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All you need to know about waiver : interpreting Section 63 of the Indian Contract Act

By
Abanti Bose
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0
Image Source: https://rb.gy/zixeq4

This article is written by Najeeb Din pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho.

Introduction

By entering into a contract, both the parties undertake certain obligations with respect to their considerations. Consequently, both parties have to perform their part of the consideration for the contract to work successfully. In case any party under the contract does not perform its part of the consideration, it would amount to a breach of contract. However, there are certain instances where non-performance of the contract by a party would not amount to a breach of contract. Under the Indian Contract Act, 1872, the instances where a contract need not be performed are given in Sections 62-67. In this article, we would be focussing on Section 63 which talks about waiver of contract. 

What is known as a waiver?

Waiver is an act by which a person knowingly relinquishes his right or claim to which he is entitled. Under the Contract Law, waiver is a method by which the promisee (person to whom a promise was made) with his free consent, extinguishes the obligations which are to be performed by the promisor (person who makes the promise). Section 63 of the Indian Contract  Act states:

  1. Promisee may dispense with or remit performance of the promise.—Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead any satisfaction which he thinks fit.

Illustrations:

  1. A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer bound to perform the promise. 
  2. A owes B 5,000 rupees. A pays to B, and B accepts, in satisfaction of the whole debt, 2,000 rupees paid at the time and place at which the 5,000 rupees were payable. The whole debt is discharged.
  3. A owes B 5,000 rupees. C pays to B 1,000 rupees, and B accepts them, in satisfaction of his claim on A. This payment is a discharge of the whole claim.
  4. A owes B, under a contract, a sum of money, the amount of which has not been ascertained. A, without ascertaining the amount, gives to B, and B, in satisfaction thereof, accepts the sum of 2,000 rupees. This is a discharge of the whole debt, whatever may be its amount.
  5. A owes B 2,000 rupees and is also indebted to other creditors. A makes an arrangement with his creditors, including B, to pay them a [composition] of eight annas in the rupee upon their respective demands. Payment to B of 1,000 rupees is a discharge of B’s demand.

This section provides the promisee with the right to waiver. Under this section, a promisee may release the promisor from his performance either before or even after the breach of contract occurs due to the non-performance on the part of the promisor. 

Remission or dispensing either in whole or in part

The promisee may:

  1. Waive the performance of the contract completely. The promisor now has no obligations with respect to the promise he had made to the promisee. The promise stands to be waived off in whole. 
  2. Waive only a part or specific parts of the promise. The promisor now has to perform only the part/parts of the promise which are not waived by the promisee and is relinquished from fulfilling the parts which are waived off by the promisee.

Time extension

The promisee may extend the time for the performance of the promise. The time in which the promisor was supposed to fulfil the promise now stands void and the extended time frame now constitutes the duration of the promise. There is no need for an agreement to extend the time period of the promise. Consequently, there is no requirement of consideration to be in place for the time period to be extended by the promisee. However, it is to be kept in mind that there has to be consent from both parties so if the promisor feels that the extended time frame might hamper the performance of his promise, he may choose not to accept the extended time. This principle is explained by the Supreme Court in Keshavlal Lallubhai Patel v. Lalbhai Trikumlal Mills Ltd. where it was held that an extension of time for the performance of the contract under Section 63 of the Indian Contract Act must be based upon an agreement between the parties, and it would not be open to the promisee by his unilateral act to extend the time for performance of his own accord for his own benefit. Such an agreement need not necessarily be reduced to writing and can be proved by oral evidence or by evidence of conduct.

No consideration is required for waiver

There is no consideration required for the performance to be remitted. The waiver does not depend upon any consideration or reciprocal consideration for the promisor to be relieved of his performance. The Supreme Court held in Waman Shriniwas Kini v. Ratilal Bhagwandas and Co. that waiver is the abandonment of a right which normally everybody is at liberty to waive. However, the absence of consideration does not mean the absence of intention. The promisor should have the complete knowledge and intention of waiving his right to a claim which the promisor is entitled to perform. It is just that the right of waiver should exist with the promisee at the time of waving his claim. 

The law with regard to waiver in India is very different from the law in England. In England, the waiver is contractual and there must be an agreement to waive either supported by consideration or it must be by contract under seal.

A waiver can be expressed or implied

There is no new written agreement that is required to be entered into for the discharge of performance of the promisor. The waiver of performance can be conveyed either orally or in an implied manner from the conduct of the promisee. Waiver in an implied manner should be by such conduct or a positive act done towards waiving off the promisor from his obligations. Generally, mere silence is not considered a waiver of contract.

Acceptance of reduced amount or performance

As seen in illustration (b) above, when discharge of whole debt is given on a reduced payment of the amount, it is a valid satisfaction of the debt and the debt stands discharged. In Hari Chand Madan Gopal And Others vs State of Punjab, the Supreme Court held that the Government had decided to recover only 40% and no more. The Government’s decision would amount to remitting a part of the debt due by the appellants. Therefore, the government cannot ask to recover more than 40%.

Even if there is a performance apart from repayment of the debt, the promisee may accept a reduced performance of the promise by waiving off the actual performance which was required to be done by the promisor. 

Reduced payment by the third party

As seen in illustration (c) above, when a third party makes payment or performance of the promise on behalf of the promisor, the promisee may remit the performance of the promisor. The payment or performance can either be done of the whole promised amount or if the promisee may deem fit, even a reduced amount or performance may satisfy the debt. The Supreme Court in Kapur Chand Godha vs Mir Nawab Himayat Ali Khan Azamjah stated that the promisee having accepted the payment in full satisfaction of his claim was not entitled to sue.

It is important to note that if acceptance is made under protest by the promisee regarding the reduced amount of performance, the promisor is liable to pay/ perform the promise and the amount/performance does not stand waived off.

Principle of accord and satisfaction

If the promisor is not able to perform his part of the promise and a breach has occurred, the parties can enter into an agreement whereby the promisee accepts some consideration apart from the legal remedy available to him. Thus, when the promisor performs his obligations with respect to the new agreement, he is discharged from the liability arising out of the breach of the previous contract. This discharge is done by accord and satisfaction between the two parties. This principle is applicable in Section 63 since, by accord and satisfaction, the promisee waives off his claim arising out of the original contract.

Revocation of waiver

The Court of Appeals stated that the party who has waived compliance with a particular requirement may in circumstances and by giving reasonable notice withdraw his waiver. However, such notice should be given such that the promisor has a reasonable opportunity to satisfy the requirement which was waived off by the promisor. If it is too late or unreasonable, the waiver cannot be revoked and the parties are bound to the waiver.

Waiver clause in a contract

It is advised to have a waiver clause in the contract itself. The waiver clause may include additional details with respect to waiver like, “waiver shall not be inferred simply from failure to insist on performance” or “waiver shall be done in a written manner”. The waiver clause cannot state anything contradictory to what is provided by the law in Section 63 of the Indian Contract Act.

Conclusion

The waiver is a concept that is ignored many times in the boilerplate clauses of a contract but it can cause a major effect on the contract. Section 63 of the Indian Contract Act has developed through judicial pronouncement to provide a comprehensive meaning of waiver of contract. Hence, we deduce that waiver is the way by which a promisee remits the performance of the promisor either in whole or in part or may provide for the time extension. This can either be conveyed expressly or in an implied manner. Under Indian laws, there is no need for any agreement or consideration for waiver unlike what we see in English law. Thus, it is important to cautiously draft the waiver clause in an agreement as it may cause a lot of loss if there are any loopholes in the clause.

References

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Powers of female heirs over inherited property

By
Diva Rai
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0
Image source - https://bit.ly/3sg3xNu

This article has been written by Lakshita Khurana.

Introduction

The Hindu Succession Act of 1956 is an act relating to the succession & inheritance of the property. The Act lays down a comprehensive & uniform system that incorporates both the succession and inheritance. Succession means the act of succeeding or following, as of the events, objects, or places in a series. Succession, in the sense of partition or redistribution of property of any former owner is, in modern systems of law, subject to several rules, depending on type of the succession. There are 2 types of succession, which are as follows:

  • Testamentary Succession

When the succession of the property is governed by testament or a will, then it is referred to as testamentary succession. Under the Hindu law, a Hindu male or female can make the will for the property, including that of a share in the undivided Mitakshara coparcenary property, in favour of anyone. This should be valid & legally enforceable. The distribution will be under the provisions of the will & not through the laws of inheritance. When the will is not valid, or not legally enforceable, then property can be devolved through the laws of inheritance. 

  • Intestate Succession 

It is based on laws of inheritance viz. the rules which determine mode of devolution of property of the deceased on the heirs solely on the basis of their relationship to the deceased. If the person dies without leaving a Will, it is the object of the law of inheritance.

The right of inheritance is primarily a transfer of the individual’s property, debts, titles, rights, and obligations to the other individual upon the death of that person.

The laws of inheritance in India are applicable based on types of succession as well as religion which include:

  • The Hindu Succession Act, 1956/ 2005 – This law of succession applies on succession without any will i.e., intestate succession among Hindus which is applicable to Sikhs, Jains & Buddhists as well.
  • The Indian Succession Act, 1925 – This law of succession is applicable on transfer of property of Hindus by a Will, i.e., testamentary succession. This law allows any individual for transferring his own property to any individual he wants legally by getting a Will drafted.

Inheritance Laws for Daughter, Mother, & Widow

  • Daughter

The term ‘daughter’ includes a natural born or adopted daughter, but doesn’t include a stepdaughter or an illegitimate daughter. The daughter born of avoid marriage or avoidable marriage where a degree of nudity has been obtained from the court, may be a legitimate child and would inherit the property of her father. Under the act, there’s no distinction between the rights of a married and unmarried daughter. Under the Mitakshara law, an unmarried daughter was preferred over a married daughter. Presently there’s no such discrimination. A daughter may be a daughter and her legal marital status, her chastity, or maybe her financial position is of no consequence. So, a wealthy daughter will inherit an equal share thereto of a poor son. Similarly, how and to whom she gets married to is completely irrelevant.

The property rights for a son and a daughter were totally different before 2005, earlier, only an un-married daughter had a right to share within the ancestral property. However, after 2005, a daughter was granted similar rights also as duties as that of a son. A daughter has an equal share of right within ancestral property. Besides this, during a situation where the father has a self- acquired property or a separate property and he dies intestate, then the daughter who may be a Class I heir will have succession rights adequate to her living mother, sister, grandmother and brother.

  • Mother

The expression ‘mother’ includes a biological also as an adopted mother, but it doesn’t include a stepmother. If a biological mother gives us under adoption, she ceases to be his mother and wouldn’t be entitled to inherit from him on his death.
Marital status of mother irrelevant: mother may be a mother and is usually deemed to be associated with her child regardless of whether she is married or unmarried at the time of the birth of her son, or whether the marriage was valid, void or voidable. The legitimacy or illegitimacy of the child doesn’t affect the inheritance rights of the mother.  

Moreover, conduct of mother is also irrelevant. She could also be involved during a live-in relationship with the father or the other person, and may have remarried somebody else, aside from the father of the child. Even if she renounces Hindu religion and converts to a different religion, she retains her right to succeed the property of the son.

  • Widow

A wife has no right to share within the ancestral property. As a result, a widow has no right over husband’s ancestral property. However, since a wife may be a Class I heir, the wife will have the right in the self-acquired property of her husband.

The term ‘widow’ refers to the spouse of a legitimate marriage. It doesn’t include a divorced wife, but it includes a wife who at the time of the death of the male Hindu, was living separately under a decree of legal separation. The widow often Interstate takes a share that’s adequate to the share of a son. If there’s more than one widow (provided they were party to a legitimate marriage), all of them collectively, take one share that’s adequate to the share of the sun and divided equally among them, taking it as tenants in common.

Under the Mitakshara Law, be inherited together, but took the property as joint tenants, having a right of survivorship.

Presently, each of them takes it as an absolute owner, with full powers of enjoyment and disposal over it. Under this law, the moral connected or faithfulness of a wife aren’t relevant considerations for determining her eligibility to say inheritance from her husband. Moreover, the very fact that the widow remarried isn’t important, unless she didn’t remarry before the date of the death of the husband.

Historical Background

Prior to the passing of the Hindu Women’s right to property Act, 1937, the property of a woman comprised ‘stridhan’ [‘Stri’ means a woman, and ‘dhan’ means her property] and ‘non-stridhan’. Stridhan From Christ, property received by way of gifts and presents given to a woman by her parents, husband, close relations of husband or parents, either at the time of marriage or on other occasions, or at the time of the performance of ceremonies, of ‘sulka’ or gift, of money given in lieu of maintenance, etc. Non-stridhan comprised what she inherited from a male or female relation.

A woman enjoyed larger powers of disposal over her stridhan, but had limited interest in non-stridhan. She was called a limited owner of her non-stridhan property. The limitation was with reference to the power over its disposal and therefore the inability to translate this estate to her own heirs, but otherwise, she had full powers to enjoy it and appropriate the income coming out of it. It had been the power to transfer it that was denied to her, except in the case of need, or for the performance of indispensable religious and charitable purposes, including for according spiritual benefits to her husband.

Hindu Women’s Right to Property Act, 1937

Later, this Act was passed, under which, on the death of the husband, his share, in the presence of his widow (widow of a predeceased son and widow offer predeceased son of a predeceased son), didn’t pass survivorship to the surviving coparceners, but went to her. But the limited ownership terminated on her death, or maybe remarriage, going back to the heirs of the husband. This concept of ownership without absolute powers of disposal, had the aim of enabling of women to take care of herself, without being dependent on anyone.

This Act governs the devolution of the property of a male Hindu, and not the property of female. Consequently, the property of female devolved according to rules of the Hindu law, which provided a distinction between inheritance of the stridhan and non-stridhan property. Secondly, earlier, the widow succeeded only on failure of his male issue. Now, under the provisions of this act, she inherited with him, taking an share equal to his, but, due to her limited interest in the property, the doctrine of survivorship shall apply and her interest may be taken by the surviving coparceners, in case she remarried or died.  

