The scope of CS in India and abroad

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October 11, 2021

Company Secretary — Image Source: https://rb.gy/a0obkp

This article is written by Vanya Verma from O.P. Jindal Global University. This article discusses the scope of CS in India and abroad.

Table of Contents

Introduction

Company Secretary (CS) is a well-known course in India. Work as a Company Secretary is not only prestigious and financially rewarding, but it also provides a high level of job satisfaction. The Company Secretary is an in-house legal expert, a compliance officer for the company, and a specialist in corporate law, securities law, corporate governance, and capital market legislation.

Employment of Company Secretary

Regulatory recognitions

Companies with a paid-up share capital of Rs. 10 crores or more are required, under Section 383A of the Companies Act, 2013, to appoint a full-time Company Secretary.
Rule 8 A of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014 mandates the appointment of a whole-time Company Secretary for a private company with a paid-up share capital of ten crore rupees or more.
Regulation 6(1) under the SEBI Listing Regulations, 2015 lays down that a listed entity must appoint a competent Company Secretary as the Compliance Officer. [Note: This clause does not apply to units issued by mutual funds that are publicly traded on a recognised stock market.]
The disclosures made by the large corporations to the stock exchanges with respect to the issuance of debt securities must be certified by both the Company Secretary and the Chief Financial Officer (CFO) of the large corporations, according to the SEBI guidelines for fundraising by the issuance of debt securities by Large Corporates.
All companies wishing to list on the stock exchange must hire a full-time Company Secretary. Membership of the Institute is recognised for appointment to senior positions and services in the Central government.
Membership in the Institute is a recognised qualification for recruitment into the Indian Company Law Service’s Accounts branch from Grade I to Grade IV.
Almost every type of organisation whose operations are managed by boards, councils, or other types of associations, federations, authorities, commissions, or any such similar organization finds it beneficial to appoint a Company Secretary in a crucial administrative role.

Opportunities for CS in India

There are opportunities for a qualified Company Secretary in both employment and as a practising independent professional.

Self-employment

Members of the Institute can practise independently after receiving a ‘Certificate of Practice’ from the Institute.

Any firm with a paid-up share capital of Rs. 10 lakh or more but less than Rs. 10 crores must employ the services of a Secretary in full-time practice and this compliance certificate has to be issued by a practicing CS .
Practising Company Secretaries have been authorised to issue certificates regarding compliance with the conditions of Corporate Governance as required in Clause 49 of the Listing Agreement.

The Company Law Board, Securities Appellate Tribunal, Competition Commission, Telecom Dispute Settlement and Appellate Tribunal, Consumer Forums, Tax Tribunals, and other tribunals have authorised practising Company Secretaries to represent the parties before them.
The Reserve Bank of India acknowledged practising Company Secretaries to undertake due diligence reports for banks.
In practice, a Company Secretary is authorised to issue certificates and attest documents under the following statutes and regulations:
- Companies Act, 2013
- SEBI Act, 1992
- Depositor i es Act, 1996
- SCRA, 1956
- Exim Policy etc.

Secretarial Auditor

One of the major areas, secretarial audit, is unquestionably a thorough representation of the legislature’s and government’s reliance on the Company Secretaries to inculcate corporate discipline and ensure compliance with legislation.

Companies Act, 2013 (Section 204)

Under Section 204, companies are required to obtain a Secretarial Audit Report from the Company Secretary in case of :

Every listed company.
Every public company with a paid-up share capital of 50 crore rupees or more.
Every public company with a turnover of 250 crore rupees or more.
SEBI (LODR) Regulations, 2015

Under Regulation 24A, every listed entity and its material unlisted subsidiaries incorporated in India must conduct a Secretarial Audit and annex a Secretarial Audit Report and Annual Report, given by a Company Secretary in practice, in such form as may be specified.

Insolvency professional

Company Secretaries who have passed the necessary examinations, have a prescribed number of years of experience, are enrolled with an Insolvency Professional Agency, and are registered with the Insolvency and Bankruptcy Board of India (IBBI) as Insolvency Professionals, can take up matters relating to corporate insolvency resolution as interim resolution professionals/resolution professionals, as well as voluntary liquidation cases. In a resolution process, they can also act as an authorised representative for a class of creditors at a meeting of the Committee of Creditors.

Licensed Appraiser

When a company’s stocks, shares, debentures, securities, or other assets are to be valued, they must be valued by a person with the stipulated qualification and experience and who is registered as a valuer in the manner and on the terms and conditions as prescribed. Under the Companies (Registered Valuer and Valuation) Rules, 2017, a Company Secretary is recognised as a Registered Valuer for the asset class ‘securities or financial assets.

GST Specialist

Company Secretaries provide value-added services to trade and industry by functioning as extended arms of regulatory mechanisms, with their expertise in the interpretation of laws and skills in tackling and managing regulatory compliances under GST. Enrollment as a GST practitioner is open to anyone who has passed the CS final exam. Company Secretaries can assist business entities in interpreting GST laws and effectively discharging various GST compliances while performing activities such as tax planning, maintaining GST records, drafting legal documents such as responding to show cause notices, conducting impact analyses, and so on.

Corporate law expert

A CS can assist in the following corporate laws advisory services:

Companies Act, 2013;
SEBI Act, 1992;
Securities Contracts (Regulation) Act, 1956;
Depositories Act, 1996;
Cyber laws;
Environmental and pollution control laws;
Foreign Exchange Management Act, 1999;
Industrial and Labor Laws;
The Cooperative Societies Act, 1912;
Competition Act, 2002;

IPRs, WTO services and international trade

CS can provide advice on matters relating to:

IPRs under the TRIPs Agreement of the WTO;
Foreign trade policy and procedures (also issuing certificates thereunder);
Anti-dumping, subsidies & countervailing duties;
Acting as a registered agent of trademarks;
Licensing of intellectual property and drafting of agreements;
Protection, management, audit and valuation of IPRs.

Representation services

Company Secretaries have the authority to represent in the following:

National Company Law Tribunal;
National Company Law Appellate Tribunal;
Competition Commission of India;
Competition Appellate Tribunal;
Securities Appellate Tribunal;
Registrar of Companies and Regional Directors;
Telecom Disputes Settlement and Appellate Tribunal;
Tax Authorities;
Authorities under Real Estate (Regulation & Development) Act, 2016.

Internal Auditor

Companies in the prescribed class or classes are required to appoint an internal auditor to perform internal audits of the company’s duties and activities. [Section 138 read with Rule 13 of Companies (Accounts) Rules, 2014]

CS in practice is authorized to undertake an internal audit of the following:

Credit rating agencies;
Portfolio managers;
Stock brokers/clearing members/trading members;
Registrar and share transfer agents (RTAs);
Internal audit & concurrent audit of depository participants;
Annual compliance audit of research analyst;
Reconciliation of share capital audit;
Yearly audit of investment advisors.

Issue of shares and other securities

Company Secretaries can assist in the following:

Due diligence;
Advisor/consultant in the issue of shares and other securities;
Drafting prospectuses/offers for sale/letters of offer/other documents related to the issue of securities and obtaining various approvals;
Private placement of shares and other securities;
Buy-back of shares;
Raising of funds from international markets ADR/GDR/FCCBs/FCEBs/ECB.

Corporate restructuring

Company Secretaries can help in the corporate restructuring in the following ways:

Assist in joint ventures and foreign collaborations;
Creating joint ventures and wholly-owned subsidiaries in other countries;
Ensure that the takeover regulations and other related regulations are followed;
Ensure that the prohibition of Insider Trading Regulations is followed.

Services in finance, accounting, and taxation

Company Secretaries can provide finance, accounting, and taxation services in the following ways:

Budgetary controls
Determination of the appropriate capital structure
Feasibility Studies and project reports
Tax management, tax planning, returns and reports under Income-Tax, GST and other taxation laws.

Arbitration and Conciliation agreements

Assisting in commercial disputes.
Acting as an arbitrator or conciliator in commercial issues both domestically and internationally.
Drafting the Arbitration and Conciliation Agreements.

Advisory role of CS

CS is also entrusted with the role of advising matters relating to:

Compliance management;
Intellectual property rights;
Risk management;
Corporate restructuring;
Business policy, strategy, and planning;
Agreements & MoUs;
Corporate Social Responsibility and Sustainability Reporting;
Taxation issues etc.

Other roles performed by a CS of the company

Ensuring that Corporate Governance obligations, such as the Companies Act, its rules, Secretarial Standards, and other applicable legislation are followed.
Assisting and advising the Board of Directors in the company’s operations.
Assisting in the convening of meetings, as well as attending Board, Committee, and General Meetings.
Obtaining necessary authorization from the Board of Directors, shareholders, and regulatory agencies.
Representing clients in front of various regulators and authorities.
Drafting of legal documents..

Opportunities for CS abroad

Many Company Secretaries are already employed in countries such as the United States, Canada, the United Kingdom, Singapore, Malaysia, Thailand, Australia, New Zealand, the Middle East, and Africa. The companies have recognised their professional skill sets with their research and legal bend of mind. CS also possesses analytical skills and managerial capabilities.

Following the globalisation of services through the WTO and GATS, opportunities for practising Company Secretaries are emerging in several nations. India has signed bilateral Comprehensive Economic Cooperation Agreements with Singapore, Malaysia, Thailand, and Mauritius, among others.

These agreements recognise Company Secretaries as professionals who can freely move across borders. The Chartered Governance Institute UK and Ireland (CGI) and ICSI have signed a Memorandum of Understanding (MoU). On specific conditions, this MoU recognises the Company Secretaries of both countries. Mutual recognition agreements between the ICSI and institutes controlling the profession in several other countries have been set in action as part of India’s globalisation and comprehensive economic cooperation initiatives. Company Secretaries will have access to the other parts of the world as a result of these agreements.

MOU with ICSA, London

After meeting the high standards of examination and appreciating each other’s activities in promoting the best practices in Company Secretaries and professional education and administration, the ICSI and the Chartered Governance Institute UK and Ireland signed an MOU that provides for reciprocal exemptions on a mutual basis.
Members of ICSI are exempted from passing 14 of the 17 papers and must pass the following three core papers to become an CGI member:
- Corporate Secretaries;
- Corporate Law;
- Corporate Administration.
The MOU is available to members of the Institute of Company Secretaries of India who have been in good standing for at least two years.

MOU with CISI, London

ICSI and the Chartered Institute for Securities and Investment (CISI), London, have signed a Memorandum of Understanding (MOU) under which ICSI will, among other things, offer certain CISI units in capital markets, commodity markets, wealth management, fund management and investment banking as electives to its students as well as members. Apart from a globally recognised qualification, this will give students exposure to the securities and investment industry.
ICSI students who have completed the ‘Executive Program’ have been granted specific recognitions by CISI, which will help them acquire the ‘International Investment Administration Qualification (IAQ)’.
CISI has also recognised the membership of ICSI for automatic membership of CISI at the associate level (ACSI). Senior ICSI practitioners in the securities and investment industry would be entitled to apply for membership (MCSI).

MOU with Malaysian Institute of Chartered Secretaries and Administrators (MAISCSA)

ICSI and the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) have signed a Memorandum of Understanding. Students and members will benefit from the MOU by being able to attend training programmes, exchange course materials, and participate in research projects.
The ICSI is the only organisation in the world that has created Secretarial Standards to offer uniformity to the various secretarial techniques used by corporate boards of directors. The Government of India has ordered that all enterprises follow SS-1 and SS-2 under Section 118(10) of the Companies Act, 2013. The Malaysian Association of Company Secretaries (MAICSA) has adopted the ICSI Secretarial Standards to measure its Standards. MAICSA’s principal aims are to promote, improve, upgrade, and advance the professional standing of company secretaries in Malaysia.

UK NARIC

While striving for academic and professional excellence among its major stakeholders, namely students and members, ICSI aspires to extend opportunities for governance professionals not only within the country but also outside. In this regard, the ICSI engaged with UK NARIC, the UK’s National Agency for providing informed advice and guidance on vocational, academic, and professional qualifications from over 190 countries worldwide to conduct an independent benchmark study and assess the comparability of the Company Secretaryship Course’s Executive and Professional Programs in the UK and UAE education systems.

Other opportunities for a CS abroad

A CS can also do the following abroad:

Contract drafting

A person who has a qualification of both CS and lawyer is acquainted with the legal and financial implications between the parties and can even help out the parties with the contract drafting. Contract drafting has a lot of scopes abroad. Scope of earning via drafting ranges between USD 10-300 and differs on work to work basis.

Content writing

Another great opportunity for a CS is content writing. A CS can make an efficient profession in content writing by writing on law and financial subject matters. Content writing has a lot of scope outside India, and someone interested must look into this field. You can earn between USD 10-50 per article.

Freelance

A CS can also find work on Upwork and Fiverr, one can find an opportunity that relates to compliance or vetting various company-related documents and drafting and negotiating, and even being part of the drafting of minutes of any AGM or other meetings. Even more so, these clients are open to providing at least $30-$50 for a one-time work of vetting documents, asking for suggestions to certain compliance-related clauses in agreements, etc.

Payscale/ salary of Company Secretary

Company Secretaries earn a satisfactory salary in a variety of industries. Most organisations pay more for Company secretaries that are highly skilled and experienced. The Company Secretary’s average salary structure is given below.

Job Profile	Starting Salary per annum (in INR)	Mid Level Salary per annum (in INR)	Senior Level Salary per annum (In INR)
Company Secretary	Rs. 3,00,000	Rs. 6,00,000	Rs. 9,00,000 – 12,00,000
Legal Advisor	Rs. 3,00,000	Rs. 4,00,000 – 5,00,000	Rs. 10,00,000
Principal Secretary	Rs. 3,00,000	Rs. 6,00,000	Rs. 9,00,000 – 12,00,000

Salary of CS based on experience

Experience	Annual average salary of CS
0-1 year	INR 119,195 – INR 805,366
1-4 years	INR 232,260 – Rs 770,450
5-9 years	INR 302,012 – Rs 1,468,135
10-19 years	INR 380,000 – INR 2,440,000
20 years or more (highest salary of CS in India)	INR 1,768,743 – INR 1,924,279

Conclusion

Considering the number of opportunities open for a CS, it definitely has a lot of scope in India as well as abroad. One can choose this field based upon their interest and join in any of the fields given above.

