Initial Public Offer (IPO), Follow-on Public Offer (FPO), private placement, issue of debt securities (debentures, corporate deposits, consortium financing, etc.), and such other means. Investment bankers primarily aid companies in the preparation of documents, liaison with bankers and investors, preparation of public issue and private placement documentation, and acting as lead agents and advisors for the same.

Mergers & acquisitions

Mergers & Acquisitions (M&A) is a general term that describes the consolidation of assets or companies through different types of financial transactions such as tender offers, acquisitions, mergers, consolidations, purchase of assets, and management acquisitions. In a merger, two or more companies are amalgamated to form a single entity and carry on business under a single brand name. In an acquisition, however, one company takes over the assets and liabilities or the management of another company and absorbs it within itself, and carries on business in its own name. Investment bankers facilitate and provide advisory services, both on the buyer and seller side, throughout the M&A process for the successful completion of transactions.

Underwriting

Investment bankers also function as underwriters to corporate entities to cover financial risks during a capital transaction in exchange for a fee, termed as underwriting commission. If, during a public issue, a company is unable to reach a minimum subscription, the investment banker, acting as the underwriter, purchases shares to make up for the deficit between the securities subscribed by the investors and the stipulated minimum subscription.

Asset management

Investment banking entities, on behalf of clients, acquire, manage, and dispose of assets that have the potential to grow in value, with a view to increasing the total wealth of the clients.

Equity research

This service vertical focuses on conducting research and analysis of equity securities and assisting clients in their decision-making on their investments and trading transactions.

Sales & trading

Investment bankers help identify and match buyers and sellers of securities in a secondary market for a fee or commission. They also assist in price negotiations between the parties and act as intermediaries in the completion of all procedural documentation relating to the transaction.

Trusteeship services

Trusteeship services include intergenerational distribution of wealth and assets of a deceased person (Executor Trusteeship), safeguarding security and protecting the interests of holders of both public and private placement (Debenture Trusteeship), and safeguarding the interests of the creditors in obtaining the custody of loan documentation.

Investment banks can be separate financial institutions or a part of a larger bank or financial institution. Companies hire investment bankers either as retainers for recurring financial advisory services or on a one-time basis for ad-hoc requirements.

Investment banking agreement

An investment banking engagement agreement is a contract wherein the investment banker provides professional services to a client in exchange for remuneration or fee. It is a written document executed between an investment banker and the client, outlining the parties to the contract, particulars of the services, term or duration, compensation, rights, duties, obligations, and liabilities of the parties, indemnification, termination, and other miscellaneous provisions.

Negotiation of investment banking agreements

Negotiation refers to the process by which parties arrive at a common conclusion and mutual understanding through discussion and resolution of points of conflict, without the involvement of any third party. In the case of Werner v. Hendricks, “Negotiation” was defined as below:

“To negotiate is to transact business, to treat with another respecting a purchase and sale, to hold intercourse, to bargain or trade, to conduct communications or conferences. It is that which passes between parties or their agents in the course of or incident to the making of a contract; it is also conversation in arranging the terms of a contract.”

The terms of investment banking agreements/contracts can be customized according to the needs and requirements of the parties. The popular legal maxim “consilia omnia verbis prius experiri, quam armis sapientem decet”, meaning an intelligent man would try all his plans through words (meaning negotiations), before taking up arms, is relevant here. Therefore, prior to executing a contract, it is essential that the parties discuss, negotiate and understand the terms of the agreement.

Considerations for successful negotiation of investment banking contracts

Contract negotiations can be frustrating, challenges, cumbersome, and time-consuming. Investment banking agreements are no exception, since this banking service vertical, by its very nature, is complex. However, with the right tools, skills, and techniques, and with clearly established objectives and goals, negotiations can be very fruitful and eventually result in a win-win for all parties. Some important points to consider while negotiating an investment banking agreement are:

Commence discussions with a draft

Discussions are better when parties bring to the table their draft version of a contract. Draft contracts usually signify the initial intentions of both sides and enable a quick assessment of what the expectations of the parties are.

The general terms to be included can be discussed beforehand and simple, standardised, and unambiguous language can be used to enable ease of understanding. If at the draft stage itself the negotiations become complicated, it is better to go back to the drawing board and start with a fresh draft.

Break the contract into smaller parts

Even the simplest of investment banking contracts can run into tens of pages, with a whole multitude of clauses. It can be quite overwhelming for parties to agree upon such huge swathes of a contract in a single go. Hence, it is a good practice to break down the larger contract into smaller, more manageable contracts. Thus, parties can negotiate smaller pieces more effectively and avoid the “all-or-nothing” approach.

Keep the initial terms simplistic

Investment banking contracts contain a lot of technical and nuanced language. While such terms are necessary, they tend to make an already complicated negotiation process even more challenging. Hence, commencing initial discussions with simple terms, such as the duration of the agreement, parties to the contract, etc., and gradually moving to the technical and complex terms can help parties feel more comfortable with discussions.

Collaboration is key

It is important for both parties to understand that it is important to work together in a spirit of collaboration rather than being competitive and aggressive. Collaborative behavior is an inherent necessity for business success. Some of the important principles for effective collaboration are:

Honest inclusion, meaning there must be honesty and trust between the parties.

Considered communication, meaning communication should be simple, consistent, complete, realistic, and free from assumptions and conjectures.

Action from the first day, meaning parties should spring into action from the first day itself, and keep the momentum constant.

Simplifying complexity, meaning that parties should keep negotiations simple, and reduce ambiguity and complexity wherever an opportunity presents itself.

Establish and prioritize objectives

Having a keen understanding of, and prioritizing the objectives and essential needs help in identifying which aspects of the investment banking agreement are important and which can be modified to accommodate the counterparty’s objectives and requirements. Once the essentials are met, the other points can also be arranged in the order of importance, with an evaluation of the risks and rewards of not being able to meet them.

Understand the counterparty’s motives

Clients look for investment bankers providing the best and widest range of services at a reasonable cost. Investment bankers focus on client satisfaction. By understanding the counterparties’ objectives, the party can be in a better negotiation position by fulfilling its requirements as well as accommodating the counterparty’s needs and interests.

Research well

To have a complete understanding of investment banking agreements, it is essential for the parties to come well-prepared with proper research and analysis of all relevant information. Data-based research on matters such as scenario analysis, trend analysis, decision-making models, flow charts, and pie charts are some of the important tools that parties can use for carrying on research activities.

Professional judgment should not be clouded by emotions

Whenever a contract negotiation takes place, there are bound to be points of disagreement or conflict, leading to heated discussions. Such situations should be handled in a sound and professional manner, without letting human emotions come in the way. Investment banking is business, and thus, discussions should be made treating it as such.

Positive approach

Positivity plays a huge role in the successful conclusion of an investment banking agreement. Identify points that can be agreed upon quickly. Acknowledge the efforts of the counterparty in the contract drafting and negotiation process. The ultimate objective should be to arrive at a common conclusion that serves the interests of all involved parties.

No hurrying

It’s a great idea to take sufficient time, do proper research, and have sufficient deliberations before finally signing the contract. However, unusual delays are not appreciated, as the other party would also be inconvenienced due to such delays. Taking sufficient time before, during, and after the negotiations would enable parties to evaluate the effects of the contract on its interests.

Do not make quick major concessions

Although it is a good idea to make smaller compromises in the initial stage itself, making a major concession too early in the negotiation process would send a signal to the counterparty to increase their expectations, and give them an edge early on in the negotiating process.

No blanket acceptance

Investment banking engagement contracts are highly customized and complex documents. Go over each individual term of the contract and agree upon them separately. This would enable the parties to have a clear understanding of the contract terms, identify areas requiring further deliberations and changes, and prevent misinterpretation and possible litigations. Blanket acceptances should not be given.

Relevance

Discuss only those matters that are relevant to the negotiation process. In some cases, it is better to remain silent than to speak, as the more information the counterparty obtains about one party, the greater his bargaining power. It also saves a lot of time, effort, and energy for all parties.

Professional skepticism

Not all information provided by the counterparty needs to be correct, complete, and reliable. There are huge possibilities of differences between expectation and actuality, in terms of the services offered, the promises made, the expertise offered, or the application of contract terms. Hence, it is always good to view negotiations and the other parties with a reasonable level of skepticism and critique. Doing independent due diligence prior to contract finalization would go a long way in protecting the parties’ interests.

Conclusion

Investment banking agreement negotiations, if carried out in a scientific, systematic, and holistic approach, can be very fruitful. The above tips and tricks can serve as great tools for successful negotiations and thereby enable both parties to protect their interests, achieve their goals, collaborate effectively, and maintain a long-term business relationship.

References

1. https://www.karrass.com/10-contract-negotiation-strategies

2. https://www.legalbites.in/negotiation-meaning-scope-adv-dis/#_ftn1

3. https://www.investopedia.com/terms/m/mergersandacquisitions.asp

4. https://corporatefinanceinstitute.com/resources/careers/jobs/investment-banking-overview/

5. https://m.economictimes.com/definition/investment-banking/amp

6. https://ironcladapp.com/journal/contract-management/contract-negotiation/

7. https://www.lawinsider.com/contracts/2e9uJh5a5PR

8. https://www.centralbankofindia.co.in/en/node/1833

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Default bail under section 167 of The Code Of Criminal Procedure, 1973

By

Shoronya Banerjee

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November 10, 2021

0

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

Table of Contents

Introduction

As per Section 167 of CrPC, if the investigation into an offence is not completed within 24 hours and the accused is in custody, the concerned police officers shall forward the accused to the nearest Judicial Magistrate. If the accusations made are well-founded, the accused shall not be released on bail unless his/her detention is authorized by a magistrate from time to time. In the case of a woman under 18 years of age, the detention shall be in a remand home or a recognized social institution.

A Judicial Magistrate may authorise the detention of the accused from time to time for a maximum period of 15 days through a reasoned order and a copy of such an order shall be forwarded to the Chief Judicial Magistrate except where the magistrate authorizing detention is the CJM. The Judicial Magistrate can authorise detention beyond 15 days if sufficient reasons exist for doing so. If the Judicial Magistrate does not have jurisdiction to try the case, he/she shall forward the case to the concerned jurisdictional Judicial Magistrate.

If the Judicial Magistrate is not available, the concerned police officers, not below the rank of sub-inspector, shall forward the accused to the nearest Executive Magistrate conferred with the power of a Judicial Magistrate who shall authorise the detention of accused of a maximum period of 7 days through a reasoned order and forward the accused to the nearest Judicial Magistrate.

Default bail under section 167 of The Code Of Criminal Procedure, 1973

The accused is entitled to an indefeasible right of default bail/compulsive bail/statutory bail if the accused is prepared to furnish bail in case the charge sheet has not been filed in court. This right accrues after 90 days of custody in cases punishable with death, life imprisonment, and imprisonment not less than 10 years and after 60 days of custody for any other offence. Every person released under default bail shall be deemed to be released under Chapter XXXIII of CrPC.

During the period of detention, the accused may be remanded either to police custody i.e. in the police station lockup or to judicial custody i.e. in the prison. However, as held by the Supreme Court in CBI vs Anupam J. Kulkarni, although the magistrate may authorize police custody after authorising judicial custody and vice versa, the magistrate can only authorise police custody till 15 days after arrest and further detention shall only be in judicial custody except where the same accused is implicated in a different case arising out of a different transaction.
The Delhi High Court in Noor Mohd vs State held that an order of remand is judicial interference with an accused’s liberty and one who seeks remand must justify it. When an accused is produced before the court for obtaining a remand, if the court finds that prosecution has not shown sufficient grounds for obtaining a remand, the court shall pass an order releasing the accused on bail forthwith even without an application being filed on behalf of the accused. The accused needs to file an application only when he seeks bail only during the operation of the period of remand. The Court observed “Neither Section 436(1) nor Section 437(1) nor any other section dealing with bail enjoins an application…when the accused is produced before the court for obtaining a remand, an application is quite unnecessary, unless the purpose be to bring on record matters not otherwise apparent there from.”

The mere filing of a charge sheet after the accused has applied for default bail will have no consequence and the accused can be committed back to custody only if the bail is canceled by virtue of Section 437(5) or Section 439(2) CrPC.