The mode of acquisition of the share by the window created confusions with respect to her status, the quantum of interest and also the mode of devolution of this interest in her favor. 

Under the classical Hindu law, an unchaste woman was disqualified from inheriting property from her deceased husband. This act did not really help much, as it was silent on this issue. 

So, there was a need to enlarge the limited estate after women till now, which was accomplished by the Hindu Succession Act, 1956. 

Hindu Succession Act, 1956

Section 14 of the present Act, converted limited ownership into a full-fledged ownership and also terminated the confusion as well as controversy regarding the exact share that the widow took on the death of her husband as an undivided member in the Mitakshara coparcenary. Presently, she inherits separate property of her husband as his primary heir, & the quantum of her share and the nature of her estate are completely identical to that of the son. From the undivided share of the deceased husband in Mitakshara coparcenary, her mere presence defeats the application of the doctrine of survivorship over deceased husband’s undivided share and prevents it from going to his surviving coparceners. The share of the deceased husband is ascertained by means of a notional partition & she inherits his share as his class-I heir, taking it as an absolute owner. For widow who, on the date of the passing of the Act, were in possession of the property as the limited owner, it was provided that henceforth, they would hold these estates as full owners thereof.

There were two basic objectives of the Act. The primary one was to get rid of the incapacity imposed under Hindu law on a woman, to hold the property only as a limited owner. The Act removed it expressly, enabling her to acquire the property from as a full owner, that included the power to dispose it of at her pleasure. Any property that a woman acquired after the passing of the Act, was her absolute property. In this sense, it abolished the concept of a woman’s estate as being different from a man’s ownership.

Secondly, it also converted the then existing limited ownership, into an absolute ownership, by providing that where a Hindu female was in possession of the property as a limited owner, such limited ownership would automatically mature into an absolute ownership from the date of the commencement of the Act. Rather than her husband’s heirs taking her property, the property is often transmitted by her to her own heirs, thus abolishing the concept of reversioners. By providing for absolute ownership and a really wide definition of the term ‘property’, the Act also abolished the whole distinction between stridhan and non-stridhan, saudayika and non-saudayika stridhan and therefore the different modes of its acquisition and devolution.

The advantage of enlargement of limited interest into an absolute ownership is available to a Hindu woman regardless of her marital status and legality of her relationship. Thus, the expression Hindu ‘woman’ includes a woman in ‘live-in relationship’.

Application of Act to Properties Acquired before the Commencement of the Act 

One of the aims of the Act was to convert the limited interest of a widow into an absolute estate, provided she was in its possession on the date of the commencement of the Act. It was, therefore, immaterial that the acquisition of this property was before the passing of the Act. Where the widow inherited the property of her deceased husband or acquired an equivalent interest as her husband under the Hindu Women’s Right to Property Act, 1937, or maybe before that, and was in actual or constructive possession of it, the act converted the limited estate into an absolute estate. However, if she remarried before the commencement of the Act, or died, her heirs couldn’t take the advantage of these provisions, because the Act isn’t retrospective in application.
Two conditions were required to be satisfied before the limited estate matured into an absolute estate, viz.:

(i) She possessed the property as a limited owner.

The term ‘possessed by’ indicates a possession in law. It signifies a legitimate title to the property and includes a situation where an individual is possessed of the property in law, without having its actual or constructive possession. It includes a right to possess also.

(ii) She had not remarried.

In order that a limited estate held by a woman , converts into an absolute estate, she must be possessed of the estate on the date of the commencement of the Act. In three cases, the limited estate wouldn’t mature into an absolute estate. The primary case would be when she dies before the Act is passed. Therein, there would be no question of conversion of the estate, because the reversioners would get a vested title thereto. Second, where she relinquishes her estate or transfers it in favour of another person and parts with the possession; and therefore the third, when she remarries. Upon her remarriage, the limited estate terminates as if she had then died. A widow remarrying is presumed to be dead as far her rights within the former husband ‘s property is concerned, and therefore the reversioner’s right to succeed are going to be immediately activated.

Acquisition of Property 

The property that a woman may acquire before or after the commencement of the Act, shall be now held by her as a full owner and not as a limited owner. The term ‘property’ has been explained within the explanation appended to Section 14(1) that says: In this sub-section, ‘property’ includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition or in lieu of arrears of maintenance, or by gift from a person , whether a relative or not, before, at, or after her marriage, or by her own skill or exertion or by purchase or by prescription, or in the other manner whatsoever, and also any such property held by her as stridhana immediately before the commencement of the Act.

This explanation, which is extremely exhaustive, also contains a clause saying that it might include property acquired in any manner whatsoever. It clearly shows that the legislature wanted a really comprehensive definition of the term ‘property’.

  • By Inheritance 

A Hindu woman inherited a limited interest within the property of her deceased husband under the Hindu Widows’ Right to Property Act, 1937, and also received his share within the coparcenary property that he had held as an undivided member of a Mitakshara coparcenary. Similarly, a woman may have inherited a limited estate from her husband or father-in-law, under the other Act. Such limited interests would be converted into absolute interests by virtue of this Act. Thus, where a Hindu man died, leaving two widows who inherited his properties, in 1946, the character of the estate that that they had inherited was a limited estate. This interest matured into an absolute estate on the passing of this Act.

  • By Device 

A Hindu woman might have received a limited interest within the property given to her under a device of Will or a settlement. Such property shall be covered under s. 14(1), Explanation, and will mature into an absolute ownership.

  • At a Partition

A Hindu female is entitled to receive a share at a partition in certain specific situations only. She wasn’t a coparcener and thus, couldn’t claim a right to invite a share within the coparcenary property. However, certain females were entitled to receive a share out of the property as and when an actual partition happened within the family, under all the sub-schools of Mitakshara, except the Dravida school. within the remainder of the regions governed by the Mitakshara law, the father’s wife would get a share adequate to the share of the son, when a partition happened between the father and therefore the son.

The mother would get a share adequate to that of the son if a partition happened among the brothers and therefore the paternal grandmother would get a share adequate to that of a grandson, where they effected a partition amongst themselves. If a partition happened and that they weren’t given their shares, that they had a right to approach the court and enforce their claims. the character of the interest that they took during this property, was that of a limited interest, terminable on her death or remarriage. Additionally, a widow of an undivided coparcener, under the Hindu Women’s Right to Property Act, 1937, was entitled to an equivalent share as that of her husband, and was capable of receiving his (deceased husband’s) share on partition and even demand a partition and ascertain the share herself. Any property that she received at a partition, during which she had only a life interest, after 1956, was held by her as an absolute owner, albeit she was given the property with some restrictions.

  • In Lieu of Maintenance 

The incapability of a Hindu woman to acquire an absolute ownership within the property was very closely linked to her sole entitlement to the assets for her personal maintenance. Her economic dependence on men was a well-entrenched and deep-rooted practice within the Hindu society and was viewed by the conservatives as essential for her subjugation, lest she became too independent & assertive, a sign that was seen as a danger mark to the stability of family & even for the protection of marriage as an institution. However, as a human being, without any material assets, she had to be maintained. During coverture, the husband maintained her out of his property and after his death, the heirs who took his property were responsible for her maintenance. The Act of 1937, gave her a share in husband’s property, but in lieu of her maintenance, and that is why, on her death, it reverted again to the husband’s heirs. Because she got the property in lieu of her maintenance, she lost the right to claim maintenance once she inherited the husband’s property or acquired his individual share in Mitakshara coparcenary.

Whatever share or property she received in lieu of her maintenance became her absolute property after 1956. ‘Maintenance’ includes a reasonable provision for food, clothing, & shelter. It used to vary from case to case, but the basic purpose behind securing a maintenance is that, a woman who loses a regular monetary support, shouldn’t be left in the lurch, and a suitable alternative amount or property that yields income, should be given to her, more so if her husband died leaving behind the property. Maintenance is never to be understood as enabling a woman to strengthen herself economically or maybe to reach the same level as her male counterpart. It is basically an amount, or income, or property that can take care of her main or basic expenses or even the comforts of life. It isn’t a luxury and therefore, the quantum of the property given or settled in favour of the female, can afford a true test of whether the property was given in lieu of the maintenance or otherwise, i.e., in lieu of the partition.

However, where a widow had no pre-existing right of maintenance, but was given the right of possession of the property for her lifetime, out of love and affection, such rights will not mature into an absolute interest.

  • By Gift 

The property that a female may receive under a gift, can be from her friends or her relatives or from any other person. Any property that she receives under a gift would be held by her as an absolute owner. Prior to 1956, a woman held these properties as stridhan and had absolute rights over it at all times, except coverture, where the consent of her husband was necessary for its disposal. 

  • By Personal Skill or Exertion 

Any property that was acquired by a woman by her skill or exertion or through any art or a special learning, in the nature of a salary or a share in profits, with the help of any trade or business, was always considered to be her exclusive property and continues to be so even now. However, her absolute powers of disposal over it, were constrained during marriage as they were being subject to the consent of her husband. This restriction is now removed and even during marriage, a woman is free to dispose of her own property at her pleasure.

  • Purchase and Prescription 

A property purchased with the help of her own funds, would be an absolute property of a woman, with full powers of disposal over it.

  • Acquired in Any other Manner 

The property that a woman acquires in any other manner than the ones specified above, will be held by her as the absolute owner. It is a very wide clause and would cover property received under a decree or award, or through adverse possession.

Property Acquired After the Commencement of the Act 

14(1) of the Act removes the incapability of a woman to acquire property as a full owner. The property could have been acquired by her before commencement of the Act, as a limited owner, or after the commencement of the Act. Except for s. section 14, there is no other provision in the entire Hindu Succession Act, 1956, which specifies the ‘nature’ of the interest that a Hindu woman takes in the property that she may inherit under this Act. Had it not been for this phrase used in the section, ‘whether acquired before or after the commencement of the Act’, controversies as well as conflicts, genuine or due to vested interests of the parties, were bound to surface. It is these words that enables a woman to inherit the property as an absolute owner under the Act.

Limited Estate Expressly Conferred under a Will or an Award [Section 14(2)] 

Section 14(1) removes statutory incapability of a woman to hold property as the absolute owner. It recognizes that the acquisition of property by a woman needn’t be only for her maintenance, by obliterating the differences between the acquisition of property and the differential consequences based on the sex of the acquirer. But at the same time, it hasn’t interfered with the powers of an owner of property, to make a disposition of his property in accordance to his wishes. Thus, if a person wants to settle his property in favour of a woman by creating any life interest in it, he is competent to do so. Section 14(1) does not mean that after the commencement of the Act, a woman can never acquire any life interest; she can.

The position before the enactment of the Act was, that barring some exceptions, a woman couldn’t take an absolute ownership in property, and a compulsory limited ownership was being imposed on her. The situation presently, is that this statutory disability to acquire a full ownership is now removed, and depending upon the terms & conditions of the grant, she can acquire either a limited or the absolute estate. Her position has been brought at par with men. An absolute owner can make any kind of disposition of his property, in favour of anyone, under the Hindu law. Such life interest or a limited ownership will not mature into the absolute ownership. What is removed by the Act is the inability of the recipient to take a full ownership, but the Act does not impose a disability on the powers of an owner to make a disposition in accordance with his wishes. 

Section 14(2) thus provides: 

Nothing contained in sub-section (1) shall apply to any property acquired by way of gift or under a Will or any other instrument or under a decree or order of a civil court or under an award, where the terms of the gift, Will or other instrument or the decree, order or award prescribe a restricted estate in such property. 

Now, Section 14(2), which is an exception to the general rule incorporated under s. 14(1) protects the power of the owner to settle the property in accordance with his wishes. Hence, where a female receives a limited interest in any property under a decree of a court or an award or under a gift or a Will executed by an individual, such limited ownership wouldn’t be affected by section 14(1) and would not mature into an absolute interest. Section 14(1) is very wide in application, but section 14(2), being an exception, has a restricted application. Both these sections cover cases where a female acquires property by way of gift or Will, but the consequences mentioned are different. Where a female acquires property under a Will or a gift and the case is covered under section 14(1), the limited interest would mature into an absolute interest, but where it is governed by section 14(2), the limited interest would remain a limited interest. This overlapping has created a confusion and has made this a focal point of litigation.

Judicial pronouncements

  • V. Tulasamma v. V. Sesha Reddy

The court noted that clause 1 and 2 of section 14, were presenting serious difficulties of construction in cases where property was received by a Hindu female in the lieu of her maintenance and the instrument granting such property prescribed a restricted estate for her in the property, and the divergence of judicial opinions was creating a chaotic situation. An uncertainty with respect to the interpretation of these two clauses of section 14 was prevailing & the legislature was not bothered about correcting its inapt draftsmanship, which had created endless confusion for the litigants and a paradise for the lawyers.

  • A.K. Laxmanagounda v. A.K. Jayaram

The husband bequeathed his property in favour of the sons & created a life interest in favour of his widow, in lieu of her maintenance. After 1956, the widow sold her share so as to meet the marriage expenses of her daughter. This sale deed was for a valid consideration. The sons challenged the validity of the sale deed executed by their mother, on the ground that she was merely a limited owner of the property and consequently, incompetent to alienate it. The court upheld the validity of the alienation on the ground that after the passing of the Act, the limited interest that was bequeathed to her by her husband, had matured into an absolute interest, conferring on her, the power of disposal over this property, as the full owner.

  • Karmi v. Amru

A Hindu man executed a Will in favour of his wife, expressly stating that she alone is to enjoy the property during her lifetime and it was only after her death that the property shall go to his three daughters. In 1955, the widow allotted some parts of the property to her two living daughters and retained the remaining portion with her, as the third daughter had by that time, died. She later executed a gift of that portion & the same was challenged by the heirs of the deceased daughter, for the want of competency. The court held that she was the absolute owner of the property and competent to dispose it by gift.

