All you need to know about business crimes

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September 23, 2021

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This article is written by Kavana Rao from Symbiosis Law School, Noida. This article is about the types of business crimes and the process of investigation and prosecution based on Indian laws and statutes.

Table of Contents

Introduction

With the rise in the number of corporate companies and start-ups, there is also a rise in the number of corporate fraud, embezzlement, money laundering, etc. Business crimes are often characterized by deceit, concealment, or violation of trust. These are committed by business professionals for financial gain or fear of losing business standing, money, and other assets. Business crimes are also done to avoid the payment of legal or formal dues and unjustly retain money or property. The primary reason for the increase in business crimes is the rapid growth in industries and technologies.

Criminal Law enforcement under Indian Law

The Government of India, under the department of revenue, has set up various agencies to enforce laws and combat crime. Some of the major organizations listed are:

Different kinds of business crimes

Securities fraud

The Securities and Exchange Board of India Act, 1992 and Rules deal with the frauds related to securities and the issue, purchase, or sale of securities.

Fraud as defined under Section 17 of the Indian Contract Act, 1872, as the acts where:

Any such facts which are untrue and the person making it also believes it to be untrue, or
There is active concealment of facts by the person who knows about the fact, or
Promises made without the intention of fulfilling it, or
Other acts which are fitted to deceive the other party or any such act or omission which is considered fraudulent.

Therefore, securities fraud is a serious type of white-collar crime that is committed in a variety of forms but ideally involves misrepresenting information that investors use to make decisions.

Accounting fraud

Accounting fraud is the manipulation of financial statements to create a false appearance of corporate financial health. The financial statements can be falsified by overstating its revenue, failing to record expenses and misstating assets and liabilities. Under the Companies Act, 1956, the Central Government is empowered to inspect the books of accounts of a company, direct special audits, order investigations, and launch prosecutions. The IPC sets out punishments for forgery and falsification of accounts.

Forgery

Section 465 describes the punishment for forgery which states that whoever commits forgery will be punished with imprisonment of description for a term which may extend to two years, or with a fine, or with both.

Falsification of accounts

Section 477A describes the punishment for falsification of accounts with imprisonment which may extend to seven years and shall also be liable to a fine.

Insider trading

In India, SEBI (Insider Trading) Regulation, 1992 framed under Section 11 of the SEBI Act, 1992 intends to curb and prevent the menace of insider trading in securities. An insider is someone who is connected to the company, who was connected with the company, or who is deemed to be connected to the company. The scope and definitions of who an “insider” or a “connected person” is widened. Hence, any person, related to the company or not, comes within the purview of these regulations if he is expected to have access to or possess the UPSI. The insider cannot communicate, counsel, or disclose UPSI (Unpublished Price Sensitive Information). The SEBI, advancing its stance against insider trading, notified the amendments in 2018 of the Prohibition of Insider Trading Regulations, 2015.

Embezzlement

Under the IPC, embezzlement under Section 409 is defined as a criminal breach of trust and dishonest misuse of property. The individual entrusted with such property should have either dishonestly misappropriated or converted the property to his advantage, or used and disposed of the item or property illegally. The offence carries imprisonment for a term that may extend to two years or fine or both.

Bribery of government officials

Bribery of government officials is governed by the Prevention of Corruption Act, 1988. Public servants or other persons or commercial organizations attract penalties under the Act:

Taking gratification other than the legal remuneration in respect of an official act.
Taking gratification by corrupt or illegal means to influence a public servant.
Taking gratification for the exercise of personal influence with a public servant.
A public servant obtaining valuable things without consideration from the person concerned in proceedings, or business transacted by such public servant.
Any person who promises to give undue advantage to a person with an intent to induce or reward public servants to perform their public duty “improperly”.
Anyone who is associated with a commercial organization who gives or promises to give undue advantage to a public servant to obtain or retain business or an advantage in the conduct of business for such commercial organization.

For all the above offences, mere acceptance, or agreement to accept to obtain such gratification or give or promise to give an undue advantage to a public servant is sufficient to constitute an offence.

Other acts such as IPC, the Benami Transactions (Prohibition) Act, 1988, and the PMLA are also applied for penalizing acts such as the bribery of Government officials.

Cartels and other competition offences

Cartels are where firms or companies agree to not compete with one another to manipulate the markets by raising prices and restricting supply. This harshly injures the markets and the customers. Under the Indian Law, disputes regarding cartels and other competition offences fall under Civil Statute therefore remedies are available in the form of penalty or cease and desist order. Section 3 of the Competition Act, 2002 states that if any agreements are likely to have adverse effects on the competition in India, then such agreements will be considered void. If complaints are filed by the Competition Commission or an authorized person, the Magistrate has the power to take cognizance of the offence.

Tax crimes

Crimes related to tax in India are prosecuted under various acts like The Income Tax Act, 1961, the Customs Act, 1962, Central Excise Act, 1944, the Central Sales Tax Act, 1956, etc. These crimes include – smuggling, tax evasion, tax fraud, customs duty evasion, etc.

Environmental crimes

Companies generate a lot of wastes in the process of their manufacture and production, which largely affects the environment, also having a direct effect on animal and human life. Therefore, as per the Water (Prevent and Control Pollution Act) of 1974 entrusted to the Pollution Control Board, any person who wilfully causes any poisonous, toxic, or polluting matter into any water stream, well, sewer or land or otherwise contravenes the provisions of the act is liable for imprisonment for anywhere between 18 months to 6 years along with a fine. A subsequent similar offence will result in imprisonment from 2-7 years along with a fine. Any person who knowingly permits the said violation is also liable for the same.

Campaign finance/election law

Corporate contributions to candidates and political parties are regulated under the Companies Act 2013. According to it, the contribution amount must not exceed 7.5% of the company’s average profit of the past 3 years. Non-compliance to this would result in a fine up to five times the said amount and imprisonment up to 6 months. Under the Income Tax Act, the corporations can deduct the total income to the extent of the contribution made to the political parties for tax purposes.

The political parties can accept any amount voluntarily offered to them by the companies except Government companies under the Representation of People Act, 1951 (RPA). Additionally, there is an absolute restriction on contributions coming from foreign sources.

Market manipulation

Derivative sales are controlled under provisions of the Securities Contract (Regulation) Act, 1956 (SCR Act) and the Securities Exchange Board of India (SEBI) Act 1992.

Section 12A of the SEBI prohibits the use of manipulative and deceptive devices, substantial acquisition of securities, and insider trading. As per it, no person shall use or indulge in connection with the issue, purchase, or sale of any securities listed on a recognized stock exchange, any manipulative or deceptive device or contrivance which stands in contravention of the SEBI Act.

Money laundering or wire fraud

Money laundering is the illegal process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, but make it appear to have come from a legitimate source. The Prevention of Money Laundering Act, 2002 (PMLA) deals with offences related to it.

Cybersecurity and data protection law

The Information Technology Act, 2000 (IT Act) and the Amendment Act 2008 cover offences related to cyber-terrorism, identity theft, violation of privacy and also deal with e-governance and e-commerce. The IT Act also covers offences committed outside India by any person if the act involves a computer system or network located in the Indian territory.

It also prescribes that a corporate body would be liable to pay damages if it is negligent in implementing reasonable and proper security practices, which results in any wrongful damage or gain to individuals.

Trade sanctions and export control violations

Matters relating to foreign trade and its regulation are controlled under the Foreign Trade (Development and Regulation) Act, 1992, which gives the Central Government powers to make provisions for prohibiting, restricting, and regulating import/export of goods in the country. They also have the power to impose restrictions related to the number of goods imported if it may seem that these imports may cause or threaten to cause serious injury to the domestic industries and sectors.

Corporate criminal liability

Under the older traditional view of the subject, the company itself was not perceived to have the mens rea to commit an offence. However, subsequent decisions by the courts universally have established the fact that the company or a legal entity has virtually the same position as an individual and can be convicted of breach of statutory laws requiring mens rea.

To further clarify, Section 85(2) of the Information Technology (Amendment) Act, 2006, reads:

“…. where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officers of the company, such director, manager, secretary or other officers shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.”

Additionally, there have been cases where it was held that impleading the company as an accused is sine qua non (an essential condition) for prosecuting the directors and /or individuals employed with the said company.

In cases of mergers and acquisitions, if the same is court-approved then the court-sanctified scheme will itself provide for the successor liabilities.

Statutes of Limitation

As per Section 468 of CrPC, no court can take cognizance of an offence after the expiry of (1) six months, if the offence is punishable only with a fine, (2) one year, if the offence is punishable with imprisonment for a term not exceeding one year, or (3) three years if the offence is punishable with imprisonment for a term not exceeding three years. The limitations period commences on the date of the offence.

However, concerning certain economic offences/ business crimes, the Economic Offences (Inapplicability of Limitation) Act, 1974 provides that provisions of CrPC relating to limitation shall not apply in relation to, inter alia, the following statutes:

If the court is convinced that the delay has been properly explained or if it is necessary to do so in the interest of justice, then the limitation period will not apply.

The time during which a person has with following due diligence has been prosecuting another action against the offender in another court of the first instance, a court of appeal or revision, if it relates to the same facts and is prosecuted with no malicious feelings in another court which could not entertain it for want of jurisdiction or another cause of a similar nature.
When the institution of the prosecution has been stayed by an injunction or order,
Where the previous sanction of the government is required for the institution of the offence, and
Lastly, the time during which the offender has been from India or has avoided arrest by absconding or concealing himself.

Initiating the investigation

As a normal routine, investigations are initiated by filing a report with the concerned police station, called the First Information Report (FIR). Based on the FIR, the police initiate an investigation. The procedure for conducting an investigation is prescribed under Section 157 of the CrPC.

Cooperating with foreign enforcement authorities

Under the provisions of the PMLA, if an order is passed for freezing any property which is a proceed of a crime, and such property is located outside of India, then the concerned authority can make a request to the appropriate court in India under Section 166A of the CrPC to issue a letter of request to a court or authority in the contracting state to execute the order. The contracting state refers to any country or place outside India in respect of which arrangements have been made by the Central Government with the Government of such country through a treaty or otherwise.

In the course of the investigation into an offence, an application can be filed by an investigating officer saying that evidence is available in a county or place outside India. For this, the court may issue a letter of request to such court or authority outside India to examine any person acquainted with the facts and circumstances of the case and to record his statement. The court may also see to, that such a person or any other person produces any document or thing in his or her possession which is concerning the case and forward all the evidence to the court that issues such a letter.

The Indian legal regime provides for other cooperation with foreign enforcement authorities. Some of them are listed below:

Central Bureau of Investigation (CBI).

The CBI serves as a National Central Bureau for corresponding with the ICPO-INTERPOL to cooperate and coordinate with each other concerning the collection of information, the location of fugitives, etc.

The double tax avoidance agreement and tax information exchange agreements .

They ensure and strengthen the information exchange relating to tax evasion, money laundering, etc.

Mutual Legal Assistance Treaties (MLATs)

The MLATs facilitate cooperation in matters relating to service of notice, summons, attachment, or forfeiture of property or proceeds of crime or execution of search warrants. They have been given legal sanction under Section 105 of the CrPC.

Collecting information during the investigation

The pre-set-up investigation agencies have the required authority and statutory powers under Section 156 of the CrPC, which gives the officer in charge to obtain records, documents, any company or employee information as well as to record statements if required within the course of the investigation. They also have the authority to conduct searches within the company premises or their employees.

Under the Prevention of Money Laundering Act 2002 (PMLA), the affiliated banks may even be required to present records relating to the suspected transaction by the DOE including any electronic evidence under Section 69 of the Information Technology Act, 2000.

In the duration of a trial or investigation/inquiry, the court or the investigation agency may issue a summoning order for any documents as they may deem fit for the same. The Court may also issue a search warrant if the Court has reasons to believe that the accused may not comply with their orders.

Additionally, the police also have the authority to seize certain property which might be allegedly stolen and/or creates suspicion of the offence.

The law does recognize the non-disclosure of some privileged information but only because the disclosure of such documents would result in injury to the public interest. Some other examples of privileged information would be, communication between wife and husband and communication between attorney and client in a professional purpose

Business secrets are no grounds for non-disclosure of documents before an authority however, in certain cases the courts may examine the documents before admitting their relevance to the matter. It must be noted that the labour laws do not protect employee information under company files.

Under Section 43(A) of the IT Act, a person’s “sensitive personal data or information” (SPDI) is protected along with compensation for mishandling and failure to protect this data by the concerned authorities. Rule 5 and 6 of the Information Technology Rules 2011 state that no SPDI can be collected unless it is necessary to collect it for a lawful purpose and its disclosure requires the consent of its provider.

For procurement of any personal information under the IT Act, it must be satisfied that it was done so for the greater goods like Public Benefit, Public order, or in the course of the reasonable procedure.

To a person under investigation by the authorities, it may seem like a good choice to simply not answer them, however, the Right to Silence is only available to an accused and not to a person under investigation, yet being silent in a court of law doesn’t translate to the admission of guilt as the courts operate on the belief of “innocent until proven guilty”. As far as other rights are concerned, any confession made to the police is inadmissible in court and a person cannot be compelled to sign any statement presumably given by him. The person cannot be represented during the questioning but he can hire a lawyer of his choice during interrogation though he cannot be present throughout.

Initiating the proceedings

A Magistrate can take cognizance of an offence in the following manner under Chapter XIV of the CrPC

On receiving a complaint constituting an offence- An individual or a corporate entity may file a complaint in the court of the jurisdictional Magistrate in respect of a crime. Complaints can also be filed by statutory authorities under various enactments, like under the Income Tax Act in the Court of Jurisdictional Magistrate
On receiving a police report- After the investigation is completed, the police force is required to file a report. This report is referred to as the charge sheet and this is filed in the court of the jurisdiction Magistrate. On receiving such a police report, the Magistrate takes cognizance of the offence and issues summons to the accused persons.
On receiving information from any person other than a police officer- The Magistrate can take cognizance of an offence based on information received by him, other than a police officer. This information can also come from an uninformed source or an informer.
Based on the knowledge of the magistrate itself, that an offence has been committed.

Burden of proof

The burden of proof refers to the responsibility/obligation of the party to back up their claims and assertions in a court of law. Usually, in a civil matter, this obligation rests with the party making the said claims (with a few exceptions). However, in criminal cases, the burden of proof may shift, as per Section 101 and Section 102 of the Indian Evidence Act 1872, from one party to another.

It must also be noted that the standard of proof in criminal matters is much higher than that in civil matters. In a case of defence by justification (affirmation), the party taking the said defence must be obligated with the burden of proof.

Aiding and abetting

A person aiding, assisting, or conspiring with someone can also be held liable for conspiring, abetment, and acts done in furtherance of a common intention.

Abetment

Covered under Section 107 of the Indian Penal Code 1860 (IPC), abetment is when a person instigates another to do an illegal act or engages with one or more people in conspiring to perform or omit to perform an act which makes the thing or acts illegal, or causes or procures or attempts to cause or procure an act by willful concealment and/or misrepresentation of material facts.

Criminal conspiracy

As stated in Section 120A of the IPC, it arises when two or more people agree to commit or cause an act that is either statutorily illegal or a legal act in an illegal manner.

Acts in furtherance of common intention

As stated under Section 34 of the IPC, “When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.”