Some confusion had arisen after the SC judgment in Hitendra Vishnu Thakur vs State of Maharashtra because few observations by the Apex Court were construed by the TADA Courts to mean that the right to default bail survived even after filing of charge sheet if investigation was not completed within 60/ 90 days.
The Constitution Bench of Supreme Court in Sanjay Dutt vs State through CBI, Bombay (II) cleared this confusion and observed very appositely that even in the modified application of Section 167 CrPC to under Section 20(4) of TADA Act, 1987 “…The indefeasible right accruing to the accused.…is enforceable only prior to the filing of the challan and it does not survive or remain enforceable on the challan being filed, if already not availed of.” The SC further held that an accused who does not exercise his right to default bail can always seek regular bail under CrPC.
The Supreme Court in Ravi Prakash Singh vs. State of Bihar following the State of M.P. vs Rustom held that the period of 60 days or 90 days shall be computed from the date of first remand after arrest and not on the date of arrest and the date on which charge sheet is filed shall also be included. In Ravi’s case, where the accused surrendered before the magistrate and was remanded to Judicial Custody on the same day, while computing the 90 day period, excluded the date of surrender/ remand and included the date of filing the charge sheet.
In Mohd. Iqbal vs. State of Maharashtra, the Supreme Court deprecated the practice of some courts of keeping the applications for default bail pending for a few days, which enabled the IO to file a charge sheet in the meantime so that the statutory right of the accused is defeated.
The 3 Judge Bench of the Supreme Court in Uday Mohanlal Acharya vs. State of Maharashtra, while relying upon the judgment of Constitution Bench in Sanjay Dutt vs State, held that the accused shall be said to avail of his right to default bail when he files an application for the same and not when he is released on default bail. This right of the accused does not extinguish on the magistrate not being available, the magistrate refusing to pass an order or an appeal or revision being filed against the magistrate’s order. However, if an order of default bail is passed in favour of the accused, but he/she fails to furnish bail and a charge sheet is filed in the meantime, then the right to default bail shall stand extinguished.

Further, the SC overruled the State of MP vs. Rustom wherein it was held that the right of the accused to default bail had been extinguished because on the date the magistrate passed the order, the prosecution had already submitted a charge sheet.

In Sadhwi Pragya Singh Thakur vs. the State of Maharashtra, it was erroneously observed by a Division Bench of the Supreme Court that. if during the consideration of an application for default bail, a charge sheet is filed, then bail could only be granted on merits. A Division Bench of the Supreme Court in Union of India vs. Nirala Yadav held that the SC in Pragya Singh Thakur did not lay down the correct law as it ran directly counter to the majority judgment in Uday Mohanlal Acharya and other later judgments. The abovementioned observation in Pragya Singh Thakur’s judgment has been held to be per incuriam by a 3 Judge Bench of the Supreme Court in M. Ravindran vs. Directorate of Revenue Intelligence.

In Rakesh Kumar Paul vs. the State of Assam, a 3 Judge Bench of the Supreme Court, by a 2:1 majority, held that the period of 90 days for availing default bail shall not be applicable to offences where the minimum imprisonment is not 10 years or more. Thus, for an offence where the minimum period of imprisonment is less than 10 years and the maximum period of imprisonment is not life imprisonment or death, the period of imprisonment for availing default bail shall be 60 days.

The Supreme Court in M. Ravindran vs. Directorate of Revenue Intelligence has observed that the limited notice issued to Public Prosecutors while hearing the application for Default Bail should not be misused by buying extra time and filling up lacunae in the investigation. The SC further observed that the purpose of hearing Public Prosecutors is only to ensure that the accused is not suppressing material facts in the application, whether charge sheet has been filed, whether the period of 60/90 days has expired, whether any extension of time for investigation has been granted to the prosecution in case of special statutes like under the proviso to Section 36-A (4) of the NDPS Act, 1985.

Conclusion

Section 167 CrPC makes it clear that whenever a person is arrested and detained in custody, the time for investigation relating to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than 10 years, cannot ordinarily be beyond the period of 15 days, but is extendable, on the Magistrate being satisfied that adequate grounds exist for so doing, to a maximum period of 90 days. The first proviso (a)(i) to Section 167(2) of the Code goes on to state that the accused person shall be released on bail if he is prepared to and does furnish bail on expiry of the maximum period of 90 days, and every person so released on bail be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter.

References

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Genuine use and trademarks : Supermac’s vs. McDonald’s

By

Oishika Banerji

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November 10, 2021

0

This article has been written by B Andrews pursuing the Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).

Table of Contents

Introduction

A trademark is generally a word, phrase, design, symbol or the combination of all the above, which identifies and also distinguishes the goods or services of one company from another. There are five main categories of trademarks. These are Generic Mark, Descriptive Mark, Suggestive Mark, Fanciful Mark, and Arbitrary Mark. You can protect your trademark by registering with the concerned authorities. In some countries it is not compulsory to register the Trademark. When registering a trademark it has to be clearly defined so that your competitor cannot encroach upon your products or services. In the European Union, before applying for registration one must search whether one has registered the same mark earlier. Once this is confirmed the application can be submitted with relevant details regarding ownership, place of activity and the products or services to be provided along with the applicable fees. Once the application is submitted the European Union Intellectual Property Office (EUIPO) will examine the application and then publish this application for any opposition and for which a waiting time is given. Once the waiting is over and there is no opposition then they publish the Registration.

Genuine use of trademark

As per the EUIPO laws one of the conditions to maintain the validity of a Trademark is to genuinely use the same. Otherwise third parties can encroach and use it. Lack of genuine use of trademark may lead to revocation of the Trademark. After Registration and completion of five years, the trademark owners have to demonstrate that they genuinely used the trademark for the product or service.

What is genuine use?

The owner of the trademark has to demonstrate the usage of the trademark continuously for the products or services for which they registered. If there is any opposition then it is the duty of the owner to prove the usage or provide proper reasons for nonusage, if not done the validity will be revoked. Genuine use means public issues of the trademark which the public can identify the products or services. It is determined by the market share of the product and the frequency of the usage. It depends not only on quantity but the volume of business, share in the relevant sector, marketing capacity and characteristics of goods and services in the relevant sector. Accounting documents, sales figures, and invoices are not mandatory for establishing genuine use. Advertising efforts and the preparatory works are enough to prove the genuine use. Evidence needs to be provided for at least minimal use to prove genuine use.

Nature of goods and services

It is a rule of trademark law that a trademark has been registered for goods or services for which it is not possible to make clear subdivisions within the relevant class, the proof of genuine use of the trademark for those goods or services for the purposes of the opposition proceedings necessarily covers the whole class. The intention or the purpose of the goods and services plays a very important role in determining whether the particular goods and services can be viewed independently.

In the case of Polfarmex SA v EUIPO , the applicant raised the question of whether registering a trademark under the name of as SYRENA trademark for racing cars is enough for the category of racing cars, as the usage is different in this context as compared to cars used for transporting passengers. The court concluded that the racing car is an independent subcategory within class 12 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, and not enough to show in the whole category of the cars.

Nature of usage : altered form

Trademarks can also be used under EU trademark law in an altered form without altering the distinctive character of the mark. This is to meet the public demands and for promoting the brands according to the changed market conditions and the competition. In the case of Euroapotheca UAB v EUIPO, the EU trademark GNC LIVE WELL in a changed font with different colours and with “gnc” “live well” was sufficient to prove the genuine use of the trademark as per the court. The court said by altering the background and the font, colour etc without altering the semantic content of the trademark is permitted and does not amount to anything which alters the trademark’s distinctive character. A Trademark as per its essential function should distinguish the product or services by fulfilling the essential function to prove the genuine use. The trademark can also be indicative of the origin of the product.

The valid evidence for the proof of genuine use

To prove the genuine use of the trademark valid evidence needs to be given, not probabilities or suppositions, which is only possible by giving solid evidence of usage of the trademark in the market and among the public. Sometimes grouping of items of evidence may be useful in proving genuine use, when individually it is not possible to prove. As per previous case laws websites place an important role to the genuine use of trademark. The brochures, advertising materials, the goods offered for sale, pages of social media, bank statements, and the online booking orders may prove to be good evidence. But it is worthless unless it indicates the time period, and the visits made by the public and the customers for the relevant goods and services and the territory of use. The affidavits submitted by the applicant or the party’s close to the applicant is invalid in proving the genuine use. The genuine use must be proved by the trademark holder as per the procedure established by the law. Also apart from the five year period the later period usage can also be presented to the court for evaluation, since it may be helpful in establishing the commercial usage of the trademark. This may be useful in establishing the intentions of the holder in the latter period, and to assess by the court for genuine use.

The case of Supermac’s vs McDonald’s

“Supermac’s” is an Irish fast food restaurant Company with more than a hundred outlets that wants to expand its business in the UK and Europe. It is already registered in Irish Jurisdiction. It applied for Trade Mark protection for its European Business expansion. At that time McDonald’s opposed the granting of a trademark to “Supermac’s” for the European region. The reason given by McDonald’s is that the Trademark named “Supermac” is confusingly similar to McDonald’s “Big Mac”. Supermac’s contended this. The applicant filed a revocation request in European Union trade mark registration No. 62 638 ‘BIG MAC’ (word mark) (the EUTM). The request is directed against all the goods and services covered by the EUTM(European Union Trade Mark), namely:

Class 29: Foods prepared from meat, pork, fish and poultry products, meat sandwiches, fish sandwiches, pork sandwiches, chicken sandwiches, preserved and cooked fruits and vegetables, eggs, cheese, milk, milk preparations, pickles, desserts.

Class 30: Edible sandwiches, meat sandwiches, pork sandwiches, fish sandwiches, chicken sandwiches, biscuits, bread, cakes, cookies, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, seasonings, sugar.

Class 42: Services rendered or associated with operating and franchising restaurants and other establishments or facilities engaged in providing food and drink prepared for consumption and for drive- through facilities; preparation of carry-out foods; the designing of such restaurants, establishments and facilities for others; construction planning and construction consulting for restaurants for others.

The applicant asked for invoking Article 58(1)(a) of EUTMR(European Union Trade Mark Regulation).

Issues of the case

McDonald’s registered the trademark for its goods and services. These are valuable if it is used for its products continuously for five years. If it fails to use it without genuine reason the Trade Mark can be cancelled. This is called revocation. There are four reasons why a trademark can be cancelled or revoked.

If a Trademark is not used for the first five years from the calendar year of the Registration without genuine reason.

If there is no genuine use for five years without proper reason for no use.

If the owner does not use the trademark or there is inactivity in the utilization of this Trademark then the name becomes a common name for the product or service and the registered Trademark may be cancelled.

The Quality, nature and the geographical origin of the goods and services should not mislead the public by the way of using the trademark by the owner of the mark. Here it is the duty of the owner of the Trade Mark to prove its genuine use.

Mc Donald’s objection to Supermac’s

Supermac’s after a long time wanted to expand the business for their products out of Ireland particularly in the European region and in the UK. Therefore they submitted an application to the EUIPO in class 42 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks,. McDonald’s also registered in class 42 for its Trademark of “Big Mac”. s. McDonald’s opposed Supermac’s registration saying that it is an infringement of their trade Mark and had given the following reasons.

The Infringer used the Trade Mark identical to the Mark and also used it for the same goods or services. The public is likely to be confused between trademarks and think the goods or services are associated with the same trademark.

The reputation of the Trade Mark in the Market is used by another competitor among the public to boost the business by misrepresenting the Trade Mark.

Here the ‘Supermac’s’ is not identical to ‘Big Mac’ but is used for identical services. Therefore McDonald’s had to prove the association between the Two trademarks to prove their infringement claim.

Supermac’s defence for the objection

“Super Mac” was founded by Galway Businessman Pat McDonough in 1978 and is the largest Irish owned fast food restaurant firm in the Republic of Ireland.

McDonald’s is a Super brand and has a valuable reputation in the market.. The court can infer confusion from the surroundings due to the popularity of both brands. But Supermac’s challenge is based on the non use of trade mark for the product they claim as per law. This argument gave the verdicts to permit Supermac’s to use the Trademark. Whereas McDonald’s tried to argue that because they had some products that started with “Mc” was so synonymous with them that they had the right to own the trademark “Mc”

The decision does not impact McDonald’s ability to use its preferred mark Mc-trademark or the other Trademarks throughout Europe and the other parts of the world. The EUIPO upheld the US firm’s right to own the “Mc” trademark on chicken nuggets and a range of its sandwich products including meat, pork and chicken sandwiches.

