We often come across judgments wherein judges remark on the notion of ethics and moral conduct of parties. Time and again, it has been reiterated that law cannot be completely separated from ethics. Food for thought arises here. Do the judges who comment on the ethics of politicians, officers and government agencies are also bound by a code of ethics? The term ‘Ethics’ comes from the Ancient Greek word ethos, which is derived from the word ethos meaning habit, belief or custom. According to Rushworth Kidder ‘the science of the ideal human character’ or “the science of moral duty” is called ethics. This article will throw light on the important documents that serve as a guide for the observance of judicial ethics in India.
What is judicial ethics?
Judicial ethics consists of the standards and norms that bear on judges and covers such matters as how to maintain independence, impartiality and avoid impropriety.
Justice S.H. Kapadia said; “When we talk of ethics, the judges normally comment upon ethics among politicians, students, professors and others. But I would say that for a judge, ethics, not only constitutional morality but even ethical morality, should be the base.”
According to Mr. Justice Thomas of the Supreme Court of Queensland, there are two key issues that must be addressed: (1) the identification of standards to which members of the judiciary must be held; and (2) a mechanism, formal or informal, to ensure that these standards are adhered to. A reference to various dictionaries would be unable to frame the definition, if one must be framed. Judicial ethics are the basic principles of right action of the judges. It consists of or relates to moral action, conduct, motive or character of judges; what is right or befitting for them. In the High court of Judicature at Bombay v. Udaysingh, it was observed by the Supreme Court that;
“Maintenance of discipline in the judicial service is a paramount matter and since the acceptability of the judgement depends upon the credibility of the conduct, honesty, integrity and character of the office and since the confidence of the litigant public gets affected or shaken by the lack of integrity and character of the judicial officer”.
Canons vs. Principles
‘Principles’ are fundamental truth, the axioms, the code of right conduct. Much of these remain confined to theory or hidden books. Canons are the rules perfected by the principles, put to practice. Principles may be a faculty of the mind, a source of action which are a pleasure to preach or read. ‘Canons’ are principles put into practice so as to be recognized as rules of conduct commanding acceptability akin to a religion or firm faith, the departure wherefrom would be not a pardonable mistake but an unpardonable sin. The intention of the Principles is to establish standards of ethical conduct for judges, to provide guidance for individual judges and the judiciary in regulating judicial conduct, and also to assist members of the executive and legislature, lawyers and the public, better to understand and support the judiciary.
The principles are stated as “values”:
Judicial independence is a prerequisite to the rule of law and a fundamental guarantee of a fair trial. A judge shall therefore uphold and exemplify judicial independence in both its individual and institutional aspects.
Impartiality is essential to the proper discharge of the judicial office. It applies not only to the decision itself but also to the process by which the decision is made.
Integrity is essential to the proper discharge of the judicial office.
Propriety, and the appearance of propriety, are essential to the performance of all of the activities of a judge.
Equality to all before the courts is essential to the due performance of the judicial office.
Competence and Diligence are prerequisite to the due performance of judicial office.
There is no code for judicial ethics in India but there are three important documents which serve as a guide to be observed by Judges.
The Oath of a Judge (as contained in the Third Schedule of the constitution of India).
Restatement of values of judicial life (1999)
The Supreme Court of India adopted a Charter called the Restatement of Values of Judicial Life on 7th May, 1997. It is the restatement of the pre-existing and universally accepted norms, guidelines and conventions observed by Judges. The restatement was ratified and adopted by the Indian Judiciary in the Chief Justices’ Conference, 1999. All the High Courts of the country have also adopted the same. It reads as under:
(1) Justice must not merely be done but it must also be seen to be done. The behaviour and conduct of members of the higher judiciary must reaffirm the -people’s faith in the impartiality of the judiciary. Accordingly, any act of a Judge of the Supreme Court or a High Court, whether in official or personal capacity, which erodes the credibility of this perception has to be avoided.
(2) A Judge should not contest the election to any office of a Club, society or other association; further, he shall not hold such elective office except in a society or association connected with the law.
(3) Close association with individual members of the Bar, particularly those who practice in the same court, shall be eschewed.
(4) A Judge should not permit any member of his immediate family, such as spouse, son, daughter, son-in-law or daughter-in-law or any other close relative, if a member of the Bar, to appear before him or even be associated in any manner with a cause to be dealt with by him.
(5) No member of his family, who is a member of the Bar, shall be permitted to use the residence in which the Judge actually resides or other facilities for professional work.
(6) A Judge should practice a degree of aloofness consistent with the dignity of his office.
(7) A Judge shall not hear and decide a matter in which a member of his family, a close relation or a friend is concerned.
(8) A Judge shall not enter into public debate or express his views in public on political matters or on matters that are pending or are likely to arise for judicial determination.
(9) A Judge is expected to let his judgments speak for themselves. He shall not give interviews to the media.
(10) A Judge shall not accept gifts or hospitality except from his family, close relations and friends.
(11) A Judge shall not hear and decide a matter in which a company in which he holds shares is concerned unless he has disclosed his interest and no objection to his hearing and deciding the matter is raised.
(12) A Judge shall not speculate in shares, stocks or the like.
(13) A Judge should not engage directly or indirectly in trade or business, either by himself or in association with any other person. (Publication of a legal treatise or any activity in the nature of a hobby shall not be construed as trade or business).
(14) A Judge should not ask for, accept contributions or otherwise actively associate himself with the raising of any fund for any purpose.
(15) A Judge should not seek any financial benefit in the form of a prerequisite or privilege attached to his office unless it is clearly available. Any doubt on this behalf must be resolved and clarified through the Chief Justice.
(16) Every Judge must at all times be conscious that he is under the public gaze and there should be no act or omission by him which is unbecoming of the high office he occupies and the public esteem in which that office is held.
The Bangalore principles of judicial conduct
The Preamble of the Bangalore Principles of Judicial Conduct, 2002, states that the principles are intended to establish standards for the ethical conduct of judges. They are designed to provide guidance to judges and to afford the judiciary a framework for regulating judicial conduct. They are also intended to assist members of the executive and the legislature, and lawyers and the public in general, to better understand and support the judiciary. These principles presuppose that judges are accountable for their conduct to appropriate institutions established to maintain judicial standards, which are themselves independent and impartial, and are intended to supplement and not to derogate from existing rules of law and conduct which bind the judge. The values of judicial ethics which the Bangalore Principles define are, independence, impartiality, integrity, propriety, equality, competence and diligence, and implementation. These values have been defined on the following principles, as under: –
(i) Judicial independence is a prerequisite to the rule of law and a fundamental guarantee of a fair trial. A judge shall therefore uphold and exemplify judicial independence in both its individual and institutional aspects.
(ii) Impartiality is essential to the proper discharge of the judicial office. It applies not only to the decision itself but also to the process by which the decision is made.
(iii) Integrity is essential to the proper discharge of the judicial office.
(iv) Propriety, and the appearance of propriety are essential to the performance of all of the activities of a judge.
(v) Ensuring equality of treatment to all before the courts are essential to the due performance of the judicial office.
(vi) Competence and diligence are prerequisites to the due performance of the judicial office.
(vii) Implementation – By reason of the nature of the judicial office, effective measures shall be adopted by national judiciaries to provide mechanisms to implement these principles if such mechanisms are not already in existence in their jurisdictions.
The oath by a judge
Once a Judge has sworn to uphold the Constitution of India and the laws, he has to discharge his duties by guarding the constitutional values. By swearing in the name of God or making a solemn affirmation, a Judge invests in himself certain sacrosanct principles: –
(i) that I will bear true faith and allegiance to the Constitution of India as by law established;
(ii) that I will uphold the sovereignty and integrity of India;
(iii) that I will truly and faithfully, and to the best of my ability, knowledge and judgment perform the duties of office without fear or favor, affection or ill-will; and
(iv) that I will uphold the Constitution and the laws.
Conclusion
The Canons state overarching principles of judicial ethics that all judges must observe. Although a judge may be disciplined only for violating a rule, the Canons provide important guidance in interpreting the rules. An eminent jurist Justice G.P. Singh believes that canons of ethics cannot be learnt simply by listening or be taught only by being told. One must live by values to preach and emulating is the best way to learn. Sir Stephen Sedley, a former Judge of the Court of Appeal of England and Wales, has stated that independence and impartiality are the twin pillars without which justice cannot stand.
Therefore a judge needs to deal with not only the changes in the law but also constantly keep abreast with judicial ethics. A judge must appreciate that it is a process of continuous education and must periodically remind himself of the high ethical standards that he is expected to maintain. ‘Canons of Judicial Ethics’ is a shield to protect legal decorum of law and keep the faith in judiciary. When we talk about Judicial ethics people utterly think of only bookish laws not social and moral science. Jurisprudence taught us how we can enhance our laws and judges must keep the faith of law in society.
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This article is written by Aditi Aggarwal, from Symbiosis Law School, Noida. The article provides a detailed analysis of the Raja Nand Kumar case, the first judicial murder by the colonial government in 1775.
Table of Contents
Introduction
The rule of law is nothing more than an instrument of societal control supported by a sovereign, but that law or control must be balanced by certain principles or tenets of justice. Only a state governed by such a law can be said to have the ‘rule of law’.
The pre-independence ruling in India by the British, where law used to be enforced unequally on parties with a different set of rules for the Indians and the British, is a clear illustration of what it means to be ruled without fairness and justice. ‘Law’ was used as a tool of political repression by the British on Indians. It can be said that rather than the rule of law, ‘rule by law’ was the aim of the British. Judicial remedies lost their importance since they were administered with the best interests of the colonial authority in mind, rather than what was right or legitimate.
The Raja Nand Kumar case is one of its kind that adequately demonstrates the oppression by the British and is heavily criticized even now. Raja Nand Kumar was hanged to death by the colonial government because of a conspiracy initiated by the then governor-general Warren Hastings against him to fulfill his grudge and to take revenge for the trial conducted against him because of a report presented by Raja Nand Kumar.
Passing of the Regulating Act of 1773
In 1773, legislation known as the Regulating Act was passed by the British Parliament. It was passed for the regulation of Indian territories governed by the British East India Company, mainly in Bengal.
One of the main provisions of the Act was the setting up of a Supreme Court having four English judges in Kolkata. As a result of this Act coming into force, the Supreme Court of Judicature at Fort William in Kolkata was founded in 1774 under Section 13. A charter issued by King George III appointed Sir Elijah Impey as the Chief Justice and Robert Chambers, John Hyde, and Stephen Caesar Lemaistre, as puisne judges.
It can be said that this Act initially attempted to establish a separate and somewhat independent judicial institution in India, under the king’s direct control. But in the era of this Act of 1773, Raja Nand Kumar’s trial, which is also known as the ‘the first judicial murder in colonial India’ caused big mayhem.
A brief about Raja Nand Kumar
Raja Nand Kumar, also known as Maharajah Nuncomar, was a Hindu Brahmin of the highest rank. He was given the title ‘Maharaja’ by Shah Alam II in the year 1764. He was a big zamindar. He worked for the Nawab of Bengal in a variety of capacities, mostly as a revenue collector. He was made the Governor of Hugli under Nawab Siraj-Ud-Daulah once in 1756.
He had earned the confidence of the Murshidabad Durbar. After holding a succession of posts under native governments of Bengal, owing to his loyalty pledged towards the English East India Company during 1757, he was awarded the name “Black Colonel” during Governor General Robert Clive’s period. In 1758, he was even recommended to Lord Robert Clive for appointment as an agent to collect revenues for the districts of Burdwan, Hooghly, and Nadia. He was a very influential person in Bengal.
First-person of India to get executed by hanging
Raja Nand Kumar brought several charges against then Governor-General Warren Hastings. The charges were related to the offenses of bribery and corruption, after which he himself was accused and convicted of forgery and became the first person of India to be executed by hanging.
Facts of the case
At Warren Hastings and his favorite council member Barnwell’s instance, Raja Nand Kumar, Fawkes, and Radhacharan were arrested. Both of them clearly declared their intention before the Supreme Court judges to prosecute all three persons for conspiracy.
Hastings wanted to take revenge from Raja Nand Kumar in furtherance of which he demanded Mohan Prasad to humiliate Nandkumar by filing a case of forgery against him. The charges of forgery against him were in connection to a deed or bond which was executed by Raja Nand Kumar in 1765 and was claimed as an acclamation and ratification of a debt from a banker, Bulaki Das. The judgment was reserved for Nand Kumar whereas Fawkes was fined.
The trial against Raja Nand Kumar for forgery and conspiracy ran concurrently. Warren Hastings anticipated that involving Nand Kumar directly in any way possible as far as charges for the conspiracy were concerned, would be laboriously difficult, so he implicated and scapegoated Raja Nand Kumar in another case of forgery.
What happened during the trial
The trial went on continuously for eight days without any adjournment, starting from 8th June and ending at the midnight of 15th June 1775. The judges, in red robes and heavy ‘full bottomed’ wigs, heard the case at length and used to change linens twice a day. From 8 am every day till late night, they used to probe and contemplate the evidence on behalf of the prosecution, and witnesses used to be cross-examined till late at night.
Meanwhile, a plea was filed according to which the King’s Counsel was not proficient in doing the cross-examination of witnesses fastidiously. After this, the defense witnesses were critically and exhaustively cross-examined by the judges. This raised questions on the probity and righteousness of the judges.
After careful consideration, they refuted the evidence provided by the prosecution witnesses and then ordered the sheriff, Alexander Macrabie, and keeper of His Majesty’s Prison in Kolkata to detain Raja Nand Kumar in safe custody until his release per the legal provisions.
Issues raised
Whether the Supreme Court had jurisdiction to hear the matter in the first place?
The question raised was whether the Supreme Court had jurisdiction to hear the matter in the first place. Raja Nand Kumar’s advocate advanced a plea relating to this matter in front of the Supreme Court at the beginning of the trial but it was rejected.
But in actuality, it is observed that the offense was committed before the Regulating Act 1773 came into force and subsequently, before the establishment of the Supreme Court. Before this establishment, the Indians residing in Bengal were tried by local Faujdari Adalats. Thus, the Court had no prima facie jurisdiction to decide on the matter.
Whether the English Act of 1729, according to which forgery was a capital offense, was applicable to India?
Under the English Act of 1729, the offense of forgery attracted capital punishment. Questions were raised on the applicability of this Act to India and there was a divided opinion even among the sitting judges at that time but ultimately, the view of the majority of the judges along with that of Chief Justice Impey prevailed.