Conclusion & analysis

Prior to passing of the Hindu Women’s Right to Property Act, 1937, women only had limited rights over her non-stridhan properties or inherited property. On her remarriage, her limited estate terminates as if she died. This was because of an express provision in the Hindu Widow Remarriage Act 1856, which was passed with the primary aim of validating as well as legalising the marriage of Hindu widows and so as to accord legitimacy to their offsprings. So, after divorce, she had to depend on her husband and his family for her maintenance.

Hence, the Hindu Succession Act, 1956 was passed so as to enable her to maintain herself without depending on her in-laws. But this act was silent about her inheritance in case she remarried, giving her limited inheritance powers. So, an amending act was passed in 2005, which gave her absolute power over the inherited property, if she was still married to the deceased Hindu male when he died intestate.

Therefore, over time the rights of females in property were recognized, and power of female heirs over the inherited property were increased.

References

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Section 375 and 376(2) of the Indian Penal Code, 1860 with reference to Priya Patel v. State of M.P. Case

By
Diva Rai
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0
Image source - https://bit.ly/2XkX9ZM

This article is written by Srishti Yadav, student of Amity Law School, NOIDA.

Introduction

Rape is one of the most terrifying criminal activities. It is such a traumatic activity that it affects the person adversely at psychological and emotional level. It has its origin in the Latin word, ‘Rapio’ meaning to take away. Therefore, literally, rape could mean to snatch something from someone by the means of force. The article throws light over different over different aspects of rape in India, Especially concerning the question as to whether a woman could be charged for gang rape and its analysis.

Definition of Rape

Rape refers to an unlawful sexual activity which involves sexual intercourse against the will of victim, either by force or threat of force or against a person who is incapable of giving consent because of reasons such as mental illness, intoxication, deception or unconsciousness. In many countries, the crime of rape is a categorization of sexual assault. Earlier, it was considered to be caused by an overpowering sexual desire but now it seems to be a inveterate assertion of power over the victim. 

Legal provisions of IPC- defining the offence and punishment

Section 375 of the IPC lists down the conditions which lead to the commission of rape at the time of sexual intercourse between a man and woman. 

As per the Section, the act of penetration is sufficient enough to be treated as sexual intercourse, and therefore rape. The Supreme Court in the case of Sakshi v. Union of India, reiterated the definition of rape and held that only heterosexual intercourse i.e. vaginal and penial penetration be considered as rape. Giving the reason, the court held that, though there are many forms of sexual abuse which are heinous in nature, but every sexual offence cannot be considered as rape.

As per Section 376, the punishment of rape is for minimum 10 years and maximum imprisonment for life (which shall be construed as imprisonment for remaining life of that person till he dies a natural death) plus fine, is for the following g list of personsLeaving certain aggravated situations, the punishment for the rest of cases shall be minimum seven years and maximum punishment for life, plus fine. Section 375 was amended by the Criminal Law Amendment Act, 2013 or the Nirbhaya Act. For the purpose of removing ambiguity in the law before and provide strict punishment in rarest cases of sexual violence, the definition provided in the act such as penetration of penis into:

  • Vagina
  • Urethra
  • Anus 
  • Mouth
  • Or any object or any part of the body

To any extent into the body parts of such woman (or making someone else do so), constitutes an offence of sexual offence.

Can a woman be prosecuted for the offence of gang rape?

The issue as to,

‘Whether the commission of rape could be done by a woman?’ becomes quite clear looking at the language of article 375 which expressly mentions that the act of rape could be committed only by a man and not ‘any person’. But as far as the commission of gang rape is concerned, there is ambiguity as to whether it could be committed by woman. Section 376(2)(g) mentions ‘persons’ rather than man which means that it was the vision of lawmakers to keep this Section gender-neutral. The Court was encountered with this question in the case of Priya Patel v. State of M.P. 

In this case, there was a complaint lodged by prosecutrix alleging that while she was returning by an express train after attending a sports meet. When she reached the destination, she met the accused (Bhanu Pratap Patel) and told her that he was asked by her father to receive her. Since the girl had fever, she accompanied Bhanu Pratap to his house where he committed rape on her.

During that time, the wife of the accused came there. The prosecutrix pleaded in front of her and asked her to save her, but instead she slapped her, closed the door of the house and left the place. There were charges levied against Bhanu Pratap for the offences punishable under Sections 323 and 376, IPC; and the appellant was charged under Sections 323 and 376(2) (g) IPC. The Court held that a woman cannot commit rape as it is conceptually inconceivable that she had an intention to rape. Therefore, she can’t be held for both- rape or gang rape. The court further laid down that the expression “in furtherance of common intention” which appears in explanation 1 of Section 376(2) IPC is construed as the intention to commit rape. Therefore, a prosecution could not be started against a woman for commission of rape. 

Analysis

The case of State of Rajasthan v. Hemraj, too had similar facts, as that of Priya Patel. The same judgment was given here as well and the appellant was acquitted just because she is a woman. The Supreme Court, in this case, left many questions unanswered. The following reasons could be cited for the prima facie wrong nature of the acquittal of the appellant:

  1. The prosecutrix was slapped by the appellant; afterwards she shut the door and left the place. This clearly indicates that she was supporting her husband’s act of rape and thereby, is sufficient enough to establish criminal intention on part of Priya Patel.
  2. The reasoning given by the judges is quite ‘fallacious’ in nature as it assumes that it is conceptually inconceivable on the part of a woman to have an intention to commit rape.
  3. The Supreme Court just adhered to the bare provision of law and no referral to any case law or any legal or juristic writing was made, which is quite atypical considering the nature and gravity of the case.
  4. According to the Positivist approach, criminal jurisprudence has evolved as per the needs and requirements of the society. It is accepted on the part of judges that they don’t just mechanically apply the law without undertaking proper analysis. They must adhere of law and give the judgment accordingly. 
  5. Explanation 1 attached to Section 376(2)(g) is gender-neutral is in Pari Materia with Section 34 of IPC which means that they shall be construed together. From cases regarding the interpretation of Section 34 IPC such as Mahbub Shah v. King Emperor, it is well-settled that participation in the actual criminal act is not required to suffice the purpose of Section 34.

Because of its uncommon nature, the case didn’t have much effect over the criminal jurisprudence, but anyhow, the interpretation made by the judges was contrary to the gang rape provision. Although it makes sense that women can’t be charged for commission of rape because of the obvious reason in their incapacity of doing so; but there is no reason because of which she can’t be charged for gang rape (she too can share the same common intention). It is because of these critical errors in its judgment that Priya Patel should be declared a bad law, but till then, it should be declared as an aberration. 

Conclusion

The rape laws existing in India only cover the tip of iceberg and fail to recognise that other atypical scenarios might exist. Thereby, the legal definitions of crime as well as its elements must be construed according to the social context where they are applied. The old notions denying female criminality should be given up. Therefore, the legislature needs to come up with further amendments to make such laws gender neutral otherwise the female offenders would easily escape from punishment. 

References

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Need for research on judicial delays

By
Diva Rai
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0
Image source - https://bit.ly/3CIXt4Z

This article is written by Vidisha Verma, student at Damodaram Sanjivayya National Law University, Visakhapatnam.

Introduction

In terms of impartiality, efficiency, and independence, the Indian judiciary, an integrated federal hierarchy with federal, state, and district courts established under the Constitution, outperforms the legislative and executive aspects of the Indian government in both unique and comparable dimensions. As a result, it is critical to recognise and comprehend that, a functioning legal system that delivers justice to the ordinary man is a pre-requisite and foundation of a democratic society. Despite decades of experiments to enhance the justice delivery system, the ordinary man continues to be denied the most fundamental right to justice. The most often debated problems in judicial reform are delays in justice delivery, the resulting pendency, and the growing backlog in courts. Inadequate research on delays is a sign of a larger problem, and an in-depth empirical study of India’s judicial systems is still in its infancy.

As a result, anecdotal information, rough estimates, and occasionally misreported data are used to guide public opinion and legislative choices concerning the courts. Empirically-based reform is especially important in the context of India’s courts, because justice is denied if it is delayed. According to estimates from 2016, judicial delays cost India about 0.5 percent of its GDP each year. Though a variety of causes contribute to the delay, such as law enforcement organisations’ sluggish and ineffective investigations, the major cause is a lack of judicial infrastructure, which includes vacancies in the number of judges, insufficient operational financial allocations, and physical infrastructure. Consequently, the nation is in the dire need for the changes that transform India’s dysfunctional judicial system into an institution that would uphold the fundamental rights of citizens by providing timely justice.

Concerns to be addressed

The endemic delay in Indian courts is one of the most widely discussed topics in judicial reform. On this front, there have been significant attempts to enhance judicial institutions’ performance. However, due to a lack of data-driven research, judicial policy is still based on obsolete or incorrect techniques and estimations. The judiciary’s efforts to enhance its performance and respond to the changing requirements of the litigating public are significantly hampered as a result. Therefore, the following are some of the concerns that can be addressed and their corresponding solutions that can be implemented:

  • Pendency of cases

Issue: The pendency of cases has been alarmingly high in last few years. Across the country, almost 5.75 million cases are pending in the high courts (HCs), and 38.15 million cases are pending in the district courts (DCs). A whopping 43.90 million cases have been reported.  Even the Supreme Court had over 65,000 pending cases as on January 1, 2021, according to ‘National Judicial Data Grid’ official report.

This excludes cases that are pending before multiple tribunals and for which no authentic and up-to-date information appears to be accessible or available. The outcome is an over-burdened and sub-optimal judicial system. Because of the large number of pending criminal cases, many of which may be minor or involve technical violations, those who should be punished for serious violations do not receive the punishment that is due to them in a timely manner, and those who are wrongfully accused must wait years, if at all, to be exonerated. In this context, tribunals were supposed to be a game-changer, addressing economic and other specialised topics that had traditionally been handled by courts. Unfortunately, they haven’t been able to do plentiful. 

Suggestion: A comprehensive strategy for data collection and analysis at courts, tribunals, and investigative agencies needs to be developed. This can be done using a set of consistent and agreed-upon parameters, such as those based on the nature of the cases, the length of the pending case, and the stage of the case. This can help in evaluating the impact of various efforts. Additionally, measures to accelerate, promote openness and concentration in investigations, as well as imposing time limitations for the resolution of problems, are critical. Prosecution and punishment should be swift and proportionate, with a focus on the most key offenders. Another solution could be to introduce, publicise, and promote settlement and mediation processes under various legislation, including approaches like deferred prosecution agreements.

Finally, steps to enhance and accelerate justice delivery and case disposition at the tribunal level must be implemented, including timely appointments, appropriate infrastructure, and frequent monitoring of case-load ageing at such tribunals. As a result, the long-standing problem of backlog and delayed cases in the Indian judicial system necessitates a multi-pronged strategy that should involve, among other things, measures to increase court efficiency in resolving cases.

  • Shortage of judges

Issue: The subject of pendency cannot be addressed unless the problem of the shortage in the appointment of the Judicial officers is dealt with. Out of 1,080 sanctioned posts for judges in higher courts as well as the Supreme Court, as many as 419 are lying vacant. Only 661 posts are being occupied, shows data provided by then Minister of ‘Law & Justice, Communications and Electronics & Information and Technology’ Ravi Shankar Prasad in the Lok Sabha. When it comes to lower courts, as many as 24,247 posts have been sanctioned but 4,928 are lying vacant. It is evident that the Judiciary lacks in the number of the Judicial officers and that is not compensated with the number of new appointments that are being done but a new framework is essential to deal with the condition. This backlog results in large pendency of cases, which eventually violates the spirit of Article 14 (right to equality before law) and Article 21 of the Constitution (right to life and liberty) that too by the protectors of the constitution.

Suggestion: The solution to this has also been endorsed by Justice BN Srikrishna, Justice RC Chavan and 100 Indian Institutes of Technology alumni, which clearly proved that even if we assume no reduction in the number of judicial hours for cases, just ensuring about 15% more judges was adequate. The best way to appoint new judges in the higher court is to have an ideal number of judges chosen through a democratic and transparent process that can manage the backlog of cases in a highly efficient and effective manner.

Furthermore, as a performance-based incentive for states, the government might consider adding efforts and success achieved in reducing pendency in the lower judiciary. The recruiting process should be given greater attention since it has the potential to become a desirable job opportunity for bright and talented young law graduates. The individuals ultimately selected into the judiciary would be of proven competence and ability. Simultaneously, the quality of adjudication and the administration of justice would undergo transformative changes across the judicial system, from the lowest to the highest levels.

  • Information technology intervention

Information technology is now a tool essential for modernisation of the judicial system. Judicial Administration can play a chief role in making justice more accessible and transparent with the assistance of IT tools. Development and upgradation of the old technology can boost effectiveness and efficiency of courts in the following ways:

  • E-filing in all courts: The detailed standard operating procedures on how petitions, affidavits, and fee payment may all be completed online without the need for attorneys or litigants to visit the courts. IT changes will lead to more reliable data gathering, better categorization of cases based on their urgency and importance, and case tracking and monitoring, all of which will improve the judicial process.  Many High Courts have mandated that petition be filed by email first, followed by the submission of physical copies. Lawyers and litigants would save a lot of time and money on travel and expenses. It would also free up a lot of room in the courts, making them cleaner and more sophisticated. 
  • Virtual hearings: Virtual hearings have been held by courts for around two decades in a few cases. But this has been done as an exception. The need for virtual hearings arose as a result of the Covid-19 crisis. We don’t know when the Covid-19 catastrophe will end, but it looks that by 2022, we’ll have a backlog of more than 5 crore cases. By that time, the Indian judicial system would be utterly shattered. As a result, the courts must instantly convert to virtual mode and begin disposing of cases at the usual rate. To protect their exorbitant salaries, some prominent lawyers are fighting virtual courts. Even once the Covid-19 issue has passed, continuing hybrid courts will be extremely useful. It should be up to the attorneys and plaintiffs to decide whether to present virtually or physically. Courts will be less crowded as a result of this and save a lot of wasted time and cost.