McDonald’s had argued that due to its long and continuous use of the “Mc” term, the trademark had become widely and exclusively associated with McDonald’s by EU consumers.

The US firm also pointed to several earlier decisions in its favour issued by courts and trademark offices throughout Europe. But Supermac’s argued that “Mc” was a very common prefix for surnames in the UK and Ireland and throughout the European Union. It pointed out that there were a huge number of pubs, hotels, restaurants and food products which contain the prefix “Mc’ as part of the surname.

The Irish firm claimed that Mc Donald’s had never used the prefix “Mc” in a standalone sense, but only in combination with other words to brand their products. It is not the ‘Mc” Chicken sandwich, it is a “Mcchicken” sandwich as per the statement. The EUIPO agreed with Supermac’s that there was no evidence of use of the contested trademark “Mc” alone but only accompanied by the further elements.

Decision

1. The application for revocation is upheld.

2. The EUTM proprietor’s rights in respect of European Union trade mark No. 62638 are revoked in their entirety as from 11/04/2017.

3. The EUTM proprietor bears the costs, fixed at EUR 1080.

Conclusion

Main elements for genuine use: The trademark holders should prove the genuine use of trade mark registrations currently and continuously after registration for the last five years as per the regulations. The trademark holders should exercise extreme diligence in safeguarding the documents and materials for the use of trademark for support in future if any such materials are required in future. By maintaining time, place, nature of use, sales, online orders, delivery, finance details, customer details they can withstand legal challenges and can demonstrate the genuine use of the trademark. It follows from the above that the EUTM proprietor has not proven genuine use of the contested EUTM for any of the goods and services for which it is registered. As a result, the application for revocation is wholly successful and the contested EUTM must be revoked in its entirety. According to Article 62(1) EUTMR, the revocation will take effect from the date of the application for revocation, that is, as of 11/04/2017. An earlier date, on which one of the grounds for revocation occurred, may be fixed at the request of one of the parties. In the present case, the applicant has requested an earlier date. However, in exercising its discretion in this regard, the Cancellation Division considers that it is not expedient in this case to grant this request, since the applicant has not shown any legal interest to justify it.

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Sexual harassment of men at workplace : need for a legal framework

By

Oishika Banerji

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November 10, 2021

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This article has been written by Saloni Chitlangia pursuing the Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).

Table of Contents

Introduction

Sexual harassment is one of the most prevelant socal problems that exist today, and it can happen to any individual, regardless of their age, sexual identity or gender identity. While employees have the right to freedom from sexual discrimination and harassment at the workplace, workplace harassment has escalated to a great extent in the recent years

What is sexual harassment?

Sexual harassment is an unwelcome advance of a sexual nature which results in unreasonable interference with the individual’s work performance or creates an intimidating, hostile, abusive, or offensive working environment and can take various forms such as physical, verbal, non-verbal, and visual. Being a social problem, it consequently causes problems such as loss of job, dignity, social status, and in some cases loss of life as well.

Sexual harassment at workplace includes making undesirable requests for sexual favors, making inappropriate and displeasing comments about someone’s body or appearance, saying inappropriate things,making fun of someone of a specific gender and using gender-based slurs, and making vulgar, derogatory, or offensive jokes about sex or sexual acts. It also includes sending and sharing emails and messages of sexual nature, unwanted or inappropriate touching of any body part, hugging, kissing, leering or making gestures by blocking someone’s movement, sending or sharing vulgar pictures or pornography ortrying to create a hostile work environment. For something to be considered sexual harassment, the opinion of the harasser is irrelevant. It is only what the individual who is being harassed thinks of the incident and if they believe it to be offensive.

The prevalent gender inequality

When one thinks of sexual harassment, one immediately thinks of male workers harassing or propositioning female co-workers. People mistakenly believe that sexual harassment is restricted only to women. How many times do we hear in the media that a man is being sexually abused? It has been portrayed by the media and other sources that women are helpless, that they are damsels in distress and are subservient to men. This is accurate to a certain extent as not all men tyrannize or abuse women.

Men and women were created in the same image to enjoy equal participation in all opportunities, rights, and also protection. But for eons, it has been thought that women are naive and that men are the mighty ones and stereotypes like these have been instilled in the minds of children. Patriarchy is not only the root cause of problems faced by women but has also created many setbacks for men. It forces men to be in predetermined notions; where they have to live up to the toxic masculinity and behave in a certain way. Because the culture of masculinity is so strong, men who are sexually harassed at the workplace face additional challenges because of the stereotypes while some others do not even realize when they have been sexually abused. Stigma and gender norms surely affect how men report sexual harassment, and also act as a barrier to report the crime. As a result, men are reluctant to report the crime or come forward because of the social norms that say sexual harassment is not a male issue. Men are also reluctant to complain due to the misuse of sexual harassment laws by women and the filing of fale complaints.

Article 14 of the Constitution of India, which is our Fundamental Right, specifies the right to equality. But the legislation has a greater focus on the issues that are faced by women. The government has made effective laws for preventing sexual harassment at the workplace for women but there has also been a slow rise in the cases of sexual harassment against men. The majority of the laws in India negate the fact that men can also be victims to sexual harassment. Sections 354, 354B, 354C, 354D of the Indian Penal Code,1860 deal with sexual harassment, stalking, etc but all these sections are primarily concerned with women. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 only refers to “women” and it specifies certain remedies and provisions for women who have been harassed. This act recognizes sexual harassment as a violation of the fundamental rights only of a woman and their right to life and dignity and to carry on their profession in an environment free of sexual harassment.

However, sexual harassment has nothing to do with gender, it is about the person who is in power. In the current situations where women are also in powerful positions at the workplace, there is no reason why a woman in power cannot be abusive and vituperative. While there is vast majority of sexual harassment cases that are filed by women, yet there are a number of cases involving female on male workplace sexual harassment and male-on-male workplace sexual harassment claims have also been becoming more common. These include instances of refusing sexual advances, unwelcome touching, and being subjected to offensive sexual comments and jokes. Thus, it is a gender biased law that violates Article 14 as it protects only women who have been harassed.

Sexual harassment against men at the workplace is an overriding issue and it is very important to discuss the concern of rising crime against men. It is necessary to create an equal awareness about the sexual harassment at workplace, which will happen only when we realize that women are not the only victims to sexual assault. We cannot ignore sexual harassment against men and there has to be an equal access to justice in case of all genders. There is a need for laws where men will be given equal protection as women since everyone regardless of their gender is entitled to the right to live free of harassment. We need to make an environment which does not create any discrimination between the genders as sexual offences are serious crime and they need to be prevented. This will only be possible if men are also given equal rights and remedies. The need of the hour is to stop sexual harassment at workplace and to make laws that are gender-neutral: whether male, female or transgender.

Conclusion

Thus, the main issue regarding sexual harassment is that the victim can be of any gender and every gender should feel safeguarded by the laws and this will only be possible through equal protection under the laws. If the crime is gender-neutral the laws also need to be gender-neutral. If we live in a society that treats women and men equally then this balance should be reflected in the laws. Laws need to be made that are gender-neutral and not that are confined to only one section of the society thus emphasizing on the equal treatment of people of any gender. In a society where women are still hesitant to complain that they have been sexually harassed, it takes a lot of courage for a man to speak up and hence he should feel equally comfortable to come out and complain and object about the issues without the fear of being disregarded. However, the problems faced by them are not taken into consideration as people think that men are strong and that they are manly enough to deal with it. They are expected to take these incidents in a fun-spirited manner and not to feel uncomfortable. In fact, until now neither there is a law to punish a person for molesting or sexually harassing a man nor a forum where they can talk about it safely.

Hence, there is a need for laws where men will be given equal protection as women as everyone regardless of their gender has the right to live free of harassment. We need to make an environment that does not create any discrimination between the genders. This will only be possible when we realize that women are not the only victims to sexual assault and men are also given equal rights and remedies. While India legislated the Sexual Harassment of Women at Workplace Act, 2013 which recognized sexual harassment at workplace for women 8 years back, India needs to understand the ambiguity in the law and should amend the Act by bringing in the harassment of Men under the purview of the Act. Effective protection needs to be provided by the constitution to all persons vulnerable to sexual assault. The social stigmas attached to this need to be broken, awareness needs to be created and this will only be possible when a person who is sexually abused complains about it. Men too need to stand up and come forward and complain to break the social stigmas related to them. But this is a two-way process and first, we as a society need to accept that men too can be victims of sexual assault.

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An overview of the Foreign Marriage Act,1969

By

Sneha Mahawar

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November 10, 2021

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This article is written by Aditya Anand from Symbiosis Law School, NOIDA. In this article, the author has tried to cover the foreign marriage aspects and their relevance in our country.

Introduction

Marriage is a common tradition not only in India but all over the world and we all are accustomed to the values of this tradition that holds the culture and family values together. The value of marriage lies in both the religious and non-religious societies across the world. They follow the custom of marriage representing the civilized society of beings. The sanctioned union between two persons would greatly enhance the development and welfare of the people. The Foreign Marriage Act abridges the gap between the Indian Nations and the Foreigners by providing a common platform for the solemnization of marriages..

Objective of the Act

The basic objective of this Act is to solemnize the marriage between Indian citizens and foreigners. There are various pre-existing marriage laws in our country but this Act covers the exclusive and exhaustive conditions or various possibilities that can be related to marriage. In other words, they have some special provisions related to marriage which are not mentioned impliedly in other Acts related to personal laws. This Act abridges the gap between the Indian marriage laws and the foreign marriage laws and has some exclusive provisions for the citizens as well as non-citizens. In India, such marriage laws are governed under the Foreign Marriage Act,1969.

Importance of this Act in India

The Act plays a very important role as it is a foundational law for the issue related to foreign marriages. India is a culturally diversified and tradition-enriched country where marriage is considered a holy union. The Act provides recognition of marriage irrespective of any tradition, custom, or unreasonable conditions.

The Foreign Marriage Act is completely based on factual situations in addition to certain fulfillment of conditions that are justifiable as to recognize the marriage according to the laws of the country. The Act recognizes the presence of the couple and their consent in which one should strictly be an Indian citizen as mentioned in Section 4 of Chapter 2 of the Act. Section 4 states some conditions relating to solemnization of Marriages. This Act has eliminated many flaws that would have created the issue and dilemma among the public. Earlier, there were no dedicated marriage laws related to foreign nationals or marriages of Indians in foreign countries. This kind of dilemma gets solved by this special Act.

The Act has also reduced the conflict over certain issues related to the recognition of marriage. For example in the judgment delivered by Bombay High Court, Minoti Anand & Anr vs Subhash Anand & Ors (2011), the Court held that the marriage was solemnized under Section 18 of the Foreign Marriage Act. The fact was that they were an Indian Hindu couple and the marriage between them was performed in Japan as per the Japanese traditions and customs and it was registered under the Foreign Marriage Act. The major dispute was about the claim of matrimonial relief and the parties were at the dispute that it should come under the Hindu Marriage Act,1955 but the Court held that since the marriage is solemnized under the Foreign Marriage Act, the special relief would be claimed under the Special Marriage Act,1954. Section 18 subsection 1 of Chapter 4 accepts the provisions of chapters four to seven of the Special Marriage Act, 1954 and it shall be applied in case of the parties whose marriage was solemnized in foreign countries between parties and one should be the citizen of India.

In another landmark judgment of Andhra High Court in relation to Section 18, Joyce Sumathi vs Robert Dickson Brodie (1982) the Court held that if the parties marry in a foreign country then the relief can be claimed under Section 18 of the Foreign Marriage Act. The fact is that the wife of the appellant is a resident of India and they resided in Bahrain. As per the facts, the husband deserted the wife and so the wife filed for divorce in the lower court of India. The lower court dismissed the petition on the ground that the marriage is not registered under Section 17 of the Foreign Marriage Act (registration of foreign marriages) but after the appeal in the High Court, it was concluded that marriage solemnized under Section 18 of the Act or any other marriage solemnized in a foreign country should be taken into consideration as a valid marriage, on the condition that one party should be an Indian citizen and so wife’s petition to move forward for divorce was held maintainable.

