Garware Wall Ropes Ltd. v. Coastal Marine Construction and Engineering Ltd. : a course correction

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August 6, 2021

This article has been written by Debasmita Goswami pursuing a Certificate Course in Arbitration: Strategy, Procedure and Drafting from LawSikho.

Table of Contents

Introduction

It is a settled principle of law that a document that is not duly stamped and registered is not admissible as evidence in any court of law. Stamp Duty is one of the important sources of revenue generation for the Government. Therefore, it may be inferred that it was one of the sole intentions with which the legislators enacted the Indian Stamp Act of, 1899 (Stamp Act) along with an intention to give the documents a legal sanction and to make them admissible as valid evidence in the court of law. In this regard Section 35 of the Stamp Act expressly mentions that “Instruments not duly stamped are inadmissible in evidence.” Although the opening line of this Section gives a negative connotation, subsequently in its sub-section 35(a) the legislator provides a remedial measure for the documents not duly stamped and mentions that in case the parties have insufficiently stamped any document, the document shall be admissible as evidence only post the parties pay the required penalty and the stamp duty as enshrined under the Act. The Garware Wall Ropes Ltd. V. Coastal Marine Construction and Engineering Ltd(Garware Judgment) is one such case wherein the Apex Court has analyzed the issue of whether an arbitration agreement in a contract that is not duly stamped be admissible as valid evidence. Various debates and narratives have erupted post the decision of the Garware Judgment. Therefore, the author through this article has attempted to clear the air in this regard.

The intention at stake: tussle between the Stamp Act and the Arbitration Act

We all are very well aware that an Arbitration clause is covered under the garb of “Doctrine of Severability” which means that an arbitration clause has the capacity to survive even if the contract or the agreement is repudiated or is declared to be as invalid. The Garware judgment in this regard upsets by not upholding the true essence of this doctrine and contravenes with the sole intention of Section 16 (a) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) which expressly mentions that “an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.” The apex court while deciding the Garware case has relied on its erstwhile decision given in the case of SMS Tea Estates Pvt. Ltd. V. Chandmari Tea Co. Pvt. Ltd (SMS Tea Estates Judgment) wherein the Apex Court has adjudicated on similar issues as has been observed in the Garware Judgment. In the SMS Tea Estates Judgment, the Apex Court did observe that non-registration of the Sale Deed will in no way restrict the parties to invoke the arbitration clause. Further, the Apex Court through its reasoning in para 7 of the said judgment did uphold the essence of Section 16(a) of the Arbitration Act, it has further observed the exception laid down under Section 49 of the Registration Act, 1908 (Registration Act) that is, instruments that are not registered and affect the immovable property can be served as valid evidence of collateral transactions. But, to the contrary in para 18 of the said judgment, the Apex Court has observed that non-registration of the Lease Deed will lead to non-appointment of the arbitrator with regards to adjudication of the disputes arising out of the said Lease Deed. Lastly, the Apex Court, in this case, has held that non- stamping of the Lease Deed will therefore act as a hindrance and will not allow the parties to invoke the Arbitration Agreement.

The decision laid down in the SMS Tea Estates Judgment even though being rigid in nature, the Apex Court has iterated similar interpretation and analysis in the Garware Judgment too. The Court while adjudicating the Garware case opted for a narrowed pathway while interpreting the principles, clauses, and statutes. The Court in this judgment has construed the “Doctrine of Severability” in its narrowest form and has, therefore, applied this doctrine differently to the Section 35 and Section 49 of the Stamp Act and Registration Act respectively, even when it may be established that the inference drawn from these two sections intent and mean the same. The Apex Court in the Garware Judgment has further observed that going by the harmonious interpretation of the provisions enshrined under the Stamp Act and Indian Contract Act, 1872 (Contract Act) it can be inferred that, an agreement would be said to be invalid if it is not duly stamped. It further iterated whilst not upholding the true meaning and essence of the “Doctrine of Severability” and held that bifurcation of the arbitration clause as enshrined in the agreement will not be possible since the applicability of the Stamp Act to the agreement acts in its entirety.

In the Garware Judgment the Apex Court did not give permission to invoke the Arbitration agreement reason being that the arbitration agreement was enshrined in an unstamped contract and as a result the arbitrator in the instant case could not be appointed under Section 11 of the Arbitration Act, thus causing huge loss and agony to the party. The arbitrator could only be appointed only after the court impounds the document which is not stamped and the parties duly completing their compliances including due payment of the Stamp Duty. It is imperative to mention that the decision laid down in the Garware Judgment attracted huge criticism and as a ‘course correction’ the precedent laid down in the case of N.N. Global Mercantile Pvt. Ltd. V. Indo Unique Flame Ltd. (N.N. Global Mercantile Judgment) came as a huge breather rightly observing that the decision laid down in both SMS Tea Estates Judgment and Garware Judgment were not correct. The Apex Court in the N.N. Global Mercantile Judgment expressly mentioned that even if the Stamp Duty on the contract is not paid even then the arbitration clause or the arbitration agreement will survive and will not be invalidated. The Apex Court has also placed its reliance on various international cases in order to substantiate the significance of “Doctrine of Severability” and “Kompetenz – Kompetenz.” This is definitely an extremely welcoming and one of the landmark judgments in the Arbitration arena, therefore, rightly catering towards making India an arbitration-friendly locus.

Concluding remarks

Through the analysis of the above-mentioned judgments, I in no way intend to say that parties should not get their documents stamped and registered. The parties must adhere to the compliances and abide by the procedural law. What I intend to cater to is that there needs to be a balance between both the legislation that is the Stamp Act and the Arbitration Act. We needn’t brainstorm on the fact that the sole purpose behind the enactment of the Arbitration Act, which was to ensure minimal to nil judicial intervention of the courts yet again upholding the essence of Section 5 of the Arbitration Act which being a non-obstante clause. Not only this, we further need to acknowledge the true essence of the “Doctrine of Severability” as has been rightly iterated in the N.N. Global Mercantile Judgment which very clearly mentions that technical snag such as non- payment of the Stamp Duty will in no way evade the rights of the parties from invoking the Arbitration Agreement and the parties will not be devoid of their ad- interim measures. While we cannot say that there haven’t been any precedents where even when the documents not being stamped or insufficiently stamped the courts haven’t invoked the arbitration clause or the arbitration agreement, the courts have invoked the arbitration clause in such cases and have also provided interim relief to the parties.

The Bombay High Court in the case of Gautam Landscapes Pvt. Ltd. v. Shailesh Shah (Gautam Landscape Judgment) has duly given its reasoning stating that the Stamp Act which is a fiscal statute shall in no way be used as a defense mechanism by the opposite parties and due interim relief shall be granted to the Petitioner(s). We may further infer that the SMS Tea Estates Judgment and the Garware Judgment acted as a hindrance against the entire arbitration mechanism negating the main purpose of this Alternative Dispute Resolution mechanism. The N.N. Global judgment is one of its kind wherein the Apex Court has intended to uphold the principles of UNCITRAL model law and there also has been the due application of the judicial mind. In a nutshell, I conclude that the intent of the courts must be to safeguard the equitable rights of the parties and cater more towards arbitration-friendly mechanisms rather than being entangled in the vicious cycle of technical compliances.

References

https://www.scconline.com/blog/post/tag/stamp-duty/ (Last retrieved on 29th June, 2021, 10:00 P.M.)
https://www.scconline.com/blog/post/2020/11/07/stamping-of-agreements-vis-a-vis-section-9-of-the-arbitration-conciliation-act-1996/ (Last retrieved on 1st July, 2021, 1:00 A.M.)
https://www.conventuslaw.com/report/india-invoking-arbitration-agreements-in-unstamped-2/ (Last retrieved on 30th June, 2:00 A.M.).

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Poverty and COVID-19 : ground realities we fail to acknowledge

By

Rachit Garg

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August 6, 2021

0

373551-covid-19-burial — Image source - https://bit.ly/2SNerx0

This article is written by Harman Juneja, from Dr. B.R. Ambedkar National Law University, Rai, Sonepat. The article talks about the ground reality of COVID-19 and its effects on the poverty levels.

Table of Contents

Introduction

The country has been suffering from the pandemic for over a year now and after such a long time, the effect on the poverty levels of the country has been severe. Last year, the World Bank estimated in their October 2020 Global Economic Prospects report that around 88 to 115 million people would be pushed to extreme poverty but with the passage of time and the growing pandemic, this number rose to around 119 to 124 million in the January 2021 Growth Economic Prospects. The difference between poverty projected with the pandemic and poverty anticipated without the pandemic is used to determine the number of COVID-19-induced new poor. The World Bank utilizes economic prospects growth projections from January 2021 to predict poverty in the first case, and Growth Economic Prospects forecasts growth from January 2020 to predict poverty in the second case.

This Report clearly shows what a big effect COVID-19 has on the poverty levels around the world. The lesser developed nations are facing greater problems because of the lesser availability of resources. The Reports also show that the new poor will be from the countries that already have higher poverty rates. These countries are already struggling to help the poverty-stricken people and the pandemic has only added to their problems. Poverty is defined by more than just surviving on less than $1.90 a day. Poverty is more than just a lack of resources to make ends meet or pay basic expenses on time. Poverty is multifaceted and involves a lot more than just a lack of money.

Impact of COVID-19 on the sustainable development goals – a UN study

Over the last 30 years, the globe has faced numerous crises, notably the Global Financial Crisis of 2007-09. Each has had a significant impact on human progress, but overall, global development gains have increased year after year. COVID-19, with its three-pronged attack on health, education, and income, has the potential to reverse this trend. This was said by UNDP Administrator Achim Steiner in one of his speeches.

COVID-19 and Sustainable Development Goals

The coronavirus pandemic has introduced us to a new world, one in which what used to be considered normal now seems a dream. As the virus overwhelms our bodies and economies, millions of people are enduring unspeakable pain and anguish. The epidemic has caused us to reassess nearly every facet of our lives, rich or poor. The pandemic is a huge problem as well as a huge opportunity for achieving the 2030 Agenda and the Sustainable Development Goals (SDGs). The Sustainable Development Goals (SDGs) serve as a road map for humankind. They include nearly every element of human and planetary well-being and, if met, will provide everyone with a stable and affluent existence while also ensuring the planet’s health. SDG’s have been dealt a devastating blow this year, one that will have long-term consequences.
The pandemic, on the other hand, demonstrates the soundness of what is already written into the SDGs: the issues we confront cannot be addressed in isolation. While most developing nations are still in the early phases of the epidemic, their socio-economic evaluations, based on data from more than 70 countries and five regional studies, reveal that they are already grappling with its detrimental impacts. Even before the crisis, the globe was falling behind to provide universal healthcare by 2030.
For the first time in a century, the entire world is focused on a single goal: to defeat the coronavirus. It’s impossible to return to “normal” because “normal” is what got us here in the first place. The crisis has taught us how intertwined we are with one another and with the environment. COVID-19 is compelling us to reconsider our principles and establish a new sector of development that properly balances economic, social, and environmental progress, as the 2030 Agenda and SDGs foresee. Integrated solutions are the only approach to assist countries to achieve the 2030 goals by building a greener and more inclusive future.

Impacts on physical and mental health

Now, the remarkable progress made in recent years—declining infant and child mortality rates, shifting the balance on HIV/AIDS, and lowering malaria deaths—is in jeopardy, and we face potentially alarming setbacks, not only from the disease itself but also from the after-effects of the disease and vaccination campaign.
In the last two decades, the number of undernourished persons has decreased by nearly half. Latin America, Central, and East Asia, and the Caribbean have all made significant strides forward. Despite this, 821 million people were chronically malnourished in 2017. COVID-19 has revealed flaws in the world’s food supply chains. And it has driven vulnerable countries like Yemen, where 15.9 million people wake up hungry every day despite humanitarian aid, into even deeper suffering.
Lockdowns harm an estimated 1.25 billion students, according to UNESCO. According to the UNDP, 86 percent of primary school children in poor nations are illiterate. The pandemic has brought attention to the so-called “digital gap” and the right to internet access, particularly for those living in rural regions. According to the UNDP, eliminating the digital divide would lower the number of children who are unable to learn as a result of school closures by more than two-thirds. There have been at least 18 national elections and referendums postponed due to COVID- 19. This can sometimes lead to an increase in the danger of unrest. Governments are under unprecedented pressure to provide digital services and social protection, as well as to function in ways that promote social cohesion while safeguarding human rights and the rule of law, particularly in unstable circumstances.

Economical Impacts

Rapid economic growth in India and China has lifted millions of people out of poverty, yet around 736 million people still lived on less than $1.90 per day in 2015. According to Oxfam, the crisis could force half a billion people back into poverty. The foundation of the goals is Sustainable Development Goals. The crisis has made this aim more difficult to achieve, but it also provides an opportunity to transform development. About 1.6 billion people work in the informal economy, accounting for over half of the global workforce. According to the International Labour Organization, they are in urgent danger of losing their jobs. More than one out of every six young people has lost their job since the pandemic began, and those who are still working have had their hours slashed. UNDP will work with business and governmental partners to foster integrated growth that leaves no one behind as the lead on COVID-19’s socioeconomic response.

Poverty on the rise – is COVID-19 the reason or just another factor

For years, poverty has been increasing day by day with devastating effects on the lives of people and economies worldwide. Over the period, we have seen a lot of government systems but none of them can completely eradicate poverty from its roots. There are a lot of factors that affect poverty and the number of people in the category of below the poverty line, similarly, COVID-19 is another factor that contributed to the rise of poverty. As mentioned earlier, around 150 million people would be pushed to poverty by the year 2021 and let alone 75 million people from India fell into poverty last year.

Although the lockdown seems helpful in containing the spread of the virus it has a lot of serious side effects on people as well. Such stringent restrictions, however, will almost certainly harm the population’s mental health. Because of their fragility, certain subgroups of the population are especially vulnerable in this situation. Homeless people, migrant workers, asylum seekers, and refugees, and individuals with mental health problems are among them. Furthermore, some people will fall into multiple groupings, putting them at greater risk. Emerging evidence from the pandemic COVID-19 also shows several factors affecting child and young people’s mental health and well-being as well. Their concerns and worries about education, missing school, transitions, school leaving, academic stress, career, etc are troubling them in serious ways.

In this scenario, we estimate that containment measures will be effective in halting the virus’s spread over the coming months, with the virus’s main economic impact being a large, but short-term disruption of global economic activity. Once the movement of people, products, and services return to normal, a rebound is probable. This scenario is similar to the Organisation for Economic Co-operation and Development’s (OECD) projection of a 0.5 to 1.5 percentage point slowdown in global economic growth in 2020. Workers who are unable to perform their duties have a significant impact. As a result, labor productivity will fall by 1.4 percent on average in 2020. (This equates to a 1.4 percent reduction in labor supply)

The effects on GDP are felt through a temporary halt in domestic economic activity due to distribution channel interruptions, the inability to offer inputs and services due to worker quarantines, and so on. This is simulated by assuming a 1% loss in global GDP due to a fall in total factor productivity growth. International trade disruptions have caused a nearly 5% increase in the cost of conducting business, enough to cause a 1% cost of world economic growth.

The most egregious lockdown blunder was barring migrant employees from returning home when illness levels were low and any further spread could have been readily contained. First and foremost, the migration crisis tells us that the epidemiological and humanitarian effects of any big move should always be properly studied in advance.

