Job opportunities in IP Law in Canada

November 2, 2021

This article is written by Yash Kapadia. In this article, we explore the various job opportunities available in the field of intellectual property rights law in Canada. We shall further enlist the set of skills needed to land the desired jobs.

Table of Contents

Introduction

Article 2 of the Central Organisation for the protection of Intellectual Property (IP) Laws and the expert organization of the UN, World Intellectual Property Organisation defines IP as follows: “Intellectual Property shall include the rights relating to literary, artistic and scientific works, inventions in all fields of human endeavour, scientific discoveries, industrial designs, trademarks, service marks and commercial names and designations, protection against unfair competition, and all the other rights resulting from intellectual activity in the industrial, scientific, literary or scientific fields.”

Intellectual property (IP) generally includes trademarks, copyrights and patents. All these three are different from each other and require specific knowledge to be well versed with each.

Canada specifically provides statutory protection for trademarks, copyright, patents and industrial designs, and common law protection for trade secrets and against passing off. Canada Intellectual Property Office (CIPO) is the official body responsible for the administration and processing of IP i.e. patent, trademark, and copyright in Canada. CIPO is responsible for processing applications to register patents, trademarks, copyrights, and industrial designs.¹ CIPO’s mandate is to provide this service and, more generally, to provide education on intellectual property to Canadians.²

For anything that is related to IP, it is important that a person equipped with specific knowledge and skills in this domain is consulted like a lawyer or an expert consultant. This may include registering a trademark before starting a business or even registering a patent after years of research.

Through this article, we shall explore the opportunities for IP law enthusiasts in Canada and the set of skills that are required in order to bag these opportunities.

Disclaimer: The data and content for this article have been taken from a ton of opportunities (posted on LinkedIn, Indeed, etc.) in Canada for different kinds of IP law work and their requirements.

Various areas in the IPR field

The following are the areas in the IPR field wherein professional expertise is needed:

Trademark

Pursuant to the formulation of Canada’s Trade Marks Act, 1985, a holder of any registered trademark has the right to take action against any person who is using the same or confusingly similar trademark. A registered trademark holder is not required to establish goodwill or a reputation as a prerequisite for enforcement. In fact, there have been significant changes brought in the Trademark System in 2019 which one can read about, here. The changes include the process being at par with international trademark standards, change in the registration process, filing fees and mainly “use or intent to use” is no more required whilst registering a trademark.

Patent

Pursuant to the formulation of the Patent Act, 1985, an inventor may obtain a patent for any new, useful and non-obvious art, process, machine, manufacture or composition of matter or any new, useful and non-obvious improvement thereof. The Canadian Intellectual Property Office (CIPO) issues patents that are valid (presumptively) for 20 years from the date of filing with no ability to renew or extend (historically). In fact, the Patent Act enforced certain Amendments in September 2017 allowing pharmaceutical patent owners to obtain, in certain circumstances, a Certificate of Supplementary Protection for extended protection of up to two years.

The Copyright Act, 1985 is in force to prevent unauthorized copying, performance or publications of original artistic, dramatic, musical and literary creations. In Canada, registration of copyright is not a precondition for enforcement but provides the registration holder with the presumption of ownership and subsistence of copyright in any future enforcement proceedings.

Industrial Design

This is governed by the Industrial Designs Act, 1985 that relates to registering original visual features of patterns, shapes, configurations and ornaments.

Trade Secrets

There is currently no legislation with respect to trade secrets in Canada. However, the rights, interests and obligations of interested parties are protected within the four corners of contract law by means of confidential agreements, non-disclosure agreements, etc.

A detailed informative article about the various areas can be accessed here.

Job opportunities and positions

There are numerous job opportunities available for every IP law enthusiast. The only thing that remains is to ascertain which position is one well prepared for and passionate to practice. These job opportunities can be part-time, full-time, remote, hybrid depending on the location and at the discretion and working policies of every employer/ company/ organisation. The following are some of the job opportunities in the field of IP law in Canada.

Patent Assistant/ Patent Agent/ Patent filing Clerk:

Being a patent specialist is one of the highest-paying jobs in Canada. There are various job availabilities³ depending on the skillset one has and for the aforementioned niche positions under Patent law, the following are the job profiles:

Preparing, filing and reporting patent applications in Canada, USA and WIPO.
Preparing applications to file electronically with CIPO and USPTO and PCT applications.
Drafting, proofreading and prosecuting patent applications, amendments, and other documents.
Preparing and filing formal documents such as Assignments, Declarations.
Formulate IP strategies and maintain close relations with clients to update the IP strategies in line with their business needs.
Execution of invention mining, patentability searching, landscaping.
Preparing and managing the freedom-to-operate analysis as well as non-infringement and/or invalidity opinions.
Preparing cost estimates and items required for filing and reporting to clients.

These positions are regularly updated on Indeed.ca or Linkedin or even Google.

For example, for the position of Patent Counsel at Huawei Technologies Canada Co. Ltd,⁴ the following are the job requirements:

“Registered USPTO/CIPO Patent Agent (member in good standing with applicable provincial/territorial Law Society will be considered an asset).
Four or more years experience of preparing and prosecuting U.S., Canadian and/or international patent applications preferably in the telecommunications, semiconductor, and computer fields.
Strong technical background with a B.S. and/or advanced degree in Electrical Engineering, Computer Engineering, Computer Science or relevant field.
Strong written and oral communications skills.
Proactive, result-oriented, and strong motivation to excel.”

A successful candidate can then work closely with Research and Development engineers in Huawei’s invention disclosure review process to identify valuable inventions for patent applications in the telecom technical area, analyse pending patent applications (across various jurisdictions like Canada, US, EU) and analyse global strategies. As per Glassdoor, a role like this offers a pay of around $140,000.

One can also use the aforementioned skills and use them independently as a freelancer by working for individual clients one can get from sites like Upwork, PeoplePerHour, Fiverr or by working at law firms or companies too.

One can practice in the field of copyright or trademark with the help of certain online courses and further certifications. In Canada, there are many post-graduate diplomas to become a certified law clerk and paralegal. These courses act as one of the many gateways to being well equipped to apply for roles like a trademark agent or a trainee or a clerk or a paralegal. Following certain years of practice and relevant experience, one can also become an IP Counsel for a huge organisation like Amazon or Google considering the number of legal tussles they have under the IPR infringement domain. The following is a list of curated work that needs to be done if one is applying for the aforementioned roles⁵:

Preparing and filing Canadian trademark applications with all relevant follow-through correspondence.
Reporting routine correspondences, including approval notices, advertisements and Registration Fee Notices to one’s senior.
Knowing the process of how to pay fees to CIPO, including registration and renewal fees.
Managing, organising, prioritising and completing the given administrative tasks, including reminders, billing and status tasks (for the role of an IP Legal Assistant).
Monitoring various dockets and deadlines for the action of every case assigned(for the role of an IP Law Clerk).
Reporting case updates and preparing and filing responses to office actions, including revising the application and all relevant follow through correspondence.

For example, a job opportunity for the position of Senior IP Counsel at Sophos (a software company) requires the following qualification⁶:

“Strong academic credentials including a J.D. degree and membership in one state bar of Canada.
Relevant experience in a well-regarded law firm and/or in-house legal department. Preferably in-house legal experience with a global high-tech company preferred.
7-10 years drafting and prosecuting applications.
Self-starter with the ability to execute tasks efficiently with sound business judgement and attention to detail.
Excellent legal and business judgement.”

A successful candidate, as an IP Counsel, will be developing and maintaining the Company’s IP and processes, including patents, trade secrets, trademarks, copyrights, licensing and research agreements, be part of IP Review Committee, IP filing, reviews, prosecutions, etc. The estimated pay structure for this role is between $75,000-$100,000.

Freelance legal writer

The role of a writer across various fields has become more important than ever during and post the COVID-19 pandemic. The ability of a person to write on certain specific knowledgeable topics displays a plethora of skills. This especially does not require any major qualifications.

For example, on Upwork, Fiverr and Indeed, there are abundant opportunities for IP professionals to write articles, blogs, research papers and various small gigs. These roles are remote, part-time and therefore this can also be taken up as a side hustle where the writer can keep building his knowledge in his area of interest and also earn money while doing so.

Start-up Consultancy

Legal Consultants can be a side hustle as well as a full-time commitment wherein one can advise growing startups in Canada, the USA and other countries on the various IP-related pre-requisites they need to comply with before starting their businesses.

One can approach these startups through various sites like Y Combinator or various other startup directories which can be accessed here.

Independent one-time or weekly consultancies can also be provided through various platforms as discussed above like Upwork, Fiverr, PeoplePerHour.

Skills required to land these jobs

The following are skills as per which area one wants to practice in:

As a trademark professional

Identify the list or bundle of IP rights that can be included in the branding and can be protected under both trademark and copyright legislation;
Ability to conduct the required research to evaluate and assess whether the mark is available to use and register in Canada or not;
Ability and knowledge on how to submit a strong initial application that can avoid unnecessary costs and delays; and
Experience to help, develop and strategize the usage of the mark to maximize the brand value and further make sure that the benefits of registering a trademark are actually realized.

As a patent professional

Ability to conduct in-depth research in order to ascertain whether a client’s invention is patentable;
To further evaluate the scope of the patent’s protection that may be obtained for the client’s invention, in Canada and other places recommended;
Ability to perfectly, in detail, describe and explain the client’s invention for the claim so that when the patent application is filed, the chances of it being refused during examination by the Patent Branch is drastically reduced;
Skills to develop various strategies in order to increase the value generated by the client’s invention; and
Knowledge and experience that minimise mistakes that may cost the client later on so that the client can focus to develop their invention in an undistracted environment.

As a copyright professional

The primary aim must be to build a high wall to protect the interests of one’s client.
Well-rounded knowledge and experience in copyright clearance, prosecution and enforcement.
Preparing and filing copyright registration applications in Canada.
Arranging and supervising the filing of copyright registration applications in the United States and other foreign jurisdictions.
Drafting and responding to cease and desist notices and further ability to close litigation favourable to the client.

Conclusion

The field of Intellectual Property Rights is only going to go up in terms of work, market size and opportunities. There is no reference needed here as it is public knowledge when we hear about the multi-billion dollar lawsuits filed by companies including Google, Facebook (now Meta). A legal professional deciding to focus in this field is definitely taking the right track when considered in terms of scope, growth and of course the monetary benefits.

It is imperative to state here that one must be aware and must have knowledge about the IPR market, the job opportunities available across various countries and how to learn the skills and put them to use. Law students and professionals can take up various courses or even attend bootcamps like this from Lawsikho which require less time commitment but are willing to go through a brainstorming session of knowledge.

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

Important clauses of pre-incorporation contracts

Shoronya Banerjee

November 2, 2021

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

Table of Contents

Introduction

In India, after the formation and registration of any company, it becomes a separate legal entity. After that, the company is able to form contracts in its name and bear all the liabilities of an entity. After the incorporation of a company, it goes through various contracts and agreements daily. But, “the promoters” of the company are able to form contracts even before the incorporation of the company. These contracts are valid in the name of promoters and are known as pre-incorporation contracts. Pre incorporation contracts or preliminary contracts are made by promoters of the company on behalf of the company before its incorporation for acquiring some property or rights for the company. Pre incorporation contract is binding on a company or promoters after incorporation when it is according to the object of the company and it is accepted after incorporation. After acceptance of pre-incorporation contracts by the company, it should also be communicated to parties. Pre incorporation contracts get their validation from the “Specific Relief Act” and “Companies Act, 2013”.

There are various types of pre-incorporation contracts that can be made by a company according to their need before incorporation, such as a lease agreement, employment agreement, founder’s agreement, shareholder agreement, etc. That’s why it becomes a very important legal document for any company that is going to be incorporated or for any promoters who are going for incorporation of a company. Therefore, one should know the essential clauses of pre-incorporation contracts which ought to be included in the contract to make it more beneficial and how to draft it. The most important clauses of a pre-incorporation contract such as the corporate name, object clause, term and termination clause, methods of enforcing the agreement after incorporation of agreement, and so on.

What are pre-incorporation contracts?

Contracts that are made on behalf of the company by the promoters before the incorporation of the company for gaining some rights and property are called pre-incorporation contracts. A corporate promoter is a firm or person who does the preliminary work related to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company when it is being formed. Therefore, they are bound to promote their company at the operational level or make sure that their company is running successfully. For that, they enter into various contracts. Pre incorporation contracts are those contracts that are necessary to run a business or incorporation. When promoters make pre-incorporation contracts, the company is just an artificial entity which means at that time, the company does not exist. So basically, it cannot be executed at the time of incorporation. It will only be executed after the incorporation is formed. Therefore, promoters who are making these contracts before incorporation bear the liability at that time. These contracts are formed pre and not post-incorporation, and therefore, are called pre-incorporation contracts.

Significance of pre-incorporation contracts

As we already know, the incorporation of a company gives various advantages to a person in a corporate structure as it helps individual owners or shareholders to protect themselves from financial liabilities as, after incorporation, it is the company that goes into debt. Therefore, before the incorporation of any company, we can consider pre-incorporation contracts to decide the roles, functions, and liabilities of any company before its incorporation. There are two situations where individuals can prefer to draft pre-incorporation contracts.

Internal arrangements

Before the incorporation of the concerned company through this agreement, we can decide about the roles, functions, and liabilities of each and every incorporator such as who will be directors, financial head, legal head, etc., and what are their liabilities. We can also draft rules and regulations of the company once it is incorporated completely. By this agreement, we can also decide what benefits will be given to incorporated employees who are going to be part of the company such as apartments, cars, and all other benefits which they will receive.

Business agreements

When we incorporate any company, then it is obvious that the company goes and deals with various other firms and companies on a regular basis. So, a pre-incorporation contract will protect your company’s operations before its incorporation as this contract may specify that this company is of limited liability or not before its actual issuance of incorporation details. This agreement also specifies that the actual ownership will be transferred from promoters to a company after incorporation.

Pre-incorporation contracts are crucial documents; it is very important to incorporate any company control or operation for the proposed business during its pre-incorporation period. An absolute incorporation contract helps to avoid future disputes by drafting a pre-agreement by negotiation on complicated matters. By drafting a pre-incorporation contract with promoters in stores that everyone who is involved in the incorporation of this company should be clear about the idea, strategy and have a proper understanding of business which helps to avoid future disputes.

Key concerns to keep in mind while drafting and negotiating a pre-incorporation contract

This agreement lays out the basic structure and function of a company: what will be the name of the company, its purpose, its vision, who will be the directors, what will be the roles, what should be the capital investment of promoters, and so on.

So, while drafting any pre-incorporation contract and negotiating it, the following are the key concerns which one should keep in mind:

To include the purpose clause which defines what should be the main purpose of the company, shareholders clause which discusses the name of the shareholders, corporate name, corporate address, capital contribution and all the clause which gives the basic structure of the company.
While drafting and negotiating the incorporation clause, one needs to keep in mind that it should be better if the state of incorporation should be the same as the state in which business is going to be carried out after incorporation. Although all the companies are incorporated through the Companies Act which means all of them are governed by the law all over the country, it would be better to incorporate the company in such states which have better corporate support means the state which has better stamp duty acts, where registration of the property is easy, etc. For example, Maharashtra, Karnataka, New Delhi, etc. have a good corporate structure.
While negotiating the capital contribution it should be kept in mind that the promoters with less capital contribution should also get equal or proportional rights in the decision making. No decision should be taken by any partner/ promoter who has a major contribution without informing all the partners.
Clearly negotiate about voting rights for any decision-making.
While negotiating, it must be decided who will be the authorized person because he/she will be the person who is going to sign on all the legal documents or perform all legal actions of the company in future. Always keep in mind to draft it in a way that he has no authority to sign anything without prior concern of all the partners unless required.