Thus, the court has contradictory views in two different judgments where in one case the relief was provided under the Special marriage act while in the other case the relief was provided under the Foreign Marriage Act. It can also be concluded from the above judgments and Sections that this Act provides an exclusive view of the provisions that play an important role and reduces the conflict over such disputes which has not been discussed under personal laws and other marriage laws. The Act eases some of the discrepancies that cannot be dealt with in other marriage laws.

Solemnization of marriages

The solemnization of marriage is the process to perform the official marriage ceremony. There is an exhaustive process involved in the solemnization of marriages. Certain conditions have to be mandatorily fulfilled to get their marriage registered through Chapter III Section 17 of the Act.

Conditions of a valid marriage

The essential conditions that are requisite for the registration of marriages are stated in Chapter II Section 4 of the Act.

First Condition- As per the Section 4, a marriage between parties can only be possible when one of the parties is a citizen of India. Otherwise, the marriage will not be considered under this Act.
Second Condition- The parties should not have any existing spouse or pre-existing marriage. They shouldn’t have any living spouse as this has been specifically mentioned under Section 4(a) of the Act. The Act requires the condition of monogamy for registration under this Act.
Third Condition- This essential condition mentioned under Section 4(b) is that the mental condition of the parties which should be stable. They shouldn’t be idiotic or lunatic. During the marriage, both the parties should be of sound mind.
Fourth Condition- This condition under Section 4(c) discusses the eligible age of parties for the solemnization of marriages. At the time of registration, the bridegroom must have completed the minimum age of twenty-one years and the bride must have completed a minimum of eighteen years of age. The violation of the minimum age would make the marriage null and void.
Fifth Condition- Section 4(d) specifically states that parties shouldn’t be within the degree of prohibited relationship. If the personal law or custom is binding on anyone of the parties and even that law or custom permits the marriage as well as the marriage is solemnized then also the marriage will come under the degree of prohibited relationship.
Sixth Condition- When a marriage has to be solemnized under the Act, then the parties must give prior notice in writing for their intended marriage to the Marriage Officer of the district in which at least one of the parties to the marriage has resided for a period of not less than thirty days immediately preceding the date on which such notice is given as mentioned under Section 5 of the Act. The structure of the form should be in accordance with the first schedule. It will be counted after the notice is given and the party has resided.
Seventh Condition- As per Section 11 of the Act, marriage should not be in contravention to the local laws. The Marriage Officer can refuse to solemnize the marriage by stating justifiable reasons that have been recorded in writing. Marriage should not be prohibited by law in force in a foreign country where it has to be solemnized. The Marriage Officer can also state the reasons in writing to refuse the solemnization of marriage if he thinks that marriage is inconsistent with international laws. The Section also mentions the remedial measures under sub clause 3 for the issues related to the solemnization of marriages by the Marriage Officer.If the Marriage Officer refuses to solemnize the marriage then the intended party as per the this Section then the party may appeal to the Central Government as per the rules within the time period of thirty days. After that the Marriage Officer has to act as per the decision taken by the Central Government.
Eighth Condition- As per Section 12 of the Act which states the condition for declaration by parties and witnesses. There should be three witnesses and the parties. They should sign the declaration in the form that is specified in the second schedule in the presence of the Marriage Officer and the declaration shall be countersigned by the Marriage Officer.

Notice of marriage

After the fulfillment of conditions, the further process of solemnization of marriage shall take place. When the notice is issued of the intended marriage then the Marriage Officer has to maintain the Marriage Notice Book specified under Section 6. The Act stated that the Marriage Officer should keep a record of all notices given under Section 5 of the Act. A true copy of every notice should be entered in the book that is prescribed for that purpose and it shall be called the Marriage Notice Book. The book can be inspected by any desirable person free of cost and it shall be open for inspection at all reasonable times.

Publication of Notice

The Marriage Officer shall publish the notice given under Section 5 of the Act. This has been mentioned under Section 7 of the Act. The notice shall be published in his own office by affixing the copy at the prominent place as well as in the foreign countries where the parties are resident in the prescribed manner.

Objection to marriage

Section 8 of the Act invites the objections to marriages by any person within thirty days from the date of publication of notice in the public domain. The notice that is issued under Section 7 of the Act can be objected to under the following specified conditions that are stated in Section 4 of the Act. The objection shall be in writing along with the sign of the person or any other person authorized on his or her behalf. The person objecting should also specify the ground of objection and the Marriage Officer shall take note of the nature of objection in his Marriage Notice Book as well.

If no objection is raised within the given period then after the expiry of that period the marriage can be solemnized under Section 9 of the Act. If the objection is raised then there is a procedure on receipt of objection given in Section 10 of the Act. When the objection is raised under Section 8 of the Act then the Marriage Officer cannot solemnize the marriage until the objection is resolved. The Marriage Officer will inquire about the matter of objection.

Place and form of marriage

The place and form of marriage have been stated under Section 13 of the Act that marriage should be conducted before a Marriage Officer and shall be solemnized at the official house of the Marriage Officer in the presence of three witnesses with the open doors between the prescribed hours. According to Section 13(2) the parties may also choose to adopt solemnization of marriage in other forms as well provided it should be in the presence of the Marriage Officer and three witnesses and in any language understood by the parties. The language used in the process should be interpreted and understood by the Marriage Officer.

Certificate of marriage

After the declaration of marriage, a certificate of marriage is issued under Section 14 of the Act. The marriage officer shall enter a certificate that is specified in the third schedule in a Marriage Certificate Book that should be kept by the Marriage Officer for that purpose. The certificates shall be signed by the parties and the three witnesses. The marriage certificate is a piece of conclusive evidence that marriage has been conducted as per the rules and regulations stated in the Act. If the marriage is solemnised with formalities and duly signed then it is valid as per Section 15 which describes the validity of the marriages as it shall now be acceptable as per the law of the land.

Critical analysis

Although the Foreign Marriage Act was formulated with the intent to create special provisions related to the marriage of Indian citizens with foreigners, it has some flaws as well. It is dependent on the provisions of other Acts. There are certainly major issues in the provisions of the Act that were reflected in certain cases as well that are referred to in the latter part of this article.

The major problem is that the Act is silent in the case of divorce, nullity, or any other remedies as these provisions are not specifically stated in the Act. However, these issues have been covered so far in the Special Marriage Act while the marriages are solemnized and registered under the provisions of the Foreign Marriage Act. The issue raised is that remedy or relief will be based on the Special Marriage Act and the rights of couples would be given under general matrimonial laws that are enforceable in the country in such marriage solemnized under Foreign Marriage Act. In the case of Neerja Saraph vs Jayant Saraph, (1994), the Hon’ble Supreme Court has issued this issue where the court stated that general rights are available.

The Act also fails to address the issue of Succession related to matrimonial relief. The parties for remedies can’t use any provisions related to joint family status, inheritance rights of parties to civil marriage, and the succession law applicable to parties and their children found specifically in the Special Marriage Act. If the marriage is solemnized under Foreign Marriage Act then the future descendants of the parties will have to approach the court under the law of succession applicable in general cases.

The penalties are only for citizens of India. The punishment in case of any crimes related to Domestic Violence or any other kind can apply to Indian citizens and it cannot be applied to foreign parties even if they are found guilty of such crimes.

Problems related to foreign marriage

Certain issues need to be discussed related to foreign marriages. The Non-residential Indians play a significant role in preserving the rich Indian culture, religions, traditions, and languages. In the recent few years, the Overseas Indian Marriages have seen a rapid increase of cases due to various issues.

The common incidents that are related to Overseas Indian marriage are increasing day by day. The increasing problems in overseas marriage are complex in nature as these also fall under the Private International Law and Law of the Foreign Land. The issues have been addressed in accordance with the 15th Report of Lok Sabha Secretariat that are as follows-

Abandonment of the wife for various reasons

In recent years, this has been a major problem as there has been an increase in the large number of cases where the Indian woman who marries an NRI man is abandoned in India. The first issue discussed in the Report. The husband doesn’t show care as he never calls or writes as well as never returns to his wife. The girl becomes helpless if somehow she manages to reach her husband’s residential city but no one comes to receive thus leaving her at the mercy of total strangers in a foreign land.

Domestic Violence

This is the second issue addressed in the Report. There has been an increase in the cases of violence both physically and mentally, malnourished, confined, and ill-treated by husbands in several ways. She is compelled to move to her own home along with her children.

Instances of the NRI husband found to be already married

The third issue is that after the marriage when a woman starts to live with her husband in a foreign country she gets to know that her husband has already married a person of her desire but then also he marries again due to family pressure. The woman faces trouble as well as mental trauma due to this issue as her husband is already married as per the laws existing in that foreign country. One such example is the case of Harmeeta Singh vs Rajat taneja 102 (2003) DLT 822 under which wife was deserted by her husband within 6 months of marriage as the husband was already married so the Indian court concluded that whatever be the case in the US Court in India he will be guilty of bigamy and also would be liable to face criminal action.

Continued demands for dowry, pre and post marriage

The fourth issue is related to dowry. Dowry is an old traditional custom under which the bride brings property or money to her husband on their marriage. The demands for dowry makes life vulnerable for women as are harassed by the husband who demands dowry either in cash or kind which creates a huge burden to the girl as well as her family. For example, if the male person marries the woman upon certain demands that are mandatory to be fulfilled then the woman faces the burden.

Lenient legal system abroad for grounds for divorce, etc

The fifth issue is that the NRI husband takes advantage of comparatively lenient laws in other countries as a woman is denied maintenance in India on the pretext that the marriage had been dissolved by the court in another country. There are no specially codified acts or laws to especially deal with such issues as it is governed by the other laws and acts.

Proposed Solution

There are various agencies such as the Ministry of Overseas Indian Affairs, Ministry of External Affairs, Ministry of Women and Child Development, National Commission for Women, etc which promote and protect the values and deal with the problem of NRI marriages.

Help offered by the Ministries and National Commission for Women

The organization is the coordinating agency at the national level for dealing with issues with foreign marriages. The organization deals with complaints and grievances related to NRI marriages. The body organises several Awareness Building Programme. Time and again the NCW takes various steps like awareness-building programmes in areas where such fraud marriages are very common by taking help and tying up with various NGOs working in the same field.

Awareness Building Programmes

The innocent women get trapped in fraudulent marriages with overseas Indians and the purpose is to create awareness on this issue and to reduce the problems related to NRI marriages. The various initiatives are taken by the government in order to improvise this issue. The initiative such as National Consultation and Workshop and Awareness Campaign.

In 2006, the Ministry of Overseas Indian Affairs along with National Commission for Women organized and formulated two regional workshops in Chandigarh and Thiruvananthapuram with the objective to raise awareness.
The National Commission for Women and Ministry of Overseas Indian Affairs jointly conducted a National Seminar on 15th February, 2011 on the issue related to NRI marriages.
On the day of Pravasi Bhartiya Diwas several campaigns are done by the Ministry of Overseas Indian Affairs and women organizations where the various issues related to NRI marriages are discussed.
The Ministry has introduced information and guidance pamphlets in several languages to make awareness among the women about their rights and responsibilities. The pamphlets also contain legal remedies and suggestions.
The Ministry has also launched the publicity cum awareness campaign through audio visual entertainment on T.V in several regional languages.

Impact of this Act

The Foreign Marriage Act has eliminated the conditions of following personal acts or any other marriage laws. India is a diverse and secular country that has its own personal religious laws but this Act provides a common law marriage system for all as there are no limitations of laws to the territories of the country as it is applicable to the people who marry under foreign laws, provided one of them should have an Indian citizenship.

The foreign marriages have been duly acknowledged and accepted as per the law of the country. This has impacted the NRI as well as the people residing abroad and not only reduced the barriers of culture and other conditions but also created the mental ambiance for all those who want to marry as per their choice. When the Bill for this Act was brought in parliament in the year 1963 as per the recommendations of the 23rd Report of the Law Commission of India after a thorough discussion and analysis it was concluded that there is a need for a recognition of such marriages of people living in foreign countries or with the people who are not Indians.

Chapter six of the Foreign Marriage Act explains the exclusive provisions for the recognition of foreign marriages. As per Section 23 of the Act, the marriages solemnized under foreign marriage laws in foreign countries will be valid and acceptable by the Indian Courts under the Official Gazette. The Official Gazette is issued by the Central Government if satisfied with provisions of the marriage laws enforced in the foreign country and the solemnization of marriage is similar to the Act enforced in the Foreign Marriage Act. There are different religions in India and many personal laws but there is no uniform civil code for marriages yet that can be applied over the country and so this law provides the convenience for the solemnization of foreign marriages.