Join us for an exclusive 3-day boot camp on – International Opportunities for Chartered Accountants / Company Secretaries in US Corporate Law from 9th to 11th October, 6-9PM.
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References

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Overview of the Cutchi Memons Act, 1938

By

Rachit Garg

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October 11, 2021

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This article is written by Oishika Banerji of Amity Law School, Kolkata. This article provides a detailed understanding of the Cutchi Memons Act, 1938.

Table of Contents

Introduction

In order to understand the Cutchi Memons Act, 1938, it is necessary to understand the term “Cutchi Memon” which may appear to be unfamiliar to the majority of the readers. It is believed that around 1404 AD a group of around 700 individuals who originally belonged to the Lohana community belonging to the Sindh region accepted Islam as their religion under Pir Abdul Qadir Gilani of Baghdad. Therefore, it can be said that the Cutchi Memos were Hindus who had converted to the Islamic religion around four hundred years ago. Cutchi Memon is a community that used to practice retail trade as street vendors, and the weighing scales they used were called “meimon” from where they came to be known as Cutchi Memon. This story is one of the versions of the origin of Cutchi Memon, a community that appears to be approximately six hundred years old. While there exist several other theories behind the origin of Cutchi Memon, which one of them spells the truth is difficult to ascertain. It is said that the ruler of Cutch (also spelled as Kutch or Kachchh), a district in the state of Gujarat, invited a group of Muslims to reside in his kingdom. This group of Muslims was called “Mumins” which further became familiar by the name of “Memons”. The Memons majorly reside in India, and parts of Pakistan with a population of 9 lakhs, and 7 lakhs respectively. In India, the Cutchi Memons are governed by Islamic laws as they voluntarily opted for them. Previously they were governed by the Indian legislation Cutchi Memons Act, 1920 which has now been repealed and replaced by the Cutchi Memons Act, 1938. This article intends to provide a detailed explanation of the small statute that has received significance over the years in law books, lectures, and research papers.

The Cutchi Memons Act, 1938

On the 8th of April 1938, the Indian legislature had promulgated the Cutchi Memons Act, 1938 to provide a codified governing statute for the Cutchi Memons in matters relating to succession, and inheritance. The Act stated that the Cutchi Memons will be ruled by the Muhammadan law in subjects of inheritance and succession. This being the underlying intent of the legislation, the same comprises three short provisions that execute the purpose of the Act of 1938.

The provisions of the Cutchi Memons Act, 1938

The Cutchi Memons Act, 1938 is made up of three sections which are:

Section 1: Short title and commencement.
Section 2: Cutchi Memons to be governed in certain matters by Muhammadan Law.
Section 3: Savings.

Section 1: Title and commencement

Section 1 of the Act reads as, “ (1) This Act may be called the Cutchi Memons Act, 1938.

(2) It shall come into force on the 1st day of November 1938.” The Section thus provides the name of the Act along with which it states that the Act commenced from 1st November 1938. Before understanding Section 2 of the Act, it is necessary to analyze Section 3.

Section 3: Prospective application of the Act of 1938

Section 3 of the Act of 1938 deals with savings. The Section reads as, “Nothing in this Act shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of any such right or liability, and any such legal proceeding or remedy may be continued or enforced as if this Act had not been passed.”

The provision provides that the Act will be functioning prospectively thereby not affecting any right, or liability that had been acquired prior to the promulgation of this Act. Further, it also states that if there existed any legal proceeding, or that had commenced, or provided prior to the implementation of this Act, and is continuing at present, then the same will in no way be affected by the provisions of this Act. Thus Section 3 of the Act bars retrospective operation of the statute.

Section 2: Matters of governance

Section 2 of the Act reads out as, “Subject to the provisions of Section 3, all Cutchi Memons shall, in matters of succession and inheritance, be governed by the Muhammadan Law.” The provision, therefore, lays down certain matters in which the Cutchi Memons will be governed mandatorily by the Muhammadan law provided the same is applied prospectively. The matters are inheritance and succession.

Testamentary powers of Cutchi Memons

It is because of Section 2 of the Cutchi Memons Act, 1938 that the Cutchi Memons enjoy the same testamentary powers as the Muslims in general. The testamentary power, also known as bequeathable third provides that no Muslim can make a bequest that exceeds one-third of his assets after deducting the funeral charges and debts that need to be made after the death of the person. If the bequeathed property exceeds beyond the one-third limit, then in such circumstances the consent of other heirs stands mandatory.

Let us hypothetically imagine that Mr. R is a Cutchi Memon who passed away in the year 1945 leaving behind a Will in which he had bequeathed half of his existing property to his best friend Mr. Q. Now, will the Will made by Mr. R be valid, and would it have made any difference if Mr. R died in the year 1937 instead of 1945?

In order to answer these two questions, we need to keep in mind that the Cutchi Memons Act 1938 makes it clear that the Cutchi Memons will be governed by Muhammadan law for the matters of inheritance, and succession. Taking into account the facts provided above it can be said that Mr. R had bequeathed his property to a stranger, Mr. Q, and the same is in excess of the legally prescribed bequeathable limit that is one-third. Because of this, the Will cannot take effect unless the legal heirs of Mr. R provide their consent to the same. Also, if Mr. R had died in 1937 instead of 1945, he would have been subject to Muhammadan law only.

A comparison between the Cutchi Memons Act, 1920 and the Cutchi Memons Act, 1938

Before the enactment of the Act of 1938, Cutchi Memons were governed by the Cutchi Memons Act, 1920. The arrangement of the Act of 1920 was very much different from that of the Act of 1938.

Section 2 of the Cutchi Memons Act, 1920 stated the power of the Cutchi Memons to declare that they desire to obtain the benefit yielded by the Act thereby giving consent by means of declaration before a prescribed authority to be governed by the Muhammadan law in matters of inheritance and succession. But in order to do so, a Cutchi Memon had to abide by the parameters provided by the provision which are;

A Cutchi Memon had to attain a majority in order to exercise the power of declaration; and
A Cutchi Memon had to be a citizen of British India.

But after the Act got repealed by the Act of 1938, and Section 2 mandating the application of Muhammadan law in subjects of inheritance, and succession for all the Cutchi Memons, the provision will be read according to Section 3 of the Shariat Act, 1937 which vests the power to make a declaration to,

“(1) Any person who satisfies the prescribed authority-

(a) that he is a Cutchi Memon and is the person whom he represents himself to be;

(b) that he is competent to contract within the meaning of Section 11 of the Indian Contract Act, 1872 (IX of 1872); and

(c) that he is resident in India.”

Section 3 of the Cutchi Memons Act, 1920 provided the rule-making power of the local governments, and prior to the 1938 amendment read as:

“(1) The Local Government may make rules prescribing the authority before whom and the form in which the declarations under this Act shall be made.

(2) Rules made under the provisions of this section shall be published in the local official Gazette and shall thereupon have effect as if enacted in this Act.”

But, with the 1938 amendment, the rule-making power of the local government is now to be read in accordance with Section 4 of the Shariat Act, 1937.

The Controller of Estate Duty, Mysore, Bangalore v. Haji Abdul Sattar Sait & Ors (1972)

The case of The Controller of Estate Duty, Mysore, Bangalore vs. Haji Abdul Sattar Sait & Ors (1972) came before the Supreme Court of India in 1972 that concerned the right of succession of property among Cutchi Memons.

Facts of the case

The family of the respondent who was Cutchi Memons had settled in Madras between the years 1928 and 1930 and further shifted to Bangalore Civil Station. In the meantime, the father of the respondent passed away in 1955 in Bangalore leaving behind properties that were to be charged by estate duty. The respondent had contended that his family was governed by Hindu law and therefore, the rules for distribution and devolution of joint family property were applicable by survivorship, and therefore only one-third portion of his father’s property that contributed as the undivided share will be subject to assessment under the Estate Duty Act, 1953. The Bombay High Court had observed that the application of Hindu law was prohibited on the Cutchi Memons by the provisions of the Cutchi Memons Act, 1938.

The Supreme Court’s observation

The Apex Court while deciding on this matter took into account the language of the provision of Section 3 of the Cutchi Memons Act, 1938 which reads as, “nothing in this Act shall affect any right or liability acquired or incurred before its commencement or any legal proceeding or remedy in respect of such right or liability and any such proceeding or remedy may be, continued or enforced as if this Act had not been passed.” Observing the decision in favor of the respondent, the Court held that if the respondent and his family were governed by Hindu law of property, succession, and survivorship then the son had the right to his father’s property by birth itself. And therefore, applying Section 3 of the Act of 1938 the same right cannot be taken away from the respondent.

Conclusion

Although the Cutchi Memons Act, 1938 governs a small portion of the mammoth population of India, discussing the same, and finding its mention in law books, and research journals are by itself astonishing. The recognition provided to the Cutchi Memons community by the legislation of 1938 is noteworthy and should be appreciated. But the Cutchi Memons Act, 1938 being a facilitator of Muhammadan law upholds all the loopholes that the latter incorporates thereby adding to the already existing issues.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

President’s power to grant pardon

By

Rachit Garg

-

October 11, 2021

0

presidential-pardon-9-638 — Image source: https://bit.ly/2UPk8pG

This article is written by Ronika Tater from the University of Petroleum and Energy Studies, School of Law. In this article, she discusses the constitutional provisions in relation to the pardoning powers of the President with the support of various case laws and other relevant provisions.

Table of Contents

Introduction

The Constitution of India comprises the three branches of the government namely the legislative, the executive and the judiciary. The head of the executive is the president, who is the first citizen of India and the Constitution entails various powers in it. Under Article 72 of the Constitution of India which states that the President shall have the power to grant pardons, reprieves, respites, or remissions of punishments or to suspend, remit or commute the sentence of any person convicted of any offence under The Indian Penal Code, 1860 (“IPC”) where the sentence is a sentence of death. Under Article 161 of the Constitution of India which states the power of pardoning by the Governor, however, these do not extend to death sentences.

History behind the President’s power to grant pardon

During the British reign, the power of pardon was vested in the British monarch. This power was absolute, unrestrained and not subject to any judicial scrutiny. It was considered as an act of mercy at the hands of the King to forgive any crime, offence, punishment, execution, right, or duty. Consequently, the constitutional framers have stated the position of the President in the Constitution as symbolic and the Central Government is the reality. In the same case, the Governor is the formal head and the sole repository of the executive power, but it acts upon the advice of the Council of Ministers. Article 74 of the Constitution of India provides that the Council of Ministers with the Prime Minister at the head shall aid and advise the President while exercising its function and the President should act as per such advice. The action of commutation, pardons, and release is not open to the President or the Governor to take independent decisions and directly release anyone of their choice. While drafting the criminal provision with regard to the existence of capital punishment the framers of the Constitution were known that it is a permissible punishment under the law and also has been in existence from ancient times.

Article 72(1)(c) provides the President with the power to grant pardons to any person convicted of any offence and also in all cases where the sentence is a sentence of death. On the contrary, Article 72(3) provides that the President’s power to grant power shall not affect the Governor of a State as mentioned under the law. Article 134 provides the right of appeal to the Supreme Court in the cases where the High Court reversed an order of acquittal and grants a person capital sentence. Thus, the constitutional framers recognize the death sentence as a permissible punishment. On the contrary, Article 21 of the Constitution of India states that no person shall be deprived of his life except in the cases where the procedure established by law is followed. It is clear that the deprivation of law is constitutionally valid if done according to the procedure established by law. Hence, the provision for capital sentences cannot be said as unreasonable or not in the public interest.

Hence, in the case of Devender Pal Singh Bhullar v. State of NCT of Delhi, (2013), it was held that the powers under Article 72 and Article 161 are the two highest dignitaries in the Constitution should act with the aid and advice of the ministers. It also stated that the Governor is a shorthand expression for the State Government and the President for the Central Government. However, the constitutional status stated in Article 72 and Article 161 does not get affected by the common ground mentioned under Section 433-A of the Code of Criminal Procedure, 1973 (“CrPC”). Section 433A states the restriction on the power of remission or commutation on certain cases where a death sentence is imposed on a person and has been commuted to imprisonment for life. In such circumstances, the person convicted must at least spend fourteen years of imprisonment.

Different types of pardoning powers

Article 72 of the Constitution provides the five different types of pardoning power of the President as mandated by the law.

Pardon means completely resolving both the conviction and sentence and letting him go free from the hands of the law. In such circumstances, the pardoned criminal will be treated just like a normal citizen.
Commutation means changing the type of punishment given to the convicted person at the time of conviction. In other cases, the power extends to the Government of the State. Section 433 of the Code of Criminal Procedure, 1973 provides the power of the appropriate government to commute the sentence of a person without consent in the following cases.

A sentence of death may be commuted to any other punishment as mentioned under the IPC.
A sentence of imprisonment for life commuted for imprisonment for a term not exceeding fourteen years or for a fine.
A sentence of rigorous imprisonment commuted for simple imprisonment for any term or a fine.
A sentence of simple imprisonment commuted for a fine.

The expression “appropriate Government” means in cases where the sentence is for an offence that restricts the liberty of any person or imposes any liability or on his property is passed under any law. The power in such related matters extends to the executive power of the Union, the Central Government.

A reprieve means a delay allowed in the execution of a sentence especially that for a death sentence for a temporary period. The purpose of it enables the guilty person to seek presidential pardon or any other legal remedy to prove himself innocent.
Respite which means reducing the quantum or degree of punishment of the convicted person considering special circumstances such as in the case of pregnancy, the death penalty may be commuted to imprisonment for life.
Remission means changing the quantum of the punishment without changing its nature. Section 432 of the Code of Criminal Procedure, 1973 provides the power to suspend or remit sentences of punishment by the appropriate government. It states that the appropriate government with or without conditions may at any time accept, suspend or remit the punishment for an offence wholly or any part of the punishment.

Case laws

In the case of Ram Shankar v. State of Madhya Pradesh, (1981), the Supreme Court held that the government may remit or reduce sentences while exercising the power of clemency after considering the facts and circumstances of the case.