The important facts to be established here are that the person aided in the said act and it in pursuance of a common intention shared by all accused.

Common defences available

Lack of intention (no mens rea)

Since nearly every offence under IPC requires a criminal intent or mens rea as essential, the lack of proper motive to a crime can be a viable defence. This burden of proof rests upon the prosecution who must prove the accused’s criminal intent ‘beyond a reasonable doubt’.

However, in certain cases like negligence, the law does not require the establishment of a mens rea.

Mistake of fact

As per Section 76 of the IPC, nothing will be considered an offence if the person does an act by a reason of a mistake of fact and not under a mistake of law, and also believes that in good faith he or she was bound to do that act. The defendant, however, must prove that they were acting with reasonable care and caution.

Voluntary disclosure and leniency

If a person has a reason to believe that an offence has been committed, then they are bound by the law to disclose such information to the respective authority under Section 202 of the IPC. If not, such a person will face punishment where he or she can be imprisoned for a term which may extend up to a period of six months or fine, or both.

Further, if the person happens to be a party/co-conspirator to the crime and truthfully discloses all facts to his knowledge, the Magistrate holds the power to pardon the person. Upon acceptance of the pardon, the person shall be treated as a witness in a trial. However, this only applies to cases to be tried by the Session court in an offence that attracts a jail time of 7 years or more.

If the said person is found to have concealed information or given false evidence, his pardon shall be repealed and he will be tried for the same offence he was pardoned for in addition to the offence of presenting false evidence under Section 193 of IPC.

Plea bargaining

Plea bargaining is when a defendant agrees to plead guilty before the court in exchange for reduced charges or some concession. Such a settlement is mutually acceptable and negotiable by the prosecution and the victim. The court can award further compensation to the victim and decide on the punishment after discussing it with the parties. The final judgment must be delivered in an open court and cannot be appealed. Plea Bargaining is defined under Section 265(A)–265(L) of the CrPC.

As per Section 265(A) of the CrPC, plea bargaining is only available to the accused who is charged with any offence other than offences punishable with death or imprisonment or for life or imprisonment for a term exceeding seven years.

Sentencing

If the defendant is found guilty, then depending on the statutory provisions they may be imposed with a fine, imprisonment, or both. The Court, however, holds the majority of the discretion in such matters especially the compensation to be paid by the defendant which may include the expenses that occurred in the duration of the trial and/or compensating the bona fide buyer or the victim in cases of criminal misappropriation, criminal breach of trust or cheating. Before imposing a sentence, the court must look into the facts and circumstances of the case, motives of the accused, nature and manner of crime, etc. to come to a fair outcome.

Further appeals

If either of the two parties is dissatisfied with the court’s verdict (partly or whole) then they may appeal to a higher court.

If the appeal is to a Sessions Court, then there may be a full review of facts, appreciation of evidence, and the law. However, unless there is a gross miscarriage of justice or a prima facie error of facts, any appeal to a High Court or Supreme Court would result in confiding only to the issues of law. However, if the case is regarding a sentence of more than 7 years of imprisonment, it is treated in the same way as the former, with a full review of facts, evidence, and the law.

In case the appellate court upholds the appeal then as dictated under Section 386 of the CrPC, they are free but not limited to:

a. Through an acquittal order, reverse the order and direct that further inquiry be made or the accused may be re-tried or committed to a trial and pass the sentence

b. In a conviction appeal or enhancement of sentence-

i. reverse the finding and sentence of the lower court and acquit the accused or discharge them

ii. Maintain the sentence

iii. Alter the extent or the nature of the sentence.

c. Alter or reverse order from an appeal from any other such order

d. Make any just and proper amendment or any consequential or incidental order

Conclusion

In conclusion, with many business crimes that have occurred in the past, like the Satyam scam, the Mundhra scam and the Harshad Mehta scam, the laws have evolved and become more stringent to prevent such scams in the future. The advancement in science and technology has also played a vital role in making the process to identify such irregularities in the system. Certain things can be followed to prevent such crimes like ethics training, creating an ethical environment, regular auditing of accounts, constant monitoring of financial transactions, strict reference checks on new employees, and other such practices.

References

https://iclg.com/practice-areas/business-crime-laws-and-regulations/india

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Status of suspension of performance in international arbitration

By

Abanti Bose

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September 23, 2021

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This article is written by Jeya Suthagar A, pursuing Certificate Course in International Commercial Arbitration and Mediation from LawSikho. The article has been edited by Aatima Bhatia (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).

Table of Contents

Introduction

The contracting parties to an international arbitration often come from different legal systems which follow different national laws. In case of breach by either party, the common remedies available for the other party generally includes the rescission of the contract, sue for specific performance, claim for damages, quantum meruit, seeking injunctions etc.

Suspension of performance in terms of relief is quite contrary to the remedy available by terminating the contractual relationship. While the former relates to only temporary separation from work, the latter relates to permanent dismissal and aims to bring the contract to an end. In certain situations depending on the nature of the events, either of the parties would have the right to temporarily suspend the performance of contractual obligations. Examples include force majeure events, unsafe construction work causing threat to the public, failure by a party to perform its obligations etc. This article aims to examine the differences that are existing between the civil law jurisdictions and the Common Law jurisdictions with regard to the issue of suspension of performance in international arbitration. This article also attempts to analyse whether the suspension of performance constitutes a general principle of international law.

The remedy of suspension of performance

Suspension of Performance allows the parties to excuse the performance of the obligations on a temporary basis. Further, the parties have the option to either give them time to cure the breach or even to opt for the termination in case of prolonged suspension of performance. The defaulting party may be provided with a remedy for specific performance, only if the suspension is preferred by both parties.

The maxim ‘exceptio non adimpleti contractus’ ( in short “exceptio”) serves as a means of a defence, whereby a party to a treaty can withhold the performance of its obligation till the time the other party has not performed its synallagmatic obligation under the treaty. The exceptio principle stems from the broader meaning of not being under the requirement to respect an obligation if the other party to the contract did not respect its own’. According to this broader principle, a party to a treaty need not perform its obligations, if the other party to the treaty has not performed its own obligations. In general, the principle ‘inadimplenti non est adimplendum’ is considered as encompassing the responses to breach of a treaty and are not restricted to synallagmatic obligations including the ‘termination’ or the ‘suspension’ of the operation of a treaty either in whole or in part in response to its material breach.

Civil law jurisdictions

Civil law jurisdictions accomplish this by operation of the exceptio non adimpleti contractus (‘the exceptio’), which is a specific doctrine only pleaded in cases of suspended performance. This doctrine relates to the performance of an obligation to be withheld if the other party has failed to perform his obligation. The party claiming under this doctrine shall prove that it has performed its obligations.

The principle of exceptio can only be applicable to interrelated obligations; otherwise, it would completely undermine the principle of pacta sunt servanda. While the codes of the Germanic legal systems enshrine the exceptio principle, the Franco-Roman legal systems tend to employ the principle of exceptio but not to enshrine it as a general principle. The right to suspend performance has been characterised in certain matters as a general principle of International Private Law which is applicable to all international contracts, as part of the lex mercatoria.

Lex mercatoria (merchant law) meaning a national body of legal rules and trading principles used by merchants throughout Europe in medieval, which are developed primarily by the international business community itself based on custom, industry practice, and general principles of law. Lex mercatoria allowed the merchants to conclude transactions, without any fear of being subjected to foreign rules in the event of a dispute.

When compared to the other contractual remedies in the case of a breach, suspension of performance is apparently simple. It requires no contractual planning, it fits the aggrieved party’s intuitive reactions and it does not require any detailed analysis beyond general requirements of good faith, reasonableness or proportionality. In the case of cross-border transactions, the parties may consent to have the contract entered and be governed by the rules of law that are personalized by the private institutions in order to meet the needs of international trade such as the UNIDROIT Principles and PECL Principles. Due to its inherent characteristics, the remedy of suspension of performance has been considered in the transnational commercial rules referred to as the lex mercatoria in the UNIDROIT Principles of International Commercial Contracts as well as in the PECL (Principles of European Contract Law). The Vienna Convention accordingly provided for the right of suspension in the cases of material breach.

Common law jurisdictions

Common law jurisdictions on the other hand generally apply applicable rules relating to contractual conditions that are used to regulate suspension of performance.

In the case of International contract law instruments, the UNIDROIT and PECL principles are frequently entreated as a ‘codification’ of the general principles of international private law as a general right to suspend performance. While the CISG (UN Convention on Contracts for the International Sale of Goods) law instrument does not adopt suspension of performance as a general principle.

In light of the above position, a general right to suspend performance does not have international consent.

Suspension of performance in comparative context

Suspension of performance is governed by the exceptio principle in Civil Law countries. The principle of exceptio is unknown in the Common Law jurisdictions, only analogies can be drawn, though they are far from precise.

The Civil Law systems consider ‘suspension’ and ‘termination’ as separate remedies available for the parties. Whereas the common law systems consider both together by invocation of the term ‘rescission’.

The right to suspension of performance and termination depends upon the ‘conditions’ in England and the US. The conditions are of two types:

Contingent Conditions (one or both parties not bound to perform unless an external event occurs)
Promissory Conditions (Party A is not obligated to perform until Party B performed its obligations). Precedent, Concurrent and Subsequent promissory conditions are sub-categories.

Where a party’s non-performance is not in the nature of breach of ‘condition’, but of an ‘intermediate’ term, the right of the other Party not in breach to treat itself as discharged from reciprocal performance will depend upon the ‘gravity of the consequences of the breach’. In the modern law, the term of a contract will be classified as an ‘intermediate’ term, and not as a ‘condition’, unless the Court concludes that it falls as a condition by Statute or by Judicial decision or express mention in contract or based on the circumstances.

Suspension of performance is mostly used in the form of self-help in order to coerce the debtor to complete performance rather than as a defense. The principle of exceptio is thus construed as a ‘defense’.

Rules of suspension of performance

The laws of States and various decisions by the arbitrators based the applicability of the doctrine based on four factors as under:

Contracts that make the obligations of the creditor contingent in some manner;
Contracts that provide parties to perform simultaneously (or) debtor to perform before creditor;
Nature of Breach justifying suspension shall meet some minimum standard of severity;
Exceptio will prove, when the gap between withdrawn performance and the defective one is wider.

The UNIDROIT Principles and PECL

UNIDROIT is an intergovernmental organization aimed at harmonizing international private law across countries through a set of uniform rules, international conventions, and production of model laws, sets of principles, guides and guidelines etc. Initially established in 1926, as part of the League of Nations, it was re-established in 1940 following the League’s dissolution through a multilateral agreement, the ‘UNIDROIT’ Statute. As of 2019, UNIDROIT had 63 member states. The “UNIDROIT Principles” set forth general rules for international commercial contracts. These principles may be applied when the parties to the contract have agreed to follow general principles of law, the lex mercatoria or in cases where the parties have not chosen any law to govern the contract.

Their main goal of both the PECL (Principles of European Contract Law) and the UNIDROIT Principles was the compilation of uniform legal principles for reference, and, if necessary, the development of national legal systems. In the compilation of the PECL, the Law of the EU member states, and thus common and civil law, as well as Non-European Law was taken into consideration. The PECL Principles are applied in European Communities, as general rules of contract law. These principles are applied where the parties in the contract had agreed to be governed by lex mercatoria or the like or the parties have not chosen any rule of law to govern their contract.

The suspension of performance is governed by a single provision in both the UNIDROIT principles and PECL. Article 7.1.3 of UNIDROIT Principles, includes suspension of performance in situations where the parties are to perform simultaneously and consecutively to withhold performance until the first party has performed. Under Article 9:201 (1) of PECL principles provides for a party to perform simultaneously and has a right to withhold performance. The option of withholding whole or part of the performance of the first party depends on the reasonableness in the circumstances.

The only difference between these two principles is the ‘requirement of reasonableness’ test in the case of the PECL principle.

The CISG and ULIS

The recent globalisation trends and the rising volumes of international trade have made it necessary for effecting increased regulations in international sales. Hence in the early 1980s, the UN Convention of Contracts for the International Sale of Goods (CISG) came into effect. CISG was thus the result of efforts originating from the 1964 Hague Conventions of Uniform Law on the International Sale of Goods (ULIS) and the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF) involving 28 states. The rule of international trade was facilitated further in 1994 when the International Institute for the Unification of Private Law (UNIDROIT) had put forth its Principles of International Commercial Contracts or the UNIDROIT Principles. Noticeably, in the same year, the European Contract Laws Commission also brought out its first part of the Principles of European Contract Law (PECL), followed by its complete version in the year 1998. Many people who participated in the creation of the CISG were also instrumental in drafting the UNIDROIT and the PECL.

The CISG and ULIS relate to only contracts involving the sale of goods that are bilateral and synallagmatic in nature.

The provision for suspension of performance under the CISG Rules is provisioned under Article 71, which provides that a party has the right to suspend the performance, only if it becomes apparent that the defaulting party will not perform a ‘substantial’ part of its obligations, in the case of anticipatory breach of contract. In cases where the breach has already occurred the Courts have applied Article 71 in two different matters to find the right of suspension by analysing the provisions of various Articles and the non-existence of the general provision in respect of the requirement of the parties to act in good faith. Accordingly, the Courts have gone on to hold that nothing in the text of Article 71 states the extent to which the performance may be suspended.

The ULIS under Article 73 provides an analogous provision under Article 71 of CISG. The buyer’s right to reduce the purchase price is provided for under ULIS Rules and the same shall not be construed as a specific instance of ‘suspension of performance’.

ICC Case no 4629 of 1989

The contract in the present case required the construction of a hotel called for by the Middle Easter Hotel developer (the Respondent, herein) to be constructed by the Claimant within a specific timeframe. Whereas soon after the commencement of the work by the Claimant, the Respondent who is obligated to obtain licenses/ authorisations and to fulfil certain credit stipulations set by the claimant’s bank, had failed to fulfil its obligations. Resultantly, the Claimant suspended performance on the ground. The Respondent drew down the performance guarantee issued by Claimant due to suspension of performance and hence Claimant initiated the arbitration. The subject contract between the disputing parties provides for a clear and valid ‘choice of law’ to invoke a specific national law, and hence there is a rare occasion for an arbitration tribunal or a court to choose a different law, against the intent of the contract. The suspension of a performance issue in the present case was decided by the arbitral tribunal in accordance with the provisions of the Federal Act on the Amendment of the Swiss Code, “The Code of Obligations” (CO), as the contract agreement entered into between the parties contained an express choice of Swiss law. The Tribunal analysed the claim of suspension as per Article 82 of CO as embodying the exceptio principle and found that the parties are to perform simultaneously.

The Tribunal held the Respondents ‘’could not reasonably insist’’ the Claimants to finish the work by the targeted dates, as the Respondent itself had breached its obligations in the present case. The Tribunal found that when the Respondent refused to remedy its non-performance, as the Claimant is entitled to terminate the Contract as per Article 108(1) of CO, fortiori the Claimants were justified in suspending performance of its obligations.

It is evident that the ruling of the Tribunal on suspension of performance is consistent with the Swiss approach and in order to invoke direct termination a more severe breach is required to be justified.