Comparison with other Acts

There are several laws in our country governing marriage such as Hindu Marriage Act,1955, and Special Marriage Act, 1954. The basic difference between the Special Marriage Act and the Foreign Marriage Act is that the former Act is limited to marriages that are executed in the territory of the country while the latter Act is not limited to marriages in the territory of the country but it duly accepts the solemnization of foreign marriages.

The Special Marriage Act is made for those who want to have inter-caste or inter-religion marriage with their willingness while the Foreign Marriage Act is considered for those who want to marry abroad as per their willingness. The pre-condition for considering marriage to be legitimate is that one should have Indian citizenship while for Special Marriages Act both should be Indians. However, the matrimonial relief would be provided under the Special Marriage Act if the marriage is registered under the Foreign Marriage Act that has been explicitly mentioned in Section 18 (1) of Chapter four of the Foreign Marriage Act. Both Acts aim to widen the spectrum of the marriage conditions and to make the laws superior to the personal laws for promoting the individual’s right to choose and marry as per their own will.

The basic difference between the Hindu marriage laws and the foreign marriage laws is that the Hindu Marriage Act deals exclusively with the person who is a follower of the Hindu religion mentioned in Section 2 of the Act while there are no limitations of religion in the Foreign Marriage Act. A couple can marry under the Foreign Marriage Act irrespective of their religion. The laws of the Hindu Marriage Act can be applied when both parties have a domicile of India and they are marrying in the territory of the country while the Foreign Marriage Act laws will be applied to those when at least one of the people is of India or has Indian citizenship and they can marry in any foreign countries. There is usually no need for a Marriage Officer to validate a marriage under the Hindu Marriage Act as the priest performs the rituals in front of guests and family members while a Marriage Officer should be present to solemnize the marriage under this Act.

There are certain common grounds also under both the Acts such as, in both the Acts bigamy is not acceptable as there can be no second marriage in case of living spouse or divorce. Bigamy is also punishable under Sections 494 and Section 495 of the IPC(Indian Penal Code) which is common for both Acts. A marriage is considered void in the case of bigamy. Thus, these were the common points and some differences with the other marriage laws. However, it can be concluded that Foreign marriage is mostly based on the essence of the Special Marriage Act as most provisions of this Act are already included in the Foreign Marriage Act such as Section 18 of the Act.

Conclusion

The Foreign Marriage Act has played a significant role in reducing the conflict for the validity of a marriage based on foreign countries. This Act has undoubtedly provided a good platform for the legitimate recognition of marriages as per the laws of the country. It reduced the flaws regarding marriages of nations by providing exclusive points on foreign marriages. The best distinctive feature of this Act is that it covers the conditions irrespective of religion.

References

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Validity of narco-analysis in India : crime detection technique

By

Sneha Mahawar

-

November 10, 2021

0

This article is written by Oishiki Bansal, a student of Symbiosis Law School, Noida. The article delves into the admissibility of narco-analysis as a scientific test for the investigation process and the constitutional provisions attracted by it.

Table of Contents

Introduction

Imagine a society divided into factions as they were in ‘Divergent’, written by Veronica Roth. Having a faction that only speaks the truth, honesty and morals are their values. There are no legal consequences of using the truth serum to verify that the person is speaking the truth or not. In such a scenario, the identification of criminals and the administration of justice would have been very easy. However, if seen in a realistic way, forcing someone to speak against his will would mean invading the privacy of the person.

In the present time, with the growth of technology and new means to aid justice, the Indian Evidence Act,1872 still does not cover the scientific tests, also known as ‘deception detection tests’ that aid investigations. The three scientific tests that are commonly used in the investigation process are:

Polygraphy (lie detector)
P-300 (brain mapping)
Narco analysis (truth serum)- In narco analysis, the person is sent in a state of disinhibition, i.e., a state where the person is not conscious of his actions. It is done by administering a solution of sodium pentathol and distilled water into the veins by a qualified anaesthetist. The test is conducted by recreating scenarios or situations or by asking questions of the testifier and prodding him to answer. The solution works like a truth serum as the testifier is not in a state to think consciously about what he is answering. The tests pose a lot of problems, one of them being the administration of too little narcotics. The testifier can fake scenarios and can resist the process of disinhibition, whereas if the narcotic is administered in higher amounts than required, the testifier can go into a state of unconsciousness, which could in turn even cause him to go into a coma. The testifier’s vitals are continuously monitored by a team of doctors to prevent any health issues. The whole process is video recorded and a report is given by the doctors for further consideration and to help find more evidence.

This test has always been controversial due to its nature and the way it is conducted. It is often questioned whether the narco-analysis test infringes the right to be protected against self-incrimination and the right to life.

Constitutional provisions on Narco-analysis in India

Article 20(3) of the Ind i an Constitution provides that, “no person who is accused of a crime can be compelled to be a witness against himself”.

One can seek protection under Article 20(3) only if the following requirements are fulfilled –

Only an accused can avail of the protection guaranteed.
Only when the accused is compelled to be a witness against himself.
Only available if a person is charged with an offense.

The statements made by the testifier are not admissible in the Court; they can only be used for further investigation purposes.

When evidence procured comes into the inhibition of Article 20(3) of the Constitution:

The person who made the statement must have been accused of committing an offense at that time.
The statement had material applicability to the criminality of the accused.
The accused was forced or compelled to make that statement.
The force used on the accused should come under duress.

‘Duress’ includes compulsion or force applied through some physical or objective act and does not refer to the state of mind of a person while making the statement. Therefore, it is contested that narco-analysis does not amount to compulsion as it is a mere process of extracting information by the accused through disinhibition. The results are ascertained from the video recorded during the test which could help in disseminating more information on the case. However, it is still a controversial topic as the accused makes the statement himself unlike the other tests, and sometimes the statement made can be self-incriminatory. It cannot be ascertained before the Court whether the test will be self-incriminatory or not. Article 20(3) of the Constitution can be appealed if the statements made by the accused are self-incriminatory and will be rendered inadmissible in the Court even though they provide a piece of evidence or lead to dissemination of more facts or evidence.

In the case of State of Bombay, v Kathi Kalu Oghad(1961) the Court held that it must be shown that the testifier was compelled to make a statement that was self-incriminatory to attract the provisions of Article 20(3) of the Constitution.

The narco-analysis test is also contested on the grounds of the right to life and privacy, as provided under Article 21 of the Constitution. It is argued that using extraneous means to force a person to speak and forcible intrusion into one’s mind is an invasion of one’s privacy. Also, the mental torture that one goes through during this test is violative of the right to live with human dignity under Article 21.

The practice of narco-analysis in India

The practise of narco-analysis has continuously been used in India. The Courts in many instances have permitted the use of different scientific tests or deception detection tests for further investigation. In India, the narco-analysis test is conducted by a team that comprises of the following medical practitioners and other officers:

An anesthesiologist
A psychiatrist
A clinical/ forensic psychologist
An audio-videographer
And supporting nursing staff.

The test is read and analysed by a forensic psychologist, who then presents a report accompanied by a video recording stored on a CD. If the Courts find it necessary, then this test is further verified through brain mapping and polygraph (lie detector) test.

Admissibility of narco-analysis in the court

Just like a confession made in the police station is not admissible, a statement made during the narco analysis test is not admissible in the Court, except under certain circumstances when the Court thinks that the facts and nature of the case permit it. The Courts have, however, provided differing views on the permissibility of conducting narco-analysis. In the case of SeIvi Murugesan v. State of Karnataka,(2010), the High Court of Karnataka explored the issue of whether narco-analysis is a compulsion on the invasion of the human body or not. Justice Majage referred to Section 53 (1) of the Criminal Procedure Code,1973 which provides for the use of reasonable force by a medical practitioner at the request of a police officer for ascertainment of facts that could help in finding new evidence. He stated that the narco-analysis test done by a qualified medical practitioner within a prescribed manner is justified under Section 53(1) of the CrPC. Further, supporting his view with the help of Section 39 of the Criminal Procedure Code, he stated that it is the duty of every individual to give information about a crime, and Article 20(3) of the Constitution cannot hinder the process of acquiring the truth. This view has further contended in the case of Ramchandra Ram Reddy v. State of Maharashtra,(2004) where the petitioner argued that the narco-analysis test is an invasion of the body and thus violates Article 20(3) of the Constitution. The Court shared similar views as in the case of SeIvi Murugesan v. State of Karnataka and further stated that contrary to the belief sometimes the test could be used to prove testifiers innocence.

Various Courts have opined that the Constitution framers while formulating the right against self -incrimination, did not intend to interfere in the process of proper and efficient investigation. However, the Courts have emphasized two conditions for allowing scientific tests on the accused:

The totality of a case’s circumstances as well as context.
The setting of the case is such that reasonable doubt should exist to permit the tests.

Criticism of narco-analysis test

The question that arises with the use of the narco-analysis test is whether conducting a test that invades one’s body and violates privacy by intruding on the mind of the accused is reasonable? Whether it is legal to use inhuman ways to find the truth? The reliability of narco tests has always been questioned. Whether it is right to inflict such pain on a person when 100% accuracy in the results can’t be promised? There have been many cases where the testifiers have given false statements even in narco-analysis. It is argued that only interviewees, who have been efficiently trained in asking questions should conduct the test, as it is the process of reviving a memory that the testifier has already forgotten which could lead to distortion of facts. The importance of consent has always been emphasised by all the Courts for the narco test. Without the consent, the narco-analysis test should not be conducted and it is deemed that the test has been fair without any compulsion without knowing what goes behind giving the consent.

Court Precedents

Dinesh Dalmia v. State by Spe (2006)

In the case of Dinesh Dalmia v state by Spe,(2006), the Court held that if the accused does not cooperate with the investigation team and the investigation is unable to complete within time and if the nature of the case permits, the investigation team can go forward with scientific tests to find any leads for the case.

Sh. Shailender Sharma v. State & Another (2008)

Further in the case of Sh. Shailender Sharma vs State & Another (2008), the Court took forward the same view and stated that narco-analysis and other scientific tests help in determining evidence in the case helping the investigation.

Therefore, the Courts in India have recognised that the scientific tests do not violate the protection given under the Constitution and a narco-analysis test can be conducted if the circumstances of the case allow, although, all the Courts have presented the view that any statement that is self-incriminatory cannot be permitted in the Court as evidence and prosecution cannot rely on the said statement.

The right against self-incrimination

Every coin has two sides. On one hand, the narco-analysis test helps in discovering new facts, leads or evidence which could aid the investigation and act as a catalyst in the process of justice. On the other hand, narco-analysis, if done forcefully or used unfairly, can attract the protection guaranteed under the Constitution, such as the fundamental right to life, privacy and the right against self-incrimination. The Courts have recognised the narco analysis as a permissible means of investigating. It also comes in handy when the interest of society at large is involved, and it is more important than the interest of an individual. In Rojo George Vs. Deputy Superintendent of Police (2006), the Courts held that the ways in which the crime is conducted in present times are more sophisticated and technology-equipped, and therefore, the conventional means of investigating may not necessarily lead to a fair result. The more time an investigation takes, the more time the actual offender gets to cover up his crimes. Thus, the views on narco-analysis have always been mixed and have now been converted into a never-ending debate.

Conclusion

With the development in various human rights, narco-analysis has always been criticised on the view that it infringes the right to privacy and the right to life of the accused. Since it is the only deception detection test that requires the testifier to make statements, it is always subjected to the question of whether the provisions of Article 20(3) of the Constitution are attracted or not. The Courts have contended that conducting narco-analysis is permitted if the nature and circumstances of the case are such that a narco test is necessary. The accused should have consented freely to the narco test and there should be no sign of compulsion or force on the accused. The statements given by the accused cannot be treated as evidence and the prosecution cannot rely on such statements to present their case.

References

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What to do if your cheque gets dishonoured

By

Sneha Mahawar

-

November 10, 2021

0

Negotiable Instruments Act — Image Source: https://bit.ly/2kTxcxH

This article is written by Daisy Jain, pursuing B.COM.LLB (Hons) from the Institute of Law, Nirma University. This is an exhaustive article which talks about what to do if your cheque gets dishonoured.