Important clauses of a pre-incorporation contract

Corporate name- Name of the company which is going to be incorporated.
Incorporation- The state in which the company is going to be incorporated in the future.
Corporate address- The official address of the business which is mentioned in the memorandum of association and article of association is mentioned here.
Directors- Names of all the proposed directors must be mentioned here.
Object clause – It defines all the purposes and objects of the company once it is incorporated. It also describes the license which may be required for the incorporation and how it will be received.
Due date – The targeted date on which all the procedures of the corporation are completed and the company is finally going to be incorporated.
Capital contribution – This clause discusses what will be the total capital contribution of all the subscribers and what should be the mode of subscription? should be discussed here.
Bank account – It discusses the opening of a separate corporate bank account in the name of the company and who will be the authorised signatory who will be responsible to carry out all the transactions in the name of the company.
Authorized person- This clause discusses who is the authorized person to carry out all the actions of the company, sign contracts, and borrow on the behalf of the company.
Reimbursement of expenses- This clause talks about the reimbursement of money of shareholders and any other persons for handling all the incorporation matters.
Corporate stock – It is a very important clause that discusses all the authorised and issued share capital of the company by the shareholders. It also discusses in detail about what is the total authorised capital of the company, what is the issued capital, and what is paid and unpaid capital of all the shareholders of the company is going to be incorporated.
Jurisdiction of court- discusses what is the jurisdiction of court- for any matter which arises in the company in the future.
Confidentiality – This clause discusses how to keep safe all the confidential information shared amongst the promoters and others during the process of incorporation and with whom should the liability lie in case of its breach.
Termination – The termination clause discusses all the circumstances in which this agreement is terminated. For example, if any of the party declared insolvent by the band, became insane, the death of any promoter ( in case there are only two promoters and so on).

There are various other boilerplate clauses that are drafted in a pre-incorporation contract such as damages to be paid, methods of incorporating the agreement after the company is formed, dispute Resolution, notice clause, and so on but these are some important clauses that are present in a pre-incorporation contract. Here is a sample template of a pre-incorporation contract for a better understanding.

Enforceability of pre-incorporation contracts

According to the Indian Contract Act, 1872, pre-incorporation contracts are not valid as for the formation of any contract there should be two parties and in the case of a pre-incorporation contract, the company is not incorporated at the time of agreement. Hence, no legal entity is there in the contract on whose behalf the contract is going to be made. The second reason is that in pre-incorporation contracts, parties form the agreement as agents of the company but without the presence of the principal itself, how could parties nominate themselves as agents? Per Section 230 of Indian Contract Act 1872, an agent cannot personally enforce or bind the principal on their behalf as in this case the company that is principal is not legally present as this agreement is made before incorporation of the company.

Therefore, enforcement of pre-incorporation contracts in India comes from the Specific Relief Act 1963. Section 15(h) of the Specific Relief Act, 1963 says that when promoters of any company form a contract for the purpose of the company before its incorporation, it is said that the company has accepted the agreement and warranted it, and also communicated this to other parties. This section means that if promoters of the company on behalf of it then it is said that the company has accepted the agreement and will incur all the liabilities of the contract and it was also assumed that promoters have communicated the same to other parties. Hence, this section basically gives the concept of a pre-incorporation contract. Section 19(e) of this Act says that to give relief to the promoters of the company who entered into a contract before its incorporation which is warranted by the term of incorporation, then it is said that the company has accepted this contract and also communicated it to the other parties. This section gives relief to the promoters of the company who have entered into a pre-incorporation contract.

Case laws

Weaver Mills LTD. v. Balkies Ammal

In this case, Madras High Court gave a judgment that can give a broad aspect of pre-corporation contracts. In this case, motors of the company have agreed to purchase a property on the behalf of the company before its incorporation after that when the company is incorporated the as zoomed the position and start the construction of a structure on it but they have not transferred the title of the property in the name of the company. Court held that even in the absence of the transfer of property in the name of the company the title of the company over any property cannot be set aside.

Kelner v. Baxter

In this case, the promoters of a hotel company entered into a pre-incorporation contract for the purchase of wine. Here, in this case, wine was consumed earlier and due to some reasons, the company went on liquidation. Another party to the contract sued the promoters for the non-payment of wine. Promoters claimed that as this was pre-incorporation contract liabilities were transferred to the company and hence they were not personally liable for it. The court held that as the company was not incorporated at the time of the contract that’s why it can not relieve them from the responsibility and hence were personally promoters were liable to compensate the other party.

Phonogram Ltd v. Lane

In this case, there was a group of people trying to incorporate a new company that will run a group of pop artists and for that, they took a loan from a recording company. However, due to some reason, this company never came into existence, and hence, money is due on them, recording company filed a suit, and then the court held that as the company was not in existence at the time of contract. That’s why promoters are personally liable.

This principle of liability of promoters is also followed in India. In the case of Seth Sobhag Mal Lodha v. Edward Mill Co. Ltd., the Rajasthan High Court held promoters of the company personally liable for the non-performance of obligations decided in the pre-incorporation contract.

Conclusion

Pre incorporation contracts are preliminary contracts that are formed before the incorporation of a company. This basically helps the company set up the rules and regulations for the future. It decides the roles and responsibilities of all the promoters for shareholders who are going to be a part of the company in the future which helps in dispute resolution which may happen in case of ambiguities. It might seem that pre-incorporation contracts have no legal validity but as proven by the aforestated case laws, they are valid and valuable which helps promoters of the company to gain rights and properties before the incorporation of any company. Pre-incorporation contracts may or may not be undertaken by the company after its incorporation. It is totally dependent upon the promoters of the company whether they want to incorporate it or not. It can be incorporated by novation or by only accepting the benefits of this contract either expressed and implied.

References

https://indianlawportal.co.in/pre-incorporation-contracts/
https://smallbusiness.chron.com/preincorporation-contract-11865.html
https://enterslice.com/learning/sample-format-pre-incorporation-agreement/
https://enterslice.com/learning/wp-content/uploads/2018/04/PRE-INCORPORATION-AGREEMENT.pdf
https://blog.ipleaders.in/tips-drafting-pre-incorporation-contracts/
http://www.legalservicesindia.com/article/134/Pre-incorporation-contracts.html
https://www.lawteacher.net/free-law-essays/contract-law/pre-incorporation-contracts-and-the-promoter.php
Weaver Mills LTD. V Balkies Ammal (AIR 1969 Mad 462),
https://ukdiss.com/examples/pre-incorporation-contracts-liability-india.php
Kelner v Baxter (1866) LR 2 CP 174

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

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Authoritarianism in Asia and the dwindling role of trade unions

Oishika Banerji

November 2, 2021

This article has been written by Nikhil Gayner pursuing the Diploma in Labour, Employment and Industrial Laws (including POSH) for HR Managers from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Ruchika Mohapatra (Associate, Lawsikho).

Table of Contents

Introduction

Trade unions or labour unions are institutions/organisations formed by the workers working in the same establishment or working in the same profession across establishments to work for the common interest of its members. These trade unions play a major role in advocating workers’ rights and helping them with issues such as equality of pay, good working conditions , better working hours and benefits. Such labour unions also operate as an intermediary between the management and workers.

In India, The Trade Union Act, 1926 is the primary act which enumerates the guidelines and regulates the mechanism governing trade unions. However, major trade unions in India are also often influenced by various political ideologies. At an International level, the International Trade Union Confederation (ITUC) works to safeguard the interests and fundamental rights of workers. This ITUC is a brainchild of the International labour organisation (ILO) and enumerates the right to organize in trade union, collective bargaining and protection against discrimination. The Confederation also works to protect children against practises of child labour practice and forced labour. The ITUC has three salient arms as its regional organisations, namely Asia- Pacific Regional Organization, Trade Union Confederation of the Americas and the African Regional Organisation. The main purpose of the regional organisations is to streamline the international policies on trade unions.

The ITUC Asia Pacific represents the trade unions from the countries in Asia and Oceania. It has 40 affiliated organisations across 28 countries, with a membership numbering 30 million. From India, the Hind Mazdoor Sabha and Indian National Trade Union Congress are the main members of ITUC Asia Pacific.

Authoritarianism

An authoritarian state is defined as a state in which the basic liberty and rights of an individual have been curbed and the power has been concentrated on a single party or individual. In such a situation, it is very much likely that repressive strategies would be in use to suppress any dissent and curb individuals’ rights to protest. The state and labour relations encompasses the role of effective communication and laying down the conditions of employment for workers. Typically, there are four types of authoritarian governance related to unions and these types are distinguished by certain key dimensions of state-labour relations: resolution of industrial conflict, tolerance of labour organising and labour-related policies and legislation. These types are as under;

Exploitative :

In this, the governing body adopts a repressive approach towards managing the state and labour conflicts. The Trade Unions work only in the interest of the state and the labour protest and strikes are subdued forcibly . Demonstrations by labourers are prohibited strictly and there is no scope for the development of labour. All the employment policies favour the employer and the labourers are not allowed to protest.

Protective:

In the protective type, the state imposes certain limits to exploitation. However, Trade Unions continue to support the protective measures and follow the states policies at large. This has scope for legal activism and makes adherence to labour laws and workers are allowed to use protective laws to claim their rights. The state’s policies are aimed to protect the labour.

Open:

This is a more open system and works on the inclusion of labour representatives with effective dialogue and proper negotiating tools such as collective bargaining. Workers are allowed to share information on protests and are involved in strategic decision making . Some labour organising and internal coordination of activities allowed for labourers and labor can take the role of educating and guiding others on their rights, sometimes supporting the strikes as well. Various policies and laws are designed to help in effective negotiations and means for arbitration. Workers and laborers have some influence over policies and states allow more freedom in decision making.

Encapsulating:

Here, the state is more inclined towards resolving the industrial conflict and has a limited role for negotiation. The Trade unions work as a state agency but are made to focus on addressing the workers grievances. Little scope for experimentation in organising and resolution of conflicts/disputes. No opportunity for inclusion of labour representatives in decision making.

The above types of authoritarian governance related to unions are driven by various factors such as globalisation, state internal developmental strategy, state leadership and approach towards good governance.

Trade unions in Asia and the Pacific

In the last decade, many Asian countries have revised their respective policies on labour relations, some of which were specifically focused on regulating the activities of trade unions and focused more on Industrial peace.

Trade unions play an important role in ILO’s tripartite structure. Trade union representatives play an important role in shaping and directing ILO policies and programs concerning employers and government agencies. Constant dialogue with such employers and such agencies is important to promote the standards for decent work for all men and women and implement decent work country programs.

However, the trade unions in the regions are facing serious challenges in terms of protecting the interests and rights of the workers. Few of the key issues includes the inability to organise and push for a collective bargain, failing to protect r the rights of migrant laborers, unable to deal with the problems of child labour, forced labour and increasing level of gender inequality.

COVID-19 and Unions

The COVID-19 pandemic has widened the gap of inequality and created major rifts between the working class and the employers. Like everywhere in the world, Asia also has encountered the problems of job loss, major lockdowns and forced job cuts. As per the report of 2021 ITUC Global rights devastating events have taken place across Asia, to name a few, In Cambodia work suspension was imposed unilaterally on all the airports without even informing the unions thus leaving thousands unemployed. The governments in Indonesia, Philippines and Myanmar have violated the workers’ rights and their strike and opposed such measures by forcibly suppressing them by means of force. Several killing incidents of trade unionists were reported across the region.

As per this same report, the workers’ rights were denied in Asian & Middle East countries such as Myanmar, Bangladesh, Cambodia, India, Indonesia, Iran, Iraq, Jordan, Pakistan, Philippines & Thailand. Region wise APAC Asia Pacific Accreditation Cooperation was the second-worst region in violating the workers’ rights and India was one of the several other countries to adopt the laws which have severely violated the basic liberty of workers leading to major strikes across the country.

In 2021, countries such as Myanmar, Cambodia and Hong Kong were devastated by major violence which suppressed the workers’ protests and intentionally prosecuted major Union leaders. Many countries adopted regressive laws which have severely violated the workers freedom and challenged the state’s role in their protection. The various violations observed in these countries relating to Trade Unions include violation in right to strike, violation in joining a trade union, trade union activities, and attack on trade unionists.

Challenging time for Trade Unions in future

Work and employment are major activities for an individual and the society at large and participation in this labour force determines the opportunities for work and subsequently, the workers joining Unions. Considering the disinterest of various governments in protecting the workers rights and the current scenario where many have been asked to leave their jobs and their voices were not heard due to ineffective mechanisms of negotiations, there are many other factors which will directly impact the role of Trade Unions.

The changing landscape for employment and higher growth in the service sector decreases the unionism number along with the lack of permanent jobs coupled with hiring threats making the time difficult and thus decreasing the number of union members. As per a recent report of ILO, the future of the trade union depends on the informal economy and reveals that renewal in trade union movement can only be possible if the workers working in the informal economy are organized. The future trends have direct implications on workers organizations and thus the trade union must be focused on promoting workers rights and raising concerns over states’ forceful implementation of unjust laws.

The current situation is making the unions lose their effectiveness in promoting good relations in the organisations. The position of the union and its traditional members has been affected due to the current scenario. The major policy changes at the government level and ineffectiveness of trade unions in raising the voice against such rules have made the current situation worse and because of which the coming workforce labour members are of the opinion that the trade unions are unable to represent them and have become the tolls to drive government’s agenda making drifting them away from unionism. Eventually depriving them of effective collective bargaining and ultimately losing the power of unity.

Conclusion

Deploying a new index for measuring de jure and de facto labor rights, the article presents new comparative data on labor rights in the region. Democratization has produced stronger collective labor rights in much of the region, but labor laws in most countries still fall far short of international labor standards. East Asia’s labor laws offer similar levels of protection for individual labor rights to the rest of the world when firing costs are taken into account, and low regional averages are primarily a consequence of Singapore’s extremely weak individual labor rights. Few countries have revised their labor laws in the direction of allowing greater labor market flexibility. However, the distance between law and practice is wide, so improvements in laws are not necessarily reflected on the ground. Flexibility enters through the back door of ineffective labor law enforcement, which in turn has affected the organizing efforts of unions.

References

https://www.ilo.org/dyn/natlex/docs/WEBTEXT/32075/64876/E26IND01.htm

International Trade Union Confederation – Building Workers’ Power (ituc-csi.org)

2021 ITUC Global Rights Index: COVID-19 pandemic puts spotlight on workers’ rights – International Trade Union Confederation (ituc-csi.org)

https://www.ictur.org/pdf/IUR_274_AMRC.pdf.

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All you need to know about foreign investment in Australia amidst COVID-19

Oishika Banerji

November 2, 2021

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This article has been written by Ayushi Ajay Sharma pursuing the Diploma in International Business Law from LawSikho. This article has been edited by Zigishu Singh(Associate, Lawsikho) and Ruchika Mohapatra (Associate, Lawsikho).

Table of Contents

Introduction

Foreign investment happens at the decision of an individual, business or an investment vehicle outside the country, who wants to set up a new business in the country or purchase property or shares in the country’s economy. Due to the global lockdown caused by the COVID-19, economic disruptions had been caused. Foreign investment (FDI) had assisted the economies during the crisis via supporting the government in addressing the challenges of pandemic and linkages with Multinational enterprises, research and development, and local firms. However, even in this rough patch, the Australian economy showcased a resilient economic growth, formed strong institutions and drew high levels of foreign investment. In 2020, the country had attracted A$1 trillion of foreign direct investment. The aggregate value of foreign investment stock had grown up from 120% in 2000 to 203% in 2020. Foreign investment in Australia rose up to 2.5% in 2020 leading to a total stock of 7% Foreign Investment per year. Developed economies like the US, Japan, the UK, the Netherlands and Canada have been prime investors. More than half of the FDI is spent on real estate and financial services, followed by investment in scientific, mining and professional sectors. However, mining has accounted for the principal beneficiary of the FDI, with a total of 35%.

Outline of foreign investment framework

Australia’s economic growth is attributed to the competitiveness, open, resilient and diverse markets and a rules-based trading system. There are two broad categories under which the foreign investor can approach the Australian government:

1. Portfolio investment: It refers to the acquisition of securities or equity and debt transactions wherein the investor doesn’t have any control over the operation of the enterprise. It is inclusive of property, shares in Australian companies or pension funds.

2. Foreign direct investment (FDI): it is performed when the individual or entity sets up a new business or purchases 10% or more of an Australian enterprise and has at least partial control over its operations.

The Australian government evaluates the proposals in a detailed manner through the Foreign Investment Review Board (FIRB). Thereafter the board examines pertinent investment applications which fall within the scope of Australia’s foreign investment policy and Foreign Acquisitions and Takeovers Act (FATA), 1975. It recommends to the Treasurer on behalf of the proposals and the government. This system enables the government to consider community issues revolving around foreign ownership of certain assets while examining Australia’s national interest.