Klöckner Industrie-Anlagen GmbH (FR Germany) v. United Republic of Cameroon

Klöckner entered into several contracts with the Government of Cameroon. The contract intends to supply and construct a fertilizer plant providing technical and commercial management services. No choice of law has been agreed into in the Contracts. The contract was running smoothly for nineteen months and after which the plant shut down. Consequently, Klöckner instituted arbitration for non-payment of the contract price. Government of Cameroon defended on several grounds including the principle of exceptio alleging various breaches committed by Klöckner.

The Arbitration Tribunal in the present case applied French derived Cameroonian law as the Cameroonian court would consider based on the location and place of contract execution. The Arbitral Tribunal found the exceptio principle to embody a general principle of ‘French, English and International law’.

The Tribunal cited to various French commentaries and judgments having satisfied that it could recognise the principle of exceptio, held that the debtor’s breach must be of more than ‘slight importance’ that partial non-performance by the debtor does not justify the suspension of the entirety of the creditor’s performance and that the Tribunal must ‘measure the relative effect of the refusal to perform against the seriousness of the faulty performance’.

In light of the aforesaid position, the Tribunal held that breaches committed by Klöckner had partially discharged the obligations of the Government of Cameroon and held that Klöckner is not entitled to any more payment in excess of what has already been received by it. The Tribunal held that exceptio is a dilatory plea that permits the creditor to temporarily withhold the payments but do not discharge the obligations of the parties.

ICC Case no 3267 of 1979

The contract in the subject matter of this case relates to a fixed price contract that is subjected to modifications only under very limited circumstances. The Claimant is obligated to achieve contractual milestones in order to enable the Respondent to pay in instalments. During the course of execution of work, the Respondent alleged failure of the Claimant to reach milestones and deducted the sixth and seventh payments, which the Tribunal characterised as suspension of performance. The Claimant subsequently terminated the Contract.

The Contract contained no choice of law. The Tribunal was thus empowered to act as an amiable compositeur. The Tribunal accordingly applied ‘general principles of international commercial law …. with no specific reference to a particular system of law’.

The Tribunal held that the payment deductions by the Respondent were not justified as the Respondent failed to follow the procedure specifically stated in the contract to deal with this kind of contingencies. The Tribunal held that ‘the respondent argument on deduction was made in accordance with…. international trade usages’ does not carry any weight. Accordingly, the Tribunal declined to state whether suspension of performance constituted a general principle of law consonant with ‘international trade usages’ in view of the agreement provisions between the parties overrides any such principles.

Conclusion

From the above instances, it is apparent that the Arbitration Tribunals in order to justify the suspension of performance have preferred:

International contract law instruments and/or,
General principles of international law.

The Arbitration Tribunal declared that suspension of performance is a general principle of international law in the cases including Klo¨ckner Industrie-Anlagen GmbH (FR Germany) v. United Republic of Cameroon, ICC Case no.3267 of 1979, ICC Case no.3540of 1980 and ICC Case no.8547 of 1999.

The Arbitration Tribunal in a series of decisions tends to view the suspension of performance as a principle by promoting the application of the general principles of international private law in contracts of bilateral nature. Order of performance has been discussed in ICC Case nos. 4629 of 1999 and ICC Case no.8547 of 1999.

The Tribunals addressing suspension of performance preferred the rule that contains a requirement of proportionality in the creditor’s conduct rather than the requirement of a serious breach. As the Arbitrators being composed mostly of civil lawyers, the awards published by them may have an influence on more diverse tribunals which owe much to the exceptio principle and specifically to its Germanic formulation. The recently enacted major international contract law instruments such as UNIDROIT Principles and PECL too adopt the Germanic approach to suspension of performance with the remedy in future characteristics of the general principles of international law.

References

Damien Nyer – Withholding Performance for Breach in International transactions: an exercise in equations, proportions or coercion?
Anson’s Law of Contract 29^th Edition, Oxford University Press.
UNIDROIT Principles of International Commercial Contracts, 2004.
Treitel (n 4) 306. The exceptio can be found in jurisdictions that are part of the English legal family but have a civil law heritage, such as South Africa and Scotland.
Principles of European Contract Law – PECL.
B Nicholas, The French Law of Contract (2nd edn, Clarendon, Oxford, 1992) 213-214.
Report of the Commission to the General Assembly on the work of 51^st session – Yearbook of the International Law Commission, 1999, Volume II Part Two; https://legal.un.org/ilc/publications/yearbooks/english/ilc_1999_v2_p2.pdf

https://www.cambridge.org/core/journals/international-and-comparative-law-quarterly/article/abs/contract-law-in-international-commercial-arbitration-the-case-of-suspension-of-performance/7655C6252F5B44113E31E4A4F04A7898.

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3 legal consequences of HIPAA non-compliance worth knowing

By

Rachit Garg

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September 23, 2021

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Documents about HIPAA violation and gavel in a court. — Image source: https://bit.ly/3ky2LJg

Table of Contents

Introduction

If you’re in the healthcare industry or a business that uses, transmits, and stores protected health information (PHI), then you’ve probably heard about the Health Insurance Portability and Accountability Act or HIPAA. This federal regulation is intended to protect sensitive health information against unauthorized access and other cyberthreats. Because of this, strict adherence to HIPAA rules and regulations are expected from the covered entities and business associates that handle confidential patient health information.

Moreover, to ensure compliance, the covered entities and business associates need to conduct training to make sure all the employees understand and follow the rules and regulations and avoid the risks of cyberthreats, including phishing attacks. However, the failure of your organization to comply with the HIPAA privacy and security rule comes with some legal consequences that you won’t surely want to deal with.

With that said, here are three legal consequences of HIPAA noncompliance worth knowing from the get-go:

Civil Penalties

One legal consequence of HIPAA noncompliance is the payment of civil money penalties. However, keep in mind that civil fines are divided into three categories, depending on the level of intelligence and intention of the violating party. These categories can be categorized into the following:

Reasonable Cause: This refers to a situation where the violation is due to a reasonable cause or when you’ve known of the violation and didn’t deliberately neglect it. The fines can include not more than USD$1,000 for first violations and up to USD$50,000 for repeat violations.

Ignorance: This refers to a situation where you had no knowledge of the violation. For your violation, you may have to pay not more than USD$100 if it’s the first time and up to USD$50,000 if you’re a repeat violator.

Willful Neglect: This refers to a situation where you fully knew of the rules and deliberately and willfully violated them without justifiable cause. When it comes to the fines, the amount usually depends on whether correction has been done within the 30-day period. For example, you may have to pay from USD$10,000 to USD$50,000 for a corrected violation and a higher flat rate of USD$50,000 for an uncorrected violation.

As enumerated, non-compliance of the rules and regulations can cost you hundreds to thousands of dollars. That’s why it’s important to get familiar with the HIPAA rules so you could avoid civil fines in case of a violation. Finally, to make sure you remain compliant with HIPAA security protocols, make sure you conduct regular training sessions for all your employees.

Criminal Charges

Aside from the civil money penalties, HIPAA rules and regulations violators or those who failed to comply may also have to deal with criminal charges, depending on the extent and severity of the violation. For instance, if you or one of your employees committed the most serious violations, you can face criminal sentencing and jail time.

Generally, the criminal penalties incurred for HIPAA noncompliance can include the following:

For no knowledge of the rule violated, up to 12 months’ imprisonment.
For intentional deception in accessing protected health information, imprisonment of up to 5 years.
For malicious intent, imprisonment of up to 10 years.

As you can see, violating HIPAA rules and regulations incurs heavy civil and criminal penalties. Therefore, if you don’t want yourself or your employees to face fail time because of these violations, then you need to enforce measures to safeguard sensitive patient information.

Sanctions

In addition to civil and criminal consequences, noncompliance of HIPAA rules can also mean sanctions for the covered entities and business associates. For example, if your organization is one of these covered entities and some of your employees committed a violation, you may be left with no choice but to discipline them and, in extreme cases, terminate their employment contracts and pay their wages if necessary.

However, on top of firing employees, they may also have to face some legal sanctions as provided for by the federal statute itself. But given the sanctions and terminations associated with noncompliance, your organization may need to spend more money as a result of the payment of fines as well as the costly employee turnover.

Bottom Line

Indeed, strict compliance with HIPAA can save yourself, your organization, and your employees from the legal consequences mentioned in this post. However, in the event you need to deal with these repercussions, the situation can be damaging, especially for your business. For this reason, it’s crucial for your organization to take the HIPAA compliance seriously.

Remember, by properly complying with the rules and regulations, you can safeguard all sensitive information and your organization from cybercrimes and other related security breaches.

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21 recent criminal law judgments

By

Diganth Raj Sehgal

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September 23, 2021

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This article is written by Varchaswa Dubey from JECRC University, Jaipur. This article consists of 21 recent important criminal law judgments.

Table of Contents

Introduction

Criminal law is that branch of law that deals with criminal matters or treats crimes and their punishment. The scope of criminal law is very wide and it deals with all the crimes which shake the consciousness of the society, or the acts which are committed against the state.

In India, there have been numerous landmark judgments regarding criminal law, and each time, such judgements have not only assisted the judiciary in delivering justice to the victim but have also established a new legal precedent that shall deliver new legal principles or concepts. Landmark judgments are often those judgments that are comparatively new or which do not have much judicial interpretation.

Recent landmark Criminal Law judgments

Rambabu Singh Thakur v. Sunil Arora (2020)

Facts of the case

In this case, the Supreme Court of India observed that there has been an increase in the number of criminal politicians in India since the last 4 general elections, and there is no explanation on the part of political parties as to why they have selected a candidate with a criminal record. In 2004, 24% of the members of Parliament had criminal cases pending against them. In 2009, that went up to 30%, in 2014 to 34%, and in 2019, as many as 43% of MPs had criminal cases pending against them.

Judgment of the court

The Supreme Court directed the political parties at the Central level and State level to upload on their respective websites the correct details concerning the pending criminal cases against the selected candidates, with the reasons why such candidate has been selected instead of other candidates with no criminal record.

Such information must also be published in one local newspaper and one national newspaper, and on the official media platforms of the political party, including Facebook, and Twitter. The details must be published within 48 hours of the selection of the candidate and not less than two weeks before the first date for filing of nominations, whichever is earlier.

All the concerned political parties must also submit a report of compliance with the directions passed by the Apex Court with the Election Commission of India within 72 hours of the selection of the candidate, and if any political party fails to submit such report to the Election Commission, the Election Commission shall bring such incident to the notice of Supreme Court of India as being in contempt of court’s orders.

Anuradha Bhasin v. Union of India (2020)

Facts of the case

The case primarily dealt with the suspension of the internet in the State of Jammu and Kashmir post revocation of Article 370 of the Constitution of India, however, one of the issues in the case was regarding the excessive imposition of Section 144 of the Code of Criminal Procedure, 1973, which empowers a magistrate to impose restrictions on movement and speech in areas where trouble could erupt.

Judgment of the court

The Supreme Court of India, in this case, held that Section 144 CrPC cannot be used as a tool to prevent legitimate expression of opinion. The court further held that Section 144 CrPC is not only remedial but also preventive, and shall be exercised only in cases where there is danger or apprehension of danger. The jurisdiction of Section 144 of CrPC shall not be used to suppress the legitimate expression of opinion or grievance or exercise of any democratic rights.

The Apex Court also directed the respondent-State or competent authorities to publish all orders in force and any future orders under Section 144 of CrPC and for suspension of telecom services, including internet, to enable the affected persons to challenge it before the High Court or appropriate forum.

The Court further held that an order passed under Section 144 of CrPC should state the material facts to enable judicial review of the same. The power should be exercised in a bona fide and reasonable manner, and the same should be passed by relying on the material facts, indicative of application of mind which will enable judicial scrutiny.

Paramvir Singh Saini v. Baljit Singh (2020)

Facts of the case

The Supreme Court of India in this case, after hearing the learned amicus curiae, considered the guidelines given in the case of Shri Dilip K. Basu vs State of West Bengal & Ors., (2015) which held that there is a need to install CCTV camera footage and periodically publish a report of its observations.

Judgment of the court

The court in this case has directed all the States and Union Territories to install CCTV cameras in their jurisdictional police stations and file an affidavit regarding the same within six weeks from the date of delivery of the judgment.

The Apex court also directed the Central government to install CCTV cameras which shall be equipped with night vision and consists of audio and video footage at the Central Bureau Investigation (CBI) offices, National Investigation Agency (NIA), Enforcement Directorate (ED), Narcotics Control Bureau (NCB), Department of Revenue Intelligence (DRI), Serious Fraud Investigation Office (SFIO) offices, and other similar central agencies at the places where interrogation of people takes place.

Shilpa Mittal v. State Of NCT of Delhi (2020)

Facts of the case

In this case, the accused, who was a juvenile at the time of the commission of the offence, committed an offence that is punishable under Section 304 of the Indian Penal Code, 1860. The juvenile at the time of occurrence of the incident was above 16 years but below 18 years, and the Juvenile Justice board held that the accused has committed a heinous offence, and, therefore should be tried as an adult.

Judgment of the court

The Supreme Court of India, in this case, held that an offence for which there is a sentence of more than 7 years of imprisonment but does not have any minimum sentence, or providing a minimum sentence of fewer than 7 years, cannot be considered as a heinous offence within the ambit of Section 2(33) of the Juvenile Justice (Care and Protection of Children) Act, 2015.

Re Exploitation of children in orphanages in State of Tamil Nadu v. Union of India (2020)

Facts of the case

The Supreme Court of India, in this case, took suo moto cognizance when the learned amicus curiae drew the attention of the court towards two circumstances and some allegations regarding the detention and torture of children in police custody in Delhi and Uttar Pradesh.

Judgment of the court

The Apex court, in this case, held that a child cannot be kept in jail or police custody and instead shall be kept in an observation home or place of safety. The court also emphasized the compulsion of bail to juvenile offenders, the provisions of which are enshrined under Section 12 of Juvenile Justice (Care and Protection of Children) Act, 2015.

The Apex Court further held that Section 10 of the JJ Act, lays down that when any child alleged to be in conflict with law is apprehended by the police, such child should be placed under the charge of the special juvenile police unit or the designated child welfare officer. The Section further provides that such authority should produce the child before the Juvenile Justice Board without any loss of time and within 24 hours after the child is apprehended.

The court also came heavily on the Juvenile Justice Board, who shall not be silent spectators and pass orders only when a case comes to them. The JJ boards can also take cognizance of the situations when it comes to the knowledge of the board that a child has been detained in police custody or prison. It is the primary duty of JJ boards to grant bail to juvenile offenders or at least send them to an observation home or any such place of safety.

Abhilasha v. Parkash and Ors. (2020)

Facts of the case

In the present case, the appellant filed a petition challenging the judgment of Punjab and Haryana High Court which upheld the decision of sessions court which held that the daughter of the respondent is only entitled to maintenance under Section 125 of Code of Criminal Procedure, 1973 till she attains the age of majority.

Being aggrieved by the decision of the sessions court, the appellant filed a review petition under Section 482 of the Code of Criminal Procedure, 1973. Eventually, the matter came before the Punjab and Haryana High Court, however, the learned court also upheld the decision of the sessions court, and later the matter came before the Supreme Court of India.

The primary issue raised in this case was whether a Hindu unmarried daughter can claim maintenance from her father under Section 125 CrPC only up to the time she attains majority or can she claim maintenance till she gets married.