Table of Contents

Introduction

In India, cheques are issued for a variety of transactions, the majority of which are commercial dealings. It is common practice for business owners to issue post-dated cheques to their distributors or service providers; moreover, it does happen that a cheque gets dishonoured when delivered to the bank caused by a lack of finances. Cheques are often used in roughly all payments, including loan repayment, payment of fees, payment of bills, salary payment, and so on. Regularly, banks process and clear the wide proportion of the cheques that come through their doors. Cheques are issued to obtain documentation of payment. The introduction of cheques into the economy has provided a novel path for the financial industry and commercial world, as well as for individuals. Individuals now wish to hold and undertake a slip of paper known as a cheque instead of having cash in their pockets. Transactions involving checks are essential and significant not just in the banking industry, but also in the fields of trade and commerce, as well as in the overall national economy. However, the increase in the use of cheques has also increased the practice of granting cheques to people who have no purpose of honouring them.

If the sum of money of the cheque is given to the payee by the bank, the cheque is deemed to have been honored by that bank. If the bank denies paying the sum of money of the cheque, the cheque is deemed to be dishonoured and is returned to the sender. As a result, a dishonoured cheque indicates that the bank has refused to pay the sum of the amount of the cheque to the payee. The drawer draws an e-cheque without complying with the norms and legislation of issuing a cheque, or the drawer draws the cheque with a balance over the bank account’s available funds. Section 138 of the Negotiable Instruments Act 1881 is intended to curb malpractice on the part of the drawer by causing him or her to draw a cheque without adequate money in his or her account managed by him or her in a bank and to provoke the payee to respond on the cheque in the proper course of events. The primary goal of this statute is to impart confidence in the productivity of financial transactions as well as the robustness of transactions involving negotiable instruments in the general public.

What is a cheque

A cheque is considered to be a negotiable instrument. It is governed by Section 6 under the Negotiable Instruments Act of 1881. In the financial world, a ‘cheque’ is a bill of exchange drawn on a definite banker and not expressly stated to be payable except on demand. It also involves a computerized picture of a compressed cheque and a cheque in digital format. In layman’s terms, a cheque is a paper that is drawn by one individual for the benefit of another individual to whom he has consented to pay a specific amount of money within a specific time frame. There are three parties to a cheque:

Drawer- The drawer is the individual who is responsible for issuing the cheque.
Drawee- In the case of a cheque, the banker on whom the cheque is drawn is indeed the person who receives the cheque.
Payee- The individual to whom the cheque is to be made payable.

The number of commercial transactions is increasing at an alarming rate. As a result, it is hard for an individual to hand over liquid money to some other individual. In such circumstances, a cheque serves as a means of transferring money from one individual to another, ensuring that the transfer of money is secure and that both parties benefit from the savings in time that the cheque provides. While there are numerous advantages of using a cheque:

Some protocols must be pursued when money is transferred through the use of a cheque. A crossed cheque ensures that only the payee can obtain the funds.
It also ensures that the drawer has a bank account; the cheque must be given some obligations to the recipient (payee); and, in form of finance, there must be adequate funds in the drawer’s bank account for the cheque to be issued and not to be dishonoured due to inadequacy of funds.
Most pertinently, it ensures that only the payee can obtain the funds.

Dishonour of cheque

As the number of individuals conducting commercial transactions grows daily, the consistency of retaining a positive bank balance has fluctuated in response to the people’s monetary requirements. If an individual issues a cheque to another, it is possible that he or she is not cognizant of the actual bank balance, and as a result, the cheque may be rejected. In such cases, the drawer of the cheque is provided a 30-day grace period to pay back the amount to the payee. However, if the drawer does not agree to pay the amount within that time, the payee has the alternative to file a lawsuit against the drawer seeking payment of the sum of money of the cheque and also an amount of interest as remuneration for the default induced by the drawer.

Cheques are deemed to have been honored when the payee’s bank transfers payment of their portion of the cheque amount to the drawee bank. On the other hand, when a bank refuses to pay the sum of the amount of a cheque to the payee, the cheque is referred to as being “dishonoured.” A cheque may be returned unpaid by the drawee bank for a variety of factors, one of which is insufficient money in drawee’s checking or savings account. When a cheque is returned unpaid, the drawee’s bank immediately issues a ‘Cheque Return Memo’, which details the causes for the cheque’s non-payment. At this point, the payee has the alternative of furthering legal claims for dishonour as soon as possible or resubmitting the cheque for realization after receiving confirmation from the drawer that the cheque will be honored the second time around. It is critical, after all, that any legal action can be taken if the cheque is presented to the bank after the validity period of 3 months or 90 days.

Reasons for the dishonour of cheque

In the following cases the cheque gets dishonoured:

If there is an overwriting or if the signatures do not complement.
If there is any reason to think about the authenticity of the cheque.
A discrepancy in the account number may even result in a cheque being bounced or a cheque being dishonoured.

The customer’s insanity, bankruptcy, and death as a result of providing a cheque at the incorrect branch are all possibilities.
The bank will dishonour the cheque if the drawer has requested the bank to stop payment and not pay for the cheque already issued.
If the payment is made to the bank after three months from the date which is written on the cheque then the cheque will be dishonoured due to the expiry of that period and this type of cheque is known as a stale cheque.
When the government or the court will order the bank to freeze all the accounts of that individual and thereafter the cheque pertaining to that individual’s account will be dishonoured.
In case the drawer closes his account before a cheque is presented to the bank then the cheque will be dishonoured. If the drawer doesn’t have adequate funds to pay the amount mentioned in the cheque then the cheque will be dishonoured. What happens when the cheque is dishonoured by the bank

According to the Negotiable Instruments Act, 1881, the dishonour of a check is a criminal offence, and the person in whose favor the cheque is issued can seek both civil and criminal redress. An individual who has obtained a cheque in exchange for services provided or for other obligations will incur financially if the very instrument that guarantees to honor the payment in the mode of a cheque is not honored. When a cheque is dishonoured, the law contains regulations that ensure the payee is not left without recourse in form of money that he is lawfully authorized to and emotional trauma that he has been subjected to, and he must take specific measures, which involve sending a legitimate demand notice to the drawer or filing a lawsuit if the drawer fails to honor the cheque after receiving such a demand notice. dishonouring certain cheques has been made an offence under Section 138 of Negotiable Instrument Act, 1881 punishable by imprisonment for up to two years, a pecuniary fine, or both. To put this into impact, the Public Financial Institutions, Banking, and Negotiable Instruments Laws (Amendment) Act, 1988, was passed, which amended the Negotiable Instruments Act, 1881. The Negotiable Instruments Act was amended to include a new Chapter VII, consisting of Sections 138 to 147. Sections 143 to 147 of the Negotiable Instruments (Amendment) Act, 2002, have been incorporated into the same Chapter.

According to Section 138, if an individual draws a cheque from an account managed and maintained by the same individual with a banker with an intention of the repayment for his debt or other liability to another individual from that account wholly or partially, and then it is reverted by the bank unpaid either due to the sum of money standing to the credit of that account had inadequacy of money in the account or it exceeds the sum of money which had to be paid from his account through an agreement signed between the bank and the individual, such individual would be considered to have committed an offence and shall be liable for that offence without any bias to any other provision of this act and shall be punished for an extended term of 2 years of imprisonment, or with a fine which can be more than twice the amount of the cheque, or shall be liable for both imprisonment and fine.

Essential ingredients to constitute an offence under Section 138

Legally enforceable debt or other liability

If the drawer intended to use the cheque to discharge a legally enforceable debt or other liability, the drawer should have issued the cheque to the payee in full or in proportion. The repercussions of dishonouring a cheque when it is provided as a gift to a private person, or as a charity or donation to a charitable organization, or even as an unexpected cost or reward, are not addressed by Section 138 of the Act, as determined by the Supreme Court in the case of Uplanche Mallikarjun and Ors. v. Raj Kanti Vimala and Anr. (1997). Even if the cheque is issued as a safety or as a discharge of liability as a guarantor, provisions of Section 138 of the Act apply in these cases.

Presentment within three months

The cheque should have been addressed to the bank by the payee within the time specified on the cheque. Normally, a cheque’s time frame is three months from the date of issue; however, if a shorter period prescribed (for example, less than three months) is stipulated on the cheque, that time frame is taken into consideration.

Return of cheque due to insufficiency of funds

In this case, the cheque should have been given back to the drawer by the bank because the sum of money standing to the credit of the account is inadequate or surpasses the amount of money organized to be paid from that account. When we say “money standing to the credit of the account,” we refer to the resources available in the account that can be used to honor the cheque issued by the drawer. Unless otherwise specified, the phrase “amount organized” relates to the money that is currently in the drawer’s account plus any funds that have been organized by the drawer with the banker, whether through an overdraft agreement or other means. A stop payment will be considered to have been dishonoured for inadequacy unless a valid reason for the stop payment can be demonstrated.

What to do if cheque gets dishonoured

30 days notice to the drawer

As soon as a payee or an account holder learns that a cheque has been dishonoured due to a lack of funds in the drawer’s account, he or she must send a notice to that drawer requesting that the cheque amount be paid within 30 days of receiving notice of dishonour from their bank. It is not possible to give notice under Section 138 of the Act verbally. The notice may be provided in any written form, as well as by fax, email, or any other electronic means of communication.

Failure of the drawer to make payment within 15 days of receipt of notice

The person who received the aforementioned cheque should have failed to make payment within 15 days of receiving the notice from the payee, as stipulated in the agreement. It is important to consider that the holder does not have access to the cause of action at the time the cheque is dishonoured. When the holder receives notice of a dishonoured cheque and transmits a notice seeking payment of the cheque amount within 30 days of receiving notice of the dishonoured cheque, and the drawer fails to pay the exact thing within 15 days of receiving the said notice, the situation is then called for.

Filing of complaint with magistrate under Section 142

When an individual provides a cheque or payment that is not honored, the banker notifies the individual that the cheque has been dishonoured. Following that, he delivers a notice to the drawer, requesting that the amount of the cheque be paid within 30 days of receiving notice of dishonouring the check. After the notice is issued to the drawer, and if the payee does not make the payment within 15 days of receiving the notice, an offence is committed under Section 138. The drawer’s cause of action for filing a complaint emerges on the 16th day following receipt of the notice, which is when the complaint is filed. Section 142 talks about the cognizance of offences.

Offence by companies

Everything about commercial transactions, especially the efficient and timely governance of cheques as instruments, is dependent on the credibility and sincerity of the parties involved in the transaction. There is no denying that a bank’s failure to honor a cheque causes the payee irreparable loss, damage, and discomfort and that the complete validity of business transactions conducted within and out of the country suffers a sharp downturn as a result. As a corporation, is an independent entity formed by law, a corporation operates through its board of directors and officers, who are accountable for the overall operation of the corporation. Criminal liability for cheque dishonour is mainly imposed on the drawer company, but it may also be imposed on officers of the company. Generally speaking, in cases that involve criminal liability, the rule against vicarious liability applies, which means that no one can be held criminally liable for the actions of another. This general rule, however, is subject to an exception which makes the drawer vicariously liable under Section 138 of the Negotiable Instrument Act, 1881, but the drawer will only be held liable if the drawer itself is a corporation or a firm or an association of people, and at the commencement of that offence, all such persons were involved in that offence and were held guilty for that offence under Section 138 of Negotiable Instrument Act, 1881. Companies are subject to the provisions of Section 141 of the Negotiable Instruments Act, 1881.

Punishment and penalty

The court will issue a summons and hold a hearing on the particular matter after obtaining the complaint of the alleged crime, as well as an affidavit and all relevant documentation. The defaulter may be penalized with a monetary punishment that is twice the amount of the cheque in issue, or he may be imprisoned for a term that can last up to two years, or he may be prosecuted with a combination of the two. In addition, the bank has the authority to suspend the defaulter’s access to his or her checkbook and to close the account if the defaulter has a history of bounced checks. Unless the drawer fails to make payment on the disputed cheque within 15 days of receiving the notice, the drawer is not considered to have committed an offence. Alternatively, the payee may file a complaint in the court of a jurisdictional magistrate within one month of the date on which the 15 days specified in the notice was completed.