What do the bureaucratic reports and studies miss out on

The COVID-19 pandemic has resulted in a significant loss of human life around the world, and it poses an unprecedented threat to public health, food systems, and the workplace. The pandemic’s economic and social effects are devastating: tens of millions of people are at risk of falling into extreme poverty, and the number of undernourished people, which is presently estimated to be around 690 million, might rise to 132 million by the end of the year. The governments around the world are so busy with improving their medical system and the reports and analysis are much centered around the patients suffering from COVID-19 or those who have died from it. These reports easily tend to miss out on the harsh realities and ground-level problems that are caused due to the virus. Let’s look at some of the aspects which are not being focused upon:

While feeding the globe, millions of agricultural workers – both paid and self-employed – confront high levels of working poverty, malnutrition, and bad health, as well as a lack of safety and labor protection, as well as various forms of abuse. Because of their poor and irregular salaries, as well as a lack of social support, many of them are compelled to continue working, often in hazardous situations, putting themselves and their families at risk.
Furthermore, when faced with a lack of income, individuals may turn to negative coping techniques such as asset distress sales, predatory lending, or child labor. Migrant agricultural laborers are particularly vulnerable because they confront dangers in their transportation, working, and living situations, as well as a lack of access to government-sponsored assistance.
Food security, public health, and employment and labor issues, particularly worker health and safety, all intersect during the COVID-19 crisis. The human dimension of the problem will need adherence to workplace safety and health measures, as well as providing access to decent work and the protection of labor rights in all industries. Immediate and focused action to save lives and livelihoods should include expanding social protection to encompass universal health coverage and financial support for the most vulnerable.
COVID-19 has a particularly negative impact on countries that are currently dealing with humanitarian crises or emergencies. It’s vital to respond quickly to the pandemic while also ensuring that humanitarian and rehabilitation aid reaches those who need it most.

These are some of the areas that are not being focused on because immediate medical needs are being considered while making policies. Along with these some diplomatic and political reasons also come in the way of making policies for such distressed people.

Indians and poverty during the COVID era

During the initial wave of the COVID-19 pandemic, a statewide lockdown to stop the spread of the virus robbed millions of Indians of their employment and livelihood. According to research undertaken by the Pew Research Center, a think tank located in the United States, the first wave of the coronavirus pandemic in India may have doubled poverty. According to the Report, income levels in India fell substantially for a huge portion of the population after the nationwide shutdown, based on World Bank forecasts of economic development. Last year, the pandemic wreaked havoc on practically every industry, leading to enormous employment losses in both the formal and informal sectors of the economy. Various problems have been identified by this and other reports as well which are discussed below:

Due to the pandemic, India’s GDP (gross domestic product) growth rate was one of the lowest among rising economies. Last year, India’s poor faced the brunt of the country’s economic downturn. Pew Research classified India’s income levels as follows: $2 or less per day (poor), $2.01 to $10 per day (low income), $10.01 to $20 per day (middle income), $20.01 to $50 per day (upper middle income), and $50 or more per day (high income) (high income).
According to the Report, the number of impoverished individuals in the country climbed from 6 crores to 13.4 crores, with daily incomes of less than $2 (Rs 150). As a result, India’s poor population expanded by nearly 7.5 crores last year. As the economy entered a downturn in 2020, India’s enormous middle class decreased by 3.2 crores, falling to 6.6 crores from 9.9 crores before the pandemic.
According to the Report, the number of impoverished individuals in the country climbed from 6 crores to 13.4 crores, with daily incomes of less than $2 (Rs 150). As a result, India’s poor population expanded by nearly 7.5 crores last year. As the economy entered a downturn in 2020, India’s enormous middle class decreased by 3.2 crores, falling to 6.6 crores from 9.9 crores before the pandemic.
According to new research by Nomura, the impact of the second wave on the economy would be worse than projected. Tighter regulations, according to the report’s authors, are wreaking havoc on businesses, particularly smaller ones. While experts had predicted that the second wave would only have a short-term impact on economic growth, the situation quickly shifted, with several states opting for a near-complete lockdown to prevent a rapid increase in COVID-19 cases.

In crucial urban areas such as Maharashtra and Delhi-NCR, economic activity has come to a halt. As the second wave continues unabated, many additional states have enforced localized lockdowns. The limits on travel have exacerbated losses for small firms, which are still reeling from the pandemic’s initial effects. Several industries, including aviation, tourism, retail, entertainment, and restaurants, are once again concerned about a repeat of the year 2020.

Can India overcome the economic slip faced because of the pandemic

As India works to strengthen its economy, it’s important considering the additional fundamental changes that will be required to move the country toward a more sustainable and resilient economy. Here are a few suggestions that are all related:

Through suitable legislation and commercial models, India should seize the potential to enhance support for renewable energy, particularly rooftop solar.
If the initial capital limits can be overcome, decentralized solar power can help distribute important services to rural areas. It should reconsider the possibility of imposing import tariffs on solar panels, as this would not promote domestic production but would raise the cost of solar energy.
Approximately 90% of India’s workforce is informally employed, including gig economy employees. This population is very exposed to economic shocks and requires more formal credit as well as social safety nets like insurance and pension plans. A universal basic income, which is broader than present plans that are conditional on occupation and property ownership, can assist in providing necessary resources for subsistence as well as investment in education and health care. Greater access to bank accounts for the 20% of persons who do not have one, according to 2017 data, will assist transfer this money to households more efficiently.
While fostering low-carbon development, fiscal measures can aid recovery and resilience initiatives. Among other things, the Indian government has announced an INR 1.7 trillion ($24 billion) economic boost and is considering another INR 750 billion rescue for Micro, Small, and Medium Enterprises (MSME). Though MSMEs require immediate funding to meet their payroll obligations, the government can also provide money to help them increase their industrial energy efficiency.
Consumption patterns have shifted as a result of the current crisis. People are working from home on more flexible schedules, which has changed how they use electricity. Purchases of non-essential items have been temporarily halted. All of these factors present an opportunity to apply demand-side solutions that will result in long-term behavioral changes that will lead to more sustainable growth. Encouragement of energy conservation, for example, through nudges and tariff adjustments, can reduce usage. Promoting consumption models of reuse, recycling, and repair can help to create a circular economy and reduce waste caused by present business models. Supporting work-from-home policies can help reduce traffic congestion and pollution on the roads.
Finally, keep in mind that the gig economy and e-commerce sectors, as well as emerging technologies that can support future response and resilience measures, may see increased employment in the future. While encouraging the growth of such industries, it is critical to ensure that data privacy and consumer protection are protected.

Along with all these measures India can also work with UNDP in a much effective way and make policies to fight increasing poverty. UNDP works in 170 countries and territories to eradicate poverty and decrease inequality as the UN’s primary agency for international development. They assist nations in developing policies, leadership skills, partnership ability, institutional capacity, and resilience to meet the Sustainable Development Goals. Sustainable development, democratic governance and peacebuilding, and climate and disaster resilience are the three focal areas of our work. India is already working with UNDP on various policies such as the project named GOALS (Governance and Accelerated Livelihoods Support), DISHA, etc. These policies are made with a lot of deliberations and while keeping in mind a lot of aspects so efforts should be made to strengthen these policies so that these policies can give the results anticipated.

Conclusion

COVID-19 has done a lot of harm to the already struggling world and increasing poverty is also one of them. The world has already been struggling with increasing poverty and the lockdown and shutdown of the economy have added to it. This however is not the end as it has provided us with a lot of opportunities to change the way economies and goals used to work. . Instead of looking at narrower things, the focus should be shifted on broader aspects and work should be taken up accordingly. UNDP has been working hard for helping countries with attaining sustainable development goals and every country should work with them to make a balanced and effective strategy. A lot can be done in the future to increase the poverty levels and make a better system for everyone

References

https://www.worldbank.org/en/news/press-release/2020/10/07/covid-19-to-add-as-many-as-150-million-extreme-poor-by-2021

https://www.indiatoday.in/business/story/covid-19-poverty-doubled-in-india-in-2020-will-second-wave-make-it-worse-1793826-2021-04-22

https://news.un.org/en/story/2020/12/1079152

https://www.undp.org/press-releases/covid-19-could-push-number-people-living-extreme-poverty-over-1-billion-2030-says

https://www.undp.org/sustainable-development-goals

https://www.in.undp.org/content/india/en/home/operations/projects/poverty_reduction.html#:~:text=In%20partnership%20with%20the%20Ministry,housing%20for%20the%20rural%20poor.&text=These%20choices%20are%20tailored%20to,the%20environmental%20footprint%20of%20housing.

https://blogs.worldbank.org/opendata/updated-estimates-impact-covid-19-global-poverty-looking-back-2020-and-outlook-2021

https://feature.undp.org/covid-19-and-the-sdgs/

https://sdgintegration.undp.org/accelerating-development-progressduring-covid-19

https://scroll.in/article/962992/what-effects-has-the-lockdown-had-on-the-evolution-of-covid-19-in-india

https://www.ifpri.org/blog/how-much-will-global-poverty-increase-because-covid-19

https://www.wri.org/insights/after-covid-19-5-ways-india-can-pursue-sustainable-and-resilient-recovery

https://www.cnbc.com/2021/03/19/covid-pandemic-pushes-75-million-more-people-into-poverty-in-india-study.html

https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp

https://sdgs.un.org/2030agenda

https://en.unesco.org/news/secretary-general-warns-education-catastrophe-pointing-une https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_745879/lang–en/index.htm

sco-estimate-24-million-learners-0

https://www.oxfam.org/en/press-releases/half-billion-people-could-be-pushed-poverty-coronavirus-warns-oxfam

http://www.fao.org/news/story/en/item/1313598/icode/#:~:text=The%20economic%20and%20social%20disruption,the%20end%20of%20the%20year.

https://economictimes.indiatimes.com/news/economy/indicators/second-wave-impact-nomura-revises-indias-fy22-growth-to-12-6-from-13-5/articleshow/82026343.cms

https://www.pewresearch.org/fact-tank/2021/03/18/in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-china-sees-smaller-changes/

https://www.hindustantimes.com/india-news/sitharman-unveils-1-7-lakh-crore-package-for-poor-amid-covid-19-crsis/story-mBs2BpCdlCnd6CXZeCKKvL.html

https://www.hindustantimes.com/business-news/covid-19-govt-working-on-bailout-package-of-up-to-75-000-crore-to-revive-growth/story-i2U9jULsSyUJQkSRUhvLQJ.html

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Elections during the pandemic : critical analysis

By

Rachit Garg

-

August 6, 2021

0

QT-haryana-election — Image source: https://bit.ly/30tbktG

This article is written by S A Rishikesh, from Shri Ramswaroop Memorial University, Lucknow. This article focuses on the importance of elections in a democratic setup. Should the elections be postponed in pandemic, and what steps must be ensured to conduct elections in times of a pandemic?

Table of Contents

Introduction

The coronavirus outbreak, known as SARS-CoV-2, has impacted and changed all our spheres of public and private life. It is a once in a decade challenge faced by governments all around the world, and most importantly, this threat is not likely to end soon. The democracies were no exception to the outbreak. The COVID-19 pandemic made the delivery of elections an enormous challenge worldwide.

The challenge of conducting elections in a vast country like India, which has the largest electorate in the world, adds more misery to our problems. At the best of times, the elections of India are one of the largest in the world and the most complex logistical exercise.

Elections and democracy

Regular and periodic elections are the essential feature of a democracy. This has been mentioned in Article 21(3) of the Universal Declaration of Human Rights. Elections are the symbol of democracy in the modern world. Elections are the central institution of a democratic government. In a democracy, the authority of the government derives solely from the consent of the governed. The principal mechanism for translating that consent into governmental authority is the holding of free and fair elections.

Jeane Kirkpatrick, scholar and former U.S. ambassador to the United Nations, has offered this definition – “Democratic elections are not merely symbolic…They are competitive, periodic, inclusive, definitive elections in which the chief decision-makers in a government are selected by citizens who enjoy broad freedom to criticize the government, to publish their criticism and to present alternatives.”

Importance of elections

Through elections, people choose their representatives. Certain elections ensure the citizens the opportunity to bring in a new leader or extend the current representative’s tenure by giving a mandate. Elections also stage the voice of the citizens. By voting against the current government, citizens show that ultimate power in a democracy rests with them.

Elections ensure public participation. Elections also open doors to new problems and issues raised by the public from time to time. Because the elections are conducted regularly, it acts as a system that keeps a check on the ruling government. So, elections are also a self-corrective system.

Can elections be ignored or skipped during a pandemic

Everything has pros and cons; similarly, it will not be the first when an election is skipped. It has happened before; delayed presidential elections of the Republic of Congo (2008) because of Ebola. In 2001, when the United Kingdom general elections were postponed because of the spread of foot and mouth disease. There are numerous such examples where elections have been postponed for the safety of citizens’ health.

The election is an antonym of social distancing. Elections are public events where people come together, exchange ideas, engage themselves in healthy debates about the future of the country and the direction it should head in. Elections generally involve candidates and their supporters reaching out to the masses to ask for votes. Door-to-door campaigning, pamphlets distribution, organising mass rallies, etc. are all the signs of a healthy election in a democracy, which in today’s context, will turn out very unhealthy for citizens.

The next thing of concern is the large turnout of people at the polling stations on the polling day. And it is not just people, but also the workers at those polling stations who work day and night to keep democracy moving.

The postponement of elections is done during an extremely rare situation when there is an evident threat to human life. Earthquakes, tsunamis, wildfires, epidemics, and pandemics are all examples of unexpected events over which humans have no control. Going by the textbook definition of democracy, even in emergencies, the rule of law must prevail. Rule of law says elections cannot be skipped as it is the very fundamental thing on which democracy stands.

Postponement simply means giving the previously elected representatives extra time in office, indifferent to the fact whether they are working good or bad. It means denying the public the right to shape public policy even though temporarily. A fear that can not be ignored is that the government may capitalise on the postponement and completely refrain from holding elections. If the elections are postponed and will be rearranged, then when? The government may use this time to get the public opinion in their favour.

The coronavirus has brought into the limelight what all goes into conducting an election. It is almost impossible to conduct elections during such a pandemic, or a natural disaster without any compromises. But, postponing poses a risk to democracy too. Measures were taken by authorities to prevent coronavirus from spreading during elections.

Best election practices during the pandemic

Elections around the world have demonstrated some of the best election practices that can be followed by the countries in their upcoming elections. The world has moved up from just ‘free and fair’ elections; along with it the demand of time is to conduct more accessible, inclusive, transparent, and safe elections.

Rallies are the most common and traditional form of campaigning which can turn out to be super spreader events. In this context, countries limited the number of people gathering in rallies while some completely banned political rallies and other such public gatherings, based on the situation of their respective countries. Banned rallies gave rise to a new practice: e-rallies. Various social media platforms like YouTube, Facebook, Instagram, televisions and radio channels were used by candidates for the same. Door-to-door campaigns were still allowed in most countries. No doubt that e-rallies were safest in this context. As it involved no human to human contact. A complete ban on the celebration after winning an election was also a welcoming step from most of the democracies.

Masks, sanitizers, gloves, temperature checks, social distancing and continuous sanitization are now the new normal at the polling booths. All the workers cover up themselves in full-body protective gear. The countries have come up with innovations and quick thinking in this desperate time for smooth conduction of elections. Many countries which have the option of ‘residential voting’ worked to expand their horizons, using mobile apps to post ballots. While many others focused on increasing the number of polling booths and poll timings so that the crowd could be avoided and social distancing guidelines could be compiled. Separate isolated polling booths for people showing high temperature during the polling day or asymptomatic patients were ensured so that they could exercise their right to vote.

Voter turnout trend in elections in a pandemic

What if the voters did not turn out to vote was a major question troubling political scientists and analysts. Low voter turnout is not a good sign for a democracy. But, contrary to all predictions, the voter turnout in almost all major countries increased. This came out as a surprise for many.

South Korea was the first country to go into elections in the COVID-19 pandemic. The voter turnout in South Korea was 61.2 percent – the highest voter turnout for the legislative election since 1996. South Korea has provisions for ‘presidential election’, which allows voters to cast their votes relatively easier. Apart from it, the health infrastructure of South Korea allowed the government to go forward in the election, even in the surveys before elections voters expressed their trust in the safety protocols of the government.

Situations in India were different, the health infrastructure crumbled by the pressure of the daily number of cases in the second wave. But the government went forward with the Bihar Assembly polls in 2020. Bihar has one of the lowest literacy rates in India, which means the government had to tighten its preparations so that all guidelines were followed. The Voter turnout in the Bihar elections was 57.05 percent higher than the 2015 Assembly elections when the situation was normal.

Furthermore, on analyzing the data of the International Institute for Democracy and Electoral Assistance (IDEA) in all the elections and referendums held during the COVID-19 pandemic, thirty-one countries showed an increased voter turnout. On the other hand, fifty-three countries showed a decrease in voter turnout. There was no direct connection between this decrease to the pandemic.

Risks involved in conducting elections during a pandemic

Undoubtedly, conducting elections during a pandemic involves a lot of risks. From public health to the health of officials and candidates themselves, ensuring free and fair elections in normal situations is a challenge in itself, pandemic just manifests it.

