Case analysis : the Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith and Lynn Goldsmith, Ltd

By

-

November 9, 2021

This article is written by Nilesh Pratap Singh, pursuing Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. The article has been edited by Aatima Bhatia (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).

Table of Contents

Introduction

In the Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith and Lynn Goldsmith, Ltd., the United States Court of Appeals for the Second Circuit ruled that contemporary artist Andy Warhol’s 1984 images of musical artist Prince did not make fair use of photographer Lynn Goldsmith’s 1981 photograph of the music legend, overturning a 2019 decision by the United States District Court for the Southern District of New York. This case is essentially about a contradiction between an artist’s right to communicate ideas, which includes the creation of creative works that incorporate prior material, and a creator’s right to control his original work.

Facts of the case

The Andy Warhol Foundation (“AWF”) requested panel rehearing and en banc rehearing, claiming that the Second Circuit’s judgement deviates from established fair use law and will have far-reaching implications. Goldsmith responded by filing an opposition to the motion for rehearing.

Background

In this case, the late Andy Warhol created a set of 16 silkscreen prints and pencil illustrations. The series is based on Lynn Goldsmith’s 1981 photograph of late musical artist Prince, to which she owns the copyright. Lynn Goldsmith Ltd. (“LGL”) is a professional photographer and the creator of Lynn Goldsmith Ltd. (“LGL”), which specialises in celebrity portraiture.

Andy Warhol is well-known for his contributions to mixed media art in the modern era. Warhol’s fame stems mostly from his silkscreen portraits of modern icons, each of which is instantly recognisable as a “Warhol.” Much of Warhol’s work is owned by AWF, which also owns the rights to it.

AWF gained rights to and copyright in the Prince Series after Warhol’s death in 1987. Goldsmith stated that she first became aware of the Prince Series after Prince’s death in 2016 and that she notified AWF of the alleged breach of her copyright in the photo. In 2017, AWF sued Goldsmith and LGL for a declaratory judgement, claiming that the Prince Series works were non-infringing or, alternatively, that they constituted fair use of Goldsmith’s photograph; Goldsmith and LGL countersued for infringement.

The district court’s decision

In a decision by Judge John G. Koeltl, the district court granted AWF summary judgement on its claim of fair use and dismissed Goldsmith’s and LDL’s counterclaim. Judge Koeltl emphasised in his ruling that “fair use” is a legislative exception to copyright infringement, and listed the four statutory considerations that must be considered when determining whether a use is fair:

The nature of the copyrighted work;
The substantiality of the portion used in respect to the copyrighted work as a whole; and
The purpose and character of the use;
The impact on the copyrighted work’s potential market or value.

The District Court determined that the use of the Prince Series was fair, partly because it was transformative: the Goldsmith photograph represented an up-and-coming, insecure musician, whereas the Warhol photograph depicted a tremendously successful music legend. The court determined that the accused works “have a different character” (evocative of a “Warhol”) that provides Goldsmith’s photograph with a “new expression” by adopting new aesthetics that produce creative and communicative effects that are separate from Goldsmith’s.

Furthermore, the new works contribute “something fresh to the realm of art,” and the audience would be deprived of this contribution if the works were not available for distribution. As a result, the court determined that the first and most crucial fair use criteria favoured AWF. Aside from the commercial nature of the work, the court found that all of the circumstances went in favour of AWF and that the use was fair.

Second circuit appeal

Goldsmith took his case to the Second Circuit, contending that the district court’s decision on transformative use was “based on a subjective underlying artistic message of the works, rather than an objective assessment of their purpose and character,” according to the appeal. The Second Circuit agreed with Goldsmith and overturned the decision. It agreed with the District Court solely in determining that the usage was commercial; it disagreed with the district court on all other reasons the district court found to be in AWF’s favour.

The fair use defence tries to create a balance between a copyright owner’s rights to his work, including the ability to licence and develop derivative works, and others’ rights to express themselves through transformative use of the original work, according to the court. Throughout the case, the court struggled with the line between transformative and derivative works.

The focus is “chiefly on the degree to which the use is transformative,” according to the court, and notably on “whether the new work just supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, modifying the first with new expression, meaning or message.”

The Appellate Court acknowledged that the district court relied on an earlier Second Circuit decision, Cariou v. Prince, in reaching its transformativeness determination, noted that Cariou “has not been without criticism” and was the “high-water mark of the court’s recognition of transformative works.”

Cariou was a case in which appropriation artist Richard Prince used Patrick Cariou’s black-and-white images of Rastafarians as “raw material” in his work. The works were modified in that case, according to the Second Circuit, by “the development of new information, new aesthetics, new insights and knowledge.” While criticising the District Court for “stretching” the Cariou decision too far, the Court acknowledged that “alteration of an original work ‘with new expression, meaning, or message,’… whether by use of ‘new aesthetics,’… by placing the work ‘in a different context,’… or by any other means is the sine qua non of transformativeness. “It does not follow, however, that each secondary work that adds new aesthetic or new expressions to its parent material is inherently transformational,” the report said.

“There is an entire class of secondary works that add ‘additional expression, meaning, or message’ to their source material but are nonetheless specifically barred from the purview of fair use: derivative works,” the court stated. “Where a secondary work does not obviously comment on or relate back to the original or uses the original for a purpose other than that for which it was created,” the panel continued, “the bare assertion of a ‘higher or different artistic use’… is insufficient to render a work transformative,” and it is instead derivative and infringing.” The secondary work must “fairly be viewed as reflecting an altogether independent artistic aim, one that transmits a ‘new meaning or message’ entirely separate from its parent material” in order to be found transformative. The court determined that works that fit under this category frequently “draw from a variety of sources, rather than those that merely alter or recast a single work with a new aesthetic.”

Furthermore, “whether a work is transformative cannot rest solely on the artist’s expressed or perceived goal, or the interpretation or impression that a critic – or, for that matter, a judge – takes from the work,” according to this court. A judge is not a critic of art. “Rather, the judge must consider whether the secondary work’s use of its source material is in service of a fundamentally distinct and unique artistic purpose and character, such that the secondary work stands independently from the ‘raw material’ utilised to generate it,” the judge writes. “At a bare minimum, the transformative purpose and character of the secondary work must consist of something more than the imposition of another artist’s style on the primary work, such that the secondary work remains both recognisably deriving from and retaining the essential elements of its source material,” according to the guidelines.

Petition for rehearing en banc

The initial panel’s ruling “conflicts with Supreme Court and Second Circuit precedent and establishes a circuit divide on an issue of particular importance to copyright law and free expression,” according to AWF’s application for a rehearing en banc. Amici have filed briefs in support of AWF’s position. AWF argued that the appellate panel’s rejection of the well-known and widely-used “meaning and message” analysis in favour of an analysis that determines whether work was reasonably derived from and retained the essential elements of its source material was in error deviated from the principle defined in Campbell and upheld in the recent Google v. Oracle decision.

The AWF’s petition distinguishes a novel adaptation from a film adaptation by stating that a novel adaptation does not convey a new message. The Prince Series, according to the petition, conveys the “opposite” message from Goldsmith’s portrait, namely, the strength of the well-known artist Prince rather than the fragility of the up-and-coming artist Prince. As a result, according to the petition, the Prince Series is revolutionary. The petition lists opinions from the United States Courts of Appeals for the First, Fourth, Sixth, Ninth, and Federal Circuits finding transformative use when the new work conveyed a different message than the original work and claims that the Goldsmith ruling creates a circuit split.

Finally, the petition claims that the panel’s decision “threatens to render unlawful large swaths of contemporary art that incorporates and reframes copyrighted material to convey a new and different message,” and that it “will have extraordinary and harmful effects in an area of exceptional public importance.” The AWF concludes by claiming that the court’s decision “will inevitably chill the creation of similar art in the future” and “deter many artists” from “using existing imagery in the service of new and different creative expression,” effectively eviscerating the First Amendment safeguard that fair use was supposed to provide.

In its brief, Goldsmith contended that the judgement was perfectly consistent with the Google decision, which was also consistent with existing fair use law, and that, in any case, Google did not immediately apply because it included a functioning computer code rather than an artistic piece. “The Supreme Court in Google specifically indicated the decision was not modifying the legal framework for judging fair use,” Goldsmith said in response to the court’s request to address the impact of Google. “We do not overturn or amend our earlier rulings involving fair use,” the Supreme Court stated.

Goldsmith also contended that Google “stressed that the question of fair use is case-specific and that the Supreme Court’s application of recognised fair-use principles, in that case, was impacted by the distinctive features of computer code,” making Google consistent with the panel’s conclusion. The other issues raised in the AWF brief and by amici were not addressed in Goldsmith’s brief.

Impact of the decision if it stands

The panel’s determination that the Prince Series was not transformative but rather derivative aimed to clarify the Court’s previous stance in Cariou while also upholding the Supreme Court’s 1985 Harper & Row decision, which found no fair use where a secondary work took the “heart” of the original work. However, as a result of this ruling, artists and litigants are left without a clear standard to assess whether a work based on a single other work is transformative, and so fair use, or derivative, and thus infringing usage.

The panel instructed that while determining whether a work is transformational, the focus should be on whether the new work has a “fundamentally distinct and new creative purpose and character so that the secondary work stands independently from the ‘raw material’ used to generate it.” While it would appear that this analysis requires a court to decide whether the secondary work stands apart from the source material, the panel stated, confusingly and explicitly, that courts are not art critics and should not make “inherently subjective” judgments about an artist’s intended meaning of the artwork an issue. What is the panel’s advice to lower courts on how to conduct a fair use analysis to determine whether an allegedly infringing work is substantially similar to the original?

Is it possible that Section 106 of the Copyright Act, by allowing a creator the exclusive right to make derivative works, will nullify the safeguards afforded by Section 107’s fair use defence?

Is the Second Circuit returning to a more restrictive construction of Section 107, which provides a safe harbour for purposes such as criticism, comment, news reporting, or teaching, despite Sections 106 and 106A?

Is it possible to claim fair usage just when the new work responds to or critiques the source work?

Can a photograph of another copyrighted work, such as a painting, street art, or a copyrighted product label, ever be considered a transformative use if the snapshot captures the source work in its entirety?

Conclusion

While the panel’s decision emphasises the difference between “transformative” and “derivative” works, the implications of these classifications will most likely be clarified by the decision on the petition for rehearing and rehearing en banc, as well as possibly by a petition for certiorari to the United States Supreme Court.

Until this issue is further clarified, artists, musicians, photographers, and other work creators should be aware of this decision, which appears to require that their works stand apart from any source material on which they are based in such a way that they have a fundamentally different and new artistic purpose and character.

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

Can I criticize the judiciary without contempt of court

By

Diganth Raj Sehgal

-

November 9, 2021

0

This article is written by Vanya Verma from O.P. Jindal University. This article talks about contempt of court as well as fair comment on the judiciary that does not attract contempt of court as well as covers various instances where people got punished for contempt of court and viewpoints of various judges on the matter.

Table of Contents

Introduction

Under Article 19(1)(a) of the Constitution, every person, including municipal councillors, has the right to free speech and expression, which includes reasonable criticism of the law or any executive action. In our democratic republic, freedom of speech and expression is guaranteed both in the legislature and in local bodies, thus a lawmaker or a municipal councillor can legitimately voice his opinions on what he considers to be in the public good. A reasonable exercise of one’s right to free speech and expression, which includes fair criticism, is not to be suppressed.