  • Infrastructural Problems

Issue: Infrastructure is the elementary prerequisite for anybody to work to the best of its ability. Courts have established dedicated stakes for court administrators in order to improve court operations and increase case flow for more productive judicial time. However, some courts have taken up such positions, while others have yet to occupy the allocated stakes. The employment of outdated technology in administration, as well as the slow pace of development, has resulted in a significant loss of adaptability and an impediment to court efficiency. Low budget allocation to judicial infrastructure has resulted in a depleted structure of buildings that is pathetically dismal, preventing Judges from delivering quality judgments in a timely manner.

Suggestion: A quality infrastructure can help a person complete assigned work in the most effective and efficient manner possible. Similarly, in the judicial system, infrastructure is critical to improving service delivery. In terms of infrastructure, there are several options. Land for infrastructure is essential, and it is the state’s responsibility to provide suitable land for the creation of the Court Premises. Because there is a scarcity of ground, the infrastructure should be built vertically. As a result, there will be a more efficient use of space on the designated property. Furthermore, a change in the low budget allocation to judicial infrastructure must be implemented, as a consequence of which the depleted structure of buildings, which is horribly dismal and preventing Judges from delivering excellent judgements in the shortest possible period, may be eradicated.

Responsibilities of the Court Managers

It is an undoubted fact that Court Managers can have a huge positive impact on the judicial system. Their managerial abilities and experience may usher in waves of change in the judiciary, benefiting not just judges but also litigants, attorneys, government agencies, and other stakeholders. Their job was designed to make a positive difference in the system. However, Court Managers have had a tough decade, as they have dealt with and continue to deal with a variety of difficulties in their daily operations. They’ve been operating in an environment that hasn’t recognised their significance and hasn’t been able to completely integrate them into the system.

Court Managers have not been utilised to their full potential as a result of these difficulties. The government, the Supreme Court, and the high courts have all indicated that judges should be permitted to spend more time on case adjudication and less time on administrative tasks. As a result, the next step is to formalise the role of Court Managers in the system and implement long-awaited reforms. Change in the legal system can only come from inside the system, not from the outside. Judges will have to accept them into the system and maximise their powers in order for them to work optimally. While Court Managers have been functioning in different capacities in various district courts and high courts, their role needs to be expanded and clarified. The Supreme Court can also lead from the front by creating a post of Court Managers in its own establishment and entrust them with various administrative duties. The Supreme Court in its 2018 judgment had stated that Court Managers can improve the efficiency of the system and their position needs to be regularized, it, however, did not explore the possibility of creating this post in Supreme Court itself.

Perhaps, the apex court can implement the post to set an example for courts in the country to follow. After all, even in the Supreme Court, there are many administrative tasks that can be automated. As India enters a new decade, one can only hope that Court Managers be given the respect they deserve inside the system. The problems that Court Managers confront will endure until the government take the required steps to make them an essential part of the judiciary. These reforms are long overdue and must be implemented as soon as possible. With a view to ensure timely and qualitative justice by the courts, to strengthen the judicial administration, and cope up with the dynamic & advanced technological environment, keeping the above challenges and recommendations/suggestions in consideration, it is vital that the post of Court Manager be regularized within the appropriate cadre. 

Conclusion

Judicial delay is a hydra-headed monster and needs to be tackled at multiple levels, instead of a single-pronged approach of merely looking at appointments. It necessitates coordination and collaboration among the government, judiciary, bar, and general public. Each individual is a stakeholder who is also accountable for guaranteeing the system’s functionality. As a result, all vacancies in the different courts must be filled, judicial infrastructure, including court halls and technical support, must be improved, and administrative work must be accelerated. Furthermore, it is critical to expedite the reforms suggested by the different law commissions. Criminal cases must be prioritised and disposed within a deadline in order to reduce caseloads by 2025. For civil matters, a separate remedy process should be established. However, there may be a greater allocation in the budgets, both by the Union and by the states, to begin with.

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Highlighting the major changes and significant updates landlords should know for 2021

By
Sneha Mahawar
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0
Landlord-Tenant
Image Source- https://rb.gy/4untif

This article is written by Sahaja from NALSAR University of Law, Hyderabad. This article highlights the changes that have come up due to the approval of the Model Tenancy Act, 2021 in the realm of landlords and tenant relationships. 

Introduction

On June 2, 2021, the Union Cabinet adopted the Model Tenancy Act, 2021 (‘Tenancy Act’) for distribution to all States and Union Territories for adoption through new legislation or appropriate amendments to existing rental laws. The Tenancy Act aims to revamp India’s legal structure in relation to rental housing and institutionalize it by establishing a Rent Authority to record rental agreements. The Act, according to the government’s news release, intends to “create a vibrant, sustainable, and inclusive rental housing market in the country” to support the construction of enough rental housing available for all income categories.

The Model Act is identical to the proposed Model Tenancy Act, 2020 presented by the Ministry of Housing and Urban Affairs in October last year, with 47 parts and two schedules. The Act addresses issues such as balancing the landlord and tenant’s interests, providing sufficient and affordable rental housing, formalizing the rental housing market, releasing vacant properties for rental purposes, and encouraging private participation in the rental sector. 

What is a Model Act

Model laws are laws that are drafted at a central level and then circulated and enacted by multiple legislatures. These laws may be intended to be implemented verbatim, with minor changes, or to serve as more general guidelines for legislators. In the Indian context, this means that it serves as a model for legislation that states and union territories can accept in its entirety, with modifications, or not at all. 

The reason for publishing only a Model Act rather than establishing binding legislation in this circumstance is because Parliament cannot pass a binding law. The land is included in the State List of the Seventh Schedule, and according to Article 246 of the Constitution, state governments have sole authority to enact legislation pertaining to the State List.

Due to this reason, nearly all states in our country have their legislation concerning matters of rental housing in the form of Rent Control Acts.

The Act will take effect on the date specified by the State Government or the Union Territory Administration in a notification published in the Official Gazette. This Act’s provisions may be issued on a variety of dates.

Need for the Model Act

In India, self-owned housing is home to 95 percent of rural households, while rental housing is mostly a city phenomenon. Between 1951 and 2011, India’s urban population increased sixfold, accounting for 31 percent of the country’s overall population. 

Rental housing is a major strategy to reduce informality and shortages, according to the Economic Survey (2017-18). It was mentioned that rental housing allows low-income segments who may not be able to purchase housing mobility and affordability. It also found that a large share of the urban rental housing stock is vacant, citing ambiguous property rules, weak contract enforcement, and rent control legislation as reasons.

Rent control rules, it was noted, skew arrangements in favour of tenants and lead to greater litigation. Landlords’ faith in the regulatory system has been weakened as a result of this. Alternative arrangements, such as leave and license agreements and informal leases, are used to provide a major portion of the rental demand.

In order to deal with and address these issues, the draft Model Act was proposed in 2020 which was then approved by the Union Cabinet in 2021. 

Objectives of the Act

The primary objectives of the Model Tenancy Act are:

  • To form a Rent Authority to oversee the rental of properties.
  • To safeguard the rights of both landlords and tenants
  • To provide a quick adjudication system for resolving disputes and issues related to them.

In addition to its main goals, the Model Act aims to ensure affordability, formalize the rental housing market, and stimulate private investment.

Important features of the Act

Setting up a rent authority

The model law asks for the establishment of a rent authority, a rent court, and a rent tribunal, while also stating that such issues will no longer be heard in civil courts. 

Rent court can be led by an Additional Collector or Additional District Magistrate, while the authority can be administered by an officer, not below the rank of Deputy Collector. Both must be appointed by the District Collector or District Magistrate with the state government’s prior consent.

Tenancy agreement

When renting a property, the renter and the landlord are required by law to sign a written agreement. The agreement must state the amount of rent to be paid, the length of the tenancy, and other details. It is mandatory to form a tenancy agreement and submit it to the rent authority. 

To facilitate the filling of the agreement, the rent authority is required to create a digital platform in a local vernacular language or the language of the state or UT.

The rent agreement will be signed twice, with one copy kept by the landlord and the other by the renter. Receipts for rent and other payments are required from landlords. Bank slips will suffice in the case of electronic transfers.

Before the introduction of the Act, a rent agreement between the landlord and tenant was not mandatory. 

Rent and security deposit

There has been no prescribed price ceiling for rent. The Act gives liberty to the pirates of the agreement to negotiate and mutually agree on the terms of the agreement. 

However, the sum of the security deposit cannot exceed two months’ rent in the case of a residential property and six months’ rent in the case of non-residential property, according to the legislation. The security deposit will be repaid to the tenant by the landlord once all deductions have been made at the time of handing over vacant possession of the premises.

Tenancy period

The rent agreement needs to specify the period of tenancy. The renewal of the tenancy period must be done during the period of tenancy. According to the Model Act, the tenant can ask for a tenancy renewal or extension from the landlord. If a tenancy time has finished and not been renewed, or if the tenant fails to depart the premises at the conclusion of such tenancy, the tenant will be liable for increased rent. 

The Act also covers situations of emergency and unprecedented events that might occur. If the premises become uninhabitable owing to a force majeure event, the landlord is not allowed to charge rent until the issue is resolved. If this is not practicable, the rent advance and security deposit must be reimbursed within 15 days after the notice period’s end and after tenant liabilities have been deducted.

Eviction

The new Model Act has a comprehensive list of scenarios wherein the tenant can be evicted at the discretion of the landlord. According to the Model Act, the Rent court has the authority to order the eviction of a tenant based on a landlord’s application under Chapter 5 of the law. The Rent court can issue eviction orders based on a landlord’s plea in the following circumstances:

  • Non-payment of the rent by the tenant as agreed and signed in the rent agreement. 
  • The tenant does not pay the two months’ rent, plus interest and service charges, within a month of the notice being sent.
  • The tenant sold away part or all of the property without the landlord’s written permission.
  • Even if after the landlord has served the tenant with a notice, the tenant continues to mistreat the property.
  • If the property needs to be changed, repaired, or redeveloped. Only once a new tenancy agreement is registered with the Rent Authority can tenants return. The tenant may be allowed to stay in part of the property if the landlord agrees.
  • The tenant may be served with an eviction notice by the Rent court if the landlord dies and the legal heirs can substantiate the need for the property.

Maintenance of the property

The landlord and tenant must preserve the premises “in as good a condition as at the commencement of the lease, except for natural wear and tear”, according to Section 15 of the model law. The Model Act’s Second Schedule lays out the allocation of obligations for property maintenance between the landlord and the tenants. 

During the tenancy, the tenant is responsible for the management and repair of the premises. If the tenant fails to make agreed-upon repairs, the landlord may use the deposit money to make the repairs. The tenant must repay it within a month after receiving the landlord’s notice.

Another major change introduced with respect to maintenance is that without the landlord’s express consent, the tenant may not make any structural changes, establish any permanent structures, or rent out the premises. 

Dispute resolution mechanism

The Model Act proposes establishing a three-tier quasi-judicial conflict resolution system. The District Collector, with the agreement of the state government, will designate Rent Authorities and Rent courts. After conferring with the jurisdictional High Court, the state government may create a Rent Tribunal in each district. No civil court will have jurisdiction over disputes relating to the Model Act’s provisions.

The Rent Authority will be headed by the Deputy Collector. It will be responsible to resolve disputes concerned with the revision of rent and determine revised rates. If the property manager acts in violation of the Act or against the landlord’s orders, he may be fired or fined. The Rent Authority can pass interim orders to restore necessary services and compensate those who have been affected.

The Rent court will be headed by an Additional Collector or Additional District Magistrate. The Rent court will adjudicate appeals against the Rent Authority’s orders. It can pass orders for eviction and recovery of possession of premises.

The Rent Tribunal will be headed by the District Judge or Additional District Judge. This body will adjudicate appeals against the Rent court’s orders. 

The procedure for the resolution of the disputes by the three quasi jurisdictional bodies and the timelines for the same is also mentioned in the Model Act. 

Analysis of the Model Act

The Model Tenancy Act recognizes areas of contention between the landlord and the tenant, and tackles issues such as the requirement for a documented rent agreement, a security deposit cap, the rate of rent increase, and arbitrary eviction restrictions. 

The planned rental court can allow repossession of the premises if the tenant misuses the property after being served with a notice, which will benefit the landlords.

Though the Act has brought about significant positive changes when it comes to the renting of the property, there are certain vague and ambiguous provisions. Some of these are with respect to timelines for certain cases like essential services and revision of rent. 

The Model Act further stipulates that the parties will be given a unique identification number after registering with the Rent Authority and that the rental agreement (together with other papers) will be uploaded to the Authority’s website. On the other hand, individuals’ personal information may not serve a public purpose and hence may infringe their right to privacy.

Conclusion 

The Model Tenancy Act 2021, has indeed brought about changes that will improve the rental market and ensure the smooth functioning of the same. The Model Act aims to achieve a balance in the tenant-landlord relationship by defining both sides’ rights and responsibilities. The features of the Act covered under the previous sections of this article are some of the major updates and changes brought about in the law regarding landlords. 

The necessity to record all lease agreements and the administration of such relationships is intended to bring order to the country’s otherwise chaotic rental housing industry. The establishment of a rent authority, a rent court, and a rent tribunal to deal with operational and day-to-day management issues, such as non-payment of rent, delays in repairs and maintenance, and eviction of tenants are all positive measures. 

The proposal to charge punitive rent to tenants who do not vacate a property after the lease term has expired or the agreement has been terminated, limit the chargeability of security deposits by landlords, and hold landlords accountable for timely repairs are all intended to boost the rental housing sector.

When the States and Union Territories pass this law, it will increase private participation in rental housing, address the massive housing shortfall across all income groups, and reduce homelessness.

References

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Legal recourses available to companies against corporate defamation: a review

By
Oishika Banerji
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0
Image source: https://blog.ipleaders.in/defamation-2/

This article has been written by Kumar Rajiv Ranjan pursuing the Diploma in General Corporate Practice: Transactions, Governance, and Disputes from LawSikho.