Judgment of the court

The Supreme Court of India, in this case, held that an unmarried Hindu daughter can claim maintenance from her father till she gets married under Section 20(3) of Hindu Adoption and Maintenance Act, 1956, however, such daughter must prove that she is not able to maintain herself and then only she shall be entitled to maintenance under the 1956 act.

Vineeta Sharma v. Rakesh Sharma (2020)

Facts of the case

The said case raised the question that whether the Hindu Succession (Amendment) Act, 2005, which provides a daughter with the equal right to inherit ancestral property, has a retrospective effect to such an extent that when the 2005 act came in force, the father of the appellant daughter was not alive.

Judgment of the court

The Supreme Court of India in this case held that the 2005 amendment has retrospective effect and a daughter will remain a coparcener throughout her life irrespective of whether her father is alive or not or was alive or not at the time of commencement of the 2005 amendment.

The court held that under Section 6 of the Hindu Succession Act, daughters who are born before or after the commencement of the 2005 amendment hold the equal status of coparcener as a son. The court further upheld the judgment of Danamma @ Suman Surpur vs Amar (2018) where the Apex court held that provisions of Section 6 confer full rights upon the daughter coparcener. Any coparcener, including a daughter, can claim a partition in the coparcenary property.

The statutory fiction of partition created by the provision of Section 6 of the Hindu Succession Act, 1956 as originally enacted did not bring about the actual partition or disruption of the coparcenary. The fiction was only to ascertain the share of the deceased coparcener when he was survived by a female heir or male relative of such a female.

Amish Devgan v. Union of India (2020)

Facts of the case

In this case, the petitioner, who is also a journalist, hosted and anchored a religious debate, which led to the registration of at least 7 First Information Reports (FIR) against him. The petitioner in this case eventually reached the Supreme Court of India under Article 32 of the Constitution of India. Most of the punitive sections are concerned with infringing religious sentiments of a community, including Section 153B and Section 295A of the Indian Penal Code, 1860.

Judgment of the court

The Supreme Court of India in this case came heavily on the difference between hate speech and free speech, and the need for criminalizing hate speech and the tests to determine hate speech. The court held that it is important to make a difference between free speech and hate speech. While free speech does comprise the right to criticize government policies, hate speech refers to the spreading of hatred against a group or community.

The court, further, while considering the tests regarding the reasonableness, involved the realization of limits within which rational responses shall be included, which also includes taking into consideration the characteristics of a situation and circumstances and if a particular group is likely to get affected, and at the same time, the society is also entitled to have certain tolerance.

Anversinh @ Kiransinh Fatesinh Zala v. State of Gujarat (2021)

Facts of the case

In the present case, the appellant approached the Supreme Court of India with an appeal to set aside the order of the High Court of Gujarat, which overturned the charges under Section 376 of Indian Penal Code, 1860 but upheld the charge of kidnapping under Sections 363 and Section 366 of IPC.

The main issue before the court, in this case, was whether a consensual affair can be a defence against the charge of kidnapping a minor?

Judgment of the court

The Apex Court, in this case, held that a consensual affair is not a defence against a charge of the kidnapping of a minor. The court held that the extravagant passion or love of a minor girl cannot be allowed as a defence, or the same would infringe the protective essence of the offence of kidnapping.

The Apex Court, while considering the case of State of M.P vs Surendra Singh (2014), held that undue sympathy to impose inadequate sentences would do more harm to the justice system to undermine the public confidence in the efficacy of law. Every court must award a proper sentence having regard to the nature of the offence and how it was executed or committed. The sentencing courts are expected to consider all relevant facts and circumstances bearing on the question of sentence and proceed to impose a sentence commensurate with the gravity of the offence.

The court must not only keep in view the rights of the victim of the crime but also the society at large while considering the imposition of appropriate punishment. The meagre sentence imposed solely on account of lapse of time without considering the degree of the offence will be counterproductive in the long run and against the interest of society.

The court further held that, once the prosecution establishes the evidence which reflects that the offence of kidnapping was done with the intention or knowledge of compelling the marriage of the girl or to have illicit sexual intercourse with her, the punitive measures of Section 366 of IPC would be attracted, however no offence of Section 376 could be made out against the accused.

Laxmibai Chandaragi B v. State of Karnataka (2021)

Facts of the case

In the said case, the father of the petitioner filed a police complaint alleging that his daughter is missing. During the investigation, it was found that the daughter of the complainant had married petitioner no. 2 out of her own will, and the marriage certificate was shared by the petitioner to her family through Whatsapp.

Despite being aware of the wedlock of the petitioner, the investigating officer (IO) in this case, instead of taking the statement of petitioner no. 1 in her place of residence, insisted on recording her statements in the police station.

Judgment of the court

The Apex court, in this case, came heavily on the conduct of the IO and other police authorities, which were not only responsible for insisting a woman record her statements in the police station but also threatening her about the false case her parents may register to the police, which will result in the arrest of her husband.

The court further held that there is no need for consent of the clan, family, or the community in the cases where two adults have voluntarily decided to enter into a wedlock.

Union of India v. Prateek Shukla (2021)

Facts of the case

In this case, the respondent’s company had not deposited its quarterly returns as ruled by the Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 2013 and the respondent’s company purchased 896 grams of acetic anhydride and 1.885 kg of amphetamine. Notices under Section 67 of the Narcotic Drugs and Psychotropic Substances Act, 1985 were issued to the respondent. During a search based on the information given by the informants, a search was carried out which resulted in the disclosure of 9650 kgs of acetic anhydride, and the accused was held guilty under the NDPS Act. The accused later appealed before the High Court which granted him bail on the ground of him having a clean past and being an educated person.

Judgment of the court

The Supreme Court of India ruled that the learned High Court has erred in granting bail to the accused, as the High Court has placed the reverse burden of proof, which is on the accused in cases of NDPS according to Section 68(J) of the NDPS act, 1985 and considering the educational background and clear past of the accused.

Thus the Apex court found the High court to be in error in granting bail to the accused and cancelled the bail allowed to the accused.

Shivaji Chintappa Patil v. State of Maharashtra

Facts of the case

In this case, the accused was found guilty of homicide for the death of his wife by the sessions court and later by the High Court under Section 302 of Indian Penal Code, 1860. Both the courts relied upon the medical examination which itself was full of inconsistencies. The matter eventually came before the Supreme Court of India.

Judgment of the court

The Apex court, in this case, held that both the Sessions Court and High Court have erred in determining that the prosecution has established the guilt of the accused beyond a reasonable doubt. The Apex Court further held that in cases of homicide, there is usually more than one person involved and in cases of homicidal hangings, usually, more than one person is involved in the act, unless the victim is a child or very weak and feeble, or is rendered unconscious by some intoxicating or narcotic drug.

The Apex Court while relying on the case of Sharad Birdhi Chand Sarda vs State Of Maharashtra (1984) gave 5 principles that must be fulfilled before a case against an accused can be said to be fully established,

The circumstances from which the conclusion of guilt is to be drawn should be fully established.
The facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty.
The circumstances should be conclusive and tendency.
They should exclude every possible hypothesis except the one to be proved.
There must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused.

The Supreme Court also held that in case of suicide, the hanging marks on the neck of the victim are upward ears, which was confirmed by the senior medical officer, and therefore the Apex Court set aside the orders of conviction of the Sessions Court and High Court, and acquit the accused of all charges.

State Of Rajasthan v. Love Kush Meena (2021)

Facts of the case

The case was primarily concerned with the question of whether a benefit of doubt resulting in acquittal of the respondent under charges of Sections 302, Section 323, and Section 341 read with Section 34 of the Indian Penal Code can create an opportunity for the respondent to join as a police constable in Rajasthan Police Services.

Judgment of the court

The Apex court, while relying on the case of Avtar Singh vs Union Of India & Ors. (2016), held that mere fact of an acquittal will not suffice, and it depends on whether the acquittal was clean on the grounds of total absence of evidence or the acquittal was made on the grounds of the benefit of the doubt. The court further held that in cases of heinous offences, if the acquittal is based purely on the grounds of the benefit of the doubt, and the same shall not make the respondent eligible for appointment.

Sudha Singh v. State of Uttar Pradesh & Anr. (2021)

Facts of the case

In this case, the wife of the deceased victim appealed against the order of the High Court in granting bail to the accused who was arrested under charges of Section 120B, Section 302, Sections 3 and Section 25 of the Arms Act, 1959. It was alleged by the appellant that the accused is a contract killer and has at least 15 cases registered against him, including murder, attempt to murder, and criminal conspiracy. The appellant has also argued that the learned High Court has not taken into consideration the past criminal history of the accused before acquitting him and the threatening of the witnesses which has forced the Sessions Court to grant protection to the witnesses.

Judgment of the court

The Apex court in this case was of the view that the High Court has indeed erred in granting bail to the accused without taking into consideration the threats the accused has been making to the witnesses which have forced the Sessions Court to grant police protection to the witnesses. The Apex Court, while emphasizing the case of Neeru Yadav vs. State of U.P (2015), held that the courts must consider every aspect of the criminal before granting bail. It further emphasized the case of Prasanta Kumar Sarkar vs. Ashis Chatterjee and Another (2010) and highlighted certain factors for High Courts to exercise their discretion judiciously, cautiously and strictly in compliance with the ratio set by a catena of decisions:

Whether there was a prima facie or reasonable ground to believe that the accused had committed the offence.
Nature and gravity of accusations.
The severity of the punishment in the event of a conviction.
The danger of the accused absconding or fleeing, if granted bail.
Character, behaviour, means, position, and standing of the accused.
Likelihood of repetition of the offence.
Reasonable apprehension of the witnesses being influenced.
The danger of justice being thwarted by a grant of bail.

The Apex Court while considering all the above-mentioned circumstances overruled the order of the High Court which granted bail to the accused.

Patan Jamal Vali v. The State Of Andhra Pradesh (2021)

Facts of the case

In this case, the appellant reached the Supreme Court of India after being aggrieved by the order of the Andhra Pradesh High Court which convicted the accused under Section 3(2)(v) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 and Section 376(1) of the Indian Penal Code, 1860.

The appellant in the present case argued that the ingredients of Section 3(2)(v) were not established. The court considered the theory of intersectionality by Kimberly Crenshaw in the U.S.A.

Judgment of the court

The court while emphasizing the case of Navtej Singh Johar v. Union of India (2018) applied the intersectional lens to Article 15(1) of the Constitution of India which provides the statute guarantees against discrimination.

The court held that intersectionality refers to the oppression which arises out of the combination of various oppressions which combinedly produce something unique from other forms of discrimination standing alone.

The court further held that certain measures have been taken over some time but they have been too far and too few and they certainly have not attempted to restructure and transform society and its institutions but the state must ensure that no woman suffers discrimination on grounds of caste or religion.

The court further referred to the Justice JS Verma report which was constituted after the 2012 Delhi gang-rape case while referring to how discrimination caused by intersecting identities increases the violence against specific communities, gender, religion, etc. The court also discussed the conditions of women in contemporary Indian society and held that while laws are being enacted to bring about change, significant work needs to be done to make sure that the laws benefit the objective with which they were enacted.

The court lastly discussed Section 3(2)(v) of the SC and ST act. It set aside the conviction under the said section after finding no essentials under the section and upheld the conviction of the accused under Section 376(1) of IPC.

Achhar Singh v. State of Himachal Pradesh (2021)

Facts of the case

In this case, the appellants being aggrieved by the order of the Himachal Pradesh High Court reached the Supreme Court of India wherein they challenged the order of the High Court which set aside the order of acquittal passed by the Sessions Court.

In the present case, the appellants no. 1 and 2 were tried under Sections 452, Section 326, Section 323 and Sections 302, Section 452 of Indian Penal Code, 1860 respectively, and were acquitted by Sessions Court by taking benefit of the doubt.

While relying on the case of Murugesan & 16 Ors vs State Tr.Insp.Of Police (2012) the appellant’s counsel contended that as long as the trial court’s view is a possible view, further scrutiny by High Court under Section 378 Code of Criminal Procedure, 1973 was not needed.

The primary question before the Supreme Court of India was whether the learned High Court in exercising its jurisdictions under Section 378 of CrPC was justified in intervening with the order of the acquittal delivered by the trial court.

Judgment of the court

The Supreme Court of India, in this case, held that one of the most important features of criminal jurisprudence is the presumption of innocence of the accused until proven guilty by a competent court and in the present case, the trial court, after analyzing all the evidence, records, and witnesses, had acquitted the accused. Under the jurisdictions of Section 378 of CrPC, if there are two possible views, then in such cases the High Court shall not interfere with the trial court’s judgment, however, such rule cannot be extended to reflect the contours of appeal against the order of appeal under Section 378 CrPC which is limited to determine whether the view of the trial court was possible or not, furthermore, there is no bar on the High Court to re-appreciate the evidence during an appeal against the order of acquittal.

Thus the Supreme Court of India, in this case, upheld the conviction of both the accused persons, one of whom was responsible for delivering a blow of a stick on the head of an aged woman which caused her death on the spot. The court furthermore held that the fact that the testimony of witnesses was overstated suggests the elements and ingredients of truth, and in cases where a significant portion of the evidence was insufficient, but the rest of the portion of evidence proves the guilt of the accused, a conviction can be ruled on it and reliance was placed on the case of Gangadhar Behera And Ors vs State Of Orissa (2002).

Gautam Navlakha v. National Investigation Agency (2021)

Facts of the case

In this case, the appellant was placed under house arrest, and the primary question, in this case, was whether the period of 34 days which the appellant has already spend under house arrest shall be counted under a period of 90 days under Section 167 CrPC.

Judgment of the court

The Supreme Court of India in the present case while attending the above question held:

When the report of remand is taken into consideration by the magistrate, the bail application can be filed under Section 439 CrPC instead of Section 437 of CrPC considering the restrictions in the present case.
The application under Section 397 CrPC shall not be against the remand, but the application under Section 439 of CrPC will be for bail.
In cases of remand being illegal or imposed without having any jurisdiction, or is conducted in any manner, then the person whose rights have been violated can seek remedy under the writ of Habeas Corpus, except in such circumstances, the writ of Habeas Corpus is not maintainable.
Usually, the Court of Magistrate practices the power of remand under Section 167 CrPC, and the exercise of power under the said section by the superior courts will be to determine the duration within which the charge sheet must be filed, and in case of failure to file a charge sheet, the accused has a statutory right to bail.
The order of remand must be a transit remand order, and shall be passed under Section 167 CrPC, though it may be for the exhibiting in a court of law the appellant, it also involves permitting continued detention under Section 167 CrPC.
If the court of law tends to invoke and exercise jurisdictions under Section 167 CrPC, the detention shall qualify even in cases where the order of detention was illegal.

The court further held that the house arrest must be a complete prohibition on going out and the order of injunction passed to prevent the persons from engaging other than the residents of the house, and placing the guards to enforce such conditions will be judicial custody but not under the jurisdictions of Section 167 CrPC.

Shaik Ahmed v. State Of Telangana (2021)

Facts of the case

In this case, the appeal was filed before the Supreme Court of India after the appellant was aggrieved by the order of the High Court which had convicted the appellant under Section 364A IPC. The primary question before the court, in this case, was what essentials of Section 364A IPC are to be proved beyond a reasonable doubt to convict an accused under Section 364A of IPC.