That the accused is a primary school teacher with no bad history of conviction.
The amount robbed by him was a trivial amount.
There was no resistance or hiding of his identity while arresting.

In a similar case, Shidagauda Nilgappa Ghandakar v. the State of Karnataka, (1981), the Supreme Court while upholding the validity of Section 433 of the Cr. P.C held that the Government cannot reduce or commute the sentence to less than 14 years for a crime of serious nature.

Nature of the pardoning power

The pardoning power of the President is not absolute. It should be exercised by the President on the advice of the Council of Ministers. However, Article 74(1) empowers the President to return it for reconsideration once. If the Council of Ministers decided against it, the President has no option but to abide by it. In several cases, the Supreme Court has ruled that the President has to act on the advice of the Council of Ministers. These include Maru Ram v. Union of India, (1980), the Supreme Court held that the power under Article 72 is not an independent power of the President but it is to be exercised on the advice of the Central Government and that the advice of the Government binds the head of the Republic to act upon it. The case of, Epuru Sudhakar v. Government of Andhra Pradesh, (2006), established a well-set principle stating that a limited judicial review while exercising clemency powers is available to the Supreme Courts and High Courts. Granting of clemency by the President or Governor can be challenged based on the following grounds:

The order has been passed without application of mind.
The order passed is mala fide.
The order passed is wholly irrelevant and extraneous.
Relevant material has not been considered.
The order passed suffers from arbitrariness.

Impact of the judiciary on clemency power

The Constitution of India provides the separation of power between the three branches of the government and each branch should function under its sphere. In the cases of extreme inhumane treatment against the rights of the citizen, the judiciary can come into the picture to uphold constitutional morals and values. In the context of Article 71 and Article 161 of the Constitution of India, the judiciary has a limited sphere by allowing judicial review. In the recent case of Shatrughan Chauhan v. Union of India, (2014), the Supreme Court held that the petition filed by 15 prisoners whose mercy got rejected while exercising the pardoning under Article 72 without providing any reason for undue delay is a violation of Article 21. It provided guidelines in order to ensure that while carrying out death sentences a more humane process should be adopted. It was unacceptable that the right to life of the prisoners is subjected to torture due to delay in the rejection of the mercy petition.

Further, the Court while commuting the death sentences stated that it is not questioning the power of the President in the Constitution to reject the mercy petition. Though the Court exercised limited powers in exercising judicial review over the President’s decision to grant power. But, in the instant case, the undue delay represented as a grave violation of the right to life under Article 21 and the Courts are bound to protect the rights of all the persons. The present judgment is appreciated by most of the public but it is crucial to understand that it only covers one aspect of the administration of the death penalty in India. There are hundreds of death row prisoners whose voices are not heard and they are living an uncertain life. Some of the key points stated by the Supreme Court, in this case, are below-mentioned:

In the cases where there is an unexplained delay for the time period of 6 to 12 years, then the death sentence must be commuted to imprisonment for life.
Factors such as mental trauma, lack of legal aid, age of convict, and pregnancy can be used as a ground for challenging the order of clemency.
The clemency power of the President is now exercised by rule of law rather than the discretion of authorities.

It is rightfully said that ‘Justice delayed is justice denied’ as in several instances the President has taken more than 10 years in replying to the petition leading to grave violation of human rights. The purpose of clemency power was to ease the path of justice rather than acting as a denial of justice. Hence, it is necessary to establish a well-set process and a timeline for the disposal of mercy petitions.

Conclusion

The President is known as the head of the executive in India and has to act on the advice of the Council of Ministers in every matter except in the case of the appointment of the Prime Minister. Further, the Constitution entails the rights and duties of the citizen and the personal liberty of the citizen that is paramount. It provides guidance while deciding on matters of law. In my opinion, the clemency power of the President should be made independent and the provision of aid and advice of the Council of Ministers should be detached for the sake of justice. This may require amendments in the Constitution under specific Articles, but in order to uphold the democratic value of the Constitution, it is necessary to provide speedy justice to every person.

References

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

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

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GST impact on food delivery startups : Swiggy, Zomato, and more

By

Shoronya Banerjee

-

October 11, 2021

0

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

This article is written by Shreya Ganapathy pursuing a Certificate Course in Advanced Corporate Taxation from LawSikho. The article has been edited by Zigishu Singh (Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).

Table of Contents

Introduction

You would get an idea of the changing landscape of the food industry by visiting your favourite restaurant. You would notice a bunch of people decked in orange or red t-shirts chattering and waiting at the doorstep. This is a common sight across major restaurants in almost all the cities in India, big or small. This is a fine first-hand experience you can have of the market disruption caused by food delivery startups. But is everything well in the sector growing exponentially on the back of instant deliveries by gig economy workers?

In this article, we look at the impact of the GST laws applicable to food delivery partners. “The only way to encourage the use of technology and to incentivize restaurants to use online delivery partners is by reducing the GST rate, which would add to the growth of this theme.” – Kunam Wadhwa, Indirect Tax, PwC India

Goods and Services Tax (GST) rates reduction and Input Tax Credit (ITC) withdrawal

Recently, GST rates were reduced for eating outlets. This caused quite a stir. The erstwhile 18% GST was reduced to 5%. However, this decision was coupled with the decision to withdraw input tax credit for the provision of these services. Input tax credit refers to GST paid on raw materials or procurements that can be set off against future tax liability of a certain kind. This decision directly led to restaurants charging higher prices on online food delivery platforms like Zomato, Swiggy, and Foodpanda. On the other hand, some restaurants have opted for commission cuts with their online food delivery partners.

Some key points to note post-ITC withdrawal

Online food delivery services are provided at a commission of around 20 percent (including 18% GST).

Restaurants can no longer claim ITC on the 18 percent GST against input services from these delivery platforms.

There is immense pressure from restaurants on online food delivery services to cut margins.

Impact of ITC withdrawal and reduction of tax rates

1. ITC withdrawal has led to a price hike on the food sold by many restaurants. It is expected that most other restaurants will follow the suit. Lack of ITC is not feasible for most restaurants.

2. The increased prices could severely dampen the growth of online food delivery services.

3. The total number of registered restaurants on food delivery platforms stands at 100,000. About 70% of the orders on these platforms are through digital payments. This is a great facilitator for the government’s digital payment campaign. A reduced GST will go a long way in further promoting the digital campaign.

4. Scalability will be most impacted. Growth plans via new franchise outlets for marquee restaurants will be less feasible. In comparison to the five percent GST on food bills, the GST on royalty and franchise fees is 18 percent. This could clearly chain the Rs 200-billion restaurant chain sector which is currently growing at 22 percent annually.

Change in GST collection point

Meanwhile, in the 45^th GST Council Meeting held on 17^th September 2021, the GST council announced that cloud kitchens and food delivery platforms like Zomato, Swiggy, Foodpanda, etc would be charged GST at a rate of 5% with effect from 1.1.2022.

“Food delivery operators like Swiggy who collect orders from restaurants and deliver (to customers) the place where the food is delivered will be the point on which tax will be collected by the gig groups Swiggy and others,” Finance Minister Nirmala Sitharaman said.

This decision is based on the GST Fitment Committee’s recommendation to the Council that e-commerce operators (ECOs) be required to pay GST on restaurant services provided through them.

So far, such food delivery platforms collected GST from customers and gave it back to the restaurant. On the food bill, restaurants listed on food delivery apps pay a 5 percent GST. The commissions that food delivery aggregators charge restaurants for providing delivery and marketing services are subject to 18 percent GST. After receiving the GST collected by the food delivery platforms, the restaurants were supposed to pay it to the government. Food delivery platforms were also entrusted with the responsibility to collect TCS (Tax Collected at Source) at the rate of 1% on the taxable value of supplies made by the restaurants through them.

The system in place was confusing and led to tax evasion. The Department found huge differences between the taxable value reported by Food Delivery platforms in the TCS returns filed and the taxable value of supplies reported by restaurants in the returns. Restaurants would not deposit the tax collected by the food delivery platforms with the government

Henceforth, the food delivery companies will collect tax from customers and directly deposit it with the government on behalf of the restaurants.

Revenue Secretary Tarun Bajaj said that this decision was taken after analysis of the GST returns where it was observed that some unregistered restaurants were evading taxes. He said “Analysis – of returns filed by delivery apps and some Haryana restaurant services – showed the gap in taxable turnover for suppliers where TCS was deducted by a delivery app was greater than turnover declared by such suppliers. The evasion amount is believed to be substantial as food delivery apps have high supply volumes”

How will this impact food delivery platforms?

For food delivery platforms, this will also add more burden of compliance towards collecting and depositing taxes on behalf of the restaurants and maintaining additional records.
The move may also create some confusion in terms of the applicability of input tax credits, for which food aggregators are expected to seek clarifications from the government.
As a result of the move, the smaller restaurants that did not pay GST so far will have to renegotiate contracts with food delivery platforms to accommodate the changes caused by the new GST regulation
Zomato and Swiggy, have also reached out to the government and sought clarification around the recent decision to treat them on a par with restaurants under the GST framework.
The companies seek clarity around how the GST would be levied and whether this could lead to “tax cascading” or problems in claiming input tax credits.

How will this impact restaurants?

This new GST rule will impact small restaurants, especially the ones having an annual turnover of less than Rs 20 lakh, as these restaurants were earlier not required to be registered under GST. As a result of this decision, the restaurants will also have to mandatorily register themselves like other e-commerce sellers.

Also, after this new rule, there will be an additional compliance burden on most restaurants, as they will have to maintain two separate accounts — one for their regular business done and the second for the business done through Zomato or Swiggy. Tax experts have observed that the way the GST framework works, some of the smaller restaurants may see their costs increasing going ahead.

“The last thing which must happen is the increase of cost when the delivery takes place from those suppliers which are currently exempt under the tax system. One way to extend exemption is to specifically exempt when the delivery by the online operator is made with respect to the goods of small suppliers,” said Abhishek A Rastogi, partner at law firm Khaitan & Co.

As per the current regulations restaurants pay 5% GST, but they do not get an input tax credit on that. Some of the smaller restaurants and cloud kitchens do not pay GST currently. The new GST regulations however might result in them having to cough up taxes. These small restaurants fear that they may have to increase the price, which could consequently impact their demand.

Impact on customers

Revenue Secretary Tarun Bajaj clarified that no new taxes have been introduced nor have the existing tax rate increased. He announced that the only change that was happening was that the GST collection centre was being transferred. Bajaj said, “Suppose you order food from the aggregator, and now the restaurant is paying taxes. But we found some restaurants were not paying. We are now saying that if you order, the aggregator will collect from the consumer and pay to the authorities instead of the restaurant doing this. There is no new tax.” Therefore, this rule will have no impact on customers as there is no extra or new tax being collected. Customers used to pay 5% GST and they continue paying the same. The new rule has only changed the point where tax will be collected.

Conclusion

A government official said that “These online food delivery companies have represented for a rate reduction or to allow IT to restaurants. The matter is being discussed.” We see that as the Government ponders over the recall of ITC limit provision for restaurant owners under GST, the current scenario has for the time being has led restaurant chain owners and franchise partners to go back to the drawing board. The proposal of the GST Council also pegged to bring the delivery services under the tax net, but it determined that since the customer does not directly avail the services of a delivery executive, nor do they have the choice of which delivery executive services them, the responsibility for paying the tax on delivery services will lie with the food-delivery apps. The GST council has said that food delivery platforms such as Swiggy and Zomato should cough up 5% GST just like restaurants. The tax for the platforms will come into effect from January next year. According to the people aware of the development, companies are concerned about the way the tax system works; they could see a jump in their total costs.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

Swords, capes, fanart, and fanfiction : Delving deeper into the Copyright Act, 1957

By

Shoronya Banerjee

-

October 11, 2021

0

Copyright 1976 — Image source: https://rb.gy/lq8duf

This article is written by Sharanya Chowdhury, a legal intern at Lawsikho. The article has been edited by Smriti Katiyar (Associate, LawSikho).

Table of Contents

Introduction

The world of writing has never been an easy one to tread, the complications of publishing, the monotony of editing, and the investment required to actually put your work in the market have discouraged many young teens from flexing their writing or artistic skills.

Recently the rise of fanfiction and fanart communities has made it easier for young writers to write stories that they are passionate about, often making sequels or making an alternate universe within the original work. Many of these writers hope to turn fanfiction writing into a source of revenue, but with minimal legal safeguards, is it even possible? This and other questions on potentially marketable storylines and ways in which fanfiction writers can protect themselves from potential lawsuits.

The Copyright Act of 1957

In India, copyright is governed under the Copyright Act of 1957 which reflects the general practices and procedures of the Copyright Office for examination and registration of literary works. It explains the process for examination of literary work application(s), documentation of ownership; provides guidelines on how to identify the originality of authorship, copyrightable subject matter, and discusses the grounds on which a discrepancy letter may be issued. This specific subject can be found in the literary manual (referenced below) published by the Copyrights Office. However, reading and understanding such a lengthy and technical document may not be possible for everyone, thus the aim of this article would be to answer simple questions on the basis of this document while avoiding the use of legalese involved in the same. It is imperative to note that there aren’t many cases that talk about ‘fanfictions’ in the world per se and none in India which makes this subject even more unpredictable.

Is writing fanfictions legal in the first place?

A common belief is that a disclaimer at the beginning of the fanfiction will protect you against all liability, this unfortunately is just a myth. A disclaimer does not equate to permission from the author. It might clarify that your work is not intended to deceive the audience, but it does not mean that the author cannot sue you for damages anymore.

Generally, authors don’t seem to mind fanfictions and, in some cases, even encourage them as long as it is done for non-commercial/ non-profit purposes, if you are not receiving any kind of compensation such as money, property, advertisements, services, etc. and the website you’re using is from a not-for-profit organisation such as Wattpad, fanfiction.net and Archive Of Our Own, your work should come under ‘fair use.’ This has been defined in Section 52, in the Copyright Act 1957, but to simplify, when the work does not threaten the revenue of the original creator, copyright claims don’t tend to come into the picture. Please note that the ‘fair use’ defense is not absolute and can depend from case to case. If the work you’ve created is a parody or satire, you will find yourself more protected than others as these works get special rights. Please bear in mind that these terms are still vague and there is a lot of grey area between parody and copied work.