Section 5 of the Contempt of Courts Act, 1971 states that a person is not punishable for contempt of court if he or she publishes a reasonable comment on the merits of a matter that has been heard and determined or if a person publishes a fair comment on the merits of a matter that has already been heard and determined.

What is contempt of court

Contempt is the power of the Court to safeguard its majesty and respect, as stated by Smita Chakraburtty (2017). This power is inherent, and it is recognised in the High Court’s and Supreme Court’s constitutions. The Contempt of Courts Act of 1971 regulates but does not limit this power.

Both civil and criminal contempt is defined under the 1971 Contempt of Courts Act. Civil contempt refers to willful disobedience to any court judgement, whereas criminal contempt can be invoked if an act tends to scandalise or lower the authority of the court or tends to interfere with or obstruct the administration of justice.

The effect on the judicial process and the authority of the courts are used to determine whether conduct is contemptuous. According to S P Sathe (1970), the intent of the accused in a contempt action is irrelevant. What matters is the impact of his act or the likelihood of it having an impact on the administration of justice. Any conduct that undermines the administration of justice, or otherwise interferes with or tends to corrupt it, must be avoided.

P Chandrasekhar (2002) went on to say that actual scandalization or lowering of the court’s authority is not required. It suffices if it has the potential to cause controversy or undermine the court’s authority.

Whether or not an activity contributes to weakening the court’s authority is likewise susceptible to judicial interpretation. According to Alok Prasanna Kumar (2016), any publication that “scandalises” or “lowers the authority of any court” qualifies as “criminal contempt” under Section 2(c) of the Contempt of Courts Act, 1971. These are broad and vague expressions, but the Supreme Court has underlined that reasonable criticism of decisions is always permitted and that defaming a judge is distinct from contempt of court as held in the case of Brahma Prakash Sharma v State of Uttar Pradesh (1953).

According to Section 5 of the Act, “fair criticism” or “fair comment” on the merits of a final decision does not constitute contempt. The judgement of what is “fair” is, however, left to the judges’ opinion.

Before 2006, even the truth could not be used as a defence in a contempt case. According to Rahul Donde (2007), “truth has been included as a defence with the enactment of the Amendment Act of 2006, but with the restriction that it can be used as a defence only if it is in the “public interest.” The judge has complete discretion over what constitutes public interest. The truth cannot be used as a defence unless the supposedly contemptuous behaviour was both genuine and in the public interest.

Criticism of court when it does not amount to contempt

The obligation of lawyers to criticise the courts is one of their most essential societal responsibilities. Informed criticism of the courts and their rulings, is not only a right but also an ethical obligation put on every member of the Bar.

There are two methods to criticise the Supreme Court in general, they are as follows:

The critic can present some fundamental principles and argue that the pattern of decisions or a particular decision is inconsistent with these principles. For example, he might argue that constitutional decisions should be based entirely on the document’s terms and the framers’ intent, that the Court should make decisions based on prevalent opinions about core values, or that antitrust rules should be read to promote allocative efficiency. Decisions that are contradictory to these initial principles may be labelled as incorrect or misguided by the critic. The critics who use this strategy base their arguments on documents, proceedings, and norms that are not related to the Court.
The Court’s performance as an institution is the subject of the second type of criticism.

The critic can argue that the Court is too frequently divided, that it fails to sufficiently explain its rulings, or that it makes decisions that contradict one another. In other words, he could claim that the Court is divided or that precedent is ignored. Duty on the part of lawyers to identify and discuss incorrect actions by the courts, subject only to the condition that the criticism is motivated by a good-faith desire to improve the law and the legal system. Malicious or false statements about a judge, or disruptive or contemptuous conduct in the courtroom, of course, cannot be tolerated.

Fair criticism as a shield to criticize the judiciary

Fair criticism of the position stated in a judicial pronouncement, or even other types of judicial activity, is consistent with the public interest and public welfare that judges are sworn to serve and uphold in such circumstances. As a result, awareness among judges that they can or have erred in their judgements would provide much-needed fuel to the judicial system; another perspective, a new dimension, or insight must always be welcomed. Such a realization that would enhance the majesty of the rule of law will only be possible if the doors of self-assessment, in the light of the opinions of others, are kept open by judges.
On March 4, 2008, in the case of Lalit Kalita and others v. Unknown, (2008), it was stated that the judiciary is not overly sensitive to criticism; in fact, genuine criticism may be welcomed because it allows for self-reflection. Judges are not infallible; they are people, and they frequently make mistakes unintentionally and as a result of their preconceptions.
According to Krishna Iyer, J. in Baradakanta Mishra v. Registrar of Orissa High Court, (1973) “if judges decay, the contempt authority would not save them”. It must be stated, honestly and truly, that faith in the dignity of the Court and the majesty of law has eroded, and this has been caused not so much by scandalous words made by politicians or ministers, but by the courts’ inability to provide prompt and significant justice to the needy.
In Rama Dayal Markarha v. State of Madhya Pradesh, (1978) it was decided that fair and reasonable criticism of a judgement that is a public document or a public act of a judge involved in the administration of justice is not considered contempt. Such reasonable and honest criticism should be encouraged because no one, including judges, can claim infallibility. Such criticism could reasonably claim that the judgement was erroneous or that an error was made, both in terms of law and known facts.
When it is said, however, that the judge had a predisposition to convict or purposefully took a turn in the discussion of evidence. This is so because he had already made up his mind to convict the accused, or has a wayward bent of mind, it is attributing motives, a lack of dispassionate and objective approach and analysis, and pre-judging of the issues, all of which would bring the administration of justice into disrepute.
Judge’s criticism attracts more attention than other types of criticism, and such criticism can sometimes interfere with the administration of justice. This must be measured by the criterion of whether it ridicules the administration of justice or hinders it. After all, predisposition, subtle prejudice, and prejudging the issues and that an investigation into the conduct of the judge will be conducted who delivered the judgment as he is to retire within a month and a wild allegation that judiciary has no guts, no honesty and is not powerful enough to punish wealthy people, would bring the administration of justice into ridicule and disrepute. Unconscious prejudice, or “Sanskar” as it is known in the Indian language, is inarticulate fundamental premises in the decision-making process. That aspect of the decision-making process cannot be overlooked; it should be taken note of.

Without a doubt, judgments can be questioned. No amount of vehement criticism of a decision can be considered contempt of court if it is kept within the bounds of reasonable civility and good faith. Contempt would be demonstrated by fair and reasonable criticism of a judgement that is a public document or a public act of a judge involved in the administration of justice.
The speech that the decision is rubbish and should be tossed in the trash can’t be considered fair criticism of the verdict. These remarks have gone beyond the bounds of legitimate criticism and have a demonstrable propensity to undermine the judiciary’s dignity and prestige. It tends to raise public suspicions about the judge’s integrity, ability, or fairness, and to discourage actual and potential litigants from placing complete trust in the court’s administration of justice. It is also likely to cause embarrassment to the judge in the performance of his judicial duties.

Many people today suffer from intractable problems that courts of justice are unable to address. For far too long, justice has been silent. The legal wrangling is destroying public trust in our justice system. It is a criticism that judges and attorneys must make of themselves. The searchlight must be directed inward. At the same time, we cannot be blind to attempts to criticise or discredit the legal system, if they are seriously done.

Contempt of court : does criticism lower the authority of the judiciary

Judges have ample room when it comes to interpreting the law that punishes contempt of court. This kind of discretion could be used to silence critics of the judiciary.

The Supreme Court decided to send notice of criminal contempt of court charges against stand-up comedian Kunal Kamra and cartoonist Rachita Taneja on December 18, 2020, and issued notifications to both.

The contempt charges against Kamra and Taneja were based on their tweets criticising the Supreme Court and its judges, especially when the Supreme Court granted journalist Arnab Goswami interim bail. The Supreme Court’s notices follow Attorney General K K Venugopal’s approval to pursue contempt proceedings.

Why is discretion a concern

The definition of criminal contempt is written in exceedingly broad terms, allowing judges to impose more restrictions on the free press at their discretion. Donde (2007) outlined the difficulties created by judges’ discretionary powers under the Contempt of Courts Act:

To begin with, it is wholly reliant on the judges’ judgments and predispositions. Second, the Act ignores one of the most fundamental principles of natural justice: nemo debet esse judex in propria causa, i.e., no one shall be a judge in his cause. As a result, in contempt proceedings, the court assumes the roles of judge, jury, and executioner, which frequently results in unfavourable outcomes. Finally, Section 14 of the Act gives the court the authority to punish accused acts of contempt immediately. Judges have used this power to prosecute persons in the heat of the moment in various situations, even when the contemptuous act was minor.

He went on to say that another troubling trend is the court’s tendency to interpret personal attacks on their character as contempt. It is sometimes forgotten that the law of contempt is intended to defend the judiciary’s institution from scurrilous and baseless attacks on the institution rather than the individuals who make up the institution.

According to Donde, the implementation of the Act’s contempt powers has been far from satisfactory: “Contempt of court in this country is sadly prone to the twin evils of favouritism and nepotism.” While the Court did not hesitate to arrest a poor Muslim for begging leniency from a Muslim judge in the name of religion, it failed to take any action against Shiv Sena supremo Bal Thackeray, even though he had accused the judges of corrupt election practises.

Kumar (2016) highlighted these concerns, saying, “I have argued elsewhere that the criminal contempt statute has no place under the Indian Constitution” (Kumar 2015). It is a colonial relic that does not ensure the dignity of our courts in the least. Unfortunately, it has been used to settle scores and suppress the Court’s critics. It’s even gotten in the way of reporting on corruption in the judiciary in good faith.

Is contempt action a reasonable restriction on free speech

While the Constitution of India recognises the right to freedom of speech and expression in Article 19(1)(a), Article 19(2) states that laws can put reasonable restrictions on this right for a variety of reasons, including “in relation to contempt of court.”

Even the Indian Constitution, which is the source of all legislation in the country, has recognised contempt as an exception to freedom of speech, according to Donde (2007).

The historical interrelationship between contempt of court and free expression was explained by Sathe (2001) as follows:

Since the early 1970s, when the Supreme Court found Kerala’s then-chief minister, E M S Namboodiripad, guilty of contempt of court for his critical comments on the judiciary as an institution, acrimony has existed between the judicial power to punish for contempt of court and citizens’ fundamental right to freedom of speech, the court had subjugated the most crucial of the fundamental rights, freedom of speech and expression, to the judiciary’s power to penalise for contempt of court. The freedom of speech had been trivialised by a broad contour of contempt of court.

As a result, he advised, “Freedom of expression is the most fundamental of the fundamental rights, and constraints on it must be kept to a minimum.” Only the restrictions necessary to maintain the legitimacy of judicial institutions can be imposed under the legislation of contempt of court. The judges are not required to be protected by the law. Only the judiciary must be protected.

A contempt notice issued without due diligence could put those in positions of public trust in jeopardy. The rule must be freedom, and the exception must be a constraint.