Case laws

Dashrath Rupsingh Rathod v. the State of Maharashtra & Anr (2014)

Because of the above-mentioned groundbreaking Supreme Court decision, the foundational standard for filing criminal complaints about cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881 has been altered. Initially, a case under Section 138 could only be brought by the person who received the cheque at his or her business premises or residential, but this has changed. According to the above-mentioned verdict, the complaint must be filed in the county where the branch of the bank on which a cheque was drawn is situated, and the judgment will be applied retroactively, i.e., lakhs of cases currently pending in numerous courts across the nation will be subjected to an interstate transfer of cheque bouncing cases and dishonouring of cases under the verdict.

Dalmia Cement (Bharat) Ltd. v. M/S. Galaxy Trades & Agencies Ltd. (2001)

It was in this case that the Supreme Court delivered a milestone decision, in which the rationale behind the implementation of Section 138 of the Negotiable and Instruments Act, 1881, was laid out. The facts of the case begin and end around the non-payment of a cheque, for which a notice was issued to the convicted to inform him of his rights. When the complainant obtained the complaint, the time limit for filing the complaint was extended until that point. The exact thing happened a second time, with the suspect failing to give the required sum of money. Based on the current facts, the court held that Section 138 of the Act was created to protect against any sort of violation of a person’s legal rights who have not received payment and that if a scenario comes up that makes it extremely difficult for the person to receive payment, then Section 138 should operate as it has been legislated to maintain the person’s legal rights. As a result, in this case, the court ordered that actions be taken against the respondent following the Act.

M/S Meters and Instruments Private Limited & Anr. v. Kanchan Mehta (2017)

In this case, the Supreme Court took into consideration the object linked with Section 138, as well as other existing laws stipulated in Chapter XVII of the Negotiable Instruments Act, 1881, and decided on whether Section 138 was constitutionally valid.

On the grounds of a pre-existing agreement between the two parties, the complainant Kanchan Mehta filed a complaint against the plaintiff under Section 138 of the Act, alleging that the latter had failed to pay a sum to the complainant every month as stipulated in that agreement. The court dismissed the complaint. The company had issued a check to the complainant, thereby discharging their legal obligations to that person or entity. The inadequate funds were handed back to the sender because there were inadequate funds on hand. Legal notices were served on the company for them to complete their payment, but the company failed to comply, and as a result, the company was held liable for the violation of Section 138 of the relevant Act of Parliament. Furthermore, when the company’s director expressed a willingness to pay the complainant, the demand draft was rejected by the company’s legal department on their end. As a result, the company filed a lawsuit against the complainant under Section 147 of the Act, which provided for the prosecution of compoundable offences. The complaint was dismissed by the concerned High Court because the complainant had not given his assent to the holding that the offence was compounding in character.

The Supreme Court of India has ruled that all of the crimes listed under Section 138 are civilmen’s. In addition, the Negotiable Instruments (Amendments and Miscellaneous Provisions Act, 2002 contains a statute for compoundable offences, which requires the assent of both parties in the transaction in question to be effective. Because the company agreed to remunerate the complainant, the court, in the interest of appropriate administration of justice, considered discharging the accused because the complainant had been compensated with the amount that was required to be given in the first place.

Canara Bank v. Canara Sales Corporation (1987)

This case provides a foundation for understanding the relationship held in common between a bank and its customers, which is bound together by strands of responsibilities and justice, particularly in the event of negligence on the part of either party or involvement in deceitful actions on the part of either party. As a result of this investigation, the respondent was found to have a bank account with the plaintiff’s bank, which was later discovered to have been linked to illegal transactions because the cheques that were cashed did not bear the initials of their managing director, the respondents. As a result, fraud occurred in the particular instance. The respondents have filed a lawsuit to be compensated for the money they believe they have lost. The Court noted that there was negligence on the part of both the creditor and the debtor, but that the equilibrium of negligence tipped more in favor of the banker than in favor of the company. In this case, the bank’s simple negligence cannot be used as a justification for not utilizing the service. The court ultimately determined that the company is entitled to compensation, and the case was dismissed as a result.

Dayawati v. Yogesh Kumar Gosain (2017)

The Delhi High Court’s decision in 2017 opened the door to a new avenue known as the alternate dispute resolution mechanism for deciding crimes classified under Section 138 of the Act that is criminally compoundable by nature. This decision not only signaled a shift in the way the Act was dealt with, but it also signaled a shift in the Indian judicial system. It went on to say that because the offences listed under the Negotiable Instruments Act, 1881 are distinct from other criminal offences, they can be given a priority to be remedied distinctly and more expeditiously than other criminal offences.

Conclusion

When it comes to the crime of dishonouring checks, the element of motive, or ‘mens rea,’ which is a vital aspect of all criminal offences, is not pertinent in this case. When cheques are dishonoured because there are insufficient funds in the drawer’s account, Section 138 of the Negotiable Instruments Act makes it a statutory offence, and the situations in which the dishonor occurred are insignificant. However, the law only takes into consideration the fact that a check has been dishonoured and does not take into consideration the numerous causes that led to it.

The dishonour of a cheque is one of the most common problems that parties encounter when moving funds through negotiable instruments. Even though the drawer was ignorant of the inadequacy of the funds in his account within a recommended period, he will be held liable. However, the law itself offers them a decent length of time to reimburse the money to the payee. The mistake that occurs after such a time frame must be treated as a criminal offence because it entails the illegal intention of not repaying the money which is due to the party in the first place. As a result, the law makes it evident that the parties signing a cheque must be cognizant of the amount of money in their respective banks at the time of signing.

References

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Analysis of dilution doctrine under trademark law

By

Oishika Banerji

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November 10, 2021

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This article has been written by Hinal Khona pursuing the Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).

Table of Contents

What is a trademark?

Words, symbols, designs, or combinations of these can be used as trademarks to differentiate between different products and services. Consumers associate such distinctive logos with a particular product or service. For example, when we see a bitten apple design, we immediately think of Apple.

What is dilution of a trademark?

Unauthorized use of and/or application for a trademark that is likely to undermine the unique quality of or harm a well-known mark is referred to as trademark dilution. The question of whether a well-known trademark has been diluted is distinct from the question of whether the mark has been violated, that is, whether the unlawful use is likely to lead to consumer confusion. The most prevalent sort of dilution is blurring, whereas the other is tarnishing.

When a trademark gets diluted, it loses its ability to be identified by a single source due to the usage of similar or identical trademarks in non-competing areas. Dilution protection, unlike regular trademark law, extends to trademark uses that do not cause consumers to be confused about who manufactured a product. Dilution protection law, on the other hand, prevents sufficiently strong trademarks from losing their unique identification with a certain product in the public mind, as might be envisaged if the trademark were to be encountered independently of any product.

Consider the following scenario: The ‘BMW’ trademark is recognized for its automobiles, but what if a third party started selling cigars with that trademark the next day? Because the public associates the BMW mark with automobiles, having BMW on a cigar would be unacceptably damaging to the company’s reputation. Furthermore, BMW also prefers to be linked solely with automobiles, that’s when Doctrine of Dilution comes into the picture.

The first instance of trademark dilution was in 1927. Frank I. Schechter first proposed the trademark dilution idea in his paper “The Rational Basis of Trademark Protection,” which was first published in the Harvard Law Review. In his article, Schechter stated that trademark protection should not be limited to addressing concerns of public deceit, but should also include stopping offenders. Due to his work Frank Schechter is hailed as the “Father of Dilution.”

Evolution and acceptance of dilution doctrine in India

With the passage of the Trade Marks Act of 1999, which went into effect in 2003, statutory measures relating to trademark dilution were first brought into Indian law. The notion of dilution has been primarily expressed in Indian trademark law through Section 29 (4), however, there are additional important sections that connect to Section 29. (4).

It is important to highlight that, while statutory recognition was implemented in India in 2003, it should not be assumed that the well-known mark was not protected against misuse in respect of distinct goods prior to the Act’s implementation. Even before TRIPS became effective in January 1996, Indian courts had implemented the dilution theory under the passing off remedy. It may not have been in its current form, but the uniqueness of the mark was protected in some cases. In the majority of cases, the claimant has sought relief under the tort of “passing off.”

In Sunder Parmanand Lalwani and others v Caltex (India) Ltd, the High Court of Bombay decided that using the Caltex mark for watches would mislead and cause consumer confusion because the mark was connected by customers and the general public with petrol and different oil goods.

Since the early 1990s, Indian courts have recognized trademark dilution, although without providing any analysis of the theory in their decisions. One of the questions before the single judge bench in Daimler Benz Daimler Benz Aktiegesellschaft versus Hybo Hindustan was whether the defendant could use the brand ‘BENZ’ on underwear. The Hon’ble Judge used the notion of dilution without even mentioning the word “dilution” once in the entire judgment, which was less than 1,700 words long. The Hon’ble Judge did, however, use the word ‘dilute’ once, at the end of the sentence, while noting ‘In my view, the defendant cannot dilute, that by a user of the name “Benz” with respect to a product like under-wears.’ The court’s decision was solely concerned with the significant injustice that would result if the defendant were allowed to continue to use the mark, with no consideration of dilution or any other legal concept.

As a result, without any statutory requirement, Indian courts efficiently protected well-known trademarks, which were eventually acknowledged and accepted by the government in the form of TMA, 1999.

Trademark dilution in US

Both federal and state laws protect trademarks in the United States. The Lanham Act of 1946 is the fundamental federal act that controls the law. The Federal Trademark Dilution Act of 1995 (FTDA) forbids trademark dilution if it is well-known. The courts will consider the following factors in determining whether a mark is famous: (1) whether the mark is innate or acquired distinctive; (2) the duration and scope of its use; (3) the amount and type of promotion; (4) the geographical scope of the market; (5) the channels of trade; (6) the degree of recognition in the marketplace; (7) whether similar marks have been used by others; (8) whether a mark has been registered.

The cause of action against this use might be brought via blurring or tarnishment if the claim for dilution has been satisfied. Blurring happens when the distinctiveness of a well-known brand is diminished as a result of its association with unrelated goods, whereas tarnishment occurs when the mark is connected with poor or unfavorable goods or services. In the matter of Toys “R” Us v. Akkaoui, the plaintiffs own the trademarks “R Us,” which the defendant utilized to launch an adult website named “Adults ‘R’ US”. The court had concluded that the defendant’s mark tarnishes the plaintiff’s line of items by associating it with a line of sexual merchandise that is unrelated to Toys ‘R’ Us. The court ordered the website, as well as any products affiliated with it, to be shut down immediately, as well as any further use of the above-mentioned mark that might dilute and tarnish the plaintiff’s mark’s reputation.

Previously, establishing that there had been an actual dilution of the mark was required to gain any action under this legislation. However, the Trademark Dilution Revision Act of 2006 (TDRA), the most recent addition to the FTDA, emphasizes that even the possibility of dilution is sufficient to acquire appropriate remedies under this statute. The introduction of TDRA overturned the US Supreme Court’s decision in Moseley v V Secret Catalogue, Inc., where the respondent’s mark, ‘Victor’s Little Secret,’ was very similar to the petitioner’s mark, ‘Victoria Secret,’ and the court had held that the petitioner’s claim for dilution would not hold because no actual dilution had been proven.

The TDRA also brought about an amendment that requires demonstrating how well a mark has been recognized by the public in the United States in order to establish it as famous and to acquire protection against dilution. In trademark dilution cases, damages are only attainable if the defendant knowingly traded on the plaintiff’s goodwill. Plaintiffs in a dilution case are confined to injunctive relief otherwise. Injunctive relief, recovery of damages in some situations, lost profits, and destruction of infringing items are among the remedies available for trademark dilution, and a similar remedy was also available in the Toys R Us case.

Some acts are expressly excluded from the scope of dilution under the TDRA. It exempts simply nominative or descriptive uses of another’s mark, such as in advertising or promotion that allows customers to compare goods or services, and in parodying, criticising, or commenting on the famous mark’s owner or its goods and services, among other things.

The Act contains a significant flaw. There is a multifactor test for measuring dilution by blurring, i.e. elements are provided under the Act for establishing blurring, but no factors are offered under the Act for proving dilution by tarnishment. Because no yardstick is provided, the court has the ability to assess it at its discretion. As a result, we must expect conflicting judgments from different courts when it comes to measuring dilution by tarnishment. Again, the parties to the dispute may be victims of judicial arbitrariness. As a result, the Act should be modified, and those precise elements for evaluating dilution by tarnishment be included in the Act, and that the court be required to base its measurement solely on those factors.