Introduction

Individual defamation and mudslinging upon each other are not unnatural in our social system. Many a time it had led to a generation-defining crisis and the emergence of a new order. It was the CHEER HARAN of Draupadi by Duryodhana and other Kauravas which culminated into the Mahabharata war as Draupadi had vowed not to tie her log-flowing hairs until blood of her tormentor DUSHASHAN was put into her hair by Pandavas which was fulfilled by BHIMA after killing DUSHASHAN in the war. Not long ago, the # me too movement had rocked the country when the journalist Priya Ramani alleged former minister M J Akbar and subsequently many female actresses followed suit which had practically rocked the Film world.

As far as the corporate world is concerned, Industrialists have often sued media houses and journalists claiming crores of rupees in damages. One case which had rocked the corporate world not long ago was when Bombay Dyeing Chairperson Nusli Wadia had threatened to sue Tata Sons for defamation if his demands were not met which caused a big dent to the image of Tata Sons as a corporate entity always claiming to have been promoting the highest degree of ethical standards and it took some time for Tata Sons to come out of this rude shock.

In the era of hyperactivity, social media, various electronic platform, various malice are propagating everywhere as a result of which safeguarding the hard-earned reputation is becoming a bigger challenge every day in the corporate world in light of which the need for having effective legal tools as safeguard measures against defamation and for promoting organizational excellence has gained prominence. This paper has attempted to analyze the need for having a stronger legal system, both civil and criminal, against unwanted defamation for the corporate houses/Companies/Corporation as well as the prevalent legal system.

Defamation vis-a vis-reputation

Before analyzing DEFAMATION, I would like to dwell upon the other important aspect of a Corporate Culture which is REPUTATION- a term that is closely linked to the other term DEFAMATION and it is the attempted decimation of REPUTATION which creates grounds for DEFAMATION. It is this REPUTATION that determines the social standing of the organization as well as the persons working therein in the eyes of society. A positive reputation as an employer of organizations like Tata Steel helps attract and retain the best talent in the sector. Corporate Social Responsibility, financial performance, staff reviews, media coverage, brand values etc. are all weighed not only by the prospective employees but also by the other stakeholders while evaluating whether to work in the organization or whether to have business dealings with the said organizations etc. I would also like to refer to the historical and mythological characters of DURYODHANA and RAVANA. Their administrative competence and acumen as EFFECTIVE AND EFFICIENT RULERS were never questioned, no public rebellion was ever heard but both are permanently condemned all through their lives which was further compounded by acts of CHEER HARAN of Draupadi and APHARAN of  Goddess Sita by Duryodhana and Ravana respectively. I would also like to quote the famous saying of Mark Twain about another condemned character “SATAN” wherein he stated:

“ I have no special regard for Satan but I can at least claim that I have no prejudice against him. It may even be that I lean a little his way on account of his having NEVER a fair show. All religions issue bibles against him and say most injurious things about him but we never hear his side…..”

It is under this backdrop CORPORATE REPUTATION has to be analyzed since any attempt of defamation causes an immediate dent to such reputation. CORPORATE REPUTATION is an index indicating the overall estimation in which the organization is held by its internal and external stakeholders based on its past actions and the probability of its future behavior. A positive corporate image also creates the possibility for more business opportunities just due to solid loyalty and commitment of different stakeholders including the customers. A business organization has to be extremely conscious towards building as well as retaining a positive reputation amongst its stakeholders which includes customers, opinion leaders, suppliers, etc. and any attempt to malign such an image is required to be countered ferociously. That is where the defamation suits come into the picture.

For any organization, it takes years of hard, sincere, dedicated, and committed efforts by all stakeholders working in unison with each other to earn a GOOD POSITIVE REPUTATION and gain the trust and respect of their contemporaries, customers, investors, present and future employees, general masses and every other stakeholder. It is like a prized property invaluable for the company both for the business as well as for its existence. Therefore, when that REPUTATION comes into question in the court of public scrutiny, every company does have a right to preserve it as fiercely as it could for which every possible legal action are required to be taken recourse against any attempted corporate defamation.

Defining defamation

As far as corporate defamation cases in India are concerned, one of the most publicized cases is the case of Veritas Vs. Indiabulls which was filed by Canadian Investment firm Veritas against Indiabulls in 2014 at Ontario claiming for damage of 11 million Dollars [Rs 70 crores] in damages for the alleged defamatory announcements and press releases put out by Indiabulls which led to the closure of its India Research Unit. India Bulls also moved before Delhi High Court and succeeded in obtaining an interim order against the move. Subsequently, it also filed a suit before Delhi High Court claiming Rs 200 Crores in damages from Veritas and its analyst Neeraj Monga for defamatory submission made by them against Indiabulls in the Ontario claim. The matter at present is still sub judice. 

In law books or in statutes, the term DEFAMATION has not been defined. However, under the English Common Law, a corporation is entitled to sue for defamatory statements which may affect the reputation and are further also entitled to recover damages without the need to prove special damage. In the landmark judgment of the National Union of General and Municipal Workers Vs Gillian, it was held that there is a distinction between trading and non-trading corporations. It was also ruled that the trading corporation can pursue an action against defamation affecting its trading business as well as its reputation while a non-trading corporation can pursue action only in cases of reputational damage. In Jameel vs Wall Street Journal Europe Sprl., the House of Lords ruled that the corporation need not prove any special damages in a defamation suit. In Metropolitan saloon  Omnibus co, Vs Hawkins, it was held that an organization is entitled to sue for defamation “by which its property is injured.”In Dixon Vs Holden, a bird’s eye review of the term PROPERTY was made and it was held that “ What is property? One has property in land, another in goods, another in business, another in skill, another in reputation, and whatever may have the effect of destroying property in any one of these things ( even in a man’s good name) is, in my opinion, destroying property of a most valuable description.”Thus, every corporation/Company does have a right to preserve its reputation. It is a jus in rem , a right enforceable against the world at large.

Types of defamation

DEFAMATION is usually of two kinds:

  • LIBEL and ;
  • SLANDER. 

While LIBEL is  “publication” of a false and defamatory statement, tending to injure the reputation of another person/corporation/company/body corporate without any justification, the presence of element of publication requires that the defamatory expression must be made in a medium, which is permanent in nature viz. in writing, printing, pictures, social media quotes, etc. which can be retrieved and presented in a defamation lawsuit whenever it is required.

On the other hand, SLANDER is a false and defamatory statement by spoken words or gestures, tending to injure the reputation of another person. In this case, just words are enough to constitute defamation.

In the Defamation Act of 1952 and  Defamation Act of 1996 in England, there is a difference between libel and slander. Libel and not slander is punishable but slander is no offense. Libel is always actionable per se but if laws of Torts are given cognizance to, then slander is also actionable in exceptional cases on proof of exceptional damage.

For constituting defamation, a statement need only have a tendency to affect the person’s or Company’s/Corporate reputation and it need not necessarily lower it down. The applicable standard for filing a legal defamatory suit is that the ordinary members of the society should perceive such statements to lower down the reputation of the Company/body corporate/ members of the corporate management team/Corporation which is enough to be considered as defamatory. So the essential attributes of any defamation lawsuit are:

1) Presence of an untrue spoken/written statement/expression/sign/visible representation;

2) Referring to specific persons/company/body corporate;

3) It is published/comes to the knowledge of other persons; and

4) Deemed harmful/likely to harm the reputation of the Company/body corporate/ members of the corporate mgt team/Corporation.

Evolution of defamatory laws in India

In the Indian context, the defamation laws were conceived by Lord Macaulay in 1837 in the first draft of the Indian Penal Code[IPC] which was codified in 1860 by which the act of defamation has been criminalized under Section-499 of IPC which has remained unaltered till today. Section-499 of the Indian Penal Code reads as follows:

“Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such persons, is said except in the cases hereinafter expected, to defame that person.”

On the other hand, Section-500 of IPC prescribes punishment for defamation as it states “Whoever defames another shall be punished with simple imprisonment for a term which may extend to two years or with fine or with both.”

The status of a company as a JURIST PERSON has long been accepted and, therefore, a Company may also sue or be sued in defamation cases. Further, the gravity of the offense of defamation under criminal law is a lot higher than in the common law. In criminal law, however, it has to be established that the statement has been made with the explicit intent to arouse the hostility of another person, then only it shall constitute a defamatory statement. In BRK Murthy Vs State of AP[Andhra Pradesh], it has been held that “in brief, the essentials of defamation are, first, the words must be defamatory. Second, they must refer to the aggrieved party and THIRD, they must be maliciously “published”.In this case, the accused had published an article in their journal regarding the conduct of Sri A Shiva Shankar, Inspector General of  Police(Intelligence) in the discharge of public functions/duties which caused defamation to Sri Shiva Shankar and filing of defamation suit against the Special Correspondent of the Journal and the case was decided by the Appellate Court which came out with a broader definition of the acts which shall constitute defamation. In Union benefit Guarantee Company vs Thakarlal Thakor, a defamation suit was filed by the company against the defendant for libel action claiming that injury to its credit and reputation as well as in the way of its business has been caused by way of certain statements which according to the plaintiff were false and malicious and it was further claimed that the said false and maliciously written statements were published or caused to be written and published by the defendants which constituted cause for the defamatory suit. The claim was allowed by Bombay High Court and it was held that words used in a manner to negatively reflect upon a company in relation to its trade and business with the intent to cause harm to the company are actionable without proof of special damage. In case, a defamatory statement refers to the character or reputation of its officers, members of the corporate management team, special damage has to be proved.

Some stumbling blocks to be taken care of before filing a defamation suit

Before filing any defamatory suit, it has to be very carefully examined as to whether the suit is going to have any “chilling effect” on the rights of expression and free speech as enshrined under Article-19 of the Constitution of India. The right to fair criticism is a vital ingredient to the right of free speech. A statement based on the analysis of factual information cannot be categorized as defamatory. The defendants in defamation lawsuits are also repeatedly taking shelter to the grounds of truth or bonafide/ fair criticism which the Courts are also accepting. The question of defamation arises only when it is established that the statements are false and maliciously intended. It is this ground of “chilling effect” to the right of expression which most of the Financial Analysts on corporate affairs take recourse to whenever they are countered with a defamatory suit. However, a blanket immunity to such Financial Analysts from defamation lawsuits cannot be granted as many a time false, perverted, and biased Financial Analyst’ reports are also published causing heavy dent to a company’s reputation and in that eventuality, the company as a Jurist person shall be completely justified if it adopts a legal course of action by filing a defamation suit against such Financial Analysts/Experts.

Some significant lawsuits in defamation cases

  1. In 2008, Bank Atlantic, a Florida-based bank, had filed a defamatory suit against a prominent wall street analyst, Mr. Richard X Bove over a report on potential bank failures titled “Who is next?”. In the defamation suit, the bank claimed that the analyst had defamed the bank by suggesting that it might fail. During the court proceedings, the Lawyers of Mr Bove took the stand that the report had not included Bank Atlantic itself but its holding Company and claimed that Mr. Bove is fighting the lawsuit to defend the career of a financial analyst like him undermined by the constant flurry of lawsuits. The case ended in a settlement between the parties and as part of the settlement, Mr. Richard issued a statement reiterating that his rankings did not include Bank Atlantic but included its holding Company. However, he had to incur a hefty sum of money towards court fees during litigation.
  2. In 2009, Hertz Global Holding Inc had sued another Financial Analyst Company, Audit Integrity Inc, and its chief executive, Jack Zwingli before Bergen County Superior Court in New Jersey over a report that suggested, as per Hertz’s claim, that the world largest car rental company may go bankrupt. The case was subsequently settled between the Parties through the terms of settlement was not made public and Hertz dropped its defamation suit against the Financial Analyst.
  3. In 2020, Binance, one of the largest digital asset exchanges, filed a defamation lawsuit against Forbes Media and in the lawsuit, it was claimed that “Forbes published numerous false statements about Binance claiming that it created a corporate structure designed to intentionally deceive the Regulators and that an image was attempted to be created that Binance engages in activities characteristic of money laundering”. According to Binance, in the lawsuit filed, all such statements were false and highly defamatory. The Lawsuit was, however, dropped by Binance voluntarily three months’ after its filing without assigning any reasons.
  4. In India, recently Edelweiss filed a USD 100 million defamation suit against Moody’s Corporation, a global rating agency, before the Bombay High Court for misreporting its numbers in one of the Firm’s investor reports. It was claimed that in May’2020, Moody’s published a report titled “Economic Slowdown worsened by CoronaVirus will exacerbate liquidity stress” wherein the asset quality and liquidity of various non-banking financial companies (NBFCs) was compared and it was claimed by Plaintiff Edelweis that an incorrect report with malice prepense was published to create panic amongst its shareholders, damaged its Brand and lowered down share prices. In the report, it was claimed that the cash and cash equivalents as a percentage of total assets of Edelweiss were zero and the firm has the least balance in liquid assets compared to other NBFCs. This report was contested by Edelweiss and it was claimed by them that the company’s liquidity position was 17% of total assets as of 30th September 2019 and 22% as of December 2019 and so they alleged that Moody’s put out a wrong report with malicious intent to damage the group and create panic amongst its shareholders which created grounds for filing the lawsuit. Presently, the case is subjudice.
  5. Subramaniam Swamy vs Union of India is another landmark judgment wherein the TWO JUDGES bench of Hon’ble Supreme Court namely Justice Dipak Mishra and Justice PC Pant decided to maintain constitutional validity of the Country’s criminal defamation laws. The gist of the case is that in 2014, Dr. Subramaniyam Swamy, an MP, had made corruption allegations against Ms. Jayalathitha. In response thereto, the Tamil Nadu State Government filed a defamation suit against Dr. Swamy. Thereafter, Dr. Swamy and some other prominent politicians had challenged the constitutional validity of the criminal defamation laws in India and the matter came before the Apex Court which decided and upheld the constitutional validity of the defamation laws. The Court observed that the right to freedom of speech and expression cannot be “ allowed so much room that even reputation of an individual which is a constituent of Article-21 would have no entry into that Area.” It further held that Section 499 and Section 500 of IPC, being the ROOTS for prosecution under the criminal defamation laws in India, are not vaguely worded or ambiguous. This order, having been an ordain of the Supreme Court, has put to rest the repeated arguments, disagreements, and discourse on the issues pertaining to the constitutional validity of the Criminal defamation laws in India.