What lowers the authority of courts : criticism or intolerance

According to Sathe (2001), “the court’s ability to punish for contempt is likely to be ineffective against the moralist Gandhian willingness to bear the punishment rather than apologise for what they regard as defiance rather than the use of their freedom.”

When it comes to the contempt proceedings brought against Prashant Bhushan, Medha Patkar, and Arundhati Roy for their opposition to the Supreme Court’s decision in the Narmada Bachao Andolan case, Sathe wrote: “Where fear of punishment is gone and one is willing to suffer, the deterrence of punishment vanishes.” Furthermore, when people have strong moral convictions, their suffering elevates their social status.

If the court had penalised them, their public respect would have risen, and the court’s public regard would have eroded as a result.

This resolute reluctance to retract or apologise for critical views has been seen on several occasions, most recently with Bhushan in 2020. Justice A P Shah (2020) remarked in response to the contempt proceedings brought against Bhushan for his contentious remarks, “The Court is typically becoming pricklier when it comes to problems of free speech, as seen in the most recent Prashant Bhushan case.”

The Court, in a show of self-proclaimed “magnanimity,” let Bhushan off with a punishment of one rupee for the contempt case against him stemming from two tweets, but not without criticising his behaviour. One thing was evident during the proceedings: the Court came across as an intolerant institution.

The paradox of judicial legitimacy was articulated by Sathe (2001) as follows: Courts must maintain their social legitimacy by their rulings and people’s view that they are objective, unbiased, and principled. Some people believe their decisions are incorrect. Some decisions may be heavily criticised allowing such criticism to strengthen the court’s legitimacy.

A free society is built on such criticism and dissent. What distinguishes a free society from a totalitarian one, according to Sathe (1970), is the freedom of expression in the former. This liberty is available not only for the propagation of the popular viewpoint but also for the propagation of potentially unpopular viewpoints.

Conclusion

The preceding instances demonstrate that whether or not a comment constitutes criminal contempt is dependent on the facts and circumstances of each case. To summarise, conscientious citizens’ tweets or statements have no bearing on the dignity of the Indian judiciary, which, to quote Lord Denning, “must rest on firmer grounds.”

References

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

Resistance to arbitration in Asia

By

Abanti Bose

-

November 9, 2021

0

This article is written by Alan V. Avanesh, pursuing 6-Month Growth Camp: Preparation for LLM Abroad from LawSikho. The article has been edited by Zigishu Singh (Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).

Table of Contents

Introduction and origin of arbitration

Arbitration is a type of Alternate Dispute Resolution mechanism, which helps in solving disputes between parties outside the courts of law. Arbitration is usually conducted in an arbitration tribunal. In arbitration, an independent third party will make the final decision regarding the dispute faced by the parties. This independent third party is called the arbitrator or arbiter. The decision made by the arbitrator is known as an arbitration award. An arbitration award will be legally binding on both sides and can be enforceable in the courts of law. However, it needs to be noted that arbitration awards are not directly enforceable as a party may need to approach the court of law in order to confirm the award.Hence, arbitration is a consensual and confidential procedure consisting of an arbitrator who is neutral and the decision made in the arbitration tribunal is final. Arbitration helps to reduce the load on courts of law and it provides an easy, less time-consuming procedure to obtain justice.

Arbitration initially originated in Greece, in the sixth century BCE during which it was used to settle disputes related to ownership of land, assessment of damages etc. It was later adopted in various Roman cities where it was called “compromissum” which means compromise. From there arbitration was adopted by various European countries like England. From England, arbitration was later adopted by various English Colonies like America, Australia and India.

Classification of arbitration

With the passage of time arbitration has been used in different fields of law. Arbitration can be classified differently based on different factors On the basis of procedure and rules, arbitration can be divided into the following three types:

Institutional arbitration: An arbitration that is conducted in an arbitral institution is called institutional arbitration. In institutional arbitration, the parties have the opportunity of choosing their desired arbitral institute to settle their dispute.
Ad-hoc arbitration: An Ad-hoc arbitration is when the parties themselves agree to arbitration and such arbitration does not have any kind of institutional proceedings. It can be domestic, international or foreign arbitration. The expression ‘Ad Hoc’, as in ‘Ad Hoc Arbitration’ or ‘Ad Hoc Submission’ is used in two quite different senses: an agreement to refer to an existing dispute, and/or an agreement to refer either future or existing disputes to arbitration without an arbitration institution being specified to supervise the proceedings, or at least to supply the procedural rules for the arbitration. This second sense is more common in international arbitration. In an Ad-hoc arbitration, the parties do not need to comply with the rules of the arbitral institute.
Fast track arbitration: While other methods of arbitration are quite a time consuming, fast track arbitration is comparatively way quicker. It abandons all methods that are too time-consuming and only focus on the main goal of arbitration.

Arbitration can be divided into three types based on jurisdiction

International Arbitration: Arbitration that occurs outside India is called International Arbitration. Both Indian and foreign law can be applied in cases of international arbitration. In order for an International Arbitration to take place, any one of the parties should be domiciled in a foreign country or the subject matter of the dispute is abroad.
Domestic Arbitration: It refers to the type of arbitration that occurs in India. Domestic Arbitration is subject to the laws of the native country. In this type of arbitration, both parties must be domiciled in the native country. In the case of India, with reference to Section 2 subclause (2) and subclause (7) of the Arbitration and Conciliation Act 1996, domestic arbitration is the type of arbitration in which the arbitral proceedings must necessarily be held in India, and according to Indian substantive and procedural law and the cause of action for the dispute has completely arisen in India.
International Commercial Arbitration: It is a type of international arbitration that is used to settle commercial disputes. In International Commercial Arbitration, the arbitral tribunal is bound to decide the conflict based on the laws chosen by the parties as applicable to the substance of the dispute.

Arbitration in Asia

Asia is home to various densely populated countries like India, Singapore and South Korea. All of these countries have their own separate legal systems and have a huge number of legal cases which is a burden to the courts of law. India is considered to be the country with the most pending legal cases and despite arbitration being established in the country for more than 20 years with the help of laws like the Arbitration and Conciliation Act 1996, arbitration is still not very popular in the country.

Resistance to arbitration in Asia

There are many reasons why arbitration is not a popular option to seek justice in Asia. A few of them are as follows:

Underdeveloped Institutions: Countries in Asia have very few well defined, developed arbitration institutions when compared to their western counterparts. Many countries do not even have proper laws and regulations for arbitration. These underdeveloped institutions even prevent the growth of international arbitration. The lack of properly functioning institutions makes it an unpopular choice for the general public to seek justice.
Lack of knowledge: Since arbitration is a European concept, a lot of countries in Asia that have not had any influence from Europe would find the concept of arbitration to be quite foreign. These countries do not have a clue as to how arbitration works and what are the necessary arbitration proceedings.
Weak legal systems: Asia is home to the most number of developing countries. However, few of the countries in Asia such as Cambodia and Afghanistan have one of the weakest legal systems in the world. The laws in these countries barely have any power which may help to maintain public order. So, the settlement of disputes using the laws of these countries may not have much significance.
False perceptions: The general public has a rather false perception of Arbitration. People believe that arbitration to be costly, time-consuming and have complex procedures. However, the truth is that arbitration provides an easier and comparatively more flexible platform to seek justice.
Lack of recognition in most countries: Many countries do not recognize arbitration to be an alternate dispute resolution mechanism thereby not allowing arbitration with the opportunity to develop in the country.
Lack of support from the government: In order for arbitration to develop, governments need to support in forming a proper framework for its functioning. The lack of support from the government in the development of arbitration does not help to increase the popularity of arbitration as a means to seek justice.

Development of arbitration in Asia

Despite all the drawbacks that affect the popularity of arbitration, there have been few recent developments that provide an opportunity for arbitration to grow in Asia. Several Asian countries are experiencing rapid growth in their economies. The increase in cross border transactions by various leading companies have led to various international commercial disputes for which arbitration was very useful. There have also been a few well-developed institutions such as the Singapore International Arbitration Centre (SIAC), Hong Kong International Arbitration Centre and KCAB International that have helped to settle disputes that come under the ambit of international arbitration. Several countries like Singapore, India, China and South Korea have provided opportunities for the growth of arbitration. Singapore is also known as one of the main global arbitration hubs in the world.

Conclusion

Although there have been recent developments in Asia that may support the development of arbitration. These developments are only in a few countries like Singapore, China, India and South Korea as the concept of arbitration is still foreign to a lot of Asian countries. Asia is the most populous continent in the world, a continent like this would have an enormous number of legal cases which would be a huge burden on the judiciary. Arbitration in Asian countries would help to reduce the backlog of pending cases and would thereby help the people in having an easier and relatively more flexible way to seek justice. Arbitration would also help to settle various commercial disputes between Asian countries in a relatively easier and less time-consuming manner than a court of law thereby helping to maintain efficiency in trade. If actions are taken for the development of arbitration, then the legal system of these Asian countries would become more efficient.

Hence, efforts need to be made to spread awareness about the advantages of arbitration and also debunk all of the false perceptions towards this concept. This can be done by conducting seminars, workshops and conferences. Governments of different countries also need to take initiative with regards to framing rules and establishing arbitration institutions. Hence, it can be concluded that Asian countries would benefit a lot from arbitration and these countries need to take efforts to develop the same.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

The legal structure of e-banking in India

By

Abanti Bose

-

November 8, 2021

0

This article is written by Raunak Sood, pursuing 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

Albert Einstein once said, “Technological progress is like an axe in the hands of a pathological criminal”, this quote of Albert Einstein is the main crux of this paper, put forth in a simpler manner. The linking of the internet and banking has made the procedures, techniques and processes of banking simpler, easier, faster and efficient. Since the internet works on big chunks of data that are exploited by malicious elements, such as hackers, spammers, drudgers and infection vector creators who target and compromise data of financial institutions by using unlawful methods to put the safety, security and privacy of various individuals who confide, rely and trust the Banking infrastructure of India at risk. To protect the faith reposed by Indians in the Banking System, there are laws enacted by the Parliament of India to protect the confidence placed in the e-banking system, meanwhile, the currently existing legal structure is sufficient but due to the entry of artificial intelligence and daily evolution of technology, the current legal structure might fall short by a yardstick until and unless it undergoes an upgrade to protect Indian consumers. The objective of this paper is to analyse the existing legal structure of e-banking and give some constructive recommendations to upgrade, improve, enhance, and adapt to the forthcoming future of the banking processes in India.

Banking is defined as the business of accepting monetary deposits from the public with the sole objective of loaning, or financing, repaying money on receiving requests, and withdrawal of money via any financial instrument. The internet has been called the “highway of information” because it possesses the capability to connect billions of people across the globe at the touch of a button at the same time internet uses IP Addresses (Internet Protocol Address) to identify, locate and detect servers across its network to communicate information in bytes across the network laid down by the Service Provider.

The legal structure of e-banking in India

E-Banking or Internet Banking has eliminated the need for paper and physical financial instruments because funds, money and capital can be easily accessed and transferred to the beneficiary on this online platform, therefore Internet Banking has reduced problems like geographical barriers, lack of infrastructure, cost, difficulty in obtaining loans and time consumption. Therefore, it is important to know the existing legal structure of e-banking and the challenges that lie therein.