The Treasurer is empowered to prohibit investment if they assume it would go against the ‘national interest’. Primarily national interest was interpreted in terms of economic benefits keeping in mind the five factors mentioned below:

1. National security: the influence of investment on Australia’s capability to secure its strategic and security interests,

2. Competition: the competitive spirit between customer and producer, investor having more power over global market,

3. Australian government policies,

4. Influence of the economy and community: assurance of fair return to Australian people,

5. Character of investor.

Temporary measures in response to Covid-19

Reduction in monetary threshold: Monetary screening thresholds for the completion of application and approval under FATA were reduced to $0. This had a huge impact on the foreign investments as every single investment required FIRB approval, irrespective of the amount of investment or nature of the investor. This guaranteed that all the foreign investors are given equal opportunity. Previously the threshold was as high as $1,192 million, depending upon the nature of investment and origin of the investor. The Federal Government took this extreme step to protect the ‘national interest’ by restricting the investors from investing in critical sectors which might hamper the security and viability of such sectors in the economy.
Increased time limitation: The statutory period for the examination of applications has been extended from 30 days to six months. However, the agreements entered prior to the new measures will stand unaffected. These rules will be applied for the duration of COVID-19 and no specific time period for exhaustion of the same has been decided yet. Moreover, the Treasurer had declared that it will give importance to urgent applications for investments and consider the commercial deadlines in relation to the proposals.
Student Accommodation, Retirement Villages and Residential Care: The Regulation had expressly declared that aged care facilities, student accommodations and retirement villages are excluded from the strict rules subjected under ‘residential land’. These categories would assume lenient rules and thresholds of developed commercial lands.
Application Fees: All fees with respect to the investment proposals are payable and no action can be taken prior to the payment. The foreign investment generally expects a fee between $2,000 and $105,000 which is necessary to be paid off. The time limit on approval of application doesn’t commence unless fees are paid. Further, the Federal Government had announced that the Treasurer will consider the refund of fees if the investor wishes to withdraw the application.

Benefits of foreign investment in australia

Ranked at third position in the Economic Freedom Index 2021, it is needless to justify the FDI benefits Australia can offer to the investors. Moreover, the country has witnessed consistent economic growth over the years, starting in 1990. It is credited to the highly skilled workforce as the country has the seventh-highest proportion of working population in the tertiary sector.

Australia is proud of its stable democracy and strong governance. Governance of Australia was ranked at 93.8 percentile in 2020. It’s location further benefits the trade and cultural links amidst the Indo-Pacific region with a 24 hour connectivity between major time zones in Americas, Asia and Europe. Befitting the geography, the country has built a world-class infrastructure to even the needs of businesses.

Not just to foreign countries, but the country itself benefits a lot from FDI. Foreign investment supports the nation to reach its economic potential via capital funding, improving existing industries, and creating employment opportunities. It pays dividends for the Australians as it boosts the tax revenues to the federal and state governments, further increasing funds for hospitals, roads, schools and essential services. Through foreign investment, competition and interaction amongst different businessmen also expand, motivating the countries to spend more on innovation and technological advancement.

Restrictions on FDI policies in Australia

Even though the country offers a wide range of opportunities for trade and foreign investment, the Australian economy is less open than the rest of the OECD (Organization for Economic Cooperation and Development) member countries. The country had ranked at 5^th most restrictive of the OECD countries in 2018 owing to the screening and approval regime. Australia had also secured the same position in real estate investment regime in OECD.[16]

Conclusion

Despite the pitfall caused by the COVID-19 pandemic, the economy of Australia did not stagger. Due to the resilient approach and highly structured FDI policies, the country had a total FDI influx of $1 trillion in 2020, with higher stakes from Direct Investment and Portfolio Investment Equity. The temporary amendments had widened the scope for foreign investors for better returns in future. However, these amendments will be re-evaluated after the COVID-19 eases out.

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All about criminology and criminal psychology

Sneha Mahawar

November 2, 2021

This article is written by Oishiki Bansal, a student of Symbiosis Law School, Noida. This article gives insights into criminology and criminal psychology, the two different branches of criminal law and tries to explain the scope of both the branches.

Table of Contents

Introduction

Crime can be defined as an act of divergence from the accepted societal norms, morals, and behavior that results in a harmful impact on the whole society. Different countries have their own criminal code which codifies these crimes and states ways to prevent further, the occurrence of such acts. The word ‘crime’ is derived from the Latin word “crimen” which means “ to charge”.

Criminology and criminal psychology are two fields of crimes that are often misunderstood and mixed with each other. The difference between both the branches of criminal law is explained below.

Criminology

Criminology is an interdisciplinary field of study of crimes and the social responses followed by these criminal acts. It is a study from a sociological viewpoint. Individuals who study criminology are called criminologists. Their work is to study why the crimes are committed, who commits the crime, the root cause of the criminal activity, the impact of the criminal activities in the society, and how crimes can be prevented.

What constitutes a crime according to criminologists

The debate as to what constitutes a crime and what comes under the purview of crime has always been considered by the criminologists. Crime, if put in the most basic sense, means any act which has legal consequences or is codified in any prevalent law as an act of violation by the state. However, according to criminologists, crime is any act that is recognized by society as opposed to historical, cultural, and social conditions. For example, the act of consuming cannabis in the US during the 1937s was a crime but later consumption of cannabis for medical and recreational purposes was legalized.

Subsequently, many criminologists view the legal definition of crime as either too narrow or too broad as it excludes many harmful acts that could have a huge impact on the society and includes other harmful activities that could have little or no impact on the society. Therefore many criminologists have argued that the scope of crime should not be limited as to what is prescribed by the law but it should be understood from the perspective of social and non-legal disapproval and sanctions.

Theories of criminology

Classical theory

In the 18th century when the society was moving from a system of feudalism to a system where all the citizens were considered equal and were not divided based on class, the classical theorists of criminology were of the view that crimes are a result of an irrational decision or an individual’s choice. The states were empowered to develop codified laws for crime and ensure that all the citizens are treated equally. Any commission of a crime by an individual was considered a violation of the social contract. The social contract is an agreement between the citizens and the state, whereby the state promises to protect the citizens in return for citizens giving up their rights. Cesare Beccaria, an Italian philosopher, found that the impact of crime affected society as a whole, and therefore the state must take all the appropriate actions to establish law and order in the state.

Jeremy Bentham, one of the most prominent philosophers, argues that human behaviour is built on the principle of pleasure and pain, where the act of a human is categorized in such a way as to reduce pain and maximize pleasure. Therefore, the classical theories of criminology focused on punishments that acted as a medium to prevent crime by increasing the pain but not in a vengeful manner. Hence the role of the state was not only limited to deciding what is included in crime but also to deciding an appropriate punishment that would prevent the wrongdoer as well as other citizens from committing other crimes.

Positivist theory

As the theory of positivism began to take form and more scientific ways were developed to overcome the societal problems, two areas of criminology interested the positivist. Firstly, the Idea as to what contributed to an individual in becoming an offender. Secondly, getting deviated from the general societal norms and the social contribution mechanism in the society whose operation no longer ensured that the “system was working as a whole”.

The positivists focused on the wrongdoer and the individual and societal characteristics that influenced an individual to commit the offence as compared to classical theorists focused on law and the nature of the offence.

Strain theory

Strain theory was the first theory to argue that crime was a social phenomenon and a function of social processes and structures. Strain theorists believed that crime represents a violation of societal norms, values, morals, and behaviour that are agreed upon by the society as compared to the positive theorists who believed that crimes are a result of individual deficiency. The strain theorists pointed out that individuals commit crime as an alternative to meet their needs when the citizens do not have equal access to the resources of the state. According to these theorists, crime is best addressed when individual rehabilitation is combined with institutional reforms to increase access to the social programs available. They also advise on removing the causes of strain by providing access to social programs to the individuals who are prone to the maximum risk. They believe that by removing the causes of strain, the state can prevent individuals from committing crimes.

Critical theory

Critical theory of criminology is concerned with how the structure of power works within society and how these powers are placed in the hands of certain privileged citizens of the state resulting in marginalized communities committing a crime. Critical theorists are divided into two orientations, namely the structuralist and the post-modernists.

Structuralist

The structuralist focuses on how power is incorporated in society such as the criminal justice system. They believe that the marginalization of certain communities in society is the main cause of why crimes are committed. The structuralist critical thinkers focus on empowering the marginalized section and distributing resources equally to all the sections of society.

Postmodernist

Postmodernists investigate how “knowledge creation impacts human experience while simultaneously inculcating conflict over meaning”. Their approach identifies major beliefs, reasons, and causes that result in individuals committing crimes. The postmodernist’s focus is on building a society that includes every community of the society and decentralizes the power from the dominant sections to the marginalized section.

Both the structuralist and postmodernist, however, have an interest in disclosing the power that leads to the differences in the relationship of various communities in the society.

Criminology evolutionary models

The study of criminology focuses on the problems and reality of crimes in society. It is not just the study of crime as a static reality but rather a very evolutionary process. It reveals concerns about the welfare of society. The evolutionary process of criminology conceptualizes crime and law as a part of society and reflects human morals. The two model theory for the evolution of criminology is-

Life history model

The life history model is based on the observation that the individual’s growth and development in different areas of maintenance and reproduction is marked by the trade-offs they make. Thus the investment in some areas can supersede the investment in other areas especially when resources are scarce. Contingent strategies are inculcated by the environment in the individuals which leads to the different levels of investment in different areas. These strategies of investment are called life-history strategies. Individual life-history strategies are the trade-offs that an individual makes. For example, examining the current situation instead of future reproduction, choosing quality over the quantity of offspring, and inclining towards parenting compared to the mating effort. Individual life history presents the capital an individual has invested for his/ her survival and reproduction. Life history theory proposes that individual genetics are fashioned to respond to the environment‘s salient and recurring stimuli and cues. The flexibility in designing genetics allows an individual to endure various environmental stimuli and continue the reproduction process by finding multiple ways.

The life-history theory in criminology conceptualizes engaging in anti-social and criminal conduct as an individual strategy that invests in the current reproduction and not the future, the quantity of offspring over the quality, and in the mating process over the parenting process. The life-history strategies are divided into two categories – faster and slower. The faster life-history strategies are those strategies that involve more crime risk estimation and slower life-history strategies are those strategies that involve less crime risk estimation. The environment is the most important factor in this theory. Environmental stimuli that signal unpredictability, harshness, and survival risks mostly lead to crime-risk life-history strategies. Hence, these types of environments are important for criminologists to study. This model of evolution is related to the strain theory of criminology. They provide a framework that helps in understanding the variables such as economic status, age, sex, etc. that could lead to crime.

Evolutionary Neuroandrogenic theory

The evolutionary neuroandrogenic theory focuses on and explains why men are more prone to criminal activities. The word “neuroandrogenic” refers to the androgen hormones that are a specific type of hormones found in men to explain why men tend to exhibit characteristics that make their behaviour criminal in nature. This theory focuses on the question of ‘how’ and ‘why’. ‘How’ deals with the relation of the proximate mechanism to how the criminal functions and why the proximate mechanism and criminals are correlated. The ‘why’ part examines the evolutionary process whereas the how part examines the neuroandrogenic process.

The evolutionary neuroandrogenic theory uses the concept of competitive actions that leads to victimization and can risk the chance of one individual using the same action on another. Competitive actions that do not involve victims such as competitive sports or games are not considered criminal in nature. There is no surprise in the fact that the competitive actions that lead to victims have consequences for the success of survival and reproductive process for both the victim and the perpetrator.

Thus, the evolutionary neuroandrogenic theory helps us in understanding why patterns of crime exist more in men as compared to women. How the characteristics of criminal behaviour get formed in the genetics of some individuals. It explains why criminal behaviour is common among boys during puberty as compared to girls. With a surge in the production of androgen hormones in men, it tries to explain why men are more prone to hormone-stimulated criminal behaviour. The proponents of this theory believe that due to the selection pressure of resource provisioning skills required in the past to ensure the survival and success of the reproduction process has led men more vulnerable to the hormone-stimulated criminal behaviour

Criminal psychology

What is a criminal psychology

Criminal psychology also known as forensic psychology, focuses on studying the mind patterns of a criminal and his/her behaviour. A criminal psychologist is interested in the question of what may have led an individual to commit a crime rather than the question of why. It deals with the thoughts, behaviour, feeling, emotions of an individual to study the criminal circumstance that led him/her to commit a crime. By studying the mind pattern of a criminal the criminal psychologists can identify the criminal’s chance of committing a crime again and again.

Role of criminal psychologists

A criminal psychologist’s role is to aid in criminal investigation by helping law authorities in solving crimes and analyzing the behavioural patterns of the suspects. They play an important role in the investigation of criminal profiling, also known as offender profiling. The investigation of criminal profiling deals with individuals who commit crimes at hand. This type of investigation helps in identifying serial cases of criminal activities as the details of multiple cases are compared in this investigation. This investigation aims to categorize the suspect’s behavioural tendencies, demographics, and geographical variables. It forms a framework of the suspect’s life and his/her psychological state of mind.

Investigation challenges in criminal psychology

The challenges that are faced by the criminal psychologists while interrogating a suspect is that sometimes the suspect tries to be hostile, distrustful, and uncooperative to save themselves from the criminal charges. The suspects become deceitful, cunning, and try to save themselves from the situation. Sometimes the biases of the psychologists also affect the interrogation process. The most common approaches adopted by the suspects to deceive the criminal psychologist –

The logical and realistic approach

This approach is based on relating the events or scenarios that happened by the suspects to persuade the psychologist of their inability to commit the crime. The suspects also resist answering the questions of the interviewer which makes the process long and tiresome. Suspects by using this approach become very uncooperative and the process of obtaining truth becomes challenging.

A passive and helpless approach

In this approach, the suspect sticks to one version of the story and tries to refute all the questions asked by the interviewer. This is done to avoid confrontation with criminal psychologists during the whole interview to reduce stress. However, it increases the susceptibility of the suspect.

Techniques of investigation in criminal psychology

The reverse order

In this technique, the interrogator asks the suspect to explain the whole situation from the start or uses different situations as the beginning for the suspect to explain the whole situation. The suspect can be asked to retell the situation from the end and work anticlockwise to the start. For example, the suspect can be asked from where or at what time he/ she was arrested.

Change of perspective

This technique is used on the witnesses to crimes. Witnesses are asked as to what they saw from the perspective of different people, like some standbys, the victim itself, or any other individuals relevant to the situation. This technique is used to induce a witness to recall situations from different perspectives to find clues that could help in investigation purposes. The correctness and weight of evidence play an important role in this type of interrogation as it determines the extent of truth stated by the witness. This technique is generally well accepted in the case of children being eyewitnesses to a crime.

Detecting lies and deceitfulness

The verbal and nonverbal cues of the suspects can tell a lot about the deceitfulness of the statements that the suspect is stating. For example, a suspect that feels guilty while stating a false statement would not maintain eye contact and hesitate while speaking whereas, a suspect who is comfortable while speaking a false statement will look confident and the statement would be concise, logical, and believable. Most criminal psychologists believe that it is difficult to continue a lie as most of the suspects get caught up due to a lot of arrangements while others get stuck in making stories. A criminal psychologist can detect whether the suspect is stating the truth or not using the following pointers –

Interviewer having a well-prepared response
Being extraordinarily real by stating the situation
Prevent himself/herself from giving information or narrating the situation.
Easily recalling past events stating that he/she has a good memory.
Being confident, bold, or unemotional instead of being afraid or guilty.

Cognitive interviews

These interviews try to solve the problem of weak memory problems, by ascertaining the reliability of eye-witnesses statements. Three reliable techniques used in cognitive interviews are –

Social dynamics

The element of comfortability in the groups defines how the information will be passed from one member to the other. To make the witness, suspect or victim feel comfortable, the following techniques should be used by the criminal psychologist –

Develop good standing

Allow a witness to actively participate in the interrogation process.
The psychologists should not dominate the interrogation process and encourage the interviewee to participate actively by following the stated techniques –

Asking them to feel free in the interrogation process
By requesting an open-ended interview
By not interrupting the interviewee during the narration of the situation

Memory and cognition

A criminal psychologist is advised to involve cognitive tasks while asking questions from a suspect witness or a victim. These questions should involve a restatement of a contextual situation in which the Interviewee is asked to recall certain specific parts of the situation such as the appearance of the suspect, the environment of the place where the crime took place, etc. These questions should be frequently asked to verify that the interviewee is stating the truth. Many psychologists believe that if the interviewee is lying about certain things he/she would be incoherent or imprecise while narrating the situation.