Conclusion

In a Harvard Business Review from its  Feb’2007 issue, it was stated that “in an economy where 70% to 80% of market values comes from hard to assess intangible assets such as brand equity, intellectual capital, and goodwill, companies are especially vulnerable to anything that damages its reputation and, therefore, every company is rightfully and lawfully entitled to take legal resources, both civil and criminal, to safeguard its hard-earned reputation from attempted defamation by filing lawsuits.” However, every lawsuit does have its own “chilling effect” on the right of freedom of speech as enshrined in Indian Constitution and, therefore, every case shall be required to be very carefully examined for arriving at a fair balance between the right to reputation of a Company vis-à-vis freedom of speech in the face of public interest and corporate reputation. However, every corporation or a company does have a legal right to sue in defamation premised on the concept of corporate reputation as a hard-earned property that is to be protected from unlawful damages, and this legal protection is also needed for vindicating its reputation. As an additional remedy, the Corporation or the Company should be also entitled to recover special damages as reparation for damage to the reputation provided they are proved and established. In the era of hyper activism on social media, it is quite easy and becoming a fashion to criticize without going into depth of any matter. It is this tendency and exhibited behavior with fair regularity which is required to be curbed and controlled and judicial activism and defamation lawsuits both criminal and civil, maybe, the answers to the Corporate World in order to closely safeguard its hard-earned REPUTATION from acts of DEFAMATION with malice prepense.

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All you need to know about cyber warfare

By
Rachit Garg
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0
Cybercrime

This article has been written by Shrikar Ventrapragada.

Meaning

Cyberwarfare can be defined as the use of technology to create a cyberattack on a nation-state or a specific target place. The main intention of cyber warfare is to cause some significant harm to the targeted region. This damage can be physical as well as virtual. Physical damage can be damage/destruction of buildings/critical defence infrastructures. Virtual damage could be harmful to the economy due to an attack on a power grid that disrupted the city’s power sources causing millions of businesses to be paused. 

Cyberwarfare need not necessarily mean to be a cyber-attack by one nation-state on another nation-state. It can also be described as a cyber-attack by a terrorist group or hackers, which eventually aim at pushing the goals of an alien nation. 

Kinds of cyber weapons used in warfare 

  1. Viruses, phishing, computer worms and malware can affect major infrastructures.
  2. Denial of service attack, these attacks deny access to the affected device from its true owner. 
  3. Theft of critical information by hacking the servers of reputed and important institutions/businesses of a country.
  4. Cyber espionage or spyware, the purpose of espionage is to spy on other alien nations and track their activities. Espionage may also lead to theft of information which would eventually risk national security. 
  5. Ransomware, it is a form of cyber-attack in which the attacker seeks ransom for critical information he possesses of the victim. 
  6. Propaganda, it is an effort to control information and use it to influence the mind of the public in order to create chaos and disruption. Propaganda is mainly through social media apps, which triggers the crowd. 

How do Indian laws try to deal with Cyber Warfare?

In India, there is only one cyber law which is known as the IT Act, 2000; which was further amended in the year 2008. Though this act has multiple shortcomings when it comes to dealing with cyber war-related situations. In my opinion, this law is not very effective to supervise cyber wars which may occur. 

Some of the cyber crimes listed under the IT Act, 2000 and in its amendment, 2008 are as follows: 

  1. Section 43: If any person without the permission of the owner of the computer, computer system, computer network; accesses, downloads, introduces, disrupts, denies or provides any assistance to another person can be held liable under this section.   
  2. Section 66: If the accounts of a victim are compromised by an attack, who does any act mentioned in Section 43 of the IT Act, shall be imprisoned for a term which may exceed up to three years or with a fine which may exceed up to five lakh rupees or both. 
  3. Section 66 F: This section of the IT Act deals with punitive punishment for crimes that come under the branch of cyber terrorism. A cyber attack is considered to be cyber terrorism if it has the intent to threaten the unity, security, integrity and sovereignty of India. A cyber terrorism attack is intended to strike terror in the people or a group of people. 

How can it be determined as cyber terrorism?

  1. The attack denies access to any authorised person’s computer source (DDoS).
  2. Unauthorised access to computer sources, or breaking the barriers to the computer source by illegal means, which is created by the true authorised owner of the computer to protect the device.
  3. Bringing in any virus which contaminates the computer causing loss to the data/ computer. 

If the above-mentioned causes are fulfilled and the supra conduct causes death or injury to any person, and causes damage or destruction to property and disrupts the supplies of essential services to the community or in any manner affects the critical information infrastructure mentioned under Section 70, shall be punishable with imprisonment which may exceed up to imprisonment for life: 

Section 70A: This provision gives the central government the authority to appoint any department of the government as the national nodal agency in dealing with critical information infrastructure protection. Such an appointment shall only be valid if the notification is published in the Official Gazette. The notification shall also prescribe the process of how the agency shall function its duties. This appointed nodal agency shall solely determine and conduct the research and development related to the critical information infrastructure.

How is cyber warfare different from a normal cyber-attack?

A normal cyber-attack can be determined as an act of a ‘hacker’ who intends to violate the barriers set by a computer system or network and tends to expose its vulnerabilities.

Hackers’ can be classified into three categories:

  1. White hat hacker: Who are also known as ethical hackers, they violate a network for non-malicious purposes, they test the level of attacks a barrier can manage before it is compromised. 
  2. Black hat hacker- Hackers who attack for no cause but for personal gain and profits. They only violate the safety protections of a network in order to make some money, their intent is to act maliciously. 
  3. Grey hat hacker- This category of hacker is the one who is a mixture of the above two types. They break into a system and demand ransom in order to notify the administrator about the security flaw. 

Cyberwarfare is a very tangled problem that demands a lot of concerns about its meanings and discrepancies in other wars. This is because an attack will defer depending on the ultimate outcome the attacker expects, distance, hardware and software. 

The main differentiation between cyber warfare and an ordinary cyber-attack lies in the intention, the primary motivation for cyberterrorism attacks is to disrupt or harm the victims, even if the attacks do not result in physical harm or cause extreme financial harm. Just like the basic rule in torts, if there is no intention, then there is no crime. Similarly, in the case of a cyber warfare type attack on a nation, organisation or a particular individual, the intention to attack shall be keen in such a situation. If the attacker does not have any intention of causing damage, physically or in monetary terms, it would be a tough task determining the attacker guilty.   

Both of them have the aim of using information technology and networks to obtain a strategic edge. One meaning is that cyber warfare involves acts of a nation-state to access computers or networks of another country for disruption or disturbance purposes. Any cyber-warfare activities may, however, involve non-state entities including militants, political groups or nations as aggressors or as targets.

But what if the attack is being conducted by a non-resident of India/outsider?

In such a case, Section 75(2) of the IT Act, 2000 comes into play. The provision states that the IT Act is applicable to any offence which is committed outside the territory of India by any person/ organisation if the act involves the offence being constituted involving a computer or a computer network located in India. 

According to Section 75(1), this provision is also applicable to any offence committed outside India by any person irrespective of his nationality. 

How India has progressed in cybersecurity

IT Act, 2000

This Act is the primary law in India that handles the issues related to Cybercrime and electronic commerce. The secondary legislation to the IT Act, 2000 is the Intermediary Guidelines Rules, 2011 and the IT Rules, 2021. The IT Act is amended from time to time when the government feels the need to improvise the Act. 

National Cybersecurity Coordination Centre (NCCC)

This agency’s responsibility is to scan internet traffic and elaborate the smaller details which are hidden inside each communication, which is coming into the country to identify real-time cyber threats. 

Cyber Swachhta Kendra, 2017

This platform was created in 2017, to help the internet users in the Indian territory to clean their computers and devices by wiping out viruses and malicious software, if any.  

Cyber Surakshit Bharat Initiative, 2018

This policy was launched in the year 2018 with the intent to spread awareness about cybercrime and to build the necessary safety measures for the Chief Information Security (CISOs) and for the IT staff working in the frontline across all the govt agencies.  

National Computer Emergency Response Team (CERT-In)

It functions as the Nodal agency for quick response to all types of cybersecurity threats, emergency responses and crisis management.

National Critical Information Infrastructure Protection Centre (NCIIPC)

Timeline of major events of Cyberwarfare attack

The Morris Worm, 1988

This worm was created by Robert Tapan Morris, who made this worm only to check how big the internet really was. He was the first accused to have been convicted under the US computer fraud and abuse act. It is known as being the first recognised worm that struck the cyber-infrastructures around the world. It mainly affected the computers in the region of the US. The worm detects the defaults in the UNIX system and it copies itself repeatedly. It affected the computer in such a way that the computers were no longer in working conditions.  

Bronze soldier, 2007

The Estonian government displaced the bronze soldier war memorial from the city centre of Tallinn, which was the capital of Estonia, to a cemetery that belonged to the army on the outskirts of the city. This resulted in several major cyber-attacks on the country. The attack was targeted on the Estonian banks, government websites and media channels as well. The attack was such that it increased the levels of traffic on the servers and eventually led the server to crash. 

Stuxnet, 2010

In 2010, the first-ever Digital Weapon namely ‘Stuxnet’, this weapon targeted a Nuclear Facility in Natanz, Iran. The attack was called ‘Operation Olympic Games’ and was claimed to be executed by Israel and the US jointly. The Stuxnet was an infected USD drive, which completely paralyzed the hardware and software facilities at the nuclear facility. Stuxnet is claimed to be a computer worm that is used to control a factory’s assembly line.   

Edward Snowden, 2013

A former employee of the Central Intelligence Agency Consultancy, namely Edward Snowden, leaked critical information of the U.S. National Security Agency’s cyber-surveillance system. He confessed to this attack after his ethical concerns about a program he was involved in, was ignored. His attack led to mass awareness amongst the corporate and public regarding how advanced the technology has reached and since then, it came to be known as the Snowden Effect. 

DDoS attack on Ukraine, 2014

The propaganda by the Russian govt by conducting a DDoS attack that destroyed the internet services in Ukraine, which led to Russian rebels taking control of Crimea, a city in Ukraine. 

Sony Pictures, 2014

The film ‘The interview’ was based on an interview with the North Korean leader Kim Jong Un, in which the leader was said to be wrongly portrayed. The cyber-attack on Sony Pictures after Sony released the movie was blamed on the North Korean hackers associated with its government. 

US presidential election, 2016

A report on the presidential elections by special counsel Robert Mueller concluded that Russia was involved in influencing the US presidential election, 2016. The Mueller report found that Russia made use of social media to disrupt the political situation in the US, using an ‘information malware’. The malware started by first misusing the electoral system in 2014 and later to benefit the election candidate Donald Trump.

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Policy analysis – the Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

By
Rachit Garg
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0
Sexual harassment
Image Source - https://rb.gy/im8nlv

This article has been written by Virendra Bapat.

Introduction

Sexual harassment is defined as disrespectful, humiliating, or intimidating conduct that might take the form of written, oral, physical, or digital communication. In the twenty-first century, where both men and women work in the same business, it has been discovered that women are subjected to certain strange office conduct from their coworkers. Women must contend with an insecure and unfriendly atmosphere that discourages and demotivates women’s involvement and productivity. 

This has been a worldwide issue and has spread like a virus across culture, society, geographical barriers, race, class, and caste. In India, every 10th minute a woman is sexually harassed. Despite the fact that the phrase “sexual harassment” was not officially used in any Indian legislation prior to 1997, sexual harassment-related activity was made illegal under many provisions of the Indian Penal Code. Therefore, in order to safeguard women’s basic rights under Articles 14, 15, and 21 of the Indian constitution there was a need for stricter and more consistent legislation. Sexual Harassment of Women at the Workplace (Prevention, Prohibition, and Redressal) Act, 2013 was enacted to cater for the interests of women in the workplace. 

Historical evolution

Since independence, sexual harassment of women at the workplace has been a raging issue in India. In 1990, an organization named Baailancho Saad rallied against Goa’s then-chief minister to resign, who was accused of harassing his personal secretary. The Organization also filed a PIL against the definition of rape as provided under IPC and demanded an amendment in the narrow definition. However, it was Bhanwari Devi’s fight for justice that brought the issue of sexual harassment at the workplace under the spotlight and paved a way for the culmination of the “Vishakha Guidelines”. The only way to file a case was under Section-354 of the Indian Penal Code, 1860 which resolved criminal assault of women. Section-509– which punished individuals who use conduct or expression with the intent to offend a woman’s modesty.

Vishakha and others v. The State of Rajasthan

Bhanwari Devi was a Dalit woman who worked for the Rajasthan government’s Rural Development Program as a social worker, she was gang-raped in 1992. This case established the basis for the Sexual Harassment at Workplace rule (1997). This exposed the extent of sexual harassment in India’s workplaces. It struck a chord with people all around the country, highlighting the vulnerabilities that working women experience in the workplace. 

The Supreme Court has ordered that laws be enacted to combat sexual harassment in the workplace. The Vishaka Guidelines took source and inspiration from the CEDAW, Sc. 2(d) of the Protection of Human Rights Act, 1993. The Supreme Court determined that every organization should have an ethical code in place, as well as a system for implementing the code in situations that fall under its purview.