Reserve Bank of India minimum standards on e-banking

On 17^th October 2000 the Ministry of Information Technology issued a notification exercising its authority under the Information Technology Act, 2000. Pursuant to this notice the Reserve Bank of India (hereafter referred to as “RBI”) issued a notification dated 14.06.2001 and formed the S.R. Mittal Working Group Committee and subsequently the previous notification of 14^th June 2001 was amended by RBI notification dated 20.07.2005, where the need for the approval of RBI was scrapped off, the following were the minimum benchmarks of security set up by the RBI:

Highly encoded 128 Bit Security Socket Layer based digital signatures for authentication purposes. Every bank should have Security Officer solely dealing with information technology and shall work towards the execution of the rules made under the IT Act, among other things, the Board of Directors shall approve the security policy that is adopted by the bank.
At that time login id, password, biometric verification were new notions, hence the banks were asked to adapt to such new concepts wherein the bank must make sure that Internet and Digital Banking System respects the security and privacy by maintaining a line of proxy server-based firewall. All the security structures were to be tested before any kind of Internet Banking facility was available, whereas the upgradation, bug removal and other security software were deemed necessary to be installed.
Any security fissure which might open up during the E-banking must be reported and taken care of at the earliest possible opportunity and future policies should be framed while keeping in mind security fissures that are incurred from time to time. Meanwhile, the burden lies upon the bank to keep both encoded and decoded records of all the transactions and messages received during e-transactions.

Information Technology Act, 2000 (“IT Act”)

E-banking is mainly regulated by the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934 but all sorts of cybercrimes and electronic payment related systems are regulated by the IT Act and the important features of the IT Act which should be noted are:

The legislative intent behind the IT Act is to enable e-commerce and governance wherein all electronic documents and digital signatures are recognized under IT Act which should be retained and analysed properly by the bank because all contracts and electronic transactions are lawful and enforceable under this Act.
No e-banking transaction can survive if it is not in conformity with the provisions of the IT Act because the protection of privacy and crypto function-based authentication of E-transactions can only take place under the umbrella of this Act as theft of data via unethical means of hacking, creation and spreading of the virus is punishable under this Act. In fairness, the Act also grants immunity to prevent harassment to Internet Service Providers and intermediaries over the illegal activities committed on their networks.
With the immunity granted, a duty is cast on the Bank (intermediary) to keep a record and conserve the same as directed by the Central Government from time to time, meanwhile the violation of security or privacy of E-transactions during sign-in, password typing, and other confidential information is protected under the aegis of this Act, wherein any violation thereof has been made punishable.

Overlap and disconnect between Indian Penal Code (“IPC”) and IT Act

Section 378 IPC read with Section 424 IPC; prohibits and punishes people who steal or assist in the theft of data either by hacking, creation of infection vectors, or spreading viruses whereas Section 66-B of the IT Act overlapping with Section 411 IPC prohibits and punishes people for receiving stolen data and information from any sort of technological computer-based device. Even forgery or producing falsified electronic documents can be punished under Section 468 IPC but no such punishment has been prescribed under the IT Act.
Any person who cheats another person by using a computer medium commits an offence of cheating-by-personation which is punishable under Section 66-C of the IT Act which is overlapping with Section 411 IPC, i.e., dishonestly receiving stolen property, whereas Section 425 IPC which punishes mischief has not been made punishable under the IT Act hence causing mischief by spreading the virus and refusing access to personal data of individuals can be punished with 3 months imprisonment, fine or both under Section 425 IPC.

Legal remedies and some solutions to the problems in the existing legal structure

There are various issues in e-banking which the existing legal structure has failed to address, hence the following are some of the remedies and solutions to the existing cyber problems faced during e-banking:

Jurisdiction and enforceability- Since the internet is a borderless world and cybercrimes threaten the sanctity of e-banking, herein cyber-attacks can take place from any computer either located in India or abroad hence Section 75 of the IT Act gives universal jurisdiction whenever any sort of cyberattack takes place on any computer located within the territory of India. Such crimes are investigated and prosecuted by cyber cells which are located across various districts in India. If a cyberattack is foreign state sponsored, then compensation by means of attachment of property existing in India of that foreign state can be claimed by the Republic of India.
Seeking Compensation, Penalty, and prosecution by Cyber Cells- Under Section 43A and 72 of the IT Act any theft, breach of confidential data, cheating or offences of the same nature are liable to be penalized and the victim shall be compensated in case any fraud takes place during E-Banking transactions. It is also pertinent to note that the Banker’s Book Evidence Act mandates that bank records in digital format can also be appreciated by the Court as it can be treated as documentary evidence under Sections 65A and 65B of the Indian Evidence Act, 1872.
Approaching the Consumer Forum- Disputes regarding the privacy of consumer accounts, rights, deficiency in E-banking services, liabilities of banks towards its customers, and the rights of consumers can be enforced by the Consumer Forum having the relevant pecuniary jurisdiction under the Consumer Protection Act, 2019.
Approaching Special Court for Money Laundering cases- Under Section 11 of the Prevention of Money Laundering Act, 2002, any money laundering taking place through E-Banking can be prosecuted and prevented under the aegis of this Act and Section 11 also casts a burden upon the Bank to maintain a record of each and every transaction occurring through its electronic payment gateway.

Conclusion

E-banking offers a higher level of convenience for managing one’s finances. However, it continues to present challenges to financial security and personal privacy. Many people have had their account details compromised, as a result of online banking. Thus, if one is going to use it for financial transactions, he should be aware of the risks involved. Awareness of the risks and problems enables him to take precautions for a more secure online banking experience. The e-Banking system is not only popular nationally, but also internationally, where a person can transfer money through any part of the world. The e-banking system is useful for bankers as well as customers of banks.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

Necessary documents required for safeguarding business affairs from disputes related to Brexit

By

Rachit Garg

-

November 8, 2021

0

This article is written by S A Rishikesh, from Institute of Legal Studies, Shri Ramswaroop Memorial University, Lucknow. This article highlights the impact of the Brexit deal on trade and business and the additional paperwork needed to be done post-Brexit.

Table of Contents

Introduction

Separating from the largest trade partner is not easy. The 2019 statistics show the European Union taken as a whole was the largest trading partner of the United Kingdom of that year. UK exports to the EU were 294 billion GBP or British Pound Sterling (i.e., 43 percent of all UK exports). Similarly, the imports from the EU were 374 billion GBP or British Pound Sterling (i.e., 52 percent of all UK imports). When the United Kingdom was part of the European Union this trade was tariff-free and did not involve customs. But with Brexit and the new trade deal between the United Kingdom and the European Union, the business has to do a lot of paperwork to protect their rights and conduct their course of business smoothly.

Background

The people of the United Kingdom were asked to choose on June 23, 2016, about the membership of the United Kingdom (UK) in the European Union (EU). The choice was simple to continue normally and remain a member or withdraw from the European Union. The predecessor of the European Union was the European Economic Community (EEC). It was formed in 1957. The United Kingdom was not one of the founding members of the European Economic Community. Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany were the original founding members. The United Kingdom joined the European Economic Community in 1973. Notably, it was the third attempt of the United Kingdom; its earlier two attempts failed because the then French President, Charles de Gaulle, had vetoed their application twice because he believed that Britain was incompatible with Europe.

The French President may have been correct. Immediately two years after joining the EEC, there was a referendum in the UK to leave the EEC. The United Kingdom joined the EEC under the conservative government of Edward Heath, but as the government changed, Labour Prime Minister, Harold Wilson, was against the decision to join the EEC so he held a referendum and left the decision to the people. The referendum was hugely in favour of retaining the membership as 67% of the people voted to stay and continue as the member of EEC.

In the year 1992 European Union was formed by the Maastricht Treaty, the European Union formally came into existence on November 1, 1993, it was more than a simple economic union. The European Union was more of a political union. The United Kingdom has always enjoyed a special status within the European Union. Immediately after the creation of the European Union, the concept of the single shared currency ‘Euro’ was introduced. It was created to be used as a single currency across Europe. Many members of the European Union dropped their own currency and adopted the Euro. The countries that used the Euro as their currency were part of what is known as the eurozone. The United Kingdom was never part of this eurozone and continued to use its own currency ‘Pound Sterling’. Similarly, the European Union had established the Schengen Area, it was an agreement that abolished border controls between the member states which means it allowed freedom of travel among all the member countries without the need to show a passport. The United Kingdom was not a part of this agreement also.

Reasons for the referendum

The United Kingdom was never like other members of the EU. The UK has always received special treatment in the European Union. So, what exactly led to the referendum in the UK to leave the EU in the first place. In the last few decades, the United Kingdom has witnessed the growing phenomenon of Euroscepticism. It means criticizing Europe and the UK for membership within the European Union. The biggest sign of it was seen as the rise of the United Kingdom Independence Party (UKIP) and their leader Nigel Farage. In the European parliamentary elections of 2014, UKIP won the most seats this was a shock for the Conservative and the Labour party as they have dominated British politics for a century. It was the first time since 1906 that an election has been won by anyone other than the conservatives or the labourers.

The general elections of 2015 were also the reason why this referendum came into first place. Prime Minister David Cameron at that time had promised in his campaign that if the conservatives win the elections the United Kingdom will hold a referendum on European Union membership. The only reason why he did so was growing Euroscepticism within his own party. It was done to appease the party’s members, as David Cameron did not want to leave the European Union. As a result of David Cameron’s election victory, he maintained his word, and the referendum date was determined.

The major issues that popped up and later became the reason for the United Kingdom leaving the European Union were the immigration, cost of membership, sovereignty, and the European Union laws which gave the slogan of ‘take back the control’, the addition of new countries in the European Union, and the migrant crisis.

Result and aftermath

On June 23rd the referendum day arrived, all the British and the Commonwealth Citizens living in the United Kingdom were eligible to vote, European Union citizens who were living in the United Kingdom were not eligible to vote. The very next day the results were announced and the United Kingdom voters had voted to leave the European Union, with 52% votes in favour of leaving the membership of the EU and 48% votes in favour of continuing the membership of the EU. These results were celebrated by the UKIP leader Nigel Farage, who said that the 23rd of June should be celebrated as the UK’s Independence Day. While Prime Minister David Cameron resigned from his post and called for fresh leadership.

Theresa May later replaced David Cameron as the Prime Minister of the United Kingdom. The UK government then invoked Article 50 of the Lisbon treaty. Brexit was finally over under the leadership of Boris Johnson. The UK officially left the European Union in January 2020 but nothing much changed because the country went into the transition period. During the transition period, negotiations continued between the leaders of the UK and the EU to strike a deal, and in this transition period, the UK followed all the rules and regulations of the EU.

Brexit deal

After four and half years of the referendum the United Kingdom and the European Union finally agreed on a trade deal which became effective from 1st January 2021. This more than twelve hundred pages agreement is more than just trade; it covers everything from food and drinks to immigration from fishing to counter-terrorism.

Impact on trade and business

The United Kingdom leaves the single European Union market and customs union. For most UK companies, it means getting used to new laws and potentially doing more paperwork as well. Under this new trade deal, there would be no tariffs which means that the companies that import and export goods between the European Union and the United Kingdom won’t have to pay any extra cost if the goods have originated in the United Kingdom of the European Union. Free movement of the workers from the European Union to the United Kingdom or vice versa will also be affected, as the workers now have to go through the visa process.