Steps that were taken to save Raja Nand Kumar:
Raja Nand Kumar’s advocate forwarded an appeal to the King-in-Council. He also filed a petition in the court for holding the verdict till the time the Council’s decision was not established but it was rejected by the court.
Efforts to seek the aid and support of the members of rebuffed also did not help.
The letter of suggestion from the Nawab to the Council to defer the sentence till His Majesty’s pleasure was known proved to be nugatory as well because the Supreme Court took no cognizant undertaking on it after it was delivered by the Council.
The final decision of the court
The matter was summarized on the morning of 16th June 1775 by Chief Justice Impey. Raja Nand Kumar was held unanimously “guilty” by judges and the jury also gave the same verdict. He was incarcerated to death by the Chief Justice under the English Act of 1729 of the British Parliament. The then Hon’ble Supreme Court dismissed the ‘conspiracy case’ as they did not have any evidence against Raja Nand Kumar.
Therefore, he was hanged on August 5, 1775, at 8 o’clock in the morning at the Cooly Market near Fort William and close to the modern Hastings Bridge.
Why Warren Hastings conspired against Raja Nand Kumar?
One of the reasons for Warren Hastings, the Governor at the time being militant against Raja Nand Kumar, was that Nand Kumar had participated in the Battle of Plassey with Nawab Siraj-Ud-Daulah. The Nawabs admired him, so Hastings conspired against him with the help of other Indians.
Warren Hastings was appointed as the Governor-General of the Presidency of Fort William in Bengal in 1772, and directors of the Company further limited his powers by establishing a council of four members who had similar authority as he did. The four council members were Clavering, Francis, Monson, and Barnwell. Out of the four, the first three were against the governor-general and only Barewell was in his favor.
Nand Kumar was sidelined when the seat of administration shifted from Murshidabad to Calcutta and the task of actual governance got in the hands of the acknowledged officials of the company. The council members except Barnwell instigated Nand Kumar to accuse Hastings of bribery and corruption before the Council. Thus, when Francis arrived in the city, Nand Kumar gave a letter to him mentioning the complaints. He also said that Hastings had accepted bribery of more than 1 lakh from him to appoint Gurudas, his son, as Diwan. It was also said that Hastings had accepted a bribe of rupees 2.5 lakhs from Munni Begam to appoint her as the guardian of the minor Nawab Mubarak-ud-Daulah.
After Francis presented the letter at the council meeting, Monson moved a motion for Nand Kumar to appear before the council meeting. Warren Hastings was presiding over the council at that time and opposed the move. Mr. Barewell suggested that Nand Kumar should file his complaints before the Supreme Court and not before the council as according to him, the Court was competent to hear this case. The majority members objected to the action and then elected Clavering to preside over the meeting instead of Hastings.
When Nand Kumar was called before the council to prove his charges against Hastings, the majority of the council declared that the charges against Hastings were right. As a result of this, Hastings was directed to deposit the amount of Rs 3,54,105 in the company’s treasury. This event was the second reason that made Hastings a bitter enemy of Nand Kumar and now he looked for an opportunity to show him down.
Why is the trial called the judicial murder of Raja Nand Kumar
The trial startled and dismayed the moral scruples of mankind and was termed widely as the “judicial murder” of Raja Nand Kumar. There were many peculiar features of the trial like Impey being a close friend of Warren Hastings, judges cross-examining the witnesses themselves, the petition presented to the King’s council being rejected by the Supreme Court, and the fact that even after forgery not being considered as a crime by neither Hindus nor Muslims, Raja Nand Kumar being given capital punishment.
Moreover, Elijah Impey heard the matter along with two other judges of English origin. The fact that the jury was composed totally of Englishmen gave another reason for the trial to be a peculiar one where there were many contradictory testimonies, which were incompatible with the Indians.
Seeking all the above points, it is clear that this was certainly and openly a case depicting malfunctioning of ‘natural justice’ during colonial rule.
Reaction of the native people
Nand Kumar expressed his desire to die near Adi Ganga so that the final rites can be performed at its ghats because of which the well was dug up ostensibly for his hanging. At the time of execution, the seventy-year-old prisoner’s hands were tied and he walked with difficulty on the stairs due to weakness in his knees.
The hanging of the Brahmin is believed to have caused “horror” and “consternation” among the gathering natives. Many Hindus were appalled and bathed in the holy Ganges to wash away the sin of seeing the event. Several Brahmins households even protested the hanging and left Calcutta.
The historical significance of the trial
The trial sparked a lot of controversies, shocking not just the Indians but also the British living in India. The trial of Raja Nand Kumar is historically significant because it was a primary ground for the impeachment of Chief Justice Impey of the Supreme Court of Calcutta and Governor-General Warren Hastings by the House of Commons after they returned to England. Despite being chastised by famous statesmen Edmund Burke and Lord Macaulay, Hastings was cleared of all accusations after 19 years. At the present time, Victoria Memorial authorities are putting Nand Kumar’s turban on display.
Conclusion
Even after so many years, the trial is still considered the most unfortunate and unjust. The quoted words by Bar and Bench: “Nand Kumar’s trial was a manifestation of this diabolical cocktail of connivance between the then executive and the judiciary,” clearly reflect the state of our country during the pre-independence period particularly concerning the case of the judicial murder of Raja Nand Kumar.
This article is written by Virendra Yadaorao Ramteke, pursuing Diploma in International Business Law from LawSikho.The article has been edited by Aatima Bhatia (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).
Table of Contents
Introduction
The Indian Finance Minister recently presented the Union Budget 2021-22 (Budget 2021) against the backdrop of a challenging economic environment due to COVID-19. In view of India’s tax reform measures to date, Budget 2021 maintains the same overall tax structure but contains several measures that aim to attain tax certainty, facilitate tax administration, and reduce tax disputes. Multinational entities should analyse the impact of key Budget proposals on their operations, including a helpful provision to create a new board for advance rulings.
Ease of doing business remains a government priority. The Budget continues to encourage investments and contains plans for privatization of public sector undertakings and monetization of infrastructure assets.
This article highlights key Budget 2021 tax proposals affecting foreign investors and multinational entities doing business in India. Budget proposals take effect once both houses of Parliament pass them and Presidential assent is accorded.
India Budget 2021 : impact on foreign investors and multinationals
Multinational entities should analyse the impact of key Budget proposals on their operations, including a helpful provision to create a new board for advance rulings. Ease of doing business remains a government priority. The Budget continues to encourage investments and contains plans for privatization of public sector undertakings and monetization of infrastructure assets. This insight highlights key Budget 2021 tax proposals affecting foreign investors and multinational entities doing business in India. Budget proposals take effect once both houses of Parliament pass them and Presidential assent is accorded.
No change in tax rates for companies, limited liability partnerships and firms
Income tax rates (including surcharge and cess) for companies (domestic and foreign), firms, and limited liability partnerships remain unchanged, including the rates for minimum alternate tax and alternate minimum tax.
The concessional withholding tax rate on interest, dividends paid to foreign portfolio investors (FPIs)
Budget 2021 proposes that the withholding tax (WHT) rate on interest and dividends paid to FPIs shall be in accordance with the rates provided in the relevant tax treaty or the rates prescribed under the Indian Income tax Act, 1961 (Act) whichever is more beneficial to the FPI. Previously, the WHT rate on interest and dividends paid to FPIs was prescribed as 20%. Budget 2021, however, proposes that FPIs could obtain a lower treaty WHT rate, subject to documentation.
Digital tax : rationalization of equalization levy (EL) provisions
In order to clarify the existing provisions relating to EL chargeable on consideration receivable by non-residents;
Budget 2021 proposes the following amendments:
Payments taxable as royalties or fees for technical services under the Act read with the tax treaty will not be subject to the EL provisions.
Income earned by nonresidents from e-commerce supplies or services that are subject to EL has been exempted from corporate income tax, effective April 1, 2020 (the previous effective date was April 1, 2021).
The proposed definitions of ‘online sale of goods’ and ‘online provision of services’ include various online activities – namely, accepting offers, placing and accepting purchase orders, and paying consideration.
E-commerce supply or services are to include consideration for the sale of goods and provision of services, even where goods are not owned, or services are not provided by an e-commerce operator.
Rationalization of minimum alternate tax (MAT) provisions
Budget 2021 proposes that, for the purpose of computation of MAT, any dividend income of a foreign company that is taxable at a rate lower than 15% shall be excluded from book profits when computing MAT. Similarly, any expenditure incurred by a foreign company while earning dividend income shall be added back to compute the book profits. Further, in cases where past-year income is taxed in a financial year pursuant to an advance pricing agreement (APA) or secondary adjustment, book profits of the previous years also shall be adjusted for MAT purposes.
Reduced time limits to issue scrutiny audit notices
Budget 2021 proposes to;
Reduce the time limit for issuing scrutiny audit notices three months (instead of six) from the end of the tax year in which the tax return is filed;
Reduce the time limit for issuing income-escaping audit notices to four years from the end of the tax year (instead of seven years). However, in the case of serious tax evasion, a notice for audit may be issued up to 11 years from the end of the tax year;
Reduce the time limit for completing the scrutiny audit to 21 months from the end of the tax year (instead of 24 months).
Simplification of tax administration procedures
A dispute resolution committee is proposed to be formed to resolve disputes in a faceless manner for small taxpayers whose returned income is up to INR 5 million (~USD 70K) and the disputed amount is up to INR 1 million (~USD 14K). The Budget also proposes to form one or more Boards for Advance Ruling in order to make the advance ruling mechanism more effective and efficient (and replace the existing authority).
Withholding tax on the purchase of goods
Budget 2021 proposes a new section that seeks to apply a 0.1% WHT on the purchase of goods by a buyer that has a turnover exceeding INR 100 Mn (~USD 1.3Mn), and that purchases goods from an Indian resident seller of value exceeding INR 5 Mn (~USD 70K ). The WHT shall be 5% if the resident seller fails to furnish an Indian tax ID (permanent account number).
Advance tax does not apply to dividend income
Taxpayers face a practical challenge in estimating dividend income when calculating quarterly advance tax payments. To address this, Budget 2021 proposes that no interest shall be payable for any advance tax shortfall arising from failure to estimate the dividend income. In order to benefit from this proposal, any applicable advance tax would have to be paid in subsequent instalments upon the payment or declaration of a dividend.
‘Slump sale’ (business transfer as a going concern) to include all ‘transfer’ types
Budget 2021 proposes to extend the scope of a slump sale to cover all types of transfers undertaken by any means (including exchange of business for securities). The current definition covers transfer only through a ‘sale.’
Faceless proceedings for second-level appeal process before the income-tax appellate tribunal
Budget 2021 proposes to introduce faceless appeal proceedings before the Tax Tribunal (second-level appeal authority). This is in addition to faceless audits, the first-level appeal process, and penalty schemes that previously had been introduced.
Exemption on re-domiciliation of offshore funds to International Financial Services Centre (IFSC)
IFSC provisions were introduced to promote and enable overseas financial services entities to set up a presence in India and undertake financial services transactions that currently are carried on outside India (an IFSC unit is treated as a non-resident).
The Budget proposes to exempt from capital gains tax the transfer of capital assets by an offshore fund (original fund) to a resultant fund upon re-domiciliation to an IFSC before March 31, 2023. The Budget also would exempt from capital gains tax the transfer of shares or units held in the original fund in consideration for shares or units in the resultant fund.
Budget 2021 proposes to exempt the capital gains arising on the transfer of shares of an Indian company by the resultant fund (acquired upon re-domiciliation), provided that such capital gains originally were exempt before re-domiciliation.
Budget 2021 also proposes to allow carry forward losses of an Indian company if there is a change in beneficial shareholding with voting power on account of such re-domiciliation to an IFSC.
Other exemptions for non-residents
Budget 2021 proposes to provide the following exemptions to non-residents:
• Any foreign enterprise income from royalties for aircraft leases paid by a unit of an IFSC that has commenced operations on or before March 31, 2024, shall be exempt from tax.
• Any income arising to a unit of an IFSC (that has commenced operations before March 31, 2024) from the transfer of aircraft or aircraft engines shall be exempt from tax.
Conclusion
Budget 2021 proposal aims to boost India’s economic recovery through increased investments in public as well as private sectors, self-reliance through incentives across all business segments, and improved ease of doing business. The tax proposals present a stable approach and focus on increasing tax certainty, attracting foreign investments, and improving tax administration in India. Multinational entities should assess the impact of some of the key proposals such as the rationalization to the digital tax provisions and non-availability of depreciation on goodwill. The proposal to constitute a new Board for Advance rulings is a welcome move and paves the way for speedy disposals of private ruling applications.
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This article is written by Priyanshi Soni, a student of Symbiosis Law School, Noida. This article seeks to examine the recent plea filed against the Gujarat Freedom of Religion Act and also discusses the controversy over Love Jihad laws.
Table of Contents
Introduction
Interfaith marriages have been a question of societal non-acceptance for a very long time. But when there is a conversion of religion by the way of marriage, i.e., if the sole purpose of such marriages is conversion, then it is considered illegal as per the laws passed by state governments. Women are the major targets of these. Many states like Uttar Pradesh and Madhya Pradesh, have already passed laws on Love Jihad. Love Jihad is a term that is widely referred to Muslim agendas of trying to convert Hindu girls into Muslims under the guise of love.
Interfaith marriages and the laws
Over the years, there has been a stigma regarding interfaith marriages in India and societies consider it against their social norms, as casteism and regionalism still prevails despite several laws. Recently “Love Jihad” laws were enacted by the government formally to stop these marriages. Interfaith marriages refer to civil marriage between people who practice and profess different religions. Ideally, it is the choice of the people regarding whom they want to marry and whether they want to marry someone of their religion or not, but there are certain issues regarding the same-
Interfaith marriages are considered to be a forced religious conversion of one spouse and mostly, it is the woman.
Also, as per the Muslim Personal Law, conversion is the only way to get married to a non-muslim.
There is no such provision of caste determination for children who are born out of such marriages.
Another major issue is regarding the validity of Article 226 of the Indian Constitution in the context of annulling the interfaith marriage by the high courts. Lastly, the Special Marriage Act is now considered to be outdated and backward.