Judgment of the court

The Supreme Court of India in this case held the essentials which will bring home the guilt of the accused:

Kidnapping or abduction of an individual and keeping such person in detention after the kidnapping or abduction,
There is a threat to cause death or hurt to the person, or the conduct of the kidnapper leads to a reasonable apprehension that such person may cause death or hurt,
Such kidnapper causes hurt or death to such a person to compel the government of any foreign State or any Governmental organization or any other person to do or abstain from doing any act or to pay a ransom.

After establishing the first condition, the prosecution must establish either the second or third condition to prove the guilt of the accused.

Lakshman Singh v. State Of Bihar (Now Jharkhand) (2021)

Facts of the case

In this case, the appellant was aggrieved by the order of the High Court which had upheld the order of conviction of the accused under Sections 323 and Section 147 of the IPC and had appeared before the Supreme Court of India.

The prosecution alleged that the accused persons formed an unlawful assembly and tried to snatch away the voters’ list present with the aggrieved person, and on the refusal by the aggrieved person, the accused started beating him, and later, one of the accused also fired gunshots at a person.

The learned trial court found 16 people guilty for offences under Sections 323, Section 307, Section 147, Section 149, and Section 379 IPC.

Judgment of the court

The Supreme Court of India upheld the decision of convicting the appellants under Section 323, and Section 147 of IPC. The court then emphasized the case of the People’s Union for Civil Liberties & Anr. vs Union of India (2004), which held that freedom of voting is a part of freedom of expression and it is necessary to strengthen democracy.

The court further held that “the essence of the electoral system should be to ensure freedom to voters to exercise their free choice. Therefore, any attempt of booth capturing and/or bogus voting should be dealt with iron hands because it ultimately affects the rule of law and democracy. Nobody can be permitted to dilute the right to free and fair election.”

Harshvardhan Yadav v. State of U.P. and Ors. (2021)

Facts of the case

In this case, an appeal was filed before the High Court of judicature at Allahabad against the order of special judge under Section 376 of IPC and Section 3(2)(v) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act 1989. The appeal in the present case was filed under Section 14 of the SC and ST Act, 1989. The appellant had argued before the court that he has been in jail since November 2020 and he has no criminal history. Furthermore, the accused also has an academic career and he was preparing for competitive exams. He claimed that based on an absolutely false allegation, the FIR had been lodged against him. No sign of rape has been found in the medical examination of the victim. During the investigation, the manager and waiter of the hotel gave statements to the Investigating Officer under Section 161 Cr.P.C. and had denied the alleged incident.

Judgment of the court

The High court in the present case, while finding the accused guilty under Section 376, ruled that rape is the most physical and morally shameful crime in society, which has its effects on the victim for lifelong. It is becoming a trend that the accused gains the consent of the victim to have sexual intercourse with her. Such cases of sex, on the false pretext of marriage, are increasing rapidly as the accused are of the view that they will get away from the punitive measures by taking advantage of the law.

Therefore, the legislature needs to enact specific legislation concerning the circumstances where the accused obtains the consent of the victim to have sexual intercourse with her on the false promise of marriage, however, until such legislation is not enacted, it is the duty of the court to take into consideration the protection of women who are a victim of sexual intercourse on false promises of marriage.

The court further held that the mindset of male chauvinism that women are nothing but objects of enjoyment are required to be addressed meticulously and should be dealt with in such a way that it creates a healthy society and strengthens the security of women.

Smt Aneeta And Another v. State Of U.P. And 3 Others (2021)

Facts of the case

In this case, the petitioner prayed to issue an order through a writ of mandamus to the High Court of Judicature at Allahabad, to protect the fundamental rights of the petitioners guaranteed under Article 21 and Article 22 of the Constitution of India and ensure that no infringement of safety and protection of petitioners be caused.

Petitioner no. 1 and no. 2 are not husband-wife; respondent no. 4 is the husband of petitioner no. 1, and it is the case of the prosecution that petitioner no. 1 is living with petitioner no. 2 due to the torturing behaviour of respondent no. 4.

Judgment of the court

The High Court, while dismissing the appeal of the petitioners, held that parties cannot be permitted to such illegality as tomorrow, petitioners may convey that they have sanctified their illicit relations. Live-in-relationship cannot be at the cost of the social fabric of this country. Directing the police to grant protection to them may indirectly give our assent to such illicit relations.

The court further imposed a fine of rupees 5000 on the petitioners.

References

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All you need to know about parental consent and guarantee agreement

By

Abanti Bose

-

September 23, 2021

0

domain name transfer agreement — Image source: https://rb.gy/drbpng

This article is written by Srijita Adak, pursuing Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho. The article has been edited by Ruchika Mohapatra (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).

Table of Contents

Introduction

India has the largest number of children in the world with around 472 million of our population below 18 years old, representing 39% of the country’s total population. To understand the parental consent and guarantee agreement, we need to explore the reason behind it, i.e. the vulnerability of a child. Children are considered most vulnerable as they are incapable of protecting themselves. Being innocent, children cannot protect themselves due to lack of experience and as they are unaware of the implications of harmful and abusive situations. They lack the requisite maturity and are therefore unable to handle certain situations unlike adults. For instance, if someone comes to an agreement with a child to work which hampers the child’s physical and intellectual growth, we cannot expect the child to make the right decision for him or her.

So, when the victim falls into the category of a child, certain concessions must be accorded to them. All children have the right to grow up and develop in a protective environment in which violence, exploitation and abuse are prevented, mitigated as well as redressed. That is why the responsibility of a child’s actions is given to their legal guardian through a parental consent and guarantee agreement. The purpose of this agreement is ensuring a life of safety, dignity and security to the children.

What is parental consent and guarantee agreement?

Parental consent is a consent with respect to the parent or guardians of a minor kid which permits the kid to take part in specific exercises. The consent must be taken from at least one parent before a minor can do things like getting clinical treatment, getting married or applying for a driving permit or getting vaccination. It is considered a fact that guardians can be designated to follow up for the benefit of a minor until she or he arrives at a mature age.

There are many reasons for parental consent. In case of medical purposes, minors can have severe injury or body modification via surgeries and it is therefore important for an adult who can understand the consequences of such surgeries and procedures to give assent for the same . In case of travelling, something irrecoverable may happen to the minor child or the child, if travelling solo, can get lost, be abducted, trafficked for his/her organs. Marriage is a big decision in life and if a minor takes that decision without letting his or her parents know, then it can be a great loss for that child. In case of photography of child actors, parental consent is must as the photograph can be used for private purposes as well. To avoid these unwanted situations, parental consent is very important.

Generally, parental consent can be taken through a letter or email or a specific form. But for larger purposes, we should have parental consent and guarantee agreement. This is an agreement signed by the authorised guardian of a child that describes a child doing some activity under the consent of his or her legal guardian. The agreements can be of various types like for launching a music video of a child who is a minor or for acting in a film or going through special medical treatment. In those big decisions of a child’s life, if a parental consent and guarantee agreement exists then we can prevent many risks that one might face in case of a dispute. The terms and conditions vary on the agreement to agreement basis.

Who needs parental consent and guarantee agreement and why?

The capacity to contract is one of the most essential elements of a valid contract. The parties to a contract must have the contractual capacity i.e., legal ability to make a valid contact. The capacity means the competency or eligibility of the parties to enter into a valid contract. As per the Indian Contract Act,1872, any contract with a minor is void ab initio and even after the person attains majority, the same agreement cannot be ratified by him. According to Section 11 of the Indian Contract Act, 1872, a contract by a major, sound-minded person and a person not disqualified by law is valid as those have the capacity to contract as in, they are competent to contract whereas a contract by a minor, unsound minded person and person disqualified by law is void agreement as they have not the capacity to enter into a contract as in, they are incompetent to contract. Section 3 of the Indian Majority Act, 1875, states that a person who has not reached 18 years of age, is a minor. The exception to this is if the child’s guardian is appointed by the court (lawful guardian), then the age of majority is 21 years. A minor cannot be stopped from pleading to the minority and can therefore escape liability on grounds of the minority.

The minors cannot make any decisions that will be binding, they need their guardians who can be liable for their deeds. As the minor cannot go into a contract, they need their parents who can make the contract on behalf of the minor. In this regard the minor needs parental consent and a guarantee agreement to authorize their activities. Besides, parental consent is required for those who are physically or mentally disabled. When an agreement of parental consent is made by a lawful and competent guardian on behalf of the minor, it will be a valid and enforceable agreement.

Position of an adoptive child

According to Hindu Law, the matter of adoptive children is governed by Hindu Adoptions and Maintenance Act, 1956 which talks about how adoption takes place, who can take or give adoption and if adoption is made of a child it is ensured that the child is below the age of 15 years. Any child above the age of 15 years cannot be given in adoption. On being adopted, the adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes. Everything of the adopted child will be governed by the adoptive family and not the natural family where he was born. The moment the child is adopted, it will make him or her as good as the natural child of the adoptive family. Therefore, on being adopted, the adopted child shall be deemed to be the child of his or her adoptive parents in all means be it rights of property or maintenance. In Hindu laws, an adopted child is equivalent to a natural-born child. So, the requirements of parental consent for an adopted child are similar to the natural child.

Key clauses to be mentioned in a parental consent and guarantee agreement

Parties involved

We need to give the utmost care in this clause because here we give the details of who is giving the permission and for whom the consent is along with the other party to the contract. The name, address and age of the guardian and the child need to be given properly because a mere fault can lead to disputes.

Purpose

The purpose of a particular parental consent agreement must be clear. The reason for the consent, whether to go under medical treatment or to travel, for example, should be included. In case of travelling, it should describe where the destination is, for how long and whether the child is travelling solo or with a group etc. The objective is to give compact, exact data so that broader security can be given in case there arises any need.

Term

When the parental consent agreement will start and the end is important to be noted in writing. In this agreement, the effective date when all the parties signed the contract and the duration of the agreement i.e., the term of the agreement should be pointed out clearly. Also, if a contract needs to be renewed, that also should be added here.

Payment

In case the consent is for any particular service, then there must be a payment clause stating the mechanics of payment such as the date of payment, how money should be transferred and invoicing etc.

Obligations and duties

The key obligations and duties to perform of the parties must be specified. Every action that each party commits in order to fulfil their obligations and duties will be responsible in case there is a default. Properly stating the obligations and duties in writing, often helps to resolve disputes that might arise in the future. If these things are duly mentioned, then it will help to seek compensation for specific enforcements.

Representation and warranties

Representation is a set or presentation of facts in a manner to induce someone either by words or conduct to enter into a contract and a warranty is a promise that a condition or an assertion of fact is true and is typically supported by an implied promise of indemnity if the condition or assertion is false. A warranty may apply to the present and future. In this agreement, the guardian will be representing they have full authority to consent to the child’s actions and no other person’s consent is required.

Termination

Under this clause, we should mention the circumstances under which the parental consent and guarantee agreement can be terminated. There should be a right to terminate the agreement. Termination can be either for convenience or for breach.

Indemnification

It plays as a promise made by one party to hold the other party harmless against losses caused by the other party’s action. It should be specifically mentioned about the indemnification against all the damages and losses for breaching any of the representations and warranties.

Confidentiality

This clause is very important to be added as a breach of this clause can lead to termination. It should include how the information will be shared with whom and what measures should be taken to keep the confidential information safe.

Governing law and dispute resolution

The selection of governing law is very important. It is also crucial to keep the dispute resolution clause tightly worded so that the contract is speedily enforceable. The parties should give consent for the jurisdiction of the law.

Assignment

An assignment clause means a transfer of rights, titles or interest in a contract. In this agreement, it should be mentioned that the rights can be transferred to whom under this clause to avoid disputes regarding transferring rights of the particular service.

Signature

The parental consent agreement must have a signature clause at the end. Without the signature of the child’s parents or authorized guardian, this agreement will not be completed.

Refer to a sample of a parent consent agreement here.

Conclusion

The parental consent and guarantee agreement signed by the parents of a minor is very crucial because firstly it is about liability as, if a minor were to end up causing harm or injury to someone, it will not be legitimate to hold them to the same standard as adults. There might be situations where a minor’s decision will be forcibly induced under intimidation or exploitation or they may lack the capacity and knowledge to make a good decision. So, to avoid these kinds of situations, there is a need for the consent of their parents.

We cannot hold the children accountable for their behaviour as they don’t possess enough knowledge and experience. As parents will be fully responsible for their decisions, they can be fully relied upon to give consent for their child’s activities. The parents will be accountable for their child. So, a parental consent and guarantee agreement helps to bring legitimacy to the child’s activity and at the same time protects the child. In any disputes, if the activities of a child are bound by parental consent and guarantee agreement, then it can avoid many legal issues arising from that activity.

References

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

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

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

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How can complaints be made against developers as well as real estate agents under RERA

By

Diva Rai

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September 22, 2021

0

1519797859510 — Image source - https://bit.ly/3u12ZMg

This article is written by Darshi Hetal Jhaveri, pursuing Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho. The article has been edited by Aatima Bhatia (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).

Table of Contents

Introduction

The Real Estate (Regulation and Development) Act was enacted in the year 2016. The main objective of the respective Act is to regulate and promote the sales and purchase of lands and buildings, apartments in the real estate sector. The goal is transparent and efficient service along with the protection of the interest of consumers. Consequently, the purpose is also to provide justice speedily. Solving disputes and hearing appeals of the matters connected with the developers and purchasers, regulating authority and officers.

What is RERA

For a long time, the real estate sector was ruled by developers. There was an inconsistent difference among the transactions between the buyer and the seller, which irrationally favoured the developers. This enactment reduces the same and provides transparency by making this sector easier, stronger, and durable which boosts the investments. But the primary question is how? The answer to this is the formation of a Real Estate Regulatory Authority (“RERA”) for each state.

As per the Real Estate (Regulation and Development) Act, 2016 a RERA be set up to regulate the real estate sector of the country. The Act requires the Real Estate Regulatory Authority to be set up respectively for each state. Yet not every state across the country has a RERA set up nor has a website of the same; For instance, Assam.

The ongoing projects of redevelopment and new construction at the time of commencement of the Act in the year 2016 that didn’t receive the commencement certificate along with the new projects must be registered under RERA. As of now, Maharashtra is leading with the number of projects registered under RERA across the country. The application of registration of projects shall be approved or disproved within 30 days itself. After which the registration process shall be commenced failing to which a fine or a penalty is given.

Applicability of RERA

Parties

The major parties whose involvement is a must after the enactment of the Act are the developers, contractors, builders, or anyone else who constructs or develops land, building, or apartment to sell it.

Types

The types of real estate properties included in RERA are commercial as well as residential buildings and complexes that are developed for sale purposes whose area is more than 500 sqm or have more than eight apartments.

Registration

RERA, as mentioned above, is individually established by each state and hence the process varies from state to state. But the common point is registration is online on the official website of the state after uploading the relevant documents depending on whether the promoter is a person or a company and certain applicable fees.