Necessary Documents

Employees

Employees who are working in the United Kingdom and hold the citizenship of the European Union (EU), European Economic Area (EEA), and Switzerland will have to register for the EU Settlement Scheme. The last date to do so was June 30, 2021. Since the last day has already passed there is a provision for late applicants. Late applicants will be entertained if they fall under the following reasonable grounds, including, but not limited to, the following:

Where a parent, guardian, or Local Authority has failed to apply on behalf of a child.
Where a person has or had a serious medical condition, which meant they were unable to apply by the relevant deadline.
Where someone is a victim of modern slavery or is in an abusive relationship.
Where someone is isolated, vulnerable, or did not have the digital skills to access the application process.
Where a person was unable to apply by the relevant deadline for compelling practical or compassionate reasons – including in light of the coronavirus pandemic.

Application is free to apply and can be applied for online. Failure to comply would mean suspension of your rights. The rights include your rights to live, work, study, and access benefits and services in the UK.

Tariffs

Tariffs or custom duties are taxes levied on imports. From January 1, 2021, tariffs on imports to the United Kingdom would depend on the trade deals that the United Kingdom has signed with various countries, it may differ country wise or maybe on the lines of the World Trade Organisation (WTO) since it is no longer part of the European Union. Before Brexit, there were no tariffs within the European Union customs union and the rest of the world had to follow the EU tariff rates for trading with the United Kingdom.

The UK-EU Free Trade Agreement (FTA) clearly mentions that there will be no tariffs on imported goods to the UK that ‘originate’ in the EU and vice versa. Origin will be a key if a good is moved between the UK and EU. If origin will not be satisfactorily proved tariffs will apply.

Rule of origin is complex and product-specific. It is present in detail in Annexes ORIG-1 and ORIG-2 of the Trade and Cooperation Agreement (TCA) between the UK and EU. The origin can be proved in two ways:

Self-declaration by the exporter

The exporter may provide the statement of origin. It should be in accordance with the Annexe ORGI-4 of the TCA. The exporter may then be responsible for the correctness of his/her statement, which in case found false will be subjected to extra tariff.

Importers knowledge

In this case, the importer can rely on the information provided to him by the supplier. Supplier declaration must be in accordance with the ORGI-3 of the TCA.

For trading with other countries (non- EU members) tariff would depend on the following four elements:

The customs value of goods.
The type of the good (Commodity Code).
The country they are being imported from.
Where they have originated.

Customs

From January 1, 2021, the UK is a separate customs territory from the EU. The traders will have to comply with the customs rules of both the EU and the UK. Business would require an Economic Operation Registration and Identification (EORI) number to import or export goods from the United Kingdom or the companies can hire a person or another company to deal with customs for them.

Other changes

In case a person is travelling to the EU countries for business purposes that include: travelling for meetings and conferences, providing services (even with a charity), touring for art or music, taking goods to sell. Will not be able to stay there for more than 90 days within a time frame of 180 days without a visa. A declaration must be made by the person travelling to or from the EU if they are carrying more than 10,000 British Pound (Pound Sterling).

The UK goods vehicle operators will now be required to follow the international road haulage. All the vehicles must be registered as per the EU standards, vehicles and trailers must have insurance and GB stickers. The drivers need to have a valid UK driving license, a valid driver Certificate of Professional Competence (CPC) card, a valid passport, an International Driving Permit (IDP) if they need one for the countries they’re travelling in and healthcare documents.

A special license would be required to import or export certain goods (e.g. waste, certain hazardous chemicals, GMOs). Also in certain cases importing or exporting excise goods (alcohol, tobacco, or fuel) to/from Great Britain, the business will have to comply with additional formalities.

VAT rules and procedures will be different for transactions with Great Britain than for transactions within the EU and with Northern Ireland.

Conclusion

For the time being, it can be said that Brexit is finally over. This new trade deal will determine the relations of the United Kingdom and the European Union for many years to come. This last-minute trade deal has impacted the people from both sides whether being security checks at borders or employing new people, while the government is trying its best the ongoing pandemic is giving severe blows to its efforts. The long-term effects of this deal are hard to measure at this time.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

The new relaxed rules and regulations for opening an online kitchen in Canada

By

Abanti Bose

-

November 8, 2021

0

Food Delivery App — Image Source: https://bit.ly/2OynNYg

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

Table of Contents

Introduction

Home-based food makers have gained a lot of popularity and are in demand for quite some time now. It could be an apple pie which is a speciality of a particular family and they have been passing the recipe of the dish on from one generation to another. People usually make them and send a share of it to their neighbours but that wasn’t necessarily for money. The COVID 19 left a lot of people with almost nothing and they had to find ways to not end up on the streets. These passionate housewives and others who would want to make some money to save their family and loved ones from the wrath of poverty and their situation were considered by the Canadian government and they relaxed the rules regarding starting an online kitchen that sells homemade food products. A lot of people love the taste of a traditional family recipe and want to bring the taste of the dish to the world, Canada was not a very encouraging place for it until recently. The Ministry of Small business and red tape reduction recently relaxed the rules for people who want to sell their home-cooked food. This can be done without fulfilling all the criteria that are laid down to commercial restaurants. The laws were relaxed to help local entrepreneurs to make some money amidst dealing with the wrath of the pandemic.

Background

The pandemic has changed the ordinary course of the world and brought everything upside down. Earlier for anyone who wanted to sell their homemade food through the virtual space, they were required to obtain a license, regardless of how big or small the quantity of the orders. In the vent of the pandemic, a lot of them lost their jobs and were put through financial constraints. This is when the government decided to relax the regulations pertaining to selling food through an online kitchen in Canada. Prabmeet Sarkaria, the associate minister of small business and red tape reduction said in a news release that the relaxed rules will serve as a platform for people who would want to turn their passion into a successful business. The rules regarding purchasing alcohol have also been loosened and now one could even sell liquor along with the food on a take-away food item. However, the new rules are only applicable to a limited category of food.

What are the new relaxed rules?

While a typical commercial restaurant would have a lot of rules and regulations that need to be followed, home-based kitchens have fewer restrictions. The major highlights of the new relaxed rules and regulations for opening an online kitchen in Canada are as follows:

The new relaxed rules paves way for the food prepared in residential setups to go mainstream.
People involved in the preparation process must follow all the FPR (Food Premises Regulation) and HPPA (Health Protections and Promotion Act) guidelines.
Public health inspectors need to inspect the premises where food is being prepared.
You can sell only a limited category of food which is “low-risk” and “non-hazardous” food products which do not require any time or temperature control.
The permitted category of food products include bread and bun items with no fillings, pickles, jams, chocolates, cookies, brownies and muffins that require no frosting or refrigerator, granola, preserves, hard candies, tea leaves and coffee bags.
Home kitchens will not have to abide by the commercial dishwashing requirements such as having a separate sink just for the handwash.
Home kitchens that function online do not require the food-handler training or certification anymore which was a mandate earlier.

Many public health inspectors have been assigned to conduct inspections in the premises of the place where food is being prepared in order to keep a check on the quality standards.

Impact on other food businesses

The major concern that surrounds the rules that have been relaxed for opening online kitchens in Canada is whether these relaxed restrictions would be fair to the smaller businesses that are certified. Although this wouldn’t affect the larger businesses the smaller ones are put at risk due to the high insurance costs, higher rents that they have to pay and also take care of the employee’s wages and the other benefits which would create a lot of overhead expenses which wouldn’t be very profitable to small business owners. Their business which is running on small profit margins will be affected significantly if the home-based cooks can sell their products for a cheaper rate. The question is whether the people residing in a particular locality would appreciate cars using their streets when others go to home business owners to buy products from them. While ideally it is preferred that all food businesses whether small or large scale make good profits without compromising on their quality standards.

Conclusion

It is no secret that the food prepared in a residential set-up has always had some sort of demand and to cater to that, there has always been an underground market. The huge commercial food setups will not be affected much by these rules. While the new rules have definitely enabled homemakers to earn money by selling their speciality dishes and bringing them out to the world, this has given the small business owners a huge blow. A lot of such small businesses that started from home have made it big while a lot of them are still struggling to scale their business up. The rules were relaxed primarily with an intention to reduce and eventually eliminate the evil of red tape. This is a good initiative taken by the government until home-based food operations abide by the requirements and sell quality food products keeping the health of their fellow beings in mind. If that is the case, then no doubt they will be able to earn a few thousand dollars. This step taken by the Canadian government serves as an example and hopefully, other countries too would encourage such efforts of home-makers and pave the way for them to be self-reliant in all possible ways.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

Special provisions related to women under the Code of Criminal Procedure, 1973

By

Rachit Garg

-

November 8, 2021

0

This article is written by Varchaswa Dubey from JECRC University, Jaipur. This article reflects the critical analysis of certain provisions under CrPC, furthermore, the article also highlights the issue of misuse of laws under the Indian Penal Code, 1860.

Introduction

It is a common conception that most of the laws administering the criminal justice system of India are women-centric, and they provide special assistance and protection to women, and up to a certain extent, this concept is correct and genuine to protect women from evils of the society.

Some laws in India are women-centric because women continue to be major victims in the society, including rape, dowry death, cruelty by husband and other family members of husband, molestation, eve-teasing, etc. and therefore it is the need of the hour to protect the women, however, these laws are numerous times used as a weapon against males to take revenge, and this misuse of law is a major concern in India.

The Code of Criminal Procedure, 1973 (CrPC) is the criminal procedural law, which governs the due process of law, and how things shall be done. The 1973 legislation provides with the legal procedure established by law relating to the prosecution, trial, and punishment of the offenders.

How are laws under CrPC a threat to women

Arrest

Section 46 of CrPC in its exception clause states that no woman shall be arrested after sunset and before sunrise, however, it also provides with an exception to such right regarding arrest that, a woman police officer shall, after making a written report, and after obtaining written permission by judicial magistrate first class who have local jurisdiction of such offense, may make an arrest. Once a woman is arrested, she will be kept in police custody during the night, and such circumstances are a threat to a woman. Instead of putting a woman in the police station until she is presented before the concerned magistrate the next day, such a woman should be kept in places like an NGO, or a Mahila police station where there is no male present, including the staff of the NGO and police officers.

Investigation and trial

Section 177 of CrPC reserves provisions regarding the place of ordinary inquiry and trial of an offense. In cases of rape, the statement of the victim is recorded under Section 164A of CrPC, however, in cases of a victim being below the age of 18 years, there are no separate legal provisions. A victim below the age of 18 years is very likely to turn hostile, and therefore, an amendment to record the statement of the victim below the age of 18 in the presence of her parents or guardian shall be introduced. Section 26 of CrPC states that any offense relating to rape under the Indian Penal Code, 1860 shall be tried as far as possible by a court presided over by a woman. The provision exists on the theory that a woman is more comfortable in telling the facts of the case to other women, as compared to a male judge, which safeguards the interests of female victims of rape and assists delivery of justice.

Section 167 of CrPC which deals with the procedure when investigation cannot be completed in twenty-four hours states that in case of a woman under eighteen years of age, the detention shall be authorized to be in the custody of a remand home or recognized social institution. However, the remand homes are also not safe for women as women not only run away from remand homes leading to gang rape but women are also getting raped in the remand homes as well, leading to major loopholes concerning the protection of women. Such incidents reflect the clear scenario of current government administration, and of remand homes that are specially established for the protection of women.