The Special Marriage Act
The Special Marriage Act, 1954 deals with inter-caste and inter-religion marriages. Marriages between Hindus, Muslims, Christians, Sikhs, Jains, and Buddhists are all covered under this Act. This statute extends to all Indian states. This Act applies not just to Indian citizens of various classes and religions, but also Indian people living overseas.
Requirements
The fundamental prerequisite for a lawful marriage under this Act is the consent of both parties to the marriage as if this condition is fulfilled, caste, religion, race, etc., cannot be a barrier to their union in this case. To marry under this Act, the parties must file a notice with the district’s Marriage Registrar of a district, where one of the spouses has been living or has lived (resided) for at least 30 days, but the residing period of 30 days should be before the filing of the notice, indicating their intention to marry each other. The marriage is said to be solemnized after 30 days from the date when such notice was issued. A legitimate marriage also requires the parties to consent to the marriage in front of the marriage officer and three witnesses. These are the fundamental prerequisites for a lawful marriage under the Special Marriage Act.
Conditions for Marriage
Few conditions must be fulfilled to qualify for a lawful marriage under this Act, which are quite similar to the conditions of a simple marriage. These are as follows-
The minimum age limit for boys/girls to marry is that the bridegroom must be at least 21 years old, and the bride must be at least 18 years old at the time of the wedding.
At the time of their marriage, both of them should be unmarried without any living spouse.
They should be mentally sane and fit at the time of marriage.
They should not be in a prohibited relationship that will make the marriage null and void, such as a blood relationship.
The challenges with the laws for interfaith marriages
Laws regulating marriage ties between two consenting people would not only violate constitutional rights but would also violate the concept of individuality and basic freedoms. Such laws violate one’s choice to marry and thus, in turn, violate the right to equality as per Article 14, right to freedom as per Article 19, right to life and personal liberty as per Article 21, and freedom of religion as per Article 25, which gives individuals the right to freedom to practice any religion, and personal laws of the religions have specified various laws relating to marriage for the followers of that religion. So, interfaith marriages are allowed as per the Constitution and it nowhere declares such marriages as void.
The U.P. Love Jihad law
Even the UP Government passed “Uttar Pradesh Vidhi Virudh Dharma Samparivartan Pratishedh Adhyadesh 2020”, i.e., The Uttar Pradesh Prohibition of Unlawful Conversion of Religion Ordinance, 2020, which among other things, declares that a marriage will be considered void if the sole purpose of such marriage is conversion. Also, those found guilty of conversion done through misrepresentation, force, undue influence, coercion, allurement, or by any fraudulent means would be punished. Now, in the new law, those who want to convert have to prove that such conversion is not forceful. This law is similar to the current Gujarat Freedom of Religion Act, discussed below.
The Gujarat Freedom of Religion Act
Recently, the Gujarat Freedom of Religion (Amendment) Bill, 2021 was passed by the Gujarat legislature which amended the Gujarat Freedom of Religion Act, 2003 with some stringent provisions against any individual or institution indulging in forcible religious conversion by marriage. Despite a lot of opposition stating this to be a “political agenda”, Governor Acharya Devavrata gave the assent to the Bill. This bill has been passed along the lines of laws passed by the states of Madhya Pradesh and Uttar Pradesh.
Key provisions
The Statement of Objects and Reasons of this Bill states that though there is a trend that promises a better lifestyle in the name of religious conversion, there are many women who are lured to marriage for religious conversion.
The original Act of 2003 provided only two conditions of allurement given during conversion under Section 2 of the Act as-
Any gift or gratification, either in cash or kind, and
A grant of any material benefit, monetary or otherwise.
But, in the amended Act, a third condition: “better lifestyle, divine blessings or otherwise” was added. Also, in Section 3, the original act merely outlawed forceful conversion from one religion to another by the use of force, allurement, or fraudulent means; however, the amended Act aims to prohibit acts such as forcible religious conversion through marriage or assisting someone to marry.
Section 3A, which deals with lodging the complaint, states that an aggrieved person, his parents, brother, sister, or any other person related by blood, marriage, or adoption may file an FIR against the individual for an offence committed under this Act with the police station having jurisdiction.
The amendment Bill [Section 5(2)] includes other categories of people as well, who will be regarded to have participated in committing the offence and will be punished as if they actually committed the offence. A person who acts or fails to do any act to assist another person to commit the offence or enable him for the same, or a person who assists, abets, counsels, or induces another person to commit the offence, would be considered such.
The burden of proof is on the person who caused the conversion of other persons and on the second person who assisted it, if at all. This has been mentioned under Section 6A.
The offences under this Act are cognizable and non-bailable and they will be investigated only by an officer who is not below the rank of Deputy Superintendent of Police (Section 7) and the marriages solemnized for the purpose shall be declared void (Section 4B).
The plea challenging the Act
There was a plea filed in the Gujarat High Court arguing that conversion by marriage which has been made an offence is against Article 21 and that it is for the married couple to decide which religion to follow (in case of inter-religious marriage).
The Bench of Chief Justice Vikram Nath and Justice Biren Vaishnav remarked that it is not correct that only because of marriage, someone converts, and therefore, it is an offence. It is an affair between two individuals and so, there should be their say as well. The Court issued a notice in this manner to the state and Advocate General to seek the response.
The order
On a hearing which took place on 17th August, the Gujarat High Court gave an interim order which held that the provisions of the Gujarat Freedom of Religion (Amendment) Act, 2021, will not apply to inter-faith marriages which take place without force, allurement, or fraudulent means. This was a move by the Court to protect the inter-faith marriage couples from being harassed. This was in response to a writ petition filed by Jamiat Ulama-E-Hind and Muhahid Nafees who challenged the provisions of the Gujarat Freedom of Religion (Amendment) Act, 2021 as they contended that the provisions violated the rights of inter-faith marriage couples. The Court further clarified that without any evidence or findings of fraud or force or allurement, the provisions cannot be applied in inter-faith marriages.
Observations made by the court
The High Court observed that this amendment brings conversions due to marriage through force or allurement or fraudulent means under the purview of the Act and a common man may not be able to understand this. A common man may perceive ‘every’ conversion due to inter-faith marriage as unlawful. The Court said that a prima-facie reading of Section 3 of the Act implies that marriage inter-faith followed by conversion would amount to an offence. Marriage itself and a consequential conversion is deemed as an unlawful conversion attracting penal provisions. But as per the argument made by the Advocate General, it is not so.
Therefore, the Court was of the opinion that rigours of Sections 3, 4, 4A to 4C, 5, 6, and 6A shall not operate merely because marriage is solemnized by a person of one religion with a person of another religion without force and such marriages cannot be termed as marriages for unlawful conversion. This interim order was mainly to protect the parties from being unnecessarily harassed.
While observing this, the court referred to the case of Shafin Jahan v. Ashokan (2018) which also held that the right to marry is a fundamental choice that gets covered under the right to life.
Lastly, the Court clarified that these provisions, as given under the Act, will not be applied if the conversion in the inter-faith marriage is based on free consent.
Conclusion
To conclude, there is a debate going on whether these love jihad laws are unconstitutional. The plea was filed with regards to the same and the Court explained as to when these provisions are actually applicable.
The rights should not be abused; converting to another religion solely for marriage is not a good idea. Marriage is the decision between two individuals and it is for no one to interfere in the same. The need is to accept this fact.
The applicability of the GDPR is directly related to member states of the European Union, which will lead to a greater level of security to European Unions. Many companies have initiated privacy processes and procedures to comply with the GDPR which contains a number of new protections for EU data subjects and provides for significant fines and penalties for non-compliant data controllers and processors.
The GDPR has two main technical terms: Anonymization and Pseudonymization through which it recognizes the privacy or security-enhancing effect and provides exceptions to many other provisions of the regulations when steps are taken to protect or guard personal data.
Recital 26 of the GDPR defines anonymization or anonymous information as “information which does not relate to an identified or identifiable natural person or to personal data rendered anonymous in such a manner that the data subject is not or no longer identifiable” and the GDPR does not apply to anonymized information.
What is anonymization?
Anonymization is the process through which removal of personal identification can be done whether it’s direct or indirect that may lead to an individual being identified.
An individual may be directly identified from their name, address, postcode, mobile number, picture or appearance, or some other unique personal characteristic.
An individual may be indirectly identifiable when certain data is linked together with other sources of information, including, their place of work, job designation, salary, their postcode, or even the fact that they have a specific diagnosis or disorder.
Once data is truly anonymized and individuals are no longer identifiable, the data will not fall within the scope of the GDPR and it becomes easier to use.
While there may be incentives for some organizations to process data in an anonymized form, this technique may devalue the data, so that it is no longer of use for some purposes. Therefore, before anonymization consideration should be given to the purposes for which the data is to be used.
What is pseudonymization?
“Pseudonymization” of data means replacing any identifying characteristics of data with a pseudonym, or, in other words, a value that does not allow the data subject to be directly identified. And it also replaces personal identifiers with non-identifying references or keys so that anyone working with the data is unable to identify the data subject without the key. This type of data may enjoy fewer processing restrictions under GDPR.
Recital 78 lists pseudonymizing data as a method that can be used to meet the GDPR’s principles of “data protection by design and data protection by default.”
Pseudonymized data also enjoys more freedom under the GDPR than non-pseudonymized, fully identified personal data. For instance, Article 6(4) of GDPR lists pseudonymization (and encryption) as a possible exception to the general rule that a controller cannot process data for a purpose other than for which it had been collected.
Under Article 9 of the GDPR, data controllers and data processors have been permitted to collect and use personal data of the data subjects in just about any way that they choose in a lawful manner.
This article will help you understand in brief the benefits of pseudonymization and how this technique may play an important role in GDPR compliance.
GDPR persuades pseudonymization of personal data
Pseudonymization is the process of separation of data from specific identifiers so that a connection to the identity is not possible without additional information saved separately.
Personal identifying information lies at the core of the GDPR. Any “personal data” which can be identified or defined as “information related to an identified or identifiable natural person” can be known as “data subject” and it falls under the GDPR.
As per Article 4(1) of the GDPR personal data consist of any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.
For Example:
A university that wants to process personal data may consider a variety of lawful bases depending on what it wants to do with the data.
Universities are classified as public authorities, so the public task basis is likely to apply too much of their processing, depending on the detail of their constitutions and legal powers. If the processing is separate from their tasks as a public authority, then the university may instead wish to consider whether consent or legitimate interests are appropriate in the particular circumstances. For instance, a University might rely on public tasks for processing personal data for teaching and research purposes; but a mixture of legitimate interests and consent for alumni relations and fundraising purposes.
The university however needs to consider its basis carefully – it is the controller’s responsibility to be able to demonstrate which lawful basis applies to the particular processing purpose.
The GDPR does not apply to any data that is not related to or does not identify the identified or unidentified person or the data that is provided anonymously in a way that the data subject could not be identified for a long time.
The concept of pseudonymization has been introduced under the GDPR in the European data protection law. It reduces risks from the perspective of the data subject, as a way for data controllers to enhance privacy and, among others, making it easier for controllers to process personal data beyond the original personal data collection purposes or to process personal data for scientific and other purposes.
Pseudonymization can significantly decrease the risks that are associated with data processing while maintaining the usefulness of the data. For this reason, the GDPR encourages controllers to pseudonymize the data they collect. Although pseudonymous data is not completely exempt from the regulation, the GDPR relaxes several requirements on controllers who use the technology.
What do you mean by pseudonymous data under GDPR?
As per Article 4(5) of the GDPR pseudonymization data is “the processing of personal data in such a manner that the personal data can no longer be attributed to a specific data subject without the use of additional information”, provided that such “additional information” is “kept separately and is subject to technical and organizational measures to ensure that the personal data are not attributed to an identified or identifiable natural person.”
In a nutshell, it is a privacy-enhancing technology where identifying data is separated and securely processed to directly identify data to ensure non-attribution.
With the help of Recital 28 of the GDPR we can understand it in a more clear way;
Pseudonymization – it can reduce risks to the data subjects.
Pseudonymization is not intended to preclude any other measures of data protection.
Pseudonymization alone is not a sufficient technique to free data from the purview of regulation.
Personal data which have undergone pseudonymization, which could be attributed to a natural person by the use of additional information, should be considered to be information on an identifiable natural person” (e.g., names, phone numbers, government-issued ID numbers, etc.).
To understand the data protection regulation compliance we need to understand the differences between these technical terms;
Anonymization V. De-identification V. Redaction V. Pseudonymization V. Tokenization
What is anonymization of data?
Data anonymization is the processing of data to prevent an individual’s identity from being retrieved. Now it would be very difficult or nearly impossible to connect the data to an individual in order to meet the requirements for data anonymization. There is no standard technique or procedure to comply with the anonymization under GDPR.
True data anonymization is irreversible and makes it difficult to identify a natural person whether it is directly or indirectly.
Legal basis of anonymization
As per Article 6 of the GDPR processing personal data for the purpose to anonymize the data must have a legal basis. “Further Processing” is also known as the Anonymization process. And the new processing must be in compliance with the principle of purpose limitation.
In a practical way the legal basis of the data controller or data processor contract or legitimate interest will be considered if the principle of collection, purpose, retention have complied.
Data anonymization used for GDPR compliance
If the process of anonymization has been done correctly, then data will no longer be linked to an identified or identifiable natural person and it can be considered as personal data. The GDPR does not comply with anonymous data and because of it, one can use this kind of data freely.
The process of anonymization can be used to improve any organization’s protection compliance in two main ways.
Privacy by design – strategic work to improve the protection of processed data
Data Minimisation strategy – a place where data can be anonymized and used with no risk of harming the data subjects.
Example of anonymization;
Anonymization is a preferred method for structured as well as unstructured data and it can be trickier to do so.
Below is the sample Email that has been properly anonymized;
“Hello [NAME],
I hope you are doing well and safe!
I have booked at [TIME] the day after tomorrow, but [TIME] would work. I will share the updated invite for that time with the day and date. Kindly revert if that does not work for you.
Thank You,
[NAME]”
What is de-identification of data?
De-identification of data means the procedure which is used to prevent personal identifiers whether it is both direct and indirect from being connected with information. And it also requires the removal of individual and semi-identifiers, but it is possible to link the original data back to the de-identified result by a process.
In practice, de-identification is often used to describe the process of removing direct identifiers (Address, Full Name, etc.) and sometimes semi-identifiers (Gender, Age, etc.), but less frequently. With a guarantee that the data cannot be linked back to an individual other than anonymity, although it is sometimes used as a term that includes anonymity as well as a pseudonym.