Financial risks

Elections are a costly affair. A lot of money is required for the successful conduct of an election. These costs increase more when extra personnel are in polling booths, to arrange masks, sanitizers, personal protection kits and means to reduce voters in a particular polling booth. These arrangements have increased the cost of elections in all the countries.

An election is a process where the budget can not be slashed even during a pandemic. The election is the bedrock of democracy and principles of sufficiency, transparency, sustainability, legitimacy, and contingency need to be maintained during the elections along with ensuring the health of the people involved in the process and the conduction of the process with integrity.

Health risks

The health risk was the most focused one during elections in this pandemic. Any bad decision would have turned elections into a major human-made catastrophic health disaster. To ensure the safety of the voters and the personals involved in the elections, various steps were taken by the countries across the world which were: social distancing, personal protective equipment for polling station staff, masks mandatory for voters entering polling stations, mandatory use of hand sanitisers, sanitation of electoral materials/periodic cleaning of polling station/vent polling stations, temperature checks, reduced number of people allowed in polling stations, disposable gloves mandatory for voters, extra polling station staff who will ensure compliance with health measures and social distancing, increased number of polling stations, multi-day voting or multi-day elections, dedicated polling booths for persons with respiratory symptoms.

Legal and political risks

The biggest risk in an election during the pandemic is the credibility of the election. At all costs, free and fair elections must be ensured. Voter turnout and the right to vote had to be ensured in these elections. The postponement of the election posed a threat to democracy and its principles.

Conclusion

There is no one size that fits all answer to the question of conducting elections during the pandemic. The answer will differ from country to country and from time to time. But there are some general guidelines which can be followed by all. Inter-agency coordination will play a key factor in these times:

Public health should be the topmost priority. Every possible step must be taken to ensure the safety of voters and officials involved in the entire election process.
COVID-19 appropriate behaviour must be followed during all the times in the election process, from campaigning to winning the elections.
Alternate ways of elections must be developed to mitigate the risk.
If no other option is left other than postponing the election, strict guidelines for the caretaker arrangements must be ensured.

The COVID-19 pandemic has affected the lives and wellbeing of citizens globally around the world. The decision of holding the election or postponing the election by the policymakers will further have an effect on people’s lives and the health of democracy in the future, the intensity of which will depend on the nature of measures taken up by the governments.

References

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Due diligence in healthcare sector – a M&A perspective

By

Oishika Banerji

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August 6, 2021

0

GettyImages-1189508360 — Image source: https://www.fiercepharma.com/pharma/bristol-myers-merck-amgen-j-j-are-most-likely-u-s-pharma-acquirers-moody-s

This article has been written by Milendra Jain pursuing a Diploma in Merger and Acquisitions (PE and VC transactions) from LawSikho.

Table of Contents

Introduction

Are you familiar with the maxim Qui Ignorare Non Debuit Quod Jus Alienum Emit? No? Let me enlighten you! This means “let purchaser beware, who ought not to be ignorant that he is purchasing the rights of another”. The phrase denotes the importance of Due Diligence (“DD”) as it reminds the buyer/investor to complete their DD when entering into deals.

With the Covid 19 pandemic, it is evident that the healthcare sector is growing at a great pace and the world has seen a trend to invest in and enter the healthcare sector, pharmaceuticals, and life science. As per the S&P Global Market Intelligence reports the aggregate transaction value for healthcare M&A was five times in the first quarter of 2021 compared with the year-ago period reaching up to USD 101.8 billion. Moreover, India has also seen a surge in M&A deals in the healthcare sector which is expected to reach USD 372 billion by 2022. That said, there are nuances that how Due Diligence will play out across the healthcare sector in this pandemic with unforeseen circumstances. In this article, the author is going to discuss why DD is important for a successful closure? what legal and regulatory material risks can be prevented through DD during healthcare M&A? and what is healthcare M&A.

Due diligence

Closing a deal is an easy part, but what comes first is DD as it can be the most time-consuming and tedious aspect of a transaction. DD can be referred to as an investigation of a potential investment that adds significant value to the transaction by showing red flags and ensures that the proposed transaction is safe to proceed with or not. DD enables an entity to undertake these transactions from an informed point of view. DD is used by both the buyer and seller to determine the worth of the business before the negotiations begin. Generally, it is for the buyer to make sure that it knows what it is investing in and to uncover the possible relevant elements which might be critical for the success of the M&A, and to know more about what it is buying.

Moreover, DD is getting access to data from the other side in the form of various documents, to ascertain risks that could be deal-breaking. DD can be structure into three steps as follows:

Preliminary DD
Detailed DD
Final DD

Tools for conduction DD are the documents made available in the Physical Data Rooms or Virtual Data Rooms. These data rooms consist of several important documents to be kept for review in order to communicate issues through DD Report to the acquire. However, due to the amidst pandemic, the DD process has undergone a change as it shifted the process to Virtual Data Rooms.

Statutory consideration of due diligence

No statute defines the term ‘DD’. However, there are judicial precedents that recognize the essential elements of DD as ‘duty of care, ‘exercising reasonable competence’, etc. The Hon’ble Supreme Court of India, in the case of “Chander Kanta Bansal v. Rajinder Singh Anand”, stated that:

“The word “due diligence” has not been defined in the code. According to Oxford Dictionary (Edition 2006), the word “diligence” means the careful and persistent application of effort. “Diligent” means careful and steady in application to one’s work and duties, showing care and effort. As per Black’s Law Dictionary (Eighth Edition), “diligence” means a continual effort to accomplish something, care; caution; the attention and care required from a person in a given situation. “Due diligence” means the diligence reasonably expected from, and ordinarily exercised by, a person who seeks to satisfy a legal requirement or to discharge an obligation. According to Words and Phrases by Drain-Dyspnea (Permanent Edition 13A) “due diligence”, in law, means doing everything reasonably, not everything possible. “Due diligence” means reasonable diligence; it means such diligence as a prudent man would exercise in the conduct of his own affairs.”

Further, the Security Exchange Board of India (“SEBI”) Act, 1992 provides to exercise all due diligence to prevent the commission of contravention. Also, the SEBI (Issue of Capital and Disclosure Requirement) Regulation, 2009, mandates the lead merchant banker to exercise DD, before the opening of public issue. Due diligence in healthcare deals

Conducting DD in the acquisition in a healthcare sector includes all the ordinary legal, corporate, and financial due diligence activities, but also includes unique areas of inquiry:

Covid 19 DD

With the advent of the Covid 19 pandemic, various unique areas have emerged and which is need to be investigated before entering into a deal as follows:

Production and Labour Force
Raw-Material Sourcing
Healthcare Delivery
The demand of Life Saving Drugs

2. Corporate Structure and Disclosure DD:

DD generally reviews the legal liabilities in regards to the corporate structure of the targeted company as “whether the entity is duly incorporated under the laws of the state or not?” and “whether the entity has made adequate disclosures under the securities law of the state or not?”. Moreover, it is necessary to investigate the matters of the targeted entity as all the compliance has been made under the corporate and securities law considerations, in order to prevent future legal risks.

3. Healthcare Regulatory compliances and Licensing DD:

The healthcare sector is highly regulated by various Authorities in India under different business models in the healthcare sector and it is essentially important to ensure that the targeted company has complied with all applicable laws governing sub-sectors of the healthcare sector. Furthermore, it is also essential to review that the targeted entity has obtained permissions and licenses for sector-specific considerations.

Following are some mandatory regulatory compliances in the healthcare sector:

4. Tax DD:

It is also necessary to ensure that the targeted company has complied with the provisions of the Income Tax Act, 1961 and Goods, and Service Tax, as tax DD explores any income tax liabilities and uncovers potential tax benefits which the targeting company is not availing. This reduces the risk exposures associated with the business transaction to be carried out.

5. Financial DD:

Financial DD includes reviewing financial statements and audit reports, targeted entity’s debt structures, potential liability, revenues, and value of assets, in order to assess financial risks and opportunities. Financial DD is important, as it fully investigates the financial health of the targeted entity which is an important consideration in the valuation of the targeted entity. Following are some common valuation techniques:

Discounted Cash Flow Method
Comparable Transactions Method
Economic Value-Added Approach
Net Asset Valuation
Principal Valuation Approaches – International Valuation Standards

6. Contracts DD:

Generally, it includes reviewing all material contracts and commitments of the targeted entity which could raise certain red flags, or yellow flags, or green-flag. However, the pandemic has raised more importance of the DD of the contracts as it puts more focus on the issues pertaining to force majeure, termination, and dispute resolution.

7. Litigation and Malpractices DD:

Generally, it includes reviewing litigation history and any judicial, quasi-judicial, arbitral and other administrative proceedings are pending against the targeted entity. However, malpractice will be the primary focus of any healthcare litigation due diligence.

8. Risk Management DD:

With the Covid 19 pandemic, DD is essential to ascertain specific sectors which are prone to the pandemic. In order to mitigate uncertainty and risks, Investors should be mindful regarding risk transfer mechanisms through Representation and Warranty Insurance and the policies governing such mechanisms.

9. Labour and Employment DD:

The healthcare sector can be an employee-heavy sector, therefore it is essential to investigate various documents and agreements with employees and to evaluate compliance requirements with the various labor laws.

10. Solvency DD:

Reviewing the solvency of the targeted entity is necessary as it identifies potential liabilities of the targeted entity. It will also be necessary to assess the impact of the pandemic on the target’s financial status and determine any solvency risk.

11. Intellectual Property (“IP”) DD:

Healthcare IP assets can come in form of trade secrets, copyright, trademarks, and patents. Healthcare companies, especially pharmaceutical and biotech companies, often deal with various forms of intellectual property, including patents. So, it is important to review the targeted entity’s rights and obligations attached to certain IPs in order to evaluate the value of such IPs.

12. Anti-Trust DD:

It is important to ensure compliance with the Competition law during DD, as it will review that the transaction undertaken would have adverse appreciable effect or abuse of dominant position and to seek approval from Competition Commission of India if the transaction qualifies as a combination.

By conducting DD on the target company, the buyer company gets a detailed understanding of the target companies business module, and thus the buyer company is better able to ascertain a fair purchase price.

Due diligence report

The final product of DD is a thorough report that summarizes the process and supplements of the decision-making. The most important part of the report of the DD is the ‘Executive Summary’, to be delivered to the executives of the company. However, the DD report stating summary/recommendation is translated into transactional documents in the following ways:

Condition Precedent
Condition Subsequent
Warranties
Indemnity

What is Healthcare M&A?

The object and definition of Healthcare vary from person to person. However, when Healthcare M&A is referred to as a transaction in the healthcare industry as it is about a sale or purchase or an investment in a business in various categories under the healthcare sector as recently AstraZeneca acquired a drug developer Alexion for $39 billion. However, there are various sub-sectors in the healthcare industry in which various deals could take place as follows:

Pharmaceuticals
Healthcare Services
Biopharmaceutical
Healthcare Technology
Medical Devices
Telemedicine

Conclusion

Despite the Covid-19 pandemic, India has seen significant growth in the healthcare sector and is expecting to witness various M&A coming into the space. Having said that, in a highly regulated market, healthcare deals require deep-dive investigation for a successful closure. Besides, it helps to avoid several material risks. After all, the information that is discovered during diligence is critical to a deal’s success. Healthcare companies require significant investment to bring products to the market in such cases DD provides a high level of security in the sector. A DD investigation will depend largely on the specific requirements of the buyer and the transaction in order to assess the value of the deal. Lastly, it is the lack of DD, which destroys the deals.

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A guide to paying foreign freelancers from India

By

Rachit Garg

-

August 6, 2021

0

This article is written by Gursimran Kaur Bakshi, from the National University of Study and Research in Law, Ranchi. This article explains how foreign freelancers can be paid from India.

Table of Contents

Introduction

In the world of employee versus entrepreneur, freelancing is the new light of the day.

Merriam Webster defines a freelancer as someone who pursues a profession without a long-term commitment to any one employer; someone who works independently; or is not affiliated with any organisation. In simple terms, it means someone who is self-employed. But unfortunately, freelancers are often referred to as jack of all trades which is not true.

Freelancing is a part of gig employment that refers to a work arrangement where persons are hired on a temporary basis by companies and other organisations for short-term commitments. The person offers his/her services to a potential employer in return for monetary consideration. However, the person engaged in offering his freelance work is not considered a regular employer but a disguised employee.

Freelancing requires a varied set of skills and sometimes, the freelancer is supposed to acquire both a general and specialised set of skills. That is why venturing into freelancing is a tough decision to make. Because it may not offer the stability that a 9 to 5 job does. Still, in recent years, the freelancing market has grown drastically.

A lot of people may think that freelancing is a new profession. It is definitely not. Freelancing is said to have originated in Italy where medieval mercenary knights, with no allegiance to any side of the party, offered their combat lances to states or rulers in return for monetary consideration. The leader of the group who offered their freelance work was known as Condottiere. However, it was acknowledged properly after Sir Walter Scott published his novel ‘Ivanhoe’ in 1819. The novel has certain references to freelancing as a profession.

Currently, the freelancing job market in India has led to an increase in hiring to 22% from 2019 to 2021. The number of freelancing job postings during the pandemic exceeded the number of people who were applying for the concerned job. It is currently the new black in the market. It even pays you well.

Let’s understand what led to this growth and how foreign individual freelancers can receive an advantage from this in India.

All about freelancing in India

Freelancing in India during the COVID-19 pandemic

In the times when the COVID-19 pandemic took a serious toll on economies resulting in high unemployment rates, the demand for freelancing has burgeoned.

The International Labour Organisation (‘ILO’) estimates that more than 114 million people lost their jobs as a result of the pandemic and lockdowns in 2020. There is also a paradigm shift visible in the business market from the traditional in-office work culture to the work from home culture (‘WFH’) because of the lockdowns, in addition to the growing need for technological development and digitisation.

These factors have led to the significant growth of freelancing in India, especially for the age group of 20-29 years old. This is because of the fact that freelancing during the pandemic in the WFH culture allowed productivity while being in a comfortable atmosphere. It also gave a sense of ownership and creative freedom.

According to ILO estimates, WFH has allowed the workers to manage their work-life balance and that is why around 80 percent of the people in that survey are willing to give up their full-time job to continue working as freelancers. Out of this, 70 percent will choose self-employment opportunities to gain a better lifestyle.

Growth of ‘work from home’ culture during the COVID-19 pandemic in India

The WFH culture was not easy to adapt to, especially in growing economies like India, where there is a disparity in the distribution of socioeconomic resources. It means that not everyone has access to the internet. Despite these issues, India turned out to be the second-fastest-growing market for freelancers as per a report ‘Freelancing in 2020: An Abundance of Opportunities’ published by Payoneer. The freelancing market will touch 25 USD Billion by 2025.

Since many of the workplaces in India have now accommodated the WFH culture, there has been a reduction in the per-person cost of maintenance and incidental costs, thus, saving the overall expenditure of a workplace. This arrangement paved a way for other types of gig employment as well.

Freelancing challenges in India

In India, freelancing has failed to receive the due recognition it deserves. For instance, imagine that your child will be graduating from college in a month and he informs you that he would be pursuing freelancing in writing.

Essentially, the reaction of the typical household for a career option, except for those traditional ones, could be summarised with the famous dialogue from 3 Idiots: ‘Abba nahi manenge (Father will not agree)’.

This is why freelancing is stigmatised because it is not like a regular job and the person will not get the designation of a regular employee. But now is the time we get over these stereotypical notions of what, how and why you are supposed to do something. It’s time to really introspect what you really want to do and freelancing is a great choice to consider.

The benefit of freelancing is not limited to just Indians. It also includes foreign nationals who are able to offer their requisite skills for a specific work. But engaging a foreign national as a freelancer means that both parties may face some extra set of difficulties as compared to Indian nationals. This is due to reasons like the fact that the foreign nationals are not aware of the basic nitty-gritty of laws, the industry standard for payment, or simply that they are unable to find a freelancing job.

If you are a foreign national who is just a beginner in freelancing or that you have started and you want to explore the Indian freelancing market, this article is your bible. This article is to help you get through this adventure, to understand what to expect or not expect from a place of hiring, and what is the common industry practice in paying for the purpose of payment.