Section 309 of CrPC is concerned with the power to postpone or adjourn proceedings especially in cases of rape where the inquiry or trial shall be completed within two months from the date of filing of the charge sheet, yet there is a case of gang rape where police took more than 2 decades to arrest the prime accused. Strict compliance in the cases of rape, murder, and abduction is necessary to meet the ends of justice.

Domestic violence

Section 198A of CrPC states that no court shall take the cognizance of an offense concerning a domestic matter, except when a police report of facts is filed which contains the complaint made by the relatives of the victim. This provision is bestowed to protect the interests of a woman and to safeguard her marriage. Section 498A of the Indian Penal Code, 1860 is the most significant legal provision here which prosecutes the husband and other family members of the husband when they practice cruelty on a woman. This procedural law has its drawbacks including, if the police fail to entertain the complaint of the victim of cruelty or her relatives, or if the police are indulged in taking bribes from the accused or the family members of the accused, which the police most of the time does, then no cognizance of cruelty can be filed leading to injustice to the victim and her family members.

Maintenance

Section 125 of CrPC is the primary piece of legislation concerned with providing maintenance to wives, children, and parents. Considered as one of the most secular laws ever in the country, Section 125 of CrPC provides with the compulsion of maintaining the wife of the accused, if such wife is unable to maintain herself. This provision is bestowed to protect women in society. However Section 125 of CrPC is the only application in cases where the marriage is lawful under personal laws of the concerned parties, and this has led to many women abandoning their right to maintenance, as most of the time they were kept in the dark regarding the other marriage.

In the case of Smt. Yamunabai Anantrao Adhav A v. Ranantrao Shivram Adhav (1988) The Supreme Court of India held that a marriage which is not in accordance with the Hindu rites with the husband who already has a legal spouse, by virtue of Hindu Marriage Act, 1955 is invalid and null in the eyes of law and therefore the second wife is not entitled to the benefit of Section 125 of CrPC. The main dispute is, why the second wife is not entitled to the benefit of Section 125 CrPC, even though she was kept in the dark about the first marriage, and her rights are also violated in such circumstances, therefore, new provision regarding the maintenance or any other compensation to the second wife shall be introduced in the definition of Section 125 CrPC.

How some women misuse laws

The women-centric laws have made a tremendous achievement in the field of protection and safeguarding the rights of women in India, however, the very laws on the other hand are also used as a weapon against men sometimes to seek revenge, and therefore there is an urgent need to curb the fake cases against men since they are equally entitled to fundamental rights enshrined in the Constitution of India.

While some argue that Women’s protection laws should be amended to eliminate misuse of laws and to safeguard innocent masculinity, others are of the view that we haven’t reached the point where men need protection from women.

Section 498A of Indian Penal Code, 1860

Section 498A is the most abused legal provision enshrined in the Indian Penal Code, 1860. The legal provision was made to prevent dowry deaths in India. Section 498A was added by the Criminal Law (Amendment) Act, 1983 (Act 43 of 1983), and with the same objective Section 113A of Indian Evidence Act, 1872 was also added.

In the case of Saritha vs R. Ramachandra (2002) the Supreme Court of India held that educated women are approaching courts for divorce and initiating proceedings against their in-laws under Section 498-A of IPC, which is nothing but abuse of beneficial provisions which were bestowed to protect women from the cruelty of their husbands but it has taken a reverse approach now.

In the case of Anju vs Govt. Of Nct Of Delhi &Ors (2019), the Apex Court observed that the petitioner in the present case has named all the family members of the accused in one go, without actually mentioning their specific roles, and has failed to give any evidence regarding the changes concerned with Section 498A of IPC, and has also failed to give rise to any suspicion as well.

A similar view was taken by the court in the case of Bhupinder Kaur And Ors. vs the State Of Punjab And Ors (2003) where the complainant wife first filed a false FIR against all the family members of her husband and then later initiated a fake case under Section 498A of IPC. The court held that every member of the family of the husband has been implicated in this case and the initiation of criminal proceedings against all of them is a case of abuse of process of the court.

According to an NCRB report, out of 99,135 cases in the year 2012 concerning the offense of Section 498A of IPC, 10193 cases were reported to be fake on the grounds of mistake of fact or law.

Report of Law Commission of India

The Law Commission of India in its Report No. 243 on Section 498-A of IPC while considering suggestions of specific provisions to punish women who are involved in filing false complaints about irrelevant reasons ruled that there is no reason to make a special provision for Section 498A, and the existing legal provisions like Section 182 and Section 211 of IPC and Section 250, Section 358 of CrPC are sufficient.

Section 376 of Indian Penal Code, 1860

Section 376 of IPC lays down the punishment for rape, with a minimum of ten years of imprisonment to life imprisonment, and a fine, while the definition of rape is laid down in Section 375 of IPC.

Rape is the most gruesome crime against a woman and society overall, and the consequences of rape continue to haunt society forever. The offense of rape is the most worrying concept in India, with an average of 87 rape cases daily, India continues to be one of the most dangerous countries in the world for women.

However, there is an increase in the trend of filing fake rape cases against men, sometimes out of anger, and sometimes under pressure from relatives. In most fake rape cases, sexual intercourse is consensual but later, the woman files a rape case either to seek revenge, or out of jealousy, or anger, which leads to ruining of the whole life of the accused even if he is later found to be innocent. According to the Delhi Commission of Women report between April 2013 and July 2014, of the 2,753 complaints of rape, only 1,287 cases were found to be true, and the remaining 1,464 cases were found to be false in the NCR region.

In the case of Mohit Nagar vs State & Anr (2017) the complainant woman argued before the court that she was indulged in consensual sexual intercourse on the pretext of marriage, however the woman was already married to another person, and all her arguments were false. The court observed that the woman has already filed other similar cases, and the court quashed the criminal proceedings against the accused.

In the case of Vineet Kumar And Ors vs State Of UP (2017), the wife of the petitioner argued before the court that his wife was gang-raped by the accused persons in their own house, however, the court found no evidence to such allegations, furthermore, the alleged victim also refused any medical examination due to delay of time. The case later turned out to be a case of revenge, as the alleged victim, her husband, and her son owed a certain amount of money to the accused.

Conclusion

It is evident from the above study that the Indian legal mechanism is certainly lacking the enforcement of the laws, also certain legal provisions in the criminal procedural law in India highlighted above are vague, and a threat to women in this country, therefore, the Parliament of India should urgently consider these loopholes, to protect the interests of women in this country and also to eliminate misuse of laws by introducing new laws, so that not only the resources of the court but also the abuse of provisions under CrPC be eliminated.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

Arbitrability of non-arbitrable disputes under the Transfer of Property Act

By

Diva Rai

-

November 8, 2021

0

This article is written by Bhavyika Jain, a student of Symbiosis Law School, Noida. This article talks about the arbitrability of disputes that arise under the Transfer of Property Act, 1882 and the recent amendments made to the existing rules.

Table of Contents

Introduction

Transfer means a conversion of one thing to another and property may be defined as any virtual or physical entity owned by a person or a group of people. The scope of this Act is limited as it applies only to the acts of parties and not to operations of law. Also, it involves both movable and immovable property but the major portion of the act covers immovable property.

The term ‘transfer of property’ is defined under Section 5 of the Transfer of Property Act, 1882. Earlier, the transfer of immovable property was governed by the principles of English law and equity. Transfer of property is done by a living person who conveys property to one person or more people or can do it himself or by one or more living persons in the present or the future. A company, an association, or body of individuals whether incorporated or not together constitute living people.

Disputes under Transfer of Property Act

The manner of determination of leases along with the grounds for forfeiture due to breach of the express covenants in the lease agreement is laid down in Sections 111, 114, and 114A of the Transfer of Property Act. The forfeiture of the lease deed due to non-payment of rent is also governed by the aforementioned sections. According to Section 114 of the Transfer of Property Act, the Court may allow the lessee to hold the property if the forfeiture has not occurred and also if the lessee pays or tenders to pay the rent in arrears to the lessor. The lessor may also be prevented from pursuing a suit of ejectment by the Court upon examination and deliberation of the facts of the case.

In case of a dispute regarding the determination of the lease, the landlord must institute a suit before a court which has jurisdiction over the matter. However, parties are allowed to pursue alternate modes of dispute resolution including an arbitration or conciliation mechanism depending on the express conditions of the lease deed or the terms of the agreement. The landlord is entitled to invoke the arbitration clause and seek remedy under an arbitrator.

Rules laid down in various case laws

The dispute that arose in Himangi Enterprises Vs. Kamaljeet Singh Ahluwalia (2017) was a lease dispute that was not arbitrable under the Transfer of Property Act,1882. The case was moved to the larger bench for review. The reason given by the Court was that the disputes that have been raised under the Transfer of Property Act,1882 involve a ‘right in rem’ and the question for debate is non-arbitrability. This has been reflected as an unprogressive view given on arbitration at the time when the public policy of India has asked to increase the reliance on Alternate Dispute Resolution(ADR) mechanisms for commercial and civil disputes.

The appeal was dismissed by the Supreme Court of India relying upon the judgment given in the case of Natraj Studios (P) Ltd. vs. Navrang Studios (1981) and of Booz Allen & Hamilton Inc. vs. SBI Home Finance Ltd.(2011) and held that the court was right in taking the decision of dismissing the application of the applicant to refer the dispute under arbitration under Section 8 of the Arbitration and Conciliation Act, 1996.

Regarding Natraj Studios, the facts of which are similar to that of the instant case, where the tenant application filed under the Arbitration Act, 1940 was dismissed by the Supreme Court. It was held in the judgment by Justice O. Chinnappa Reddy that “both by reason of Section 28 of the Bombay rents, Hotel and Lodging House Rates Control Act,1947 and on the broader considerations of public policy” the jurisdiction to hear instant disputes lies in the hands of the Court and not the arbitrator.

With reference to Booz Allen, the nature of disputes that are non-arbitrable in India were listed down by the Supreme Court. One such dispute observed by the Court was “eviction or tenancy matters governed by the special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes”.

In Himangi Enterprises, the Supreme Court relied upon the above given two judgments. It dismissed the appeal without being hesitant and it was held that despite the parties having the right to arbitrate, the civil suit that is filed by the respondent is still maintainable. The appellant argued that the two judgments should not be taken into consideration as they speak of the matters that are governed by some special statute. This was also dismissed by the Court stating that if the Delhi Rent Control Act, 1955 is inapplicable the matter shall be governed by Transfer of Property Act, 1882 and the civil suit maintained shall be heard by the Court and not the arbitrator.

Recent cases

In Vidya Drolia & Ors.vs. Durga Trading Corporation (2019), there was a tenancy agreement between the landlord and the tenant where the maximum period for tenancy was 10 years. An arbitration clause was mentioned in the tenancy agreement. After the maximum period, the tenant was asked to vacate the premises which he failed to do, following which the landlord issued a notice of arbitration to the tenant. For the appointment of an arbitrator, the landlord applied under Section 11 of the Arbitration Act. The tenant’s objection relating to the non-arbitrability of the dispute was rejected by the High Court of Calcutta and the matter was referred to arbitration.