Example of de-identification of data;
Let us take the above-anonymized mail and change it to;
“Hello [NAME_1],
I hope you are doing well and safe!
I have booked at [TIME_1] day after tomorrow, but [TIME_2] would work. I will share the updated invite for that time with the day and date. Kindly revert if that does not work for you.
Thank You,
[NAME_2]”
And now let’s assume an organization decided to encrypt the direct and potential identifiers associated with the NAME_1, NAME_2, TIME_1, and TIME_2, and now let us store them in a separate way in case they ever needed to re-identify the email. So now the email will not be counted as anonymized because the identifiers can be linked to that.
But that does not mean that confidentiality has been compromised. For example, if analytics and machine learning teams are using de-identified email, they are really providing a great service to their users and their company. It is possible to gain insights while mitigating user privacy risks and mitigating the security risk of sending personal data to another part of an organization where it may be inaccessible.
What is redaction?
To add to the confusion between anonymity and erasure of identity, the term reduction is often used incorrectly. The reduction plays an interesting role in relation to de-identification. The reduction does not mean the complete removal of personal data, especially the selection of sensitive information. An example is the removal of credit card numbers from customer service conversations. Emails, call transcripts or chat logs are leaked with questions about how to use the most harmless vacuum cleaner.
Examples of pseudonymization data
In simple language, pseudonymization refers to a data management and de-identification procedure by which replacement of some data (such as a name, address, etc.) with fake data is often depicted as being linked to the original data. This has left a huge hole to fill in a word that means replacing information with fake data that is not linked to the original data.
A pseudonymization has many advantages without any additional association with identity. One, the data is more suitable for machine learning training and inference.
In the below example the PII has been replaced with fake data in bold;
“Hello, Arjun,
I hope you are doing well and safe!
I have booked an appointment for 11 am the day after tomorrow, but 5 pm would work. I will share the updated invite for that time with the day and date. Kindly revert if that does not work for you.
Thank You,
Dilip”
In addition, any personal or semi-identifiable information that is accidentally left behind will become like a needle in a haystack to separate from duplicate data. ); For example, suppose “Dilip” accidentally goes missing when he is not identified in the above email.
“Hello [NAME_1],
I hope you are doing well and safe!
I have booked at [TIME_1] day after tomorrow, but [TIME_2] would work. I will share the updated invite for that time with the day and date. Kindly revert if that does not work for you.
Thank You,
Dilip”
In private AI, we spent a lot of time learning how to do an automated pseudonymization correctly. Here’s a clue: Encyclopaedia improvements don’t work. We need to build our own transformer model structure (a type of machine learning model designed for common language processing) to generate realistic words and numbers in a contextual, decisive manner. It is important to carefully select training data to create realistic alternatives, including other ideas in the trade. As a type of pseudonymization, Tokenization is also referred to.
Blockchains are considered as personal data
Blockchain is a database in which data is stored and distributed to a large number of computers and in which all entries, called “transactions”, are visible to all users. It is a technology that enables the protection of data against manipulation. And in this sense, it increases the security of data. However, simply put, this security is achieved by making the records saved in the blockchain transparent and immutable; and this, in turn, is achieved through the redundant and distributed storage of each record at multiple nodes throughout a large network. If we consider the necessities of the EU General Data Protection Regulation (GDPR), the very core of the security of the blockchain is therefore in conflict with the privacy required for the protection of personal data. As a result, the development of a blockchain project desires to include cautious examination of what kind of data is being stored, and whether that data could be considered to be personal data.
If a blockchain processes personal data, the GDPR will apply. In order to find out if it does, the data has to be reviewed under the terms of the GDPR. For the data to be personal, a natural person has to be directly or indirectly identified. If found that the data does not, or does not any longer, identify a natural person, the GDPR does not apply since such data is anonymous. Since blockchain encrypts all entered data firstly we need to examine all data and where the line is drawn between anonymous data and indirect personal data. Secondly, two categories of data in the blockchain will be examined in which personal data may occur. The identifications of the blockchain, i.e. in the private and public key or in the public address, and the additional data, i.e. the transaction data.
According to the GDPR, personal data includes all information that refers to an identified or identifiable natural person. An identified person is relatively simple: name, or an email address that includes an individual name; a fingerprint, perhaps a photo of the face, and so on – these are immediate identifiers. The direct identifiability is set aside, and data that third parties have becomes relevant. To understand what kind of third-party data falls within this scope, the question is whether the identity can be determined with an equivalent amount of effort with the means available to the processing party or any other person. Factors for this include the cost of identification, the time required for available technologies, and technological development, which is always changing.
This could, for example, be the IP address. Are IP addresses personal data? The European Court of Justice has now answered this question, maintaining that attribution is possible for an ISP, given that, at least for a short period of time, there is the possibility of attributing an IP address to a customer via that customer account.
There are so many individuals who, for instance, broadcast their public key on their Facebook profile and ask for contributions in Bitcoin. In this case, of course, there is directly a connection to the Facebook profile. And specified that we will not be able to check every single public key, and we cannot eliminate the possibility that one of the account holders has made theirs public at some stage in the past. We need to assume that all public keys represent personal data.
What is the tokenization of data?
The last word often used to identify the type of token that replaces some data is known as tokenization.
By replacing personal data with an incidental token. A link between the actual data and the token is maintained (E.g – for payment processing on websites). The tokens may be generated by a one-way operation or maybe entirely random numbers. Various types of tokenization can also be varying if they rely on encryption. Let us take an example to store only the decryption key instead of the link between each piece of personal data and their restoration.
Tokenization of the direct and quasi-identifiable information in our previous email example;
“Hello 342456D 852BC11A3C6532JF0T9S888C9LAA,
I hope you are doing well and safe!
I have booked at 1122E05147D0342FC087KKBDECCA544F9 day after tomorrow, but J8J9988D2321D4B8007DF24547BB1A96C would that would work. I will share the updated invite for that time with the day and date. Kindly revert if that does not work for you.
Thank You,
DSD45FAJKLJLJ76897938BJHJSDKHKUYWOO76876DD
Although tokenization is very useful for payment processing, it is unlikely to be a winner for structured data security, as there is no relevant information regarding it, compared to non-linkage pseudonymization.
In a nutshell, although direct and quasi-identifiers are removed one way or another by anonymity, de-identification, editing, pseudonymization, and tokenization, they are all very effective in retaining the relevant information of the original data.
European Union Agency For Cybersecurity (ENISA) recommendations for pseudonymization
The European Union Agency for Cybersecurity (ENISA) has published a report on pseudonymization techniques and best practices, which discovers the basic ideas of pseudonymization, as well as technical clarifications that can support implementation in practice.
The report discusses, in particular, the parameters that may affect the choice of pseudonymization techniques in practice, such as data protection, utility, scalability, and recovery.
The ENISA report states about pseudonymization techniques:
Under a single identifier, the pseudonymization counter is the simplest pseudonymization function as the identifiers are substituted by a number chosen by a monotonic counter. And in terms of data protection, the counter provides for pseudonyms with no connection to the initial identifiers.
Secondly, Random Number Generator (RNG) is a mechanism that produces values in a set that have an equal probability of being selected from the total population of possibilities and, hence, are unpredictable. This approach is similar to the counter with the difference that a random number is assigned to the identifier.
Thirdly, a cryptographic hash function takes input strings of arbitrary length and maps them to fixed-length outputs. It satisfies the following properties:
∙ One-way: it is computationally infeasible to find any input that maps to any pre-specified output.
∙ Collision free: it is computationally infeasible to find any two distinct inputs that map to the same output.
It also builds on specific use cases for the pseudonymization of certain types of identifiers (for example, IP addresses, email addresses, and complex data sets).
The report determines that the field of data pseudonymization is a challenging one in complex information infrastructure. This largely depends on matters of context, the entities involved, data types, background data, and implementation details.
Furthermore, there is no single, easy solution to pseudonymization that works for all methods in all possible scenarios. The report states that it is necessary to implement a robust pseudonymization process to reduce the risk of discrimination or re-identification attacks while upholding the degree of utility required to process pseudonymized data.
The report makes a series of recommendations, set out below:
Data controllers and processors should carefully consider the implementation of pseudonymization following a risk-based approach, taking into account the purpose and overall context of the personal data processing, as well as the utility and scalability levels they wish to achieve.
Producers of products, services, and applications should provide adequate data to controllers and processors about their use of pseudonymization methods and the security and data protection levels that these provide.
Regulators (e.g. data protection authorities and the European Data Protection Board) should provide practical guidance to data controllers and processors about the assessment of risk while promoting best practices in the field of pseudonymization.
The European Commission and the relevant EU institutions should provide support for defining and disseminating the state-of-the-art pseudonymization, in cooperation with the research community and industry in the field.
The research community should work on extending the current pseudonymization techniques to more advanced solutions which efficiently address special challenges arising in the big data era. The European Commission and the relevant EU institutions should support and propagate these efforts.
Benefits of pseudonymization
Case-1 : removes sensitive data
Pseudonymization enhances privacy by removing the identity of sensitive information. It removes or masks direct identifiers such as full names, contact information, credit card numbers, or social security numbers (SSN). As a result, Pseudonymization can help to reduce the risk of data loss, data theft, and data breaches.
Regardless of whether hackers have access to specific user credentials or malicious aid have legal access, under pseudonymization they cannot obtain ‘real’ data. Whereas Data controllers can use this technology to identify specific data from securely and directly processed data.
Case-2 : empowers data-driven business
Pseudonymization helps to protect the rights of individuals, and also allows the use of data in a legal way. Already small and big companies using data is an important part of doing business. Although GDPR requires data controllers to collect data only for “specific, explicit and legitimate purposes” it provides data controllers that allow greater flexibility to process personal data for a different purpose. For this, it was first collected.
Let’s take data masking, for example, which is considered a pseudonymization that replaces sensitive data with hypothetical but realistic values. We can tell you that a man named Dilip Vishwakarma is 25 years old and a record shows his Social Security number (SSN) is 245-19-9876. After the data was hidden, Dilip Vishwakarma could be 46-year-old Premchand Parmar and his SSN 111-24-7687. Masked data maintains reference integrity and operational accuracy to securely process personal data for historical, statistical, and scientific purposes. And this is the main reason why pseudonymization contributes to the processing of personal data rather than the actual collection purposes.
Case-3 : method of data minimization
Last but not least, pseudonymization permits data controllers to practise “data minimization”, an additional concept introduced by GDPR that limits the use of data required for a specific purpose.
For example, an insurance institution gathers personal information for the issuance of a policy. Further, the institution needs to evaluate this data to enhance policy prices. According to the data minimization principle, the insurance institution cannot do so because the personal data collected for one purpose (e.g. policy issuance) cannot be used for a new purpose (e.g. generate a database for the price investigation), and if the data is pseudonymized, for example, by masking the company for price analysis. The database can be used because GDPR’s Data Protection pseudonymization dictates the protection of personal data.
Implementation of pseudonymization on SME’s
Small and Medium Enterprises (SMEs) are defined as any enterprise which employs fewer than 250 persons, and which have an annual turnover not exceeding €50 million. 9 out of every 10 enterprises in the EU is an SME and they are understood to generate two out of every three jobs. Given this, it is a policy objective of the European Commission to promote entrepreneurship and improve the business environment for SMEs.
SMEs are explicitly mentioned in the text of the GDPR – Recital 13 indicates that one motivation for the Regulation was to provide “legal certainty and transparency for economic operators, including micro, smalls and medium-sized enterprises”.
Recital 132 of the GDPR states that “Awareness-raising activities by supervisory authorities addressed to the public should include specific measures directed at controllers and processors, including micro, small and medium-sized enterprises”. The regulation also provides some specific exemptions to SMEs – for example, reduced requirements around records of processing activities for non-regular processing (Article 30).
Privacy officers and IT professionals are well versed with the benefits of data pseudonymization and data anonymization. So business owners, non-profit organizations, SMEs, or big enterprises are all subject to the GDPR. Therefore all are responsible for the protection of personal data and exposed to potential fines and reputation damages.
The GDPR imposes two main kinds of fines under its regulation:
As per Article 83(4) penalties up to €10 million, or in the case of an undertaking or 2% of the organization’s global turnover of the preceding financial year whichever is higher. These fines are generally issued for violations connected with record-keeping, data security, data protection impact assessments, data protection by design and default, and data processing agreements.
As per Article 83(5), the framework of the fine could be up to €20 million euros or up to 4 % of their total global turnover of the preceding financial year whichever is higher. The above fines were issued for violations relating to data protection principles, the legal basis for processing, information to data subjects, the prohibition of processing sensitive data, denial of data subjects’ rights, and data transfers to non-EU countries.
According to Article 83, GDPR, each individual fine should be effective, proportionate, and dissuasive,taking into account:
Thenature, gravity, and duration of the violation;
The intentional or negligent character of the infringement;
Actions taken by the data controller or data processor to mitigate the damage suffered by data subjects;
The degree of responsibilityof the controller or processor (related to technical and organizational measures);
The previous violations by the data controller or data processor;
Cooperation with the supervisory authority;
Affected categories of personal data;
How did the supervisory authority learn about the violation;
Where measures previously ordered against the controller or processor regarding the same subject;
Compliance with approved codes of conduct or approved certification mechanisms;
Any other factor applicable to the circumstances of the case.
Hence it is very important to understand that the benefit of implementing such techniques will overcome the implementation cost and contribute to the education of everyone handling and processing personal data.
GDPR creates an incentive for controllers to pseudonymize data
The GDPR determines the power of pseudonymization which helps to protect the rights of individuals and also permits the use of data in legitimate interest.
Recital 29 highlights the GDPR’s mission “to encourage pseudonymization within one controller and to make applicable pseudonymization when processing personal data by the same data controller and that’s processing personal data for other purposes, for a longer period by ensuring appropriate safeguards so that unauthorized people find it difficult to identify the original or personal data refers to.
These incentives appear in five different sections of the regulation.
Pseudonymization is a fundamental component of “data protection by design”
The GDPR was the first to introduce the concept of “data protection by design” informal design in the legislation of the EU. At the national level, data security by design means that privacy should be an element of product development, not something to be dealt with later. Therefore, Article 25 (1) of the GDPR regulators must apply the appropriate protections “during the determination and processing of processing equipment.” One way controllers can do this is by pseudonymization of personal data.