Communication

Communication is key to resolving any kind of problem therefore communication between an interviewer and the interviewee should be appropriate and non-biased. Inadequate communication can result in a witness or victim not stating an essential fact or the suspect not disclosing a crucial element. The interviewee should be allowed to narrate the whole scenario or situation without any interruption. This technique is based on the contextual connectivity which is built when an interviewee narrates the situation. It is also used to infer relatedness or connectivity between the suspect’s statement, witness’s statement, and victim’s statement. This technique helps to ensure that the testimony given under the interrogation is reliable and is not staged by any of the interviewees.

Assessment of statements validity

This technique can be used to assess the validity of the testimonies given by the victims in the case of sexual assault kidnapping Child labour etc. It comprises three types of techniques-

Statements are taken in the form of interview

In this technique, the questions are asked from the witness in a structured or unstructured way that is related to the situation in a manner to ascertain the truth. The interviewer asks lead questions that are salient to the investigation and reads non-verbal and verbal cues to ascertain the reliability of the testimony.

Criteria-based content analysis

In this technique, the content of statements made by the witness or suspect is evaluated by the clinical forensic experts. The content from the statements is structured on the features of the statements made by the suspect or witness using the precise content of the testimonies given. Some examples can be a description of the appearance of the suspect, description of the standbys of the crime, objects used, etc.

The use of the content checklist

In this technique, a checklist is prepared of content that is inferred from the criteria-based content analysis. The checklist prepared is tested through a systematic process by formulating questions based on the resulting content and interviewing the interviewee again.

Offender profiling

As discussed above, in this technique the accused profiles are segmented based on certain criteria or characteristics. Two approaches to offender profiling are –

Inductive method

This technique of offender profiling relies on the criminal psychologist’s competency, knowledge, and skills. This technique is often referred to as being clinical in nature as it is logically used to persuade the interviewee to spill the truth.

Deductive method

This type of technique is often referred to as being statistical in nature. The deductive method relies only on the forensic evidence and facts, the evidence obtained from crime scenes, and empirical data such as fingerprints, video recordings related to the offence.

Some of how offender profiles are segmented using both the approaches are –

Profiling based on historical figures and political data
Profiling based on criminals and the crime scenes.
Profiling based on common features of the criminals – some of the features can be:

Psychopathic behaviour
Impulsive low attention hyperactive behaviour
Family history of criminal behaviour
Financial instability
Lack of parenting

Psychological criminal investigation intervention techniques

Criminal psychologists are often involved in the study of assessment, management, research, and prevention of crime. Therefore, implementing methods to modify the behaviour can result in the prevention of crime and intervene in the study of criminologists, social workers, etc. The techniques to control and manage criminal behaviour using criminal psychology are –

Aggression replacement training

This technique was developed in the United States. It is used to correct the behaviour of violent criminals. This technique contains three components –

Techniques of skill streaming

This technique includes training the accused in replacing aggressive behaviour and antisocial skills.

Training techniques for anger management

This technique identifies the criminal’s triggers that lead to anger issues. After identifying the triggers the anger management training is executed including the following –

Improving the knowledge about the trigger using emotional factors.
Teaching skills and strategies to cope
Giving exposure by training skills
Self-instruction training
Social – solving problem

Training techniques for moral reasoning

This type of training aims at improving moral skills and reasoning skills. The objective of this training is to enhance the offender’s understanding of the effect of their behaviour on society as a whole and individuals.

Group therapy

This technique includes making a group of criminals that have a similar criminal history and discussing with each other ways to solve their problems. These groups also include rehabilitated criminals as models who encourage others during these group activities.

Token economy

This technique uses the age-old method of rewarding the desired behaviours and punishing the undesired behaviours.

Cognitive therapy

This technique is used when the wrongdoer has false beliefs about a situation or behaviour. The method of cognitive restructuring is used to rectify false beliefs. This technique is used mostly when the wrongdoers believe that doing acts that divert from socially accepted norms will give them fame and recognition. These beliefs need to be restructured and this is done using cognitive methods.

Criminal psychology and its relevance in social work

Social work is dependent on studying the psychological aspects of a human. Psychological factors are needed to understand issues like parenting styles, traumatic experiences that an individual has gone through, and suicidal tendencies that lead to criminal behaviour in the individuals. Criminal psychology helps social workers to understand and train on issues that govern psychological criminal behaviour. Criminal psychology helps the social worker to detect and be able to manage formation, biases of attribution, past impressions, prejudice, etc.

Conclusion

Criminology and criminal psychology are different branches of study under the law of crime. They are often confused together, however, both have a huge variation. Criminology is the study of crime and its impact and criminal psychology is the study of the human psyche which influences humans to commit crimes.

References

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

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A monstrous act of crowd

Sneha Mahawar

November 2, 2021

This article has been written by Adv. Dristy Gupta & Ms. Tripti and the article has been edited by Khushi Sharma (Trainee Associate, Blog iPleaders).

Table of Contents

Abstract

Mob lynching is the activity which came into focus in last few decades. Lynching is a cruel mob justice in which ordinary people come together to punish someone without thinking about laws, morality, justice, and social standard. The group of people takes all the law and order in their hands.

Nowadays these activities increase in India under the name of religion, caste and creed. So, this topic should be properly discussed and researched. In the last 2-year SC and states made a number of laws and acts to control these activities.

Still these activities are not stopped in the states like U.P, Bihar, and Maharashtra etc. Now it is really important to spread awareness in the people about these laws and should promote the “Right to Heard” for each person.

Introduction

The basic and most essential feature of a democracy is to protect the life and liberty of the people, but, today, in the largest democracy of the world, the life and liberty of the people are being infringed upon. Right to life is a fundamental right in India, where it is seen to be violated at a public level and the government has not been able to show its efficiency over the years in getting rid of the crimes. There are many actions which are criminalized by the government to protect the fundamental rights of the citizens, but there are some crimes which have been rampant in the past few decades. The Mob lynching is the best and suitable example of recently immersed crime in India. Mob lynching, even though is a new glossary in Indian scenario, but has been coming from time to time through the world society for centuries.

Mob is the English word which means unrestrained or uncontrolled crowd and on the other hand, lynching can be considered an Americo- Latin word, which means awarding the death sentence without any legal proceeding.

Lynching is a premeditated extrajudicial killing by a group. It is most often used to characterize informal public executions by a mob in order to punish an alleged transgressor, or to intimidate a group. It is an extreme form of informal group social control such as charivari, skimming ton, riding the rail, also often conducted with the display of a public spectacle for maximum intimidation.

Mob lynching is not an ordinary crime. Evidence collected by India Spend suggests that since 2010, there have been 87 incidents of hate crimes in 289 victims of cow-related violence. Significantly, 98% of these incidents of lynching have occurred since May 2014.

The Supreme Court used powerful language in calling on the Union government to curb lynching of the Mafia. He has notified, “Citizens cannot take the law into their hands and added that “horrendous acts of monocracy” cannot become the new norm.

Multiple cases of mob lynching have been registered in Bihar, UP, Rajasthan, Madhya Pradesh. Several cases have also been reported in the south Indian states of Karnataka, Telangana and Kerala. In other words, mob lynching has almost become a national phenomenon.

Background of lynching

Mob lynching is started as social and racial discrimination against black Americans with the purpose of making them inferior to the whites. These were performed mostly in the US south from around 1877, soon after the reconstruction from civil war, through 1950.
It was believed that the term was first used by a planter named Charles Lynch to describe extra-judicial authority assumed by private individuals. Lynching was becoming a popular way of resolving some of the anger that whites had in relation to the free blacks.
From 1882-1968, 4743 lunching occurred in the United States. Of these people that were that was lynched 3,446 were black.
Back then, lynching referred to vigilante justice meted out to black people. Before American Civil War brought an end to slavery, several instances of black slaves being lynched were reported in the US. In some cases, whites were also lynched for opposing slavery of black people.
In India, from quite a few years there have been plenty of incidents of horrifying mob lynching cases. Single women have frequently been lynched through the centuries, branded as witches. Dalits have been lynched with enormous cruelty for millennia.

Causes of mob lynching in India

Rise of cow vigilante

Cow vigilante groups or ‘Gau Rakshaks’, following the Government’s ban on cow slaughtering, have been ruthlessly killing those suspected of killing, trading, or consuming beef. Example- Dadri lynching of 2015.

Dirty politics

Mob lynching is not only a social problem but a political one too. Due to selfish political benefits, some leaders have destructively used the diversity of India and pitted groups against one another.

Rumours of child-lifters

In a case of a man in the Malda district of West Bengal on suspicion of being a child-lifter. The man was reportedly homeless and panicked when confronted by an angry mob.

For personal enmity

In the cases of personal issues the powerful person tries to kill the weak for superiority.

Social media influence

Lynching, however, did not remain limited to religious hysteria over cow protection. The same conditions – the easy spread of rumours using social media, an apathetic or incapable administration and a mercurial population – meant a spate of mob violence with varied motivations.

Fake news

Fake news, misinformation and warmongering about the other community have always been around in India. The same social media apps which carried reports of the cow mother being killed also transmitted rumours of children being kidnapped. And like in the case of gauraksha lynching, social fissures played a key role here too.

Indian laws and mob lynching

Indian is a democratic economy. Every person and individual have their own rights and duties. No one can derivate an Indian from their basic rights as an individual. Violation of fundamental rights creates violation and harassment of the person.

The criminal laws face a void as there is no specific law or provision that penalizes the act of mob lynching. Under Section 223(a) of the Criminal Procedure Code (Crpc), it is possible to punish two or more accused committing the same offence in the course of the “same transaction” but this section is not complete falls for punishment in this crime.

In Constitutional law, there are some articles that are violated under this crime. Article 14 in The Constitution of India,1949 “Equality before the law” The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.

Article 15 in The Constitution of India 1949, “Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth”

The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, and place of birth or any of them.

No Equality and prohibition of discrimination are violated in the act of lynching. The victim doesn’t get equal opportunity for hearing in a court of law. Every individual has a Right to be heard and equal opportunity. Every individual under the law is innocent until proven guilty. Usually, these incidents are the results of discrimination in the name of caste, creed, sex, race etc.

Article 21 in The Constitution of India 1949, “No person shall be deprived of his life or personal liberty except under procedure established by law.” The objective of Article 21 is to prevent the state from depriving a person of his/her personal liberty and life but in the case of lynching, the mob take laws into their own hands and take someone life and hamper their right to life.

These incidents are rising day by day but states gave failed to implement the laws. The widespread corruption in law enforcement agencies, unconscionable delays in the disposal of the cases by the judiciary and the unfair advantages to the rich and the dominance of the laws.

Tehseen S. Poonawalla v. Union of India

Bench

Chief Justice Dipak Mishra, A.M Khanwilkar and Dr. D.Y Chandrachud, Supreme Court, India.

Facts

The incident of mob lynching was rising every other day. Especially in the name of cow vigilantism. So, three activists namely Mohanbhai Hamir Bhai Bedva, Matin Macwan and Tehseen Poonawalla. They filed a writ petition under Article 32 of the Indian Constitution and highlighted some of the important points. These are:

Two men were hung in Balumath forest, Latehar District, Jharkhand.
Lashing of Dalits, Una, Gujarat.
Mob Lynching incident with Pehlu Khan, Alwar, Rajasthan.
Mob Lynching incident with Mohammed Akhlaq, Dadri, Uttar Pradesh.

The petitioner challenged the Cow protection laws of six states namely:

Gujarat;
Jharkhand;
Karnataka;
Maharashtra;
Rajasthan;
Uttar Pradesh.

It was challenged on the ground that the acts done in good faith somewhere protected the individuals from legal liability.
The petitioner claimed that the respondent states must take instant necessary actions against all such cow protection groups who in the name of protecting Cows are involved in acts of assignation and violence. Moreover, the petitioner also alleged the respondent states to remove violent posts on the social media posted by such groups.

Issues

Whether immediate and necessary action should the states and Centre should take against the cow protection groups for creating violence in the society?
Whether the states and Centre should issue a writ to remove all the violent posts on social media by the cow protection groups?
Whether Section 12 of the Gujarat Animal Prevention Act, 1954 , Section 13 of the Maharashtra Animal Prevention Act, 1976 and Section 15 of the Karnataka Prevention of Cow Slaughter and Cattle Preservation Act, 1964; are unconstitutional?

Arguments

By Petitioner

Mr. Sanjay R. Hedge that “no person even if they are the cow protection group is entitled to involve themselves in the activity relate to lynching.” The act of mob lynching must be suppressed by the executive. The legal procedures must be followed and no one should take the law into their hand.
Ms. Indira Singh contested that, “union and states are duty-bound to prevent the acts of lynching. They should take immediate actions to prevent such acts.”
It was also contested that the “Centre has the power to intervene in the acts of states as mentioned under Article 256 and Article 25 7 of the Indian Constitution.”

By Respondent

Ms. Hemantika Wahi stated that, “all individuals who were involved in the activities related to the lynching has been arrested and relevant charges has been filed against them.”
Mr. Tapesh Kumar Singh stated that, “legal actions gas been taken against all those individuals who were engaged in such acts and criminal charges has been filed against them.”
Mr. Ranjit Kumar, Solicitor General (appearing on behalf of the Union) stare that, “it is the matter of the state and Union does not in any way support the cow vigilant groups.”

Judgment

The court held that the law enforcement agencies are duty-bound to look after the proper administration of law and no private individual is entitled to take law in their hand.
The issue raised by Sanjay r. Hedge has been dealt with by the Central Government in the case of Shakti Vahini V. Union of India.
The Court came up to the conclusion which can be categorized under three heads, namely:

Preventive Measures.
Punitive Measures.
Remedial Measures.

Preventive measures

A nodal officer is to be appointed by the State in each district, who will be a senior police Officer (not below the rank of the Superintendent of Police). The nodal officer will receive help by the DSP to take necessary actions to prevent the act of lynching. To receive the intelligence, report a special task force is to be made who from time to time will get information about those people who are engaging in the acts of spreading hate speeches, proactive statements and made-up news.
State Government will pinpoint the districts, villages and subdivision where the case of mob lynching has been reported recently.
Nodal officer is duty bound to make sure that the pinpointed mob lynching area there the officer-in-charge of the police station takes extra caution.
Nodal officer from time to time will conduct the meeting and should take necessary action to step the acts of mob lynching.
The police officer can use their power under Section 129 of CrPC to deal with the cases of mob lynching.
A warning can be given by the Central Government and State Government on television, radio and other media platform which includes the official website of law enforcing agencies the act of lynching requires serious action under the law.
The police can register FIR under Section 153A of IPC or any other relevant provisions of law for the time being enforced.
The advisories of the Central Government will direct the State Government which will show the seriousness of the situation and the actions to be taken by the State Government.

Remedial measures

FIR should be filed immediately whenever the case of mob lynching comes to the notice of the local police station.
The filling FIR police station must inform the same to the nodal officer in the district.
The nodal officer will personally conduct a strict and brief investigation to ensure safety and peace in society.
Under Section 357A of CrPC the State Government will prepare the compensation scheme for the victim’s family.
Establishment of fast-track courts for the speedy trial of the mob lynching case.

To set an example the fast-track court should impose the maximum sentence.
Measures must be taken to conceal the identity of the witness and the addresses of the witness.

Under the Legal Service Authorities Act, 1987; the victim shall receive free legal aid.

Punitive measures

In any situation where the police officer or officer of the district administration, finds that they fail to follow the direction of the court to stop and/or to investigate and/or to facilitate the speedy trial of any crime of lynching and mob violence then it shall be considered as deliberate misconduct and negligence.
Such deliberate misconduct and negligence will give birth to the departmental inquiry.
The State Government must take disciplinary action against the officer if it is found that:

The officer had prior knowledge about the incident and he did take any action to prevent the same.
Instant arrest and criminal proceedings against the culprit were not in initiated by the officer.

The law for mob lynching

Objective of the Act

To protect the constitutional rights of vulnerable persons.
To punish lynching acts.
To conduct speedy trials through Special Courts.
To rehabilitate victims of lynching & their families.

Chapter I: Preliminary

Section 1: Short title, extent & Commencement.

It will be called PROTECTION FROM LYNCHING ACT, 2017.
Extends to the whole of India.
Will come into force within 30 days of the enactment.