Can I ‘own’ my plotline?

No, copyright is only extended to the expression and not to the actual idea, hence a plotline cannot be copyrighted. However, there can be an issue if your storyline is very close to another storyline, to demonstrate, let’s say your story revolves around a girl living in a dystopian society who participates in the biennial ‘Tumbler Games’ to feed her family, the game involves contestants harming each other till one last contestant remains unharmed. This might actually get you in trouble with Suzanne Collins’ ‘Hunger Games’. In such cases, depending on the court’s discretion, you may be charged with copyright infringement.

Note that copyright infringement is not the same as plagiarism as the latter applies when ideas are copied, so technically plagiarism in itself is more of a moral wrong, which makes sense because almost every work can be said to have at least a small amount of plagiarism. When a certain level of plagiarism is breached, it becomes copyright infringement. Copyright violation occurs only when a specific fixed expression (e.g., sequence of words, use of an image) is copied.

Can I sell my fanfiction to the copyright holder?

Yes, and that is the only legal way to do it. If you are trying to sell a storyline to someone other than the copyright holder, it is advisable to change the name of the characters, remove any direct references and then put it on the market, this way it can still be sold as an original work. There have been many examples of such works in the past and a recent one in the movie ‘After’ which was originally a One Direction fanfic or ‘50 shades of grey’ which used to be Twilight fanfic.

If you are worried that your work might not be original because it follows an unoriginal trope then you should refer to the principle of Scène à faire, which vaguely translates to “scene you cannot do without”. To exemplify: if your work is a typical ‘enemies to lovers’ plot in which the heroine falls in love with the hero after he saves her from a life-threatening event (I really hope it isn’t that, but for the sake of an example), you might fear that the storyline is too similar to many in known novels or Bollywood movies. This principle protects you to a certain extent and allows you to use such established tropes. The doctrine was first discussed in India in the case of RG Anand v. M/s Deluxe Films, where the key findings of the supreme court were :
An idea or a plot cannot form a part of the copyright, but what does, is how they are subject to presentation. If the same is such that suggests imitation, it would be equivalent to a breach of copyright.
If the idea or the plot is the same, the existence of similarities cannot be avoidable. The court will then examine and determine the extent of the breach
It would amount to a breach of copyright if any ordinary man is able to point out the similarities.
Even though it was decided tThe theme of the work can be identical, but the execution of that idea must be different to constitute the originality
More dissimilarities than similarities will indicate that there was never any intention to copy off someone else’s work.

The court also stated that the possibility of trying to evade plagiarism by covering broader concepts and making few changes here and there could certainly be prevalent. It is then the duty of the court to identify the uniqueness of the content and intent of the creator. The judgment then became a landmark case for all the cases after that. it was implemented in cases like:

All this is great, but I’m a Fanartist, what about me?

Copyright applications pertaining to artistic works also come under the Copyright Act 1957 and Copyright Rules 2013 but here reading the manual (referenced below) may not be of much help because the anticipated infringement will not necessarily be of another artwork, instead, it will be of a literary work. In general, the answers to the questions tend to mirror the answers related to fanfiction

Is making fanart legal in the first place?

If the fanart is commercial in nature i.e merchandise such as keychains, mugs, clothing, stationery items, posters, or underwear with a picture of Lightning McQueen on it, the straight answer is no, as it will breach the ‘fair use’ doctrine discussed above. Please note that it won’t matter whether the pictures used are copied or drawn by you. On the other hand, if the artwork created is for your own artistic expression or to give a beloved, it will come under ‘fair use’. To be on the safe side, it will be a good idea to stick to a painting or craftwork instead of merchandise as it all boils down to the idea that you are producing something that the copyright owner sells or can sell for a profit. For the purpose of convenience, we will assume that fanart constitutes physical or digital artwork that is not to be affixed on merchandise.

Can I ‘own’ my fanart?

To answer this we will have to divide the fanart into two categories

Literature inspired fanart

This will consist of a fanart from a book that has not yet been converted into a comic and has no official artwork depicting the characters. In which case, it will be easier for you to navigate as compared to your fanfiction-writer friend. As long as there are visible differences between the character/scene/object you’ve created and what the author wrote about, you may own it as long as you don’t mention your inspiration or label it as ‘fanart’, the increasing contrast between your fanart and your inspiration will increase your chances of having ownership over it. The element of imagination and creativity is critical here.

Visually inspired fanart

This includes fan art from a work that either already has a visual representation of the plotline within it such as comic books or has a movie/series adaptation. The recent Netflix series ‘Shadow and Bone’ derived from Leigh Bardugo’s ‘Six of Crows’ and ‘Shadow and Bone’ is a good example of this. In such a case, the simple answer will be no, as long as your artwork resembles the actual inspiration to a recognizable extent, you cannot own your artwork.

Can I sell my fanart to the copyright holder?

Yes, and that is the only legal way to do it. Unlike fanfiction, fanart loses its value in the market the moment its resemblance with the original work is no longer recognizable because at that point, it is no longer a part of the franchise and you cannot sell your artwork as long as it mimics the inspiration, in this catch 22, it may not be possible for you to derive profits from your work.

After how long does a story/ artwork lose its copyright?

In India, the copyright of an original literary, dramatic, musical, or artistic work lasts for 60 years, after the death of the creator, as per Section 22 of the Copyright Act, 1957. This means that if you were to make a fanfiction of a classic piece like ‘Emma’ or ‘Little Women’, you would not be under threat because the copyright has now lapsed. This allows many directors to create movies/plays on these without having to secure the rights.

On that note let’s discuss the difference between a derivative work and a transformative work, the former simply furthers the plot or re-enacts it with less change to the original storyline, for instance, the movie ‘Pride and Prejudice’ (2005) will count as a derivative work as it does not change the main idea of the work despite certain alterations, whereas ‘Pride and Prejudice and Zombies’, Seth Grahame-Smith’s 2009 novel will count as a transformative work.

Am I entitled to credit if my work is commissioned by the original creator?

Not necessarily, technically the original work still belongs to the author of the book/series. There have been instances of fanfictions being read by writers of the book/movie which were later added to the sequels and thus became ‘canonical’ but compensation or credit has rarely been given to the fans who prompted the idea.

If an original storyline of yours has been commissioned by a company, you are entitled to compensation, you may be entitled to credit for the work depending on the kind of contract you are signing, in such cases, it will be a good idea to seek legal advice to be sure about the rights you have on your work.

What do I do if my fanfiction/ artwork gets stolen?

Fanfictions and fanart tend to have little legal protection which makes it easier for them to be copied and misused. The lack of actual cases regarding this in India makes it even more difficult to pave a proper recourse, some websites have communities that keep track of plagiarism and make sure that the credit goes to the proper author but they too can only remove such content from their own websites and can’t do much if the fanfic has been moved elsewhere. In such cases, it is better to contact the owner of the account, directly mentioning your disappointment on how the story has been stolen and passed off as their work, contacting the website that has copied material is also a good idea. In addition to this, fanfiction of fanfiction should not cause infringement since the primary content, in this case, was a derived work that has no copyright of its own.

Conclusion

The main issue with the concept of fanfictions and fanart is that although their concept is almost as old as the concept of publishing itself, they don’t have a lot of legal recognition especially because of how easy it is to publish them on the internet. In the recent trend, we’ve seen that authors don’t seem to mind fan-created work as it gives them publicity and allows them to gauge the enthusiasm of the reader about a specific character or plot, but a simple rule of thumb would be to not commercially advertise such material and only use it to feel closer to the stories you love.

An exception to this would be if you have managed to send your work to the author and get a jackpot deal, in which case, consulting a professional about your rights, remunerations and other details of the contract will be advisable.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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

The drone rules, 2021 : an overview

By

Oishika Banerji

-

October 11, 2021

0

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

Introduction

In March 2021, the Ministry of Civil Aviation (MoCA) published the UAS Rules, 2021. They were perceived by academia, Startups, end-users and other stakeholders as being restrictive in nature as they involved considerable paperwork, required permissions for every drone flight and very few “free to fly” green zones were available. Based on the feedback, the Government has decided to repeal the UAS Rules, 2021 and replace the same with the liberalized Drone Rules, 2021. This article will provide the analysis and development of the laws governing Unmanned Aircrafts Systems, specifically on recently notified Rules by the Civil Aviation, on 25 August 2021 i.e., the Drone Rules, 2021.

Development of the unmanned aircrafts systems

The development of Unmanned Aerial Vehicles started in the late 16^th century, with an unmanned air balloon. But here we are not discussing the air balloon but a lot of advanced technology in drone systems. Any aircraft not having a human as a rider on it and which can be controlled via any radio control device which transmits signals and controls the movement of that device will be called Unmanned Aircraft Vehicles hereby called UAVs. These drones have helped the cinema world and the defence industry of the country. The use of drones has significantly gotten a boost after the end of the cold war. As they can be used in spying, monitoring and taking nature’s true shot, and it also helps in providing services like delivery, etc. Thus, UAVs benefit both the manufacturers and users. The global drone market size is forecast to reach US$ 41.3B by 2026 at 9.4% CAGR.

Why was there a need to formulate Drone Rules ?

In the past two decades, it has been seen that the use of UAVs for commercial purposes, defence and filmmaking has increased. The benefit of it can also lead to some negative outcomes of such technologies which include supplying explosives & weapons from alien territory inside our borders, passing of messages, and blasts by UAVs inside Indian territory to cause harm to the civilians or to any high-profile project. The IAF station in Jammu was bombed twice using drones on 27 June 2021. There have been regular attacks via drones and the supplies are also sent from across the border to rage a terrorist attack in India. Various districts in north India have also banned the sale, possession and use of drones considering the security reasons as being near to borders and by knowing the damage caused by drone’s attacks and spying activities done by them.

Children are also fascinated by using drones as seen by their use in many social and cultural gatherings for capturing photos and videos. It was reported that the drones have caused injury to property and life. Thus, there emerged the need for regulating the Unmanned Aircrafts in India.

Introduction of Drone Rules, 2021

The draft of the drone rules was published and left for suggestions. The Ministry of Civil Aviation notified ‘The Drone Rules, 2021’ on 25^th August 2021 and by taking into consideration all the objections and suggestions made thereof. The aforesaid rules have been made in compliance with the provision of Aircraft Act, 1934 (22 of 1934). These rules came as a secession to Unmanned Aircraft System Rules, 2021 by rectifying the inconsistencies in the UAV Rules, 2021. The unmanned Aircraft Vehicles and Drones denote similar systems.

Applicability of Rules

These rules will only be applicable on-

Anyone who owns or possesses or is engaged in leasing, operating, transferring or maintaining an unmanned aircraft system in India;
Every registered UAV in India;
Any UAV operated in or over India;
Every UAV not more than 500 Kilograms;
Every UAV not belonging or used by any defence forces of India.

Classification of zones for drones operation

Green Zone – The airspace above the land areas or territorial waters of India i.e., the vertical distance of 400 Feet or 120meterand 200 Feet or 60 metres at the lateral distance of 8 km to 12 from the perimeter of an operational airport.
Yellow Zone –Prior permission from the concerned air traffic control authority shall be taken to fly in this zone. This includes airspace above the vertical distance as provided in the Green Zone.
Red Zone – The use of any UAV will be prohibited except permitted only by the central government.

Classification of Unmanned Aerial Vehicle (UAV)

a. Based on Design

Aeroplane – Any vehicle which has wings and drives support in the atmosphere by engines not having rotors.
Rotorcraft – Any vehicle having rotors that help them to take off the ground.
Hybrid UAV – Any vehicle having the specification of both Aeroplane and Rotorcraft.

b. Sub-Categorization of the above Aircrafts

Remotely piloted aircraft system;
Model remotely piloted aircraft system;
Autonomous unmanned aircraft system.

c. Based on Weight

Nano drone: less than or equal to 250 grams;
Micro drone: greater than 250 grams and less than or equal to 2 kilograms
Small drone: greater than 2 kilograms and less than or equal to 25 kilograms
Medium drone: greater than 25 kilograms and less than or equal to 150 kilograms.
Large drone: greater than 150 kilograms.

Certification of UAV

Certification is necessary before operating UAV on or above the Indian Territory. This is required to be done to check whether the UAV conforms to a type certificate or is exempted. Any person who intends to obtain a certificate shall make an application in form D-1 on the digital Sky platform along with the prescribed fees which further be examined by the Quality Council of India and the proper test’s report and recommendation will be provided within 60 days from the date of filing application. After proper satisfaction by the report, the Director-General can issue the specific type of certificate for which it has been examined.

Registration of UAV

To operate a UAV, the person shall first register it with the Digital Sky Platform or other he may incur liability and it is to be noted that the UAV conforms to a valid type of certificate. The application can be made in form D-2 along with the specified fees and the unique number along with the type certificate. The digital sky platform after verifying the details will provide the unique identification number to the applicant. This number will then be linked with the number provided by the manufacturer and also of the remote flight control module. It is important to note that the flight control module or remote pilot station of an unmanned aircraft system whose serial number is linked to such UAV unique identification number shall not be replaced without first updating on the Digital Sky Platform before operating the UAV.

Registration for the Existing UAV Rule 16 provides that the person who owns any UAV made in India or imported before 3st December, 2021shall make an application to register and obtain a Unique Identification Number within 7 days from the period of replacement and before operating UAV.

Transfer of UAV

Transfer of UAV can be done in the form of sale, lease, gift or another mode only after filing Form D-3 on the Digital Sky Platform with the requisite details. The director-general shall generate the registration record only by electronic verification of the transferor, transferee and the unique identification number. A person can deregister his UAV if it has been lost or destroyed by form D-3 to the Digital Sky Platform which maintains data of the same.

Important rules relating to UAVs use

The central government will be making further steps for the effective application of the drone rules. Some of which include –

Setting Up of Airspace Maps – The central government by notification will publish the airspace map on the Digital sky platform by segregating the different zones.