Controllers can use pseudonymization to avail of the GDPR’s data security obligations
According to Article 32, controllers must implement risk-based allowance to protect data security. Measures like “pseudonymization and encryption of personal data” as per the [Article 32 (1) (a)] of GDPR. The use of pseudonymization under this provision has serious implications. Data controllers need to notify the Data Protection Authority in the event of a security event that provides for a “threat to the rights and freedoms of natural persons” as per the [Article 33 (1)] of GDPR. In addition, they must at any time inform the persons concerned that the risk is “high” as per [Article 34 (1)] of GDPR. Because pseudonymization reduces the risk of harming data subjects, controllers who use it can avoid reporting security incidents.
Controllers can put a restriction on data subjects with access, rectification, and erasure or data portability if they can previously identify a data subject
A controller can use pseudonymization methods that prevent the data subject from being rediscovered or re-identifiable. For instance, if the controller deletes the detected data directly without keeping it separate, the data may not be retrieved without collecting additional information. Article 11 recognizes this situation and provides exemptions from the right to access, rectification, correction, eraser, and data flexibility rights set forth in Articles 15 to 20.
The exception applies if “the controller can be proven not to be in a position to identify the data subject” and, if possible, it provides information on these exercises for data topics. GDPR does not need the Controller to keep additional information “for the sole purpose of complying with this Regulation”. If additional information is provided to the Data Subject Controller, Articles 15 to 20 should be allowed to exercise its rights if it allows it to be identified in the data set.
Pseudonymization is an extensive shield for processing personal data for statistical, historical, and scientific purposes
GDPR further implements an exception to the objective limitation principle of data processing for statistical, historical, and scientific research. Nonetheless, Article 89 (1) of the GDPR stipulates that controllers who process data for these purposes must implement “appropriate protections under this provision” for the rights and liberties of the data subject “. In particular, controllers must adopt” technical and organizational measures “to adhere to the principle of data minimization. The only example provided is the use of pseudonymization for controllers, so that processing “does not allow or no longer concede the identification of data subjects.”
Pseudonymization simplifies processing personal data apart from original collection purposes
The GDPR requires controllers to gather data only for “specific, explicit and legitimate purposes.” Article 5 of the GDPR provides an exception to the Objective Limit principle, however, is that data is further processed in a way that is consistent with the initial objectives of the collection.
Even if processing depends on a number of factors mentioned in Article 6 (4) of the GDPR, including the link between the processing activities, the collection context, the nature of the data, and the consequences for the data subject. An additional factor to consider is “the existence of reasonable security measures, which may include encryption or pseudonymization” [Article 6 (4) (e)]. Hence, the GDPR allows controllers who pseudonymized personal data to an extent to process the data for a separate purpose than the one for which it was collected.
Conclusion
Pseudonymization is an established and accepted de-identification process that has gained additional attention following the adoption of GDPR. Where it is referenced as both a security and data protection by design mechanism. As a result, in the GDPR context, pseudonymization can motivate the relaxation to a certain degree of data controllers’ legal obligations if properly applied. GDPR Data is different from anonymous data and endorsed by the GDPR.
Data controllers, as well as producers of products, services, and applications, should adopt data protection as a key design approach in their processes; doing so, they should reassess their possibilities of executing data minimization by applying proper data pseudonymization techniques. Regulators (e.g. Data Protection Authorities and the European Data Protection Board) should encourage the use of pseudonymization as a core data protection by design strategy by further elaborating on its role under GDPR and providing relevant guidance to controllers as well as SMEs.
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This article is written by Adithya Prasad, pursuing Diploma in International Business Lawfrom LawSikho.The article has been edited by Aatima Bhatia (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).
Table of Contents
Evolution of international trade
Trade is among the oldest activities known to mankind; it has formed the bedrock of human civilization. The concept is simple, however as everything man does, trade as an act has taken many incarnations and with each incarnation, the law had to change to better adapt. This article will focus on the evolution of law and its presence over the markets of a nation and the world itself. Along with which the following questions will be answered:
What is the free-market dynamic? Why is it widely accepted and/or debated upon?
What position did the law initially hold?
Freemarkets : history and morality
On March 9th, 1776, Adam Smith, one among the most profound economics and philosophers of his time authored a book that would forever change the world of global economics. Titled, ‘An inquiry into the Nature and Causes of the Wealth of Nations’ better known as the Wealth of Nations, described the fundamentals of industrial capitalism and the end for the prevailing mercantilist system.
The book can be summarized into the following points:
The central idea behind Smith’s “The Wealth of Nations” is that our individual need to fulfil self-interest results in societal benefit, called the “invisible hand”.
This invisible hand combined with the division of labour in an economy, results in a web of mutual inter-dependencies that promotes stability and prosperity through the market mechanism.
Smith rejected the need or idea of government interference in all market activities, instead state governments should serve just three functions: protect national borders; enforce civil law; and engage in public works (e.g., education).
He elaborately spoke about the invisible hand, which he understood as a key factor that governs all markets. This invisible hand is what one would call the amalgamation of every decision taken, rendered, thought, and executed by all players in the market. One could, loosely call it the average outcome of all choices made in a market to affect the market thereof.
“This free-market force became known as the invisible hand, but it needed support to bring about its magic. In particular it was the market that emerged from an increasing division of labour, both within production processes and throughout society that created a series of mutual inter-dependencies, promoting social welfare through individual profit motives.”
Another concept that Adam smith explained with the invisible hand is the inevitability of globalization. He explained that all nations that take part in trade amongst themselves in any micro or macro way will find themselves integrated and pitted against other parties from different nations in the free market system. However, this theory, though accepted by most economists and philosophers till this date, had its own legal issues.
Dynamics of the Free Market
The importance of the free-market dynamic cannot be explained in a book much less an article. When one reads about the free market dynamic, the basic idea is that the market remains undisturbed through its operation. This dynamic remains favourable to all merchant guilds and others engaged in business as it creates an equation where only buyer and seller exist without third party influence. Merchant guilds, in the early eras of trade heavenfuls pushed for independent marketplaces under their respective rulers to amass the most amount of profit.
This also brings into question the morality of free markets. The concern for free markets comes with the notion that the parties involved must be the participants of the markets and no other third party.
Richard Ebeling, professor of economics at the Citadel, The Military College of South Carolina said: “The hallmark of a truly free market is that all associations and relationships are based on voluntary agreement and mutual consent. Another way of saying this is that in the free market society, people are morally and legally viewed as sovereign individuals possessing rights to their life, liberty, and honestly acquired property, who may not be coerced into any transaction that they do not consider to be to their personal betterment and advantage.”
This did not stand, with the concept of state-owned services being used to run such free markets, rulers and then states all wanted a part of the merchant business This lead to the formation of trade laws or what was known, back in medieval times as Lex Mercatoria and Lex Maritima also known as the “law of merchants on land” and “law of the merchants on sea”. However, these laws were crude at best, they did not fulfil the purpose that modern trade law does.
What purpose did the law initially serve?
The law initially held a very divergent attitude, the medieval era saw most nation states trading in cold coins with the insignia of the ruling house. The law in such eras varied between the ruling houses with some city states such as Venice being comparative tax havens to other city states. Most laws in this time were basic laws that dealt with import and export tariffs, routine checks for questionable goods and other basic elements. The difference was between how each state treated trade as an aspect of their society, warring states often had more stringent laws that helped the war effort while others were much more lenient due to geographical advantage.
“The king has jurisdiction over merchants to put them to the stand to right”, These laws were often in accordance with the laws of nature. English courts applied merchant customs depending on the nature of trade and its existence must be consistent with the law. One could say that early laws of trade were foundational bits to common law today, a philosophy and codification of law practiced by most commonwealth countries till date.
Prior to and during the medieval era, international trade was never a law itself but an activity that was practiced. Heavy accounts on this were found in the entries of famous explorers and travellers who went along the silk route and across the seven seas. In such journals, laws were described in a similar fashion with respect to trade since they all followed a retributive style of punishment to morally incorrect activities. One could say that the law was what the powerful wanted it to be. Early accounts of rulers and ruling parties determined the fate of those that lived on their land.
Going a century ahead, into the 16th century mercantilism reached what was its peak in human history. This philosophy of trade ran around the hoarding and exchange of gold as a common value of exchange.
“Mercantilism was based on the conviction that national interests are inevitably in conflict—that one nation can increase its trade only at the expense of other nations. Thus, governments were led to impose price and wage controls, foster national industries, promote exports of finished goods and imports of raw materials, while at the same time limiting the exports of raw materials and the imports of finished goods. The state endeavoured to provide its citizens with a monopoly of the resources and trade outlets of its colonies.”
An illustration of the mercantilist spirit is the English Navigation Act of 1651, which reserved for the home country the right to trade with its colonies and prohibited the import of goods of non-European origin unless transported in ships flying the English flag. This law lingered until 1849.
In summary, law held a purpose that was decided by morality often bought with gold and other jewels. This was going to go through a massive change because society was going to take its greatest evolution yet, the Industrial revolution.
Trade law of the modern world
The industrial revolution saw two major ideologies come into the world of philosophy and economics. While liberalism was on the rise, the majority supported labour unions whilst the majority of power was held in the hand of the lesser in number, capitalists.
“After Adam Smith, the basic ideas of mercantilism were no longer considered defensible. This did not translate into nations abandoning all mercantilist policies. There was still a restrictive economic philosophy which they justified by the claim that the government should keep foreign merchandise off the domestic market in order to shelter national production from outside competition”.
This translated into law, where the industrial revolution saw the law adopt a more holistic nation state approach. With the rise of colonization, common law in this era was the most widely accepted form of law. This version of trade law, focused on the nature of goods traded, import, and export duties and even say a more widely accepted form of force majeure or the act of God.
In Tennant v Earl of Glasgow (1864 2 M (HL) 22) Lord Chancellor Westbury enumerated on the act of God in the case:
“What is denominated in the law of Scotland damnum fatale — occurrences and circumstances which no human foresight can provide against, and of which human prudence is not bound to recognize the possibility; and which, when they do occur, therefore, are calamities that do not involve the obligation of paying for the consequences that may result from them.”
This concept played a heavy importance in the realm of trade law as the transportation of goods at the time was still crude and unpredictable. The silk route was not the only trade route that was taken, this legal integration and the colonial effort saw for the first-time a near unified law on trade between countries. The British presence though harmful for all countries including India, played a vital role in shaping what is now the global economic integrated market.
Towards the world wars, protectionism came back into existence through the German- Nazi rule where the country would spend its time protecting its assets to aid the war effort. Seeing the birth of major companies that are still operational today. The world war also saw a huge increase of trade in the intellectual property rights segment. Where countries would commission other country’s weapon designs to aid their armies in the war effort. Even so, before the development of the M1 grand, America’s most iconic weapon, their standard issue rifle was based on a design from a German manufacturer which required royalty payment.
By the end of world war, trade as an activity had seen a tremendous change, with the rise of the United Nations and the global collaboration effort, trade was seen as that activity that could bind the world together. With the batter of both physical goods and meta-physical goods such as ideas and other goods. The world was ready for economic integration.
Conclusion
Trade in the modern world is governed through treaties, agreements, and organizations such as the International Monetary Fund, International Trade Centre, etc. Each having its own rules and regulations however, the laws followed in the general space of international trade have not changed much post World War II. Yes, there were slight changes in terms of tradable goods and services, methods, and channels of trading, etc. This however does not see an actual shift in the legal thought process of society itself. The general principle of international trade laws are as follows:
National Treatment Principle:“Imported and locally-produced goods should be treated equally, at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights, and patents. These principles apply to trade in goods, trade in services as well as trade related aspects of intellectual property rights.”
Most Favoured Nation Principle: “The MFN principles ensures that every time a WTO Member lowers a trade barrier or opens up a market, it has to do so for the like goods or services from all WTO Members, without regard of the Members’ economic size or level of development. The MFN principle requires to accord to all WTO Members, any advantage given to any specific country.”
The future does not see much change, apart from human activities finding their integration into the title of interplanetary species with spatial conquest being our next goal. Even then, the primary philosophies of trade will not change, they will have additions and subtractions in terms of contents but not in context.
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Traditionally, India has been a knowledge society. Many great philosophers have walked on this land. Indian culture and traditions have welcomed and captured a wide spectrum of thoughts, through practice as well as writings. Our culture has always emphasised the need for quality education and has opened a door of perception, that education is the greatest power; it is the essence that a child carries forward in a form of a genetic chain. The transitions of natural values have been institutionalised through the abodes, also known as the Ashrams in Indian culture. Hinduism is at the centre of India and yet it is not the only religion practiced, propagated and preached here – we have Islam, Christianity, Sikhism, Buddhism, Sufism and other cults being followed too. Each of these religions has four primary elements that add up to a holistic education system.
The nomenclature of these elements may vary from culture to culture but the basic understanding is this – the first element comprises of a concrete and specific aspect of learning, the second element emphasis on methods and modes of learning; the third aspect progresses towards a more sublime understanding, whereas the final element is an abstract dimension of existence.
Different religions, one philosophy
In Hinduism, these stages are Brahamchari (student life), Grihastha (household life), Vanaprastha (a semi-retired life) and Sanyasi (a full-retired life). The Western culture also stages these elements of human development, in four stages.
The first being disordered and chaotic, where one disobeys authority and is unwilling to accept subordination.
The second stage being of blind faith;
The third stage of inquisitiveness – where one experiments and only then will rely on the belief.
Lastly, the stage where they start accepting the beauty of nature.
In Islam, these four stages are:
Shariat, following by the book,
Tareeqat, that emphasis on training,
Ma’refat, which means the apparatus, and
Haqeeqat, which, as the name suggests, is the divine truth.
In Buddhism too, this process is categorised in four stages of enlightenment – Sotapanna, Sakadagami, Anagami and Arahant:
The first stage is that of a partially enlightened individual,
The second being that of a person who still has desires and ill-will but comparatively less than the first stage.
The third stage, being that of a person completely free from ill-will and fantasies; and
Lastly, a person attaining complete enlightenment, who does not seek rebirth on their passing.