All about foreign nationals engaged in freelancing in India

Who is a foreign freelancer

A foreign freelancer is an individual, who is not a national of India and/or is not currently residing in India. However, he/she may be working from India or from any other country by working from home in India. Hence, the place of business remains in India.

Things that foreign freelancers should remember before engaging in freelancing in India

Since the foreign freelancer is not an Indian national, it is important that the online profile of the person is vetted (verified). This is the job of the employer to verify the foreign status. For instance, in the United States, a foreign individual freelancer has to submit IRS Form W-8BEN to verify their foreign status. In India, Form 16 allows the employer to get all the information of the individual for a particular financial year.
Before finalising a freelancing project, ensure that you take a trial project for a few days to understand the work before venturing into it.
Check the local laws of the employer’s country and check the corresponding laws of your country and ensure that there is no conflict between the two.
Written communications are essential especially if you are working from a different jurisdiction.

Freelancing jobs for foreign nationals in India

Recruiting foreign freelancers from all around the world helps in increasing the pool of qualified candidates. At the same time, it brings with it issues like managing the working irrespective of the time zone restrictions, language barriers, different industry practices and other issues that the WFH culture may bring. Despite this, there is tremendous availability of freelancing jobs as a content writer, graphics designer, web developer, digital marketing, and software analyst to name a few.

About the freelancing contract

A letter of agreement is a contract between the freelancer and the employer. The employer can be a business or a company. A letter of agreement is the most crucial component in freelancing as it lays down the responsibility and liability of the freelancer and the employer.

The contract must have clauses like:

Scope of the agreement;
Information on the parties to the contract;
Terms and conditions of engagement;
Payment clause;
Termination clause;
Confidentiality clause; and
Dispute resolution clause.

This article has further dealt with the essentials of a contract under Indian law.

How to find a freelancing job in India

Most freelancing jobs take place online. But there are too many websites that offer you freelancing which also means that there is a likelihood of getting confused. It is important to do background research on some of the known freelancing websites before engaging with them.

The pointers to remember while doing background research on different freelancing platforms are:

About the Employer: Whether that platform is a company incorporated in India? When was that company incorporated? How is the company performing currently?
Read the user agreement of the company: How does it define employer and employee, does the meaning of the term employee include the designation of a freelancer? If yes, does it include it as a regular employee who is eligible to get a pay rise and other employment benefits (if applicable)? Or does it use some other term such as disguised employee?
What work does it offer: What is the nature of the work the platform offers? Do they offer flexibility in choosing the nature of work? Is the work temporary, contractual, full-time or half-time?
Work hours: How many hours do you have to invest in that job? Does it offer flexibility in terms of sending the work? Is the payment dependent on work done on an hourly basis or monthly basis?
What platform do they use to pay their clients: It is very important to look up this part as well because, in India, platforms like GooglePay and Paytm are used to transfer money. However, since you are a foreign national, please check which platform is often used for online payment outside India. Platforms like Paypal can be used for international transactions.

The section dealing with the payment platforms is discussed further in this article.

Indian laws to be considered by the foreign freelancers

The Indian Contract Act, 1872

The parties are supposed to abide by the Indian Contract Act, 1872. A valid contract is an agreement entered by both the parties above the age of 18 years old by free consent for a lawful object and a lawful consideration under Section 10 of the Act. Both the parties are required to refer to some of the most of the important Sections of the Act which are:

That the parties must be major which is 18 years old or above as per the Indian Majority Act, 1875 and they must not be of unsound mind. What amounts to the soundness of mind has been defined under Section 12 of the Act.
That the terms and conditions of the agreement must be clear, the acceptance must be absolute and should be made in free consent without any fraud, coercion, misrepresentation, or undue influence as per Section 14.
That the parties must not be mistaken on an essential fact of the agreement the mistake of which will make the contract void under Section 20.
That the agreement between the parties should not violate any law of the country including the public policy under Section 23.

Further, the agreement must have some of the basic information, like the definition of both the parties, what is the nature of the work they are engaging in, payment and the method of payment, termination and the terms of termination as negotiated by both the parties, and what the dispute settlement mechanism is when the contractual obligations are breached by any of the parties or both the parties.

The parties can decide whether they want to approach the local courts to seek remedy where the contract has been entered or whether they want to adopt other speedy dispute settlement methods like arbitration.

Intellectual property rights

As a freelancer, you should know the basic intellectual property rights laws of a country before signing a contract.

Copyright

In India, the Copyright Act, 1957 protects original literary, dramatic, musical, artistic works, cinematograph films and sound recordings under Section 13.

Patent

The Patents Act, 1970 protects a new invention that involves an inventive step and is capable of industrial application. The invention must have novelty and utility to be protected.

Trademark

The Trade Marks Act, 1999 protects a mark capable of being represented geographically and which is capable of distinguishing the goods or services including the shape of goods, their packaging and combination of colours. A mark may include a device, brand, heading, label, ticket, name, signature, letter, shape of goods, numerals to name a few.

The Arbitration and Conciliation Act, 1996

If the parties are opting for arbitration, then this will be termed as international commercial arbitration since one of the parties is a foreign national under Section 2(f) of the Act. The parties can either include a clause of arbitration in the contract or can enter into a separate arbitration agreement for further disputes.

Usually, if parties have decided the manner in which they will resolve their disputes, in those cases they include the arbitration clause as a part of the main agreement.

Further, the arbitration clause sustains through the doctrine of separability in cases where one of the parties challenges the invalidity of the contract. Separability is essential in international arbitration as it allows parties to choose a different national law other than the law which governs the main contract.

Important sections to be remembered by both parties are:

That the arbitration agreement must be in writing and signed by both parties as per Section 7 of the Act.
That the parties are free to choose the place of arbitration as Section 20.
That the parties can decide the law that binds the substance of the dispute under Section 28.

List of platforms hiring freelancers and their details

Truelancer

Truelancer is one of the widely used platforms in India. It can be used both by the freelancer and the client. It regularly updates opportunities through posts that specify the details of the client, his place of business, requirements, and the budget.

The budget is both mentioned in Indian currency which is INR and in dollars. You have to make an account first and then choose the most suitable choice of freelancing work that you want to pursue. Further, do a bit of background research on the client. There is an option to send a proposal to the client. This way the platform also allows you to interact with the client.

LinkedIn

LinkedIn is a professional platform that allows you to connect with people in your professional circle. First, make a simple profile of yourself by adding various details such as your name, qualifications, and what you are looking for.

Using filters, you can first connect with the people you might know that can help you with finding freelancing jobs. Another option is to make a profile, go to the option ‘Job’ at the upper right of the screen and fill in your details.

The filters easily allow you to select a location which you have to select as India and then fill in other details such as whether you like to freelance as a content writer, content creator, and graphic designer to name a few; what is your experience, which company would you like to work with, and what is your job type such as is it temporary, contractual, full-time, and part-time.

Once you fill in all the details, the filtered options appear. Select a particular option and you will find a side-screen appearing, which has all the details about the workplace such as what are they hiring for, what will be the expected pay and other details of the workplace and what all they are expecting from the freelancer.

Upwork

Upwork is probably one of the best-known platforms for freelancing. You can make an account by simply adding your basic details like name, email id, and which country you want to work as a freelancer. It is suggested that before you proceed, read the User Agreement and the terms of service according to your requirement.

These agreements mention clearly that Upwork is only a site hosting various contents and opportunities, which allows both the freelancer and the client to select each other as per their requirements. It’s basically an intermediary. In case the parties (freelancer and the client) enter into a service contract, the terms of the contract should not bind Upwork as another party or a third party in any manner.

FreelanceINDIA

Freelance INDIA is a platform headed by Mr. L.N. Agarwal of Alumni of BITS Pilani. It allows both the employer and the freelancer to register their account and find their requirements. On the right-hand side of its page, you have the link to the option of freelancing. You will have to register your account by filling in your details such as your name, address, email, and other things. It is suggested that you read the terms of service before registering an account.

WorknHire

WorknHire is a product of WorknHire Technologies Pvt. Ltd. which has been co-founded by Kumar Mukul and Manish Prakash who are both graduates of IIT Kharagpur and IIT Guwahati. It has a separate bar that allows you to find freelancing jobs as per your interests, the time you can invest, and in accordance with the amount of money you are expecting.

Fiverr

Fiverr is similar to LinkedIn except that it is more specific and is meant for freelancers. Fiverr allows freelancers to promote their services to prospective clients. This is a greater opportunity to sell your work to a global audience.

You have to create your profile by adding basic details like your name, profile picture, your professional qualification, your interests which must be specific in terms of attracting potential clients and then post a request to find clients. Fiverr is unlike any other platform as it offers freelancing in almost everything from translation and graphic design to astrology.

Guru

Guru is an Indian freelancing website that offers freelancers an opportunity to find a job based on their skills or post a job based on their requirements. However, Guru charges nominal fees from the freelancers on every invoice they are paid. It offers benefits based on membership.

Rockerstop

Rockerstop allows freelancers to register their requests as individuals or through their business and it does not charge any money for the same. It is quite popular amongst Indian students.

Fixnhour

Fixnhour is a similar kind of platform to Rockerstop. The only difference is that Fixnhour ensures that the payment of the freelancer from the client or the recruiter is done on time. It has one of the most user-friendly websites. It allows you to chat with the freelancer or the one hiring a freelancer. It also allows the freelancer to check the reputation of the client and has a payment protection system.

How do foreign freelancers get paid from India?

Since foreign freelancers would be based outside India, the uncertainty surrounding the payment may make one anxious. Reasons that could be attributed to this are the difference in jurisdictions in terms of laws and remote-based work to name a few.

Other than this, the payment may be intentionally or unintentionally delayed from the side of the employer. According to a survey by Paypal, payment remains one of the consistent issues in freelancing.

How are international payments made in India

In India, making international payments is usually done through wire transfer. Making payments in India is simple and usually requires certain documents like the account number, IFSC code, Permanent Account Number (‘PAN’) card, and Unified Payment Interface (‘UPI’) ID. However, UPI can soon become global. It means that international transactions can soon be through this method. If you are a business owner looking at hiring local talents be it as a regular or as a freelance employee, check out Remote’s guide to legally paying remote workers in India.

Further, the payment can be done through Credit Card, Debit Card and through other online apps such as Google pay and Paytm provided that the user is verified through Know Your Customer (‘KYC’) and has an account connected to these apps.

The law regulating international transactions done from India

The Foreign Exchange Management Act, 1999 (‘FEMA’) is the main legislation that allows international transactions through two methods:

Wire payment; and
Demand draft.

The process of the payment is referred to as a ‘current account transaction’ which includes payment due in connection with any current business and services as per Section 2(j)(i). The Reserve Bank of India (‘RBI’) through the Liberalised Remittance Scheme (‘LRS’) provides a method for Indians to make outward remittance (international transaction). All Indians can make outward remittances up to USD 2,50,000 per financial year starting from April to May under the current account transaction. To avail of this, the Indian residents must have a PAN.

Tax collected at source

As per the RBI’s LRS scheme and the changes made under the Finance Act, 2017, a new provision has been added to deduce a tax collected at source (‘TCS’) at the rate of 5 percent above Rs. 7 Lacs.

How international transactions can be done from India

For international payments, there are few things that are required:

Invoice raised by the freelancer and acknowledged by the employer.
Details of the receiver are required such as name, address, and details of the bank such as International Bank Account Number (‘IBAN’) and the name of the bank.
An IBAN is a standard international numbering system to identify overseas banks. It consists of a two-letter country code, followed by two check digits, and up to thirty-five alphanumeric characteristics.
Other than IBAN, there is also something known as the Society for Worldwide Interbank Financial Telecommunication (‘SWIFT’) code. SWIFT code is also interchangeably used as Bank Identifier Code (‘BIC’). This is a code used to identify a specific bank in an international transaction.

Platforms through which international transactions can be done

Below are some of the platforms that allows one to carry out international transactions.

Paypal

This is frequently used for wire payments. You have to make an account on Paypal. It allows you to either set up an individual account or a business account. If you are a freelancer, you will need to set up a business account.

Xoom is a service of Paypal, however, the user protection available to the latter is not the same for the former. Xoom can be used for receiving the money to India but not vice-versa. Its User Service Agreement states that the parties can only make payment when they are 18 years old or above and must be eligible to form a contract.

Also, if an independent person is hiring a foreign freelancer, they can opt for an individual type of account and can enable their debit/credit card to make international transactions.

Steps for setting up a business account are:

Select business account from the option.
Select any one option from ‘looking to receive payments from freelance platforms’, ‘via email, links, or invoices’ or ‘on websites selling goods and services.
Specify your annual income in USD.
Enter your email id, set the password, and then from the option of describing your business select individual account type and you need to add your PAN card details.
Non-resident Indians generating income from taxable services in India should apply under Form 49AA for the allotment of the e-PAN card number. To apply for this, the email-id of the person should be available.
It is advisable to apply for an e-PAN card as soon as possible as it eases the authenticity of payments made between the parties and also allows the government to make a record of the transactions to pay taxes.
According to the checklist from the tax department, foreign nationals applying for a PAN card must have their residential address, letter of appointment/contract, details of the employer including his PAN card number, proof of identity such as passport, and passport size photographs to name a few.

Payoneer

This allows you to make international business payments similar to that of Paypal.

PingPongX Payments

PingPong payment specialises in cross border payments. It allows the employer to make international payments at a transaction rate of only one percent. The company has a global presence such as in countries like Hong Kong, the US, and India.

Wise

This platform allows you to easily receive or send money from one country to another. It provides country-based requirements that are required as well to make an account.

Western Union

Western Union is quite popular in India for wire transfers. Its payment interface is simple and allows the user to enter the amount they want to send and simultaneously shows them the exchange rate of the currency.

For instance, if the amount from the client in India to the freelancer in the United States has to be sent, and the amount is 2,00,000 INR, then the payment interface will ask you to fill in the bank account details of your receiver. Once done, the interface will also show you the exchange rate which is 1.00 INR = 0.0133 USD. The transfer can be done without the need to pay any extra transaction fees.

Skrill

Skrill is another amazing payment platform that does not charge transfer fees and allows the sender to send payment through credit or debit card to the receiver in more than 120 countries from India. The basic requirement is to make an account and fill in the bank details of the sender and the receiver. It is also advisable to read the money transfer terms of skrill.

Other issues to be considered by foreign freelancers

Intellectual property rights will not be applicable to them

Content making is one of the most common freelancing professions. However, there are genuine issues that arise out of that profession. The first issue could be that there are institutions and independent publication houses/authors that may engage ghostwriters. Ghostwriters are those persons who write on behalf of the actual author but the publication is not done in their name.

This means that they will not be recognised as the original writer of the work and they cannot claim any intellectual property rights over the literary work. There is another scenario to be considered here. In most cases of content writing, the copyright exists with the client only. However, there is a difference in both two cases.

One is a case where you are writing a whole publication that will be published in the name of another author. Another is a situation where you are creating content for your client. The former situation might be conflicting from the viewpoint of ethics and morality.

The Copyright Act, 1957, clearly defines copyright in literary work subsisting with the original author who has first published the work as per Section 13. This means that the original author has the right to reproduce the work, to make any cinematograph film or sound recording, for the purpose of translation, and other things as specified under Section 14.

Benefits given to employees are not available to the freelancers

In a usual workplace, an employee received a lot of benefits including a bonus on salary. These benefits include insurance, maternity and paternity leaves, health services. These benefits are not extended to freelancers because they are not considered employees.

Business insurance is not applicable to foreign freelancers

Nowadays, since freelancing has been recognized in many parts of the world, there are companies in the financial market that may offer stand-alone policies for freelancers to indemnify the loss they may suffer in discontinuation of the work. This should really be considered by foreign and Indian freelancers who depend solely on freelancing. It is pertinent to understand that even though freelancing is typically common in other parts of the world, it is still developing in India. Thus, concerns over its legitimacy and issues like irregular payment may arise.

Conclusion

Freelancing allows self-control, flexibility, and diversity which is mostly not available for traditional employer-employee relationships. While it is recommended for those who want to keep on experimenting with their career options by venturing into different fields, it may not offer long-term financial stability and security that one looks forward to for living a better life.