Interactive Maps – A program will be developed which shall provide the exact zone while before using the UAV which will help them to know whether they need prior permission before taking off.

Due Diligence To be Followed – Before taking a flight in any zone, it is the duty of the pilot to check on the Digital Sky platform whether that zone is clear from any restriction as provided in the Digital Sky Platform. The UAV shall be used not for endangering any property or person.

Restrictive use of UAVs: No UAVs shall be used for carrying arms, ammunition or any explosives except with the written permission by the central government, and carriage of goods shall be in compliance with the Aircraft (Carriage of Dangerous Goods) Rules, 2003.

Remote Pilot Licencing

The UAV shall only be operated by the holder of a valid remote pilot license. The license provides the authorization for the Specific class of UAVs. Though, exemptions are provided in the case of nano and micro Unmanned Aircraft Systems.

Eligibility to Obtain Remote Pilot License

All people are eligible who are-

Between ages of 18- 65 years;
Passed class 10^th examination;
Completed training from a pilot training organization as may be specified by the director-general.

Procedure to obtain Remote Pilot license

The applicant after passing the test within 7 days shall make an application under Form D-4, providing the details of the test and other information. After inquiring about the test and considering the test results, the certificate will be granted to the person in whose favour the application was made.

Validity of the License

The license will be valid only if it is enlisted on the digital sky platform or not suspended or cancelled subject to 10 years of applicability. The renewal can also be done by payment of fees and the applicant may also be asked to again take the test or refresher course before providing the license.

Remote Pilot Training Organization

In furtherance of granting allowance to authorized remote pilot training organizations is important to be established by the government.

Procedure for obtaining authorization

Anyone who wants to establish a remote pilot training organization shall make an application in Form D-6, and within filing the director General may within 60 days issue the authorization after verifying the information as provided in the form. After obtaining the authorization, the organization is valid for 10 years unless suspended and can be renewed after paying the requisite fees.

The authorized organization needs to ensure strict compliance with requirements like syllabus, infrastructure, instructors, proficiency testing and issuance of remote pilot certificates while conducting tests for the category, sub-category and class of unmanned aircraft system.

Exception for the regulation of Unmanned Aircraft System Operations for Research, Development, and Testing

There is no requirement to obtain a type certificate, unique identification number, prior permission and remote pilot license for operating unmanned aircraft systems for research, development and testing purposes, which includes-

Any research and development entity recognized by the Central Government or State Government or Union Territory Administration.
Any educational institution recognized or administered by the Central Government or State Government or Union Territory Administration.
Any startup of authorized testing entities for the internal trade and promotion of industry.
Any unmanned aircraft system manufacturer having a Goods and Service Tax Identification Number:

It is to be noted that all the testing of such UAVs need to be done in the green zone.

Unmanned Aircraft System Traffic Management

The Central Government will come up with the framework for developing corridors for safe and seamless transfer of goods by unmanned aircraft systems within and across zones and also the responsibilities of the state governments and the Union Territory Administrations.

The insurance provision of the Motor Vehicles Act, 1988 (59 of 1988) and rules shall be applicable to all UAVs except nano UAV. It is advised that all users shall use an insurance product.

Offences and penalties

If anyone fails to comply with these rules, they may incur liability under Code of Criminal Procedure, 1973 (2 of 1974). Rule 22 and 27, i.e. Requirement of prior permission and Prohibition on carriage of arms, ammunition, explosives and military stores, etc have been made cognizable and non-compoundable offences. The penalties in case of contravention of these rules shall not exceed rupees one lakh in accordance with the provisions of section 10A of the Act. The only defense taken in such a case of contravention or failure is proved to have been caused due to factors or circumstances, such as stress of weather or other unavoidable cause or circumstances, beyond the control of such person or without his knowledge or fault.

Critical analysis

The Drone Rules, 2021 came up by rectifying the issues aroused in the previous rules. Despite such important rules governing the use of drones, there are some areas which have not been covered by it and in my opinion, these rules lack some provisions which may include –

Provide the provision relating to the minimum distance from the person while operating the UAVs to prevent any harm to people.
Provide the provision that relates the use of UAVs not to affect the right to privacy as otherwise by the due procedure of law.
Provision for UAVs regulation in Day and Night Cycle.

The Civil Aviation Ministry in further rules or legislation may implement these to provide a better regulatory framework for licensing and the authorization of UAVs and to protect the people, property and to have peaceful use of drones. In a tweet by Prime Minister Narendra Modi, ‘The new Drone Rules will tremendously help start-ups and our youth working in this sector. It will open up new possibilities for innovation & business. It will help leverage India’s strengths in innovation, technology & engineering to make India a drone hub’.

The Civil Aviation Minister Mr. Jyotiraditya Scindia also said that the rules will trigger a revolution and India will be a potential global drone hub by 2030.

Conclusion

In conclusion, the drone rules have liberalized the operation and the process required before operating a drone in India. Most importantly the form has been reduced to 5. Including the Digital Sky Platform, which will be a single-window platform that can provide basic information and regulate the registration process, certification, maintaining maps, allocating zones and the update of the same, which can control digitally the operations and traffic of UAVs. Only after a certain period of time the application and the working of the features of the rules can be reviewed. Till the last quarter of 2021, this has been the biggest development in the regulation of Drones in India brought by the Civil Aviation Ministry. There is a lot of development which is to be seen in the Ministry of Civil Aviation in the next decade as the laws for the regulation of hybrid cars will also come in place as Indian startups have come up with the working hybrid model car which can fly and run on roads. In the regime of drone regulation, the most important role is to be played by the regulation and the control of Digital Sky, the main software developed by the ministry to govern drones in India.

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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Understanding the legality of cartels in India

By

Oishika Banerji

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October 11, 2021

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1553032958563 — Image source - https://bit.ly/2ZHhVUD

This article has been written by Jagrit Chawla pursuing the Diploma in Business Laws for In-House Counsels from LawSikho. This article has been edited by Prashant Baviskar (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).

Table of Contents

Introduction

The competition commission of India is responsible for the regulation and enforcement of Cartel laws which is governed by the Competition Act, 2002. The decision of the competition commission regarding any particular case can be challenged and appealed to the National Company Law Appellate Tribunal (NCLAT) and following to the Supreme Court of India. The Competition Commission Act, 2002 bars the civil courts from the enforcement of any proceeding in respect of any particular matter which is enunciated by the Commission and NCLAT under the governed act.

The collusion of the companies into a single entity generally happens due to the fear of missing out in the market. Generally, strong competing firms have an added advantage to grab huge amounts of attention from the public for selling its products and services, therefore, in order to curb that competition, the firms merge together to attain a higher amount of profits collectively.

What is collusion?

Collusion is the conduct in which rival firms cooperate with each other over time to raise prices above competitive levels through coordinated action.

The types of collusion

They are two ways of collusion, one is implicit and the other is explicit collusion. An explicit collusion agreement occurs when the members of the cartel actually meet to decide upon how to control the market. Such collusion is considered illegal in the jurisdiction of India by the competition act. While on the other hand, Implicit collusion which is also termed as “ tacit collusion” essentially occurs when the members of the collusion show willingness through their actions to engage in an agreement collectively.

What are cartels?

A cartel is a group of firms that conspire to reach an agreement over such conduct by explicitly communicating with each other for the purpose of collusion.

A cartel simply means an agreement between two or more companies or business partners who are engaged in providing goods and services to the public in order to engage in the regulation of manipulative pricing structures. The companies which come under the purview of cartel organizations act as a single or complete entity.

A cartel basically has less command in the market than a monopoly. It enshrines a situation where a single entity in the market owns all aspects of products and services to make them available to the public in abundance. Some cartels formed in order to curb the competition while other cartels formed for illegal trade such as drugs and illegal substances. The cartels act as a hindrance to new business startups which generally stops the innovation for that particular product. This then leads to a monotonous situation where the cartel has the sole authority to provide goods and services to the public.

The Organization of Petroleum Exporting Countries (OPEC) is considered the world’s largest cartel. It consists of a group of 13 oil-producing countries whose motive is to coordinate and manage the petroleum policies of its member countries. The activities of the OPEC is to be considered legal because U.S. foreign trade laws protect them.

What are the legal implications of cartels?

Cartelization in India is to be considered a civil offence that is prohibited under the Competition Act, 2002. Cartel formations are strictly prohibited under Section 3(1) to be read with Section 3(3) of the act.

Section 3 of the act certainly prohibits and renders the agreement void when the business partners enter into an agreement with respect to the production of supply, distribution, storage, goods or provisions of the services which are likely to cause an ample amount of adverse effect to the competition in India.

Section 3 also stipulates the provision which basically prohibits the anti-competitive agreement among the cartel enterprises which includes:-

Implicit and explicit determination of purchase and sale of goods.
Limiting the control of production, investment and sales services.
Allocation of the geographical market.
Indulging in the collusive bidding.

Such agreements are consequently to be considered void.

Breaking the code of Section 3 of the Competition Act, 2002 is to be considered a civil offence. All the enterprises who are involved in the formation of the cartel would get penalized with a fine of up to three times the stipulated collected profits or ten percent of the total turnover, whichever is higher.

The act also involves cases with a criminal offence in the following cases namely:-

Non-compliance with the orders of the competition commission.
Breaking an order of the National Company Law Appellate Tribunal (NCLAT) without any reasonable grounds.

Under the cartel legislation stipulated under the Competition Act, 2002, both companies and individuals can be prosecuted. Under Section 27 of the Competition Act, 2002, the commission can pass the orders against the companies who are involved in contravening Section 3 of the act:-

To cease from any anti-competitive conduct.
Paying penalty upto three times of total collective profits or ten percent of the turnover.
To modify any agreement with the contravention of Section 3.

Individuals can also be prosecuted under Section 48 of the act. Every person who is involved in the cartelization of the company would be responsible and is deemed to be found guilty.

What are the penalties imposed?

The Competition Act, 2002 does not have criminal punishments or sanctions for involvement in the cartel formation, both for companies and individuals. But, if the companies or individuals do not comply with the stipulated orders of the competition commission, then they have the power to initiate criminal proceedings with the metropolitan magistrate. The punishment may range for up to three years with a fine of INR 10 Million or both.

How are penalties in cartels determined?

There is no governed norm or any guideline which determines penalties in the cartel cases in India. But, however, based upon the practice, the competition commission will have to consider a certain or aggravating amount when determining the degree of penalty.

In Excel Crop Ltd V. Competition Commission of India, the Supreme Court held and set aggravating and mitigating factors which would then be used to determine the quantum of the penalty. Such factors include:-

The extent and nature of the contravention;
The time period of cartels;
Any kind of damage due to cartelization;
Bonafide intent of the company;
Profits that derived from the contravention.

Cartel conduct with outside jurisdiction related matters

Section 32 read with the Section 19(1) of the Competition Act, 2002 generally empowers the Competition Commission of India (CCI) to deal with the extraterritorial jurisdiction, thereby giving the power to inquire to any cartel which operates outside India or any foreign company forming a cartel within India.

Case laws

Flashlight Case ( Suo Motu Case 01/2017 )

The court, in this case, held that there was no violation of Section 3 of the act even when the information had been exchanged between the competitors. The commission in this case noted that as there is no fixation of prices in their agreement, thus, the presumption of appreciable adverse effect on competition (AAEC) did not apply.

Rajasthan Cylinders case ( Civil Appeal 3546/2014)

The Supreme Court in this case held that despite the identical fixation of prices by the bidders and a trade association meeting, the court found out that there was no involvement of any collusive bidding. The parallel pricing fixation is the nature of the market and not the collusion.

Madhya Pradesh Chemists and Distributors Federation V. Madhya Pradesh Chemists and drug association ( Case 64/2014)

The court, in this case, held that any agreement which causes an adverse effect on competition but is not actually covered under section 3 of the Competition Act, 2002. However, in such concerning cases, the onus to prove the guilty side of the cartel is on Commission.

Jeetender Gupta V. Competition Commission of India ( Appeal 30/2014)

In this case, the Appellate tribunal stated that the legal machinery under the Competition Commission Act, 20020 cannot certainly be moved by a person who actually has no interest in whatsoever the subject matter of the information is.

Conclusion

The Cartel laws in India which are governed by the Competition Commission of India under the Competition Act, 2002 is well versed to deal with any such kind of related cartel issues and includes penalties and punishment to the wrongdoers. The main motive of the competition commission is to strike balance and curb the monopolistic autonomy in the market. The cartel laws not only apply to just companies but also to those individuals who are involved in such collusive activities. Generally the competition act, 2002 derives civil wrong against the cartelization of the companies, but if they do not obey the orders given by the Competition Commission of India, then they also have to face criminal charges. In respect of striking a balance in the market, it is a dire need for the competition commission to keep a thorough check of the companies about whether they are engaging in healthy competition or not. The biggest essential requirement for cartel formation is an agreement, thus if the agreement between the companies includes things that involve any kind of cartelization, then it would be considered to be void as per section 3 of the competition commission act, 2002.

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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The anti-monopoly law of China

By

Sneha Mahawar

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October 11, 2021

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This article is written by Ojasvi Gupta, a student of Faculty of Law, Banaras Hindu University, Varanasi. This article brings to light the aim of the Anti-monopoly laws of China, their subject matter, and the effect of the recently updated rules on the platform economy.

Table of Contents

Introduction

Anti-monopoly laws, also known as anti-trust laws or competition laws in other parts of the world are concerned with anti-competitive agreements, their general prohibitions, dominance abuse, and anti-competitive mergers. Drafted in 2007 while being implemented on August 1, 2008, China’s monopoly law doesn’t only include AML but all the legal as well as administrative documents which existed before AML along with administrative or regulatory enforcement. After a decade, a Draft Amendment was notified on January 2, 2020, which revised provisions on various issues that are emerging in antitrust practice. The key changes suggested are:

Significant increase in fines, especially for failures to notify mergers, acquisitions and joint ventures, gun-jumping, and breach of merger conditions.
Introduce a stop-the-clock mechanism by adding Article 30, allowing SAMR (State Administration for Market Regulation) more timing flexibility in its review process.
Broaden the concept of ‘control’ in mergers, acquisitions and joint ventures.