Our culture does not teach us how to be emotional, empathetic, how to respect and make friends or attain interests. An individual grows into these values through education, through these four stages of life. The holy books, the Mahabharata, the Ramayana, the Bhagvat Gita, the Bible, the Quran, the Guru Bani, have shaped our consciousness. The prime importance of Human Rights was in the rich Indian legacy of Vasudhaiva Kutumbakam, which means that “the world is one family.” The basis of Human Rights is Dharma, which defines human experience and existence. Dhr means to uphold, to nourish, to support. The Law of Dharma in ancient India, attempted at structuring an organized social life wherein each individual attained their goals, within the parameters of social norms of principles and integrity. Whether a ruler or the ruled, every individual is governed by their own dharma. The rights and duties, the duty to uphold the law, as well as being subject to law, is dharma.
A walk through eras of Indian history
Kautilya
Kautilya’s Arthasastra outlines the rights and duties of kings/rulers, priests, soldiers, ministers, citizens, etc. The duty of a ruler is administration, protection of the state from external aggressions, maintaining law and order and safeguarding the welfare of the people. It is the duty of the ruler to protect the agriculture in the state, to build storage reservoirs or to provide resources to those who build reservoirs by giving them land, building roads, channels and sanctuaries or giving grants of timber and implements. The ruler shall enforce and execute the laws on the subject of discipline. A minister, according to Kautilya, must be a self-controlled man, having good knowledge of politics, an orator, a good debater, of a pleasing nature and courageous.
While referring to the duties of a citizen, he states that they shall take appropriate precautions against fire; not to light fires during the middle quarters of the day. If a house catches fire, the occupant, whether or not a resident, shall take immediate steps. That the citizens shall not throw dirt on the streets or let mud and water collect there. Further, one shall not kill or throw out dead bodies of animals or human beings inside the city but dispose of the remains in a proper manner. The text also refers to the womens’ right to property. A woman has control over her dowry and stridhan, to pass on the possessions to her male heirs.
Buddha
Gautama Buddha was educated to honour not only ones’ parents, brothers, sisters, children, relatives and family but also the other individuals in the society. If somebody hurt the other, physically or verbally, it is considered that the individual may be a person lacking the basic human qualities. Regard for human dignity is the basic social message of Buddhism. Buddha himself has suggested the people not to accept his words, simply because they were his words, but only after investigating the words with proper reasoning. Thus, he provided freedom of thought and expression to the people. Ashoka, adopted and publicized Buddhism and established a welfare state, one in which there would be no conflict among the people regarding caste, sect, religion, etc.
During the supremacy of the Guptas, the main objective of the king was to work for the welfare, comfort and prosperity of the people. The inscriptions of the time, mentions that a king can become a successful ruler only if he waits upon the elders, studies the art of government, embraces piousness and protects his subjects as efficiently as the celestial guardians. It was his duty to protect the province from external invasions and internal revolts. Harshavardhana’s administration resembles that of Mauryas and Guptas. Disguising himself like an ordinary man, he wandered in the country for the welfare of his subjects. He served his subjects very sincerely and kept his subjects happy. The most important feature of the middle ages was that the writers considered that the ruler was under the supremacy of the natural law. This idea led to the development of the doctrine of natural rights of man.
Mughal Period
The Mughal emperor Akbar, with his policy of universal reconciliation and tolerance established an era of traditions by the proclamation of Tauhit-i-Ilahi [Din-Ilahi] or universal religion, in which he incorporated the best elements from all religions. The Islamic tradition of Human Rights became evident in the medieval ages. The holy Quran preached universal brotherhood and equality. The Sultan was the head of the state. It revived and regenerated the cherished Indian values of truth, righteousness, justice, and morality. These values were rooted in religion, humanitarian traditions and the never-ending resistance for freedom and equality.
British Rule
Human Rights took shape during British rule. Resistance to foreign rule was manifested in the form of demand for fundamental freedoms and civil and political rights for the people of India. The main demand for Fundamental Rights found place in the constitution of India Bill, 1895, also known as the Swaraj Bill and the Home Rule Document. It emphasized on the formulation of a Constitution, which would guarantee every citizen the basic human, fundamental rights of Life and Liberty. The Indian National Congress, in the year 1925, finalized a draft of the Commonwealth of India Bill, which embodied in it a Declaration of Rights, the demand for which was repeated by the Motilal Nehru Committee appointed in the year 1928.
Whilst different movements were led and resolutions passed; the basis of all this was to see and free India, which was a fundamental right of the citizens. In 1945, the Tej Bahadur Sapru committee stressed on the need for a written code for Fundamental Rights. As a result, the Constituent Assembly included Human Rights in the constitution of Independent India. However, lately, there have been conflicts between the authority and the citizens; and to understand the problem between the two; it is necessary to examine the origin of authority.
Contrary credence
In our culture, there are two contrary beliefs. One, that human beings are defenceless and submit to the paths laid down by gods. That the gods appointed a king on his behalf, whose assignment was to protect the people and maintain law and order. In return, the king would claim a share of the produce. We also strongly believe in the duty approach and considered that one’s duties in accordance with dharma ensured the rights of other individuals and therefore, human rights did not exist.
The second, highlighting the existence through small gestures of mankind, as reflected in the sacred books. For instance, Karmanye badhika rastu ma falesu kadachan, which means, one must go on performing their duties without being worried about the reward. This is a dictum from Bhagwad Gita that we often hear parents and teachers try to inculcate in their children, that despite failure, hardwork is the key, which will eventually bring better results. Non-violence or Ahimsa is at the centre of Indian culture and ensures rights of the citizens, by implication and interpretation. It is a concept which flows from a positive value of protection. Ahimsa means not hurting anyone, both physically and psychologically and it is here that the inference of Ahimsa coincides with the main concern of the present human rights movement worldwide.
However, with evolution and advancement, human beings started lacking empathy and developed a sense of selfishness and greed. The ‘duty first’ approach was long forgotten and the architects of society, ones in power, did not adhere to the code laid down, creating a scenario wherein each individual started fighting for their rights. Such a situation resulted in anarchy and gave birth to caste-based social disorder. While correlating culture and human rights law, I have tried to maintain a balance by emphasising the similarities as well as the contradiction between the two aspects. For the sake of brevity, I have restricted this article to the main religions followed in India – Hinduism, Islam, Christianity, Sikhism and Buddhism.
Human rights is everywhere
Starting with the religion which is followed the most in India, Hinduism. We have caste-based inequalities; the practice of this inequality has been approved in the Dharma Shastras. A verse in the Mahabharata states, “Brahmins are fair, Kshatryas are reddish, Vaishyas are yellowish and the Shudras are black.” A person’s caste is determined from birth itself, on the basis of colour. Article 2 of the Universal Declaration of Human Rights (UDHR) states that “Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or another opinion, national or social origin, property, birth or another status.” Racial and caste-based discrimination fails the purpose of this Article. Society has been formed in a rigid way; it lacks flexibility and is based on caste-based hierarchy. People did not believe in the concept of equality. This hierarchy is against the respect for an individuals’ dignity, thus violating Article 01 of the UDHR, Article 06 – right to recognition as a person and Article 19, which promotes the right to freedom of opinion and expression. On the other hand, we have flexibility in our approach towards worshipping Gods. We do not believe in Monotheism, we propagate, practice and preach in our belief that worshipping any God, would always lead to salvation. No religion teaches to hate, all religions fundamentally promote brotherhood and peace and yet there are many differences in each religion; the differences that divide the people in their own religion.
The conquest of India by the Muslims brought Islam to India; it made such a deep connection with the souls of people, that it became the second most-followed religion and culture of India. It has time and again propagated the right to equality. While a gathering in Mecca, sometime around 632 AD, the Prophet while delivering “Farewell Sermon”, said, “O mankind, the Arab is not superior to non-Arab, nor vice-versa; the white has no superiority over the black nor vice-versa, and the rich has no superiority over the poor. All of you are Adam’s descendants and Adam was made of earth.” This clearly shows that equality was at the heart of the religion even then, as it is now. Why do Muslims fast during Ramzan? What is the central idea behind this? It is the lesson of self-restraint. It is easy to follow a path led by others but cultivating self-discipline is very difficult. Fasting during Ramzan encourages humility, kindness, compassion and mercy. It trains an individual to a righteous path. Are these not the essential virtues of human rights? Ramzan, protects and promotes these rights, respecting many Articles of the UDHR. Even the sufis and saints uphold the doctrine of oneness. Mystic, philosopher, poet, Ibn Arabi said, “My heart is a mosque, a Church, a synagogue and a temple.”
“Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despise you and persecute you.” This verse encourages love, compassion, tolerance, equality and brotherhood. Even in Christianity, there is no room for slavery or inhuman punishments to an individual, as is rightly deduced vide Article 4 and 5 of the UDHR. Religion provides for the right to life, to follow any religion, to love, to have a family, to choose a profession of choice and to treat fellow beings as a family.
The term “Sikh” has been derived from the Sanskrit word, “Sishya“, meaning disciple. Sikhism is a religion of the common person, emphasising simplicity. Guru Nanak conceived of God as Nirakara and rejected idol worship and superstitious beliefs. Nanak found a familiar connection between Hinduism and Islam; and with his own faith and principles, gave birth to Sikhism. One of the most common traditions in this religion, which is of Langar, upholds the UDHR principles. It is a general notion to us but when pondered upon it a bit strongly, it promotes an egalitarian society. The Gurus speak of, preach and follow in equality in all aspects, on the basis of caste, religion, sex, colour, race any other possible strata of the society.
Buddhism is all about Ahimsa, service, humility, non –hatred, compassion and personal morality. Buddha rejected the arrangement on the basis of caste. Buddhist monasteries were open to all castes but it was soon realised that the Brahmins in the Indian culture were taught in Sanskrit, while the others were not. Therefore, promoting secular education became the mission and one of the main contributions of this religion. Buddhist traditions are akin to the UDHR; law must be for the welfare of all and not merely for the welfare of the elite. The Buddhist conjecture emphasized the quasi-contractual nature of the beginnings of government and on the sovereignty of the people which is fairly similar to Article 21 of the UDHR. With this background, a lot of stress was given to individual dignity and fundamental and basic natural rights of the beings.
A little closer to achieving human rights, outshines the rest
Why did I emphasise so much on education and these religions? I read somewhere what the Roman Emperor Marcus Aurelius wrote:
“All things are woven together and the common bond is sacred, and scarcely one thing is foreign to another, for they have been arranged together in places and together make the same ordered Universe. For there is one Universe out of all, one God through all, one substance and one law, one common reason of all intelligent creatures and one Truth. Frequently consider the connection of all things in the Universe…”
When one truly believes in the Universe, for good things to happen, for a change that is for the betterment of all to take place, combined with sincere efforts; universe makes things work out. This can evidently be seen in nineteen century India. Reformative movements like the Arya Samaj led by Swami Dayanand Saraswati, Hindu spiritual movement by Ramakrishna Paramhans, the Brahmo Samaj movement led by Raja Ram Mohan Roy, etc. were the highlights, which have done exceptional work in the preservation of human rights. These movements questioned superstitions and unorthodox values and advocated progressive values. To name a few, criticising and condemning child marriage, polygamy; denouncing Sati, the emancipation of women and promotion of widow remarriage are some practices that were championed by Keshavchandra Sen and Raja Ram Mohan Roy. These practices correspond to Articles 03, 04, 16, 05 and 25 of the UDHR respectively. Ramakrishna Paramahansa, himself practices Islam and Christianity, to propagate religious freedom and the freedom of conscience, as stated in Article 18 of the UDHR.
As mentioned earlier that the Hindu society was largely caste based, the lower castes or the dalits now started to realise the phenomenon and need of human rights. With the reformative scent in the air, the dalits came to fight for their rights; the right of dignity, importance and recognition as human beings. The two main advocates of dalit rights that are on top of everyone’s minds are Mahatma Gandhi and B.R. Ambedkar. Gandhi though, not himself an untouchable recognised himself as a Harijan and gave himself towards the movement, leading to the eradication of untouchability. B.R. Ambedkar, himself a dalit, gave himself to solve the problem and eventually went on to become the architect of the Indian Constitution. Article 17 of the Constitution abolishes the practice of untouchability in any form. This means that one can seek the courts’ assistance in circumstances where this right is infringed and can seek a legal remedy from the High Court as well as the Apex Court.
Even the Preamble to the Constitution upholds the basic human rights, where it includes the words; SOVEREIGN, SOCIALIST, SECULAR, DEMOCRATIC, REPUBLIC… JUSTICE… LIBERTY… EQUALITY… FRATERNITY. The Preamble secures to all the citizens equality (civic and political) of status and opportunity. This provision embraces three dimensions of equality. Human Rights are fundamental in nature and therefore, a part of Part III of the Constitution. The Right to Equality includes equality of opportunity in matters relating to employment or appointment to office, prohibition of discrimination on the grounds of religion, race, caste, sex or place of birth, the abolition of untouchability, etc. Right to freedom guarantees freedom of speech, assembly, association, residence, the practice of any profession. Child Labour is prohibited and life and personal liberty is respected. The Right to Freedom of religion includes the guarantee to every religious denomination to manage religious affairs. Part IV of the Constitution sets out the Directive Principles of State Policy, whereby the state shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social and political, shall inform all the institutions of national life. The founding fathers of the Indian Constitution hoped that through the Directive Principles of State Policy, Human Rights would be protected and preserved.
These legislations being in place is enough evidence that social disorder has been challenged and the equality of human beings and other values such as compassion, non-violence, tolerance, human dignity, etc., are at the forefront of the culture. We must keep in mind what Rabindranath Tagore said, “The Sakas, the Huns, the Pathans and the Mughals all have merged into one body.”
India has played a momentous role in the encouragement, protection and promotion of Human Rights. India, today, in parts, remains divided over religious and communal differences, a fundamental duty of the human rights movement is to have an exchange of ideas between the governmental and non-governmental agencies, which would go a long way in curbing harm and would promote aman and shanti. No religion talks about violence, intolerance or disruption. Each individual is called upon to perform his duty without being concerned about the consequences of their good deeds. We must give up hatred and learn to live like one family. Once we honour basic rights of the people and tradition of ahimsa parmo dharma, we will be able to create a culture of Human Rights.
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Businessman being mediator between conflict or arguing co-worker in office.
This article is written by Shohom Roy, pursuing B.B.A LLB from Symbiosis Law School, NOIDA. This article sheds light on the Integrated Ombudsman Scheme and the conflict mediation climate in India.
Table of Contents
Introduction
The Monetary Policy Press Release by the Reserve Bank of India on February 5, 2021, has introduced an Integrated Ombudsman Scheme replacing the three ombudsman schemes that dealt with banking, non-banking financial services and digital transactions respectively. This step by the apex bank of the country strengthens the growing approval for alternate dispute redressal mechanisms in fields that were previously dominated by traditional litigation.