The freelancing market in India is currently experiencing drastic changes as the work from home culture is growing. This allows the marketplace to not just accept people across the world who may be perfect for the job, it also indicates the increase in the level of competition that is now available in these jobs. While India is certainly a potential marketplace to look forward to experiencing freelancing, one needs to keep basic things as mentioned in the article above, in India, because the activity is taking place online and there could be issues of accountability.

References

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Confidentiality risks associated with social media due diligence during an M&A transaction

By

Oishika Banerji

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August 6, 2021

0

Mnarfxl — Image source: https://rb.gy/fzagp2

This article has been written by Riya Dubey pursuing a Diploma in Merger and Acquisitions (PE and VC transactions) from LawSikho.

Table of Contents

Introduction

Mostly high value is decided by the buyer and seller in M&A transactions for maintaining the confidentiality of the deal. The buyer’s concern is if any information will be leaked it will result in competition for the deal and the seller’s concern is that leak of any confidential information will result in the widespread knowledge of an impending M&A deal. Another concern of the seller is that if the pending M&A deal comes into the knowledge of the public and ultimately falls through, the seller will be left with no option but will be less leveraged for all the other buyers and there are chances that it could be labeled as “damaged goods”.

In this article we are going to discuss “What’s the role of social media in due diligence, is there any confidentiality risk associated with social media due diligence during an M&A transaction, what are the consequences of breaching the confidentiality agreement, what are the consequences of breaching the confidentiality agreement, and what are the takeaways?”

What’s the role of social media in due diligence?

Often we see that we hesitate in trying new products and services and stick to the brands we are using. The same is with potential new business partners who maybe are not able to recognize the value of the merger or acquisition. In such conditions, we can make good use of social media for giving reassurance to its customers and potential business partners of the advantages of reorganization through merger or acquisition.
Many times companies fail to notice the pitfalls during the merger or acquisition. And this decreases the chance of getting success. Social media can be used for communication and for creating synergy across the reorganized companies. For example merger between Schneider Electric and Invensys, post-merger the competition was sponsored by Invensys and Schneider Electric amongst its employees for commenting and posting pictures which shows what “Better Together” meant for the two companies. And the corresponding amount was donated for charity by Schneider Electric for every post.

Is there any confidentiality risk associated with social media due diligence during an M&A transaction?

During the initial stage of an M&A, transaction parties limit the information to very few people i.e. to the key members from the founder’s or the seller’s side and the due diligence team from the investor or buyer side. Therefore, the confidentiality clause is made binding in a term sheet. Often, a confidentiality agreement is the first agreement in which the parties enter. It assures that the information which has been exchanged between the parties will not be disclosed and will be kept confidential. It even prevents the buyer from hiring the key employees and managers of the seller.

Confidentiality plays a very crucial role in buying or selling a business. And if any confidential information gets leaked it can derail the transaction and have a negative impact on the ongoing business operations. This looks efficient and beneficial from the investor’s or buyer’s perspective but there is a certain risk that is associated with this kind of approach of doing due diligence. For example, there have been cases in the past where employees from the seller end notice an increase in the amount of activity on the LinkedIn account from the investor’s or buyer’s end. And this can put the pending M&A transaction from the seller’s end at risk. This can have an impact on the seller’s management team and can even distract employees of the seller.

Other than the above-mentioned issue there are few more direct or indirect ways by which social media due diligence can leave shreds of evidence behind which can leverage the M&A transaction for both the buyer and seller.

We can take the example of LinkedIn. It has an option of view box known as “People also viewed” through this option we can see what other profiles have recently viewed. This feature can be used to infer useful information without many technicalities. The seller can even use this to ascertain whether the M&A team from the buyer side, that is viewing its employee’s profile, is also viewing the employees of prospective targets or not.

The same can be beneficial for the buyer or investor too. The buyer can even perform similar due diligence on the seller. Thus, the seller should behave more conservatively while negotiating. In both ways, this is going to be beneficial for the seller since they will be able to notice the efforts being made by the buyers in social media due diligence. The buyer will get to know whether the seller is in contact with other potential buyers. Even third parties can know about the M&A transaction by monitoring this data.

It is not only that certain sites provide the background of the target companies employees but there are web analytics tools that can be used by the buyer and even this technique can even give the flag to the employees of the target company about the transaction which maybe is going to happen. And can have an impact on the seller’s employees.

What are the consequences of breaching the confidentiality agreement?

In an M&A deal, it is generally prohibited to disclose or use any confidential information of the parties involved. The agreement usually puts the risk of the breach on each and every party involved in the transaction if the breach of agreement occurs by any “officer, director, employee or agent” of the parties. Thus, any confidential information if leaked outside the company results in a breach of an agreement. But the leak of confidential information doesn’t need to be outside the company, which can very easily result from disclosing the information to those who were involved in the transaction. Elements that are mostly covered by the confidentiality clause are as follows:

Identities of the parties;
Definition of what will be the confidential information;
The timeframe should be defined clearly;
Legal implication for disclosing;
The return or destroying of the confidential information;
Jurisdiction;
Remedies; and
Attorney’s fee.

In case of a breach, the aggrieved party can get remedies as per the agreement they have entered into like, the court can ask the party who breached the agreement to award the specific amount if (i.e. liquidated amount) if they have mentioned in the agreement, or, the court can ascertain the amount of loss the aggrieved party has suffered and ask the breaching party to pay the amount, or the court the ask the breaching party to pay the amount of profit that they have made by breaching the agreement (disgorgement) or even criminal action can be taken in certain cases like if it has affected the company severely or if there is some theft of intellectual property, etc.

Takeaways

Both the buyer and seller can agree that they will not perform social media due diligence on each other’s employees. They can ask for all the essential information from each other instead of doing social media due diligence or they can collect it from other public sources; or

We can ask the seller to allow social media due diligence to the buyer but in a restricted manner like putting a condition that it should not result in “tipping off” to the seller’s employees. The buyer should be allowed to do due diligence on employees but by keeping themselves anonymous.

“The Buyer shall not use any internet or social networking sites for ascertaining any information regarding the seller or its employees if that can result in informing or alerting any employee or consultant of the seller that both the buyer and seller are having a discussion regarding the purpose.”

2. If the parties are involved in the agreement that the buyer’s careless due diligence should not be done in such a way that creates the risk of a breach to the seller then the confidentiality agreement should be drafted in such a way that it reflects this risk.

“The sole responsibility of the breach of confidentiality provisions shall be of the Buyer if breach results from any direct or indirect action of the Buyer that violates the provision of the agreement which violates using the Internet, including social networking sites without limitation, for gathering information of the seller or its employees.”

Conclusion

The internet has made our lives very easy but social media due diligence has certain risks associated with the M&A transaction. The use of the internet and social media acts as a backdrop in maintaining the confidentiality of transactions and can have a negative impact on the ongoing M&A transaction since it leaves behind certain shreds of evidence that can be very easily used by the other party and even by the third parties to draw some inferences. Thus, the parties should address all the risks that can be associated with the transaction and enter into a proper confidentiality agreement to mitigate the risk associated with social media due diligence during an M&A transaction.

References

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

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

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Murder charges on the Election Commissioner on COVID -19 grounds : a look into the scenario

By

Sneha Mahawar

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August 6, 2021

0

This article is written by Raslin Saluja, from KIIT School of Law, Bhubaneswar. This is an exhaustive article that throws light on the judgment in the case of the Chief Election Commissioner of India v. M.R Vijayabhaskar & Ors.

Table of Contents

Introduction

Amidst the rising cases of COVID-19, the Madras High Court observed that the Election Commission (EC) was not strict enough in ensuring the compliance of the safety protocols and condemned their actions for allowing political parties to carry on with rallies. Concerned regarding the subject of public health, the Division Bench made certain remarks which were then widely circulated in the electronic media. Grieved by the stinging remarks, the EC went on to plead before the Supreme Court which has been discussed in detail below.

Factual background

On February 26th, 2021, the Election Commission (EC) announced general elections to the Legislative Assemblies of Tamil Nadu, Kerala, West Bengal, Assam, and Puducherry. As for the State of Tamil Nadu, the polling was scheduled for 6th April 2021, and the counting of votes on 2nd May 2021. During the preparation of the polls, the EC had issued a letter dated 12 March 2021 addressed to the presidents and general secretaries of all National and State political parties emphasizing the observance of instructions related to COVID-19 protocol during the elections.

Another letter was issued on 9th April 2021 during the polling phase regarding the disobedience to the norms of social distancing, wearing of masks, and other similar restrictions by the candidates set up by political parties. Eventually, when there was no improvement in following the guidelines, EC issued an order on 16th April 2021 to ban the rallies, public meetings, and street plays between 7 pm and 10 am during the campaign days. Another such letter was issued on the same day focusing on the strict adherence to safety protocols. Following the continuous contravention of these rules, a writ petition was filed under Article 226 of the Indian Constitution before the Division Bench of Madras High Court by the District Secretary who was also a candidate of the All India Anna Dravida Munnetra Kazhagam AIADMK for the 135- Karur Legislative Assembly Constituency. In consideration of the increasing number of cases of COVID-19, M.R. Vijayabhaskar, the respondent, had also sent a representation to the EC on 16th April 2021 for taking reasonably sufficient precautions and measures to ensure the safety and health of officers in the counting booths. When no response was received, the respondent approached the High Court in order to seek a direction ensuring fair counting of votes on 2nd May 2021 by taking effective steps and arrangements in accordance with protocols.

The Court heard the petition and passed an order that:

Though the polling was mostly peaceful, the EC failed to ensure the adherence of the protocols by the political parties during the campaigns and rallies.
Despite repeated orders from the court for maintaining the norms, the EC remained silent upon the violation of the orders.
Though the situation in the state was under control, the polling and the counting of votes in no way should have acted like the catalyst for a further surge in the cases. Public health is of paramount importance and it is distressing for the court that the constitutional authorities have to be reminded regarding such a state of affairs.
That the prevailing situation is of survival and to enjoy the rights of the democratic republic, the citizens need to survive first.
Further, the EC needs to maintain regular sanitization, hygienic conditions, the mandatory wearing of masks, and adherence to the distancing norms with consultations from the State Health Secretary and the Director of Public Health.

The case was then adjourned for hearing on April 30th, 2021 to review the efforts made. Later on April 30th, the petition was disposed of in light of the measures taken along with the miscellaneous application.

Aggrieved by the order dated 30 April 2021 under WP 10486 & 10812 of 2021, the EC filed a Special Leave Petition before the Supreme Court for the miscellaneous application not being evaluated on merits and the oral observation made by the Division Bench regarding the responsibilities of the EC as the cases surged due to their failure of proper implementation of the COVID-19 safety measures during the conduct of elections were not addressed. Thus, the issue remains these remarks which the EC alleges to be baseless and of tarnishing the image of EC as an independent constitutional authority.

Before the Supreme Court

The Election Commission in its appeal moved to the Supreme Court where the Court had to determine the balance of powers of the two constitutional authorities. In the backdrop of issues pertaining to the freedom of speech and expression of media, the Court had to establish the extent of the exercise of the right to information of citizens under the purview of the judiciary’s accountability towards the nation. The EC challenged the order dated 30th April 2021 and interim relief was granted in the form of a stay order.

The judgment addressed the contours that outline judicial conduct, the authority of the judge to engage in dialogue during hearings, and the extent to which media is allowed to free flow of information to report judicial proceedings beyond just reporting judgments. They also observed that whether a constitutional body (EC) can set up such a plea of constitutional status as that of immunity from judicial oversight under the various checks and balances that are imposed.

Contention on behalf of the EC

The council, on behalf of the EC, stated the High Court ought not to have made disparaging remarks such as EC is “the institution that is singularly responsible for the second wave of COVID-19” and that the EC “should be put up for murder charges”. It was further contended:

That those observations made have no relevance to the nature of incident relating to maintaining safety measures.
That the polling had been completed and the only counting of votes was to take place on May 2nd, 2021.
That the EC was not given an opportunity to explain the safety measures taken by them before making such observations.
That the High Court has made such remarks without any proof or material, and then disposed of the writ petition without addressing the miscellaneous application filed by EC.
That the remarks made by the High Court were widely circulated in the media thereby reducing people’s faith and confidence in the EC and has undermined its sanctity as an independent constitutional authority.
The scope of judicial review is limited in such matters pertaining to the EC’s conduct of the election and the court should exercise restraint making such remarks about the authority or the electoral process.
That the EC did its part of taking adequate measures for enforcing safety protocols and that the actual enforcement of these measures are under State’s governance into which the EC does not interfere due to limited personnel at hand.
That during the decision-making for conducting elections, the cases were in control and analysis would indicate that the elections were not a significant contributor to a surge in cases. Rather other states which did not even have elections had witnessed a severe surge in cases.
That the EC had taken adequate measures and formulated guidelines for campaigning and had restricted the scope of engineering.
That the High Court’s remarks being not a part of written judicial record have caused undue prejudice and that the media must ensure that only accurate reporting is made public without sensationalizing the proceedings can cause loss of public confidence.
That there should be guidelines for framing the manner of court proceedings and a balance must be maintained between conducting the court proceedings and the media’s freedom of reporting.
Though the High Court’s views are reflected through its opinion in judgments, the media has been quoting the oral remarks of judges which exceeds the judicial propriety and makes it seem like an institutional opinion.

These submissions were then opposed by the respondent’s counsel who stressed the fact that during elections the EC has a wide range of powers in a State. Powers such as deploying paramilitary forces, suspension or replacement of officers such as District Magistrates, police officers, and even the Director-General of Police, can be exercised to ensure all the guidelines and directives are followed. Thus, they were responsible for carrying out the safety protocols and ensuring the same related to COVID-19 in the elections.

Legal analysis

In the miscellaneous application, the EC had sought two things. Firstly, the media reporting only has what forms a part of the judicial record before the Madras High Court and not the oral observations of the judges. Secondly, to issue a direction that no coercive action be taken against the officials of the EC on the basis of the complaint filed before the Khardah Police Station, Kolkata.

For the first prayer, the Court observed that two fundamental principles are roped in for determining what should be the part of the media report. These are open court proceedings; and the fundamental right to the freedom of speech and expression.

Open court hearings

These are essential to safeguard constitutional freedoms and to let the citizens have a right to information relating to court proceedings. The dialogue during the course of proceedings indicates the structure of the manner of the process and should be available in the public domain. Oral arguments are based on the open exchange of ideas and through which these are tested and analysed. The citizen has a right to be informed about the arguments addressed before the court, the response of opposing counsel, and issues raised and dealt with in court – all of which would ensure the judicial process be subject to public scrutiny. It is needed in order to maintain transparency and accountability in the functioning of the democratic institutions and establish the public’s faith in them referring to the opinion, as noted in the case of Mohammed Shahabuddin v. State of Bihar (2010). They further substantiated by relying on Lord Widgery‘s remarks in the case of R v. Socialist Workers Printers, ex p Attorney General (1974) on the role of public hearings on the conduct of the judge and judicial behaviour as well the parties and their witnesses. They referred to a few more cases, such as Naresh Shridhar Mirajkar v. State of Maharashtra (1966) regarding the conduct of the judge, and Swapnil Tripathi v. Supreme Court of India (2018) stressing the importance of the live streaming of judicial proceedings with an exception to the rule of open courts as observed in Mirajkar (supra).

Freedom of expression of the media

The right to freedom of the press comes under Article 19(1)(a) of the Constitution as explained in the case of Express Newspaper (P) Limited v. Union of India (1959), and that while this freedom is guaranteed in order to distill information and express ideas and opinions, it is subject to regulatory provisions in Article 19(2), as was stated in the case of LIC v. Manubhai D. Shah (Prof.) (1992). That this freedom extends to reporting of proceedings of judicial institutions as well as courts are entrusted to perform crucial functions of law which has a direct impact on the rights of citizens and the expectation of accountability from the executive.

This ability of the citizens to be informed has a direct correlation to the seamless availability of information regarding the judicial proceedings wherein lies the importance of freedom of media to comment and write on them as recognized in the Madrid Principles on the Relationship between the Media and Judicial Independence. This has also been recognized in the Indian jurisprudence granting the right to media for reporting the ongoing litigation before the courts with certain limitations not affecting the processes of the justice for the parties involved.