Section 2: Definition.

“lynching “is any act/ series of acts of violence that can be either spontaneous or planned. It is committed to inflicting extra-judicial punishment/ protest & caused by the mob. Which is basically done to enforce any legal, societal & cultural norms; upon a person or group of persons.
“mob” is when two or more persons assemble with an intention to lynch.
“victim” a person who has suffered either physically, mentally, psychologically or monetary harm.
“offensive material” is any material that incites a mob to lynch. It can be on the ground of religion, race, culture or any other thing.
Any words or expressions used in this Act and not defined in this Act shall have the same meaning as provided in IPC or CrPC.

Chapter II: Duties Of Police Officer And District Magistrate

Section 3: Duties of Police Officers.

1) Every Police officer who is in charge of maintaining law and order will take reasonable steps to prevent any act of lynching. To that end:

Take efforts to identify possibilities of dissemination of offensive material.
To prevent lynching in accordance with the powers vested in them.

2) Every police officer will take action to prevent the commission of all offences mentioned under this Act.

Section 4: Duties of District Magistrate.

Notwithstanding anything contained in the Code, when the District Magistrate has reason to believe that in any area that comes under his jurisdiction, and there is an apprehension of lynching then he by order in writing may prohibit any act which in his opinion is likely to lead to incitement & commission of mob lynching.

Chapter III: Prevention Of Acts Leading To Lynching

Section 5: Duties to Prevent Lynching.

Every police officer who is in charge of the police station has the duty to prevent any act of lynching; falling under his jurisdiction. For such purposes:

To identify the patterns of violence, including the existence of a hostile environment against a person or group of persons; falling under the jurisdiction of the police officer.
To obtain information regarding the likelihood of an act of lynching.
To prevent any act of lynching in accordance with the powers vested in them.

Every police officer will take reasonable action to prevent the commission of any offence mentioned under this Act.
Every police officer who is exercising the powers under this Act; while discharging his/her duties will act without any delay in a fair, impartial & non-discriminatory manner.

Section 6: Power to exercise authority against mobs.

It will be the duty of every police officer who is in charge of a police station to exercise his authority in order to disperse the mob. For such exercise of the power the police officer who is in charge of a police station may use the powers vested under Sec 129 of CrPC.

Chapter IV: Offences Of Lynching And Punishment Thereof

Section 7: Punishment for offence of Lynching.	Section 8: Punishment for Conspiracy or Abetment to Lynch.	Section 9: Punishment for obstructing Legal Process.
Any person who commits an act of lynching: In case of hurt: imprisonment for 7 years and with fine which may extend to 1 lakh rupees. In case of grievous hurt: imprisonment which may extend to 10 years and with fine which may extend to 3 lakh rupees. In case of death: rigorous imprisonment for life and with fine which may extend to 5 lakh rupees.	Any person who either take part in a conspiracy or conspires to lynch or abets an act of lynching then such person will be punishable in a manner as if he had taken part in the lynching act.	Any person: Who intentionally obstructs any legal process like arrest, trial or punishment then such person will be punishable with imprisonment which may extend to 5 years and will also be liable to SThreatens any witness or any person associated with the witness or compel the witness to withdraw then such person will be punished with imprisonment which may extend to 5 years and will also be liable to fine.

Chapter V: Other Offences And Punishment Thereof

Section 10: Punishment for Dissemination of Offensive Material.	Section11: Dereliction of Duty by Police Office.	Section 12: Punishment for Dereliction of Duty by Police Officer.	Section 13: Dereliction of Duty by District Magistrate.
Notwithstanding anything contained in this law for the time being in force, any person who publishes/communicates/disseminated either physical or electronic; materials that are offensive in nature; such person will be punished with imprisonment which may extend to 3 years and with a fine which may extend to 50,000 rupees.	Any police officer who is directly in charge of maintaining peace and order in the area and he without any reasonable cause fails to do so then such police officer will guilty of dereliction of duty. This dereliction of duty will include : Failure to provide protection to the lynched victim. Failure to act. Refusing to record any information under sec. 154 (1) of CrPC.Failure to perform the duties mentioned under Sec 3,4, & 5 of this Act.	Any person who commits a derelict act with the police officer such person will be punished in accordance with the police Act of such State. In a State where there is no Police Act then in such a situation, such a person will be punished with imprisonment which may extend to 6 years and with a fine which may extend to 50,000 rupees.	If a District Magistrate is authorized to act under this Act but: Malafide acts, which led to cause harm and injury to any person or property. Willfully omits to exercise lawful act. Then in such a situation, such District Magistrate will be punished with imprisonment which may extend to 6 months or with fine or with both.

Chapter VI: Investigation, Prosecution And Trial

Section 14: Application of Code of Criminal Procedure, 1973.

The provision of the CrPC, 1973 will apply to this Act.

Section 15: Offences to be cognizable and non-bailable.

The offences that are specified under this Act will be cognizable and non-bailable.

Section 16: Investigation by Senior Police Officers.

The Police Officer not below the rank of Inspector of Police shall investigate any offence committed under this Act.

Section 17: Sanction not required for offences under the Act.

Sec 196 and 197 of CrPC will not be applicable. The Court may take cognizance of such offence when satisfied that the said offence has been committed.

Section 18: Cases triable by Designated Judges.

Notwithstanding anything contained in the CrPC, 1973, or any law for time being in force, the offences which are specified under this Act will be tried by Designated Judges appointed under this Act.

Section 19: Power to appoint Designated Judges.

In relation to the Union Territories- the CG. Or the SG by notification in the official gazette appoints as many Designated Judges in consultation with the Chief Justice of the High Court as it may be necessary to try to offences punishable under this Act.

Only Session Judge under CrPC, 1973 will be appointed as Designated Judge or Additional Designated Judge.

Section 20: Procedure and Power of Designated Judge.

A trial of warrant cases mentioned under CrPC, 1973 will be followed.
When the provisions of CrPC is not inconstant with the provision of this Act, the provisions of CrPC will be applicable to this Act. And for this purpose, the Designate Judge will be deemed to be the Court of Session.
While trying the accused person, the Designated Judge upon his will may charge any other offence which is not mentioned under this Act but which is connected to the act committed by the accused. Again, the provision of CrPC will be applicable.
If during the course of the trial the designated judge finds out that the accused person has committed any other act other than this act the Designated Judge may pass any sentence that is authorized by law.
Notwithstanding anything contained in this the CrPC, the trial will behold on a day-to-day basis except for reasons beyond the control of the parties.
The statements of the victim are to be recorded within 180 days from the date of the incident.
It is to be ensured by the court that the witness is only required to attend only 2 dates of hearing.

Section 21: Rights of victims and witnesses during the trial:

The identity of the witness will be kept secret either by the application made by the witness or by the public prosecutor or by the designated Judge on its own motion may pass such application.
The victim will have the right to a reasonable, accurate and timely notice of any court proceeding. He/she will be entire to be heard in any proceeding in respect of bail, discharge, release, parole, conviction or sentence of an accused or any connected proceedings or arguments and file written submissions on conviction, acquittal or sentencing.
The victim will be entitled to receive free legal aid if he/she demands and engages any advocate who is enrolled in the legal aid panel under the Legal Services Authorities Act, 1987 and the Legal Aid Services Authority established under the said Act will pay all costs, expenses and fees of the advocate appointed by the victim.
It will be the duty and responsibility of the State Government for making arrangements for the protection of victims and witnesses against any kind of intimidation, coercion or violence or inducement or threats of violence.
The State Government will inform the concerned Designated Judge about the protection provided to the victim, informant or witnesses. The Designated Judge will periodically review the protection being offered and he will pass necessary orders.
The Investigation Officer is duty-bound to record the complaints of the victims, informant or witness related to intimidation, coercion or inducement or violence or threats made either orally or written. A copy of such a complaint will be sent to the Designated Judge.

Section 22: Constitution of Review Committee:

Where the Investigating Officer does not file a charge sheet within 3 months from the date of the registration of First Information Report (FIR). In such a situation it will be reviewed by the committee which is to be headed by an officer of the level of an Inspector-General of Police to be constituted by the State Government. The committee may pass fresh investigation order by another officer who is not below the rank of Deputy Superintendent of Police.
The committee will also review cases of such offences where the trial ends in acquittal and issue orders for filling appeal, whenever required.
The committee will submit its report of findings and actions to the Director-General of Police.

Chapter VII: Compensation

Section 23: Duty to Provide Compensation:

With 30 days of the incident, the State Government will provide compensation through the office of the Chief Secretary.
In case of the death of the victim caused due to lynching then the compensation will be paid to the kin of the deceased.
In computing the compensation, the State Government must consider bodily injury, psychological injury, material injury, loss of earnings. But the compensation must be less than 25 Lakh rupees; only in case of death of the victim, it may exceed 25 lakh rupees.

Chapter IX: Miscellaneous

Section 25: Power to remove difficulties:

In case of difficulty arising in implementing any provision of this Act then the Central Government by notification in the Official Gazette may pass any such Act which is not inconsistent with the provisions of this Act and as it appears necessary for the Government to pass it.

Section 26: Act to be in addition to any other law:

This Act and the provisions of this will not be in derogation of any other law for the time being in force except when the provisions of other law are not consistent with the provisions of this act. The provisions of this Act will be in addition to every Act.

Recent cases of mob lynching in 2020

S. No.	MONTH	STATE	DESCRIPTION
1.	1^st, JULY	MAHARASHTRA	5 people were killed by the villager (Dhule District) as they were suspected to be part of the gang of child trafficking.
2.	28-29^th, JUNE	TRIPURA	Approximately 3 lynching cases were reported in Tripura. Again, it was a suspicion that these are involved in Child trafficking activities.
3.	26^th, JUNE	GUJARAT	Around 30 people in Ahmedabad were beaten to death by 40-year-old women on the suspicion of a child lifter.
4.	22^nd, JUNE	CHHATTISGARH	On the suspicion of being involved in child trafficking activities, an unidentified person was beaten to death in Sarguja District.
5.	19^th, JUNE	UTTAR PRADESH	Mob beating a man to confess that he was slaughtering a cow in Hapur District.
6.	13^th, JUNE	WEST BENGAL	In the Malda district, a man was tied to an electric post and beaten to death on the suspicion of being involved in child trafficking activity.
7.	8^th, JUNE	ASSAM	In KaarbiAnglong District; 2 men were beaten by bamboo and wooden sticks.
8.	8^th, JUNE	MAHARASHTRA	Upon the fake message on WhatsApp; 2 men were beaten to death in Aurangabad.
9.	28^th, MAY	ANDHRA PRADESH	Over 500 people lynched a transgender on the suspicion of being a child-lifter.
10.	25^th, MAY	KARNATAKA	A 26-year-old man was lynched on the suspicion of being involved in child lifter activities.
11.	24^th, MAY	TELANGANA	Two cases were reported in Telangana (Nizamabad &Yadadri District) they were killed by the mob on the suspicion of kidnapping.
12.	10-11^th, MAY	TAMIL NADU	Two cases were reported in Tamil Nadu. Where on the first incident the man was beaten to death and thereafter, he was hanged from a bridge in Pulicat upon suspicion of being involved in child-lifter and in the second incident; a 60-year-old woman in Tiruvannamalai District because she was giving foreign chocolates.
13.	16^th, APRIL	MAHARASHTRA	In Palghar District (Gadchinchale, Village); the villager suspected the Guru to be involved in the kidnapping of children. They pulled out the Guru and beat him to death.

Conclusion

Mob lynching is a serious act that requires quick stoppage. The act of Mob lynching is not constitutionally valid and it’s like taking the sight of the Judge in the hands and considering themselves as the lordship to serve Justice. We are living in the 21^st century and utter faith is there on the Judiciary but I don’t think that this heinous and barbaric act of lynching by the mob is something to be proud of. Although the Protection of Lynching Act has been passed in the year 2017 I don’t see any change. Still, mobs are considering them to be the serving tool and which needs to be stopped.

We are no one to state anyone as a criminal. To protect and maintain peace and harmony in the society the need for the law was felt and came into existence but if the situation remains the same then the law I just an ideology that remains still and the Judiciary is just a statute.

Therefore, as per me, everyone has their role to play so we should do our task and let Judiciary do their task.

References

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Cross Border Insolvency: An analysis

Sneha Mahawar

November 2, 2021

This article is written by Sarad Kumar Singh, from Damodaram Sanjivayya National Law University, Visakhapatnam and Dishi Mishra, from Lloyd Law College. The article discusses Cross Border Insolvency, its status in India and the world and the article has been edited by Khushi Sharma (Trainee Associate, Blog iPleaders).

Table of Contents

Introduction

“Life is all about a second chance. Bankruptcy is not a shame. It’s a matter of rebuilding and shaping a new world.”

Whenever we heard of the word insolvency, a word termed as “Bankruptcy” comes to our mind just because of the current legislations and financial scams of different firms, persons and companies. In India, the capitalists consider Bankruptcy as a shame. The people also used the words like “Kangaal” to make fun of those people or companies. However, this gesture of people and capitalists are not real capitalism. Every person was failed once in their life in something. Without being failed, one cannot think of the happiness of being passed. Similarly, a business can also be failed, so, failing in a business is not a matter of shame.

Real capitalism doesn’t see bankruptcy as a shame. Several examples are there in the world that got failed multiple times, but now they are change-makers, the wealthiest persons and the most powerful man in the world. But now the question that arises is, whether Insolvency and Bankruptcy are the same? If not, then what are the differences between them? To understand Cross Border Insolvency in a deeper context, let us first understand what Insolvency and Bankruptcy are and also the differences between Bankruptcy and Insolvency. The paper deals with the insolvency cross border Insolvency, Insolvency laws across the world and the laws in India dealing with cross border insolvency. In the end, we had given the conclusion citing solution as well.

What are insolvency and bankruptcy

People often use the expression “bankrupt” to illustrate a condition in which an individual or company has no more resources to pay back debts and responsibilities. This is what insolvency is called. Insolvency takes place if an individual, corporation or other organisation, as due, cannot discharge its financial debt responsibilities. Bankruptcy is not precisely just like insolvency. Bankruptcy is an insolvency identification of overcoming the insolvency with the prescribed legal set of instructions that were made by a court of law. Insolvency defines a condition in which the debtor cannot satisfy his responsibilities. Bankruptcy is a legal scheme that seeks compensation from an insolvent debtor.

One of the very basic fundamentals of being insolvent and bankrupt is just the same as we had read in the context of Contract, where, it was termed that “All contracts are agreements but all agreements are not contracts”. Similarly, the same principle applies in the case of Insolvency and Bankruptcy, where, it was stated that “Someone who is bankrupt is insolvent, but someone who is insolvent isn’t necessarily bankrupt”.

Before 2016, in India, the insolvency resolution usually took 4.3 years on average, which is higher in comparison to other countries like UK and USA, where insolvency resolution took 1 year and 1.5 years respectively. And this delay was caused because of the court proceedings and time taken to resolve cases in courts, because of the dilemma of the frameworks related to bankruptcy.

Insolvency and bankruptcy code

Background

In the year 2016, the government of India came up with a law that was unique of its kind in the history of our country. In India, Insolvency law finds its root long back from the legislation of the English people (Britishers). There was just no existing insolvency law in India until the British came to India. In India, the insolvency law was primarily essential in the cities where the British, i.e. Bombay, Calcutta and Madras, were responsible for significant trades. In order to strengthen the bond between the creditors and the debtors, the Insolvency and Bankruptcy Code (IBC) 2016 (See here) was implemented. In order to merge the current legislation on insolvency and bankruptcy, the Insolvency and Bankruptcy code (IBC), 2016 was enforced.

Aim

The Insolvency and Bankruptcy code 2016 was made applicable to companies and individuals. It provides a time-bound resolution of insolvency. When a failure arises in reimbursement, debtor assets are regulated by creditors and decisions must be taken to address insolvencies over a period of 180 days. The Code as well presents debtors with protection from claims of creditors throughout this time to facilitate an uninterrupted resolution phase. In addition, the codes consolidate the existing statutory structure and provide a shared forum to address insolvency for debtors and creditors of all groups.