The financial sector in India has undertaken much-awaited initiatives to support consumer protection under the guidance of the Reserve Bank of India. The heavy impact on the global economy due to the pandemic caused by COVID-19 has been controlled through the use of digital platforms in almost every field. The RBI has utilised the dependency on digital platforms to strengthen the fiduciary relationship between consumers and financial service providers and at the same time promoted the usage of alternate dispute redressal mechanisms through its planned centralization policy i.e “ One Nation One Ombudsman” policy of conflict resolution and the e-Integrated Ombudsman Scheme.
Mediation jurisprudence in India
The judicial system in India is overburdened with the number of cases that are filed every day. The inadequateness of our courts is noticeable from the ever-increasing number of pending cases. Therefore, the courts have started stressing the growth and usage of alternative dispute redressal mechanisms which speeds up the resolution of disputes and offer an ‘individualized’ or ‘personal’ form of justice through non-conventional processes of arbitration, mediation, conciliation, neutral evaluation etc. One of the non-oppositional methods that rely on the negotiation skills of a neutral party to broker an agreement between the disputing parties is ‘mediation’. There are usually four stages in a mediation process:
Introduction
Joint session
Separate session ( Caucus)
Closing statement
Mediation and c
A layman’s perspective on mediation and conciliation would overlap as both tend to be somewhat similar. However, there is a subtle difference between ‘mediation’ and ‘conciliation’. In the former, the mediator supervises the negotiation process and the parties are free to arrive at a common ground or refuse to resolve their differences. The role of a mediator is to ensure that the negotiation takes place in a structured format. However, in conciliation, the conciliator may not abide by any prescribed process and therefore allows more flexibility in negotiating comparison to mediation.
Statutes in India
Although there is no exclusive legislation on mediation in India, various statutes have permitted disputing parties to opt for a mediation process either through court-annexed mediation or through private means. There are some specific circumstances like divorces and labour disputes that are statutorily subjected to mediation. The following is inclusive but not an exhaustive list of statutes that encourage mediation:
The apex court has drawn up an illustrative list of matters that might be mediated in the case of Afcons Infrastructure v. Cherian Varkey Construction Co. Ltd. (2010) 8 SCC 24. In the aforementioned case, Afcons Infrastructure had subcontracted the work of building roads and bridges to Cherian Varkey Construction Co. Ltd. Due to a later dispute Cherian Varkey Construction demanded a certain sum of money along with interest and sought the court’s permission in opting for an alternate dispute resolution mechanism under Section 89 of the Code of Civil Procedure,1908. The trial court allowed the parties to engage in arbitration and this order was later upheld by the High Court. The court has also enlisted cases that are beyond the jurisdiction and scope of alternate dispute redressal mechanisms.
The Supreme Court of India has also established that all cases need not be decided by courts and has upheld the constitutional validity of statutes that seek for mediation process instead of traditional litigation in the case of Salem Bar Association v. Union of India (2003) 1 SCC 49.
One of the most controversial cases, M Siddiq v Mahant Suresh Das, Civil Appeal No. 10866-10867, 2010, more popularly known as the Ayodhya Babri-Masjid dispute was also referred to as a court-supervised mediation proceeding by the Supreme Court of India. This highlights the growing approval of the mediation process and the efforts to raise awareness regarding alternate dispute redressal mechanisms.
The Government of India might soon come up with legislation focusing entirely on mediation proceedings in India on the recommendations of the panel established by the Supreme Court of India.
Who is an Ombudsman
An ombudsman is a representative of the people who take up their complaints, conduct an investigation and resolve disputes either through recommendations or through mediations. The word ombudsman is taken from the Swedish word ‘ombud’ which means an officer or commissioner.
The concept of an ombudsman originated from the need to create a watchdog that would independently check the actions of public agents and other administrative officials. This idea has been stretched to cover various other fields that require such an independent grievance redressal official who would investigate the actions of others. In India, the Lokpal and Lokayukta Act, 2013 established a framework for the ombudsman. While the ‘Lokpal’ is responsible for dealing with complaints of ministers or secretaries in the Central and State Governments and the ‘ Lokayukta’, deals with the complaints of other administration officials.
What is the role of a Banking Ombudsman
The Reserve Bank of India exercised its powers under Section 35A of the Banking Regulation Act,1949 to introduce the Banking Ombudsman Scheme in 2006 (amended up to July 1, 2017) and established 22 ombudsman offices across the country. A Banking Ombudsman is an official appointed by the Apex Bank for a tenure of three years handling complaints and grievances related to the services provided by the banking industry.
The Banking Ombudsman can entertain grievances of any amount of money but are subject to territorial limitations specified by the RBI. The appointed ombudsman is also responsible for maintaining a budget for the functioning of his office in consultation with the RBI and provides a report of its activities during the previous fiscal year to the RBI.
Due to the rapid developments in the field of finance and banking, the role of a Banking Ombudsman has widened to manage consumer issues with Regulated Entities (REs) which also include non-banking financial services and digital transactions. The Banking Ombudsman can take up a complaint on the grounds permitted by the RBI, initiate an independent enquiry and resolve disputes between the customers and the service providers through mediation or conciliation.
Consumers can seek the grievance redressal mechanism of BOs only after the rejection or unsatisfactory redressal of a complaint by the bank. If the disputed parties are not in agreement the Banking Ombudsman may pass an award or dismiss a complaint after allowing both parties to state their cases. The Banking Ombudsman can also reject a complaint at any stage subject to the grounds allowed by the RBI.
Role of Ombudsman as a mediator
An ombudsman acts as an advisor, mediator and adjudicator with respect to the same dispute. Therefore, the dispute resolution process is streamlined and conducted in an efficient manner that benefits both complainants and respondents. As a mediator, the Ombudsman acts as an independent third party with the objective of helping the disputing parties to reach an agreement.
The ombudsman does not seek to direct how the dispute must be resolved but rather encourages negotiation at this stage. If the parties are unable to find a common ground then the mediation process is terminated and the ombudsman conducts a fair investigation between adjudicating on the matter. Therefore it is crucial for the proper functioning of the dispute resolution process that the advisory, mediation and adjudicatory divisions of the Ombudsman be distinct and independent of each other.
Related schemes in India
Internal Ombudsman Scheme 2018
In order to ensure transparency and consumer friendliness, the RBI rolled out the Internal Ombudsman Scheme 2018 for Scheduled Commercial Banks having more than 10 banking outlets and Non-Financial Banking Companies with more than 1 crore Prepaid Payment Instruments (PPIs). The three ombudsman schemes are complemented by the IO grievance redressal mechanisms that allow the REs increased freedom to handle consumer complaints on an individual level and fast track the dispute resolution process.
Under this scheme, consumer complaints are automatically forwarded to the Internal Ombudsman and thereby reducing the hassle for the consumers to file a complaint directly. The Internal Ombudsman can take up complaints on the grounds permitted by the RBI and provide resolution either through mediation or award. The internal audit mechanism supervises the working of the IO along with the regulatory framework of the RBI.
Ombudsman Scheme for Non-Financial Banking Companies (NBFCs)
A Non-Financial Banking Company is an entity registered under the Companies Act, 2013 whose principal business is financial activities i.e. accepting deposits under any scheme or arrangement either in lump sum or instalments under the regulation of the RBI. An NBFC is similar to a bank in the business of lending and depositing money, however, it cannot perform some of the important functions of a bank like accepting demand deposits, issuing cheques, etc.
Significance of the OSNBFC
The grievance redressal mechanism operates through a dual process of mediation in the first stage and adjudication in the latter. The Ombudsman can pass an award allowing compensation not more than INR 10 Lakhs or specific performance of the obligations. The Ombudsman also has the right to reject the complaint at any stage in accordance with the provisions drafted by the RBI. The scheme, therefore, envisions attracting more consumers to the non-banking financial sector through a consumer-friendly environment and speedy redressal of grievances and disputes.
Ombudsman Scheme for Digital Transactions, 2019
The Ombudsman Scheme for Digital Transactions, 2019 was set up under the Payments and Settlement Systems Act, 2007 and modelled after the Banking Ombudsman Scheme, 2006 and aims to bring system participants under the ombudsman framework thereby ensuring an efficient and inexpensive grievance redressal mechanism for digital transactions. All kinds of mobile and electronic fund transfers, prepaid payment instruments, payment intermediaries as well as Unified Payments Interface are within the ambit of this scheme.
Important developments in recent years by RBI
The Reserve Bank of India acts as the supervising body for the entire banking sector of the country. In the past few decades, various initiatives have been taken by the RBI to cater to the demands and welfare of the consumers. In order to streamline the process of grievance redressal and promote alternate dispute redressal mechanisms, the RBI has introduced schemes like Banking Ombudsman Scheme, 2006; Internal Ombudsman Scheme, 2018; Ombudsman for Non-Banking Financial Companies and Ombudsman Scheme for Digital Transactions. However, these efforts would have failed to achieve their targets if there had not been a centralized system to reinforce the Ombudsman initiatives. The RBI had launched the complaint management system (CMS) as a one-stop software application for consumers to file complaints against any regulated entity. The user-friendly CMS portal on the RBI website allows the transfer of information between offices of the BOs and the consumer education and protection cells in a virtualized, digital format ensuring transparency and efficiency.
Charter of Customer Rights
The Apex Bank has also come up with a set of initiatives to raise awareness about consumer protection in the banking industry. The ‘Charter of Customer Rights’ sets down the fundamental rights of every consumer in the banking industry. The rights include the right to fair treatment, right to suitability and privacy, the right to grievance redress and compensation along the right to transparency and honest dealing.
Consumer Education and Protection Department
Initially referred to as the Customer Service Department, the Consumer Education and Protection Department had been established in 2006. The cells of this department act as informants for the RBI and help in formulating policies that would benefit consumers and check the abuse of power by the service providers. The CEPD also takes grievances from the consumers on behalf of the RBI and increases awareness regarding consumer rights through various modes of communication.
Significance of the scheme
The Reserve Bank of India has merged the Banking Ombudsman Scheme,2006; Ombudsman for Non-Financial Banking Companies, 2018 and the Ombudsman for Digital Transactions into a single Integrated Ombudsman Scheme, 2021. This ‘ One Nation One Ombudsman’ policy simplifies the process of lodging complaints and seeking redressal than ever before. The centralisation move along with the updated complaint management system would allow banking consumers to seek grievance redressal for all kinds of banking transactions from a single platform. The promotion of the grievance redressal mechanisms in line with global initiatives seeks to ensure transparency and greater liability on service providers to cater to the needs of the consumers.
The integrated Ombudsman Scheme relieves the over-burdened judicial framework and allows consumers to seek a remedy through a cost-friendly efficient process. The Ombudsman is not bound by judicial precedents and, is, therefore, more flexible and adaptive to the rapidly changing needs of the consumers. In certain circumstances, the ombudsman might choose to overlook procedural requirements to resolve disputes between consumers and the banking sector.
Conclusion
The impact of the various initiatives undertaken by the RBI can be sustained through a systematic and constant effort to educate people about the consumer protection laws in India. The Government of India and the RBI should work synchronously to educate the masses about their basic rights as a consumer, the procedure to file a complaint and the grounds on which a Banking Ombudsman may be approached.
The various sectors in the banking industry must uphold their customer’s right to privacy while disclosing information during a grievance redressal proceeding. The primary intent of preserving and maintaining the fiduciary relationship between customers and service providers might be hampered if there is a loss of confidential information by REs. The Integrated Ombudsman Scheme is a much-awaited initiative taken by the RBI to supplement the overall growth and development of the financial sector.
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Social media has phenomenally changed the lives of people. Nowadays, social media is not only used for communication and entertainment, but also for personal branding, promotion of businesses, and sharing information with consumers. The social media platforms such as LinkedIn, Instagram, YouTube and Twitter increase people’s engagement on the service or product which allows businesses to expand their reach and strengthen their online presence on social media.
Recently, Instagram, Facebook, WhatsApp, and YouTube have also come up actively to provide services to expand the reach and contact the consumer in various ways, i.e., Feedback, Consumer Review, Sponsored Video, Affiliate Marketing, etc. The online presence of the businesses determines the authenticity of the brand. Since we have a variety of social media to promote our products, we must wisely use the social media logo for our promotion and strengthen our customer source.
Benefits of Social Media logos
Social media gives a platform to people to interact with people and find your businesses which will help you to increase your customers and expand engagement. Almost every business has its business cards, posters, banners, etc. for marketing purposes. In recent years, people are very active on digital platforms. They prefer social media over posters, templates and newspapers for acquiring information regarding the world. Hence, they are very familiar with the logos of social media and they prefer to watch content, information and feedback on social media before they rely on any businesses. Companies are setting up their online website and accounts on various social media handles that can be accessed by people easily. Businesses are using the social media logo with their username to make people aware of their online presence through offline marketing materials. Further, for digital marketing, the website is linked to various social media handles that can be accessed by people with just one click.
Guidelines by Social Media on using their Logos
Nowadays, branding and creativity are necessary for both online and offline promotion. Hence, it is obvious to up social media links with their logo to provide a visual connection to the customers. The logos of various social media sites like Facebook, LinkedIn, Instagram, Twitter and YouTube are unique and ubiquitous. These social media platforms are being generally used by businesses and individuals. However, the use of logos and designs of these platforms are permitted up to a specific extent.
Facebook Logo
The businesses owners are recommended to download the logo of Facebook from the Facebook Brand Resource Center. Before using the logos, the businesses must ensure compliance with the Guidelines provided by Facebook. The guidelines are listed as follows:
The use of the Facebook logo “F ” must have the correct colour and shape. If due to any technical limitations, the businesses can’t use the combination of blue and white combination, they are allowed to opt for black and white colour.
The use of animated, edited or filtered logos of Facebook is highly discouraged. The brand guidelines strictly object to the businesses to modify, rotate or destroy the logo in any means.
In case, when the business cites the logo of more than one social media in a place, i.e., template, website or poster, the size of the logo must remain the same as other social media.
Instagram Logo
The businesses owners are recommended to download the logo of Instagram from the Instagram Brand Resource Center. Before using the logos, the businesses must ensure compliance with the Guidelines provided by Instagram. The guidelines are listed as follows:
The businesses must use the Instagram logo from the Brand Resource Center. Unlike Facebook, Instagram allows businesses to use the logo in different versions of multicolour or black and white or any solid colour.