How to file a complaint under RERA

RERA complaints are completely hassle-free due to modernization as well as technology. Each state has its respective RERA website on which complaints can be filed by the buyer. This has changed the position of a buyer while purchasing a property. Before this, the developers were in a dominant position and the buyers did not have many options but RERA enabled the buyers to come in a dominating position and take action against the developers in such circumstances.

The process of filing a complaint is much easier currently. Any homebuyer can now file a complaint online by visiting the e- website of RERA of the state that has the jurisdiction. A form has to be filled along with the registration fees and the process is complete.

Section 31 of The Real Estate (Regulation and Development) Act, 2016 states as follows about Registering a complaint with the authority or with the adjudicating officer under the Act-

(1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the case may be.

Explanation:

For this subsection “person” shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.

(2) The form, manner, and fees for filing a complaint under sub-section (1) shall be such as may be specified by regulations.

Procedure to file a complaint

I. A complaint shall be filed under the state’s official RERA website by clicking on the link of the Complaint registration.

II. Once the link is clicked, the complaint page appears where several miscellaneous details about the complaint are asked. For instance, the initial paragraph contains the name, address, contact details, and other personal verification of the complainant as well as the respondent.

III. Furthermore, the verification details of the registered project on which the complaint is filed are asked along with the supporting documents such as the property papers, receipt of the payment amount, etc.

IV. After which, the facts and the reliefs sought shall be mentioned in detail along with the synopsis of the case, just as mentioned in a litigation suit.

V. At the end after fulfilling all the details asked while filing the form a payment option will appear. Once the payment is done, the complaint shall be registered and a tentative date arrives for appearing in the court.

However, it shall be noted that this is the basic procedure for filing a complaint and the details may vary from state to state. For instance, the Maharashtra website of RERA requires the complainant to file the complaint through registration and uploading documents of the case whereas the Punjab website of RERA requires the complainant to download, fill and reupload a pdf named as form N and M respectively.

RERA Complaint form- Sample of RERA Complaint form

Attached below is a Sample form named ‘FORM M’. This particular form is a necessity to file a complaint against the developer in the Punjab RERA.

FORM ‘M’

[See rule 36(1)]

COMPLAINT TO REGULATORY AUTHORITY

Complaint under section 31 of the Act For use of Regulatory Authority(s) office:

Date of filing: ______________________________

Date of receipt by post: _______________________

Complaint No.: _____________________________

Signature: ______________________

Registrar: ______________________

IN THE REGULATORY AUTHORITIES OFFICE (Name of place)

Between

__________________Complainant(s)

And

__________________Respondent(s)

Details of claim:

1. Particulars of the complainant(s):

Name of the complainant:
(ii) Address of the existing office / residence of the complainant:
(iii) Address for service of all notices:

2. Particulars of the respondents:

(i) Name(s) of respondent:

(ii) Office address of the respondent:

(iii) Address for service of all notices:

3. Jurisdiction of the regulatory authority: The complainant declares that the subject matter of the claim falls within the jurisdiction of the regulatory authority.

4. Facts of the case: [give a concise statement of facts and grounds for complaint]

5. Relief(s) sought: [give prayer in the view of the facts mentioned in paragraph 4 above

6. Interim order, if prayed for: [Give here the nature of the interim order prayed for with reasons]

7. Complainant not pending with any other court, etc.:

8. Particulars of bank draft in respect of the fee in terms of sub-rule (1) of rule 36:

(i) Amount

(ii) Name of the bank on which drawn

(iii) Demand draft number

9. List of enclosures: [Specify the details of enclosures with the complaint]

Verification

I ____________(name in full block letters) son / daughter of_________ the complainant do hereby verify that the contents of paragraphs [1 to 9] are true to my personal knowledge and belief and that I have not suppressed any material fact(s).

Place:

Date:

Signature of the complainant(s):

The above-mentioned form needs to be downloaded from the official website. After which all the required details regarding the case shall be filled and then resubmitted once again. This is how cases are operated in RERA. This is a modern solution and the cases resolve accurately and comparatively faster than the other civil matters. That is why the objective and execution of RERA is highly appreciated.

Conclusion

The Real Estate (Regulation and Development) Act was enacted in the year 2016, and it formed the Real Estate Regulatory Authority (RERA) in each state. The main objective of RERA is to bring regulation and transparency in the real estate sector. Each and every project, be it commercial or residential shall be registered under the official state website by the Builder/ Developer/ Real estate agent. After registration, tentative dates of completion of projects shall also be mentioned along with all the other details. In case, the completion of a project is stopped or takes longer than the expected time or the builder refuses to construct or there is any other hindrance faced by the buyer then a complaint can be filed through the website of RERA. Different states have different measures to upload the cause of dispute but the overall details asked i.e., the personal details of the complainant and the respondent, the registration number of the project, the cause of complaint, and the payment of fees. Once the complaint has been made, a tentative date for hearing the complaint appears and the matter continues in the court as per the Act.

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

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

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How can you create an effective social media policy for employees

By

Rachit Garg

-

September 22, 2021

0

Media and Communication policy — Image source: https://rb.gy/2yup5d

This article has been written by Shreya Jain, pursuing a Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho. The article has been edited by Aditi Deshmukh (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).

Table of Contents

Introduction

Human behavior can’t be controlled completely and people have different opinions or reactions to different situations. It takes sweat and blood for a company to establish its goodwill, and an employer cannot afford to keep a company’s goodwill and reputation at stake. An Employer takes all the requisite measures to secure its structure in and out. One of such proven measures includes the creation of an effective Social Media Policy for the employees which works as a shield for the company against sudden social media threats which may affect the goodwill of the company and its functioning.

One of the most relevant instances is of Elon Musks’ blunt smoking while he was appearing in a podcast with Joe Rogan which went viral. Resultantly, his company’s shares went down by six percent. To control such actions, social media policy and its implementation becomes mandatory and the mere reason for inculcating this policy in the company is to save the rights of the company to decide who can speak for the company.

Companies like Wal-Mart have restricted their employees from speaking out loud to their customers about their concerns; they have a separate Social Media team that may connect to the public and resolve their queries and concerns. This point is specifically mentioned in the internal Social Media Policy of Walmart and is eventually important for other organisations too to educate their employees about their online personal or professional conduct.

This article discusses the importance of Social Media Policy, how it affects the profit of the company, what it entails, its nature, and its scope.

Social Media Policy and its importance

Social Media Policy (hereinafter referred to as the Policy) is a set of guidelines that are prepared for the employees of the company. These guidelines are prepared to make the employees aware that their conduct in social media, personally or professionally, will affect the goodwill of the Company, and therefore, they have to conduct themselves in a certain manner, and follow the Policy.

Social Media Policy is a draft that is read out to the employees of the company or posted on the notice board conveying to them about the dos and don’ts on the social media at a personal or professional level; and why they need to be sensible while posting. It’s proven that one inappropriate comment/ or indecent gesture on Social Media may have a direct adverse effect on the profit of the business.

The Policy does not restrict the employees to enjoy their social life in general. The Policy is only restricting those online posts in which an employee is representing himself/herself as an employee of the company and using inappropriate language or conduct.

Merely a wrong reply to the customer, any indecent post, any political remark, or any other derogatory action of the employee may harm the reputation as well as productivity of the Company.

Hence, an effective Policy contains comprehensive points for the employees to be kept in mind while presenting themselves online. If the Policy is not taken seriously, they may face legal or other consequences, depending upon the gravity of the post. It also makes sure employees don’t share any confidential information about the company or its customers in public.

Many giant companies have a separate and dedicated team for social media, and hence, other employees are not allowed to reply to their customers or the public. The team is trained for this particular purpose and will handle the responses or concerns as per the requirement of the customer. The employer has to make sure that all the key points mentioned in the policy are efficiently informed to its employees and these points have to be religiously followed by the employees while using their online accounts.

Ten key pointers to be included in the Social Media Policy are

Restricting any illegal or discriminatory comment- Policy will mention that no employee would post anything online which is discriminatory in nature in relation to race, religion, colour, caste, sex, or creed.

In addition to it, any post which is illegal or promotes hatred, or negative political comment would not be entertained.

No employee should post anything which, directly or indirectly, affects the dignity of women.

Any random post like sitting on burgers, licking the tacos or any such indecent picture which directly affects the image of the company shall not be entertained in any manner. It would be taken seriously and necessary steps shall be taken against the employee.

Don’t let strangers have the key to the company’s door- If anything is strictly confidential, it should be protected. Employees are restricted to share financial information, fellow employee’s information, the company’s future agenda, or any other information which harms the company and benefits other competitors, or haters or stalkers.
Right to speech and expression- Employees should be motivated to use social media; restrictions to use their own media account may create frustration in them. Rather, they should be positively advised to use the online platform for the promotion of the company and the employee himself. Showcasing them the benefit of Social Media and its usage in the right way may speed up their progress in very little time.

Zaapos is the perfect example to explain the power of social media. It has proved that an employee must be trained and then set free to express himself online (with regular reminders about the goal and aim of the company). Zappos has trained their employees acquainted with twitter and more than 400 employees are actively socialising online and creating personal relations with their customers and with each other to provide better services. This is how Zaapos has increased its sales.

Right to Privacy- Company has the complete right to save its data, confidential information from the world outside. The Company must have the right to decide which part of its culture it wants to put out to the world and which part the company wants to reserve.
Employees should specifically mention in the post that the views and opinions are personal and have no relation to the company. It helps the general public to bifurcate between personal and professional views of the employee.
It should also be aired out by the company to all the employees that they are not supposed to respond to any comment. If they come across any negative post or comment from the public, they may pass that information to the concerned person in the company who takes care of social media. Any person other than assigned the particular must not exercise such right; it may tarnish the image of the company and at the same time may affect the productivity of the company.
Follow your intuitions, spur of the moment may affect you and the company- If you are pondering upon the information, you are about to post, then don’t post it. You need to be genuine, sensible, and transparent while conducting yourself online. No threat wars, misconduct, misleading statements must be posted. Employees should showcase themselves gracefully.
Consequences-

You may lose your job- The employee may face threats to their job if they run afoul of the guidelines. Therefore, they are responsible for their actions
One’s action may also lead to a decrease in productivity and sales of the company
Image of the company and employee himself is at stake
No control over the post- Company may retain the right to delete, or amend or may also provide clear instructions to the employee to make necessary changes, as and when needed.

Legal risks- Any illegal activity on the internet may put the employee behind bars, or worse. Employees should be very vigilant while exercising their rights on online platforms.
Knight in the shining armour- Every company has an assigned person or a team who deals with the customers online. They are responsible to keep a check on all social media activities and keep it on track. They are trained to respond to negative posts, hateful texts, or any other issues, which may arise.

The points mentioned above are imbibed in the Policy very clearly, and in case of failure to follow these key points, the employer can retain the right to bring disciplinary sanctions against the employee for breach of the said Policy.

What disciplinary sanctions may be brought against the employee for breach of the social media policy?

Ellis, a plaintiff in Ellis v Bank of New York Mellon Corp, who worked in a bank was terminated from her services based on her social media post on her Facebook account. She violated the bank’s Code of Conduct and its Social Media Policy as she posted a comment online which demonstrated support in favour of the protestors protesting the death of a black man who was killed by the police officers.

Plant v API Microelectronics Ltd is another important case that reminds the significance of Social Media Policy in place. A seventeen years old employee was terminated for her inappropriate and derogatory statement on her facebook post, henceforth, evidently, breach of social media policy of the company.

These cases are classic examples of how disciplinary sanctions can be brought against the employees for breach of the social media policy.

Sanctions against the employee may include:

termination of the employee,
suspension of the employee,
taking in control of the online account of the employee,
to ask the employee to delete the derogatory post,
warnings,
reduction in salary,
reassignment of duties,
employees may also end up in jail in any anti-national posts or other related posts,
or any other disciplinary sanctions as may deem fit in accordance with the situation.

Primarily, these sanctions are imposed by the employer against any employee who has acted in violation of the Social Media Policy through its online activity. The gravity of punishments is dependent on the level of harm caused to or derogatory to the reputation of the company, or any provision of any law, or in accordance with the rules provided in the policy of the company.

However, the employer cannot act unreasonably while imposing sanctions against the employee. They are accountable and have to justify their actions by providing a genuine reason to the concerned employee who has been charged with a breach. Therefore, it is pertinent to insert an appropriate disciplinary procedure in the policy for breaches concerning Social Media Policy.

What action pointers should the employer follow?

Currently, Social Media Policy plays an integral part in an organisation and for the same reason, sometimes employers have to follow a strict procedure for employees to adhere to the policy. Major actions which can be taken by the employers regularly may include: –

Conveying the actual reasons to the employees for implementing social media policy in the workplace,
Educate employees to prevent themselves from getting involved in inappropriate or unacceptable conduct,
Repeatedly remind them that Social Media is a public platform and people are watching you,
Stipulating the fact that harassing, discriminatory, obscene, pornographic, and malicious conduct is not acceptable,
Refraining the employees from any trade secret, or any confidential information of the employers on social media,
Employers should be advised to use their complete senses while posting on social media,
Employees should disclaim that the post contains opinions, thoughts, etc. of the employee himself/herself and not the employer,
Specify that any posts to be made in the name of the employer would be first authorised by the employer himself before going online

However, adopting the policy in the company does not only restrict the employee’s online activity, it may affect the business of the employer as well.

What are the drawbacks of the Policy?

No right to speak- Some employees may think that the Policy has taken away their fundamental right to speech and expression. The National Labour Relation Act explicates that not providing confidential Information in the media is illegal and takes away their right to shoot out to the public about their unfair working environment.
Lack of social media use– Restricting the use of Social Media may also lessen the promotional activities. Presently, Social Media has been the best source of marketing, and restricting the same may harm the market.
Restrictions may bring negativity– If employees are young and are addicted to social media, restricting them may create chaos within the company, creating an unhealthy working environment.

These drawbacks can be minimised if the policy created by the company is in accordance with its working culture and implemented with equal zest.

How do you know that the policy created by the company is effective?

Merely providing a ready-made Social Media Policy to its employees is not sufficient; the Company has to focus on implementing it too. It is not a short training that is completed in a day or two. It is a journey, wherein there will be many complications. The company has to provide frequent reminders to its employees so that they may not miss this part. The concerned social media person in the company may keep a regular check on the posts of its employees. The training is perpetual and may get updated with time. Companies may paste the policy on the company’s bulletin board, or the doors, for it to be visible to the employees. Also, companies may reserve the right to delete or make necessary amendments to any employees’ online posts.

Landmark Cases and findings

There has been an enormous hike in cases addressing social media. Implementation of the policies has become an integral part of the company. In case of breach of Social Media Policy, companies have conscientiously sanctioned their employees, and in some cases, terminated the concerned employee who has been liable for breach.

Few judgments and findings wherein employees were terminated or fined from its services for breach of the said Policy are: –

Whitham v. Club 24 Ltd.

Mrs. Whitham was initially terminated from her services for sharing unfavourable comments about her colleague on facebook. The matter went to the Employment Tribunal wherein it was found that reasonable investigation was not conducted on the given situation and therefore, termination can not be done. Although Mrs. William had to pay a compensatory award for her contributory fault.

Lougheed Imports v. Local 1518

Two employees made Facebook postings containing threats, defamatory statements about a manager, and discouraged the public from patronizing the employer’s business, whereafter employees were terminated. The matter went to the Board and the Board held that privacy in public Facebook posts does not exist and that their posts were damaging the employer’s business.