The Court focused on the technology and its impact over the years and stated that the acceptance of new reality is the way to adapt to it and thus the public constitutional institutions must find ways of keeping up with it rather than complaining as putting a restraint on the flow of such information would do no good.

Public discourse, media reporting, and judicial accountability

In this context, the right of media is not only restricted to disseminate issues in the public domain but also a part of the process of elevating the integrity of the judiciary and the cause of justice. It is important that a court should do nothing to discourage fair and accurate reports of proceedings.

Freedom and constraints of judicial conduct

It was observed that the grievance of the EC was more from the oral remarks that were made by the judges during the hearing. Those remarks received widespread publicity in the media however, these do not constitute a judgment or binding decision. They act as a tentative viewpoint which enables the judge to decide the final outcome based on the rival perspective of the parties. An exchange of view of the Bench is an intricate part of open and transparent judging where their revealed mindset enables the parties to further persuade the decision of the judge. Thus, the duty to preserve the independence of the judiciary and allow freedom of expression to judges, and putting some sort of restraint and control on their powers so as to prevent using strong and scathing language to an individual/organization are two ends of the same spectrum. That is where the superior courts need to establish a balance so as to now overstep the independent functioning of the court and intervene when the judges have overstepped the norms of judicial propriety.

Regarding the remarks, the Apex Court further observed that the High Court had to face a situation as a constitutional court for ensuring the protection of the life and liberty of citizens amidst the rising COVID-19 cases. Therein, though the remarks made were harsh and inappropriate, they did not seek to attribute culpability to the EC. These remarks were not a part of the official judicial record and that the formal opinion of the judgment is reflected through its judgments and orders and not through its oral observations.

Conclusion

Thus the Court concluded that they found no substance in the prayer of the EC for restraining the media from reporting on court proceedings. Language is an important instrument in the judicial process and is sensitive to constitutional values. However, the remarks made were more in the intention to urge the EC to ensure strict compliance of protocols and if the High Court had had a more cautious approach after circumspection then this grievance would not have risen.

References

https://indianexpress.com/article/india/eci-responsible-for-spreading-covid-19-says-madras-hc-7289824/

https://www.thequint.com/news/india/election-commission-moves-sc-on-madras-hc-coronavirus-remark

https://www.livemint.com/news/india/madras-high-court-holds-ec-responsible-for-second-wave-of-covid-19-says-officials-should-be-booked-for-murder-11619427908292.html

https://www.outlookindia.com/website/story/india-news-election-commission-responsible-for-covid-19-surge-madras-hc/381287

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

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

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Immigration policies and their impact on the economy and population

By

Rachit Garg

-

August 6, 2021

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Immigration population in the US — Image source - https://bit.ly/2QBxEha

This article is written by Manasvee Malviya, from the University of Petroleum and Energy Studies, Dehradun. In this article, the author had made an exhaustive analysis of immigration policies in the United States as well as the impact of policies on the economy and population.

Table of Contents

Introduction

As globalization took place around the world, people started migrating for better economic stability along with other benefits. Immigration has become an essential topic around the world. With the hope of improving quality of life and starting a career, people tend to move across the world. Transportation has played a vital role when it comes to immigration. Developing countries around the world host a maximum number of international migrants. Migrants impact the economy of both developing countries (host) and home countries.

Before understanding what are immigration policies, we need to understand immigration, migration, and emigration:

Migration refers to the movement of a larger group from one region to another region, within the country, or in another country. For example, in India, Kashmiri Pandits were forced to move out from the Kashmir region, hence, they migrated.
Immigration refers to the movement of individuals or their families from their home country to another country to live permanently in that country. For example, a family from India immigrated to Canada. Further, the term migration is used for individuals, birds, and animals whereas immigration only refers to an individual.
Emigration refers to leaving the resident country or the origin country with the intention of moving to another country. For example, Indians emigrate to the United States.

As the countries started to develop, the need for manpower increased which resulted in job creation. With effective transportation systems prevalent around the world, people began to move to another country in search of better opportunities. Gradually, the number of people immigrating to developing countries like the United States, Germany, and Canada increased. Therefore, for regulating and freedom of movement of the immigrant’s immigration policy was constituted.

Immigration policy

Immigration policy can be defined as the policy through which the states control the entry of individuals, whereby the individuals wants the right to access the countries territory; want to establish residence in the counties border; work permits- to participate in the labour market; to bring a family member along with them and the rules related to acquiring citizenship by the individual and family member.

Perspectives of an immigration policy

Immigration policy plays a significant role when it comes to economic welfare and development around the world. The immigration policies vary from country to country. All industrialized countries face certain challenges related to economic and welfare growth and sustainability. For instance, an increase in the ageing population, a decline in the birth rate, etc. There are three perspectives of immigration policy. These perspectives provide logic and help to understand immigration policy:

Economic utilitarian perspective

This perspective of immigration policy affirms the policy should be directed towards the economic growth of the country. From the economic perspective, the policy’s primary concern and objective should be upon economic growth and concern about anything else is secondary. The economic utilitarian perspective appears in two modes:

First, it explicitly focuses upon profit maximization by implementing such policies that are lenient for the immigrants and providing employers with a flexible and large labour force.
Second, this model focuses on the potential costs of immigration and drives the policy towards accumulating workers that are needed by the employers, thus, minimizing the expenses on unemployed workers. In both scenarios, the objective is the same, therefore, immigration serves the needs of employers and the economy and benefits the whole society.

Rights liberalism perspective

This perspective focuses upon the rights of an individual, both immigrants and the citizens of the country. The rights liberalism perspective also appears in two modes:

First, this perspective prioritizes the rights of immigrants and focuses upon the importance of dignity and access to welfare and family life. Here, the rights in question are considered human rights. Further, in this mode of rights liberalism, the policy is directed to facilitate free movements of the immigrants and family reunification. This is regardless of whether the economy is benefited or not.
Second, this mode prioritizes the rights of citizens in the host country. This mode can be found in the industrialized countries on the matter related to unskilled immigration. Opportunities for the citizens are considered and the policy ensures that citizens are not impacted by the immigrant flow in the country, in terms of job opportunities and wages.

Traditional community perspective

This perspective emphasizes the collective good, it includes protection of existing culture, social order and relations, and rule of law that is likely to be caused by immigration. This perspective directs the policies towards restriction or omitting policies that encourage the cultural accumulation of immigrants. When this perspective is applied it might appear racist but the policy driven by the traditional community perspective can be considered positively as it simply focuses on preventing what exists rather than excluding it. For example, Israel’s policy prefers immigrants who are Jewish.

International Migration Law

The International Organisation of Migration (IOM) is an intergovernmental organization established in 1951. Total 174 states are members of IOM. The International Organization was established with the objective to regulate migration, promote international cooperation in migration issues, and assistance to the migrants in need. In 2004, the International Organization of Migration established an International Migration Law Unit to regulate, strengthen and promote IOM’s involvement in International Migration law. The purpose of this unit is to understand international legal standards that govern migration and the rights of the migrants.

At the international level, there is no comprehensive legal instrument that governs the migration law or rights of the migrants. However, the laws can be seen in the rules and regulations of state sovereignty as well as in the human rights of the person involved in migration.

Immigration policy – the United States

Types of migrants

Immigration policies vary from country to country, thus, the names and categories are given to people moving from one to another country to live. In the U.S., there are three types of migrants which are as follows:

Immigrants

Immigrants are the people who move from one country to another country, to work and live. According to the Pew Research Centre, estimates based on census data adjusted for undercounting, there are 45 million immigrants out of which 77% of the immigrants are legally in the country. They are the individuals who generally move to explore new job opportunities. Immigrants enter the U.S border legally and acquire citizenship as per the immigration policies. They are given all the rights as other citizens.

Refugees

Refugees are individuals who have left their home country and can’t return to their home country due to the fear of prosecution. The prosecution is based on their nationality, religion, race, opinion, or political membership. The U.S Citizenship and Immigration Service has the authority to determine whether the person has suffered prosecution in the past or has a well-founded fear of being prosecuted in the future.

Asylees

Asylees or asylum seekers are the refugees who are already in the territory of the U.S. or at the port of entry or they meet the conditions required to be considered a refugee. If there is considerable fear of prosecution in the home country, then they can apply for asylum. It prevents the deportation of the individual, allows the refugees to stay in the U.S., receives a permit to work and they can apply for social security cards. Further, they can apply for refugee medical assistance and can file a petition to bring family members who have fear of prosecution in the home country to the United States.

History

Immigration policy in the US is a highly controversial issue. The present immigration policy reflects the economic needs and growth of the country. The origin of the concept of immigration policies in the US can be traced back to the 1800s. During the Civil War, many states passed their immigration law, so, the Supreme Court, in 1875, asserted that it is the responsibility of the federal government to constitute immigration laws. Industrialization and globalization were at their peak, according to the need the government passed immigration laws. The history of the development of immigration policy can be divided into three phases:

1880-1900

The Chinese Exclusion Act, 1882 was passed that bars the entry of Chinese immigrants.
The Immigration Act, 1891 mentioned who can enter and who are not welcomed. Also, this Act created the federal office of immigration.
The United States set up and opened its first immigration station, New York Harbor, in 1892.

1900-2000

The Immigration Act, 1917 establishes the criteria to be fulfilled by the immigrants to enter the United States.
The Immigration Act, 1924 introduced the quota system and confined the number of immigrants allowed to enter the U.S. yearly.
In 1924, due to the restriction on the number of immigrants, illegal immigration increased, the U.S. Border Patrol was established.
During World War II, there was a labour shortage in the U.S. that resulted in an agreement between the U.S and Mexico. The agreement formed the Bracero Program in 1942, which allowed the Mexican agricultural worker to enter temporarily into the U.S.
In 1948, the first refugee and resettlement law was passed- the Displaced Persons Act, to deal with the Europeans who were seeking permanent residence after World War II in the United States.
In 1952, the exclusion of Asian migrants was ended by the McCarren-Walter Act.
In 1965, the quota system was lifted by the Immigration and Nationality Act.
In 1986, the Simpson-Mazzoli Act was signed by President Ronald Reagan. The act granted amnesty to illegal immigrants in the United States.

To read more about the quota system click here.

2000-2018

In 2001, a bill of DREAM Act (Development, Relief, and Education of Alien Minors) was proposed which provided the legal status to the undocumented immigrants brought illegally by their parents. The bill was never passed.
President Barack Obama, in 2012, signed Deferred Action for Childhood Arrival. This provided temporary protection from deportation.
President Donald Trump, in 2017, signed two orders, both titled ‘Protecting the Nation from Foreign Terrorist Entry into the United States. These orders were passed to curtail travelling and immigration into the U.S. from 6 Muslim countries (Iran, Chad, Libya, Syria, Somalia, and Yemen) as well as North Korea and Venezuela. The order issued was challenged in both the state and federal courts.
Travel restrictions were lifted from Chad in April 2018.

The evolution of U.S. immigration policy reflects the economic needs of the country. The policies change with the needs of the economy and other factors.

Biden’s proposed changes

Biden’s administration is working towards reversing the restrictions imposed by President Donald Trump on immigration. The proposition of the changes in the immigration policy was sent on day one of the president’s ships. The Bill, the U.S Citizenship Act, 2021, proposed by Biden’s administration, was introduced with the objective to establish a new system to responsibly manage and secure the United States border, to keep families and communities safe and better management of migration across the nation.

The Bill prioritizes and modernizes the immigration legislation in the U.S., stimulates economic growth along with the needs of every worker and provides a pathway for immigrants and their families to get citizenship. The Bill provides for the following:

Providing pathways to citizenship and strengthening labour protection

Citizenship for undocumented individuals

The Bill provides for the individuals living in the country to apply for temporary legal status, on the completion of 5 years they can apply for a green card, after passing criminal and national security background checks and paying taxes. Further, dreamers and immigrant farmworkers can apply for a green card after the legislation is passed, if they are eligible. After the completion of 3 years, the green card holder can apply for citizenship, if they pass an additional background check and exhibit knowledge of English and U.S. civics. Applicants must be present physically in the territory of the U.S. on or before January 1, 2021.

Family-based immigration system

The Bill eliminates the provision related to keeping families apart and temporarily allows the immigrants to join the family in the United States with approved family sponsorship petition while waiting for green cards.

No Ban Act and diversity visa

National origin-based Anti-discrimination for Nonimmigrants Act (No Ban Act) is included in the Bill. The Act prohibits discrimination on religion and restricts the presidential authority to issue any bans. Diversity visas increased from 55,000 to 80,000.

Immigrants and refugees integration and citizenship

The Bill provides funding to local government, state governments, educational institutions, and not-for-profit organizations for expanding programs for promoting integration and inclusion of immigrants and refugees. Also, assisting the individuals trying to obtain citizenship.

Economic development

To ensure the economic growth of the country, the Bill removes employment-based visa backlogs, reduces waiting time, and eliminates per-country visa caps. This Bill provides that U.S university graduates with STEM degrees can stay in the country.

Prioritize smart border controls

Technological and infrastructural development in existing border resources

The Bill provides allocation of additional funds for immigration enforcement for developing and implementing technology to facilitate the screening process, with the ability to identify contraband at every entry port i.e., air, water, and land.

Management and protection of border and border community

For the training and continuing education of agents and officers’ safety and professionalism, the Bill provides funding. Further, the Bill creates a Border Community Stakeholder Advisory Committee, where the special agents of the Department of Homeland Security have the authority to investigate criminal misconduct as well as administrative misconduct. Furthermore, the Bill provides funding and authorizes the Department of Homeland Security in coordination with the Department of Health and Human Services (HHS) to set guidelines and protocols related to care for individuals, families, and children in Border Patrol Custody.

Criminal organizations

The Bill amplifies the ability to prosecute a person indulged in trafficking and smuggling, who are responsible for migrants exploitation. Under the Foreign Narcotics Kingpin Designation Act, the Bill widens the scope of the investigation and intelligence collection to increase sanctions against foreign narcotics traffickers. Also, for the improvement and expansion of transnational anti-gang task forces in central Asia, the Federal Bureau of Investigation, Department of Homeland Security, and Drug Enforcement Agency are required to work in coordination with the secretary of state.

Address root causes of migration

Programs to reunite the family

The Bill provides a safe legal passage for people seeking protection, including through designated processing centres throughout central America. The Bill creates the Central American Family Reunification Parole Program and also re-institutes Central America Minor Program to reunite children and families, approved by a family sponsorship petition.

Immigration courts and vulnerable individuals

The Bill amplifies the family case management program and training for immigration judges, the Bill reduces the immigration court backlogs with the technological developments in the court. Further, the Bill reinstates fairness and balance to the immigration system by authorizing the judges to review and grant relief to deserving individuals. Furthermore, the Bill funds the legal orientation programs and counselling for children, vulnerable persons, and any other person as and when necessary.

Asylum seekers and vulnerable population

The Bill provides funds to reduce asylum application backlogs and put an end to the one-year deadline for filing asylum claims. Further, the Bill increases protections for T visa, U visa, and VAWA applicants.

Future ahead

According to the United States Census Bureau, the United States is in the condition of population contraction rather than growth. It is accepted that 20% of the population will be above 65, regardless of the immigration scenario. If this holds out, the United States will require more young people for the economic growth of the country. For economic development, it is essential to sustain the working-age population by accepting migration. Some parts of the United States have begun to experience a population slowdown.

Here, immigration policies play a significant role in turning the downsizing of the population. Biden’s administration promotes family-friendly immigration policies, hence, covering the gap between the working-age population and old age population. The said report estimated that one in five individuals in the United States will be of retirement age.

Impact of immigration

Immigration not only affects the person who is moving to another country but also affects the economy and the population of both the home country and the host country. Immigration has its challenges and benefits. For an immigrant to enjoy the benefits, they have to endure certain challenges, similarly, the countries benefit from the talent and skills brought by the immigrants resulting in economic growth but on the same hand the country’s population increases.

Immigration benefits

One of the reasons to immigrate is in search of better life and opportunities. The new country provides new life and new opportunities which weren’t available previously.
An individual is benefited economically as well as socially.
It helps in the economic growth of an individual in terms of better and fair wages, better employment.
Immigration doesn’t guarantee the success rate of an individual, it requires hard work. However, people are taking such risks for better life and opportunities.