Finding itself at odds with its judgment in Himangi enterprises, the matter of this case was shifted to a larger bench. The larger bench took the matter and the Court held that the matters of tenancy are arbitrable except those which fall under some special rent-control laws.

Suresh Shah vs. Hipad Technology India Private Limited, ( 2020), is the most recent case. In this case the parties entered into a sub-lease agreement that contained an arbitration clause. Some dispute arose between the parties under the sub-lease agreement for which an application was filed under Section 11 of the Arbitration Act, in the Court. The Court elaborated on the arbitrability of disputes relating to lease or tenancy agreements before taking into consideration the appointment of an arbitrator. The Court held that the tenancy was governed by some special statutes, where the tenant is enjoying the statutory powers and where under a specific Court is conferred the jurisdiction, the disputes will be non-arbitrable. It held that the landlord-tenancy disputes under the Transfer of Property Act are arbitrable.

Test for arbitrability of an issue

The Court in the Vidya Drolia case (2020) held that there are four rules in determining the non-arbitrability of the subject matter dispute:

Relates to action in rem, that do not pertain to subordinate rights in personam that arises out of right in rem;
Impacts the rights of the third party, have erga omnes effect, require centralized adjudication, and mutual adjudication would not be appropriate and enforceable;
By expressly or through necessary implication not arbitrable because of the mandatory statute;
Relates to the inalienable sovereign and public interest functions of the State and therefore mutual adjudication would not be enforceable.

These rules are not rigid, however, they can be of some help in ascertaining the arbitrability of disputes. The Court held that public policy issues might be raised before the arbitrator in the same manner that they could be raised before a Civil Court. An award passed in the landlord tenant’s dispute would be enforceable in the same manner as that of Civil Court. It was held that the landlord-tenant disputes covered under the Transfer of Property Act would be arbitrable.

Occurrences of non-arbitrable disputes

Bankruptcy or internal conflicts.
Patents are granted and issued, and trademarks are registered.
Cases involving criminal charges.
Matrimonial conflicts involving the dissolution of marriage, restitution of conjugal rights, and other similar issues.
Probate and other testamentary matters.
When it comes to a civil dispute, allegations of fraud might be made the topic of arbitration. This is subject to the caveat that non-arbitrability includes the issue of fraud, which would be void and nullify the arbitration clause.
Disputes referred to the recovery of debts and bankruptcy for resolution under the DRT Act, 1993.

When can the issue of non-arbitrable disputes be raised

The issue regarding the non-arbitrable disputes be raised under the following conditions:

Appearing in Court on an application for reference under Section 11 of the Arbitration Act, or for a stay of current judicial procedures and reference under Section 8 of the Arbitration Act;
During the course of the arbitration procedures before the arbitral tribunal; or
Before the court at the time of the award’s challenge or enforcement.

The aspect of judicial review in relation to arbitration

The power is given to the court to refer the matter to Alternate Dispute Resolution methods as per Section 89 of the Civil Procedure Code,1908 when it appears to the Court that there exists an element of settlement which would be accepted by the parties and then such settlement can be formulated by the court and the parties could be referred to an alternate means of setting the dispute such as arbitration, Lok Adalat, mediation or conciliation.

In most of the developed countries, the concept of Alternate Dispute Resolution has been already established and the methods they adopt are also successful to the extent that almost 90% of the cases are being solved outside the Court. The main purpose of this resolution is to provide speedy justice to the parties involved despite the law’s delays and the limited number of judges available. Parties can go for dispute resolution methods for resolving their dispute instead of indulging themselves in litigation.

Conclusion

The judgment is taken in the right direction and is a positive step to put an end to a long-time debate regarding the arbitrability of the tenancy disputes in India. The judgment has ensured a pro-arbitration position and has also created a protective shield for all the unresolved issues as was in the case of Bina Modi v Lalit Modi (2020) which was decided on 3rd March 2020 wherein the arbitrability of disputes that are governed under the Trust Deeds and the (Indian) Trust Act, 1882 remains unsolved.

The judgment is likely to open up some debatable concerns. It will be really interesting to see the impact of the judgment on the pending cases which are already filed in the Court as the parties can file Section 8 applications requesting to refer the matter for arbitration. In this landmark judgment, the tenant’s rights will be protected from protracted litigation keeping the interest of countrymen in mind.

References

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

An overview of the Cable Television Network (Amendment) Rules, 2021

By

Rachit Garg

-

November 8, 2021

0

This article is written by Bhavyika Jain of Symbiosis Law School, NOIDA. This article is about the latest amendments made by the government in the Cable Television Network Rules.

Table of Contents

Introduction

When the Cable Television Network Rules have not formed the broadcasting in India was totally dependent on the state. In the early 1990’s, when cable and television were on the verge of emergence, the Indian government was still not prepared for the same. The government was not able to control the television broadcasts and the airing which was done by the foreign satellites.

It was first observed by the Rajasthan High Court that there is a need for a license to operate the cable networks in the case of Shiv Cable T.V. System vs. State of Rajasthan (1993) where the District Magistrate held a ban on the cable networks as they were operated without the license wherein the order was challenged in the Rajasthan High Court on the ground of violation of fundamental right to profess any trade and profession. The High Court stated that there was no violation of the fundamental right as the cable networks fall within the definition of “wireless telegraph apparatus” under the Indian Wireless Telegraphy Act, 1933 and therefore it is a mandate to have a license to carry out the work of the cable operator. This led to the enactment of the Cable Television Networks (Regulation) Act, 1995.

All about the Cable Television Networks Act

In the digital era, cable television is the topic of discussion everyday. There has been a mushrooming of satellite telecom companies everywhere throughout the nation. The legislation for cable television networks was introduced to ensure consistency in their operation. The law seeks to control the innumerous TV stations in the country and bring them under the ambit of law. The purpose of the Act was to regulate the operations and the content present in the rules of the cable network because satellite communication made the transmissions from the foreign television networks available.

As the Western culture was portrayed through them, the foreign television networks were regarded as a “cultural invasion”. It also wanted to lay out the “responsibilities and obligations in terms of service quality, both technically and content-wise, the use of copyright-protected materials, the exhibition of uncertified films, and the protection of subscribers from anti-national broadcasts from sources hostile to national interests.” In Rules 6 and 7 of the Cable Television Network Rules,1995 the Programme and Advertising Codes have been outlined which are required by every broadcaster to follow and act accordingly.

The introduced modifications to the Cable Television Network Rules, 1995 were made on June 17, 2021. A three-tier grievance redressal procedure has been established by the Ministry of Information and Broadcasting. According to a government release, the new laws that are formed through the Cable Television Networks (Amendment) Rules, 2021 will force “accountability and responsibility on the broadcasters and their self-regulating bodies”. The “statutory mechanism” that has been proposed under the amended rules exactly matches with the three levelled redressal mechanism of Information Technology Intermediary Guidelines and Digital Media Ethics Code Rules, 2021, to ensure strict compliance with these codes.

What are the amendments made?

The amended rules include some provisions that have allowed the central government to hand over an opportunity to the cable operator to explain himself and state his side of the story but that too in the case if it can be believed that the Program Code or the Advertising Code has been breached by the broadcaster. In this case, the Central Government can then “prohibit the transmission or re-transmission” of the channel or programme in question.

A three levelled redressal mechanism has been introduced through this amendment which includes:

Self-regulation by the broadcasters.
Self-regulating bodies of the broadcaster.
An oversight mechanism by the Centre.

Self-regulation by the broadcasters

A complaint can be filed by any viewer alleging a violation of the Advertising and Programming Codes, and which has to be resolved within 15 days itself. A proper redress system and an officer should be appointed by the broadcaster to resolve the issue. The officer will work on behalf of the broadcaster as the “point of contact” for all the complaints filed and will try to interact with the complainants so that the issue can be resolved as early as possible. The broadcaster would also be expected to make contact information for its redress process and nodal redress officer available on an appropriate interface.

Then, the broadcasters are required to keep a record of the content for a minimum period of 90 days after it gets published so that if the need arises it can be requisitioned by the government. Also, they are required to acknowledge the receipt of a complaint within the time period of 24 hours of its receipt.

Self-regulation bodies of the broadcasters

If the complainant is not satisfied with the broadcaster’s decision on the complaint made by them or the case is not resolved,he may approach the self-regulatory bodies and make an appeal before them. The self-regulatory bodies have a time period of 60 days to deal with the complaint and make their advice on the matter.

The appeals will be heard by the Inter-Departmental Committee which is established under the oversight mechanism chaired by the Additional Secretary of the Ministry of Information and Broadcasting and will also have representatives from the Ministries of Women and Child Development, Home Affairs, Electronics and Information Technology, Defense, and External Affairs and will also include representatives from other ministries and organizations which may also include the experts assigned by the Centre.

An oversight mechanism by the Centre

The third tier is not only made for hearing appeals but also has the authority to make references of the complaints to the Centre. An Inter-Ministerial Committee is formed to address the concern of the citizens if the upper two-tier fails to resolve the issue within the stipulated time. The interdepartmental committee will require a representative from each ministry, ranging from the Ministry of Electronics and Information Technology to the Ministry of External Affairs. The Additional Secretary of the Ministry of Information and Broadcasting will be the chairperson and will also include other representatives from different ministries.

An investigation can be made against the complaint that has been filed and can be referred to the Inter-Departmental committee so that it can be referred to the Centre and a warning or apology can be issued or the broadcaster can be made liable. A warning card or a disclaimer can be involved for the content to be deleted or modified or the decision can include putting the programme off the air for some time till the matter is resolved. The recommendations and suggestions can be made by the Committee but the real power to make decisions vests in the hands of the government.

Difference between the two regulations

The earlier Act i.e. Cable Television Network Act, 1995 aimed at regulating the content and operation of cable networks. The ‘haphazard mushrooming’ was regulated through this Act. Under this Act, the district magistrates, sub-divisional magistrates and police commissioners were the ones who were considered as the authorized officers and had the responsibility to ensure that the breach of the Programme Code does not take place. Unless the worker was registered as a cable operator under the Act, he was not allowed to work. It was mandatory to transmit the programmes of any channel to be in an encrypted form whenever the Centre asked the cable operator to do so and whoever does not follow the Act accordingly shall be punished. The authorised officers were given the powers to prohibit the transmission of any channel they wish to if it is in the public interest or it promotes disharmony or hatred between different religions, castes, communities, linguistic or racial groups. The Parliament was given the power, if it is in the public interest, to prohibit the operation of cable television networks.

The latest amendment has witnessed some changes. Now, the Act has various regulating bodies to address the issues raised by the complainant and different levels have been formed to address the same. Self-regulating bodies such as the News Broadcasters Standards Authority (NSBA) and Broadcasting Content Complaints Council (BCCC) have been given legal recognition. The Ministry of Information and Broadcasting has granted permission to over 900 television channels. The recent amendment has opened a path to create a strong institutional system that will be there for redressing grievances while accountability and responsibility are placed upon the broadcasters and their self-regulating bodies. This will help the television’s self-regulatory mechanism to be at par with the OTT platforms and digital news publishers as are mentioned in the Information Technology(Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

International aspect

Israel

The Israeli government has established the Council for Cable TV and Satellite Broadcasting and the Second Authority for Television and Radio, with the objective of bringing the Telecom industry under the legal framework. The Council for Cable TV and Satellite Broadcasting and the Second Authority for Television and Radio regulate two commercial television channels and a couple of commercial radio channels. There has been an initiative by the Israeli Government under the supervision of the Minister of Communications to merge the two authorities into a single independent entity responsible for broadcasting by introducing a piece of legislation.