The amendments have been identified as one of China’s key legislative tasks for 2021. Accompanying the upcoming amendment are Guidelines notified by SAMR which provide the much-anticipated combination of litigation and enforcement in the antitrust space.

Purpose of the anti-monopoly law

The basic rationale behind enacting anti-monopoly law is to prevent and restrain monopolistic conduct to a major extent, protect fair competition in the market and enhance the overall economic efficiency of the market.

A monopolized market structure usually characterize:

An economic organization or institution in a dominant position.
Material norms and technologies serving for the reproduction and maintenance of the dominant position.
Formalized structures serving for the justification and legitimacy of the dominant position.

Aggressive competition on the part of businessmen possesses the momentum to disrupt the very foundation of a vibrant economy, i.e., free and open market, making it necessary to provide an equal playing field for smaller businesses that operate in a specific industry while preventing them from gaining too much power over their competition.

These laws serve the purpose of safeguarding the interests of consumers and general social public interest while promoting the healthy development of the market economy (socialist market economy in the case of China). Their objective is to maintain competition to promote a marketplace free from anti-competitive mergers and business practices. As mentioned in Article 4 of the Anti-Monopoly Law, Competition laws are constituted in accordance with the socialist market economy promoting an open, unified, orderly, and competitive market system.

“Illegal per se” and “rule of reason”

Competitive agreements require a universal standard of review for their evaluation by market regulators. The legality of an agreement between competitors is determined by two antitrust analysis:

Per se rule

Under this standard of review, restraints analyzed are inherently anti-competitive and damaging to the market so much so that they warrant no further inquiry for their condemnation. Per se rule presumes certain categories of agreements to violate antitrust laws in itself, irrespective of factors such as business purpose or competitive benefits or its effect on the market. It just needs to be determined whether the agreement belongs to one of the specified categories or not. Examples of categories held to be illegal per se may range from agreements that fix prices or output, to agreements dividing territories or customers. Tying agreements and oral or written agreements for price-fixing, horizontal market allocation, bid-rigging, etc. are considered per se antitrust violations.

Rule of reason

Completely opposite to the ‘per se’ rule, the rule of reason analyzes all the subjective factors to determine whether an agreement violates anti-monopoly laws. This test focuses on the state of competition within a well-defined relevant agreement. It requires a comprehensive analysis considering factors as given below:

Definition of the relevant product and geographic market,
The business purpose of the agreement,
The market power of the parties involved in the relevant market,
The existence of anticompetitive effects,
Intent and purpose in adopting the restriction,
The competitive position of the defendant—specifically, information about the relevant business, its condition before and after the restraint was imposed, and the restraint’s history, nature, and effect. {as held in Business Electronics Corp. v. Sharp Electronics Corp.(1988)}
The structure and competitive conditions of the relevant market,
Barriers to entry and the existence of an objective justification for the restriction.

None of the factors is decisive and courts must balance them to determine whether a particular restraint of trade is competitively unreasonable and legitimate (pronounced in Leegin Creative Leather Products Inc. v. PSKS Inc. (2007). Such an analysis is essential to examine both the positive and negative effects of an agreement to effectively distinguish between restraints with an anticompetitive effect that are harmful to the consumer and market in general, and restraints stimulating competition that are in the consumer’s best interest.

State administration for market regulation

SAMR – China’s central market regulator, was formed in March 2018 on a government initiative to restructure all its agencies and regulatory areas. It integrated all the functions of the State Administration for Industry and Commerce, the China Food and Drug Administration, the General Administration of Quality Supervision, the National Medical Products Administration, and the China National Intellectual Property Administration.

Thus, it comprises regulation and administrative entities concerning market competition, monopolies, intellectual property, and drug safety. SAMR is primarily responsible for comprehensive market supervision and management and it performs through undertaking unified anti-monopoly law enforcement, regulating and maintaining market order; organizing the implementation of the strategy of strengthening the country by maintaining industrial product quality and safety, food safety, and special equipment safety supervision.

The task of certification and accreditation also comes under its jurisdiction and provides comprehensive law enforcement of market standards. The specific department which deals with and implements Anti-Monopoly Laws is the Anti-Monopoly Bureau. Its functions include:

Drafting anti-monopoly measures and ensuring their effective enforcement,
Conducting fair competition reviews,
Carrying out international cooperation and exchanges in anti-monopoly enforcement,
Managing the Anti-Monopoly Committee of the State Council.

Rules of 2021 vs Law of 2007 – what new provisions did China include in the new anti-monopoly rules

Law of 2007

China’s Anti-Monopoly Law is based on various European models and input from the U.S. Antitrust Law. It can be easily understood through the following four substantive Sections:

Prohibition of certain types of agreements (applying the per se rule) unless they fall within specified exemptions;
Prohibition of certain behavior classified as abuse of dominant market position, providing a framework for determining the conditions when dominance exists;
Establishment of a broad merger review scheme;
Prohibition of abuse of government administrative powers to manipulate the competition. A final Section sets forth penalties for noncompliance and some miscellaneous provisions, including one that distinguishes between legitimate enforcement and “abuse” of intellectual property rights.

Rule of 2021

The Anti-Monopoly Law, formulated by the Standing Committee of the legislative assembly of China in 2007, has been amended for the first time recently, to target the internet platform economy specifically.

SAMR issued new Rules on February 7, 2021, tightening existing restrictions faced by the country’s tech giants with an aim to prohibit monopolistic behaviors, price-fixing, and using algorithms to manipulate the market in the platform economy.

Many of these changes come under what is commonly referred to as the fourth industry, where the application of the internet and software facilitates every aspect of work and daily life. Here digital platforms play a key role and have resulted in the evolution of a platform economy – a digitally based economy where activities are facilitated by online platforms, backed by the fast-expanding Internet sector.

The new Rules notified by SAMR clearly state out monopolistic practices that have been a popular practice in the market, including the way merchants are forced to choose between the country’s top internet players in what is called an exclusive cooperation pact. The notice was accompanied by a statement from SAMR that reported an increase in internet-related monopoly behaviour. Such behaviour is difficult to discover and determine, mainly due to the concealed data, algorithms, and platform rules.

The Rules of 2021 mark a remarkable change in the country’s tech economy as it also covers in its ambit VIE (Variable Interest Entity) structure. Focusing on leading internet services, e-commerce sites, and payment services, the notification provides for a mechanism through which business operators shall declare to the anti-monopoly law enforcement agency in advance about a concentration that may enter the thresholds prescribed by the State Council. The guidelines also mentioned various ways through which tech giants may abuse their dominant market position, namely by:

Selling goods at unfairly high prices or purchasing goods at unfairly low prices.
Selling goods at a cost below market price without justifiable reasons to eliminate market competition.
Outright refusing to conduct transactions with counterparties without justifiable reasons with an aim to exclude or restrict market competition.
Restricting transactions with counterparties to a major extent without justifiable reasons.
Implementing tie-in sales (tie-in sales refers to those market tactics where purchasing one product requires the purchase of one or more goods with the ‘tying good’) without justifiable reasons or set unreasonable trading conditions to eliminate or restrict market competition.
Imposing differential treatment on counterparties applying the same trading conditions without justifiable reasons, to exclude or restrict market competition.

The concentration of undertakings leading to the elimination of competition shall be prohibited unless it can be shown that the negative impacts of such a concentration can be outweighed by the positive ones and/or it is in the larger public interest. Albeit, even in such situations also, the anti-monopoly law enforcement agency may decide to apply the various statutory restrictive conditions for lessening the negative impact exerted by such concentration on the competition.

Guidelines

SAMR published its “2019 Compilation of Antitrust Regulations and Guidance,” adopting four key guidelines relating to the enforcement of the AML, namely:

The Anti-monopoly Guidelines for Automobile Industry (Automobile Industry Guidelines)

The Automobile Guidelines specify that automobile manufacturers that do not hold a dominant market position in manufacturing could nevertheless be held to be in a dominant position in aftermarkets, such as the production and supply of aftermarket spare parts and the availability of technical repair information, equipment, and tools. Under these, car manufacturers with a market share of less than 30 percent are permitted to impose certain vertical restrictions on distributors.

The Anti-monopoly Guidelines for Intellectual Property Rights (IP Guidelines)

These guidelines provide a detailed analytical framework for a dominant market position with regard to intellectual property. Under the IP Guidelines published on September 18, 2020, SAMR will consider, among other factors, the content, degree, and implementation of the restrictions while carrying out a competition analysis. In a positive change, they aim to provide a safe harbor for undertakings that do not own significant market positions. The IP Guidelines lists out five abuse of dominance practices. They are:

Unfair high licensing fees of IP;
Refusal to license IP rights;
IP-related tying or bundling;;
Unreasonable conditions of transactions;
Discriminatory treatment involving intellectual property rights.

The Guidelines for Application of the Leniency Regime to Cases of Horizontal Monopoly Agreements (Leniency Guidelines)

The Leniency Guidelines apply to horizontal monopoly agreements, such as cartels between competitors characterized by price-fixing, output restriction, and market sharing. These Guidelines provide specific guidance to SAMR and market players regarding how leniency policy should be implemented. It clarifies the requirements for obtaining leniency, reporting procedures, and practices for the submission of material evidence. Specifically, it establishes a marker system with different fine reduction levels that encourage participants to self-report as early as possible.

The Guidelines on Commitments Made by Undertaking in Antitrust Cases (Commitments Guidelines)

The Commitment Guidelines provide details regarding SAMR’s procedure for suspending and eventually closing an investigation on the condition that the investigated company offers remedial measures to correct its behaviour before SAMR gathers sufficient evidence of a violation. The parties are encouraged to discuss commitments with SAMR at any time during the investigation up to the point of issuance of a penalty notice.

How do Chinese companies react to anti-monopoly rules and their effect on the business

The reaction of market participants to the new Rules can be directly related to the monopoly they enjoyed or were attempting to gain. Smaller competitors are looking forward to effective implementation of the new Rules as it is likely to carve up the market space for them by bringing in more players, both regional and international. Moreover, the introduction of new systems such as investigating the legal responsibilities of operators who help other operators to reach monopoly agreements and assessing the abuse of dominance in the internet sector based on a list of suggested factors – network effects, economies of scale, lock-in effects, etc, brings in a better review of the concentration of operators.

Though the prior operators who had a major hold in the platform economy, Alibaba Group’s, Taobao and Tmall marketplaces, JD.com, Ant Group’s Alipay, or Tencent Holding’s WeChat Pay to name a few, are expecting more pressure from the guidelines. Regulators have warned the company in advance over monopolistic practices including forcing merchants to sign exclusive cooperation pacts at the expense of other internet platforms.

Market specialists already sense notable effects on the market as a result of new Rules. For example, Ant Group suspended its planned US$37 billion share market listing not long after regulators warned the company that its lucrative online lending business faced tighter government scrutiny. Following this, regulators launched an antitrust investigation into Alibaba Group after the suspension of the $37 billion initial public offering plan of Ant Group – its payment affiliate company.

SAMR has also fined Alibaba, Tencent-backed China Literature, and other major firms for not reporting deals properly for anti-trust reviews. The companies were imposed a fine of 500,000 yuan – approximately $77,000 each, for their actions leading to sufficient market concentration although it did not exclude all competition from other companies in the related market.

Hence, the new legal framework promises a considerable impact on internet giants’ behaviors, who will now face stringent penalties in case of violations. This amendment has significantly increased the legal liability of offenders by introducing higher penalties and criminal liabilities for monopolistic behaviors. The new Rules are likely to expand potential liability for antitrust infringements, empowering the regulator further.

Conclusion

The updated Rules, together with the rigid legal framework of AML, provide a set of rules to increase scrutiny on internet platforms and tech companies and prevent online operators from dominating the market. To understand the extent to which the SAMR is rounding up the tech giants, consideration should be given to the detailed guidelines which note whether a transaction treats customers in different ways – based on big data, payment ability, consumption preferences, and usage habits and also prohibit practices, which force a customer to choose one out of the given two or three options.

Monitoring this guidance may prove to be a tough task as companies themselves find it a challenge to call out bad or good business conduct in the highly dynamic industry of the digital economy. On the other side of the coin, concerns have also been raised over over-regulation of the tech sector as innovation and development always take a backfall in situations of heavy-handed enforcement.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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How does digital forensics help in identifying, recovery and analyse data from electronic devices

By

Sneha Mahawar

-

October 11, 2021

0

This Article is written by Harmanjot Kaur and the article has been edited by Khushi Sharma (Trainee Associate, Blog iPleaders).

Table of Contents

Introduction

A survey conducted by Thomson Reuters (2020) quotes that there is a data breach of 9000 users in Apollo, 3000 people had their data accessible to the third party from various clinical labs and 2100 Indians lost their sensitive data from Aadhar cards.

Research conducted by Juniper Research, 2019 shows that the global cost of cybercrimes has reached over $2 trillion in 2020.

Today is an era where there is an increase in the instances of cybercrimes. With the instances such as the BoisLocker room, the issues related to cyber security are constantly amongst the top news headlines of the everyday newspapers.

What is its relevance in law

With the judgment of the Puttaswamy case about the conundrum between Article 21 and the right to privacy, it has been found that data leakage and cybercrimes are a burning issue. The penetration of dark webs, online networks, attacks from DDoS is some of the key examples of how the data breach has become a spine-chilling area of growing interest. However, since the law related to cyber security is all scattered in various areas such as IT Act, 2000; Indian Penal Code, 1860; Copyright Act, 1957; IPR and Technology Law establishing key areas and demarcating the boundaries has become an area of great concern.

What is a chain of custody

The chain of custody is simply defined as the details collected in the forensic investigation in a detailed yet easy-to-understand format. This chain consists of three columns, which carries crime-related details. These are related to:

What is the name of the device collected or the evidence?
In what quantity these devices are collected?
What are the credentials related to it?
Were there any stains of blood or scratches on it?
What was the USB number of the device?
What is the serial number of the device?
What is the model or any related details of the device?