Conclusion

As previously said, trademarks are incredibly important for identifying goods and services because consumers rely on them to determine their needs. Due to the ongoing infringement or dilution of trademarks as a result of new competitors entering the market, organizations must have diligent systems in place to ensure that their marks are protected. Such vigilance would ensure that illegal marks are reported to the courts, highlighting small issues that the legislature may need to consider and include into current legislation. If and when such adjustments are required, the legislation must ensure that the necessary amendments are included, reducing the scope of infractions.

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Infringement vis a vis passing off action in trademark : an understanding through case laws

By

Diganth Raj Sehgal

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November 10, 2021

0

This article is written by Oishika Banerji of Amity Law School, Kolkata. This article deals with a comparison between infringement and passing off action in a trademark by means of case laws.

Table of Contents

Introduction

Trademark infringement is the consequence of unauthorized use of a trademark that originally belongs to another person. The passing-off action provides protection to unregistered products and services, whereas the trademark provides protection to registered goods and services. The most essential distinction is that the remedy is the same in both circumstances, but trademark protection is limited to registered products and services, whereas passing off is applicable to unregistered goods and services.

The Supreme Court defined the difference between infringement and passing off in the case of Durga Dutt vs. Navaratna Pharmaceutical (1960). The Court held the following:

An infringement action is a statutory remedy available to the registered owner of a registered trademark who has the exclusive right to use the mark in respect to those products. Unregistered products and services are also eligible for passing off.
The second most crucial issue is that in a case of passing off, the defendant’s use of the plaintiff’s trademark is not required; but, in a case of infringement, this is required.
The third important distinction between these two is that if the defendant has adopted the plaintiff’s essential features of the trademark, the fact that the defendant’s get-up, packing, and other writing or marks on the goods or on the packets in which he offers his goods for sale marked differences or clearly indicate a trade origin different from that of the registered owner of the mark would be immaterial.

However if the defendant has passed off, the defendant may escape liability. This article provides a detailed analysis of trademark infringement and passing off actions available to the trademark users through the lenses of various case laws.

Infringement action in trademarks

Section 29 of the Trademarks Act, 1999 lays down the provision for infringement of registered trademarks which states that a person who, without being a registered proprietor or a person using by way of permitted use, uses in the course of business a mark that is identical to, or deceptively similar to, the trademark in relation to goods or services for which the trademark is registered, and in such a way that the use of the mark is likely to be taken as being used as a trademark, infringes on the trademark.

Astra IDL Ltd v. TTK Pharma Ltd (1992)

The Bombay High Court in the case of Astra IDL Ltd v. TTK Pharma Ltd (1992) laid down the test for determining infringement of a trademark. The Court observed that in order to decide whether there has been any kind of infringement or not, the impact of infringing a trademark on the purchaser needs to be considered. Only if the complete impression of the trademark is likely to cause deception in the purchaser’s mind, infringement of the trademark is said to be caused. The Court in this case also clarified that the likelihood of confusion will be sufficient ground for an infringement case to take place, establishing actual confusion is not a necessity in trademark infringement cases.

Bombay Oil Industries v. Ballarpur Industries (1989)

In the landmark judgment of Bombay Oil Industries v. Ballarpur Industries (1989), the Delhi High Court laid down the common forms of trademark infringement. The various forms as observed by the Court have been laid down hereunder:

Any mark that appears to be identical to an already registered mark and is being used by an unauthorized person in relation to similar business like the latter’s will amount to registered trademark infringement.
If a registered trademark that belongs to someone is advertised for the promotion of trade by another without the former’s consent will amount to infringement.
If a registered trademark is used in the form of spoken words or represented by an unauthorized owner, the same amounts to infringement as well.
If the unauthorized application of a registered trademark is made for the purpose of labeling or packaging goods, it will lead to infringement of the registered mark.
Usage of deceptively similar marks as to goods and services for the purpose of trade thereby causing deception among consumers will cause infringement.
Printing of a label of a registered trademark in an unauthorized manner amounts to infringement.
Unauthorized use of registered trademarks on second-hand articles results in infringement.

Playboy Enterprises, Inc v. Bharat Malik (2001)

In the well-known case of Playboy Enterprises, Inc v. Bharat Malik (2001) that appeared before the Delhi High Court, the plaintiff had filed a lawsuit seeking a permanent injunction against the defendant, a Playway magazine publishing company. It was claimed that the plaintiff’s and defendant’s magazines are largely sex-oriented and that the infringer magazine ‘Playway’ was also intermingled with information on current affairs, national interests, celebrity interviews, comedy, and photos of semi-nude models, among other things. The plaintiff’s complaint was that the use of the word “PLAY” from the mark PLAYBOY was ill-motivated, illegal, deceptive, and even phonetically similar to the mark PLAYBOY, resulting in a blatant infringement of the plaintiff’s registered trademark. The Hon’ble High Court restrained the defendant from using the trade name “PLAY” on the ground that the same word was the soul of the plaintiff’s registered trademark and the defendant had used it with the intention of destroying the goodwill of the plaintiff’s company.

Glaxo Smith Kline Pharmaceuticals v. Unitech Pharmaceuticals Pvt. Ltd (2005)

In the case of GlaxoSmithKline Pharmaceuticals v. Unitech Pharmaceuticals Pvt. Ltd (2005) that appeared before the Delhi High Court, the plaintiff had alleged that the defendants were selling products with the trademark ‘FEXIM’ that were confusingly similar to the plaintiff’s trademark ‘PHEXIN’, which was used for pharmaceutical preparations. The defendants were selling antibiotic tablets bearing the trademark ‘FEXIM,’ and packaging that looks deceptively similar to that of the plaintiff, with the intent of not only infringing on the trademark but also passing off the goods as those of the plaintiff because the two marks were phonetically similar. The defendants were barred from using the trademark ‘FEXIM,’ because the said trademark appeared to be confusingly similar to the plaintiff’s trademark ‘PHEXIN,’ along with the packaging material resulting in deceiving the purchasers.

Case of no infringement : an insight

There is no straight-jacket formula to decide as to what cases do not fall within the ambit of infringement, but the judiciary by means of several judgments has clarified the necessities that need to be complied with to file an infringement case. One such well-known judgment has been discussed hereunder.

S.M. Dyechem Ltd. v. Cadbury (India) Ltd. (2000)

In the case of S.M. Dyechem Ltd. v. Cadbury (India) Ltd. (2000), the Supreme Court of India observed that in trademark cases, the tension is between protectionism on the one hand and allowing competition on the other. In this case, the plaintiff’s label included a curving script of the word ‘PIKNIK’ with a caricature of a tiny child wearing a hat in between the letters ‘K’ and ‘N.’ The writing and the small boy’s figure were the most important aspects, and not the term ‘PIKNIK.’ The plaintiff’s label had to be considered in its entirety. Plaintiff was selling potato chips and potato wafers in a polythene pouch. He did not sell chocolates, despite having registration for chocolates under Class 30. The defendant was marketing under the trade label ‘Cadbury’s PICNIC’ in a polythene pouch and hence both marks were different.

Cadbury was a well-known brand in India, and the defendant had been selling chocolate since 1948. In India, the term had practically become associated with chocolates, as seen in the names ‘Cadbury Dairy Milk,’ ‘Cadbury Five Star,’ and so on. Neither there was room for dishonesty at all nor any violation or misrepresentation. The High Court thus upheld the respondent’s appeal and overturned the temporary injunction ruling based on these grounds. It is necessary to note that this judgment was overruled by a three-judge Bench of the Apex Court in the case of Cadila Healthcare Ltd. v. Cadila Pharmaceutical Ltd. (2001) which has been discussed later in this article.

Passing off action in trademark

Section 27 of the Trademarks Act, 1999 provides that no action for infringement will take place for an unregistered trademark. When a trader makes a misrepresentation that harms the plaintiff’s goodwill, the passing-off action arises. Put simply, whenever a trader makes a misrepresentation in the course of his or her business, it injures the business of another trader and causes actual damage to the trader’s business or goodwill thereby resulting in the passing off action.

K. Narayanan and Anr. v. S. Murali (2008)

A bench of Justices Tarun Chatterjee, Harjit Singh Bedi of the Supreme Court of India observed that mere filing of an application for trademark registration would not constitute a part of the cause of action in a suit for passing off, in the notable case of K. Narayanan and Anr. v. S. Murali (2008). The Court observed that a suit may be filed where a trademark or copyright is infringed upon, but the cause of action for filing the suit would not arise within the Court’s jurisdiction simply because an advertisement in the Trademarks Journal or any other journal notifying the factum filing of such an application has been published. The Apex Court held that the appellants were unable to file a suit in the High Court of Madras seeking an injunction to prevent the respondent from passing off his goods under the trademark ‘A-ONE’ solely on the basis of the claims made in the respondent’s trademark application filed with the Trademark Registry. This was because the necessary elements of a passing-off action were missing.

Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001)

The case of Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001) had been a key decision in the area of trademark passing off. In this case, it was decided that a passing-off action was possible in the case of unregistered trademarks only. The passing-off action is based on the idea that no one has the right to represent their commodities as someone else’s goods. In other words, a man is not allowed to sell his goods or services under the guise of someone else’s. Both the appellant and the respondent were pharmaceutical businesses that had taken over the Cadila Group’s operations when it was restructured under the Companies Act, 2013. The right to use the term Cadila was awarded to both companies. The appellant company first produced a medicine to treat cerebral malaria under the brand name ‘Falcigo,’ and was granted a license to sell it across India by the Drugs Controller of India in 1996. The respondent was also granted authorization to sell medications for cerebral malaria under the name ‘Falcitab’ in 1997.

The Hon’ble Supreme Court concluded that there was a likelihood of passing off and that it was a matter of deceptive likeness after examining the requirements of the Trademarks Act, 1999 and Section 17-B of the Drugs and Cosmetics Act, 1940. A bench of Justices B.N. Kripal, Doraswamy Raju, and British Kumar of the Supreme Court of India had laid down seven guidelines that were to be considered for determining deceptive similarity in action based on passing off, namely:

The nature of the mark;
The degree of similarity between the marks;
The nature of goods in whose respect the mark is being used;
The similarities in terms of nature, character, and performance with the trademark of the rival trader;
The class of purchasers who are supposed to be purchasing the concerned product;
The mode of purchasing;
Any other surrounding circumstance that contributes to the similarity index.

Kaviraj Pandit Durga Das Sharma v. Navaratna Pharmaceutical (1965)

The Supreme Court had laid down the differences between a passing-off action and trademark infringement in the well-known case of Kaviraj Pandit Durga Das Sharma v. Navaratna Pharmaceutical (1965). The Court pointed out that while passing off action is a common law remedy, infringement has been a statutory remedy. By virtue of the proviso of Section 6(3) of the Trademark Act, 1999, a mark that is not “adapted to distinguish” by the application of the requirements provided out in Section 6(1) of the Act may nonetheless qualify for registration by proof of acquired distinctiveness. The Apex Court after taking into consideration the said provision held that the term “distinctiveness” could not mean “suited to distinguish,” because if it did, the proviso would contribute nothing to the provision and would make no difference in the law between new and old marks that had been in use continuously before the designated date. It was therefore impossible to accept a construction that would put old and new marks on the same footing and subject them to the same registration criteria.

Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd. (2004)

The case of Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd. (2004) holds relevance because it was related to the passing off action in the case of internet domain names. Taking into account that India terribly lacks effective legislation to govern domain names and the ambit of the Trademarks Act, 1999 is not divergent enough to provide safeguard to domain names, the Supreme Court of India intended to confer protection to the same. Although statutory remedy is absent when it comes to internet domain names, common law remedy remains available in form of passing off action for legally safeguarding internet domain names. This judgment has been a revolutionary one amidst technology spreading its claws at an accelerated rate.

Conclusion

As we come to the end of this article, it is evident to mention that it is usually preferable to register a trademark because it gives the possessor legal ownership of the mark. Furthermore, the owner does not have to establish prior usage in the case of infringement, and a suit for infringement allows the owner to file a claim for damages. Therefore, although a choice in concern with the registration of the trademark is being offered by the Trademark Act, 1999, registration always carries more weightage when placed in comparison with unregistered trademarks.

References

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