Facilitating insolvency resolution

To facilitate the insolvency resolution the government created various institutions under the IBC, 2016. These institutions are as follows:

Adjudicating Authorities: National companies law tribunal (NCLT), a tribunal was established, for the adjudication of the proceedings of the process of resolution, by the central government. It was an authority for the companies. For the individuals, the Debt Recovery Tribunal (DRT) was set up. The tasks of the authorities include authorization to begin the settlement process, designate the insolvency specialist and accept the creditors’ final judgement. NCLT and DRT are the judicially constituted bodies.
Insolvency and Bankruptcy Board: The Board regulates insolvency professionals, insolvency professional agencies and information utilities provided in accordance with the Code. The Board will comprise of representatives from the Reserve Bank of India, members from the Finance, Corporate Affairs and Law ministries. IBBI is responsible for approving the list of resolution professionals. It also sets out and enforces laws to handle insolvency, corporate payments, insolvency and individual bankruptcy in accordance with the 2016 Insolvency & Bankruptcy Code. In addition, IBBI is involved in the introduction of new Code amendments.
Committee of creditors: The committee of creditors (CoC) was given under Section 21, comprise of only financial creditors. The function of the COC is to accept and reject the resolution plan suggested by the insolvency resolution professionals. At the COC meeting, the minimum vote needed for approval of the plan of resolution is 75%. The operating creditors will take part but do not have the right to vote, in the meeting of the creditor committee.

Insolvency and Bankruptcy Code (amendment), 2020

Due to the hardship of the global pandemic, called COVID-19, destruction around the world is created. Across the world, a number of people got infected and still the number is keeping on increasing. This widespread global catastrophe, almost the entire world was under lockdown. This lockdown hit hard to the economy, financial market and business at large scale and many of them were closed. This worldwide closure affected the cash flow in the market which further increases the Non-Performing Assets (NPAs) which ultimately caused a default in Repayment of the banks, creditors and financial institutions.

The Government of India introduced two changes to the 2016 insolvency and bankruptcy code in an attempt to protect the corporate interest and save those corporations who might just fail in existing debt. As a result of its Atma Nirbhar economic reforms, this Ordinance was implemented by the Indian government. The preamble to the Ordinance mentions that owing to circumstances immense to the pandemic of Covid-19, it was issued in order to avoid companies from being placed in insolvency or liquidation.

Sections 7, 9, 10, deals with the applications filed by financial creditors, operational creditors and the corporate debtors themselves, respectively. These sections were filed against corporate debtors that are suspended for a period of minimum of 6 months. Meanwhile, in the period starting 25 March 2020 to 24 September 2020 or it can be extended to further periods. The suspension of Sections 7, 9 and 10 however does not apply to the company default made before 25 March 2020, pursuant to those Sections See here.

Cross-border insolvency

In the management and disposal of debtor assets, the insolvency laws tend to support both the debtor and the creditor. Recently insolvency petitions against numerous companies are being admitted. Some of those companies still have properties in other jurisdictions and the handling of those assets is one of the key issues. This is the field of cross-border law on insolvency.

Cross-border insolvency, which can also be termed as International Insolvency, governs the protection of debtors, who are financially troubled, and have their assets and/or creditors over one or more than one nation. We had heard of the word MNC. MNC is abbreviated as Multi-National Company that is spread over the entire world, which regulates its business. So, whenever an MNC or company, which is across the border, got insolvent, then the Cross-border insolvency comes into effect. In the context of insolvency that is in any way outside the limits of a particular legal system, Professor Ian Fletcher proposes that “cross-border insolvency be seen as a situation in which insolvency occurs in such a way that a single set of domestic insolvency provisions cannot be immediately or exclusively used regardless.” Refer this

Cross-border insolvency rules on a global basis are focused on the one nation that provides aid for the other country to take over the assets and then dispose of the debtor firm’s assets. The mutual understanding of the insolvency system of each country achieves these goals. To understand cross border insolvency more clearly, let us take an example, the United Kingdom acknowledges those Commonwealth jurisdictions’ insolvency laws and courts in the UK is obliged to support courts in those jurisdictions. India is not one of the courts which qualify under this route for the gain. There is one of the most powerful cross-border structures in the European Union where the laws of that country immediately take precedence and have equal impact in all the other member states and regulate all problems other than those expressly exempted, in accordance with the Insolvency Regulations, where there is an action taken against the debtor and the Center of Main Interest.

Area of conflicts

National insolvency regimes may take widely differing approaches in some key points in every effort to align or promote cross-border management of insolvent companies.

Secured Creditors: If bankruptcy proceedings are or are not an impediment to the protection of the rights of secured creditors in relation to the way any proceedings are conducted.
Corporate rehabilitation regimes: In order to liquidate companies and allocate the proceeds to debtors, bankruptcy processes based on the rehabilitation of companies are radically different in purpose and effect for closing-up systems.
Set-off rights: Although some countries authorize creditors with reciprocal debtors to fully compensate for the debtor claims, others enable the creditors to pay any amounts due to the debtor until they demand the full amount in the proceedings. There can be differences in jurisdictions which permit set-off, whether set-offs should be on the basis of a person or community.

UNCITRAL model law

United Nations Model Law on Cross border insolvency (1997) for an efficient way of handling cases that involve cross-border insolvency was formulated by the United Nations Commission on International Trade Law (UNCITRAL). The Model Law does not recommend compulsory integration in the individual States which enforce the substantive domestic rules.

Alternatively, four components are proposed to promote the mechanism of cross-border insolvency resolution:

Access
Recognition
Relief (assistance) and
Cooperation.

Two types of procedures, foreign main proceedings and foreign non-main proceedings, are acknowledged by Model Law. This model law addresses quarter main concepts of cross-border insolvency, including the direct participation or opening of insolvency proceedings against a defaulting debtor by an international insolvency practitioner and foreign creditors.

Other main guidelines include the acknowledgement and remedy of international procedures, the collaboration between domestic and foreign courts and insolvency professionals at home and abroad. The coordination of two or more competing insolvency proceedings in separate countries has also been a matter of principle. The key procedure is based on the idea of the Centre of Main Interest.

EC Regulation on insolvency proceedings, 2000

The European Commission (“EC”) established cross-border insolvency legislation, providing a structure for EU (“EU”) Member States. The European Commission’s insolvency scheme of EU members is not harmonised by the EC Regulation. Instead, it encourages the determination of competence and the relevant law in cross-border insolvency proceedings by the Member States. It also ensures that insolvency proceedings are automatically recognised through Member States of the EU. The framework of the EC Regulation is restricted to the joint insolvency procedure involving a limited or overall debtor divestment and a liquidator appointment.

Three types of insolvency proceedings can be recognised in the EC’s Regulation. These are:

Main Proceedings: Here the debtors have the centre of interest within the EU. The main insolvency proceedings in one jurisdiction and secondary proceedings in another are recognized by EU if insolvency proceedings in one jurisdiction might actually occur. The main proceedings cover all debtors’ properties and are of universal reach. The debtor has to have its “core interests’ in the jurisdiction of that Member State in order to have the case regarded as a “main proceedings.” The main interest centre refers to the location at which the debtor administers the EC Regulation periodically and is subject to third parties’ determinations.
Secondary Proceedings: Here the debtor has an establishment. “The Establishment is designated to indicate any place of operation for which the debtor undertakes non-transitional economic activity in conjunction with the main proceedings, by human means and goods.” Throughout the Member State in which the debtor has an establishment, secondary proceedings can be initiated. The consequences of the secondary proceedings are restricted to the properties of the State concerned.
Territorial Proceedings: The debtor has an establishment here, but there have still not been any main proceedings in other places.

Status of Cross-border insolvency in India

India’s insolvency system has recently been thoroughly overhauled. On 15 December 2016, the Insolvency and Bankruptcy Code 2016 entered into force and consolidated several laws on the company, partnership and private individuals’ insolvency resolution. The Code presently applies the applicability of this Code to corporate individuals and the relationship and individual requirements have still not been notified. The Code has evolved considerably through modifications, rules and judicial interpretation, despite its recent development.

There are two main clauses in the Code to facilitate cross-border insolvency disputes:

Agreements with foreign countries

The Government might well establish an agreement in accordance with Section 234 of the Code with the Government of another nation for the enforcement of the Code. The Government might even guide the implementation by means of a mutual agreement of the clauses in the Code relating to the assets or property of an entity or a company owner, including a corporate owner’s personal guarantor, outside India.

Letter of request

If evidence or action is needed in connection with an insolvency resolution process concerning the properties of a corporate debtor located abroad, the resolution professional, liquidator or bankruptcy trustee may submit a request under Section 235 of the Code to the NCLT. If the NCLT considers it appropriate, a letter of request might well be issued in accordance with Section 234 of the Code to a court or authority of the country with whom a mutual agreement has been made.

Even though it was noted that no measures had been undertaken to fully enforce the intergovernmental agreements in order, though this incorporation of Sections 234 and 235 in the Code was to promote the resolution of cross-border insolvencies. An NCLT’s order will not be recognised or directly implemented in any foreign country at this time in a cross-border insolvency dispute. In addition, while informed, the complicated issues resulting from cross-border Insolvency cases are not appropriately addressed in these clauses.

So there comes a need for a more codified and followed the structure and for the same, a high level called Insolvency Law Committee was formed.

Insolvency law committee

Injeti Srinivasa, Secretary of Corporate Affairs, headed the Insolvency Law Committee (ILC). The UNCITRAL Model Law for Cross Border Insolvency 1997 allows for an integral structure for addressing international insolvency issues and hence it was recommended by the ILC to adopt it in the Indian context.

Recommendations

Insolvency Law Committee on 16 October 2018 presented a report on the inclusion of model law (Draft Provisions) into the Code. The Draft provisions include some changes and changes to the model law that the Committee considers essential in the Context of India.

The following are the main features of the draft provisions:

Applicability: It deals with the applicability like on whom the draft provision applies to? The Code has been notified only with respect to corporate persons as corporate debtors. The conditions when it is applied? Procedures pursuant to the Code can only be initiated when the corporate debtor has assets in India. The draft provisions include a reciprocity clause that applies in other countries for proceedings begun outside India. Its application will then apply to foreign countries that have implemented the Model Law in their domestic frameworks.

It also deals with the granting of access in case of proceedings commenced outside India. When reciprocity is established, the NCLT can request for recognition of an international proceeding by the ‘foreign representative.’ The international representative may take part throughout the insolvency proceedings, as provided for under the draft provisions, after approval of the foreign procedure by NCLT. The draft provisions shall also provide the Government with the authority to administer for foreign representatives a code of conduct.

Recognition of Foreign Proceedings: Foreign proceeding in accordance with an insolvency statute is a legal or administrative proceeding in a foreign country. In a foreign proceeding, the corporate debtor’s properties and affairs are subject to a reorganizing or liquidation oversight by a foreign court. Two forms of foreign proceedings, foreign main and foreign non-main proceedings, are highlighted in the draft provisions.
Mandatory and Non-Mandatory Relief: A moratorium guarantees that the property of the corporate debtor is secured during the insolvency procedure. In cross-border insolvency cases, the establishment of a moratorium is particularly important as the properties of the corporate debtor may be in more than one juridical jurisdiction. Depending on the essence of the external proceeding, the proposed provisions provide with mandatory and non-obligatory relief.

Conclusion

Presently, the resolution of cross-border insolvency proceedings in India has no efficient legal framework. In attempt to be inserted into the code as it currently stands, the draught provisions proposed by the Committee should necessarily be formulated as billed. Currently, the date of such modifications is unclear, although newspaper reports state that the government plans soon to add a chapter on cross-border insolvency to the Code. The amendment in IBC made by Indian government is somehow a good step for the way ahead. The Code’s primary goal is to revise and insolvency to maximize asset value in a time-linked way. Despite the ambiguities, the order is a welcome step in order not to misuse this in the current economic scenario.

While the suggested Cross-Border Insolvency Framework would make it possible for the country to deal with Indian companies with foreign assets and vice-versa, issues like insolvency treatment of corporate groups will still be a challenge. For individual companies and not business groups, this proposed framework is intended. The trans-boundary framework is intended to create further because UNCITRAL and other international bodies resume examining these problems and developing feasible international alternatives.

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Can International law be applied to cyberspace : an overview

Oishika Banerji

November 2, 2021

This article has been written by Saswati Soumya pursuing the Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho. This article has been edited by Prashant Baviskar (Associate, Lawsikho) and Ruchika Mohapatra (Associate, Lawsikho).

Table of Contents

Introduction

As per Philip Allott in “The concept of International Law”, International Law is a subset of the international legal system. An international legal system is essentially the integration of all subordinate legal systems, i.e., international constitutional law.

To understand the meaning of international constitutional law, let us take the example of the League of Nations. It is an international diplomatic group that was developed after World War I, so that disputes between countries can be solved before they resort to open warfare. It is often critiqued that this international diplomatic group puts its own self-interest before centering its focus on conflict resolution. At the same time, this international diplomatic group contends that individual governments that are a part of this group do not recognize its authority. Eventually, this international diplomatic group ceased its operations during World War II. From a legal perspective, the main legal instrument that was responsible for the formation of this international diplomatic group is the Treaty of Versailles. Often, ideas of peace and conflict resolution are translated into paper by virtue of a legal instrument. Otherwise, the idea merely becomes a figment of one’s imagination. It is important to note that, from an international politics perspective, the formulation of this treaty and the subsequent formation of the League of Nations had a direct impact on the autonomy of the United States in international matters. In this case, all the member states have their own set of laws. At a macro level, every member state has a unique society, that is a culmination of different ethnicities. For instance, the choice of music might vary from classical to Carnatic from region to region. To give you another example, the geographical conditions in one part of the society might be very different from the urban realities of another part of the society.

Even though sub-societies are fragmented, such societies are not deprived from expressing their uniqueness. For instance, the Netherlands, which is a constitutional monarchy, is different from India, which is a parliamentary democracy. But, both these countries have the imperative duty to care for the digital freedoms of their citizens via freedoms that are guaranteed expressly in their constitutions.

Issue

Daniel Joyce in “Internet Freedom and Human Rights” argues that human rights protection is required beyond freedom of expression and raises the question if internet freedom should be configured as a human right or not. They argue that internet freedom has to be weighed from the perspective of “right to communicate” along with freedom of expression, in a system of international communication that eventually forms an information society that is integrated. This is because;

(1) changes in communication technologies via satellite communications required that a new human right to communicate is required to be introduced in addition to Article 19 of the Universal Declaration of Human Rights (“UDHR”);

(2) the Human Rights Committee argues that the term “expression” also includes the right of access to information, since this involves the act of giving and receiving. It is the prerogative of the state parties to ensure that the individuals have this right in the context of accessing digital media.

The authors argue that freedom of expression is traditionally founded in the right to free speech. This right recognizes that there is a need for political communication between citizens and the government that is free to ramp up their efforts to not only participate in the government, but also to form the government so that society is developed. The author argues that the legal instrument that recognizes this idea is Article 19 of the UDHR imbibes an idea of freedom of expression that is neither concerned with an old media or a new media, but concerns “any media and regardless of frontiers” encompassing (1) right to express oneself; and (2) right to seek and receive information. From a practical perspective, the main challenge associated with the implementation of this idea is the inequality and inequity prevalent in accessing “media, information and communications infrastructure” that also includes the challenge of access to

(1) information and communication technology from a software perspective; and

(2) access to hardware such as inexpensive laptops, mobile phones and smartphones, i.e., “digital divide”.

This problem eventually led to the formation of a broker that would liaison between the private sector interests and the broader interests of the member states. For instance, the Internet Corporation for Assigned Names and Numbers (“ICANN”) was formed so that it can facilitate public governance of the internet. It would not be wrong to argue that the US gained back its autonomy via playing a key role that it had lost during World War I because it was responsible for governing “domain names”. The US retained control over essential internet infrastructure by stationing the root servers in US soil & created an Internet Governance Forum in order to enable civil society participation in the times to come. From a public policy consultant’s perspective, one is required to identify the difference between soft law and hard law. The aforesaid paragraphs illustrate the aspects of soft law and not hard law.

For understanding hard law, reference is made to precedents that have already been established and dealt with in the past. As per Hillary Clinton, the then Secretary of State iterated the concept of internet freedom from Roosevelt’s four freedoms of speech that includes

(1) old freedoms like speech and religion; and

(2) new freedoms like freedom to connect online that are coupled with “on the ground” effects of such online connections via communication networks. These effects are felt only in situations that cannot work without the cooperation of human beings, i.e, a response mechanism for raising funds for humanitarian purposes.