Immigration challenges

It is doubtful that immigration gives a fair chance of new life and opportunity, however, the primary challenge faced by the immigrants is the cost of immigration involved.
Another challenge faced by the immigrants is adjusting and mixing the culture of host countries, and difficulty in understanding the laws of the country. There are circumstances where an individual leaves the home country with the fear of prosecution, they often face discrimination in the host country.

The immigration and policies governing immigration impacts the economy and the population of the country,

Economy

Immigrants move to developed countries in search of new job opportunities. Immigrants are either workers or employees of industrialized countries and play a vital part in the countries’ economic development. Immigration has become an integral part of the global development agenda. Sustainable Development Agenda 2030 has recognized and acknowledged the contribution of migrants in the economic growth and development of the countries. They contribute to the gross domestic product. Immigrants play a distinct role in economic contribution:

As a worker, they have an impact on the labour market, they influence domestic investment and alter the country’s income distribution.
As students, they contribute towards increasing the human capital in the country.
As a consumer, they increase the demand for foreign as well as domestic goods and services. When demand is created, thus, affecting the price and production of the goods and services.
As an inventor and entrepreneur, they contribute to technological changes and create job opportunities.
As a taxpayer, they contribute to the public budget.

Immigrants stimulate the economic growth of the country. Through immigration country’s working-age population increases and contributes towards the development of human capital and technological aspects. Thus, immigration affects the economy of both the host country and the home country.

Host country

Due to immigration, the host country experiences advantages as well as certain challenges. Over time, it is evident that immigration creates population gush, which effectuates pressure on the development of infrastructure and services for the higher population. When an immigrant moves to a new country, they face many problems related to finding a house, employment, adjusting to the culture and the laws. Host countries face challenges to assimilate immigrants into society and provide support. Immigration influences the supply of the workforce in the country. There are two aspects of immigration in the host country. First, the positive, it increases the economic growth and development of the country, and second, the negative, it threatens the national security through illegal immigrants.

Home country

When immigrants move from their home country to another country, the question arises, why and what the country is not able to provide. The reasons to immigrate include the standard of living, no job opportunities, low wages, lack of education opportunities, and other reasons. The country must analyze the reason for a large number of the population moving to another country. Immigration tends to weaken the working-age population, level of production, and the economy of the country.

Population

According to the United Nations report, the world’s population is expected to increase from 7.6 billion in 2017 to 8.6 billion by 2030. Since the development of an effective transportation system, the developed countries have gained population due to migration. Migration is considered to be the primary source of population growth in the developed countries. In search of better opportunities and life, individuals migrate.

A country’s immigration policy drives the population of that country. Most of the country’s migration policy promotes the immigration of highly skilled workers, increasing the population. Many governments have policies to bring back the immigrants of their country so that the working-age population and human capital in the country are maintained. Immigration policies have affected the population of both the host and home countries. On one hand, host countries/ developed countries’ population tends to increase specifically the working-age population and on the other hand, the population of the home country tends to decline specifically the working-age capital along with the increase in the old-age population. Countries, where the working-age population is declining, must analyze the scenario, why people are leaving their home country and must implement such to attract immigrants.

India – a source of immigrants

According to the World Migration Report 2020, India sends the largest number of emigrants ( people leaving the origin country). India is a top source of emigrants since the United States started tracking the origin of the migrants in the 1990s. The total number of international migrants has doubled over the past 25 years and one in twenty-five migrants are born in India. For better life opportunities and standard of living people migrate. The main destinations for Indian migrants are the United States and the UAE. In the United States, nine in ten Indian Americans are born in India and work in the States. Indian Americans fall under the category of highly educated, skilled, and earning among the racial and ethnic groups. The political and social factors influence the Indians to emigrate in reach of better educational opportunities, health care, job opportunities, and facilities available with better economic growth opportunities for a person.

Immigrants – strength or burden to a country

According to the Pew Research Centre, most of the host countries consider immigrants as a strength rather than a burden in the country, including the largest immigrants receiving countries United States, Germany, Canada, France, and the United Kingdom. Some countries believe that immigrants make the country strong with their work and talent whereas other countries believe that they take the job opportunities of the citizens. Country’s have different immigration policies and every country has a different perspective of seeing immigrants. Like the United States, considers immigrants as a strength but at the same time, the US considers that immigrants increase the risk of terrorism.

Conclusion

It can be concluded that the immigration policy in the United States has evolved according to the needs of the people and the economic condition of the country. Immigration policy impacts the economy and the population of the home as well as the host country. Also, immigration policies play a significant role in the economic growth and development of the country.

Reference

https://www.researchgate.net/publication/324842347_Immigration_analysis_trends_and_outlook_on_the_global_research_activity

https://ccis.ucsd.edu/_files/journals/37skrentny.pdf

https://www.un.org/en/development/desa/population/publications/pdf/policy/InternationalMigrationPolicies2013/Report%20PDFs/h_Ch_2.pdf

https://www.history.com/topics/immigration/immigration-united-states-timeline

https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-president-biden-sends-immigration-bill-to-congress-as-part-of-his-commitment-to-modernize-our-immigration-system/

https://www.thebalance.com/how-immigration-impacts-the-economy-4125413

https://courses.lumenlearning.com/boundless-economics/chapter/introduction-to-immigration-economics/

https://www.oecd-ilibrary.org/docserver/9789264288737-en.pdf?expires=1623849842&id=id&accname=guest&checksum=62F8A96AA40C037E96F3913559903CA4

https://publications.iom.int/system/files/pdf/wmr_2020.pdf

https://www.pewresearch.org/fact-tank/2017/03/03/india-is-a-top-source-and-destination-for-worlds-migrants/

https://www.un.org/en/development/desa/population/publications/pdf/policy/InternationalMigrationPolicies2013/Report%20PDFs/z_International%20Migration%20Policies%20Full%20Report.pdf

https://www.oecd.org/migration/mig/G20-migration-and-displacement-trends-and-policies-report-2019.pdf

https://www.census.gov/content/dam/Census/library/publications/2020/demo/p25-1146.pdf

https://publications.iom.int/books/world-migration-report-2020

https://www.pewresearch.org/global/interactives/global-migrant-stocks-map/

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Drafting rental agreements for the retail sector

By

Shoronya Banerjee

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August 6, 2021

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This article has been written by Vidhya Sumra, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.com.

Introduction

COVID-19 has disrupted practically every area of the Indian economy, including the retail sector. While businesses have slowed down, retailers are trying to find a way out of the losses that are rapidly increasing. Rent is another important factor that shops are concerned about these days. Retailers of all sizes are facing the wrath of declining demand, supply-chain interruptions, rent payment, and even mandatory closures, as social distancing becomes the new norm. Here are some of the most typical challenges affecting the retail business during times of crisis, as well as some legal considerations to keep in mind while renegotiating lease contracts.

What is a rental agreement?

A rent agreement is a legal document that contains the pre-discussed terms and conditions under which the one-party (lessee) agrees to pay the rent of the property owned by the other party (lessor). It is also known as a contract between the landlord, i.e. the property owner, and the tenant for a specific length of time.

What is a commercial lease agreement?

The concept of a commercial leasing agreement is that the property will be used for commercial purposes. The land can be utilised for an office, a building, individual retail establishments, and retailers in shopping malls or shopping centres. Usually, the retail sector relies on the commercial lease model, which works well for brands and developers.

Essential clauses in a commercial lease agreement

Every commercial lease agreement has a standard clause that makes an agreement valid and enforceable. Below are the clauses:

1. Parties

It is necessary that we must identify the parties in the agreement. This clause should define the parties into the agreement. In the commercial lease agreement, it is necessary that the lessee should identify his business in the agreement and not himself in his capacity.

Example

“Mr. _____, S/o Mr. _____________, aged about ___ years, having PAN _________, presently residing at ___________, (hereinafter referred to as the “Lessor”, which expression, where the context admits, shall include its successors and assigns) of the ONE PART;

AND

_______, a company incorporated under the Companies Act, 1956, having CIN_______ having its registered office at ___________________, represented by its ________________ (hereinafter referred to as the “Lessee”, which expression, where the context admits, shall include its successors and assigns) of the OTHER PART;”

2. Definition

The meaning or definition of several terms used in the agreement is explained in this clause. The definition clause must define terms that are exclusive to the agreement, and the terms that have more than one meaning or specific meaning in the agreement.

Example

“Leased Premises” means the property situated at _________together with other facilities more fully described in Schedule A of this Agreement.

“Rent” means monthly rent of Rs.______ to be paid by the Lessee to the Lessor commencing from _______ for the use of the Leased Premises”

3. Premises

The lease agreement should explicitly specify the property being leased. It is important to have a full description of the property, including the location, address, and structure. It is also necessary to include information on other amenities, such as the use of elevators, common rooms, and hallways. This will ensure the property’s accuracy in order to finalise the rent price and avoid future disputes.

Example

“All that portion of the Flat situated at A-2, Janakpuri, New Delhi 110012 admeasuring unit area of 513 sq. ft. and having super built area of 581.258 sq. feet with the designated parking area of 100 sq. feet located towards the south of the Flat, situated on Sy. Nos.70, 71, 72, 73, of South Delhi, Old Delhi Village, 9th Sector, Delhi.”

4. Grant of lease

This is also a very important clause to be added to the agreement as it transfers the right to the property. The right in the property is transferred from the lessor to the lessee, which is the main purpose of the commercial lease agreement.

It is also essential to state the purpose for which the property will be used. To discourage illegal activities on the leased premises, the clause should include precise terms about the purpose of using the leased premises, such as the details of the business and the primary motive of the business.

Example

“The Lessor hereby leases to the Lessee, the rights and interest in the property situated at _____ together with other facilities more fully described in Schedule A hereunder and hereinafter referred to as the “Leased Premises”.

The Leased Premises shall be available for the Lessee solely for running its showroom or related activities to carrying on the business. The Lessee agrees and confirms that there shall be no unlawful activity be carried out from the Leased Premises and grant of lease is not to be construed as a grant of tenancy rights.”

5. Term

The agreement should clearly state the period of the lease. Typically, a standard lease or rental agreement is for a period of 11 months. The commercial lease arrangement, on the other hand, is normally for a longer period of time, such as 4 to 5 years. This is because commercial leases require a higher level of investment than other types of leases.

Example

“The Lessor and Lessee agree that the term of this Agreement shall be for the period of 48 (forty-eight) months, which shall commence from the Effective Date (“Term”).”

6. Security deposit

A security deposit is a payment made by the lessee to the lessor on the date of execution of the agreement or after signing the agreement. The security deposit is not used towards the payment of the rent. It is held by the landlord/lessor as “security” against any future losses that may occur during the lease term.

In most commercial lease agreements, the security deposit is equal to one year’s rent, however, negotiation is always an option. After the lessee vacates the leased premise, the lessor returns this sum to the lessee, and he may deduct it for non-payment of utility bills or any damage done to the leased premise.

Example

“The Lessee shall pay to the Lessor, a sum of Rs. 60,00,000/- (Rupees Sixty Lakhs only) equivalent to 12 (12) months’ Rent through bank transfer, against the use of the Leased Premises on the Effective Date (“Security Deposit”).

On the expiry or the termination of this Agreement, the Lessor shall refund the Security Deposit in full to the Lessee subject to the handing over the possession of the Leased Premises by the Lessee in the condition it was handed over to the Lessee before the Term. Normal wear and tear conditions shall be applicable.”

7. Rent

The payment made by the lessee to the lessor for the use of the leased premises is known as rent. It is the consideration in the lease agreement. The amount of rent, mode of payment, date of payment to be made, the interest charged on the late payment can be decided solely by the lessor or jointly by the lessor and lessee. In a commercial lease agreement, the lessee may be required to pay the lessor a percentage of their profit as revenue in addition to the base rent. This is a common practice in Western countries, and it is a relatively new concept in India.

Example

“The Lessee shall pay the Lessor monthly rent of Rs. 10,00,000/- (Rupees Ten Lakhs only) commencing from Effective Date (“Rent”) for the use of the Leased Premises. The payment of Rent by the Lessee shall be made in advance on or before the 7th day of every month (“Due Date”).

All the payments to be made by the Lessee to the Lessor shall be by way of account transfer to the current account of the Lessor as per details mentioned below:”

8. Improvements

A lease agreement should specify what modifications or upgrades to the leased premise are permitted and who will pay for them. It should also be mentioned that if the lessee or tenant is responsible for returning the leased premise to its original state at the end of the agreement.

Example

“The Lessee shall have the right to make improvements within the Leased Premises and make alterations, subject to applicable local laws and building regulations with prior permission from the Lessor.”

9. Duties and obligations

Another important clause in the commercial lease agreements is the duties and obligations of both parties. This clause should list down the duties and obligations of both the lessor and lessee. This should include details, as the lessee should pay rent to the lessor on time, maintaining the property, payment of utility bills, etc. This clause should also mention duties and obligations of the lessor like handing over the property on time, payment of taxes, returning security deposit on time, etc.

Example

“Obligations of the Lessee

The Lessee shall use the Leased Premises only for the purpose of carrying on its business activities along with car parking no. ___.

The Lessee shall at its own costs and charges and with prior permission from the Lessor install furniture, fixture, fittings, electrical installations, and all other related equipment as the Lessee may think fir in connection with its business.

Obligations of the Lessor

The Lessor shall bear and pay all property taxes, water taxes, and other related taxes of the Leased Premises during the period of this Agreement.

The Lessor shall be responsible for carrying out all structural repairs including any leakages to the Leased Premises as may be required.”

10. Termination

The lease agreement may be terminated by either of the parties or both parties may mutually decide to terminate the agreement. This clause should explain how the termination notice would be sent as well as the grounds for terminating the agreement.

Example

“Neither Party shall terminate this Agreement during Lock-In Period other than for the following reasons:

For breach of any term of this Agreement by other Party;
On the occurrence of the Event of Default (as defined in Clause___ below).

In the event, the Lessee terminates this Agreement within the Lock-In Period, the Lessee shall be liable to pay the Rent for the remaining period of the Lock-In Period and then shall be entitled to receive the Security Deposit provided that it returns the Leased Premises in its original condition.”

The commercial lease agreement should have other clauses like an extension of the lease period, competitor clause, arbitration clause, governing law, and jurisdiction. These are basic clauses and must be included in the agreement. It should be clearly specified before entering into an agreement in order to avoid any future disputes.

Legal aspects to consider while renegotiating agreements

Considering current pandemic situations and the government’s refusal to waive any portion of the rent, shops have already begun discussing rent negotiations, size negotiations, and consolidation of office space with their landlords. In such difficult circumstances, it has become critical for both landlords and lessees to survive in the industry. Furthermore, it is critical to negotiate, as the consequences of the shutdown will be disastrous for the firm. In this circumstance, the lease agreements must be revived, re-examined, and redrafted very cautiously. Property owners will have to reassess their leases, ensure that they understand their rights in these unusual times, opt for short-term arrangements such as base rent reduction, and recover the lost rentals when the economy improves.

Conclusion

To conclude, negotiating the commercial lease agreement is a critical phase in the current situation. To avoid future disputes in key areas like rent payment, security deposit, use of leased premises, maintenance and repair charges, it is advisable to negotiate and draft the clauses of the lease agreement carefully. The terms and conditions of the lease agreement should be carefully analysed and drafted with the consultation of lawyers so that the lease agreement should serve its purpose.

References

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Recent developments in live-in relationships

By

Diganth Raj Sehgal

-

August 6, 2021

0

This article is written by Sharad Yadav from the Institute of Law, Nirma University. This article will help you to understand the views taken by various courts in India for live-in relationships; also this article will help you to understand live-in relationships from an international perspective.

Table of Contents

Introduction

A live-in relationship is an arrangement between two people who want to live together without getting married. Today many couples live together before their marriage for various reasons, such as checking whether they are compatible with each other or not. We have seen cases where couples seek divorce after getting married because they were not aware of certain things about one another or could not live together. In India, there is no specific legislation to regulate the matters of live-in relationships. In many countries, laws related to live-in relationships are still vague. Different courts are taking different views on similar issues related to such relationships.