How to know from where the stains of blood are coming by looking at the evidence

There can be a mixture of mathematics, forensics, and trigonometry to solve this problem. One need not be a hardcore rocket scientist or a postgraduate in mathematics for this. This can be done by simple rough calculations. Some instances are as follows:

A bloodstain from 90° angle

In case the stain would be from a 90° angle, there will be no smudge or any other subsidiary stains. There can be small stains that would be at a projectile distance when it is measured by making a concentric after looking at it from above. By measuring the length and breadth it can be easily found whether the stain is from 90° or not. If the length and breadth are approximately the same lengths, there are chances that the stains are from a 90° angle.

A bloodstain from a 60° angle

In case the stain would be from a 60° angle, there will be smudge and some other subsidiary stains. There can be small stains that would be near to the major stain. These are slanting, however, oval. They cannot be termed as perfect round in shape.

A bloodstain from 180° angle

In case the stain would be from a 180° angle, there will be smudge and some other subsidiary stains. These stains are very slanting to look at. These are not perfectly round or circular. They will have a ‘sausage-like shape’.

What are the devices to carry in a forensics toolkit

Data Cables

It is not the typical data cable that one uses at home which we have to carry to a crime scene. There are various types of cables such as SATA, IDE, Micro, and Mini, etc. it is crucial to come with full preparation.

Tape

It is always advisable to carry white tape. It is because at the time of investigations you would have to number every finding. That number can be written on white tape with a marker easily.

Faraday Bags

All the evidence should be properly numbered and sealed. For this task, faraday bags are very useful.

Storage

One should keep an SSD, USB, and HDD (Hard Disk Drive) handy at the time of collecting evidence related to computers and mobile phones.

Seizing Material

This would include the machine which would record the model of the phone, translate the data at the other place such as a hard disk, etc.

Devices

Devices such as duplicator, UFED, write blockers and adopters, etc. should be carried.

Dongle

This includes a Bootable OS, Kali Linus, and License, etc.

Camera

It is crucial to record the evidence which is collected. The images of the murdered person, images of broken glass, vases, and every smallest detail. These would later act as one of the primary evidence in the court.

Marker

One should mark every piece of evidence that is collected. For this one should always carry a permanent marker with him.

Chain of Custody Form

It is the form that contains various details such as the evidence collected, its serial number, credentials, etc. It also contains the names and signatures of the investigation team, whom it was handed over? Who was the handling officer? And many other similar questions. The basic aim is to make a summary of all the evidence and the people involved in the investigation procedure.

Are the toolkits for ‘computer forensics’ and ‘mobile forensics’ same

No, there are different toolkits for computer and mobile forensics.

In the case of computer forensics, the data collecting device is of more storage. Furthermore, because computer data is arranged in various drives, it is advisable that these drives are to be transferred to the data collecting device bit-by-bit slowly. One should not try to transfer all the data at once as this can lead to an error message and even cause some troubleshoot device problems.

In the case of mobile forensics, the data interpreting device is characterized by the Model of which the suspect’s phone is. Here the data interpreting device is different as compared to the computer forensics device.

What to do if the model of the phone is not listed in the device through which you are acquiring data

In case the mobile company launches a new model of a phone, which is done every year, this can be a difficulty. However, this is not a big issue.

Let’s take a case study here.

In case the mobile is let’s say Apple iPhone 7 is the suspect’s mobile phone. However, in the interpreting device, there is only iPhone 5S. This can create a problem for a novice person in the criminal investigation. However, there is a solution to this problem. We can try a creative way out.

If the interpreting device has the model of iPhone 5S, the investigating officer has to just click that model and copy the data to the storage device where he will keep it. This is the most critical point which confuses most of the investigation officers. This is one of the reasons for the delay in the investigation procedure.

What is the ‘SSC name list’

After the data is acquired from the crime scene, it has to be numbered and kept in an analysed format. This means that the data should be solidified concretely, without missing any detail. This would require an analytical mind which can analyse the data properly with attention to detail. For this, a list of articles, their quantity and the other connotations differentiating the serial number, model, the version, USB which can be used with it, company or brand name, weight, all these things are to be numbered in a very careful way. This list has the names of all the things acquired at the crime scene and the name of the investigating officers’ subordinates and an attested copy to verify the crime scene goods as truthfully discovered and presented is known as the ‘SSC list’. This list also carries the names of the investigating officers and their signatures.

This is a very meticulous task with lots of patience and attention to detail. This is because these pieces of evidence form the ‘backbone of justice’ as they will be further produced in the court of law. This would be responsible for the persuasion of the court whether the decision would be in favour of the victim or the suspect.

What is the ‘Left-Right Rule’ in criminal forensic investigation

The rule of ‘Left-Right’ says that whenever anyone is going for a crime scene investigation, it is advisable to keep the suspected device to the left and the interpreting device in the centre. This central device will act as a transferer of the data which is collected from the crime scene. And at last, the device to which the data is transferred after the criminal investigation should be kept on the right side.

To ease the understanding, a mnemonic is created that the right-hand side, which has the device collecting the data acquired from the suspected device would be on the right side. Here, the right-hand side is equated with ‘right’ which is related to the English word ‘correct’.

Are there some limitations on how much memory a device should carry to a crime scene

In a crime scene, there is already lots of stress. However, it is a real test for the investigating officers and the team to work efficiently under this stress as the ‘quest for justice’ is dependent on the shoulders of these investigation officers.

There are some rules related to this. It is advised that if the suspect’s the hard drive is one terabyte; then, the criminal investigation officer should carry the storage device of at least two terabytes at the investigation scene.

Also, it is advised that a USB of at least 128 GB of power should be carried to the crime scene.

What should be the precautionary measures to take at the time of a forensics investigation

Be patient, don’t panic

This is one of the number one pieces of advice that is the most important when it comes to forensic science. One should not start shouting or yelling among peers or start using curse words or vulgar language. The situation is tense however, it is very crucial not to lose calm. Take some deep breaths and continue with the work patiently.

Do not rush

Hasty climbers sudden fall. This is also true in this case. If you would try to rush things, you may destroy some of the crucial evidence. However, that would take you nowhere. This behaviour can even impair justice because the life of a suspect whether he will be convicted or not, what will be his terms of imprisonment, what is the gravity of the crime, all these questions are in the hands of the person who is investigating the matter.

Try to preserve the evidence as much as possible

We know that in criminal forensics, even a small string of someone’s nail or even a hair string can be useful to know the entire DNA and biometrics of the suspect. This is especially crucial in case of rape, murder, or dacoity cases. So, it is advisable to be patient yet not delaying the process unnecessarily.

Prefer wearing hand gloves and masks

It is crucial to protect every piece of evidence. Even a piece of small evidence can entirely change the entire verdict of the decision of the jury. There can be fingerprints or the voice recording sample, a photograph of someone close to the accomplice of the criminal, and many other examples. Due to the destruction, the room can be smeared with blood strains and destruction here and there. However, it is always preferable to wear gloves, masks, and other protective equipment.

It can be probable that the person who would have committed the crime would have AIDS. However, having all the precautionary measures taken beforehand is a better idea. After all, prevention is better than a cure.

Seal the evidences as quickly as possible

It is quite probable that the person who was killed, their family members would cry, shout and ask you to give them their dead bodies. However, the criminal investigation must seal all the rooms and prevent unnecessary people from coming there as this may destroy the evidence.

Take a torch with you

It is always advisable to be very careful even while walking over small places. A small piece of the broken glass frame or a vase thrown in a certain direction can be understood by applying logical and analytical abilities. This can be very beneficial for the investigation of a crime scene.

Am you good enough for forensic science and criminology

If you have been reading so far, then absolutely, yes. However, if we look at a longer answer then it is crucial to look at the following points for reference:

Being intuitive

This is one of the most important skills when it comes to being a good criminal forensics expert. You should be able to make decent guesswork looking at the probable situations as being true. You should have the ability to read between the lines and seek a deeper and more probable reason for the cause of a problem. You have to be happy to learn body language, graphology, mathematics, and logic. It is not sufficient that having an LLB degree would help you get into it.

Being Bold and Not fearing a change

It is okay for you to work with the most hardened criminals. You should not shy away from a bad crime scene with lots of destruction and blood strains everywhere. You should have the ability to have integrity at work as there can be chances where goons may give you threats via cyber threats, pornography, emails, calls, and even texts. You should be assertive with your ethics and goals and work on the entire process without getting affected by threats or calls. You should have the courage of conviction for your actions and take responsibility for whatever you have suspected or presented to the court.

Being comfortable with attention to details

Forensics is all about attention to detail and making educated guesswork. It should be okay for you to just sit and think about the probable cause-and-effect relationship of various areas in the crime scene. You should be able to have a bird’s eye view and at the same time be okay with the solving of a mysterious puzzle along with hands.

Being okay to work for long hours

There can be chances that it may take a long time to work on the actual project but you won’t get enough evidence. However, at this time you should be okay with the delayed gratification and not get tense or frustrated.

Happy to solve puzzles

You have to be comfortable with the grey areas. It is okay for you to stop and persevere till the time you find the answer to the problem you are tackling. This has to come along with the right mindset of perseverance, patience, and integrity at work.

Good at logics and mathematics

Here, I don’t mean to say one has to have to solve a rocket science equation or problem. However, the basic knowledge of geometry, trigonometry, arithmetic comes in as handy while solving the problem.

Ability to introspect and reflect

You should be able to make educated guesswork of from where the stone, vase, or gun was triggered. In which direction it would have gone? What could be the line of the path?

It is okay to be an introvert for this case as you would have to work with a small group of people. At the same time, this can be your greatest strength as you do not show any emotions on your face and do concentrate on the work at hand properly.

Ability to have a deep thinking

You should be happy to see how and why things happen in a certain way. There can be instances where you would get shattered pieces of evidence here and there but you can think through and join the things dot-by-dot.

Happy to acknowledge new technology

There are many new ways of committing cybercrime. The darknets, spiderwebs, and thousands of other similar technologies are there which are spreading cybercrime like a forest fire. However, there are some positive sides too such as improved GPS, tracking tools, DNA testing, etc. which could aid the forensic investigators to track the culprit easily.

Perseverance

It is the most important of all the qualities. There may be thousands of people in society who would say, what look at her career option, she is working with criminals. What she is doing? She should be doing some job related to hospitality, teaching, or cooking. Why is she choosing that path? There can be thousands of threats given to you by various criminals through emails, texts, calls, etc.

But raising from all these things and materialism, you should be true to your ethics and morals and work diligently with complete integrity, selflessness, objectivity, and perseverance. You should be true to your ethics, as it is the evidence that would be proved in the court and these can entirely shift the verdict in case they were manipulated in any way.

Ability to control emotions

There can be times where the members of the family of the victim who was murdered would be crying in front of you. However, considering the importance of forensics and the need to work diligently even in a stressful situation is a cherry on the top while working in the forensics department.

In the light of the above discussion, we see that new and better technologies are still there, evolving every passing day. Cyber forensics science is still at its infancy stage and with new technologies and updates, it is still growing into a full-grown plant.

We must build a team that can efficiently deal with these cybercriminals. Ping me at LinkedIn for more information about criminal forensics.

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Analysis of Section 144 of the Code of Criminal Procedure amid the covid-19 outbreak

By

Sneha Mahawar

-

October 11, 2021

0

This article has been written by Ritushree Rathi, a 3^rd-year law student. This article contains the analysis of Section 144 under chapter X of CrPC in times of novel coronavirus pandemic along with the basic differences among ‘Section 144’, ‘Lockdown’ and ‘Curfew’ which are usually considered to be somewhat similar at times. This article has been edited by Khushi Sharma (Trainee Associate, Blog iPleaders)

Table of Contents

Introduction

Amidst the Christmas celebrations in December 2019, when India was already brawling with widespread and visually visible anti-CAA protests, an invisible disaster was lurking around the corners of India. That invisible virus, which was later named “COVID-19”, or as President Trump called “China Virus” (because of its origin in Wuhan, a city in the Hubei province of China), didn’t take long to become a serious concern not only in India but across the Globe. And by mid-2020, the infectious nature of the disease made it steadily turned into a huge pandemic in our beloved motherland, INDIA. All the more, even in 2021, this globally spreading highly transmissible virus is still on the verge of shaking India and its economy.

Even though the COVID-19 virus advanced to global upsurge, with India now being the second most highly affected Country, our Indian Government, from the beginning itself, under the guidance and directions of Prime Minister Narendra Modi and the World Health Organization (WHO) has very courageously taken all the onerous actions to detect, treat and reduce the transmission of the virus. And actually, the government is until now trying its best to take all the effective steps so that we could win by successfully flattening the COVID-19 curve as early as possible.

Preventive and precautionary measures

The various adopted preventive measures to restrict the community spread of ‘coronavirus’ includes heavy screening, suspension of Visas, mandatory quarantining of incoming national/international travelers and the most challenging and crucial step was the announcement of lockdown by PM Narendra Modi in every state of India on the evening of 24 March 2020, whereby, all kinds of social, political, religious, educational, cultural, entertainment, sports, and other non-essential activities were restricted. Thus, all the schools, colleges, libraries, coaching institutes, gymnasiums, malls, clubs, hotels, restaurants, community halls, temples, mosques, parks, etc. were closed except the very essential services like hospitals, pharmacies, etc. This was further followed by several linear unlocks wherein, relaxations were gradually granted to the people.

Apart from Lockdown, the government took another proactive step to impose Section 144 of the Code of Criminal Procedure in most of the COVID hit states of India to curb COVID-19 impact. Section 144 in itself is quite a good legal provision to adopt as a means to normalize the existing abnormal conditions in an area.

Detail analysis : Section 144 under Code of Criminal Procedure, 1973

What is the Code of Criminal Procedure

The Code of Criminal Procedure (CrPC) is the main legislation that covers the procedures for the administration of substantive criminal law in India. At present, it consists of 484 sections divided into 37 chapters (among which Section 144 deals with the power to issue orders in urgent cases of nuisance or apprehended danger), 2 schedules, and 56 forms.