It is also argued that the on-ground realities of society also get reflected in the darker sides of the internet via attacks on networks by cyber criminals. From an individual perspective, the limits of free expression are found in terms of terror speech, hate speech, anonymity, privacy and intellectual property theft. Putting the cap of a liberty believer, anonymity of individuals can be used as a means for the protection of human rights via using online tools such as onion router (“TOR”) to cover their tracks and avoid government control. From a soft law perspective, the central argument is focused on forms of “norms of behaviour”, that can be challenged by lack of empathy and identifying the exact communities that are concerned with establishing a legal order that is universal. It is argued that, from a regulatory perspective, it is imperative for the regulator to apply the principles of proportionality and necessity while deciding on the contentious issues and non-contentious issues associated with digital freedom. The assessment must start with understanding the meaning of “access”. Does the matter at hand refer to access or denial of access to infrastructure or content?

On another note, it is ironic that Paul M. Secunda, the author of the article titled “The employee right to disconnect” wrote this article not only during vacations but also after normal working hours. Paul argues that digitization has made it difficult for employees in the US to escape work that has in turn raised questions surrounding “privacy at workplace” and “autonomy of employees”. The author engages with the literature that argues that it would be wrong to undermine the reasons behind the enactment of legislations surrounding “maximum number of hours that one should work for”, “overtime” or “ weekend” that play a critical role in the advancement of industrial societies. The focus of work is always to provide “other utility maximising” goods to their respective families and friends in the form of “housing, food, recreation, retirement, vacations and entertainment”.

It is important to note that there is a difference between the ways in which countries with civil law origin regulate this issue from the way in which countries with common law origin regulate the same issue. Before that, I want to clarify that the legal system of

(1) Canada is a mix of common law and civil law;

(2) the United States is a common law; and

(3) France and Germany are civil law.

There was an absence of any specific law on the issue of “whether or not the employees have a right to be free from electronic workplace communication once their day ends”? As of 2019, there was no specific law that governed this practice in the US and Canada. At the same time, as of 2019, the applicable law in France is called right to disconnect (droit a la deconnexion) and the prevalent practice in Germany is similar to, and not the same as, corporate self-regulation that is entirely voluntary as opposed to being mandatory. It would not be wrong to state that this form of regulation promotes a human rights protection framework that is built on the “laissez – faire” approach to the relationship between the employer and the employee.

The emergence of remote work culture has resulted in outsourcing the work to resources in Indonesia and the United States.

Labour law regulating remote work via cyberspace

In the US, the applicable law is the Occupational Safety and Health Act (“OSHA”) which bifurcates employees into (1) exempt employees; and (2) non-exempt employees. Exempt employees are those employees who cannot earn even if they work overtime. On the other hand, non-exempt employees are those employees who can earn overtime.

Overtime is defined as the extra number of hours that one works beyond the stipulated work hours. The extra number of hours could be up to 40 hours in a week. From an adjudicator’s perspective, such issues have to be looked at from the lens of safety and health of the employees and separated from the issues of privacy, autonomy, productivity and leisure. This is because there is a horizontal relationship between the former issues and the later issues.

In simpler terms, when the time spent with oneself increases, the well being of an individual keeps all the later aspects in tandem with each other. The author also engages with the literature that argues that, products of technological convergence such as e-mails and video conferencing calls have weakened the boundary between work life and home life, which eventually piles up and makes one feel that there is a burnout that has resulted from stress and anxiety. This is the reason behind arguing for the right to disconnect, especially by escaping from emerging technologies like microchipping.

In my opinion, microchipping is in fact, an extreme side of cyborg innovation, thereby giving new meaning to body modification practices that are already prevalent in the form of body art. The lesser extreme approaches that are currently being employed by employers, especially multi-national organisations, are the workplace wellness programs.

These programs have blurred the line between work life and family life because the employers always have an intimate data profile of their employees, i.e, surveillance. Often, because of power asymmetry, employees tend to feel coerced to submit to the wills and wishes of the employers. It is called coercion because the legitimate business interests of the employer coincide and conflict with the “protected interests in personal autonomy” of the employees that lie outside of the strict workplace.

The characteristics of personal autonomy of an employee are as follows: “(1) ensuring that its conduct that lies outside of the work that may or may not flow from the employer-employee relationship is lawful; (2) inculcating beliefs outside of work, that can include political, moral, ethical, religious or other personal beliefs; (3) belonging to associations and assemblies that are lawful.” Such characteristics have to be borne in mind by the freelancing websites which hire freelancers from another country to provide service in a completely different country.

Rule

In the Netherlands, digital freedom is protected in the form of freedom of expression that is guaranteed to all the citizens under Article 7 of the Dutch Constitution and Article 10 of European Convention on Human Rights (“ECHR”). In such a case, it is argued that the ECHR acts as an international constitutional legal instrument that shadows the constitutional provisions in the Netherlands.

Article 7 of the Dutch Constitution reads as follows :

“ (1) No one shall require prior permission to publish thoughts or opinions through the press, without prejudice to the responsibility of every person under the law.

(2) Rules concerning radio and television shall be laid down by Act of Parliament. There shall be no prior supervision of the content of a radio or television broadcast.

(3) No one shall be required to submit thoughts or opinions for prior approval in order to disseminate them by means other than those mentioned in the preceding paragraphs, without prejudice to the responsibility of every person under the law. The holding of performances open to persons younger than sixteen years of age may be regulated by Act of Parliament in order to protect good morals.

(4) The preceding paragraphs do not apply to commercial advertising. “

Article 10 of the ECHR states that, “

(1) Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.

(2) The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.”

As a matter of rule, it is advisable not to reproduce the provisions of a foreign statute. However, for the purpose of this article, it was necessary to do the same because reading of the constitutional provision throws light on the freedoms of citizens that continue to be guaranteed in cyberspace as well.

Analysis

In the context of the current health crisis, ehealthcare services have become important. E-healthcare service is defined as the usage of digital technologies and telecommunications, such as using computers to facilitate the health care services. It is to be noted that e-health has to be bundled with the traditional non-digital approaches for delivering information to the patient.

The e-health literature identifies multiple themes like, (1) networked care; (2) inter-jurisdictional practice; (3) diffusion of ehealth with digital divide; (4) ehealth integration with existing systems; (5) response to new initiatives; (6) goal setting for ehealth policy; (7) evaluation and research; (8) investment and (9) ethics in ehealth. All these themes have a global element attached to it. In simple terms, it means that, if one were to look at these themes from space, then the theme of inter-jurisdictional care will be the most relevant from an international health lawyer’s perspective.

This concept of “inter-jurisdictional care” can be applied to ensuring the safety of citizens in the offline world as well in the context of adding meat to the idea of vaccine passports. A vaccine passport is a proof that one has tested negative and shows that they have been protected against infections that concern public health. The idea behind the vaccine passport is that it is a digital substitute to the yellow card that was earlier called the International Certificate of Vaccination. This certificate is a booklet approved by the World Health Organisation (“WHO”) that documents one’s past inoculations. In layperson’s terms this refers to the process of artificially creating antibodies. Technology is the digital health record of an individual.

It is argued that the concept of inter-jurisdictional care can be applied to overcome the problem of different requirements of the nation-states on vaccination regulation. From a regulatory perspective, this could combat the issue of counterfeit versions of the yellow card, thereby leading to a much more secure record.

The advantage of implementing this proposal is that international travellers will have peace of mind that they are amongst immunised people, especially in a crowded place like a crowded concert or a cricket stadium. The downside of using this technology is that people who do not have access to a smartphone would not be able to enter such public places. This in turn shall affect their public life and their private life, which are the two pillars of the right to privacy.

Conclusion

In short, even as states move past their initial reticence to address international law’s application in (and to) the behaviors of different actors in cyberspace, the consequences of new voices in various forms and fora warrants heightened attention. States and other stakeholders should carefully track various issues and players involved with an eye on the big picture, seeing if international law can do more than simply apply in cyber contexts. The real question remains, can it do so in ways that are effective at regulating the behavior of states and other actors of international concern?.

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The ease of doing business for startups in the light of recent amendments to LLP Act 2008

Abanti Bose

November 2, 2021

Limited Liability Partnership — Image Source- https://bit.ly/3io6dDl

This article is written by Karthikeyan M, pursuing Diploma in Law Firm Practice: Research, Drafting, Briefing and Client Management from LawSikho. The article has been edited by Tanmaya Sharma (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).

Table of Contents

Introduction

As of June 2021, 50,000 startups have been recognized by DPIIT ( Department for promotion of Industry and Internal Trade). Keeping this in mind, it is important to understand the legal compliance and the suitable legal environment relating to a startup business and the central government has a huge focus on the ease of doing business reforms. The Government wishes to simplify the business-related legal environment, with a motive of structural and financial ease of business.

In order to vitrine this rationale, for the first time, the Limited Liability Partnership Act, 2008 has been amended and the LLP amendment act 2021 has been given President Assent on August 13, 2021, and it is yet to come into force. The main objective beyond this amendment which consists of multiple recommendations from CLC (Company law committee) as stated by the central government is to bolster the business environment to act as an abutment for the startup ecosystem by increasing the ease of doing business in India. According to the Corporate Affairs Ministry, there were more than 2, 13,000 registered LLP’s in India. This article is intended to explain the crucial realities and advantages of the recent amendments which have been done with the recommendations of the company law committee (CLC) in a perspective for startups and to try to elucidate how these strategic amendments will allow this country to flourish as a corporate haven.

Why should startups choose LLP over private companies?

A limited liability partnership firm is a type of partnership firm in which every partner is independent and there is no joint liability created for independent or unauthorized acts of other partners. In other words, according to Section 3 of the LLP Act, 2008, an LLP is defined as a “separate corporate body which is being incorporated under this act and it will be considered as a separate legal entity from that of the partners.

Though incorporation of both companies and LLP seems to be aligned but in terms of the nature and the future pathway in which the founders intended to pursue may actually decide the structure of the business. So in terms of Startups, it may seem beneficial to structure it as a private company for some peculiar instances but structuring it as an LLP is preferably ideal because of certain advantages in terms of nominal incorporation fee, lesser compliance requirements, unrestricted ownership and nominal tax and fines. In spite of such flexibility and fewer formalities, many startups were shying away from choosing LLP structure. Thus in order to facilitate and encourage the entrepreneurs to choose LLP as their business structure the government has introduced significant changes in this act.

Objectives of LLP Amendment Act 2021

Previously there were 81 Sections. As per the newly amended act 2021, 7 new Sections have been inserted, 5 Sections have been substituted and 3 Sections have been omitted.

Introduction of small LLP

A very new concept of small LLP has been created which is similar to that of “Small Companies” in the companies act 2013. According to Section3(f) of the Act 2021, Small LLP is an LLP structure in which the threshold of the partner’s contribution has been revised from 25 lakhs to 5 crores and the turnover size is increased from 40 lakhs to fifty crore rupees.

In other words, if an LLP in which the partner’s individual contribution doesn’t exceed 5 crores and the turnover of the LLP is up to 50 crore rupees then the LLP is said to be a small LLP.

Small LLP in the sense means there is an existing privilege of lesser compliance than normal LLP’s and lesser fees and minimal penalties in cases of default and a drastic reduction in filing fees and exemption from standard audits other than LLP’s involved in the manufacturing sector. Thus it will boost the startups to incorporate their businesses as small LLPs rather than incorporating a company. With certain qualifications, the government can classify some as “Startup LLP”.

This classified and organized Small LLP will galvanize the small unregulated partnerships and other micro-entities to form a simplified and economical legal compliance business structure.

Ex: If A and B enter into a partnership for running a cloth business in the traditional way of entering into a limited liability partnership or perhaps entering into a normal partnership agreement to escape from the legal nuances and compliances of LLP. This Small LLP simplifies the process and illuminates them to enter in a proper, inexpensive and understandable legal exposure and will appraise their business goals. The Central Government can also recognize certain LLPs as startup LLPs through official notifications.

Though the introduction of small LLP would have a positive impact, yet in the perspective of UK companies act there is a further classification of LLP’s into micro ( turnover less than632,00 euros) , small ( annual turnover less than 10.2 million ) and medium-sized LLP ( turn over less than 36 million ) and condition-specific statutory audit relaxations have clearly helped the business structures to comply with the laws and it has been an advantage for such business to gradually develop with their legal compliance requirements and to record to their periodic growth and if such a dense classification will also be a beneficiary inclusion for the Indian startup ecosystem to avail the condition-specific exceptions based on their business growth and other qualifying conditions.

Raising funds through the issuance of secured non-convertible debenture

Earlier, as per the companies act, a company can raise borrowed funds by both issuance of debentures and by the way of loans however there is a previous restriction for LLP to avail the benefit of issuance of NDC as the company is considered as a separate corporate entity, by following up, as per the recent amendment which has now allow LLP’s to raise capital through issuing secured non-convertible debentures to corporate bodies and trusts who are being regulated by SEBI or RBI.

What is an NCD?

Non-convertible debentures are financial instrument (debt) which is being used by the companies to raise long term capital and the reason it is called non-convertible is that some debentures can be converted into shares at the discretion of the owner after a certain which is not possible if the debenture is NCD. A secured NCD means a debenture that is backed by the company’s assets and in case of failure to repay the investors can claim payment through liquidation of those assets. It may seem to work on the same principle of a bank fixed deposit however there are certain salient features like higher rate of returns, low credit risk, tax-free deduction at source ( TDS) and easy liquidity options that make an NCD more attractive and a viable option of investment.

Why is the issuance of NCD beneficial for startups?

By this amendment, the government intended to boost the debt market in India and at the same time to protect the interest of the investors which in turn create trust in the investors to invest in startups and it will be helpful for certain business-centred startups which require a huge investment and it a safer method rather than applying for loans and in case of failure on the part of the LLP and at the same time with stringent regulation of restricting them with regulated investors can be a hurdle in raising their capital, If the intention of the government is to deepen the strength of debt market in India then by allowing retail investors with such regulated safeguards will definitely boost the startups to consider issuing NCDs while raising capital.

Establishment of special courts

The Act also provides an establishment of special courts for the purpose of speedy trial of offences. According to newly inserted Section67–A the central government for the purpose of speedy trial may establish specific courts as May necessary. The special court comprises:

a) A Sessions Judge or an Additional Sessions Judge for the offence punishable with imprisonment for three years and more.

b) A metropolitan Magistrate or a Judicial Magistrate of the first class in the case of other offences.

The appeal and revision petition shall lie to the high court within which the jurisdiction of the special court is located.

This move would serve the real purpose of providing a speedy trial for the offences under the LLP act.

Accounting and auditing standards

Presently LLPs are required to comply with the accounting standards issued by the institute of Chartered Accountants of India and there is no mandate to follow the standard procedures to comply with and as recommended by the ICAI with the consultation of the National financial reporting authority prescribe the Standards of accounting and Standards of Auditing for a class of LLPs by inserting a new Section of Section34 –A with an intention to bring standardization in the procedures of accounting and auditing.

Punishment for fraud

The amendment has increased the maximum term of imprisonment from 2 years to 5 years in case of fraudulent activity carried out by the partners with the intent to defraud the creditor or any other fraudulent purposes. This stringent approach would be helpful in curbing fraudulent activities to be carried out by the partners.

Compounding of offences

Compounding refers to a process whereby the offender or an entity that defaults will file an application to the concerned compounding authority which indicates the acceptance of the commission of the offence and may plead for remission.

Compounding of offences in Companies Act and its relevance

Section 441 of the Companies Act deals with the compounding of offences and is a mechanism in which the offender is given an option to pay money in lieu of prosecution. Akin with the procedures of the companies act the newly amended LLP act has provided a procedural structure for the better usage of the option of compounding of the offences committed by the partners or any persons associated with. Thus the amendment has now provided that a person who has been appointed by the central government as in the rank of regional director or any officer who is above his/her rank may compound such offences. Previously this has been done by the central government itself under Section39 of the Act but by this amendment in Section39, the provisions for the process of compounding has been made detailed and permeating. In order to prevent reoffending the act has also stated that a similar offence cannot be compounded within a 3 year time period which is identical with the provisions of the Foreign exchange management act FEMA (Section13 and Section14). The application of the compounding of the offence will be carried out by a registrar and will be notified to the regional director or any person who is not below the rank of regional director.

Reduction of additional fees

Previously under Section 69 of the Act prescribed that any document or return filed with the registrar may be filed with a delay up to 300 days from the due date with an additional fee of Rest 100 per day.