There are various factors that assist in deciding the sanctioning of the employee after the breach of the Policy. Some of the factors to be kept in mind while dismissing for social media misconduct may include:-

The seniority of the employee,
The risk of reputational damage,
Reasonable investigation,
When social media is made public,
The terms of the company’s Social Media Policy.

Conclusion

Rules are the guidelines that acts as a protocol to the employees that if they are involved with any unlawful activity, indecent behaviour, or any other activity which directly or indirectly would affect the work of the company, he will have to face consequences for the same. Social Media Policy plays the same role and I think it would be an indispensable part of all the companies with the increase in the pace of Social Media usage.

Major future concerns in relation to the policy include its accountability. Social Media Policy is not a law or legally binding document; it is merely a guideline. Therefore, no action can be taken against anybody unless provided in any specific contract. Another concern arises concerning the incorporation of such policies in small companies; it would be an extra burden on them to create and then comply with regular checks.

Time is running fast and with that, changes are mandatory to match the pace. People have to be acquainted with novel thoughts, laws, technology, or any other innovation and imbibe them into their daily lives. Ignorance on that part could affect the profit of the company or diminish the business, in some cases. Social Media Policy is one such draft, which will play a vital role in a company in the future, which, according to me, would be a mandatory draft (looking at the increase in the use of Social Media amongst youngsters).

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Section 97 CrPC : an alternative remedy to habeas corpus

By

Rachit Garg

-

September 22, 2021

0

This article is written by Meera Shah, from NMIMS School Of Law, Navi Mumbai. This article seeks to elucidate how a person seeking to inquire the grounds of detention of the corpus can avail of the remedy under Section 97 of the CrPC over issuing a writ of habeas corpus, thereby lessening the burden of cases on the higher courts.

Table of Contents

Introduction

The term ‘Habeas Corpus’ is translated as ‘to have a body of’. The purpose of this writ is to free someone who has been unfairly imprisoned or detained. The effectiveness of this writ is equal to the court’s order. Under this writ, the court orders that the person who has been held be brought before it so that the legality of his detention can be determined. If the tribunal finds that the detention was unlawful, the person must be released immediately. It is essential to note that the warrant issued under Section 97 CrPC,1973 also performs a similar role as that of the writ of habeas corpus, wherein the police is allowed to intervene on behalf of a person who has been wrongfully imprisoned as a result of a magisterial order. This article is aimed at addressing how Section 97 of the CrPC can be a better alternative to the writ of habeas corpus.

Issue that sparked the debate

It was on 20th May 2021, while addressing a writ petition of habeas corpus, the bench comprising Justice Maheshwari and Anirudha Bose directed the petitioner to seek remedy under Section 97 of the CrPC over the writ of habeas corpus.The facts of the case were that the petitioner who was aged 28 had married the corpus aged 24 without the consent of her family. When the couple’s family got the information of their marriage, the girl was beaten and confined in the bedroom. After getting no help from the police and other authorities, he filed a habeas corpus writ petition seeking the authorities to produce his wife before the court. The bench, on hearing his plea, directed him to employ Section 97 of the CrPC. To this advice, the petitioner consented and withdrew his petition and the case was dismissed. After hearing the case, Hon’ble Justice Maheshwari remarked that Section 97 of CrPC had become a dead letter due to other shortcuts available.

What does Section 97 CRPC state

According to Section 97 of the CrPC, If the District Magistrate, SDM or Judicial Magistrate of the First Class has a reason to believe that a particular individual has been wrongfully detained, they may issue a search warrant. On its issuance, the person to whom the search warrant is directed may search for the detained person and if the detained person stands convicted, he would be punished. This provision aims to present the body of the victims before the authorities. In the case of Jay Engineering Works vs.The State of West Bengal (1968), the Court stated that the writ of habeas corpus granted under Section 97 CrPC is for the rescue of an unlawfully detained person via police intervention, who can intervene post a mandatory magisterial order. But before the magistrate issues a warrant under this clause, he must be reasonably satisfied that the detainee has been unlawfully confined, as was held in Anuara Begum vs. Habil Mea (1961). However, the provision does not mandate the magistrate to carry out any detailed investigations or keep up with records of the findings. Also, the aggrieved party cannot be allowed to be heard before a warrant is issued by the magistrate. If the person is discovered in the course of the search, he must be taken to the magistrate immediately. This action can also be applied in cases where a person has been unlawfully confined which is irrespective of the fact whether the person was confined by being kidnapped/abducted or not.

What is an alternate remedy

The concept of alternative remedy is about a strategy that might be beneficial and is a discretionary rule. It is not a legal or a jurisdictional rule. This distinction was cleared in the case Balkrishna Ram vs. UOI (2020). The concept wherein the high courts should not apply their extraordinary writ jurisdiction in cases where an effective alternative remedy can be accessed is a principle of prudence and reasonability and not a rule of law. Hence, the prevalence of such remedies does not preclude the high courts from exercising their jurisdiction1. The writ of habeas corpus was dismissed in Seeta Devi v. Mata Pher (1997), and the Court observed that the legal perspective that emerges is that a writ of habeas corpus should not be granted on the request of a husband against his wife’s parents or other close relatives as a matter of practice. Only in the direst of conditions should this extraordinary cure be used. In most situations, the appellant should pursue the remedies under Section 97 of the CrPC or the remedies under the restitution of conjugal rights.

What is habeas corpus

Writs are issued in India by the Supreme Court under Article 32 of the Indian Constitution and by the High Court under Article 226 of the Indian Constitution. Part III of the Indian Constitution contains fundamental rights such as the right to equality, the right to life, and the right to liberty. However, it is insufficient to just provide for fundamental rights. It is also critical that these fundamental rights are safeguarded and enforced. To defend fundamental rights, Articles 32 and 226 of the Indian Constitution give anybody whose fundamental right has been violated the right to file a complaint with the Supreme Court or the High Court, respectively.

In India, the Writ of Habeas Corpus has been essential in protecting the rights of detainees. It protects citizens from arbitrary arrests, police brutality, and illegal detentions, among other things. This writ was an attempt at granting judicial imprimatur to the executive action. The writ of Habeas Corpus is guaranteed under Article 32 of the Constitution of India. Individual liberty is protected under Article 21 of the Constitution of India (except according to procedure established by law) and is hence the foundation of safeguards guaranteed under the Writ of Habeas Corpus. Further, Article 22 of the Indian Constitution protects the rights of the detainees. Importantly, Habeas Corpus can be accessed by any citizen and not just the interested party. Traditionally, habeas corpus was majorly issued against state authorities, however, now the scope has been broadened to issue it even against private persons.

Procedure before applying under CrPC Section 97

Before beginning any legal procedure, it is necessary to reassure and check the facts of the case. In the case of Section 97 of CrPC, one must have material facts and reasonable grounds to believe that the corpus has been wrongfully confined. He or she can then file a complaint with the local police station or the Superintendent of Police. After that, one can simply go before the concerned magistrate and make an application under Section 97 CrPC with the assistance of an advocate.

However, there is no need to submit a complaint to a police station in the instance of Habeas Corpus. You can go straight to the High Court and file a complaint against the person or authorities who are wrongfully detaining you. Hence, most people might prefer filing a writ petition over filing a case as per Section 97 of the CrPC.

Situations in which Section 97 of CrPC can be invoked

Habeas Corpus, as defined by Article 32 or 226 of the Constitution, had never been utilised in a claim for the recovery of conjugal rights, especially when the woman was being detained against her will by her family. Petitioners, in 2020, had rushed to Supreme Courts with writ petitions seeking such orders, despite having other effective, less expensive, and faster remedies. The writ of habeas corpus was dismissed in Seeta Devi v. Mata Pher (1998) and the Court observed that the legal perspective that emerges is that a writ of habeas corpus should not be granted on the request of a husband against his wife’s parents or other close relatives as a matter of practice. Only in the direst of conditions should this extraordinary cure be used. In most situations, the appellant should pursue the recovery of conjugal rights remedies provided by Section 97 of the CrPC. In Muhammad Ikram Hussain v. The State of Uttar Pradesh (1964), the Supreme Court advised the appellant not to file the writ of Habeas corpus for restitution of conjugal rights and directed him to seek authority under Section 97 CrPC or take the aid of other civil remedies available. The Court remarked that wrongful detention of the wife in each case must be decided from case to case basis and due to several circumstances, the Court might prohibit the husband from seeking the above-mentioned remedy. Therefore, the writ of habeas corpus is never used by a husband to reclaim his wife in India; they go for the alternative remedy which is as listed under Section 97 of the CrPC or filing a civil lawsuit to seek restitution of conjugal rights, which is often used when detention cannot be regarded as an offence. Section 9 of the Hindu Marriage Act,1955 deals with the restitution of conjugal rights.

Situations in which Section 97 CrPC cannot be invoked

In Smt. Sushma Somal v. Capt. Dushyant Somal (1981), the custody of a child which was given to the mother was forcefully taken away by the father. To regain custody of her child, the mother filed a habeas corpus petition. A claim was made that a habeas corpus petition could not be shown and that the remedy under the Guardians and Wards Act,1890. was the appropriate remedy. However, the Court noted that even though the minor’s custody is not illegal, the mother’s habeas corpus petition was fully maintainable. The stated Court granted a writ of habeas corpus, reasoning that in the case of minors, a writ of habeas corpus may not be denied solely because an alternative remedy could be taken by the petitioner in question. In Munni Devi vs.The State of Uttar Pradesh (1990), a girl was imprisoned at a Nari Niketan. She was a major, who had been ordered to be held in a Nari Niketan by the Court. As a result, the girl’s imprisonment at the Nari Niketan did not constitute a crime, and as a result, Section 97 of the CrPC could not be invoked. As a result of these conditions, a writ of habeas corpus was issued. Similarly, in the case of Ramesh vs. Laxmi Bai (1997) when the child was residing with his father, the court had decided that the facts and circumstances of the case did not deem the detention to be illegal. And hence,Section 97 of the CrPC could not be invoked.

International approach

The right to query one’s arrest or incarceration is now included in international human rights norms. This privilege can be exercised by the usual process of a habeas corpus writ in common law countries, or through the standard procedural process in civil law countries, which includes appeals and petitions for retrial. In Cаnаdа, Jаpаn, Pаkistаn, and the United Kingdom, the hаbeаs сorрus writ is enforceable. The importance of the writ and use in the UK has declined dramatically as a result of extensive statutory protections. The Supreme Court of Canada stated that the law requiring those found inadmissible to Canada on national security grounds to be imprisoned must be amended to respect their right to seek habeas corpus relief. In Germany and France, constitutional and legislative guarantees against arbitrary detention are found to be similar to or equivalent to writs of habeas corpus. The other countries have a variety of constitutional and legislative measures that allow judges to determine whether a person’s detention or arrest is legal.

Cases which employed Section 97 CrPC

Mira Boro vs. Token Boro and others, 2013

In Mira Boro vs.Token Boro and others,(2013) the petitioner Smt. Mira Boro had filed a petition under Section 97 of the CrPC before the Court of the Chief Judicial Magistrate, Sonitpur. A search warrant was issued against her husband Shri Champak Boro as well as her in-laws. This was filed as he wanted the custody of her two minor children who were wrongfully confined by the respondents.The petition mentioned that the marriage of the petitioner was solemnised in the year 2008 as per the Hindu rites and customs. They had two children, who are the corpus in the current case. After years of marriage, the petitioner was subjected to cruelty and physical as well as mental harassment in demand for money. One fine day, at midnight, the revision petitioners and her husband bashed her out of her matrimonial home and snatched back the custody of her minor children. On receipt of the above petition, the Chief Judicial Magistrate inquired into the complaint and recorded the statements given by the petitioner. And after being satisfied in the case of wrongful confinement, he issued a search warrant to recover the minor children and produce them before the courts. Hence, it was an example of a case filed under Section 97 of the CrPC as a remedy to unlawful detention of her minors.

Case law which employed the writ of Habeas Corpus

Sunil Batra v. Delhi Administration, 1978

In the case of Sunil Batra vs. Delhi Administration (1978), the petitioner, who was convicted with a death sentence had sent a letter to one of the judges of his court wherein he complained about the torture which he and other inmates were facing by the police authorities. This letter was later converted into a writ of Habeas Corpus. The Apex Court took into consideration the case and held the superintendent liable for the incident even if he was not directly involved. The Court also made a list of directives that were expected to be judiciously enforced.

Conclusion

As can be understood from the above discussions that the scope of Section 97 and the writ of Habeas Corpus is almost the same. But it has been observed that people are directly moving to the high courts and Supreme Court. The negative effect of this is that the burden of cases in the high courts are tremendously increasing. Section 97 CrPC has become a dead letter due to shortcuts available. As a result, before turning to the high court for extraordinary jurisdiction, an aggrieved party must exhaust all other legal options. Even a court of appeal would not consider a writ petition if the offended party had not exhausted all other options, especially if those options are codified in law. In a culture where citizens do not all have equal access to legal institutions, having a remedy under Section 97 CrPC that expedites the process of ending unlawful detention without having to go to court is critical.

The police, District Magistrates, and SDMs must take the complainants’ petitions seriously so that they are not denied justice and do not feel compelled to resort to the court of appeal arbitrarily. It will save the courts time and lead to a better and more just society where rights are successfully enforced even outside of the courts. Finally, Section 97 of the CrPC has a lot of potential in Habeas Corpus situations and should not be neglected. Hence, the advocate must also direct their client to take recourse under Section 97 of the CrPC over issuing a writ of Habeas Corpus to protect against unlawful detention.

References

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Supreme Court’s decision on allowing Indian companies to choose a foreign jurisdiction for arbitration

By

Rachit Garg

-

September 22, 2021

0

This article is written by Dhruv Dubey, from Jagran Lakecity University Bhopal. This article talks about the decision of the Supreme Court on choosing foreign arbitration.

Introduction

The Supreme Court of India has cleared that the Indian parties involved in civil disputes may choose to arbitrate in a non-Indian forum, and such measures will be available in the Indian courts. This ruling has resolved several doubts.

Earlier, a few courts had held that, to choose a foreign jurisdiction for arbitration, one of the parties would have to be a Non-Indian.

The Court explained the position and held that an award given by an arbitral council in such conditions would be enforceable in India and that the parties could likewise look for interim help in India.

Brief background

The choice becomes very important in any arbitration. As a legal home of arbitration, the seat decides different significant parts of the arbitration. For example, the parties’ right of appeal, accessibility of interim measures, and the legal framework that will, at last, have administrative jurisdiction over the matters.

Parties joined in a similar jurisdiction could pick, for different reasons, to have their arbitration situated outside their home.

In India, before the Supreme Court’s choice in PASL Wind Solutions v. GE Power,(2021) it was unclear if there was one Indian party; whether they could look for interim measures in Indian courts.

Pasl Wind Solutions Private v. Ge Power Conversion India Private

PASL Wind Solutions Pvt Ltd (“PASL”) and GE Power Conversion India Pvt Ltd (“GE India”) had a dispute with the stock exchange. This case brought various important principles which were very important.