Marriage versus live-in relationship

Today’s India is changing at a very fast pace, and something that was socially unimaginable, like a live-in relationship that was taken up by western society, is now gradually being followed by the people in India. The laws, as well as the society, were traditionally biased in favour of marriage. The law preserves many rights and privileges for a married person but if a person is in a live-in relationship, then these rights and privileges may not be available to them. These couples can face some of the same legal issues as married couples as well as some issues that their married friends are never acquainted with. Live-in relationships are mainly followed by the elite class people. If the rights of a wife and live-in partner become equivalent, then it will lead to an increase in the cases of bigamy. It will also increase the conflicts between the couples.

Case laws

Sanjay and Anr. v. State of Haryana & Ors. (2021)

In this case, while granting protection to a couple, the Punjab and Haryana High Court stated that a live-in relationship is not a new thing, but today’s society has not been able to evolve to the extent of accepting the concept of such type of relationship without raising their eyebrows. The case was filed by a boy and girl aged 18 and 19 respectively for giving direction to provide protection to them. They met on social media and decided to marry each other. The Court stated that the Supreme Court and various High Courts have accepted live-in relationships and have granted them protection by virtue of the principles enshrined in Article 21 of the Constitution of India.

The Court, while relying on the case of Nandakumar v. State of Kerala (2018), stated that the legislature recognizes a live-in relationship under the provisions of the Protection of Women from Domestic Violence Act, 2005.

In this case, the Court considered the contention raised by the petitioners in the representation and ordered the police to protect them if there is any potential threat to them.

Soniya and Anr. v. State of Haryana and Ors. (2018)

This case was filed by a girl aged 22 years and a boy aged 19 years who decided to live together after the girl’s parents started forcing her to marry a person of their choice. They decided to live together till they could marry each other (after the boy attains 21 years of age). Petitioner stated that their relationship would not be accepted because they belong to different castes. Both approached the Superintendent of Police (SP) to seek protection, but they did not get any response. Fearing for their life from their family members, they decided to file a case.

The Court observed in this case that the petitioner did not approach this Court for seeking permission to marry or approval, but they approached the Court to seek protection. After noting that Article 21 of the Constitution of India provides its citizens with the right to life and personal liberty, the Court stated, “Once an individual who is major has chosen their partner, it is not for any other person, even their family members, to object and cause hindrance to their peaceful life”.

The Court stated that one could not ignore the danger of honour killings, which is so prevalent in our country, especially in the northern regions, particularly in the state of Uttar Pradesh, Rajasthan, Punjab, and Haryana. When people decide to marry without their parents’ consent or outside their caste or religion, honour killing happens. The Court stated, “if a petitioner has not committed any offence, this Court sees no reason to deny them protection”.

Kamini Devi v. State of U.P. & 4 Ors. (2020)

In this case, the petitioners, namely Kamini Devi, aged about 24 years, and the petitioner, two, aged about 28 years, filed a writ petition. Both the petitioners decided to live together without any compulsion or coercion. Family members were not happy with this. Petitioner 1 filed a complaint to the Superintendent of Police and requested him to provide the necessary protection to them. But no action was taken by authorities, and so the petitioner filed the writ petition before the Court to get issued the writ of mandamus so that they are not harassed by anyone and live their peaceful life.

The Court referred to the judgment of the case Lata Singh v. the State of U.P. (2006), where it was observed that a live-in relationship between two consenting heterosexual adults does not amount to any offence though it may be perceived as morally wrong. To protect the women and victims of such relationships for the first time in India, the Domestic Violence Act, 2005 protects the couple having a relationship in the nature of marriage.

The Court, after noting all the things are in the view, held that the petitioner is at liberty to live together freely and no person shall be permitted to interfere with their peaceful life. Article 21 of the Constitution states that no person shall be deprived of his right to life and personal liberty. The Court stated that if any type of disturbance is caused to them, they can approach the Superintendent of the Police. The Court ordered the police to provide protection to the petitioner.

Kajal and Anr. v. State of Haryana and Ors. (2021)

In this case, the petition was filed by the couple, a 16-year-old minor girl and a 25-year-old boy living together without getting married. The Court refused to grant protection to this couple who were living together. The Court observed that a minor girl residing with an adult in a live-in relationship is not morally and socially acceptable in society. The Court stated that there is no ground to issue any direction in the present case. However, the Court also stated that if petitioners have any apprehension of danger to their lives and liberty, they are free to approach the police authorities in this regard.

Smt. Geeta and Another v. State Of U.P. & 4 Ors. (2021)

In this particular case, a writ petition is filed by one petitioner who is a major and another petitioner, who is also a major. The Court, while deciding the case, noted that the woman is already married and is in a live-in relationship with another man. The Court stated that they failed to understand how such a petition be allowed to permit illegality in society. The Court refused to grant protection to the petitioner and dismissed the protection plea with a cost of Rs. 5,000.

Chitambresh & K.P. Jyothindranath (2018)

In this particular case, the writ petition was filed by the father of a 19-year old girl to prevent her from living with an 18-year old boy. The Court stated that partners in a live-in relationship could not be separated through the writ of habeas corpus. The Court observed that they could not ignore the fact that live-in relationships have become prevalent in the current time, and the writ of habeas corpus can not be issued to separate a couple living together. “Our constitutional Court is bound to respect the unfettered right of adults to have live-in relationships even though society does not accept such relationships.” The Court dismissed the writ petition and declared that the daughter is free to live.

Rashika Khandal v. State of Rajasthan (2021)

In this case, the Rajasthan High Court stated that a live-in relationship between married and unmarried couples is impermissible. The High Court observed that the Apex Court had already established the same in the case of D.Velusamy v. D. Patchaiammal (2010), where the Court said that a couple must hold themselves out to society being akin to spouses and must be of legal age to marry. The bench dismissed the plea to give direction to the Superintendent of Police to grant protection to them.

S.P.S. Balasubramanyam v. Suruttayan Andalli Padayachi & Ors. (1991)

In this case, the Supreme Court allowed the presumption of marriage Under Section 114 of the Indian Evidence Act, 1872 for the live-in relationship. In this case, Muthu Reddiars was in a live-in relationship with Rengammal but died without getting married and having the child from that bond. After his death, Rengammanl claimed inheritance in the property. Earlier Rengammal had married Alagarasami (who was alive), but they didn’t live together because of an undissolved marriage between them. The trial Court did not accept her live-in relationship claim. Her first appeal was dismissed. But later, the Madras High Court held the judgment in favour of the live-in partner.

Rajeeve v. Sarasamma & Ors. (2021)

In this case, while deciding a matrimonial appeal, the Kerala High Court held that service benefits by a female partner in a live-in relationship could not have a better claim than a legally married wife. The Court stated that there is evidence of long cohabitation of men with two women together, one according to a ceremonial marriage and the other not so. The presumption of the law of valid marriage will lean in favour of a married one.

While deciding the matter, the Court observed that parties in a live-in relationship that have lived together for a very long period of time could be brought within the purview of laws pertaining to maintenance and domestic violence and can be considered husband and wife for a limited purpose. But such a relationship can not be elevated to marital status. A female partner in a live-in relationship can not have a better claim than a legally married wife.

In this case, an employee of South Western Railway passed away while in service. After his death, both the live-in relationship partner as well as his wife made a claim for his service benefits from the railways. Both of them claimed to be legally wedded wives of the late Raghunathan. Subsequently, the respondent filed a petition before the family Court to declare her as a wife of late Raghunathan and sought an injunction from the Court to restrain the authorities from disbursing the family pension. The family Court granted the relief through its judgment. The present appeal has been filed before the Court to challenge the said judgment. After analyzing the oral and documentary evidence adduced by the parties, the Court opined that there is concrete evidence to prove the validity of a marriage between the respondent. The Court said that the long cohabitation of a man and woman generally raises the presumption for a valid marriage unless proven otherwise. However, there is evidence available of a man cohabiting with two women in the present case and simultaneously begetting children from both relations, one from ceremonial marriage and the other one not from ceremonial marriage.

After examining all the things, the Court stated that parties who live together for a long period of time could be brought under the purview of laws relating to maintenance and domestic violence, but they can not be elevated to marital status. The findings of the family Court were set aside by the Court.

The legitimacy of the appellant’s children

The High Court stated that the finding of the family court that there is no evidence for the marriage between the appellant and late Raghunathan and the appellant’s child who can not claim any right over the property or any benefits was set aside. The Court reasoned that according to Section 7(1), explanation(e) of the Family Courts Act, 1984 implied that only a suit for a declaration ‘as to the legitimacy of any person was within the jurisdiction of the Court. This legitimacy has presupposed a valid marriage, but this can not be stretched to adjudicate the legitimacy of any child who is born from a live-in relationship. Hence, the appellant’s child is not entitled to the said benefit, including the service benefits, and the railway authorities were given the liberty to decide the same in accordance with the law.

Prohibitory injunction set aside

The Family Court declared a prohibitory injunction against these parties from disbursing service benefits to the respondent, but the High Court, after hearing the matter observed that this dispute was between the appellant and the respondent regarding the marital status. The presence of other parties was irrelevant to the substance of the matter. Railways authorities were given the liberty to decide on the entitlement of the service benefits of late Raghunathan. For that reason, the High Court found that relief of permanent injunction granted by the Family Court against a party outside matrimony is uncalled for.

Tulsa & Ors. v. Durghatiya & Ors. (2008)

The Supreme Court, in this case, stated that a child born out of a live-in relationship could not be considered illegitimate if their parents live together under one roof for a long time. It must not be a ‘walk-in’ and ‘walk-out relationship. Section 16 of the Hindu Marriage Act, 1955 and Section 26 of the Special Marriage Act, 1954 bestow the child’s legitimacy, who is born out of null and void marriage or where a decree of nullity is granted in respect of a voidable marriage. Under Section 25 of the Special Marriage Act, any child begotten or conceived before the decree is made who would have been the legitimate child of the parties to the marriage. There is a twist in Section 26 of the Special Marriage Act. Subsection (3) states that the right of inheritance of such children is limited to parents’ property only. If their parents are not legally wedded to each other, children do not have any coparcenary rights in the property of Hindu Undivided Families. Thus, this provision has been applied to provide the right of inheritance to a child born out of a live-in relationship in the self-acquired property of parents, but if their parents are not married to each other, then he can not claim the coparcenary right in the property of HUF of their father.

My preferred Transformation and Hospitality Private Limited v. The District Collector & Ors. (2021)

In this particular case, the High Court of Madras held that the occupation of the hotel room by an unmarried couple is not a criminal offence. Justice M. S. Ramesh said that there are no laws or regulations that forbid unmarried persons of the opposite sex to occupy hotel rooms as guests. He said that the live-in relationship of two adults is not deemed to be an offence. It’s going to be a very extreme step of sealing the premise on the ground that the unmarried couple was occupying the premise. In the absence of any particular law prohibiting the same, it would be totally illegal to do so.

In this case, a search was conducted by a team of officers from Peelamedu police station. During the course of the search, they found liquor bottles and in one room two adults, male and female, who were married to each other. The officer sealed the premises without any written order. The petitioner’s counsel alleged that there is no justification for the actions of the respondent sealing the premise without any order and not giving an opportunity in a violation of the principle of natural justice. Additional Public Prosecutor appearing for the respondent stated that the petitioner’s premise is permitting illegal activities by the guests without recording details of the guest in the booking register. Various reports from print and social media were produced before the Court by the respondent to indicate that the petitioner had permitted the unmarried couple to stay in the hotel room, which has been termed as immoral. On finding liquor bottles, the petitioner stated they do not serve or sell liquor on the premises, and such bottles were brought by the guest who was living in the room. While hearing the case, the Court noted that the Tamil Nadu Liquor (Possession for Personal Consumption) Rules, 1996, permits any individual person to possess 4.5 Litres of IMFS,7.8 Litres of Beer; 9 Litres of Wine at a given point in time. Hence, the Court stated that the consumption of liquor by the guests could not be termed illegal. The Court also stated that the entire episode of sealing a premise is in violation of the principle of natural justice.

International scenario

United States of America

In the USA, the concept of ‘Cohabitation Agreements’ contains the explicit mention of rights and liabilities. It has the expression ‘palimony’, which means to grant maintenance to a woman.

In the case of Marvin v. Marvin (1976), a woman named Michele claimed palimony after living for several years without getting married to famous film actor Lee Marvin. The US Supreme Court has not given any decision on whether there is a legal right to claim palimony, but there are many decisions of the courts in various states in the USA. These states have taken divergent views, some granting palimony to claimants of live-in relationships while others denying it. Hence, in the USA, the law is still in the state of evolution on the right of palimony.

In the case of Taylor v. Field (1986), the plaintiff named Taylor was in a relationship with a married man named Leo. After Leo died, Taylor sued his widow, alleging the breach of implied agreement to take care of Taylor financially, and she also claimed the maintenance from the estate of Leo. The Court declared that Taylor’s relationship with Leo was nothing more than that of a legally married man and his mistress, albeit a long term one. The Court held that the alleged contract rested on meretricious consideration and hence was invalid and unenforceable. The Court found that there is no sign of stable and significant cohabitation between the two, and they only spend the weekend with each other.

China

In China, a couple signs a contract for a relationship, and if any child is born out of such a relationship, then that child enjoys the same succession and rights as the children born through marriage.

France

In France, two adults of the same or opposite sex can enter into an agreement to live together and organize their lives and thereby enjoy the right of a married couple and also work toward social welfare, these kinds of agreements can be revoked any time after giving three months prior notice to the other party. This type of agreement is known as ‘pacte civil de solidarite’ (civil solidarity pacts). This pact was passed by the French National Assembly in 1999 and allowed couples to enter into an agreement for a social union.

United Kingdom

In the UK, live-in relationship couples do not enjoy the legal status as a married couple. Partners are not in any type of legal obligation to maintain each other. Partners can not claim the inheritance right over each other’s property unless they mention the name of the partner in their respective wills. A 2010 note from the Home Affairs Section to the House of Commons, stated that unmarried couples have no guaranteed rights to ownership of each other’s property on the breakdown of the relationship. However, the law protects the child born out of such a relationship. Both parents are under the obligation to bring up their children irrespective of the fact that whether they are married or cohabiting.

Philippines

In the Philippines, live-in relationship couples’ rights are governed by the co-ownership rule. According to Article 147 of the Family Code, 1987 of the Philippines which provides that when a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without any benefit of marriage or under a void marriage, then their wages and salaries shall be owned by them in equal shares and property acquired by both of them through theirs work shall be governed by the co-ownership rules. Family code expressly governs the property of persons cohabiting without the benefits of marriage.

Ireland

Though living together in Ireland is legally recognized, public opinion is still against the legislation that aims to facilitate the legal right for a separated couple to demand maintenance and share in the property with the financially dependent partners. The legislation applies to both same-sex and opposite-sex unmarried couples, but the condition is that they have to be cohabiting for at least three years and if they have a child, then two years.

Australia

Australian Family Act, 1975 states that a de facto relationship can exist between two people of different or even the same sex and that person can be in a de facto relationship even if legally married to another person or in a de facto relationship with anyone else.

Scotland

In Scotland, the Family Law Act, 2007 authoritatively recognized and authorized couples dwelling together in Scotland. When the law was passed, nearly 1,50,000 individuals were engaged in live-in relationships. In the event, if such a relationship breaks, a companion has the right to apply for monetary help.

Arguments put forth against the morality of live-in relationships

There are many arguments given by people when they assert that live-in relationships are wrong or bad. Some of them are given below:

When such a couple lives together, there is no social responsibility. So there are chances that they can misuse this and change their partner sometimes.
Some people will feel insecure after having such a relationship, especially girls as this type of relationship’s future is completely uncertain.
A child who is born out of such a type of relationship faces social stigma in society.
Most of the time, such a relationship goes against the permission of elders.
If the couple breaks up after a long-term relationship, then recovering from the loss is very difficult and may lead to depression.

Conclusion

Our society is changing quickly, and courts also need to change their mindset with the changing times. Courts in India have recognized live-in relationships, but there is still a long way to go. A live-in relationship is not considered an offence, and there is no law to date that prohibits this kind of relationship. The Parliament needs to come up with a new law for dealing with the cases of live-in relationships because on the same issues different High Courts have put forth different views. Change is the need for society, and now people should not see live-in relationships as morally bad.

References

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