Unlike Facebook, Instagram allows businesses to animate, or filter the logo without changing any other aspects of the design.
Instagram only recommends maintaining a proper proportion of the logo and keeping the resolution more than 29×29 pixels. The businesses are advised to use the logo of Instagram for radio, broadcast, advertising or print in more than 8.5 inches × 11 inches.
Twitter Logo
The businesses owners are recommended to download the logo of Twitter from the Twitter Brand Resource Center. Before using the logos, the businesses must ensure compliance with the Guidelines provided by Twitter. The guidelines are listed as follows:
The businesses must use the Twitter logo in blue and white colour. If due to any technical limitations, the businesses can use the combination of black and white colour only after getting permission from Twitter.
The use of animated, edited or filtered logos of Twitter is highly discouraged. The brand guidelines strictly oppose businesses to modify, rotate or destroy the logo in any means.
In case the business wants to put the logo in a shape, the guideline approves the use of the logo inside either a circle, square or square with rounded edges.
Twitter advises not to overemphasize its logo and keep the logo at least 32 pixels wide.
YouTube Logo
The businesses owners are recommended to download the logo of YouTube from the YouTube Brand Resource Center. Before using the logos, the businesses must ensure compliance with the Guidelines provided by YouTube. The guidelines are listed as follows:
YouTube advises keeping the space of at least half the width of the logo around the YouTube logo.
The logo should be at least 24 dips tall for digital content and at least 0.125 inches or 3.1 mm tall for print content.
YouTube highly discourages the use of animated, edited or filtered logos. The brand guidelines strictly oppose businesses to modify, rotate or destroy the logo or shape of the logo in any means including altering the spacing between the letters, replacing the typeface, adding visual effects and changing the shape.
The businesses must use the YouTube logo in either red, black or white colour.
LinkedIn Logo
The businesses owners are recommended to download the logo of LinkedIn from the LinkedIn Brand Resource Center in both English and Chinese language. Before using the logos, the businesses must ensure compliance with the Guidelines provided by LinkedIn. The guidelines are listed as follows:
LinkedIn recommends the businesses to use their signature colour, i.e., blue. But, it also allows the use of black and white.
The logo of LinkedIn is always recommended to be used inside a square with rounded edges.
Since LinkedIn is a professional site, it highly discourages the use of animated, edited or filtered logos. The brand guidelines are very strict in comparison to other social media and object to the use of modified, rotated or destroyed logo or shape of the logo in any means.
The logo should be at least 21 pixels tall for digital content and at least 0.125 inches tall for print content.
WhatsApp Logo
The businesses owners are recommended to download the logo of WhatsApp from the WhatsApp Brand Resource Center. Before using the logos, the businesses must ensure compliance with the Guidelines provided by WhatsApp. The guidelines are listed as follows:
The brand recommends using the WhatsApp logo in a combination of green and white. The businesses are allowed to opt for black and white colour too.
The use of animated, edited or filtered logos of WhatsApp is highly discouraged. Hence, the businesses must not modify, rotate or destroy the logo in any means.
The logo of WhatsApp must be always used inside a green coloured square.
Amongst all the following guidelines provided by various social media platforms, businesses are strictly advised to adhere to the non-permitted use of social media. The guidelines for non-permitted use of social media are as follows.
The use of the social media brand for partnership, sponsorship or endorsement combining any part of social media must be avoided.
The use of trademark, name of the businesses, domain name, logo and other content of the business must not be done in a way that it is confused with the social media platform.
The use of logo, image or trademark of the social media that may represent any association with illegal activities must be strictly avoided.
The modifying of social media brand assets by changing their colour or design that could possibly affect their association or collaboration must be taken care of.
However, under the concept of ‘fair use’ of a trademark, the social media owners allow the use of their trademarks by a third party. The use of social media logos for the purpose of comparison, endorsement or goodwill associated with the trademark is unlawful to use under the law and the user can be held liable for such an act. But some brand owners establish some provisions to maintain brand integrity and allow third parties to use their logo and trademark by following specific guidelines. For example, the WhatsApp logo is exclusively used with the combination of green and white colour. Any modification in the design and colour of the WhatsApp logo can have a negative impact on the brand and create confusion as to the association of the brand.
Since the use of social media logos is very beneficial and recommended, it is highly advised to use the trademark or logo from the website of the brand and follow the necessary guidelines. By conducting proper due diligence, your businesses will be protected from unnecessary problems or conflict with the brand owners regarding the use of their trademarks and logos. To establish a strong social media presence, the social media logos must also be used properly. Hence, we can follow some advice before using any social media logo.
Don’t make any alterations
The logos of the social media are their registered trademarks. Hence, the businesses can’t make any changes to the logo by rotating them, changing their colours, animating them or adding any specific effect and elements. The businesses are advised to use the colour scheme of the original social media logo or use the monochrome versions like Calendly.
Maintain uniform space and size
In case, the business uses the logo of more than one social media in a place, i.e., template, website or poster, the size of the logo must remain the same as other social media. The sizes of all the social media logos must remain the same in terms of height, width and resolution. Each social media has specific requirements mentioned in their guideline to maintain a specific amount of space between their logo and other elements of the businesses to ensure proper visibility. For example, the website of iPleaders and Content Marketing Institute has enough space between different social media logos.
Choose a strategic location
The social media logos should be prominently visible to get the desired impact of the target audience. The position and size of the social media logo are very important to draw the attention of the audience. Hence, social media logos are mainly used at the bottom of the page.
Use them beyond your website
Besides the website of the businesses, social media logos are used in the videos, newsletters and emails for the purpose of marketing to increase the impact of the audience. Through this way of using social media logos on videos, newsletters and emails, the chance of attracting an audience increases, people are likely to click on the social media and follow your businesses.
For example, the YouTube videos of a famous ed-tech company, LawSikho, always mention the link of its social media in the description box to attract the audience to their website.
Conclusion
Social media logos are often used in marketing materials and websites. It is also advised to use the social media logo to increase the credibility and reputation of the business as well as increase customers. But it is also important to conduct due diligence and follow the guidelines of social media properly. A business must not be negligent regarding every minor stuff because this can lead to great loss in the long run. The big social media brands, even outside the country, observe the activity throughout the world and may sue your business for improper use of their logos and trademarks. Therefore, it is very important to be careful with logos related to your business.
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This article is written by Niharika Agrawal, from IFIM Law School. This detailed article is based on the recent judgment of the case Unitech v. TSIIC with regards to the government contract and constitutional remedies.
Table of Contents
Introduction
Fundamental rights play a very significant role in every individual’s life. Similarly, it is known that where it is right, there is a remedy. Whenever an individual thinks that his/her fundamental rights have been violated, they approach the court for the constitutional remedy called writs. But it is not always necessary that every violation or infringement is a fundamental right. In the case of contractual obligations not every breach of contract is a violation of fundamental rights. It always differs from the facts and circumstances of each case. Hence the question of maintainability of writ jurisdiction in contractual matters varies from case to case.
The case of Unitech v. TSIIC (2021) explains in detail whether the writ petition is maintainable when there is a presence of contractual obligation in the case. Hence this article deals with whether the presence of an arbitration clause in the agreement would put an absolute bar on the constitutional remedy to invoke writ petition available under Article 226 of the Constitution of India under when one such party to the contract is the state or its instrumentalities.
Facts of the case
In the instant case, three appeals were filed. It was constituted by 1. UNITECH Ltd (Unitech), 2. Telangana State Industrial Corporation (TSIIC), 3. The state of Telangana. In November 2007, the Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC) has contracted with Unitech for the development and construction of a township in Ranga Reddy district. The estimated cost of the entire project was Rs. 165 crore which includes the cost of land, earnest money deposit, and development project expense. This sum of Rs. 165 cr. was already paid by Unitech. The land over which the project was supposed to be carried out was under pending litigation. Unitech was well aware of the pending litigation. With the help of a Letter of Award (LoA), APIIC allotted the land subject to the outcome of the pending litigation in the hon’ble Andhra Pradesh High Court.
In 2011, APIIC issued a notice to Unitech for the commencement of the work, to which Unitech first asked to hand over the title of the land as per the development agreement. At the end of the year, the High Court of Andhra Pradesh confirmed that the Government of Andhra Pradesh does not have the title of the land which was mandated by the development agreement. The development agreement also contained the arbitration clause. This position of land was also confirmed by the apex court.
Later in the year 2014, the State of Andhra Pradesh was reorganized into the states of Andhra Pradesh and Telangana, due to this the control of the project land was shifted from APIIC to TSIIC. Further Unitech in 2015 sought the total refund of the entire amount along with the interest of Rs. 457 cr that is principal as well as interest amount from APIIC and TSIIC. Even after subsequent reminders and issuance of a notice, Unitech was not refunded. Further, he got the liberty to approach the High Court under Article 226 of the Constitution even after having an arbitration clause in the development agreement.
Unitech filed a writ petition before the High Court of Telangana seeking the refund of INR 165 cr together with the interest from the date of payment made. This petition was allowed by the single judge bench.
Furthermore, the appeal was filed in the division bench by the State of Telangana and TSIIC against the order of the single-judge bench of the High Court of Telangana. The division bench supported the order of the above-mentioned regarding the liability of TSIIC to refund the amount of Rs. 165 cr. but modified the interest which was supposed to be from Oct 2007 (beginning dates of payment) rather than Sept 2015 (Unitech first sought refund) at SBI-PLR (SBI Prime Lending Rate). In the present appeal it was also contended by the TSIIC that this writ petition is not maintainable as there was a “pre-contractual matter” and the presence arbitration clause under the development agreement.
These aggrieved parties after the order of the High Court of Telangana approached the Supreme Court with the Special Leave Petition under Article 136 of the Constitution filed by Unitech, TSIIC, and the state of Andhra Pradesh.
Writ jurisdiction and governmental contracts
Writ jurisdiction is not only a constitutional remedy but also a fundamental right provided under the Constitution of India for the purpose of safeguarding other fundamental rights under the Constitution whenever infringed or violated. It is available under Article 226 in the High Court and Article 32 in the Supreme Court of the Constitution. It is issued by the higher courts to provide directions or orders to the lower court to work in a specific manner and for avoiding the misuse of authority.
Government contracts are contracts where one party is itself the Government either Central or State. These parties usually come under the contract for construction, IT projects, management, etc. Art 298 of the Constitution has provided power to the Government to enter into the contract for the purpose of trade and business.
The question of maintainability of the writ petition in the case of contractual matters against the state is always debatable. According to the law, whenever there is a violation of a fundamental right, a writ petition can be issued. It is not important that wherever there is a breach of contract by the state, there is an infringement of fundamental rights. Sometimes it can merely be the breach of contract or the case of non-payments etc.
Factors regulating the maintainability of writ jurisdiction in contractual matters
There are various cases that can be referred to under the maintainability of the writ petition in contractual matters.
There is no bar for entertaining writ jurisdiction on State’s contractual matters however it completely depends upon the discretion of the court under each circumstance of the case.
In the case where the contract is statutory in nature between the aggrieved person and the state and there is a breach of statutory rights and obligations, such breach of statutory contract can be entertained by the writ petition.
Where there is a simple breach of a contract and not a statutory breach, where the rights and liabilities are regulated by the terms of the contract, such contracts are not governed by the provision of the writ petition, as it is the private right and not the public interest.
The two very important conditions for maintainability of writ jurisdiction are first the person his identity against whom the writ is issued and second the nature of the contract i.e. public duty or made for the interest of the public. This criterion cannot be ignored.
Issues raised
Whether the writ petition allowed by the High Court under Article 226 of the Constitution in the presence of the Arbitration clause is maintainable?
Liabilities of the respondents towards refund of an amount of Rs. 165 cr along with the interest from the date of the first installment is valid or not?
Findings of the court
The apex court in its judgment has observed and stated that the writ petition under Article 226 in the honorable HC is maintainable. According to the court of justice, Article 226 is included altogether in a pre-contractual matter. It has referred to the precedent of the case ABL International Ltd. v. Export credit Guarantee Corporation of India (2003) in which it was held that Art 226 is maintainable to assert the contractual rights against the State or its instrumentalities which comes under the definition of the State under Article 12 of the Constitution. This principle was followed in various other cases as well.
Further, the court observed that Article 226 is not only a public law but also acts as a constitutional remedy against any arbitrary or unfair action of the State or its instrumentality. It was also opined that investors always believe in the representations given by the State while investing in such public projects and therefore expect that such expectation through representation must be fulfilled and to adhere to the duties which have been contractually assumed.
Does the presence of an arbitration clause within a contract between a State instrumentality and a private party bar the remedies under the writ jurisdiction of Article 226
The Supreme Court has very well explained that the presence of an arbitration clause within a contract between a State instrumentality and a private party cannot be absolutely exempted from benefitting the constitutional remedy available under Article 226 of the Constitution. The jurisdiction of the court under Article 226 of the Constitution is available whenever the act of the State or its instrumentalities is arbitrary, unjust, or violating Article 14 of the Constitution. This constitutional remedy is available for the safeguard against the arbitrary action of the state while misusing its authority.
Further, it was opined by the court that the clause of arbitration in the contract cannot oust the jurisdiction under Article 226, but sometimes it may differ from case to case.
Whether Unitech is entitled to refund of an amount of Rs 165 crores with interest
According to the judgment of the Hon’ble Apex Court, Unitech was entitled to get the refund amount of Rs. 165 cr along with interest at SBI-PLR (SBI Prime Lending Rate) from the beginning date of payment, as per the provisions of the development agreement without compounding, as Unitech even after knowing about the pending litigation, its intention was found to continue with the project after the delay of over seven years until the decision of the court. However, TSIIC has the liberty to get its remedy for adjustment in relation to APIIC and the State of Andhra Pradesh in accordance with the law.
Conclusion
In accordance with the present case, it can be concluded that the presence of the arbitration clause cannot bar the invoking of the constitutional remedy that is writ jurisdiction under Article 226 of the Constitution. In the present judgment, Unitech who was an investor was entitled to get the refund of the entire amount with interest from the date of payment without compounding. This is because the investors had undisputed claims against the State and its instrumentalities. This precedent is considered to be one of the landmark judgments for the future Government contract with the private investors to make them understand that they must not violate any constitutional provision and must act fairly and reasonably.
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