The two organizations were incorporated in India. GE India is an almost 100% subsidiary of General Electric Conversion International SAS (France), which thus is an entirely claimed subsidiary of the General Electric Company (United States). The arbitration provision in the settlement agreement was given to arbitration as per the ICC Rules and was situated in Zurich. The settlement agreement was represented by Indian law.
In 2017, following debates emerging out of the settlement agreement, PASL started discretionary procedures against GE India. Throughout the proceedings, the court decided that the seat of the arbitration was Zurich; however, that hearings would be directed in Mumbai. In 2019, the tribunal gave the last award, excusing PASL’s cases and granting GE India damages and expenses.
GE India accordingly started authorization procedures before the High court of Gujarat under Sections 47 and 49 of the Indian Arbitration and Conciliation Act 1996 (the “Act”), contained in Part II of the Act, which applies to the implementation of foreign awards. Part II of the Act offers impact to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). GE India likewise sought interim relief from the Court under Section 9 of the Act to keep PASL from dispersing its assets for trying not to follow the award.
PASL contended that the award was not a foreign award fit for enforcement under Sections 47 and 49 of the Act. It argued that, under the nearest connection test, which the Supreme Court had applied in earlier cases to decide the arbitral seat, the arbitral seat was Mumbai, as it was, in addition to other things, where the hearings occurred. PASL subsequently sought to save the award under Section 34 of the Act, which applies to Indian-situated arbitrations and awards.
PASL’s case laid on the vulnerability that existed under Indian law with regards to whether two Indian parties could pick a foreign seat; an issue that had divided the Indian courts. Some High Courts in India had adopted a favourable arbitration strategy on this issue and forced the party to decide on a foreign arbitral seat, while others had not.

Obiter Dictum

Observation of the Supreme Court on choosing a foreign seat.

The Supreme Court of India has cleared that two Indian parties indulged in a dispute can choose a foreign arbitration. This case also cleared that there is nothing in the Indian Contract Act 1872 that can Bar two Indian parties from choosing foreign arbitral seats. But it was stated that the contract should not be against public policy.

The Supreme Court heavily depended on the thoughts taken on by the court in Atlas Export. An opposite decision was taken by a Single Judge Bench of the Supreme Court in TDM Infrastructure Private Limited v. UE Development India Limited (2008)[“TDM”], wherein with regards to a Section 11 application naming an arbitrator, it decided that intervention between Indian parties can’t be named as ‘International Commercial Arbitration. For this situation, the Court confirmed that since TDM was a choice of a Single Judge, it can’t be a limiting point of reference and along these lines overruled all cases that depended on TDM.

On availability of interim relief

The Supreme Court struck down the Gujarat High Court’s findings wherein it held that the Section 9 remedies would not be accessible. The Court held that the Section 9 application for interim reliefs will be maintainable to Indian parties who decide to take foreign arbitration. The Court contended that the proviso to Section 2(2) of the Act makes explicit segments of Part I, for example, Section 9 of the Act, which is generally applied to just domestic arbitrations, relevant even to “International Commercial Arbitration, regardless of whether the place of arbitration is outside India”. It is thought that the term International Commercial Arbitration at the current time does not refer to the definition contained in Section 2(1)(f) of the Act, rather it is a seat-centric terminology that identifies arbitration occurring outside India.

Accordingly, considering the previously mentioned conversation, the Supreme Court decided that in “International Commercial Arbitration taking place outside India including Indian parties, the reliefs under Section 9 of the Act will stay accessible except if contracted to the contrary.

On the choice of Foreign Law

Section 28(1)(a) read with Section 2(2), Section 2(6), and Section 4 recommends that besides in an “International Commercial Arbitration, principally when the place of arbitration is situated in India, the arbitral council will choose the dispute as accordance with the Substantive law for the time being in India. PASL raised this contention that two Indian parties can’t pick a foreign law administering their arbitration under Section 28(1)(a) of the Act.

The Court dismissed this conflict by expressing that Section 28(1)(a) falls under Part I of the Act and, subsequently, is simply relevant to India-situated arbitrations. The Court saw that the Indian law would apply in such conditions, however, assuming two Indian parties pick a foreign law, a particular decision can be evaluated while enforcing the Award in India. The award won’t be implemented in India whenever the decision of foreign law was in opposition to the public policy of India or was in disregard of the basic principle of Indian law.

Ratio Decidendi

This judgment is based on various provisions of the Contract Act Arbitration and Conciliation Act. The provisions highlighted in this case are discussed above. In this case, the emphasis was given to provision 2(2) and section 9 of the Act. Also, provisions under sections 47 and 49 of the Arbitration Act were discussed. Also, some of the provisions mentioned in this case are Section 23 of the Indian Contract Act, and Sections 2 (1)(f), 2(2), 2(6), 4, 28 (1)(A) and 34 (2A) of the Arbitration Act.

Conclusion

In recent years, International Arbitration has encountered enormous development, turning into the most favoured mechanism of dispute resolution for International Commercial transactions. The Supreme Court’s decision is welcomed with worldwide improvements in the arbitration worldview. This move by the Supreme Court could be seen as a vigorous advance in fulfilling the fantasy about making India a worldwide arbitration centre.

The essential target of the Act is to advance arbitration for settling disputes. To achieve this objective, party autonomy should be the guiding force. A basic component of this party’s autonomy is permitting the concerned parties to pick their seat and law.

The court, through this judgment, supported this thought by carefully reinforcing party autonomy with public approach concerns.

References

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International laws for environmental protection and role of judiciary in India

By

Diva Rai

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September 22, 2021

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This article is written by Aastha Verma, pursuing B.A.LL.B from Kalinga University Raipur, Chhattisgarh. The article is an in-depth analysis of international laws for environmental protection and the role of the judiciary in India. The article has been edited by Vedant (Associate, LawSikho) and Smaranika Sen (Senior Associate, LawSikho).

Table of Contents

Introduction

International Environment Law is concerned with the attempt to regulate the population and the depletion of natural resources within a framework of sustainable development. It is a branch of public international law that is created by the state for the state to govern problems that arise between states. Population, biodiversity, climate change, ozone depletion, poisonous and hazardous substances are covered under international law. Development in science and technology has enhanced the possibility of understanding the environmental implication of various natural events as well as human activities. There is an exponential increase in multilateral environmental agreements covering a wide range of problems such as depletion of freshwater supplies, ozone depletion, climate change, biodiversity loss, toxic and hazardous products, and contamination of rivers.

The evolution of international environmental law has produced mixed outcomes. While some treaties have been effective in producing the desired results, it introduces its sources and important underlying principles. The rest is explained in the latter part of the article.

Historical background and scientific foundation

International treaties, customary international laws, and judicial decisions of international courts are the three main sources of international environmental law. Customary international laws are unwritten laws that are followed from the time being among nations. It includes warning a neighboring nation about major accidents that could affect the environment. International environment law is shaped by the decision made by the International Court of Justice or the International Tribunal for the law of seas. The “Polluter pays principle” was created by an international arbitration panel which states that if pollution from one nation causes harm in another nation, the polluter nation must make compensation to the affected nation. A nation’s sovereignty allows it to act as the primary obstacle to all types of international laws. The sovereignty principle states that each country has complete control over the activities within its borders.

The degradation of ecosystems and exploitation of flora (plants) and fauna (animals) were the first environmental challenges to receive international attention. The World Conservation Union (IUCN), a non-governmental organization dedicated to environmental conservation, called on all nations to protect endangered species. The Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES) is an international agreement that regulates the trade of endangered species and items derived from them to safeguard the endangered plants and animals. There are a total of 172 nations currently participating in this trade.

International Environmental Law

International environmental law is a branch of public international law, which is a body of law created by states to resolve disputes between them. It is concerned with efforts to reduce pollution. The multilateral environmental agreement is the subset of international convention by Article 38 of the Statute of the International Court of Justice, which specifically focuses on environmental matters.

Multilateral Environmental Agreement

It refers to a set of legally binding international instruments that states employ to commit to achieving specified environmental objectives. They can be conventions, treaties, declarations, agreements, or protocols. As per the principle of international treaties, multilateral treaties are the treaties that bind only those states who have agreed to be bound by them. They are effective tools for the implementation of policies to achieve sustainable development goals.

Sustainable Development Goal

The concept of sustainable development plays an important role in preventing the depletion of natural resources. It refers to the idea of a development meeting the present generation’s cultural and physical needs, without damaging the future generation’s ability to meet their own needs. The purpose of sustainable development is to promote the type of development that has the least negative impact on the environment. It can be achieved by restricting human activities and making technological development more effective. The rate of consumption of renewable resources should not exceed the rate of production. Examples of sustainable development include wind energy, solar energy, and sustainable construction.

As part of a new sustainable development plan, all states approved a set of targets in September 2015 to end poverty, safeguard the environment, and secure prosperity. It is recognized as one of the important tools to achieve sustainable development goals. They provide the framework for the implementation of activities on the national level. Also, further guidelines will be developed to improve the effectiveness and efficiency.

International environmental law governance

The UN Environment Assembly is the highest-level UN body convened on the environment, which opened on 23 June 2014 at its headquarters, Nairobi. United Nations Environmental Assembly (UNEA) feeds directly into the General Assembly and has universal membership of 193, all members of UN and other stakeholders groups. With the help of these members, this new entity provides a ground-breaking platform for leadership on global environmental policy.

Declaration and treaties

The Declaration of the United Nations Conference on Human Environment has been the first major attempt to consider the worldwide human impact on the environment as well as international effort to solve the challenges of environmental conservation and improvement.
The Rio Declaration on Environment and Development, also known as Rio Earth Summit, was a short declaration produced by the United Nations Conference on Environment and Development (UNCED) in 1992. It is made up of 27 concepts that are intended to guide future global sustainable development.
Environmental customary laws and general ideas such as precautionary principles and sustainable development are changing. The speed with which awareness of the global environment has reached the international political agenda has meant that customary law has tended to take second place in treaty law in the evolution of legal norms.
The international community has responded to the necessity to regulate activities that endanger the environment by signing treaties.
Many bilateral and multilateral environmental treaties are creating state’s rights and obligations.

The natural growth of the population continually presents problems for the preservation of the environment and adequate policies and measures should be adopted.

Reasons for environmental crisis

Population Explosion – The high rate of growth of the population adversely affects the environment. It increases demand for environmental resources but their supply is limited.
Rise in economic activities – It leads to affluent consumption and production of goods and services. It produces wastes that exceed the absorptive capacity of the environment.
Increased use of insecticides, pesticides, and chemical industries – Increased use of harmful insecticides, pesticides, and chemical fertilizers causes health problems for farmers and employees.
Rapid industrialization – It has led to deforestation and depletion of natural resources. It leads to contamination of water due to the accumulation of increasing quantities of toxic substances and industrial wastes in the water bodies.
Urbanization – The rapid rise of slum areas is caused by the migration of people from rural areas to urban areas. It leads to an excess burden on existing infrastructural activities.

Climate change response

It is also called ‘global warming’, which refers to the rise in the average surface temperature of the earth. The burning of fossil fuels, which releases greenhouse gases into the atmosphere, primarily carbon dioxide (CO2), is the primary cause of global warming. Human activities like agriculture, deforestation also contribute to rising temperatures on the earth’s surface.

UNFCCC (The United Nations Framework Convention on Climate Change) is an umbrella for global climate change. The convention was adopted during the Rio Conference in 1992 which addressed the reduction of greenhouse gases that are not controlled by the Montreal Protocol. The objective of Article 2 of UNFCCC is to determine the global climate change response by the method of general goal and criteria for determining the time frame to achieve it. Article 3 of UNFCCC determines the principles that guide the implementation of the convention. It also shapes the commitments that have been formulated. Article 4 of UNFCCC formulates commitments for developed country parties only.

The Kyoto Protocol of 1997 set specific emission reduction targets for the developed countries. It shares the ultimate objective of the Convention to stabilize the atmospheric concentration of greenhouse gases (GHGs) at a level that prevents dangerous interference with the climate system. The aim behind this initiative is to enhance many of the commitments already in place under the convention. The focus lies on emission reduction commitments.
The Paris Agreement of 2015 establishes specific mandatory and voluntary commitments for mitigation of greenhouse gases, the adaptation of adverse impact on climate change, ensures support to developing countries from developed countries, and reports the implementation of various activities. It is based on voluntary contributions to reduce emissions, especially to address climate change adaptation and enhance reporting obligations. The Paris agreement works on a five-year cycle carried out by the countries. They aim to reach global peaking of greenhouse gas emission as soon as possible to accomplish a climate neutral world by mid-century.

India and its impact on climate change

India is one of the countries most vulnerable to climate change. Half of the Indian population is dependent upon the agriculture sector. Now, India is the third largest emitter of greenhouse gases after China and the United States. India’s annual emissions of carbon dioxide are projected to increase almost 2.5 times between 2008 to 2035. The energy sector constitutes 8% of net carbon dioxide emission and industry sector 22%, agriculture 17% as waste sector constitutes 3% of the net carbon dioxide emission.

Climate change and energy are now the focus of local, state, and national attention around the world. Earlier, India was not responsible for the greenhouse emission as it had a low per capita emission rate, but now, India plays a key role in international negotiations and must implement a diversified policy to develop clean sources of energy, improve energy efficiency, and prepare for the impact of climate change.

Role of Judiciary

The principles under which laws of the environment work in India are developed through judicial proceedings of the Supreme Court and the High Courts. The court has played a vital role in interpreting laws and laying down the principle upon the interpretation of Indian statutes and the Constitution.

The judgments and orders of the Supreme Court cover a wide range of areas like air, water, solid waste, or hazardous waste. The Supreme Court has passed orders for the closure of polluting industries and harmful aqua farms, stopped illegal mining activities, cleaner fuel for vehicles, and protected forests and architectural treasures like the Taj Mahal.

Judgment given by various courts relating to environment laws are as follows –

M.C. Mehta v. Union of India (1986): The Supreme Court formulated the principle of ‘absolute liability for compensating the victims of pollution caused by hazardous or inherently dangerous industries. When any person is involved in any hazardous activities, he shall be liable even if the defendant took necessary precautions and has followed all the safety precautions. Absolute liability is an exception to strict liability.
Ganesh Wood Products v. State of Himachal Pradesh (1995): This ruling expanded the definition of forest and put a restriction on all non-forest operations on forest land that did not get prior consent from the central government. It also provided instructions to form an expert committee in each state to identify forests and dispose of timber.
M.C. Mehta v. Kamal Nath (1996), There was an attempt to divert the river’s flow from a motel’s arguments facilities. The Supreme Court intervened by recognizing the “Public Trust Doctrine”, in which governments have a responsibility to safeguard and conserve natural resources like rivers, lakes, forests, and other common property resources.

Conclusion

It is widely recognized that the planet faces a range of environmental challenges which can be addressed through international cooperation. There is climate change because of high population density, high level of industry and the importance of its cultural heritage are all factors which have made protection of the environment a matter of international concern.

Today, countries are busy reforming their economy because of which challenges are moved towards sustainable development. Also, it depends upon achieving its economic and environmental objectives through strengthening the implementation of its environmental policies and the integration of the environment. It is always recommended to strengthen the human and budgetary resources and review its structure to better integrate into government action. The simplification of current legislation and regulation must be promoted to make it easier to enforce and strengthen the accountability mechanism for all levels of government and industry.

References

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