In 1977, a three-judge panel led issued a breakthrough and landmark decision based on the Convention on the Elimination of All Forms of Discrimination Against Women (signed by India in 1980), which offered the first fundamental definition of sexual harassment at work. After Vishaka’s ruling in 1997, there were no attempts to pass legislation for the following six years. The Supreme Court determined that all companies should have a sexual harassment code, as well as an appropriate framework for enforcing instances that come under the code’s jurisdiction. These guidelines were used in the case of Apparel Export Promotion Council v. A.K Chopra.

These guidelines were created with the primary objective of providing a mechanism for workplace sexual misconduct redress and grievance processes. These recommendations inspired the Sexual Harassment of Women at Workplace (Redressal, Prohibition, and Prevention) Act of 2013. 

The harassment statute took the government 17 years to pass. The Act became effective on December 9, 2013. The Supreme Court of India’s Vishaka Guidelines for the Prevention of Sexual Harassment are superseded by this legislation. The Act is crucial since it covers the many sorts of sexual assault and how a woman can report it.

The objective of the Act

The objective of the Sexual Harassment Act of 2013 was to make the workplace a safer place for women and to protect them from sexual harassment. It also functions as a forum for both avoiding and addressing problems. “Sexual harassment has been ruled a breach of a woman’s fundamental right to equality, as guaranteed by Articles 14 and 15, and her right to life and dignity, as guaranteed by Article 1. Sexual harassment has also been deemed a violation of the freedom to practice or carry out any vocation, trade, or business, which includes the right to a safe workplace, under Article 19(1) (g) of the Constitution.”

Provisions of the Act (Summary)

According to the Sexual Harassment of Women at Workplace Conduct of 2013, any uninvited and sexual act is deemed sexual harassment, which includes “quid pro quo” harassment. It is explained as unwelcome sexual physical, verbal, or nonverbal activity, such as physical contact and approaches, demand or desire for sexual favours, making sexually tinged comments, showing pornography, and any other unwanted sexual physical, verbal, or nonverbal activity. The concept of “extended workplace” was born as a consequence of the POSH legislation, which defines “workplace” as any site where an employee goes as a consequence of work or in the scope of employment, including transportation offered by the organization for the purpose of travel.

Committees for Complaints

The Act’s most prominent component is that it requires any corporation or organization with more than 10 workers to create an Internal Allegations Committee to hear and address sexual harassment complaints. The Internal Complaint Committee must be established in precise accordance with the provisions of Ruchika Singh Chhabra vs M/s Air France India and Anr. The Indian Ministry for Women introduced an online platform, ‘SHe-Box,’ in November 2017 that directs complaints to the employer or organization’s IC. The Act mandates the District Officer to organize a Local Complaint Committee in each district where there are less than ten workers.

Duties and Obligations of Employer

An employer is defined in Section 2(g) of the Act as a person who is in charge of the place of works management, monitoring, and regulation. It stipulates that the employer shall disclose the legal ramifications of engaging in activities that may constitute sexual harassment, as well as the composition of the Internal Complaint Committee. It is a legal need to handle sexual harassment as a violation of service regulations. If he fails to comply with the regulations a penalty of 50000 RS is recommended or it can even lead to cancellation as per Section 26 of the Act.

Procedure to file a complaint 

An aggrieved female has three months from the date of the tragedy to make a written complaint with the ICC, and three months from the last such event in the case of a series of such mishaps. The Committee, on the other hand, can pardon any delay in bringing the complaint for up to three months. According to Tejinder Kaur v. UOI, the time limitation can be extended if it can be proven that the lady was unable to register the complaint within the statutory time frame due to extenuating circumstances. If the aggrieved female is mentally or physically unable, her legal heirs may submit a complaint on her behalf. Before initiating an inquiry, the committee can attempt to address the situation through conciliation between her and the responder, and if a settlement is achieved, no further inquiry will be conducted. If the suggested conciliation fails to produce any results, a new investigation will be conducted. When both parties are employees, natural justice principles apply, and both parties are heard and given the opportunity to submit remarks in opposition to the committee’s findings. Committee has the same authority as a civil court while directing the investigation. The committee has 90 days to complete the probe.

Nature of complaint

If the Internal Committee finds that the accusation against the defendant is fallacious, or that the aggrieved person or any other person making the complaint did so knowing it was fallacious, or that the female making the complaint generated any misleading document, it can lead to firing the women. If the accusation against the defendant is ascertained, the committee will recommend to the District Officer that sexual harassment be treated as improper conduct in compliance with the provisions of the rules, or in the absence of such rules, and that the aggrieved woman should be compensated. Any person who is harmed by the Internal Committee’s guidelines or their inability to be implemented may submit an appeal with the court within 90 days following the guidelines, if the legislative conditions are followed.

The identities of the respondent, appellant and witness, as well as their addresses, cannot be revealed. However, under the terms of this Act, any victim’s justice can be shared.

Critical appraisal

The number of incidents of sexual assault in our nation is continuously rising. Whether we are male, female, or transgender, we all endure physical or mental trauma at some point in our lives. However, for different reasons, many of us do not complain and keep silent. Job security and promotion stability are the main reasons for this. When the fear of the powerful at the top is combined with a lack of organization, cases are disregarded and unresolved. As a result, the workplace becomes unclean and unpleasant. This measure appears to be fine in principle, and if enacted, it would provide women in the workplace a boost and a sense of security. A coin, however, always has two sides:

  • The Act is biased against women since it is centered on women. Because the statute makes no mention of males as injured parties, males and transgender individuals are unable to seek remedy under its provisions. Furthermore, the act’s definition of “respondent” does not specify whether or not a woman or transgender person can be a preparator. As a result, the legislation is hazy and confusing.
  • The three-month restriction period, which can be increased up to six months based on the situation, strikes me as unfair. Sexual harassment can be an occurrence that causes the aggrieved great pain and anguish, preventing the person from submitting a complaint. As a result, the time limit must be extended to allow the aggrieved to seek remedy. Furthermore, the statute contains no provisions for acting on matters retroactively.
  • The effectiveness of ICCs is questionable. Many times, IC members are unwilling to initiate an investigation of senior members of the organization, generating worries about the redressal committee’s neutrality. Furthermore, internal members must make up the majority of the committee, which might lead to a biased judgement. Frequently, committee members are unaware of the legal requirements for cross-examination. As a result, ICC must include at least one member who is unaffiliated with the firm and is well-versed in the fields of law and women’s rights.

Nevertheless, the #MeToo movement gained pace in India after actress Tanushree Dutta accused a fellow actor of inappropriate sexual behaviour, prompting additional women to speak up. Regardless of these circumstances, it is critical that democratic organs execute and enforce legislation in a strict manner in order to give a comprehensive solution to the problem of workplace sexual harassment.

Amendments in the Act

Amendments in the Posh Act 2019

In 2019, the Department of Women Development and Child Welfare issued a general notice requiring any Telangana company with ten or more employees to register its IC with the State Shebox portal by July 15, 2019. Simply so that officials may keep a closer eye on the region’s compliance status.

The Maharashtra government issued a similar notice, requesting that all businesses complete and submit a form detailing their compliance status and internal committee by July 20, 2019, to the Sub-Divisional Magistrate.

Amendment of the Sexual Harassment At Workplace Act in May 2016

Sections 6, 7 and 24 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been amended as follows: 

  1. For the words “Local Complaints Committee,” wherever they occur, the words “Local Committee” shall be substituted;
  2. For the words “Internal Complaints Committee,” wherever they occur, the words “Internal Committee” shall be substituted.”

The work of the sexual harassment committees will not be confined to handling complaints, but will also encompass prevention and a number of other measures.

As the IC’s responsibilities have grown, they must increasingly concentrate on prevention and prohibition:

  • Make sexual harassment in the workplace a no-tolerance policy.
  • Teach your workers, managers, and committee how to spot and respond to inappropriate behaviour.
  • Maintain an open-door policy! Staff should be able to ask inquiries and voice their concerns.
  • Be proactive in ensuring that IC strives to provide a safe, secure, and inviting workplace for its workers.

Judicial response

Sexual harassment allegations in the workplace not only harm an employer’s reputation, but could put them in legal trouble. Workplace sexual harassment is, without a question, one of the most delicate issues that must be treated with greatest caution and respect. Rather than performing a sham of enforcement under the POSH Act, employers must be really concerned about the wellbeing of women at work, according to the Bombay High Court in Jaya Kodate v. Rashtrasant Tukdoji Maharaj Nagpur University.

Somaya Gupta v. Jawaharlal Nehru University and Others, in this case, the Delhi High Court held that mere suspicion of prejudice is insufficient to disqualify a member from the IC. The court emphasized the importance of creating an actual likelihood of bias rather than a mere fear, noting prior Supreme Court rulings in this respect.

In Dr. T.V. Ramakrishnan v. Kannur University, the Kerala High Court overruled the IC’s order to terminate the accused, ruling that the IC had not followed the law’s protocol in conducting the inquiry. Until the investigation was concluded, the accused in this case was not provided a copy of the complaint or the IC’s conclusions.

As a result, it is clear that the courts have assumed responsibility for ensuring that this act is correctly understood and implemented in all firms, and that no unjust prejudice is maintained against both sides.

Conclusion

Indian laws have progressed from having no redress mechanism for workplace sexual harassment to having a robust process. Despite current regulations, sexual harassment at work continues to be a common problem in India. Laws alone will not solve the problem; public awareness and effective execution of these regulations are required. The harm done as a result of the state’s indifference is terrible and permanent.

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An analysis of the Zomato and Uber Eats combination in light of the regulatory violations alleged by CCI

By
Oishika Banerji
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0
Image source: https://blog.ipleaders.in/ubereaten-by-zomato-anti-competitive-nature-of-the-acquisition/

This article has been written by Shaunak_Choudhury pursuing the Diploma in M&A, Institutional Finance, and Investment Laws (PE and VC transactions) from LawSikho.

Introduction

Early 2020 the news hit the internet that Zomato, the multinational restaurant aggregator and food delivery company, has bought out UberEats, the food delivery company formerly owned by Uber India Systems Private Limited (UISPL), in an all-stock buy out. The same was also published on Zomato’s website. Most of the details of the transaction between Zomato, UISPL, and Uber Technologies Inc. (parent company of UISPL headquartered in San Francisco, USA) were unknown and only broad evaluations of the value of the transaction were reported. It was reported that the employees of Uber-Eats shall not be absorbed by Zomato after the transaction. 

Details of combination

The transaction was an asset purchase agreement dated January 21, 2020, between the parties, with Zomato not actually purchasing the whole of Uber-Eats but the parts that made the core of its business. This was made apparent after the Red Herring Prospectus for the Zomato IPO was published. The composition of the purchase did not just include particular assets of Uber Eats but also a non-compete agreement and a brand licensing agreement. The total purchase consideration was chalked down to a major ₹13,759.52 million. The bifurcation, although not very detailed, was between the three items; non-compete valued at ₹1,354.44 million, brand license of ₹1,234.37 million, and ₹11,170.71 million for the UberEats assets. In Zomato’s accounts, UberEats assets have been mentioned as “goodwill” since the individual assets were not recognized independently of each other. The only categorization that the prospectus gives is that the assets Zomato bought were the Uber Eats India Contracts and Data along with transition services. 

The consideration paid for the transaction was in fact not purely through Zomato shares. 76,376 cumulative compulsorily convertible preference shares were allotted to UISPL, they were issued at a total fair value of ₹687.39 million and share premium worth ₹13,071.98 million. ₹150,000 was given as cash consideration. The shares were then transferred to Uber B.V. and on April 6, 2021, the CCCPS were converted to 617,199,100 equity shares, which is 9.19% of the total share of equity in Zomato. 

Reason for asset purchase

The purpose with which this transaction was carried forward was, as per Zomato, was to expand the food delivery service in India by integrating the assets of Uber Eats with the existing tech platform and salesforces. Meaning the integration being primarily of the market space that Uber Eats had created along with the data from its operations to acquire more customers on its own platform. UISPL also cannot engage in the food delivery business for 3 years due to the non-compete signed in this transaction. 

As it has been previously analyzed by many, this move was to clean the marketplace to establish two clear competitors, Zomato and Swiggy. And with its IPO, Zomato is more committed to the goal of reigning supreme over Swiggy, than ever. For Uber, it is a cost-cutting strategy as Uber Eats was not performing as per what the company would have liked. It did not have the market share like Zomato and Swiggy in the food delivery service sector, and it was producing losses that the company did not wish to sustain. 

Notice from Competition Commission 

Along with details about the combination, the consideration paid, and the exact nature of shares devolved to Uber B.V., what also came to light with the prospectus was the notice sent to Zomato from the Competition Commission of India with regard to the Uber Eats purchase. In any way, in May 2020 it had been reported that the CCI was looking into the combination. The show-cause notice was sent under Regulation 48 of the CCI (General) Regulations, 2009 which is pertaining to the procedure for imposing penalties on any entity as per Chapter VI of the Competition Act, 2002. The penalty that the CCI wishes to impose upon Zomato is under Section 43A of the Act which talks about failing to give notice as per Section 6(2) of the Act, to the CCI for entering into a combination. The management of Zomato is of the firm opinion that the combination was non-notifiable and has accordingly sent a response to the CCI asking for an oral hearing as per Section 43A. The question is whether Zomato was correct in its assessment of the laws or the CCI can impose a penalty on it. This article shall not deal with the question of whether the combination causes appreciable adverse effects as that is a question of law that would require its own exhaustive analysis. 

The laws involved in the matter

Notice as per Competition Act

Section 6(2), specifies that any person wishing to enter into a “combination” shall have to give notice to the CCI about the proposal. The section is clear about the fact that the notice must be given before the combination has been executed and not after since it uses the word “proposes’ ‘. The reason it must be given before the combination has been entered into is that it will give an opportunity to the CCI to determine whether the combination is in fact in accordance with the Act or not. This assessment shall be crucial in determining the fate of the combination. This has been held in SCM Soilfert Ltd v. CCI, where a penalty of ₹2 Crores was imposed on SCM Solifert India Limited and Deepak Fertilizers and Petrochemicals Limited because they had failed to notify the CCI about the acquisition of shares in Mangalore Chemicals and Fertilizers and the Supreme Court held that an ex post facto notice would be violative of Section 6(2) since it would be a fait accompli. 