This Section has been amended and it provides that such document or return shall be filed after the due date of filing without prejudice to any other action or liability and there is a prescription of different fees or additional fees for different classes of limited liability partnerships or the different documents or returns to be filed as required. The reduction in the fee and no further legal complexity and condition specified fee will lead to reducing the compliance pressure on the Startup LLPs.

Change in name of the LLP

The LLP Act 2008 states that the central government can direct an LLP to change its name on certain conditions such as it violates the conditions or provisions of Indian trademarks act 1999 or the name is being undesirable or being identical to a trademark pending registration and if any LLP within the prescribed time limit failed to comply with Section 17 is punishable with a fine ranging from 10,000 to 5, 00,000 Rupees.

Under the Amendment Act 2021, Section 17 has removed some of the grounds under the change of name of LLP and it prescribes that the name of the LLP should not contravene the provisions laid down under the Trademarks Act, 1999 and the Section also empowers the central government to direct an LLP to change its name when it is found to be identical to an existing LLP or registered trademarks within a period of 3 months under Section17(1). If an LLP defaults in compliance with subSection (1), the central government in order to slick the procedural requirements and to reduce the real-time compliance consequences the central government can allot a new name to the LLP.

Role of Appellate Tribunal

The amendment in Section72 of the Act provides that the appeals against the order of the tribunal will lie to the National company law tribunal from an order made by the tribunal with the consent of the parties. Further, the appeal must be filed within 60 days and for sufficient cause the time frame can be extended for a further period of 60 days if the appellate tribunal is satisfied with the prevented cause from filing the appeal within the specified period.

Relaxation in “Residency”

There is a prerequisite that for each LLP at least 2 partners should be present and one of them should be a resident of India. Previously if a partner was considered as a resident of India, if he stayed in India for at least 182 days or more than that in immediately preceding 1 year. The Amendment bill has reduced the term of stay to 120 during a financial year and this reduction period would encourage and pave an easier way for foreign resident individuals to be a partner in an Indian LLP.

Decriminalization of certain offences

This Act has converted certain offences into civil defaults and decriminalized some offences which were essentially related to minor offences and has converted the nature of punishment provided from criminal punishment to monetary penalties.

The Act has proposed to decriminalize 12 offences. These offences will be shifted through an in-house adjudication Mechanism instead of being considered as a criminal offence with an intention to reduce the burden of the partners and to save the resources and time of the partners in the business.

Conclusion

The amendments were instilled in a way to boost the confidence and a standard practical governance practice will create a certitude among the innovators to adopt LLP as a viable business structure. Though this act has lacked unfulfilled expectations in certain areas like lack of clarity of merger of LPP with a private company, lack of detailed regulatory approach in carrying out a manufacturing industry by an LLP and the non-reduction of residential days in other acts like FEMA and IT act which indirectly mandates and increase the time period of stay in order to qualify as a resident. Other than above-listed reasons, this amendment has been with a primary agenda of decriminalization of offences and the direct contribution of the ease of doing business but in reality, the benefits of the amendments were deep and more obliging for invigorating the startup sector and with those reformative amendments the act has provided a most workable and flexible environment for a business to thrive and enjoy the privilege of a company without being curbing them with complex compliances of a company. Thus, these amendments seem to be providing a promising environment for startups to choose their business structure and thrive easily.

References

1. Pallavi Mishra/Trisha Shreyashi, Will amended LLP Act give start-ups a boost?, The Hindu Business line (Sep. 8,2021 ), https://www.thehindubusinessline.com/opinion/will-amended-llp-act-give-start-ups-a-boost/article36365791.ece

2. RBSA advisors, Limited Liability partnership act 2021,( Aug. 2021), https://rbsa.in/TT_Alerts/RBSA-TT-Alert-Limited-Liability-Partnership-(Amendment)-Act-2021.pdf

3. CS Jaya Sharma, Nuts and Bolts of LLP amendment act 2021,( Sep. 8,2021), https://taxguru.in/company-law/nuts-bolts-llp-amendment-bill-2021.html

4.Ashish M saji, Parliament passes the LLP amendment bill, Enterslice learning ( Aug. 11,2021)

5.Taxwink team, Key Features of Limited Liability Partnership (Amendment) Act, 2021,Tax wink, (Aug. 14,2021), https://www.taxwink.com/blog/limited-liability-partnership-amendment-act-2021

6. The Limited liability partnership amendment act, 2021, No.31, Acts of Parliament , 2021 (India)

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Forum for People’s Collective Efforts (FPCE) v. the State of West Bengal : case analysis

Diganth Raj Sehgal

November 2, 2021

This article is authored by Akash Krishnan, a law student from ICFAI Law School Hyderabad. It discusses in detail the recent Supreme Court judgment wherein the Constitutional validity of the West Bengal Housing Industry Regulation Act, 2017 (WB-HIRA) was challenged.

Table of Contents

Introduction

The case in question is Forum for People’s Collective Efforts (FPCE) vs. the State of West Bengal (2021). In this case, the Constitutional validity of the West Bengal Housing Industry Regulation Act, 2017 (WB-HIRA) was challenged on the ground of repugnancy with the Union law on the same subject matter, i.e., the Real Estate Regulation Act, 2016 (RERA). The Court after examining the provisions of RERA and WB-HIRA came to the conclusion that the provisions were clearly overlapping each other and the State of West Bengal cannot be allowed to run a parallel regime when a Union law exists on the same subject matter.

Brief facts

Legislative history

Prior to the enactment of the Real Estate Regulation Act, 2016 (RERA), several laws were enacted by the State legislatures to regulate the real estate transactions occurring within their states. One of these acts was the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 (West Bengal Act) which received Presidential assent and was published in the Official Gazette in March 1994. Some other prominent examples of state-enacted real estate laws include the Maharashtra Housing (Regulation and Development) Act, 2012 (Maharashtra Act) and the Kerala Real Estate (Regulation and Development) Act, 2015 (Kerala Act).

However, after the enactment of RERA, the Kerala State Legislative Assembly repealed the Kerala Act and the Maharashtra Act was specifically repealed under the provisions of RERA. On the other hand, the West Bengal Act was repealed under the provisions of the newly enacted WB-HIRA that received the assent of the Governor in October 2017.

RERA – the legislative process

The real estate sector plays an important role in meeting the growing demand for housing and infrastructure facilities in the country. Even though the industry has grown and evolved considerably in recent years, there are no strict laws regulating it. This results in the lack of professionalism, standardisation and adequate consumer protection thereby constraining the healthy and orderly growth of the industry. With these issues in mind, the Central Government decided to enact RERA for regulating the real estate market and ensuring proper and orderly growth of the real estate sector.

The statement of objects and reasons of the RERA Bill stated that the Bill will not only ensure greater accountability towards consumers but also reduce incidents of fraud and delays in the real estate market. The aim is to create a balance between the interests of the consumers and the promoters and impose mutual obligations on both parties and ensure transparency in real estate transactions between promoters and allottees and establish a special dispute resolution mechanism for dealing with matters of real estate.

Salient features of RERA

A real estate project is defined as the development of buildings or apartments, development of land into plots or apartments with the intention of selling the said plots or apartments post-development. This also includes the development of common areas, easement structures and appurtenances etc.

The real estate project should be mandatorily registered with the Real Estate Regulatory Authority before any advertisement or offer to sale is being made regarding the real estate project.

Real estate agents should be mandatorily registered before facilitating any form of transaction regarding the real estate project.

Details of the real estate project should be mandatorily disclosed on the website of the Real Estate Regulatory Authority.

Functions and duties of promoters:

Disclosure of details of the real estate proposal.

Ensure proper transfer of title via a registered deed.

Ensure that there is no dfault and in case of default appropriate refunds are made.

Rectification of structural defects within a specified time period.

An advance of more than 10% of the amount cannot be accepted without a written agreement for sale between the promoter and the allottee.

Rights and obligations of allottees:

Make an informed decision by obtaining the details of the real estate project from the Real Estate Regulatory Authority.

Duty to make payments at appropriate times in accordance with the time schedule agreement.

Duty to take possession.

A Real Estate Regulatory Authority should be established in each State and Union Territory by the appropriate government.

Establishment of a Real Estate Appellate Tribunal.

Section 88 of the Act provides that the provisions of the Act are in addition to and not in derogation of any other laws for the time being in force.

Section 89 of the Act gives it an overriding effect over any inconsistency contained in any other law for the time being in force.

Salient features of WB-HIRA

The main objectives of this Act were to regulate and promote the housing sector in the State of West Bengal and to ensure transparency in the sale of real estate projects within the State. It also laid down provisions for the protection of the interests of the consumers in real estate transactions and for the establishment of a dispute resolution mechanism.
Section 83 of the Act provides that the provisions of the Act are in addition to and not in derogation of any other laws for the time being in force.
No overriding effect is given to this Act under any of its provisions.

Issues

Whether RERA and WB-HIRA are enacted under Entries 6 & 7 of List III of the Constitution and therefore cover the same subject matter?
Whether WB-HIRA has received Presidential assent?
Whether the State Legislature can enact laws over the same subject matter as of the Union and create a parallel regime?
Whether WB-HIRA satisfies the test of repugnancy and thus is unconstitutional?

Submissions of the parties

Submissions for the Petitioner

RERA is a central legislation and is a complete and exhaustive code. It regulates the transactions between a promoter and an allottee in the real estate sector and therefore it is a special statute. WB-HIRA is identical to RERA and the provisions under WB-HIRA are an exact replica of the provisions under RERA with some exceptions/inconsistencies.
Due to these exceptions/inconsistencies, the test of repugnancy should be applied. This is a three-fold test. The essential parameters of this test are as follows:

The provisions of the competing statutes should be either conflicting in nature or there should be an existence of a direct inconsistency between the provisions.
If a law made by the Parliament occupies the entire subject matter then a state law based on the same subject matter would be deemed to be repugnant and inoperative.
A conflict of laws arises when the State Legislature has made laws over the same subject matter as the Parliament.

On application of the aforesaid test in the present scenario, since the real estate sector is covered by an exhaustive code, the State of West Bengal cannot enact a law on the same subject matter. Thus, the WB-HIRA is void and violative of Article 254(2) of the Constitution.
Both the RERA and WB-HIRA are enacted through the powers vested with the respective governments under the Concurrent List. Sections 88 and 89 of RERA clearly indicate that any future legislation that is covering the same field as RERA would be valid only if it passes the test laid down under Article 254 i.e., the State cannot enact such a law without obtaining Presidential assent. No Presidential assent was obtained in this case for the enactment of WB-HIRA.
Section 89 read with Article 254(2) of the Constitution, impliedly repeals any provision that overlaps the provisions of RERA.

Submissions for the Union of India

The Parliament enacted RERA with the following objectives:

To ensure a greater degree of accountability of the promoters towards the allottees and reduce incidents of fraud and delays in the real estate market.
To ensure the balance between the interests of allottees and promoters is maintained and that there should be transparency in the real estate transactions.
To establish a special dispute resolution mechanism for dealing with matters of real estate.

The Statement of Objects and Reasons of WB-HIRA indicates that the purpose for which the Act was enacted is identical to the purpose of RERA and thus the state of West Bengal had set up a parallel regime in the same area.
The inconsistency between the provisions of RERA and WB-HIRA are apparent and therefore the first test of repugnancy is satisfied.
The entire subject matter of WB-HIRA is identical to RERA and therefore the second test of repugnancy i.e., the occupied field of law is satisfied.
Both RERA and WB-HIRA were enacted with the intent of regulating the real estate sector and therefore the third test of repugnancy i.e., implied repeal is satisfied.

Submissions for the State of West Bengal

RERA is not exhaustive legislation and does not cover the whole field as the objective of RERA is limited to creating a balance between the interests of the consumers and the promoters and imposing mutual obligations on both parties including that of transparency in contractual conditions and the establishment of a fast-track dispute resolution mechanism.
The WB-HIRA was enacted under Entry 24 of the State List and is protected under the ambit of being a housing industry whereas RERA was enacted under Entries 6 and 7 of the Concurrent List. Thus, a matter falling under Entry 24 of List II cannot cover the matter falling under Entries 6 and 7 of List III.
There is no conflict between the state and central laws. Moreover, since both these laws have been enacted under different provisions, they cover different subject matters. Thus, the test of repugnancy is not satisfied in the present case.
India follows a federal system and federalism has been declared as a basic feature of the Constitution. Therefore, the Union government is not empowered to pass an order directing the repeal of a law passed by the State Legislature.
Also, Section 88 and 89 indicate that the provisions of RERA are in addition to existing laws and thus it cannot be deemed as a complete code.

Judgment and analysis

Entry 24, List II – West Bengal’s ‘housing industry’ defence

In Tika Ramji vs. State of Uttar Pradesh (1956), the Supreme Court held that there are three different aspects that have to be looked into while determining the scope and meaning of the term industry. These aspects are raw materials, the process of manufacture and production and distribution of products of the industries. In Calcutta Gas Co. vs. State of West Bengal (1962), the Supreme Court held that the term industry should be construed to have the same meaning under all the three Lists.
In light of the aforesaid observations, the Court held that the WB-HIRA did not fall under the ambit of the term industry within the meaning of Entry 24 of the State List.
It further observed that since both RERA and WB-HIRA have the same provisions and the objectives for the enactment of these legislations were also similar, WB-HIRA will also fall under Entries 6 and 7 of the Concurrent List.

Violation of Article 254 of the Constitution

Article 254 deals with inconsistencies between laws made by the Parliament and the State Legislatures and states that if any law made by the State Legislature in the exercise of the powers vested under the Concurrent List is inconsistent with a Union law on the same subject, then the Union law will prevail over any such inconsistency with the State law. However, the State law may prevail in a case where the legislation has received Presidential assent.
In GP Stewart vs. BK Roy (1939), the Calcutta High Court held that if there is a direct conflict between two competing laws, the test of repugnancy under Article 254 is attracted. In Deep Chand vs. State of Uttar Pradesh (1959), a three-fold test to determine repugnancy was laid down by the Supreme Court. The essential parameters of this test are as follows:

The provisions of the competing statutes should be either conflicting in nature or there should be an existence of a direct inconsistency between the provisions.
If a law made by the Parliament occupies the entire subject matter then a state law based on the same subject matter would be deemed to be repugnant and inoperative.
A conflict of laws arises when the State Legislature has made laws over the same subject matter as the Parliament.

In State of Orissa vs. M A Tulloch (1964), the Supreme Court held that if the Parliament has enacted legislation with the intent of covering the entire subject matter involved, then any legislation passed by any State Legislature will be deemed invalid on the ground of repugnancy with the Central legislation.
In Rajiv Sarin vs. State of Uttarakhand (2011), the Supreme Court held that there is a two-fold test to determine whether an Act is repugnant under Article 254 of the Constitution. The essential parameters of the test are, firstly, the repugnancy in question should be between a State and Union law, and secondly, the President has not assented to the State legislation.
In light of the aforesaid observations, the Court held that the provisions of WB-HIRA substantially overlap the provisions of RERA and therefore the WB-HIRA would be deemed to be repugnant and inoperative. Also, no Presidential assent was obtained for the enactment and enforcement of WB-HIRA.
Thus, the two-fold test laid down in the Rajiv Sarin case is satisfied and WB-HIRA is held repugnant to RERA under Article 254 of the Constitution.

Law for the time being in force

In Yakub Abdul Razak Memon vs. State of Maharashtra (2013), the Supreme Court held that the phrase “law for the time being in force” includes both, the law in existence at the time of the enactment of legislation and any law which may be enacted in future during the existence of legislation.
In light of the same, the Court observed that the phrase law for the time being in force as mentioned under Section 89 of RERA will include WB-HIRA even though it was enacted at a future date.

Conclusion

The state of West Bengal through WB-HIRA has intended to enact and run a parallel regime by enacting legislation on the same subject matter as the Central legislation, i.e., RERA.
Both statutes have been enacted under Entries 6 and 7 of the Concurrent List.
Due to the identical subject matter, the three-fold test for repugnancy under Article 254 is satisfied. The exception under Article 254 is not attracted since the President had not assented to the legislation.
WB-HIRA is repugnant to RERA and therefore is held to be unconstitutional. However, the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 that was repealed through the provisions under WB-HRA shall not be revived and shall stay repealed.

References

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