Switzerland

Broadcasters of telecom services can neither demand a share of fees nor a guaranteed terrestrial distribution without a license from The Federal Office of Communications (OFCOM). Broadcasters of program services of relatively low editorial importance do not fall under the scope of the Federal Act on Radio and Television(RTVA) and therefore can operate without a license or registration. The number of licenses issued to a broadcaster and the companies associated with it is limited to a maximum of two television and two radio licenses with the sole exception of the Swiss Broadcasting Company (SBC). The selection criteria of several candidates for one license is performance-based. Promotion of diversity of opinion and offerings are also considered in the case of equivalent candidates. The Federal Department of the Environment, Transport, Energy and Communications (DETEC) often grants licenses to independent applicants that do not belong to a media group already possessing another broadcasting license.

China

In China, the media is heavily regulated and the important regulators are the National Radio and Television Administration (NRTA) and the State Administration of Press and Publication (SAPP), established in 2018. Different types of licenses are required in China according to the programme and the medium through which they are transmitted. A permit is required by the broadcasters for the cable television programme along with a certificate of approval from the NRTA.

Role of the rules

According to the government, these news rules would ensure transparency in the statutory mechanism which would ultimately benefit the citizens as all the self-regulating bodies of the broadcasters will be registered under the Central government. It will also place accountability and responsibility on the broadcasters and their self regulating bodies.

Impact of the rules

On May 26, the Ministry of Information and Broadcasting has asked all the OTT platform players, digital news publishers, and the traditional news platforms to disclose all the details about their companies to check whether it has been in accordance with the new guidelines issued in the time period of 15 days. To this various digital platforms have put an objection to furnishing the details calling it a violation of the Information Technology Act and the constitutional guarantee of media freedom and some of them have already furnished the government with the details of their companies.

Conclusion

The Act governing the theme of cable television networks had established a grievance redressal framework. This grievance redressal mechanism has resulted in the voicing of concern over several issues. FIR’s have been filed against the OTT platforms and content creators. The Act envisions the aim of the legislature to reduce the number of such complaints from 300 to a negligible minimum.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

A descriptive study on after-effects of contract law : Bhagwandas Govardhan Das Kedia vs Girdharilal ParshottamDas & Co

By

Shoronya Banerjee

-

November 8, 2021

0

Contra proferentem — Image Source - https://rb.gy/8l5yni

This article has been written by Mohd Aman Khan Afghani, pursuing the Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho. This article has been edited by Prashant Baviskar (Associate, Lawsikho) and Smriti Katiyar ( Associate, Lawsikho).

Table of Contents

Introduction

Starting with Section 2(b) of the Indian Contract Act, 1872; which talks about the acceptance of contract, according to which when the proposal is made to any person and that person signifies his assent back then that proposal is said to be accepted and that accepted proposal becomes a promise. Section 2(b) of the Contract Act, 1862 lays emphasis on the importance of communication of acceptance. Communication of acceptance is very important as without that, the agreement cannot be said to be made. Communication of acceptance can be made by various modes, i.e. by post, through a letter, through phone, etc. The rule of communication of acceptance is different when it is made through telephone or through any instant mode and it is different when it is made through the post. In the case of communications through post, an acceptance is complete when that post is put in the box and in the case of communication, through the phone. The communication of acceptance is complete when the acceptance is received by the person who has made the offer and the contract is said to be made. The law for the place of formation of contract which is made through telephonic conversation was laid down in Bhagwandas Goverdhan Das Kedia vs. Girdharilal Pashottam Das & Co. Here, in this article, the after effects of the above case law shall be discussed.

Statement of the facts of Bhagwandas Goverdhan Das Kedia vs. Girdharilal Parshottamdas & co.

M/S Girdharilal Parshottam Das & Company (“Plaintiffs”) has initiated an action against Kedia Ginning Factory Oil Mills of Khamgaon (“Defendants”) in the City Civil Court of Ahmedabad for a decree of Rs. 31,150/- and the Plaintiffs have taken the plea that the Defendants had failed to supply the cottonseed cake which they are supposed to supply by an oral contract between them dated 22.07.1959, made via a telephone call. In this case, the Plaintiff had contended that the Cause of Action had arisen in Ahmedabad as the offer of the Defendants was accepted by the Plaintiffs in Ahmedabad and also because the Defendants were supposed to supply the aforesaid goods in Ahmedabad, and because the Defendants were supposed to receive the payment for the goods which were to be supplied through a Bank situated in Ahmedabad. On the other hand, the Defendants contended that the Plaintiffs had, through telephone, communicated to purchase the cottonseed cake and the Defendants had accepted that offer in Khamgaon and also the delivery of goods had to be made at Khamgaon. The Defendants had also contended that the price for the supply of goods has to be paid at Khamgaon and therefore no part of the cause of action has arisen in Ahmedabad under the territorial jurisdiction of City Civil Court of Ahmedabad.

Procedural history

That on the issue of jurisdiction, the Trial Court’s findings were that the Plaintiff’s offer to the Defendants was made from Ahmedabad and that was made by a long-distance telephone to supply cottonseed cake and the offer was accepted by the Defendants in Khamgaon, that even the goods to be supplied under the contract were to be delivered at Khamgaon and the payment was also supposed to be made at Khamgaon. The court was of the view that the contract was to be performed at Khamgaon. The court held that in case of a contract which is made through Telephone, the place where the acceptance of the offer was communicated to the person, who had made the offer, is said to be the place where the contract is made and therefore the City Civil Court of Ahmedabad had the jurisdiction. After that, the Defendants filed a Revision Application against the Order of the City Civil Court which was rejected by the High Court of Gujarat. Then, the Appeal was preferred against the Order of the Gujarat High Court by way of Special Leave in the Supreme Court.

Contention of the parties in the case

In the above case, the Plaintiffs had contended that the making of an offer is part of the cause of action and that the court would have the jurisdiction under whose territorial jurisdiction the offer was made by the offeror, which after its acceptance had become a contract. Plaintiff had also contended that the communication of acceptance of the offer is an essential part of the contract formation and the contract is said to be made at the place where the communication of acceptance has been received by the offeror. On the other hand, the Defendants contended that in the cases where the contract is made through a conversation on the telephone, the place where the offer made by the offeror is accepted can be said to be the place where the contract is made or the place of contract and the court under whose territorial Jurisdiction that place comes had the jurisdiction.

Judgment

The Supreme Court held that the making of an offer at a place that has been accepted elsewhere does not form a part of the cause of action in a suit for breach of contract or in a suit for damages. It was held by the Supreme Court that ordinarily, it is an acceptance that gives rise to a contract. The communication must be indicated or demonstrated by some external manifestation which the law regards as sufficient. It was said that the draftsmen of the Indian Contract Act might not have predicted the use of telephone conversation for making contracts and therefore could not have intended to make any law on that behalf. The Supreme Court held that the Trial Court was right in taking the view that part of the cause of action arose where the acceptance of the offer was communicated to Plaintiff through telephone, i.e. Ahmedabad. The Supreme Court had dismissed the appeal. So according to the Supreme Court, the contract is said to be made at a place where the communication of acceptance is made to the offeror. Justice Hidayatullah gave the dissenting opinion in the above case.

The after effects of the case

The case of Bhagwandas Goverdhandas Kedia Vs. Girdharilal Parshottam Das & Co. had clarified the position pertaining to the contracts which are made through telephonic conversations and also clarified the jurisdiction of the courts for that matter. It was clarified that when the parties are in the presence of each other then the communication will largely depend upon the nature of the offer and the surrounding circumstances under which it was formed.

In Republic Medico Surgical Company vs. Union of India and Anr., Supreme Court relied upon Bhagwandas Goverdhan Das Kedia Case to conclude that by just making an offer, it does not become part of the cause of action for a suit for breach of contract and damages which is a result of an acceptance of an offer. In the above case, the tender was made to the defendant in Bhubaneswar, it was accepted by the defendant in Bhubaneswar, with the stipulatio that the goods would be delivered in Bhubaneswar and the money shall also be received at bhubaneswar. Hence, it was obvious that the cause of action arises in Bhubaneswar. In this case the findings of the Trial Court were upheld and the appeal was dismissed.
In Garware Nylons Limited vs. Swastik Yarns, the decision of Bhagwandas Goverdhan Kedia was relied upon and it was held that the contract can be said to be made through a telephonic conversation when acceptance is being received by the person who made the offer.
Sadhna Arun Kothari & Ors vs. Raj Bhalla, in this case the principles laid down in Bhagwandas Goverdhan Das Kedia were upheld by the court.
Quadricon Pvt. Ltd. vs. Bajrang Alloys Ltd., in this case the decision which was given in Bhagwandas Goverdhan Das Kedia was used in order to draw similarity between the communication done by telephone and fax. The court noted that the communication by Fax is also a type of instantaneous communication and is similar to communication by telex. It is also said that communication by Fax is in fact made through telephone connection.
M/S Besant Raj International vs. M/S Vishwa Bharathi Textiles, in this case also the principle laid down in Bhagwandas Goverdhandas Kedia was relied upon by the court.

Conclusion

The rule pertaining to the place of formation of contract through a conversation on Telephone which was laid down in Bhagwandas Goverdhan Das Kedia vs. Girdharilal ParshottamDas & Co. has become a settled principle of law in India. In a contract which was concluded or made through a telephonic conversation or through a teleprinter, the parties to that contract will be said to enter into a contract in the presence of each other and the place of acceptance will be the place where the communication of acceptance is received by the person who made the offer or we can say the place where the offeror is present. It was also noted that the rule for communication through an instantaneous mode between the parties is different from the rule of communication through the post. In case of communication through the post, the communication is said to be complete when the letter of communication is put in the post box, i.e. when it is out of the control of the person who is making the communication of the acceptance and that is said to be the place of contract formation whereas, in case of telephone and other modes of instantaneous communication, the contract is said to be made when the communication of acceptance is received by the person who makes the offer (offeror) and the place of contract formation is the place where the offeror is present. The same rule is used in many European Countries and on the contrary in the US the rule for communication through post and telephone is the same.

References

Anson, “Principles of the English Law of Contract”, 22^nd edn., A. G. Guest, pp. 50-51.
Singh, Avtar, “Law of Contract and Specific Relief”, Eastern Book Company, Lucknow, 9^th edn., 2005, p.31.
Williston on Contracts (3^rd Ed.), Vol. 1, p.271.
Kapur, Jeevan Lal, “Pollock & Mulla on Indian Contract and Specific Relief Acts”, 10^th edn., N. M. Tripathi Pvt. Ltd., Bombay, 1986.
Manupatra <http://manupatra.com/>
Westlaw<http://login.westlawindia.com/maf/wlin/app/tocectory?stnew=true&sttype=stdtemplate&sp=inrmlnlun-1>

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

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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