Combination regulations

The procedure and format of the notice to be sent to the CCI has been given in Regulation 5 of the CCI (Procedure in regard to the Transaction of Business relating to Combinations) Regulations, 2011. As per the Regulation, Form I in Schedule II must be filled and submitted along with the requite fees. Form II on the other hand is an optional formality that the entities may provide if they are involved in similar or identical services or processes pertaining to similar or identical or substitutable goods, and after such combination, the share of the parties in the relevant market shall be more than 15%. Form II may also be submitted if their businesses are at different levels in the processes behind a similar, identical, or substitutable good or service and after the combination, they share more than 25% of the market. If Form II has not been given by the entities and the CCI feels that the combination may have an appreciable adverse effect on the relevant market, then it may call upon them to submit the form. If required, the CCI may ask for more information from the parties if the Forms are insufficient. The fee for Form I stands at ₹15 Lakhs and for Form II it is ₹50 Lakhs, which is why perhaps many parties to combinations would not want to send Form II right away without the CCI asking for it. 

The Combination Regulation in Regulation 8 gives the power to the CCI to inquire into the combination if the parties fail to notify about it. The CCI shall also direct the parties to file Forms I and II within 30 days of the receipt of the communication. Such inquiry shall take place as per Section 20(1) of the Act and shall be guided by the CCI (General) Regulations. 

Explicit exceptions are made in the Combination Regulations in Regulation 4 which mentions that types of combinations in Schedule I need not be notified. The exception in Schedule I that would be most relevant would be point 3 where acquisitions of assets in the normal course of business or made as an investment do not lead to control over the enterprise. 

We can also look at the definition of a combination to determine whether any of these regulations would apply to Zomato. As per Section 5 of the Act, where the acquirer and the acquired have more than ₹1000 Crores worth of assets or turnover more than ₹3000 Crores, such a transaction would be considered a combination.  

Law and Zomato

Whether a combination or not

To consider whether the combination was notifiable or not, we must decide whether the arrangement was a “combination” under Section 5 of the Act in the first place. Zomato by itself crosses the mark that Section 5(1)(i)(A) sets by a large margin. Since its assets are valued at ₹69883.21 Million (₹6988.321 Crores) it comfortably crosses the ₹1000 Crore mark. Thus, the regulations pertaining to combinations shall apply to the deal. 

Compulsorily notifiable or no

As mentioned before, there are certain exceptions to the rule of notifying the CCI about a combination. Regulation 4 of the Combination Rules mention Schedule I which lays down several exceptions although the only one meant for asset acquisitions is about purchases made by the company in the regular course of business or as an investment, which this deal will clearly not qualify for. As per the Red Herring Prospectus, the deal has been stated as a method of expanding its customer base and increasing its market share (as per page 109). It is meant for integrating the assets of Uber Eats with Zomato’s existing platform and technology for generating outputs for the Food Delivery Business and has been described as an inorganic way of growing the business (as per page 272). 

Ordinary course of business or what qualifies as an investment for the party has not been defined in the Competition Act, 2002, but the same in the context of the Insolvency and Bankruptcy Code, 2016 in Anuj Jain v. Axis Bank has been determined as the common flow of transactions of the business. If the activity is indistinguishable from the rest of the transactions of the business, it would be considered as being a part of the ordinary course of the business. The combination shall certainly be considered extraordinary since Zomato’s ordinary business is relating to aggregating restaurants and food delivery. It will not count as a simple investment since the assets are being integrated into the business. Thus, the exception would not apply to the Zomato and Uber Eats deal. 

Concluding remarks

The management at Zomato should have not taken a chance with the CCI with such a prominent and widely known deal. It was only a matter of time that they would have sent a show-cause notice under Regulation 48 of the CCI (General) Regulations and initiate an inquiry as per Regulation 8 of the Combination Regulations. This is exactly what has come to be.

It is unknown whether the CCI will find that the combination shall have an adverse appreciable effect on the market, but the whole matter has just been complicated even more due to the Zomato IPO. If the combination is found to be void as per Section 6(1) of the Act, then reversing the whole deal would be quite a task. But with respect to the analysis of this article, there is a very high chance that the CCI finds that Zomato has violated the Act and may put a penalty under Section 43A. 

Whatever the conclusion of this case may be, one thing to commend is the swiftness with which the CCI has acted. The deal went down on January 21, 2020, and the notice was sent to Zomato on February 6, 2020, with news of an inquiry in May. Hopefully, the matter concludes with the CCI’s decision and not in decade-long litigation, although that is being rather optimistic. 

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Admissibility of clandestine phone recording

By
Rachit Garg
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0
Image source - https://bit.ly/2VgA0Dv

This article has been written by Aryan Lukka.

Introduction

Phone has become an integral part of one’s routine. As a consequence of COVID-19, restrictions and limitations on physical meetings have inadvertently increased the importance of distant communication, which indeed, has made smartphone technology a compulsion. However, there has been thought of caution when it comes to having conversations through any digital device. In recent times, various controversies in relation to phone tapping have raised privacy concerns with respect to telephonic conversation.

With the amendment to the Evidence Act, 1872,  in pursuance of the Information Technology Act, 2000, electronic evidence became admissible in the court of law. Section 65-B of the Act states that “…any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be also a document…”[1], which includes recorded telephonic conversations. The evidence, if secondary, has to pass through a procedural requirement of obtaining a certificate as prescribed under Section 65-B (4) of the Act, except in the cases where the evidence itself is an original document.

A series of judgements in India make recorded conversation admissible in court, of course subject to certain qualifications, even if, in certain cases, obtained illegally. As right to privacy has been regarded as a “Fundamental Right under Article 21 of the Constitution of India”[2]; recording conversation of the person so speaking, without intimation to such recording, is a direct breach of his Fundamental Right.

Fundamental rights are regarded as one of the most sacrosanct rights in law. However, in the most recent case of Deepti Kapur vs. Kunal Julka[3], private conversation between husband and wife is considered as admissible evidence in the matrimonial court. Well, the judicial journey of admissibility of recorded conversation has been self-contradictory, based on the nature of proceedings and provisions of the law in which it is sought to be introduced and the manner in which such evidence was obtained.

Development of law in this area

In India, the courts have predominantly in substance determined the legality and admissibility of evidence based on its relevance to the facts of the case. In 1968, the Supreme Court, in Yusufali Esmail Nagree vs. The State of Maharashtra[4] held that the conversation so recorded is valid and permissible under Section 8 of the Evidence Act as it is a part of res gestae and is corroborative to the evidence given by the witness.

Herein, the conversation was tape-recorded by a government officer to investigate a complaint on corruption and bribery. It was stated that the defence of self-incrimination under Article 20(3) of the Constitution would not be applicable as the person so speaking was not forced to confabulate and his act was voluntary. It further held that the recorded conversation is admissible as evidence unless it is tampered with, and recording the conversation without intimation cannot be an impediment to admissibility.

The test of relevancy concerning the admissibility of a recorded conversation is laid down in R. M. Malkani vs. State of Maharashtra (1973)[5]. The conversation so recorded is admissible in court if:

  1. It is relevant to the issues of the case;
  2. There’s voice recognition; and
  3. There’s proof of accuracy.

The Indian Evidence Act has no provision to administer illegally obtained evidence. Nevertheless, the law with respect to it has been laid down in State (NCT of Delhi) vs. Navjot Sandhu (1973)[6]. In this case, the court relied on R.M. Malkani stating “admissibility of the tape-recorded conversation illegally collected or obtained is no longer res integra”.

The state has express power under Section 5(2) of the Telegraph Act to tap phone conversations. In Anuradha Bhasin vs. UOI (2020)[7] it was held that in order to invoke powers under section 5(2) the Government must satisfy its pre-requirements, i.e.:

  1. There must be an occurrence of any public emergency or the power must be exercised for public safety
  2. Authority must be satisfied. That it is necessary and expedient to pass orders in the interest of sovereignty and integrity of India, the security of the State, friendly relations with foreign states or public order or for preventing incitement to commission of an offence and must record reasons thereupon.

The Delhi High Court recently in Deepti Kapur vs. Kunal Julka (2020)[8] passed judgement based on relevancy of the evidence. In this case of matrimonial dispute the husband tapped the wife’s telephonic conversation with her friend via CCTV camera installed in the couple’s bedroom and produced it in court as evidence to substantiate a ground for divorce.

The Court in its concluding remarks stated “ ……… Even otherwise, the conversation between the wife and her friend, which is the subject matter of recording on the CD, in which she is alleged to have spoken about the husband and his parents, would be a ‘relevant fact’ as understood in law, upon a combined reading of sections 5, 7 and 8 of the Evidence Act. To that extent therefore, the contents on the CD are relevant for purposes of the divorce proceedings.” However, the verdict has been challenged and the case is now pending before the Apex Court.

Right to privacy as a fundamental right

In People’s Union for Civil Liberties (PUCL) vs. Union of India, (1996)[9], the Apex Court has stated that if the facts of the case determine the existence of the right to privacy, it shall be adjudicated within the purview of Article 21. It further stated that ascertaining existence or infringement right to privacy is contingent on the facts of the particular case. With regards to phone tapping the court expressly stated that ‘telephonic conversations are typically of a private and intimate nature. They have become part of one’s routine. It has become so vital that increasingly individuals are carrying phones in their pockets. The right of a person to have a phone conversation privately at his home or office without any intrusion can unquestionably be proclaimed as the right to privacy. Phone tapping would therefore infringe Article 21 except if it is allowed in accordance with the law.

The Andhra Pradesh High Court in Rayala M. Bhuvaneswari vs Nagaphanender Rayala (2008)[10] specifically dealt with admissibility of recorded conversation in a matrimonial matter. In this case, the husband recorded the wife’s telephonic conversation with her friends and parents and requested the court to make it admissible as evidence. The Court expressly held that the husband has no power to record the wife’s conversation without her consent and the act of such recording is a direct breach of the right to privacy guaranteed under Article 21.

In 2017, the nine judge bench of the Supreme Court, in K.S Puttaswamy v. Union of India[11] has held the right to privacy as a fundamental right under Article 21 of the Constitution. It also further stated that the right of privacy though regarded as a fundamental right is not an absolute right and is “subject to reasonable restrictions”[12].

Conclusion

In Yusufali Esmail Nagree vs. the State of Maharashtra, R. M. Malkani vs. State of Maharashtra and State (NCT of Delhi) vs. Navjot Sandhu, the courts have made recorded phone conversations as admissible evidence. But, it is pertinent to notice that all of these cases are criminal cases whereby the phone conversation was tapped by police and such power is granted to them under Section 5(2) of the Telegraph Act.

The act of taping conversations in such cases is absolutely justified as the offence being committed is against the state and the power is exercised for the sole purpose of public safety, which in turn, is also in compliance with principles laid down in Anuradha Bhasin vs. UOI. While relying on the relevance of the evidence to the subject matter, R. M. Malkani also acknowledges invasion of privacy. It specifically mentions that an innocent citizen’s conversation will be safeguarded by law against false or manipulated intrusion by phone tapping.[13]        

However, conversation recorded clandestinely, by a private person, in the regular course of affairs must not be held admissible in court. In State of Punjab vs. Baldev Singh[14], it was held that courts mustn’t admit evidence in the cases where it is satisfied that the procurement of the evidence has been by conduct of which the prosecution should not take advantage, especially when prejudice is caused to the accused by such conduct. In the regular course, the act of recording phone conversation without intimation to such recording must be reckoned as misconduct as it directly infringes privacy.

In PUCL vs. UOI, the courts have expressly stated that admissibility depends on the facts of a particular case. Let us analyse a situation where there’s an altercation between two parties over the phone and they eventually end up in court; whereby, one of the parties to the suit has recorded the telephonic conversation and presented it to the court to be considered as evidence.

The conversation so recorded may at that particular time be influenced by various factors including unawareness or misinformation with respect to some aspect of the subject matter, temperament of the parties, situations around, etcetera. If such conversation is made admissible in the court there is a high probability that it might lead to a prevaricate conclusion.

In the United States, admissibility of illegally procured evidence is governed by the doctrine of ‘fruits of a poisoned tree’. The doctrine states that if the evidence in the matter is obtained by illegal means (“tree”) the evidence (“fruit”) itself is illegal and inadmissible. The implementation of this doctrine in India, subject to relevant exceptions, will be a progressive step in securing privacy of the citizens as well as promoting correct methods for the collection of evidence.

While it is settled that the right of privacy is a fundamental right; and that fundamental rights are part of basic structure doctrine and supersede every other right in the country, it is contended that it is not an absolute right and is subject to reasonable restrictions. The reasonable restrictions can be imposed on the right to privacy “in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.”[15] Only in these situations the right of privacy can be denied to a person.

Recording a telephonic conversation without intimating the person so speaking is an unprincipled act. It affects the inherent societal norms, personhood and welfare of the citizens. It infringes the right of privacy which is a fundamental right guaranteed under Article 21 of the Constitution.

References

[1] Inserted by the Information Technology Act, 2000 (w.e.f. 17-10-2000)

[2] K.S Puttaswamy v. Union of India, (1997) 1SCC 301

[3] CM APPL.No.1226/2019

[4] 1968 AIR 147

[5] (1973) 1 SCC 471

[6] (2005) 11 SCC 600

[7] (2020) 3 SCC 637

[8] CM APPL.No.1226/2019; (30th June 2020)

[9] (1997) 1SCC 301

[10]AIR 2008 AP 98

[11] (2017) 10 SCC 1

[12] (Article 19(2) of the Constitution of India, 1950)

[13] See paragraph 30, (1973) 1 SCC 471

[14] (1999) 6 SCC 172

[15] Ibid (xii)

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Abhyuday AgarwalCOO & CO-Founder, LawSikho