What is Section 144

Section 144 of the Code of Criminal Procedure is the most utilitarian and frequently used section. Empowered Magistrates are conferred with great powers under this particular section basically to issue orders in urgent cases of either nuisance or apprehended danger. Here, nuisance or apprehended danger in a way signifies the situations which either create or contains the potential to create an atmosphere of unrest among people in a society or to cause danger to public health, peace, or safety. Authorities are empowered under this section to bar the assembly of 5 or more people in a given jurisdiction or a specific area which demands the urgency to impose the particular section. And the very urgency of the case even demands to lay aside the formalities and preliminaries usually required for the making of an order. An order under this section can only be passed by specified classes of Magistrates when in their opinion there is sufficient ground for proceedings under the section and immediate prevention or speedy remedy is desirable. And an order under this Section may be directed to a particular individual, or to persons residing in a particular place or area, or to the public generally when frequenting or visiting a particular place or area.

In Gulam Abbas & Ors v/s State of U.P. & Ors, it was held that an order issued under Section 144 is essentially an executive order which is passed in performance of an executive function where no dispute as to any rights between rival parties is adjudicated but merely an order-preserving peace is made and as such it will be amenable to writ jurisdiction either under Article 32 or under Article 226 of the Constitution if it violates or infringes any fundamental right.

Who can proclaim under Section 144

District Magistrate
Sub-Divisional Magistrate
Any other Executive Magistrate specially empowered by the State Government on this behalf.

What powers do the authorities have under this provision

When there is sufficient ground for proceeding under this section and immediate prevention and speedy remedy is desirable, the empowered Magistrates, may by a written order direct any person to abstain from a certain act; or to take certain order with respect to certain property in his possession or under his management.

An order under this section may, in cases of emergency or in cases where the circumstances do not admit of the serving in due time of a notice upon the person against whom the order is directed, be passed ex-parte.

The order passed by such Magistrates does not place restrictions only on movement but may also include restrictions on forming assemblies unlawfully or handling or transporting any kind of weapons, arms, access to internet services, etc. according to the requirement of the situation.

Any Magistrate either by himself or by any Magistrate subordinate to him or by his predecessor-in-office rescind or alter any order made under this section either on his own motion or on the application of any aggrieved person.

Similarly, the State Government may also rescind or alter any order made by it in connection with the extension of validity/duration of Section 144 under the proviso to sub-section (4) of the same section either on its own motion or on the application of any person aggrieved.

What are the grounds for the application of Section 144

The grounds for making the order are that, in the opinion of the Magistrate, such direction is either likely to prevent or tends to prevent the following:-

Obstruction

The Magistrate must ensure that passing of such order under Section 144 is genuinely required to prevent the disobedience as to any passed orders like public orders, courts orders, or government orders, etc., or to prevent any activity which is hindering or interfering with the law and order in any circumstances. Example –Restrictions under Section 144 were imposed in Ayodhya in 2019, in the wake of a sensitive Ram Janmabhoomi – Babri Masjid land dispute case hearing in the Supreme Court.

Annoyance

The Magistrate may pass an order under this section to prevent such kind of situation or particular activity which creates or tends to create an atmosphere of hatred or violence among the people in the society, as a result of which law, order, and peace is likely to be disturbed automatically or otherwise. And the section covers both types of annoyances whether it be a physical annoyance or mental annoyance.

Injury to any person lawfully employed

For the imposition of Section 144 based on this ground, the injury must be caused or inflicted to the persons who are engaged in the performance of their assigned duties under lawful employment. And the requirement of the situation is just that any sort of violence must be used against a lawfully employed person which creates or tends to create an imbalanced situation of law and order and it does not matter whether the injury caused is normal or grievous.

Danger to human life, health, or safety

The Magistrate must ensure that there is a great urgency to impose the particular section to timely prevent the high risk of damage to public health or safety. Urgency must be such, that if not handled promptly, it would result in a huge disaster very soon. Example – Imposition of Section 144 in the recent times of COVID-19 Pandemic.

Disturbance of the public tranquillity

Disturbance of public tranquillity can be referred to in a situation where any kind of activity or offense causes the disturbance of public order and peace in society. The Magistrate must ensure that the particular activity/offense is against the interest of society at large and it is necessary to impose Section 144 with a view to secure public safety by maintaining public peace and tranquillity. Example – Imposition of Section 144 during Anti-CAA protests in December 2019.

Riot

It is the situation that causes civil unrest and usually shows sudden and provocative behavior. The Magistrate must ensure that imposition of Section 144 is necessary to prevent the force or violence used by the members consisting of unlawful assembly. Example – Ahead of Supreme Court’s Ayodhya verdict, on 13 November 2019, Section 144 was imposed in UP, Jaipur, and several parts of New Delhi and Mumbai to prevent possible riots.

Affray

‘Affray’ signifies the threat of violence, which is more physical rather than just verbal. Under this ground, Magistrate must ensure that Section 144 is necessary to be imposed to prevent the activities which are causing a sense of fear or terror among the public in order to restore peace among the members of the society.

The principle which must be borne in mind before the application of Section 144 has been explained in the case of Manzur Hasan & Ors. v/s Muhammad Zaman & Ors –

The power must be used in urgent situations for the purpose of maintaining public peace and tranquillity.
Where there is a conflict between public interest and private rights, public interest has to be given priority and for that reason, private rights may be temporarily set aside.
Under Section 144, the question of title to properties or entitlements to rights or disputes of civil nature are not open for adjudication in a proceeding.
The consideration should be made for the large section of the community and should not be that restriction that would affect only a minor section of the community.

These principles were further approved in the case of Shaik Piru Bux v/s Kalandi Pati.

What is the duration of Section 144

An order passed under Section 144 cannot remain in force for a period of more than two months from the date on which such an order was passed. But under the state government’s discretion, the time period of two months can be extended to a maximum of six months from the date of expiry of such initial order.

Role of Section 144 amid the covid-19 outbreak

Currently, when the whole of India is engulfed with the COVID-19 pandemic, Section 144 of CrPC has emerged out as a preventive measure in the context of public health and safety as it has remarkably contributed to bringing down the communicability of COVID-19 cautiously.

Section 144 has been imposed in various cities of different states to control the spread of coronavirus disease and as a result of which it has gradually become a great topic of discussion among the people. Some of the states in which the particular section has been imposed are Maharashtra, Rajasthan, Madhya Pradesh, Uttar Pradesh, Orissa, Chhattisgarh, Tamil Nadu, etc.

Examples :

Rajasthan – The State Government imposed prohibitory orders under Section 144 in 11 districts including Jaipur, Jodhpur, Kota, Bikaner, Udaipur, etc. Chief Minister Ashok Gehlot said the decision has been taken in the public interest.

Goa – The Goa government imposed Section 144 of the Code of Criminal Procedure ahead of the festivals of Holi, Shab-e-Barat, Easter, and Eid, to prevent COVID-19 cases, etc.

Why Section 144

As we are all aware that COVID-19 has proved to be a very deadly and fast-spreading virus, for the prevention of which it has become very necessary to limit or control the movement of the public anyhow. And Section 144 of the Code of Criminal Procedure is undoubtedly an excellent provision in this respect because it confers very great power on empowered Magistrates through which they are enabled to prohibit public gatherings.

Section 144 is basically imposed in a given region/area in situations of emergency, particularly in cases of nuisance or perceived danger of some event that has the potential to create a troubling situation or result in harmful damage to human lives or property. COVID-19 sadly falls under the exact situation.

With the aim of defeating covid-19, Section 144 is brought into force with the inclusion of the following restrictions in different states of India

Prohibits the presence or movement of one or more persons in public places and also puts restrictions on gatherings of any sort anywhere, without the mask on the face of individuals. An order also directs to follow social distancing norms (minimum of 6 feet of distance) at all times.
Prohibits the public gatherings in amenities including swimming pools, gymnasiums, and party or gathering halls in apartments and residential complexes.
Ban on every kind of political rallies, unauthorized protests, demonstrations, and group prayers, etc.
All social or religious functions are prohibited. However, the government of individual states has fixed the particular number for people who in total can be present to attend a funeral or wedding functions subject to certain conditions.
All kinds of essential commodities/ services/ shops/ business establishments like grocery, dairy, fruits and vegetable stores, etc., are to be operated within a specified time period only while ensuring that proper precautions are being taken to restrict the spread of coronavirus, like fulfilling the process of sanitization, ensuring social distancing norms, etc.
A maximum of four persons including a driver in the four-wheelers is allowed to be seated at a time.
A limited number of people (probably approx. 50% of the total space) are to be allowed to enter cinema halls, restaurants, etc. while taking proper precautions like maintaining social distancing norms and use of a proper mask for covering the face.
Order contains warnings of actions against people not following COVID-19 protocols (like proper social distancing and covering of face through masks, etc.)

Latest Guidelines as per the Supreme Court Order

Supreme Court, in its order on Jammu and Kashmir on January 10, 2020, made the following points with regard to the use of Section 144 of the Code of Criminal Procedure, 1973-

Section 144 cannot be used to suppress the legitimate expression of opinion or grievance, or the exercise of democratic rights.
When Section 144 is imposed for reasons of apprehended danger, that danger must be an emergency.
The imposition of Section 144 must strike a balance between the rights of individuals and concerns of the state.
Powers under Section 144 should be exercised in a reasonable and bonafide manner, and the order must state material facts in order to enable judicial review.

Are Section 144, lockdown, and curfew same

The answer is no. They cannot be treated as the same. The main basis on which they can be distinguished are as follows:-

Sphere

Code of Criminal Procedure, 1973 constitute ‘SECTION 144’ i.e Power to issue orders in urgent cases of nuisance or apprehended danger.

The term ‘LOCKDOWN’ is not a legal term. The term is being used by government officials and others to describe a situation where free movement of public transport, persons, goods, and services, etc. are restricted according to the requirement/need of the situation. However, certain essential items are exempted from restrictions. The closest understanding of the particular term can be construed from the Epidemic Disease s Act, 1897, especially in the recent time of the pandemic.

The term ‘CURFEW’ is an addition to an order under Section 144 of the Code of Criminal Procedure, 1973. Curfew orders are issued in more severe situations for a specific time period.

Issuing Authority

‘SECTION 144’ can be imposed by District Magistrate, Sub-Divisional Magistrate, or specially empowered Executive Magistrate.

‘LOCKDOWN’ can be imposed by the order of the Central Government, or the State Government, or through any person/officer empowered by them or under any relevant Act or laws, in all or some parts of India according to the situation/circumstances. The Disaster Management Act, 2005, and The Epidemic Diseases Act, 1897 play a great role in times of handling the disaster/pandemic situation.

‘CURFEW’ can be imposed by a law enforcement agency like the District Magistrate etc. Curfew takes place when the power is with the collector and police commissioner.

Grounds or Purpose (including kinds of restrictions)

‘SECTION 144’ – To put restrictions on assembly of 5 or more persons so as to prohibit public gatherings in an order to prevent cases of nuisance or apprehended danger that has the potential to cause damage to human life or property or to maintain peace and order in those areas where the existing trouble can disrupt the regular life.

‘LOCKDOWN’ – To put restrictions on all kinds of non-essential activities, goods and services and to restrict the movement of the public through various means of public transport like buses, railways, fights, etc., in an order to curb down the danger to public health and safety and also to maintain the situation of peace among the members of the society.

‘CURFEW’ – To force people to stay indoors (completely off the roads) for a fixed period with the object of preventing danger to human life, health, or safety, and to prevent disturbance of public tranquillity, etc. Essential services are also shut down during curfew.

Punishment Provisions

‘SECTION 144’ can be enforced through the mechanism provided under Sec tion 188 of the Indian Penal Code i.e. if such disobedience by any person/persons causes obstruction, annoyance, or injury to persons lawfully employed, then such person/persons would be punished with imprisonment which may extend to one month or with fine which may extend to two hundred rupees, or with both. And if such disobedience by any person/persons causes danger to human life, health, or safety, or causes or tend to cause a riot or affray, then such person/persons would be punished with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

‘LOCKDOWN’ can be enforced through the mechanism provided under Section 188 of CrPC whereby disobedience to the directions of a public servant is punishable with either imprisonment or fine or with both imprisonment and fine, Section 269 of the Indian Penal Code i.e. if any person/persons do the negligent act which is likely to spread infection of disease dangerous to life, then such person/persons would be punished with imprisonment which may extend to six months, or with fine, or with both and through Section 270 of the Indian Penal Code i.e. if any person/persons do the malignant act which is likely to spread infection of disease dangerous to life, then such person/persons would be punished with imprisonment which may extend to two years, or with fine, or with both. And in case if someone is asked to put vessels in quarantine or for regulating intercourse between places where an infectious disease prevails and he violates such order, he would be punished under Section271 of the Indian Penal Code with imprisonment for a term which may extend to six months, or with fine, or with both.

‘CURFEW’ can be enforced through the mechanism provided under Section188 of the Indian Penal Code i.e with the provision of the same punishment which is to be awarded on violation of orders passed under Section 144.

Conclusion

Section 144 has absolutely turned out to be an exemplary legal provision in times of emergency or to say, in situations of nuisance or apprehended danger. The most astounding thing about this section is that the orders issued under this section are even anticipatory in nature, which means reasonable restrictions can be easily put upon certain actions/events, even before the happening of such an act/event which is likely to prevent some harmful occurrences. This provision, thus, no doubt comes into force as a means to secure the health and safety of people by maintaining peace and tranquillity in an area.

However, by applying Section 144 and adopting various other preventive measures, the government is trying hard to flatten the curve of the COVID-19 pandemic but results are not much satisfactory because the passing of orders is just not sufficient, if the implementation of it is not done in a properly planned manner. Government has to bring some more strict laws and should adopt every reasonable strategy to direct every police officers and other executive officers in every way to get the restrictions being followed up in the best possible manner.

Moreover, the fight against the deadly coronavirus disease is not only of government, in fact, it is of the whole nation, which itself indicate that united global efforts are required to deal with this fatal COVID-19 crisis, then only we would be able to get a successful lead over the pandemic.

Remember, ‘the death of an individual or persons is just a counting number for the government but for the family, the same individual constitutes the whole universe for them’. So, it’s high time when we all humans, irrespective of our caste or religion, have to become each other’s strength and unite all our efforts to uproot the lethal coronavirus thoroughly.

“PREVENTION IS BETTER THAN CURE’’

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

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

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